Insight SBS Tues 7.30 Sep 9 - Bursting the Bubble

[MichaelW]

Did I mention Im a bear on IR cuts? I dont think I did...

That would be a beer bearing bear then?

OK, so long as we're posting links, how about this one:

http://business.smh.com.au/business...-says-economy-in-recession-20080911-4e2c.html

New Zealand's central bank cut its benchmark interest rate by a half-point to 7.5%, more than expected by most economists, saying the economy is in a recession and inflation will slow.

``With medium-term inflation pressures expected to ease, it is appropriate to move toward a less restrictive stance,'' Reserve Bank Governor Alan Bollard said in a statement in Wellington today. The half-point cut ``is warranted in light of tightness of credit conditions and the time it will take to affect actual interest rates faced by households.''

And the AUD is taking a caning as the world treats us Tasman cousins the same. Won't be long and our RBA will be singing off the same hymn sheet.

Cheers,
Michael

 

[Aaron Sice]

i was at a 50th not long ago - an old work colleague of mine who i have kept in contact with.

he works in Shanghai.

they need to house 200 million people over the next 10 years - that two hundred million people over ten years.

that's the population of Australia EVERY YEAR.

anyone on earth that thinks that their commodity requirement will slow has their head up their a r s e. speculators can play with commodity futures all they like - there will be no stopping the chinese modernisation race.

 

[Token Funder]

i was at a 50th not long ago - an old work colleague of mine who i have kept in contact with.

he works in Shanghai.

they need to house 200 million people over the next 10 years - that two hundred million people over ten years.

that's the population of Australia EVERY YEAR.

anyone on earth that thinks that their commodity requirement will slow has their head up their a r s e. speculators can play with commodity futures all they like - there will be no stopping the chinese modernisation race.

Mining accounts for about 10% of GDP. It ain't enough to carry the entire joint, hence the two speed economy and an ever increasing Current Account Deficit.

http://www.rba.gov.au/Statistics/Bulletin/H01ahist.xls

Spending more than you earn assists with the delusion of prosperity, no more. That we feel wealthier than those who live within their means is just like the fact that the drunk man is often happier than the sober one

 

[Aaron Sice]

hang on, i'm talking about china's requirement for our resources, not the way we spend what they pay us...

 

[plusnq]

Mining accounts for about 10% of GDP. It ain't enough to carry the entire joint, hence the two speed economy and an ever increasing Current Account Deficit.

http://www.rba.gov.au/Statistics/Bulletin/H01ahist.xls

Spending more than you earn assists with the delusion of prosperity, no more. That we feel wealthier than those who live within their means is just like the fact that the drunk man is often happier than the sober one

Hi TF

So we should drink and spend more to be happy? I knew I stuffed it up somewhere along the way.



Cheers

Shane

 

[BayView]

they need to house 200 million people over the next 10 years - that two hundred million people over ten years.

that's the population of Australia EVERY YEAR.

anyone on earth that thinks that their commodity requirement will slow has their head up their a r s e. speculators can play with commodity futures all they like - there will be no stopping the chinese modernisation race.

Can you imagine what their Country - indeed; the world, will be like in 50 more years?

Haven't these drop kicks heard of birth control?

Thank God I won't be around.

 

[willair]

Dont forget tonight

Kim5;,I had a look at the sideshow,nothing new, but it does give you an idea on how people think,that's about all..willair..

 

[Beef_Hooked]

I had to turn over to Grand Designs too.

Not because I disagreed or thought they were all whingers, but purely due to the fact that having done my bit for the economy last week, I now sit in front of a 42" plasma (thanks to all involved for the great advice on the plasma vs LCD thread).

I just kept freaking out at all the extreme close ups.

I can only take so much pore.

Cheers,
Beef.

 

[tubs]

Well, I finally watched it. The repeat just finished (but I think its on again on Monday).

I agree with what everyone has said. The lady with the flower wrapping business was frustrating. Businesses can go down but her's has dropped something like 90%+ in 6 months, which suggests that her problem might be a bit closer to home than the economy.

And the guy with the business who sold it even though it was going well? Chicken Little - the sky is falling! Somebody will probably take that business and make a fortune from it, and somebody was right about how the father is just passing his fears onto his son.

Steven Keen was funny. Everyone had a funny look on their face when he started talking of 40% falls. He got very emotional when he was talking about it. Sort of like he had a point to make, but nobody was interested in listening. I thought he was going to cry.

Other than that, the show was a complete waste of time. I thought SBS was for smart people. It was kind of like 60 minutes.

 

[Aaron Sice]

yep i just finished too - bad programme. wish i'd have used that time finishing studying the last round of put/call premiums instead.

 

[topcropper]

Can you imagine what their Country - indeed; the world, will be like in 50 more years?

Haven't these drop kicks heard of birth control?

Thank God I won't be around.

We are talking China aren't we...

China has done something about the looming population growth disaster, they have implemented the one child policy, and massive family planning initiatives and good on them. China's population is still growing massively though, and it's not because they are having too many kids, it's just that there are now so many child bearing adults now having one kid.

Just shows how long it takes to slow population growth. It's like using a row boat to pull up a half million tonne oil tanker. Takes a long time.

I would think China's population should stabilise before too long.



China needs to house and find jobs for hundreds of millions of people as China industrialises it's agriculture. China had 50% of it's workforce involved in 3rd world agriculture not very long ago. When it's industrialised, you only need a few percent, like Australia and the US. Everyone else can then go and do other equally productive jobs instead of working the soil.

See ya's.

 

[boomtown]

Interesting I thought that 80% of the population was still on the farm so I checked Wikipedia

Labour force by occupation 2005 (China) agriculture (45%), industry (24%), services (31%)

Labour force by occupation 2005 (Australia) agriculture (3.6%), mining (1.1%), industry (20.2%), services (75.1%)

Its kinda funny how you can run 75% of an economy on services.

 

[WinstonWolfe]

Its kinda funny how you can run 75% of an economy on services.

easy....sell off assets like mines and farms, and use proceeds to pay other economies to produce goods for you to consume. only thing left is services. but progressively they are being outsourced to skilled and unskilled labour here on working visas.

will be interesting when there's no more assets to sell off.

 

[boomtown]

I would agree with you except:

I worked on a deal last year. An Indian company was buying a big factory in Indonesia.

They used Australian lawyers and American investment bankers. They sure as hell didnt use Indonesian lawyers and Indian investment bankers. Why do you think that is.

 

[topcropper]

Interesting I thought that 80% of the population was still on the farm so I checked Wikipedia

Labour force by occupation 2005 (China) agriculture (45%), industry (24%), services (31%)

Labour force by occupation 2005 (Australia) agriculture (3.6%), mining (1.1%), industry (20.2%), services (75.1%)

Its kinda funny how you can run 75% of an economy on services.

Yeah, I love looking at stats like that. What about those mining figures for Australia? 1.1% by occupation, generating nearly 10% of GDP, and providing way over 50% export income...

That's why we can have 75% working in services and still have a viable economy. Long live the resource boom eh. But the Poms have 80% working in services and no resource boom, and they are going to be hammered bad.

See ya's.

 

[boz]

I think he's an absolute Joker, Joker!

Two words for you demand and supply. No, make that three, plus affordability. If prices come off even 20% then the affordability equation changes markedly and the demand / supply imbalance would result in a lot of buyers entering the market. But don't take my word for it, Gittins et al basically made the same argument. Even the bearish Alan Kohler is now arguing he might have got it wrong and prices could boom from here due to demand/supply imbalances.

Cheers,
Michael

the Joker is the Economist professor Steve keen that point out the Japan house drop (I think he forgot to mention Germany that is still off the peak of 15 years ago).
I agree that is just 2 factor, demand and supply. The supply is quite defined and easy to estimate. Demand is far more complex then population numbers, affordability effect demand, employment as well and availability of money is another big one effecting demand. I found much more of a joke those analysts that give you demand numbers having no idea what will happen to the economy in few months time or to unemployment or to lending costs.