90 seconds at 9 am

90 seconds at 9 am: Backsliding in Europe by Italy, Spain and Greece; Netherlands in ratings worry; US earnings rally stumbles; Chinese eye AU banks

19th Apr 12, 8:38am by David Chaston

Here's our summary of the key news overnight in 90 seconds at 9 am, including news that there has been a heightened sense of concern about where Europe is headed overnight.

Italy announced it won't meet its debt reduction targets; Spain has made a similar announcement and its banks are the subject of new concerns. The Greeks are backsliding too.

The IMF warned that EU banks are in the process of a mammoth deleveraging - which involves shifting liabilities to the taxpayer - and the Germans are looking at all this with horror.

The growing sense that the sudden austerity will make things worse is pitting the Germans vs the rest.

Adding to the woes, Fitch has warned The Netherlands that it is at risk of losing its AAA credit rating. And Argentina's nationalising of a major Spanish oil company isn't helping either.

US Treasuries rose, commodity prices fell. The oil price retreated, as did copper and dairy products as we reported yesterday.

There were disappointing earnings reports from some major tech companies in the US and their earnings rally is losing steam. The Dow is down.

Across the Tasman, a retiring bank executive has forecast that the Chinese will seek to take a cornerstone shareholding in one of the big Aussie banks. He didn't know who, but he said these banks are being eyed because of their strength and expertise in navigating the financial crisis well.

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16 Comments

by Wolly | 19th Apr 12, 8:52am 1334782347

No worries then...just another day stuffed with lies from pollies and bankers....fabulous recovery we are having...not. And to cap it all the RUC charges go up in August.....

Now off you go to see if the poodle media are reporting the same stuff as above on this site....fat chance....

Put David's report with the Dairy price drop, the collapse of the building consents, the rise in RUC charges to come, higher power charges, winter in chch, the aussie property dive, the IMF lying, the criminal printing at the Fed, BoJ, BoE and ECB....oh what a recession and debt crisis we are living in...long long way to go folks.

by steven | 19th Apr 12, 8:52am 1334782320

For some light entertainment,

http://www.wimp.com/mphplane/

regards

by scarfie | 19th Apr 12, 10:14am 1334787294

I spent the whole time wondering how he was going to land it.... I want one.

Might have a good market for those in Iran.

by Wolly | 19th Apr 12, 8:56am 1334782609

The pain that is Spain....

"BRUSSELS - Economic experts watching Spain don't know how much money will be needed or precisely when, but some are near certain that Madrid will eventually seek a multi-billion euro bailout for its banks, and perhaps even for the state itself. "

http://www.reuters.com/

by Stephen Hulme | 19th Apr 12, 10:36am 1334788590

Pain elsewhere?

Is This The Canary Of Australia's Collapsing Housing Coalmine?

"...the company cited deteriorating market conditions in the Aussie mortgage market. Specifically, the company noted “…elevated loss experience in Australia as lenders accelerated the processing of later-stage delinquencies from prior years through to foreclosure and claim at a higher rate and severity than expected, particularly in coastal areas of Queensland that experienced natural catastrophes and regional economic slowdowns and among certain groups of small business owners and self-employed borrowers."

by Wolly | 19th Apr 12, 10:53am 1334789581

"Yet for those who are worried the only move here in GNW is up, the trade may well be to start getting increasingly cautious on other Australian equities such as QBE, ANZ, NAB, WBC and CBA. Because, to mix metaphors, when the light is shone, there is never just one canary. And central-planner can only delay mean reversion for so long..".

by Andy Rodgers | 19th Apr 12, 9:06am 1334783203

The Daily 90 secs at 9 seems to be suffering from schizophrenia. One day everythings fine and risk is off, the next day it all slumps back. IMHO everything that the EU says about the PIIIGS situation is just propoganda. It will be interesting to see what happens when it is finally accepted that Spain, like Greece, needs a bailout. Followed closely by Portugal and Italy. That will be an interesting time for the financial markets.

by stp | 19th Apr 12, 9:19am 1334783971

Andy - that's life not reporting problem.....

by Gummy Bear Hero | 19th Apr 12, 10:05am 1334786741

...... one suspects that the finger of gloom has Emailed a missive from France , telling the gang to " tone it down " ...... greenshoots and moments of positivity were sprouting with increasing regularity .......

Or it could just be the usual media practise of stirring things up , to create an interest in their particular news service .......

by powerdownkiwi | 19th Apr 12, 11:14am 1334790877

Actually, for an outfit that relies on there not being a gloomy outcome for it's income, they do a good job of reporting the bad.

Which puts them a mile ahead ofthe rest of the NZ media.

Not that there's much competition.

by Stephen Hulme | 19th Apr 12, 10:55am 1334789717

I think it fair to say a market that is dominated by hedging strategy positions requires constant repositioning of delta in response to small news items which amplifies the movements of the underlying financial instruments and hence the reporting of market changes.

by Ralph | 19th Apr 12, 2:40pm 1334803238

Yes, and as almost of the structural mechanisms that contributed so strongly to the volatility in the recent past have been restructured there is every probability history will repeat to some degree.

by Chris-M | 19th Apr 12, 1:48pm 1334800088

This is similar to the mood swings that has prevailed in previous crashes. Post the initial crash, but before a long slide. It appears to be the conflict between the hope that a bubble will resume and the fear that it will not and the reality that a lot of painful changes are yet to occur. Real recoveries occur slowly and creep up on you. By then the public mind set is rather dour and not prone to the bubble mentality.

The USA is the funny one here. It's behaviour is sort of tantric. They have a sort of crash or just about full crash, but fend it off by pumping hudge amounts of cash into the economy. The crash never really occurs and from some perspectives, thank goodness. However they miss out on the real pain that forces them to face the underlying problems that caused the crisis. And so the stimulus stokes the embers of the next bubble and crisis. I am sure that this suits the Goldman Sachs of this world as this volatility is hudgely profitable to those who understand it and to a significant extent promote it.

by Basel Brush III | 19th Apr 12, 9:31am 1334784704

DC,

No comment on the dairy price drop and the NZD

Ironic the fact noted elsewhere that farm sales volumes last month were the highest since June 2008 - just as the dairy price drops.

by steven | 19th Apr 12, 1:56pm 1334800586

A Great Depression....and yes we are liable to send so much to the IMF.

regards

by Wolly | 19th Apr 12, 3:13pm 1334805205

Snippy old bean, most Kiwi are as thick as two planks on financial matters....explaining an international banking cartel that is wrapped up in a printing borrowing bailout farce to ensure the wealthy slobs lose nothing...will be a tad difficult.

Our govt of fools are bootlickers when it comes to the IMFarce...you will pay and pay again...and be told it's in your best interests by the liars in wgtn.