Australia is going for it!

[Ausprop]

fantastic... about time this country reached some of its potential

"However, the bank said yesterday that the fastest population growth since the 1960s and rapid growth in business investment meant growth potential could now be much higher.

Business investment is building Australia's stock of plant and buildings at a rate of 5 per cent a year, double the rate of the 1990s and much higher than in any other advanced country. "

http://www.news.com.au/business/story/0,27753,26315375-462,00.html

 

[Rolf Latham]

the question is though where is the money coming from ......all this new investment doesnt seem to be coming from Australian Banks

ta
rolf

 

[Nommy]

the question is though where is the money coming from ......all this new investment doesnt seem to be coming from Australian Banks

ta
rolf

I see some major players coming from overseas. Koreans are buying up big on the Gold Coast and one project currently underway at the moment looks like it will be fully funded from overseas banks. First stage $250M, 3 stages of approx $800M project.

Also a few changes to the FIRB to makes things a little easier to implement.

http://www.firb.gov.au/content/policy.asp

 

[Ausprop]

yes I have heard a lot of foreign money being directed in... there is a lot of liquidity but our local moron banks aren't lending. The next year or 2 should see them get a good kicking

 

[Nommy]

yes I have heard a lot of foreign money being directed in... there is a lot of liquidity but our local moron banks aren't lending. The next year or 2 should see them get a good kicking

Big end stuff is still a good 12-18 months away. Over 50% of funding is borrowed by our banks from offshore. And at the moment interbank lending is still quite tight and the margins are not profitable as they used to be pre-gfc. Even more unprofitable for the smaller tier institutions which need to pay more than the what the big 4 pay.
Thats why the likes of macquarie etc have pulled out of the resi market.

 

[JulieW]

the question is though where is the money coming from ......all this new investment doesnt seem to be coming from Australian Banks

ta
rolf

A popular view is that super cheap cash in the US is being taken off-shore to purchase speculative investments (ie free money to try and win a percentage on - the so called 'carry trade').

If this is a major part of the investment in Australia then it's not particularly good for Australia since an improved US Dollar (ie the investors can earn a safe percentage in US investments) might mean an outflow of liquidity from Australia. Hence the danger of RBA cash rate being so attractive. The old what goes up must come down theory.

If others are right and Chinese and Indian money is the more significant for Australia then I'd suspect we've similar problems since, again, the popular view is that Chinese and Indian investors are trying to spend as many US dollars as they can before the US dollar is officially devalued or inflation steals a large percentage. ( I saw that the Barefoot Investor gave number 10 of Ten Ways to Lose Money, as 'own US dollars').

As another post somewhere said, these are the good old days, so I'm trying to not get too complacent and working hard at the IP and economics learning curve. After all we're barely 20 million people with a tiny little economy in a great white shark ocean, even if we are the Lucky Country.

 

[Nommy]

A popular view is that super cheap cash in the US is being taken off-shore to purchase speculative investments (ie free money to try and win a percentage on - the so called 'carry trade').

If this is a major part of the investment in Australia then it's not particularly good for Australia since an improved US Dollar (ie the investors can earn a safe percentage in US investments) might mean an outflow of liquidity from Australia. Hence the danger of RBA cash rate being so attractive. The old what goes up must come down theory.

If others are right and Chinese and Indian money is the more significant for Australia then I'd suspect we've similar problems since, again, the popular view is that Chinese and Indian investors are trying to spend as many US dollars as they can before the US dollar is officially devalued or inflation steals a large percentage. ( I saw that the Barefoot Investor gave number 10 of Ten Ways to Lose Money, as 'own US dollars').

As another post somewhere said, these are the good old days, so I'm trying to not get too complacent and working hard at the IP and economics learning curve. After all we're barely 20 million people with a tiny little economy in a great white shark ocean, even if we are the Lucky Country.

Well Ben Bernanke has recently said that rates will not rise in the U.S. We are already seeing the US dollar being used as a carry trade which will boost commodity based currencies.

I've just finished watching http://www.youtube.com/watch?v=VebOTc-7shU

Fall of the Republic, discusses the G20 discussions to drop the US dollar and also sheds some light on the arguments on why the global tax on carbon emissions is complete and utter crap. Its about 2 and a half hrs.

 

[DeeHwa]

Well Ben Bernanke has recently said that rates will not rise in the U.S. We are already seeing the US dollar being used as a carry trade which will boost commodity based currencies.

I've just finished watching http://www.youtube.com/watch?v=VebOTc-7shU

Fall of the Republic, discusses the G20 discussions to drop the US dollar and also sheds some light on the arguments on why the global tax on carbon emissions is complete and utter crap. Its about 2 and a half hrs.

If we have learnt anything from the GFC, it is that we will see a permanent and irreversible shift in our global economy. The world will never rely so much on the U.S again (nor dare to), and to a lesser extent, the European Union. No longer will the world be hostage and leveraged so much against the health and performance of the known world (which used to be only the U.S and Europe and maybe Japan). Today, we see the rise and rise of China and India and a new world order will be born. In 50 years time, the financial capitals may no longer be London and New York, but Mumbai and Shanghai. We in Australia, shall not dread what the U.S. stockmarket is doing overnight, but worry more on the simultaneous performance of the Mumbai and Shanghai index. A shifting world order...certainly interesting times ahead!

 

[joeExpat]

I've just finished watching http://www.youtube.com/watch?v=VebOTc-7shU

Fall of the Republic, discusses the G20 discussions to drop the US dollar and also sheds some light on the arguments on why the global tax on carbon emissions is complete and utter crap. Its about 2 and a half hrs.

Sorry, you wasted your time watching this US right wing conservative conspiracy theory crap.

 

[Graemsay]

Something's struck me recently:

• Eight banks in the world currently have AAA credit ratings. Four are Australian.
• There was a survey of top financial centres that ranked Sydney as second after New York.

Could Sydney come out of the GFC as a top tier financial centre, spoken of in the same breath as New York, London or Tokyo?

Australia's English speaking, there are strong trading links with Japan and China, and it's in the right sort of time zone for the Pacific Rim countries.

I don't know if it's likely, but it's certainly a possibility...

 

[JulieW]

Sorry, you wasted your time watching this US right wing conservative conspiracy theory crap.

Remember the good old days when it was the communists who had the conspiracies!

Actually, conspiracy or not, these sort of shows bring food for thought and I think it's a good thing to seek your information from a wide variety of sources, even the ones with a good sampling of augury.

I subscribe to a collection of 'economic theorist' type newsletter (such as 'Daily Reckoning' and I had to laugh at one of the latest headlines on one - 'what happened to the stock market crash?". Almost plaintiff, but they do give food for thought even if I'd take their views to a number of other sources before acting.

 

[boz]

Something's struck me recently:

• Eight banks in the world currently have AAA credit ratings. Four are Australian.
• There was a survey of top financial centres that ranked Sydney as second after New York.

Could Sydney come out of the GFC as a top tier financial centre, spoken of in the same breath as New York, London or Tokyo?

Australia's English speaking, there are strong trading links with Japan and China, and it's in the right sort of time zone for the Pacific Rim countries.

I don't know if it's likely, but it's certainly a possibility...

the 4 major australian bank are AA rated (no AAA rated banks in Australia).
one of the reason why there are not many AAA rated banks is that they can't have a rating higher then the country they are in.
There is no way Sydney can get financial capital of the worlds. i hope one day we won't need any of those financial centre where nothing phisical and useful is produced.
In any case australian top 4 banks have somewhat 1.5 tril$ of lending (rising) and obviously a similar amount of assets backing those lending. We could end up being ahead of much bigger countries with AUS banks profit very good untill those assets value hold up with debt