Here's my summary of the key news overnight in 90 seconds at 9 am, including news that there has been a shock resignation at one of the world's biggest miners.
Tom Albanese, an American who ran Rio Tinto, has quit under pressure from his board after the company was forced to take huge writedowns on its coal and aluminium assets - about US$14 billion is 'lost', and remember this is the second time this has happened.
It's that aluminium connection which affects us - Rio Tinto owns the Bluff smelter, and many have wondered how committed they are to that plant. Maybe less now. An Aussie who runs Rio's iron ore business is taking over.
Oil is rising sharply in price this morning - it is over US$95/barrel, and at the same time the US dollar is strengthening, and the Dow is up in mid-day trade, up over 13,600 and within a few percent now of its all-time high of 14,200.
The number of American filing for jobless claims hit a five year low, and housing starts and building consents in the US were very strong in December, at almost five year highs. This data is important for New Zealand because the American consumer is still the driver of world trade, which to a large extent means Chinese exports.
China is doing its bit for growth too - it has embarked on another round if infrastructure "investment" and its slowdown is clearly ending. We should get Chinese data on 2012 GDP growth later today which may confirm the extent of that past slowdown.
In Indonesia, flooding in the capital Jakarta has brought that city to a virtual halt. Flooding is a regular monsoon risk there but this year it has been particularly difficult.
In Australia, the latest jobs numbers were weak - weak again we should say, because they were in 2011 as well. This makes them the worst since 1997, fifteen years ago. Working hours are being cut.
Later this morning we get local inflation data for December, which is expected to remain modest.
The NZ$ starts today virtually unchanged at 84.0 USc, although we are edging up against the Aussie to 79.8 AUc; the TWI is at 75.5.
No chart with that title exists.
9 Comments
good read, AJ.
The banks were always going to hoover unless stopped. It's their one and only model.
At the end of the day, they - and a lot of other activities - are parasitic, not productive. The fudge could be perpetrated thanks to abundant cheap energy, which fooled most folk into thinking they were doing it themselves. It's not the truck-driver moves a semi full of sheep - it's the litres in the tank.
When the litre-supply hit the ceiling, there wasn't room for the parasites any more, but they will use their position to transfer the productively-gotten wealth to themselves.
Unless legislated against. And what chance of that, given our PM? Ultimately, on the energy downside, interest rates should go zero-then-negative, if real income fell where it lay. Buckley's chance of that.....
Go well
Thanks for the link, good read. The RBNZ are currently crucifying savers in order to help the banks who went overboard with mortgage debt prior to 2008. It now seems that the banks haven't learnt anything from that episode and are now cranking up the debt engine again.
Thanx for that link AJ very good.
I also like the bit where he says
"Who will deicide when the next ‘technocratic’ government is essential? Will it be you? No. By definition it will not be you. ‘Technocratic’ means putting hand picked rulers in place ‘temporarily’ when democratic voting does not seem to be coming to the decisions the markets deem essential and desirable. How long do you think till the next crisis and the next technocratic interregnum it will surely ‘require’?"
Reminded me of ECAN
" PM has ' out of body experience ' " screams the headline on page 2 of today's Press ....
... and are we surprised that he did .... one of his colleagues had just informed him that the dinner he was enjoying in Christchurch was not tax-payer funded , that John himself had to dip into his own pocket ...
For those of us who have dined in a Merivale restaurant , the usual response after the waiter has handed you the bill is to utter a small cry of panic , and then to faint ....
Did Bernard spend the holidays at Nouriel Roubini's place ? ...... tuning into Andrew Patterson's finance show on RadioLive , one could be forgiven for thinking that all is woe and despair after just 3 minutes of listening to Bernard .... even 2 % GDP growth was dismissed as " stagnant " by the perma-bear .... although in my mind , 2 % growth compounded would lead to a doubling of the economy in less than 2 generations , not too shabby methinks ...
.... and then , just as I was about to end it all by leaping off the fiscal cliff , Chris Smith ( CMC markets ) came onto the programme .... and the gloom lifted ... even as Andrew tried valiantly to resume the Hickey air of woe , by suggesting that private investors in the US entering the stockmarket was a sure sign that the end was near , Chris skillfully batted that nonsense away , and carried on with his view that life the universe and everything will not end anytime soon ...
Whew !
Chris skillfully batted that nonsense away , and carried on with his view that life the universe and everything will not end anytime soon ...
But "How Crazy?" will it get - y-t-d gains in some US stock market sectors are more than double any GDP growth forecasts - same for NZ I suspect.
Maybe it's a case of "Mind over Matter?".
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.