RECESSION - what does it really mean to YOU?

BayView

BayView

The recession is indicated in the media and by the Gubbermint to be a disaster.

But what effect will it really have on you, or me?

From where I stand, most people couldn't give two hoots and it won't effect their lives at all. It's mentioned in passing as something terrible; like hearing about a car accident in Central Victoria, but it has no direct impact on us, so no-one pays much attention.

The media seem to always bang on about it; similar to the way they constantly go on about the underworld figures, and yet I've never, ever heard of anyone talking about them around the dinner tables, because no-one cares about them. I think this is the same with the recession; the media think it is important to us, and what we want to hear about, so therefore focus on it.

This is certainly the case for me and always has been. Life goes on as normal while the media bleat on about how bad things are.

I don't really care if the GDP is neg, or the dollar is at USD$.63, or there is a deficit and so on. My fuel has dropped in price which is good, but my bananas are expensive; life is normal otherwise pretty much. My lessons have dropped off a bit, but I won't starve, lose my job or my houses.

Of course; exporter/importers will be affected by the dollar, but most people aren't these.

When you hear the word RECESSION, what reaction do you have?
 
BayView said:
The recession is indicated in the media and by the Gubbermint to be a disaster.

But what effect will it really have on you, or me?

From where I stand, most people couldn't give two hoots and it won't effect their lives at all. It's mentioned in passing as something terrible; like hearing about a car accident in Central Victoria, but it has no direct impact on us, so no-one pays much attention.
Click to expand...


Most people couldn't give two hoots about it, because it hasn't really started yet, and hasn't really effected anyone yet except for share owners who's share portfolio's have been hammered.

However if the recession is as bad as the share market is predicting, then it will effect most people, especially those who are highly leveraged. It's just that the share market being a leading indicator, is ahead of everything else.

If the recession is as bad as the share market is predictiing, there will be huge job loses. There will be wage drops. There will be rent drops. There will be property value drops much more than now. People will lose their houses and investment properties. Australia's wealth is going to plummit, as exporters who 6 months ago were rolling in it, now can't even make a profit.



As for myself, It's already effected me greatly. My shares have nearly halved in value from the top, and I will probably make a loss this year from my business even though I look like having another productive season with above average grain yields. My farm has dropped in value, but it's probably only back to where it was 12 months ago before the soft commodity boom went silly.

I find it strange that so many people on here think that this recession won't effect them, just business's and business owners. The total value of Australia's residential property market was over double that of the share market. Since share have crashed, it would now be triple the value or even more. Business profits plummit, and so will property values. Where do people think the money comes from to spend on houses..?? Out of thin air maybe..??

Being debt free, I reckon I will have a good chance of being an eventual winner once things improve.

See ya's.
 
I look at my excel spreadsheets and everything is ticking over nicely.

I look at recent sales in my area and while volume has dropped away the prices are about where they should be - ie there have been no drops. Some of the current asking prices are actually 10 percent higher than last year.

On the flipside there is currently one mortgagee in possession in the area for a particularly expensive property which went to auction and was passed in so will be interesting to see how that pans out. I'm fully committed at the moment and not able to bid on the prop in question.

So while I haven't been touched (yet) I'm backing off spending a bit and just building up a bit more cash in the bank than I woud normally feel the need to hold. But so far as I can tell I'm not going to be hit by this in any meaningful way.

Unlike an acquaintance that rode Oz Minerals all the way down and is taking a 300k loss on that stock alone. I could set her up for life with 300k....
 
Depends on how you define "effected".

Many thousands of guys who thought they could retire on investments are having to work a few more years. They were the guys with direct share investments and/or super.

But you guys with res property are 10ft tall and bullet proof. Enjoy it while you can. :)
 
The recession is predicted, NOT here yet.

In answer to your question, I have so far benefited from the "downturn".

My already VE+ property is doing even better.
My VE- is now very close to VE+
Petrol is cheaper.
Fewer shoppers to compete with.


BUT. While some media is scaremongering about current tough times, the reputable commentators are PREDICTING a recession, and with it difficult times ahead.

It seems that Today Tonight and A Current Affair are talking about the tough times that actually haven't arrived yet for the majority of the population.

Of course those people with significant share holdings, and those depending on shares for retirement have been shaken up.

Just wait till next year when Joe and Wilma Bloggs get shaken up. Then we will hear bleating. I will be bleating too.

It is amazing to me that there is no protest movement against the regulators in the USA.

An angry mob of retirees camped outside their office?
Think Bankok airport protest.

Do people think this was an act of God??????
 
BayView said:
The recession is indicated in the media and by the Gubbermint to be a disaster.

But what effect will it really have on you, or me?

From where I stand, most people couldn't give two hoots and it won't effect their lives at all. It's mentioned in passing as something terrible; like hearing about a car accident in Central Victoria, but it has no direct impact on us, so no-one pays much attention.

The media seem to always bang on about it; similar to the way they constantly go on about the underworld figures, and yet I've never, ever heard of anyone talking about them around the dinner tables, because no-one cares about them. I think this is the same with the recession; the media think it is important to us, and what we want to hear about, so therefore focus on it.

This is certainly the case for me and always has been. Life goes on as normal while the media bleat on about how bad things are.

I don't really care if the GDP is neg, or the dollar is at USD$.63, or there is a deficit and so on. My fuel has dropped in price which is good, but my bananas are expensive; life is normal otherwise pretty much. My lessons have dropped off a bit, but I won't starve, lose my job or my houses.

Of course; exporter/importers will be affected by the dollar, but most people aren't these.

When you hear the word RECESSION, what reaction do you have?
Click to expand...

doesn't mean much to me but has been good for some work I have been doing in US dollars also shorted before the drop so all good here:D
 
topcropper said:
Boomer, you work for RIO don't you..??

Not worried about RIO's 40 billion dollar debt? Just wondering, because it would concern me if I worked for RIO.

See ya's.
Click to expand...

I don't actually work for Rio - I work for a supplier to all of the majors and a few of the bigger minors. I have not heard any respectable commentators predicting the demise of BHP (which would concern me).

*edit* As of this morning CEO has told staff not to plan any long holidays in January because they wont be approved - there is too much happening. Frankly I think thats a good sign generally for the Aussie economy.
 
Last edited:
My biggest concern re Recession is job loss. While my husband holds his job our property portfolio is looking dandy, and getting better with each IR drop. If there is no CG for a few years, that is fine. But working for RIO, we have started to notice the impact of the economy, in terms of decreased production, a lot less contract workers running around, vacated positions not being refilled, and a massive decrease in number of jobs advertised (ie down from 300 to 100 positions). My father works for Rio in WA, and apparently they are being strongly encouraged to take paid or unpaid annual leave over Xmas. There is a lot of belt tightening

So while I think my husbands role is important to the company (Emergency Management), you just never know, so I do feel a bit nervous. Fortunately, I work in healthcare in a role that should be recession proof, so can always increase my hours to cover the short-fall - but prolly not enough to cover an unemployed hubby....:eek:

Nadia
 
-I am very appreciative of how well structured and buffered we were/are going into a recession storm ...to ride it out. There are a lot of people doing it tough:

Sunfish:
Many thousands of guys who thought they could retire on investments are having to work a few more years. They were the guys with direct share investments and/or super.
Click to expand...

-Our small, local communities have been hit by this, people ready to enjoy their retirement, wont be, or trying to figure out how to...that hits home on a very personal level. I know these people, friends who have worked so hard, juggled jobs and raised families, contributed so much...


-I do see opportunity ...already it is possible/likely, my last two purchases possibly have been affected by economy events.

I am very thankful that we are doing okay when so many are doing it so tough.
 
boomtown said:
and everything is ticking over nicely.

....
Click to expand...

We must have different personalities.


I'm debt free and a food producer with most of my assets agricultural land, about as safe as can get. And I'm concerned.

Your geared over 90% into property at historically expensive prices and low affordability in a city that has boomed because of the commodity boom. You work for a supplier to resource companies when most commodities are currently below cost of production,,,,,
And your not concerned. :confused:


Interesting times ahead eh..??


See ya's.
 
topcropper said:
Most people couldn't give two hoots about it, because it hasn't really started yet, and hasn't really effected anyone yet except for share owners who's share portfolio's have been hammered.

However if the recession is as bad as the share market is predicting, then it will effect most people, especially those who are highly leveraged. It's just that the share market being a leading indicator, is ahead of everything else.

If the recession is as bad as the share market is predictiing, there will be huge job loses. There will be wage drops. There will be rent drops. There will be property value drops much more than now. People will lose their houses and investment properties. Australia's wealth is going to plummit, as exporters who 6 months ago were rolling in it, now can't even make a profit.



As for myself, It's already effected me greatly. My shares have nearly halved in value from the top, and I will probably make a loss this year from my business even though I look like having another productive season with above average grain yields. My farm has dropped in value, but it's probably only back to where it was 12 months ago before the soft commodity boom went silly.

I find it strange that so many people on here think that this recession won't effect them, just business's and business owners. The total value of Australia's residential property market was over double that of the share market. Since share have crashed, it would now be triple the value or even more. Business profits plummit, and so will property values. Where do people think the money comes from to spend on houses..?? Out of thin air maybe..??

Being debt free, I reckon I will have a good chance of being an eventual winner once things improve.

See ya's.
Click to expand...

What % of the ASX shares drop is due to forced selling from margin calls and other selling of equity to rebalance debt. Until someone can isolate this figure, you cant say that the fall in the ASX reflects solely the potential future prediction of economic affairs and company profits.
 
The thing which I dont get, is that companies are releasing figures for the last 3 months - ie well before the talk of recession came into focus. Yet those figures are showing signs of minimal if not negative growth. So the recession is already on us!

I think most people dont know what to expect in a recession. There was one in the early 90's, yet I really dont remember too much about it, yet we were a young family and just starting our own business, so it should have hurt us.

The shares tumble; I have to laugh when people say that they dont worry about the share market tumbling because they dont hold shares; I just wonder what they think their super is invested in!

Our SMSF is diversified, but it has taken a beating from the market tumble; but I think we can recover from it.

The housing market - unless people are forced to sell, people will just sit for a while. In 12 months time as we emerge, with low interest rates it will recover. I still think that property values have just been ridiculous of late, so a fall of around 20% from these stupidly high levels is really nothing. I never thought our PPOR property was worth what it was valued at anyway so that doesnt bother me at all.
 
chilliaa said:
What % of the ASX shares drop is due to forced selling from margin calls and other selling of equity to rebalance debt. Until someone can isolate this figure, you cant say that the fall in the ASX reflects solely the potential future prediction of economic affairs and company profits.
Click to expand...


Theres a hell of a lot of forced selling. That is a worry eh, and as shares get to ridiculous valuations and those forced to sell have sold, then the forced selling moves to other assets, like property.

Shares though have been sold down due to the forecast future profits being reduced greatly. And the sellers have been ahead of the fundamentals the whole time.

Shares are probably a bit oversold, especially if you have a decade long viewpoint like I do, however they mainly crashed do to the forecast economic climate going ahead. The sellers were right, as they usually are.

See ya's.
 
Interesting times indeed...

We are not as concerned as others that we know as hubby job is pretty much a guarantee. Our properties are CF+ and we have a resonable LOC and cash deposits so see us through 2years with no income at all - rent included.

We live a very basic life so not too worried at all. Currently slowly buying blue chips that are of good value for furture long term hold. Holding off on property purchases until mid next year I think for when some bargains might really start appearing... Slow and steady ;)
 
October housing results in, showing for the month of October:
Rismark data on housing showing 0.4% growth in housing prices
APN house prices showing 1.8% growth (but units showing -ve 0.8%)

So things so fair are not as dire as the media likes to make out. (Note also that this is for October, so we still have novembers rate cut to play out)
 
Those figures are not worth the paper they are written on..or should i say ... web page.

Where do Rismark gete there data? How accurate is it? When you say 'housing', which housing? What area(s)?

chilliaa said:
October housing results in, showing for the month of October:
Rismark data on housing showing 0.4% growth in housing prices
APN house prices showing 1.8% growth (but units showing -ve 0.8%)

So things so fair are not as dire as the media likes to make out. (Note also that this is for October, so we still have novembers rate cut to play out)
Click to expand...
 
chilliaa said:
October housing results in, showing for the month of October:
Rismark data on housing showing 0.4% growth in housing prices
APN house prices showing 1.8% growth (but units showing -ve 0.8%)

So things so fair are not as dire as the media likes to make out. (Note also that this is for October, so we still have novembers rate cut to play out)
Click to expand...

Remember there is a six month time lag between the time when a contract is exchanged and the time when statistic is published.

What we see published in October statistic is actually the state of the market six month ago.

Remember to allow for this time lag when you read the numbers. :)
 
Kenster said:
Remember there is a six month time lag between the time when a contract is exchanged and the time when statistic is published.

What we see published in October statistic is actually the state of the market six month ago.

Remember to allow for this time lag when you read the numbers. :)
Click to expand...

Ah this is a good point, i dont know if it represents contracts exchanged or contracts settled, thanks for that.
 
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