Is Australia facing an economic downturn/recession?

What outlook does our economy face over the short term?

  • TEOTWAWKI

    Votes: 6 3.1%
  • Depression

    Votes: 10 5.2%
  • Recession

    Votes: 42 21.8%
  • Slight Downturn

    Votes: 76 39.4%
  • Steady As She Goes

    Votes: 48 24.9%
  • Continue To Boom

    Votes: 11 5.7%

  • Total voters
    193
Interesting piece today from Unconventional Economist on the correlation between housing growth and consumption:
http://macrobusiness.com.au/2011/05/house-prices-and-consumption/

Could be in for further poor retail spending if the correlation is to continue...

Also delinquencies on the rise:
http://macrobusiness.com.au/2011/05/rmbs-arrears-above-gfc/

30+ day delinquencies at record levels (above the GFC), 90+ days aren't there yet but rising sharply.

Clearly not all is well under the surface.
 
The la Nina is decaying. All will be back to a different version of "normal" soon. LOL


It sure has caused some havock this year.

As buster says above, there is some interesting stuff going on around the world at the moment. Floods in northern US where they want it dry for planting corn and soybeans and drought and heatwave elsewhere, where grain crops are trying to fill with grain.


See ya's.
 
Of course it was. The reparations demanded by the French, Poms and Yanks were impossible.

Talk about unintended consequences!!!! You fine a nation for going to war with you so heavily that the only way out was to go back to war.

Germany needed a patriot and Hitler stood up.

I am not defending Hitler merely recalling history as I understand it.

Eh, I was talking the economy under the matured power of Hitler, as in 37-42.

And Hitler got into power because of the fear of communists. But this is a different thread.

With my partner changing work to a more exposed job, the thought of Australia going into a recession doesn't look so rosy.
 
We are in trouble because China will have no qualms about taking Australia for its needs. China has no respect of intellectual property...its a communist country, private property is not part of their ideology. Add to that that they steal tech, pattens, impede copyright laws etc etc, and I believe they will have no qualms about taking from us what they want.

All that is keeping them in check is the USA, but if their main threat is gone, I can see them taking Taiwan, and then Australia. Australia will be invaded in mere days. Even Canberra is worried about the rise of China, many reports have alluded to many military reports at the highest levels of Canberra perceiving this threat.

Haha you're absolutely right.

China - what an evil country. If only everyone can be like the USA which only just invaded two countries in the last few years and killed thousands of innocent people. But all this in good cause right? They finally got that Bin Laden guy. Maybe they'll stop invading now.

As said, I wonder how our eastern European friends feel about the regime sitting over in our representative democratic friend in America.
 
It sure has caused some havock this year.

As buster says above, there is some interesting stuff going on around the world at the moment. Floods in northern US where they want it dry for planting corn and soybeans and drought and heatwave elsewhere, where grain crops are trying to fill with grain.


See ya's.
I'm an AGW sceptic, but even I am wondering about the weather extremes. I just can't get on board with the alarmists' rhetoric but if someone were to quietly explain without trying to scare the pants off me, I'd be polite and listen. I might even learn something. :D
 
Whilst the USA dollar remains the world currency America can NEVER go belly up. It will be decades at least before their is anew reserve currency, their is simply no one to take the placeof the USA.

America still consumes 20-30% of everythign adn that is not going to change anytime soon. The usa is printing off more dollars for themselves adn everyone else has to use those devalued dollars. It does not hurt the USA, it hurts every other country that uses the dollars for trade.

They know full way that they are inflating away their debt and that is the ONLY way they know how to get back on track.

Everyone better hope the USA does not go belly up, The financial world will come to an end and we will experience a depression like never before.
 
I'm an AGW sceptic, but even I am wondering about the weather extremes. I just can't get on board with the alarmists' rhetoric but if someone were to quietly explain without trying to scare the pants off me, I'd be polite and listen. I might even learn something. :D

I'm with ya, SF.

Personally, I reckon we are merely experiencing yet another of the Earth's cycles of weather.

The fact that it is happening right at this point in time in terms of humans on the planet is irellevent I believe. We think we are the important factor in it all.

Yep; that's why in one tiny hiccup of Earth's weather fluctuations we can see hundreds of thousands of us ants wiped out.

http://earthquake.usgs.gov/earthquakes/recenteqsww/

This doesn't include typhoons, tornedoes, hurricanes, bushfires and so on. Did I forget Tsunamis?

Wake up people.

Things like Global Warming - I often see on the news where they state an amazingly hot day was enjoyed by all, then proceed to add that this broke the previous record set for the hottest day on that day.... some 100 odd years ago :eek:

Happens quite frequently over summer. :rolleyes:
 
Global.jpg

:d
 
Interesting piece today from Unconventional Economist on the correlation between housing growth and consumption:
http://macrobusiness.com.au/2011/05/house-prices-and-consumption/

Could be in for further poor retail spending if the correlation is to continue...

Also delinquencies on the rise:
http://macrobusiness.com.au/2011/05/rmbs-arrears-above-gfc/

30+ day delinquencies at record levels (above the GFC), 90+ days aren't there yet but rising sharply.

Clearly not all is well under the surface.

Hi hobo-jo


Do you realize that the Fitch Chart only goes back six and a half years and deals with residential mortgage-backed securities - mortgages that had been packaged up and sold off by the loan originators - and especially the "low-doc" variety.


Where in the report does it list 30+ day delinquencies are at record levels and would you show me where the 90+ days are listed on the report/chart.

Perhaps for a more rounded view from Fitchs you should have included this part of the report.


" Fitch's believes that the factors that have impacted mortgage performance in Q111 will be more or less temporary and an adjustment in the next quarters is likely."

Article by Michael Pascoe "The Age" concerning the Fitch report

http://www.theage.com.au/business/s...-bark-worse-than-its-bite-20110528-1f9r0.html


The prize for beating up the Fitch story the most went to the Herald Sun, which proclaimed: "Home loan defaults continue to soar as more households crumble under financial stress and fail to make mortgage repayments".

Fitch dealt with only one part of the housing market, residential mortgage-backed securities - mortgages that had been packaged up and sold off by the loan originators - and especially the "low-doc" variety, the closest we come to

sub-prime. And Fitch wasn't talking about defaults, but being 30 days late on making repayments - there's a difference.

Within those limits, yes, there had been an increase in non-performing loans from 1.37 per cent to 1.79 per cent and the low-doc figure certainly jumped from 5.7 per cent to 6.7 per cent - but the overall proportion of non-performing Australian mortgages is just 0.7 per cent.

That has ticked up a little from an even lower base, but in the general scheme of things it remains a low rate of non-performance.

But "HOME LOAN DEFAULTS NOT SOARING" doesn't make much of a headline.



Read more: http://www.theage.com.au/business/s...an-its-bite-20110528-1f9r0.html#ixzz1NiUbEyFH

Cheers

Pete
 
Do you realize that the Fitch Chart only goes back six and a half years and deals with residential mortgage-backed securities - mortgages that had been packaged up and sold off by the loan originators - and especially the "low-doc" variety.
Fair call re this being only part of the market, however they differentiate between prime and low-doc loans in the report. Low-doc arrears/delinquencies are much higher (almost 7% for 30 day arrears).

Where in the report does it list 30+ day delinquencies are at record levels and would you show me where the 90+ days are listed on the report/chart.
Record levels mentioned in first line of scribd document.

Agree that MSM tends to sensationalise all news.
 
Moody's Analytics economist Matthew Circosta said he now expects to see a 1.7 per cent contraction in growth in the first quarter, the biggest since the economy was last in recession in the early 1990s.
http://www.theaustralian.com.au/bus...atural-disasters/story-e6frg926-1226066438394

Will be interesting to see where GDP lands tomorrow.

-1.7%? -.03%?

Other credit, building and other figures reased more recently suggest this quarter is likely to be another negative one... which means technically we are likely already in a recession.

http://macrobusiness.com.au/2011/05/ouch-rate-hike-off-the-table/
 
Maybe we are,but that does not mean you have to take part in it,..

I thought you were above these inane one liners Willair. :eek: 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. :D
 
Hobo-Jo,

I see your bearish posts on property here and on hotcopper. I think we all know what your feelings are towards the asset class.

I much prefer your posts on making money (Eg. Gold/silver stocks, asset allocating) you are a smart dude and probably have alot more to offer then this relentless beating of the property death drum. We get it.....
 
Hobo-Jo,

I see your bearish posts on property here and on hotcopper. I think we all know what your feelings are towards the asset class.

It's a more realistic view than the 30% who still thing "steady as she goes", and the 8% , who think that things will "continue to boom" (maybe Propertunity is in this lot:rolleyes:).
We are heading into a deep downturn over the next 2yrs, and despite your wishful thinking Ridin, property is going to correct by 30% (40% if you include inflation - real term correction).
The only thing that amazes me is that economists continue to be "surprised" by the negative numbers, and slowing economy.
 
I much prefer your posts on making money (Eg. Gold/silver stocks, asset allocating) you are a smart dude and probably have alot more to offer then this relentless beating of the property death drum. We get it.....
This thread is about an economic downturn, not sure I'd relate it directly to property although no doubt it will have an effect (for example if you are a reader of HC you may have noticed my post on what I expect to see rents do due to the recession).

I think the recession will bring opportunity. There will always be ways of making money in bad markets and good.

I had considered short selling Australia's banks after the recent downgrade in rating, but my concern is the ban on financial short sales might be reintroduced by ASIC.

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

As bluestorm notes, most of the forum is still delusional if the poll results are to be taken as a true indication of expectations... hardly want to see new investors being sucked into buying now before a recession that is likely to be far worse than the 1990s.
 
It's a more realistic view than the 30% who still thing "steady as she goes", and the 8% , who think that things will "continue to boom" (maybe Propertunity is in this lot:rolleyes:).
We are heading into a deep downturn over the next 2yrs, and despite your wishful thinking Ridin, property is going to correct by 30% (40% if you include inflation - real term correction).
The only thing that amazes me is that economists continue to be "surprised" by the negative numbers, and slowing economy.

I was in the 8% Lol.

To put your comment RE 30% drop into my perspective and why i think its not going to happen.

- I purchased a place in 2008 for $335,000 in Emu plains, NSW (4 bed, 2 bathroom, carport, brick, pretty nice inside, nice block) Feel free to have a look on realestate.com.au to see what similar places are going for. I estimate current value probably 360-380k.

- Purchase History, my place last sold in 2002 for 301k

- If i applied your 30% price drop, that means the price would go from 380k to 266k

- Their was sales in that range during 2001

For this to happen the country would have to goto ***** and i'm not wishing for that
 
- If i applied your 30% price drop, that means the price would go from 380k to 266k

- Their was sales in that range during 2001

For this to happen the country would have to goto ***** and i'm not wishing for that

You may not be wishing for it, but that's exactly what I believe will happen. If you exclude mining, most of the economy is really struggling already, and this will only get worst as cost of living continues to increase, and people spend less. And even mining I don't believe will hold up as well as commentator say, once China starts to slow due to a slowing world economy.

Hey, a 30% drop is only 3% compounded over the next 7-8 quarters. We have already started to see prices fall in many markets.

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.
 
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