Bernard Hickey details the key news in 90 seconds at 9 am in association with Bank of New Zealand, including news US stocks fell around 1% overnight as nervousness grew ahead of tonight's crucial non farm payrolls jobs report for the US economy.
Economists are expecting a rise of around 68,000 in August, which is around half the 117,000 rise seen in July. However, Goldman Sachs halved its forecast to 25,000 overnight, raising fears the world's biggest economy is sliding back towards recession.
US 10 year Treasury bond yields fell 8 basis points to 2.14% as investors worried again about a slide back into recession. See more here at Bloomberg on stocks and on US Treasuries.
Markets brushed aside data showing US factory output was actually slightly stronger than expected in August. See more here at Bloomberg.
Meanwhile, in Europe, factory output in August was weaker than expected. See more here at Bloomberg.
In China, factory output was also barely expansionary, but there are few signs yet that the authorities are willing to switch their focus from inflation fighting to boosting growth. See more here at BBC.
Overnight the Peoples Bank of China increased reserve requirements again to curb lending.
But there was a surprise cut in Brazil's official interest rate as it battles a very strong currency and worries about a slowdown in global growth. It surprised many because Brazil is also fighting inflation nearing 7%. See more here at Bloomberg.
In Australia, retail sales were stronger than expected. See more here at Bloomberg.
This reduced expectations for cuts in the Reserve Bank of Australia's cash rate. This tightend the expected gap between Australian and New Zealand interest rates, making the Australian dollar relatively more attractive than the New Zealand dollar. The Kiwi fell slightly versus the Aussie overnight.
Rugby World Cup debt
Meanwhile in New Zealand with one week to go before the Rugby World Cup starts, the costs to taxpayers and ratepayers are becoming clearer. Stuff reports about 20,000 corporate ticket packages are unlikely to be sold out of total hopes for 70,000 sales. The cheapest corporate packages are priced aroudn NZ$2,295 per person for two quarterfinals and the most expensive is for NZ$10,995 per person for a semifinal and final ticket.
In Dunedin, Stuff reports the Dunedin City Council has been told its debts linked to its new stadium will stress the council's finances for years to come. The report suggests extending the term of the loan by 20 years to 40 years and using any spare cash in the next decade to repay the debt.
No chart with that title exists.
46 Comments
Enuff....if you peasants want to see the forest...make a cuppa cawfee with a dram of Rum..sit back and read all of this:
http://www.marketoracle.co.uk/Article30212.html
If you are not laughing like hell at the end, you will be scared out of your wits and wondering what to do to avoid the hammer blows.
ps. If you want some free fertiliser for the roses, just ask BE or AB to explain themselves in relation to the above article's points where they clearly impact on our macro and micro economic mess.
Australia vs South Africa ! .... That is so rude ...... gosh , some people got no patriotism ...... heck ..... you're automatically assuming that the final will be between the Wallabies & the Springboks ....... crikey , hasn't history taught you anything , our good friends France could just as well be in that final !
Whats been going on in Dunedin is discraceful. The whole attitude of councils to constantly loading up debt on ratepayers to develop white elephants is criminal (but why dont more ratepayers revolt?).
Here in Nelson we recently dodged a bullet with our council trying to foist a totally unwanted Performing Arts Centre/Conference centre on us. Fortunately a deluge of negative responses from the public at the consultation phase stopped them in their tracks.
It amazes me that more councillors dont stand on a debt reduction/rate freeze platform. There would be votes aplenty.
What’s going on in Auckland – no protest – amazing !!!
A $500 million $ 500’000’000.- deal between Government and council is set to bring a fleet of new electric trains to Auckland. Transport minister Steven Joyce and Auckland Mayor Len Brown this afternoon signed an agreement to buy 57 electric multiple units (EMUs), each with three carriages.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10748778
PM – where are the 170’000 new jobs coming from, when you are constantly importing things in the billions ?
PM – in what industries are Kiwis, particularly, NZyouths going to be employed, when your government constantly taking away interesting, skilful jobs to overseas workforces ?
PM – why do we have in this country youth education programs costing taxpayers money millions, when there are no decent jobs and our youngsters are forced to move overseas ?
PM – how can we have a solid, more complex, better coordinated production sector, covering our needs, when you import them in the billions ?
..and PM why are you wondering – why we need more money for unemployment, prisons, and the police force ?
..and PM, by importing most everything and not producing in NZ – why are you wondering, why NZwages of the wider population remain low, families are financially struggling and our account deficit is going up ?
..and PM when you aren’t able to answer these questions to satisfactory – why not start thinking building up a new economic philosophy – not running for growth, stop megalomania - competing in the worldwide race – but modesty – for a balanced NZsociety with quality of life under an average standard of living and not much debts ?
.... the trick is in the delivery , Walter .... no , not of the stupid trains ! ... the trick is in the delivery of the message , that you've just lumbered rate-payers with a monumental bill , for something they didn't ask for ...
500 of anything sounds alot , OK . So you say " a half " .... get it ? .... merely one half of a billion dollars , not $ 500 million ....... oh thank god for that , the residents sigh , that's alright then .
... and if you mumble a tadge , they don't notice whether you said " million " , or " billion " ...
It's all in the spin-doctoring , my friend .
Roger - you as the PM of www.interest.co.nz please answer my 7 questions ?
We're our own worst enemy by insisting on retaining a minimum wage , Walter . Helen Clark's government caused youth unemployment to go stratospheric , by scrapping the youth pay rate . And Jolly Kid's government are " exporting " jobs overseas by increasing the minimum wage . It is a luxury that we cannot afford .
.... the government can decree and dictate till its blue in the face , but employers will not hire more staff if it's not economically feasible to do so .
But I apply this across the board , in times of recession , all salary & wage earners ought to assist employers by accepting a decreased renumeration . Why do civil servants salaries only ever go up , not down ? .. Company profits go down . .. Wage earners have their hours cut , or lose their jobs entirely . Wages & salaries must be flexible to up & down movements , as the health of the economy warrants it .
This is just one area of the NZ economy where we are living a champagne lifestyle on a janitor's budget .
[ .. the easy answer to save a fortune on prisons is to outsource them , criminals with 5 years or so non-parole , serve their time in an Indonesian gaol .. nice and tropical in Bali . .. a nice little industry there for our Indonesian friends , too .. ]
... whew ! .. need a Gummy rest after that little lot ...
Believe it or nor , Walter .. I did anwser your 7 questions ... rather cleverly , by going to the nub of the problem ( our governments and their regulations ) ... and solving that !
.. the heart of the issue is " freedom " ... freedom for bosses and workers to negotiate , without big-brother standing over them . Freedom to live your life on your terms .
Allow the economy to grow , unfetid .... without special subsidies and incentives ....
Government are pathetic at picking winners . Get them out of business entirely . Stop them from meddling .
... keep solid and simple regulations in place , where necessary , keep all regulations in the zone " commonsense " .
And unCullenise the tax code . That guy really screwed things up for everyone .
... now , take a deep breath Walter .... chill a little , OK ... relax , friend , all will be well ...
Believe it or nor , Walter .. I did answer your 7 questions ... Must be a slow day at the plantation then, Gummy!?
Of course after we’ve spent 100 million putting together facilities to build 500 million’s worth of trains, we’ll spend another 50 million getting rid of said facilities when the orders dry up the day after the last train is built.
Lucky you. I hear that's a very beautiful beach. Have fun! I'm off myself in a few weeks to Thailand and Cambodia, I can't wait to get out of this cold grey damp weather and into some sun and warmth. Gosh, that's just the same as dealing with Steven, Kunst and members of the Labour Party!
Thank you PM for your interview – not convincing - rather a propagandistic right wing resumee of old fart politics – in stead of clear answers in order to make the current government accountable.
The fact is, central and local governments make infrastructure allocations in the billions.
OZ has a minimum wage higher than ours, is their youth un-employment significantly worse? No I dont believe it is.
Exporting jobs overseas, when our minimum wage is $14 and in china its that much a week making ours say $10 makes no difference.....
Jobs are getting more and more specialised and complex, that takes experience and / or lots of training, something the young dont have.....hence increasing youth un-employment does not surprise me.
Wage cuts in tough times, indeed that happens here and has....ppl working 4 days out of 5....however they then have less to spend so that impacts others and they then do 4 out of 5.....and on and on....
Who dictates the ups and downs? employers? yeah right...sorry mate this month Ive decided you get a 20% cut. Where is the incentive for employers to run a business well? if they run it badly the employee suffers.....let central govn decide it? I just know you'll hate that idea......simple let the market decide on that one....
Indo goals....LOL, now thats a neat idea....outsource them to the 3rd world. Also of course apply that to white collar workers, none of this namby pamby home detention....5 years hard labour 20 in a cell and the loo is the corner.....cant see there being much white collar crime in a few years.....excellent idea Gummy....
regards
I'm not comparing NZ with Oz . It is enough for us to improve otherselves against our own benchmarks . And frankly , we could do one helluva lot better with what we have .
.. Jolly Kid & Wild Bill seem to think we need to export more ! .. Saints preserve us , the country earns enough as it is ..
.. the money gets wasted , mis-used by the national government and by local councils ..
I wouldn't have thought we needed 57 of them.
Isn't Len Brown a Labour supporter so he's just following the tax and spend mantra. Again it's mismanagement by both local and central govts.
Other examples of wasteful spending. These are just in one part of Auckland. How much else around the rest of Auckland that we don't know about?
http://www.stuff.co.nz/auckland/local-news/western-leader/5546566/Boat-hub-at-airbase-high-risk
http://www.stuff.co.nz/auckland/local-news/western-leader/4892282/Land-to-cost-15m
http://www.stuff.co.nz/auckland/local-news/5387285/Hobsonville-deal-done-in-secret
Note: 4.3 hectares purchased from central govt. for $500k in 2000. In 2005 3 hectares of this parcel to be bought by local govt. for $7.65m and now it cost $15.2m.
Housing NZ bought 167 hectares of the former Hobsonville airbase in 2002 for development after central govt. announced in 2000 that it was selling the site. I cannot find any details regarding how much the central govt. paid for it's own land. They are now operating a joint venture with an Australian developer and local building companies selling the sections at grossly inflated prices.
Haven't you realised yet Kunst, when the government spends billions on Auckland it's apparently good and needed, and all the so called capitalists are all of a sudden very happy, and it's never wasteful spending that on things the government shouldn't be sepnding on
But should the government spend any money what so ever in other places of the country, all of a sudden it turns into a a big red socialist monster, and is very bad.
You obviously also haven't realised the world revolves around Aucklanders.
Another red light flashing on the dashboard:
http://www.telegraph.co.uk/finance/financialcrisis/8736204/Central-bank…
the only world cup losses we should be concerned about right now are All black losses. All the nation's effforts shoudl be focussed on mitigating this over the next 7 weeks. If we win the damn thing, 2 billion in losses is acceptable (although personally I think bringing back the cup is priceless). Lets go black!!!
What's been going on in Dunedin borders on the criminally insane.
One of the poorest constituencies in the country loaded up with huge debt.
Sure we have a great,showcase stadium,but we can't afford it.
People marched against it and other spending,no one listened.
Dunedin now has to decide what to do with the oter stadium, Carisbrook!
And it's not just that,it's museums,Chinese Gardens,shopping malls ...........
Councils should stick to sewers and rubbish collecting ,pay for CEO's is massive......
No worries the ratepayer has deep pockets.........not.
Make fun of American ponzi schemes,I tell ya we have enough home grown ones!
One Nathans Finance director behind bars t'other gets home detention - http://www.3news.co.nz/Nathans-Finance-directors-sentenced/tabid/421/ar…
Gee the reporting of this is bloody light considering the impact of the crimes.
The interesting thing here is they have defended the matter but then turn around, I assume after the guilty verdict, and offer reparations. All they were doing was trying to buy their way out of a lengthy jail sentence, and it look like it worked.
Any idea of the maximum penalty Gareth? Or of precedents in sentencing for this type of offending?
What is really interesting in this case is that the judge has said there was no intent, just gross negligence. Or does the securities act allow for negligence?
Forgive me, but isn't our legal system based upon 'Mens Rea', and 'Actus Reus'.
I dont' believe for a minute that it was simply ineptness, it was wilful neglect.
Here's more from the FMA:
FMA welcomes Nathans’ sentencing
The Financial Markets Authority today welcomed the High Court’s sentencing of three directors of collapsed finance company Nathan’s Finance.
Chief executive Sean Hughes said the sentences send a clear message that the Courts regard the inclusion of untrue statements in issuers’ offer documents as a serious breach of the law.
“The guilty verdict in this case, and the penalties imposed, show financial markets participants can expect to be held accountable for their conduct,” Mr Hughes said.
“This case demonstrates that directors have a personal duty to ensure documents and advertisements offering securities to investors do not mislead or deceive. This is not a duty they can delegate to staff or external advisers.”
Nathans directors Mervyn Doolan, Roger Moses and Donald Young were found guilty on 8 July, 2011 of offences under section 58 of the Securities Act on the basis of untrue statements made in Nathans’ 2006 prospectus and investment statement.
FMA alleged that the directors were responsible for untrue statements made in the registered prospectus and investment statement of Nathans in December 2006.
The statements concerned:
· Lending to related parties, including Nathans' parent company VTL Group.
· Claims that Nathans had no bad debts.
· That it had adequate liquidity and diversified lending.
· That loans were made and managed in accordance with robust policies and processes
Background
Defendants: John Hotchin, Donald Young, Kenneth Moses and Mervyn Doolan
Charges: FMA alleged:
· That the directors made untrue statements in the registered prospectus and investment statement of Nathans Finance NZ Limited (in receivership) dated 13 December 2006. These statements concern lending to related parties (including Nathans' parent company VTL Group), that Nathans had no bad debts, that it had adequate liquidity, that its lending was diversified, that it made loans and managed them in accordance with robust policies and processes, and that all material matters had been disclosed in the prospectus.
· That the directors made further untrue statements when they signed a prospectus extension certificate on 30 March 2007. These stated that the company's financial position had not materially and adversely changed since its last balance date, and that the 13 December, 2006 prospectus was not false or misleading.
· That letters sent to members of the public advertising Nathans Finance debenture stock contained untrue statements about some of the matters referred to above. These claims do not apply to Mr Hotchin who had resigned his directorship by the time the advertisements were sent out.
The Defendants denied the charges.
Penalties: as follows:
Criminal charges- These charges were laid indictably under section 58 of the Securities Act on 12 December 2008 and carry a maximum penalty of five years imprisonment or fines of up to $300,000 plus $10,000 for every day the offence is continued.
Civil proceedings- The proceedings were issued under section 55C and related sections of the Securities Act. FMA has applied for declarations of civil liability and civil pecuniary penalties of up to $500,000 against each of the five directors. The civil proceedings are stayed pending resolution of the criminal case.
Previous plea:
John Hotchin entered a guilty plea and was sentenced on 4 March, 2011 to 11 months’ home detention and 200 hours community service, and was ordered to pay reparation of $200,000. He gave evidence for the prosecution.
Okay thanks Gareth. Section 58(1)(a) is their out given the judges comments.
But what is important is that it wasn't omissions that lead to the charges, it was untrue statements. They signed the damn thing so I don't accept there wasn't 'intent' .
Section 58 is also quite clear in that it is 'crimianl liability', so how the judge can dismiss intent is beyond me.
I would be interesting to hear their defence.
Has anyone else been charged? ie: did they furnish evidence that someone else in the company composed the untrue statement in the prospectus?
Iceland exits IMF "care"
http://krugman.blogs.nytimes.com/2011/09/01/iceland-exits/
"Iceland is no longer under an IMF program; here’s the IMF report (pdf) pronouncing the adjustment program successful. Indeed. Iceland still has high unemployment and is a long way from a full recovery; but it’s no longer in crisis, it has regained access to international capital markets, and has done all that with its society intact.
And it has done all that with very heterodox policies — debt repudiation, capital controls, and currency depreciation. It was as close as you can get to the polar opposite of the gold standard. And it has worked."
While Ireland and Greece on the other hand are still basket cases..
regards
Get real on the RWC, there are 3 teams who rate a good chance, others may be good for a one-off upset at some point, but that's all. And all 3 seroius contenders this year are the Tri-Nations teams.
And why worry about having a corporate box ticket when it is complements of the sponsor?
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