6:06PM Tuesday Nov 18, 2008
The New Zealand dollar remained steady against the greenback today.
The NZ dollar was buying US55.05c at 5pm today, down slightly from US55.88c at 8am and US55.35c at 5pm yesterday.
The kiwi remained steady between US54.70c and US56c over the last two days.
The BNZ said the NZ dollar had "tagged along" with interest in the Australian dollar on the London market but "interest in trading the kiwi remains sporadic at best".
"Looking ahead, the outlook for global growth remains the key driver of currencies. Positive economic and credit news is still lacking."
The kiwi also traded in a narrow range against the Japanese yen, at 53.21 at 5pm today from 53.95 at 5pm yesterday and 54.23 at 8am this morning.
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Currency: Dollar steady in days trading
6:06PM Tuesday Nov 18, 2008
Tracking the NZ dollar
* NZ dollar weak after market jitters
* Kiwi rallies after overnight fall
The New Zealand dollar remained steady against the greenback today.
The NZ dollar was buying US55.05c at 5pm today, down slightly from US55.88c at 8am and US55.35c at 5pm yesterday.
The kiwi remained steady between US54.70c and US56c over the last two days.
The BNZ said the NZ dollar had "tagged along" with interest in the Australian dollar on the London market but "interest in trading the kiwi remains sporadic at best".
"Looking ahead, the outlook for global growth remains the key driver of currencies. Positive economic and credit news is still lacking."
The kiwi also traded in a narrow range against the Japanese yen, at 53.21 at 5pm today from 53.95 at 5pm yesterday and 54.23 at 8am this morning.
Following the announcement that Japan's economy joined the 15-country euro zone in recession in the third quarter which added to investor concerns.
Against Australian dollar, the kiwi was at A85.45c at 5pm after slipping to A85.05c by 8am from A85.45c at 5pm yesterday.
Against the euro the kiwi was little changed at 0.43564, from 0.4391 at 8am.
The trade weighted index was at 56.31 from 56.88 at 8am.
Currency rates:
NZ dlr/US dlr US55.05c US55.35c
NZ dlr/Aust dlr
A85.20c A85.45c
NZ dlr/euro 0.43564 0.4399
NZ dlr/yen 53.21 53.95
NZ dlr/stg 36.78p 37.55p
NZ TWI 56.31 56.76
Aust dlr/US dlr US64.60c US64.77c
Euro/US dlr 1.2610 1.2582
US dlr/yen 96.65 97.50
- NZPA
Currency: Dollar steady in days trading
00:53 | Filed Under | 1 Comments
Auto execs ask Congress for $25 billion lifeline
GOP lawmakers appear wary about supporting more failing businesses
updated 7:22 p.m. ET Nov. 18, 2008
WASHINGTON - Detroit's Big Three automakers pleaded with Congress on Tuesday for a $25 billion lifeline to save their once-proud companies from collapse, warning of broader peril for the national economy as well.
"Our industry ... needs a bridge to span the financial chasm that has opened up before us," General Motors CEO Rick Wagoner told the Senate Banking Committee in prepared testimony. He blamed the industry's predicament not on failures by management but on the deepening global financial crisis.
But the new rescue plan appeared stalled on Capitol Hill, opposed by Republicans and the Bush administration who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion.
Sympathy for he industry was sparse.
Banking Committee Chairman Christopher Dodd, D-Conn., told Wagoner and leaders of Ford and Chrysler that the industry was "seeking treatment for wounds that were largely self-inflicted."
Still, he said, "Hundreds of thousands would lose their jobs" if the companies were allowed to collapse.
Sen. Mike Enzi, R-Wyo., complained that the larger financial crisis "is not the only reason why the domestic auto industry is in trouble."
He cited "inefficient production" and "costly labor agreements" that put the U.S. automakers at a disadvantage with foreign companies.
Wagoner said that despite some public perceptions that General Motors was not keeping pace with the times and technological changes, "We've moved aggressively in recent years to position GM for long-term success. And we were well on the road to turning our North American business around."
"What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II."
Failure of the auto industry "would be catastrophic," he said, resulting in three million jobs lost within the first year and "economic devastation (that) would far exceed the government support that our industry needs to weather the current crisis."
Congressional leaders worked behind the scenes in an effort to hammer out a compromise that could speed some aid to the automakers before year's end. But the outlook seemed poor.
"My sense is that nothing's going to happen this week," Sen. Bob Corker, R-Tenn., said at the opening of the hearing.
Earlier, Majority Leader Steny Hoyer said Congress might have to return in December — rather than adjourning for the year this week, as expected — to push through an auto bailout.
"Dealing with the automobile crisis is a pressing need. We are talking about a lot of people ... and a great consequence to our economy," said Hoyer, D-Md.
The financial situation for the automakers grows more precarious by the day. Cash-strapped GM said it will delay reimbursing its dealers for rebates and other sales incentives and could run out of cash by year's end without government aid.
In the Senate, Democrats discussed but rejected the option favored by the White House and GOP lawmakers to let the auto industry use a $25 billion loan program created by Congress in September — designed to help the companies develop more fuel-efficient vehicles — to tide them over financially until President-elect Barack Obama takes office.
"There was no indication that there was any traction" for the White House plan, Sen. Ben Nelson of Nebraska said after a Democratic caucus luncheon.
House Speaker Nancy Pelosi, D-Calif., and other senior Democrats, who count environmental groups among their strongest supporters, have vehemently opposed that approach because it would divert federal money that was supposed to go toward the development of vehicles that use less gasoline.
Instead, they want to draw the $25 billion directly from the $700 billion Wall Street bailout — bringing the government's total aid to the car companies to $50 billion.
A Senate vote on that plan, which would also extend jobless benefits, could come as early as Thursday, but aides in both parties and lobbyists tracking the effort privately acknowledge it doesn't have the support to advance. Treasury Secretary Henry Paulson renewed the administration's opposition on Tuesday.
Even the car companies' strongest supporters conceded Tuesday that changing the terms of the fuel-efficiency loan program might be the only way to secure funding for them with Congress set to depart for the year and the firms in tough financial shape.
"While I believe we have to have retooling going into next year, if in the short run the only way we have to be able to get some immediate help is to take a portion of that, I would very reluctantly do that — but only because I believe President-elect Obama is going to be focused on retooling and on a manufacturing strategy next year," said Sen. Debbie Stabenow, D-Mich.
The White House said the government shouldn't send any more money to the struggling auto industry on top of the already-approved loans.
"We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success," said White House Press Secretary Dana Perino.
Sen. Mitch McConnell, R-Ky., the minority leader, said that redirecting the existing loans was "a sound way to go forward," and that he was working with Democratic Leader Harry Reid of Nevada to set a vote on such a plan.
"The auto industry obviously is very important, very important to my state, but there is a way to do this," said McConnell, who has two Ford plants and a GM plant in his state.
Paulson, testifying on the House side, defended the administration's handling of the massive $700 billion bailout for the financial industry and said it should remain off-limits for Detroit, no matter how badly the automakers need help.
"There are other ways" to help them, he said.
At the same time, he testified, "I think it would be not a good thing, it would be something to be avoided, having one of the auto companies fail, particularly during this period of time."
The industry mounted a feverish lobbying effort to secure funds they said were vital to their survival — and the health of the broader economy. In an e-mail marked "urgent" and sent to owners of GM vehicles, Troy A. Clarke, president of GM North America, pleaded with them to e-mail their representatives in the House and Senate in support of a "bridge loan" for the industry — and ask their friends and family to do the same.
"Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid," Clarke said in the message.
That argument could be vital as bailout fatigue threatens to sap support for the carmaker aid.
16:48 | Filed Under Business And Finance | 0 Comments
Lawmakers grill Paulson on bailout plan
Paulson pressed on help for distressed homeowners
updated 4:36 p.m. ET Nov. 18, 2008
WASHINGTON - Faced with exasperated lawmakers upset by shifts in bailout strategy, Treasury Secretary Henry Paulson launched a spirited defense Tuesday of his handling of the $700 billion program and expressed fresh reservations about tapping the pool for mortgage guarantees to relieve skyrocketing home foreclosures.
Members of the House Financial Services Committee grilled Paulson for not doing enough to help distressed homeowners and for failing to force banks that get some of the bailout money to specifically use it to bolster lending to customers, one of the prime reasons behind the rescue package.
"It is essential" that some of the bailout money be used to ease foreclosures, said the panel's chairman, Rep. Barney Frank, D-Mass., a key player in shaping the package that Congress passed and President George W. Bush signed into law Oct. 3.
Amid fits and starts in the administration's rollout and direction of the program, "I have to say at this point that public confidence in what we have done so far is lower than anybody would want it to be, to the point where it could be an obstacle to further steps," Frank lamented.
In a break with the administration, Federal Deposit Insurance Corp. Chairman Sheila Bair, made a fresh pitch for using $24 billion of the bailout pool to help Americans at risk of losing their homes. House Speaker Nancy Pelosi is urging Paulson to support the FDIC plan.
"As foreclosures escalate, we are clearly falling behind the curve," Bair warned the panel. "Much more aggressive intervention is needed if we are to curb the damage to our neighborhoods and broader economic health."
Although Federal Reserve Chairman Ben Bernanke told lawmakers that in cases of some home loans, the FDIC plan could saddle heavy costs on the government, he said it is still a "very promising approach."
While Paulson was resistant to using some of the bailout money to provide mortgage guarantees, he said the administration will look for ways to provide foreclosure relief.
Some Democrats also prodded Paulson to divert $25 billion of the bailout money to help Detroit automakers. Paulson, however, didn't budge in his opposition.
"I don't see this as the purpose" of the bailout program, which is intended to stabilize jittery financial markets and get lending flowing more freely again, Paulson told the panel.
The Treasury chief found himself on the hot seat just one week after he officially abandoned the original rescue strategy of buying rotten mortgages and other bad assets from financial institutions. That had been the main thrust of the plan Paulson and Bernanke originally pitched to lawmakers.
Focusing the bailout program on infusing billions into banks — and possibly other types of companies — to pump up their capital and bolster lending to customers was deemed a faster and more effective approach to stabilizing the financial system than the original centerpiece of the plan, Paulson said.
Buying financial institutions' toxic debts would have required a "massive commitment" of the bailout money, Paulson told the panel. As economic and financial conditions quickly worsened, it became clear that the first installment of the money — $350 billion — for that purpose "simply isn't enough firepower," he said.
It's crucial that the administration be nimble in assessing changing conditions and adapt the bailout strategy accordingly, Paulson said.
"If we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract," he said. "There is no playbook for responding to turmoil we have never faced. We adjusted our strategy to reflect the facts of a severe market crisis."
But lawmakers worried the administration was sending confusing signals to taxpayers and Wall Street investors.
"It is in the best interest of, not only the economy, but also of the public, that as we shift and improvise on occasion that we clearly communicate the objective and the basis for what we're doing," said Rep. Spencer Bachus, R-Ala. "I have a particular concern and that's that we don't appear to have an exit strategy."
Treasury will focus on rolling out a capital injection program to pour $250 billion into banks in return for partial ownership stakes in them, Paulson said. And, the department will search for new ways to boost the availability of auto loans, student loans and credit cards, which have been become harder to get due to the credit crisis.
Specifically, the department along with the Federal Reserve, is exploring using some of the bailout money to bankroll a new loan facility designed to help companies that issue credit cards, make student loans and finance car purchases. Paulson said he expected putting up only a "relatively modest share" of the bailout money for this facility.
So far, the Treasury Department has pledged $250 billion for banks and has agreed to devote $40 billion to troubled insurer American International Group_ its first slice of funds going to a company other than a bank. That leaves just $60 billion available from Congress' first bailout installment of $350 billion.
Paulson said he is not planning to initiate another capital injection program beyond those already announced. Thus he's unlikely to tap the remaining $350 billion before the Bush administration leaves office on Jan. 20.
The idea behind the capital injection program is for banks to use the money to rebuild reserves and lend more freely to customers. However, banks do have the leeway to use the money for other things, such as buying other banks, paying dividends to investors or bonuses to executives. That has touched a nerve with some lawmakers.
"My constituents are telling me that many of them still cannot get access to credit," said Rep. Carolyn Maloney, D-N.Y.
Locked-up lending is a prime reason why the U.S. is suffering through the worst financial crisis since the 1930s. All the fallout from the housing, credit and financial crises have badly hurt the economy, which is almost certainly in recession, analysts say.
Paulson said the U.S. had "turned a corner " in averting a financial collapse, but he warned "there's a lot of work that still needs to be done in terms of the recovery of the financial system."
16:42 | Filed Under Business And Finance | 0 Comments
