Is Australia facing an economic downturn/recession?

[willair]

I thought you were above these inane one liners Willair. I agree that we are not powerless so what do you suggest? My tactic is already well known to any keen reader, and I would have thought Hobo would be the last to be accused of "acceptance". Definitely proactive.

I was not trying to put HoBoJo down in any way he knows what i'm about,but one does wonder when one reads other posters and the worry that they carry with their investments,,..

With your question about what do others investers suggest,i have a white board full of small cap miners and still waiting,and this is only the start of the slide from the way i see things,maybe some one off large hits on the top or lower end Banks over the next 12 weeks,there"s100k in there somewhere just have to find it,,but we are all different.

 

[willair]

And if Gillard manages to get her Carbon Tax through, then you can be guaranteed that the country will go to ***** even faster than it will anyway.

Well someone gotta pay for all Labor #####hit,Miss Gillard told the Australian Public prior to the last ring-in There would be no Carbon Tax
under her Government,if people can't see through this set-up then bend over and vote as you will...

 

[Aaron Sice]

I've successfully unenrolled to vote!

It's been great, apparently when you move you are "required" to fill in your new details or be removed from the register.

I declined all options, declined all requests for phone calls and letters and lo and behold, I'm officially unenrolled 12 months later.

Magic. Now I don't have to play charades with The Party.

 

[tom32]

I've successfully unenrolled to vote!

I don't want to sound patronising but that is a shame Aaron.

I know in isolation it makes no difference anyway but democracy is made strong only when those people with the capacity to know good policy from bad are engaged (they vote) with the system.

If even those who understand policy and it's influence on our collective standard of life do not vote then we will probably end up further down this spiral of ordinaryness and the political parties of the future will be made up completely of Tony Abbot / Julia Gillard and Wayne Swan Types at best.

I would much rather see Lyndsey Tanners and Malcolm Turnbulls rise to the top in both parties but it would seem that anyone with two braincells or more to rub together gets cut down in Australian politics by the masses and never makes it to the top job.

 

[Aaron Sice]

... but it would seem that anyone with two braincells or more to rub together gets cut down in Australian politics by the masses and never makes it to the top job.

you can think what you like, but my thoughts are best diverted to ways to stay afloat amongst the madness - i care very little now who runs this country of dumb luck for the exact reason you just stated - and it makes no difference.

arguing about politics, for me, is about as productive as arguing holden versus ford. they're both red versus blue arguments and do nothing but polarise a nation.

my vote, and the votes of others, clearly make no difference on where this country is headed. abbott won the election hands down but a few back room deals with undemocratic preferences and the people we didn't vote for are running the country.

al gore anyone?

i'm not even going to apologise. if they want my vote, they can start being smart.

 

[Shadow]

I think the hit to the GDP tomorrow could severely weaken the Australia dollar, there are investments/trades that would benefit from that.

Hi Hobo-jo, did you position yourself to benefit from any of those trades?

http://news.ninemsn.com.au/article.aspx?id=8256047

$A higher after weak GDP numbers

13:02 AEST Wed Jun 1 2011

The Australian dollar was a third of a US cent higher at noon, after official figures showed an economic downturn in the March quarter, the first contraction in two and a half years...

Anyway, looks like large interest rate hikes are off the table for now, and it's good to see house prices rising in Sydney even under the current interest rate environment.

 

[hobo-jo]

Hi Hobo-jo, did you position yourself to benefit from any of those trades?
http://news.ninemsn.com.au/article.aspx?id=8256047

I have positions in PMGOLD with a medium term expectation of a lower AUD. I would never take a position based on expectations of daily movement from one announcement.

 

[willair]

I have positions in PMGOLD with a medium term expectation of a lower AUD. I would never take a position based on expectations of daily movement from one announcement.

As our markets follow the US markets in time delay,it will be a interesting few weeks ahead with the way the selloff over night on the NYSE,and this is only the start..


http://www.nyse.com/

 

[bluestorm]

As our markets follow the US markets in time delay,it will be a interesting few weeks ahead with the way the selloff over night on the NYSE,and this is only the start..

Yeap. Their economic data came in worse than they expected, and the recovery that everyone over there was saying was going to happen, just isn't. Nor is a Eurpoean recovery. All this will slow China, and therefore Australia.

All the economic boffins yesterday said that the Australian March GDP figures were a one off due to the natural disasters, and June will be +1% GDP growth. I very much doubt this, and think that the June figures will be negative and show that Australia is in recession.

I'd love to be an economist. Get payed a lot of money for being consistantly wrong.

 

[willair]

Yeap. Their economic data came in worse than they expected, and the recovery that everyone over there was saying was going to happen, just isn't. Nor is a Eurpoean recovery. All this will slow China, and therefore Australia.

All the economic boffins yesterday said that the Australian March GDP figures were a one off due to the natural disasters, and June will be +1% GDP growth. I very much doubt this, and think that the June figures will be negative and show that Australia is in recession.

I'd love to be an economist. Get payed a lot of money for being consistantly wrong.

The question is Bluestorm if the ASX drops again in a big way as i think it will,when will you buy back in,, i don't care what Economist think most of their data is 10 weeks old,but if you are waiting for the inner city high end properties to drop 40%,it's just not going to happen,the amount of new people from China-India,that walk in this country each hour to start a new life are cashed up,and they also have dreams,just get out and make it happen..

 

[hobo-jo]

As our markets follow the US markets in time delay,it will be a interesting few weeks ahead with the way the selloff over night on the NYSE,and this is only the start..
http://www.nyse.com/

Yes interesting times. In my opinion the end of QE2 is going to bring around a huge drop in asset prices across the board (probably including the metals in USD for the short term).

As bluestorm suggests there has been no recovery. We've only been seeing the effects of central banks and governments printing/spending recklessly to try and get our economies back on track.

In my opinion PMGOLD (AUD Gold proxy on the ASX) still has a long way higher to go this year. We could see $1700+ even with a pullback in the US price simply due to a falling AUD.

Our dollar doesn't like systematic risk the likes of which we see coming out of Europe at the moment (Greece downgraded again overnight), said as much in a blog post here the other day with two charts showing the correlation:
http://www.bullionbaron.com/2011/05/gold-priced-in-australian-dollars-about.html


To be completely honest I was expecting the GDP figure to be worse than it was, we could see the GDP slightly positive for June quarter with recession to come slightly later in the piece (assuming that technical recession is based on the raw data and not seasonally adjusted).

 

[Aaron Sice]

Yes interesting times. In my opinion the end of QE2 is going to bring around a huge drop in asset prices across the board (probably including the metals in USD for the short term).

To be completely honest I was expecting the GDP figure to be worse than it was, we could see the GDP slightly positive for June quarter with recession to come slightly later in the piece (assuming that technical recession is based on the raw data and not seasonally adjusted).

that's my understanding, too.

 

[Corey Batt]

Selling out the last of my positions (bar two holdings) and putting wiping out a large portion of the home loan. Money is on recession, hopefully mining doesn't get wiped out too much. :/

 

[Aaron Sice]

Selling out the last of my positions (bar two holdings) and putting wiping out a large portion of the home loan. Money is on recession, hopefully mining doesn't get wiped out too much. :/

there's still a multitude of ways to profit in a recession.

my current position doesn't allow me to, therefore i'm selling out.

god forbid property be liquid. you should hear some of the crap i get about selling now - i don't care if the market DOES come back a bit in the second half of the year - i'm not waiting to find out.

so i understand - very well - where you're coming from there.

 

[Sunfish]

Selling out the last of my positions (bar two holdings) and putting wiping out a large portion of the home loan. Money is on recession, hopefully mining doesn't get wiped out too much. :/

That would still make sense if you were a share investor. Hard to make a quid anywhere.

 

[bluestorm]

Yes interesting times. In my opinion the end of QE2 is going to bring around a huge drop in asset prices across the board (probably including the metals in USD for the short term).

There are suggestions from some in the US that because the US Fed is holding so much money in rubbish assets it bought during the GFC, that they will have no option but to eventually have QE3.
Central Bankruptcy – Why QE3 is Inevitable

The question is Bluestorm if the ASX drops again in a big way as i think it will,when will you buy back in,, i don't care what Economist think most of their data is 10 weeks old,but if you are waiting for the inner city high end properties to drop 40%,it's just not going to happen,the amount of new people from China-India,that walk in this country each hour to start a new life are cashed up,and they also have dreams,just get out and make it happen..

For property, late 2013, early 2014. The property spruikers look at 30% drop and say no way. But it's really only a 3% compounded drop over the next 7-8 quarters, with inflation factored in. People from China and India migrate to all corners of the world, not just Australia. It didn't protect those property markets from correcting.
For now, I'm now a low 25% LVR, as unlike many here, I do believe there will be a correction in property.
Meanwhile making money in short term stock trades.

 

[Sunfish]

King World News has some interesting interviews and Jim Rickards is no exception.

It is his contention that the Fed will not have QE3 but will skip to QE4eva. This is because they have bought out so much debt that they will have trillions maturing each year: Enough to keep stimulating if they plough it all back. Same effect as QE3 but without the headlines.

 

[Aaron Sice]

There are suggestions from some in the US that because the US Fed is holding so much money in rubbish assets it bought during the GFC, that they will have no option but to eventually have QE3.
Central Bankruptcy – Why QE3 is Inevitable

more like QE4eva.

[/URL]
as unlike many here, I do believe there will be a correction in property.

i think most people expect a general correction - you keep tarring everyone with the same brush just because they're not you.

 

[bluestorm]

It is his contention that the Fed will not have QE3 but will skip to QE4eva. This is because they have bought out so much debt that they will have trillions maturing each year: Enough to keep stimulating if they plough it all back. Same effect as QE3 but without the headlines.

This could well be true. Especially now that the Fed have changes their accounting rules, and can book any losses directly to the Federal deficit, as it's basically insolvent.

The US is completely stuffed, as now doing all sorts of shifty accounting to try and keep the whole thing from collapsing. If people think that huge problems in the world's largest economy won't have profound effects on the Australian economy, then no sympahy when people get wiped out in a deep recession.
Europe has to keep scrambing to contain the huge debt problems there.

Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30 to 1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51 to 1! If the value of their portfolio were to fall by just 2% the Fed itself would be wiped out.

The Fed acknowledged this insolvency risk on January 6th when it modified its accounting rules to ensure that it never technically runs out of capital. In a system that would make Enron jealous, the new gimmickry allows Fed losses to be booked directly as Treasury liabilities. In other words, just throw it on the deficit pile with the rest of the Federal red ink.

 

[Sunfish]

more like QE4eva.

Was this your original work?