Is Australia facing the first recession in 20 years?

[Ed Barton]

But some Gays couples dont. They dont expect to stay together like straights.

Peter

I'll start with a joke... What does a lesbian bring to her first date? The furniture.

Young gays, just like young straights, think their relationship will last forever.

Older gays realise nothing is for ever, and recognise the high relationship breakdown of any sexuality. Something straights seemed to be trapped in a high school romance, yet well into their adult lives.

Here is your initial assertion...

It is also why a lot of Homosexual Couples rent rather than own, despite above average incomes, because they have the "single income on the books" issue.

It indicates homosexual couples are not subject to anti discrimination laws. Wrong.

 

[Peter 14.7]

Touche'

 

[Peter 14.7]

I'll start with a joke... What does a lesbian bring to her first date? The furniture.

Young gays, just like young straights, think their relationship will last forever.

Older gays realise nothing is for ever, and recognise the high relationship breakdown of any sexuality. Something straights seemed to be trapped in a high school romance, yet well into their adult lives.

Here is your initial assertion...

It indicates homosexual couples are not subject to anti discrimination laws. Wrong.

I will also start with what I know is the second half to that Joke...What does a gay man bring to his second date...his new boyfriend.

I agree same sex couples cannot be discriminated against sadly the rules are not the same, especially in death. I understand because you cannot marry you cannot get the automatic ownership of the house that applies in straight relationship when owned as joint tenants and one partner dies. Super also has issues. Lastly CGT can apply for property transfers. No don't quote me as I am no expert but I know it not straightforward, no pun intended.

Personally all my gay friends who have property have then in single ownership even if coupled up. It is simpler to separate should that arise.

As a straight man who married his school sweetheart we are all good but if not, I know the glue is children. It is much harder to walkaway when there are kids involved. Whether that is right or wrong is another topic.

If I was gay I would buy and get my partner to pay rent and get Bank to count that.

Regards Peter

 

[HiEquity]

Peter - to my understanding the discrimination you mention against gay couples was one of the first things removed when Mr Rudd came to power. Including giving gay partners the same access to military and other pensions left behind by a deceased spouse as enjoyed by the straight community. It's strange that this wasn't done by the Liberal party when in govt as they are the ones meant to hold individual liberty issues like this as a core value but life is strange sometimes.

These days, the only issue I am aware of is giving gay couples access to the symbolism of marriage - all of marriage's financial benefits (and responsibilities) are already equally available to defacto couples - straight or gay.

 

[lizzie]

Why was I "so wrong" on the timing of the downturn? I don't have any economic model to use and am no economist, so while I can draw broad conclusions from observing the market, events and data, I have no way of gauging the exact timing of cause and effect, I made an educated guess.

Hobo - what are your thoughts for the next 2-5 years?

Sentiment is a strange animal - and I am as guilty as the next person. We are just not spending like we used to, although nothing has changed re pay, family situation etc.

This Christmas I'm spending about half what I normally would on people, although am trying to keep it to local small businesses - and when in the shopping centre the other day (that was practically empty) I went in, bought what I went for and left - no browsing around - which is where the impluse buys come in.

Also we've had an accepted offer on a property for $400k less than what the vendor paid for it 4 years ago.

It's rather scary - even tho we are spending less, will have little debt and a secure-ish job.

But - on the other hand - was talking to a friend today, who is a manufacturer "sourcer" and there is a lot of small business innovation going on out there.

Methinks - after some tough times and a mental readjustment by the entire country - small business will move into the breech and the cycle will start again.

 

[Peter 14.7]

Peter - to my understanding the discrimination you mention against gay couples was one of the first things removed when Mr Rudd came to power. Including giving gay partners the same access to military and other pensions left behind by a deceased spouse as enjoyed by the straight community. It's strange that this wasn't done by the Liberal party when in govt as they are the ones meant to hold individual liberty issues like this as a core value but life is strange sometimes.

These days, the only issue I am aware of is giving gay couples access to the symbolism of marriage - all of marriage's financial benefits (and responsibilities) are already equally available to defacto couples - straight or gay.

Ok i found this

http://glrl.org.au/index.php/Rights/Relationships/Tax-and-Superannuation

Which says you are right. Gay or Straight, defacto or married, is the same, provided you can establish a de-facto relationship which comes to;



In deciding whether a de facto relationship exists, the law sets out a number of factors –

the length of the relationship;
whether the people have resided together;
the nature and extent of common residence;
whether there is, or has been, a sexual relationship between them;
the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
the ownership, use and acquisition of their property (including property they own individually);
the degree of mutual commitment by them to a shared life;
whether they care for and support children;
the reputation, and public aspects, of the relationship between them.



Something to note.

I guess the issue arises when a wealthy person dies and leave his/her wealth to the partner and the family objects. Like Anna Nicole Smith. In the LBGT World this can be further complicated by shame or denial by the family that the person was every gay.

Anyhow, off topic.

My original claim I stand by as overall gay ownership is less than straight in my observation but not statistically enough to influence our comments about price rises.

Regards Peter 14.7

PS For those wondering why Gay Marriage is an issue it is because the USA does not have the above laws in each state and not being able to marry does make a huge difference. This also applies to Aust Employees of US companies working Overseas. Know this one personally from friends.

 

[turk]

These quotes from the original post/thread (May 2011):




By RBA's account commodity prices peaked in late 2011 (around 5 months later than I expected):

My guess on the timing of a technical recession was wrong, but that doesn't mean my expectations for one are misguided. The commodity/mining bust is playing out. It's full effect on the Australian economy is yet to be seen.

Why was I "so wrong" on the timing of the downturn? I don't have any economic model to use and am no economist, so while I can draw broad conclusions from observing the market, events and data, I have no way of gauging the exact timing of cause and effect, I made an educated guess. The property market also surprised me by staying buoyed longer than I would have guessed, but in time it still turned around and started to correct as I expected it would. I still think we are looking at recession in the near future & as pointed out by myself (& BayView + others) in this thread and Alan Kohler above, the conditions for many businesses are already there.

hobo

Resources, as per your graph also peaked in '08 and came off approx.33%
there was no recession then, what is to say volume wont help offset prices or that prices may come back as they did after '08 or a combination.

You say that property "started to correct as I expected it would", The latest figures that I'm seeing shows house prices to be flat/slight rise.


http://www.abs.gov.au/ausstats/[email protected]/mf/6416.0

Annual Changes (September Quarter 2011 to September Quarter 2012)
■Preliminary estimates show that the price index for established houses for the weighted average of the eight capital cities rose 0.3% in the year to the September quarter 2012.
■Annually, house prices rose in Darwin (+8.2%), Perth (+4.4%), Sydney (+1.3%), Canberra (+0.4%) and Brisbane (+0.3%) and fell in Melbourne (-2.3%), Hobart (-2.2%) and Adelaide (-1.

Speaking of Alan Kohlers article he is suggesting that the RBA should further cut interest rates which will support business and stimulate the economy this flies in the face of your view that interest rates cuts are not stimulus.


I still await your answer as to why you deem interest rate cuts are not stimulus?

 

[hobo-jo]

Hobo - what are your thoughts for the next 2-5 years?

With regards to the Australian economy?

I don't think the demand (or prices) for our resources can be sustained at levels seen in the last 5 years.

IMO the end of the commodity boom will have pretty far reaching implications for the Australian economy. Lower house prices. Higher unemployment. Incomes falling in real terms (either nominal falls or lower than inflation growth). Lower AUD. Recession.

I do agree with you that it's just a cycle and we will likely pull out of the depressed state before other western economies (UK, Eurozone, US, etc), but there is significant risk of further shocks to the global economy/monetary system until the significant (public) debt burdens fall either through high inflation, debt jubilee or something else.

Resources, as per your graph also peaked in '08 and came off approx 33% there was no recession then, what is to say volume wont help offset prices or that prices may come back as they did after '08 or a combination.

Right, there was only 1 quarter of negative growth. Last time we had massive stimulus, this time we have a government trying desperately to achieve a surplus. Of course their priorities could change depending on the fall out from the commodities bust.

Maybe they will (volume and prices bounce), in my opinion they won't (I am entitled to that right?). I would expand, but I would be wasting my time as you seem keen to continue your nitpicking/trolling on everything I post.

 

[Peter 14.7]

Ho BO JO is right to say the Gov sent $$$$$$$$$$ avoiding a recession in 2008/9.

I dont know the exact figure but we went from $20BN in black to something like $300BN in red.

This time , the cupboard is bare!

Peter

 

[willair]

IMO the end of the commodity boom will have pretty far reaching implications for the Australian economy. Lower house prices. Higher unemployment. Incomes falling in real terms (either nominal falls or lower than inflation). Lower AUD. Recession.

That's what happens over time the rapid rise bull-run is sometimes too powerfull for all,and people just hang in there,as they say..
"You can't go broke taking a profit"

 

[turk]

I would expand, but I would be wasting my time as you seem keen to continue your nitpicking/trolling on everything I post.

I am not nit picking or trolling, making these claims seems to be your way of avoiding questions you don't seem to have answers for.

On this thread you have continually claimed that interest rates cuts were not stimulus.

Governments/Central banks use Monetary and Fiscal Stimulus to expand/contract the economy as required.

Monetary Policy using interest rate cuts are a major force in expanding the economy and as such are central to your assertions on this thread as to whether there will be a recession or not.

Your entitled to form any opinion you want on a public forum but expect it to be challenged especially when you make an unsubstaniated claim that flies in the face of recognised economic theory.

 

[Aaron Sice]

IR cuts aren't stimulus because they had next to no effect on the dollar and no real effect to the rate that joe average was paying.

 

[TingTong]

Interest rate cuts are intended to stimulate but whether they do the job or not is another matter.

 

[turk]

IR cuts aren't stimulus because they had next to no effect on the dollar and no real effect to the rate that joe average was paying.

The cuts have certainly had an effect on the dollars in my pocket to spend and they have certainly had an effect on the dollars available to my business to spend.

They will certainly have an effect on the repayments made by a FHBer.

And so on and so on.

As hobo can't supply any credible references as to when Monetary Stimulus stopped being part of controlling the expansion/contraction of the economy perhaps you can.

 

[hobo-jo]

Monetary Policy using interest rate cuts are a major force in expanding the economy and as such are central to your assertions on this thread as to whether there will be a recession or not.

So in your opinion RBA will be able to avoid an Australian recession by cutting rates?

As hobo can't supply any credible references as to when Monetary Stimulus stopped being part of controlling the expansion/contraction of the economy perhaps you can.

That's not what I said. You are putting words in my mouth.

We were talking about stimulus packages, which you said China was engaging in. When I questioned you on the stimulus measures, all you could come up with at the time was rate cuts, which I said wasn't really stimulus in the context of the conversation that was taking place.

You have since blown this into much more than it was and continue trolling with it every chance you get.

 

[Trippy]

Monetary Policy using interest rate cuts are a major force in expanding the economy and as such are central to your assertions on this thread as to whether there will be a recession or not.

Based on this - Low interest rates = expanding economy.
Why don't we just go to zero percent, wouldn't this = bigger level of expansion in the economy.
I think other countries that have done this have failed to stimulate their economies (look to the USA where they have had close to 0 rates for years)

 

[BayView]

Methinks - after some tough times and a mental readjustment by the entire country - small business will move into the breech and the cycle will start again.

What's the mental readjustment?

Sorry Lizzie, I can't see it happening...

The pattern is now that more and more folk are buying online, while labour costs and red tape are increasing for those who want to employ staff and run a shopfront business.

Not all businesses can be an online type; we already have a million different online shops for anything you can think of buying.

You might see some one-man operations starting up in the shopfronts, but they won't be able to expand too significantly - if at all; it'll require staff, and a one-man show simply doesn't have the purchasing discount power to be able to turn enough profit to keep staff and compete with online businesses with no overhead.

Yes, they may be able to start up their own online business too, but as I said; the internet is already flooded....

It'll be a big ask.

 

[VYBerlinaV8]

Based on this - Low interest rates = expanding economy.
Why don't we just go to zero percent, wouldn't this = bigger level of expansion in the economy.
I think other countries that have done this have failed to stimulate their economies (look to the USA where they have had close to 0 rates for years)

Why don't we go to zero percent? Because inflation will go nuts. Countries like the US are in way more trouble than we are. Imagine if their rates weren't at zero...

 

[Peter 14.7]

Based on this - Low interest rates = expanding economy.
Why don't we just go to zero percent, wouldn't this = bigger level of expansion in the economy.
I think other countries that have done this have failed to stimulate their economies (look to the USA where they have had close to 0 rates for years)

In answer, that is only one factor in the economy.

To summarise all of the above the situation is this:

A robust strong economy has multiple earners. Mining, Agriculture, Retail, Tourism, Education, Manufacturing, etc...of item and goods that be traded across the globe.

Building Houses and selling Goods Made Overseas are not earners but spenders of the economies wealth.

Australia has a lop sided economy. We have mining and agriculture but retail and manufacturing we sell little os.

The strength of mining is such the $ is high and destroying the other earners. Education and Tourisim is struggling. Even food is coming from OS is cheaper than grow up the road. WHY?

The issue is when mining stops, due to any number of reasons beyond our vision and or control, what do we have to fall back on?

So what are we doing about it?

We are making our energy more expensive through bureaucracy, carbon pricing, etc.. so we cannot complete.

Yet, we sell our coal cheap to China who burn it, defeating the purpose of carbon tax and providing them with more cheap energy.

http://www.abc.net.au/environment/articles/2012/03/19/3455327.htm

We add unrealistic and unaffordable rules to employment, to wages, to business which our Overseas competitors don't have. i.e. Unfair dismissal extremes, workers comp cover for staff travelling to work, etc..

http://www.news.com.au/business/wor...mployers-offside/story-e6frfm9r-1226489795262

We put taxes on our own companies that the Overseas companies don't pay. I.e. Google, Ebay, Ikea, etc...

http://www.smh.com.au/business/worl...it-we-hardly-pay-anything-20121113-298zf.html

We don't apply GST to internet sales under $1000 from goods OS but we do to locals importing goods from OS who emply locals, pay rent, pay taxes, etc... I,e, Ebay, Amazon, any one.

We correctly apply high levels of safety and warranty to products made here and those imported here but not to goods bought on the internet. I,e, Chinese toys painted with lead. Non compliance labelling and materials.

lead.http://www.productsafety.gov.au/content/index.phtml/itemId/984581

We allow our land and wealth to be bought by Companies that are fronts for other Countries Sovereign Wealth funds but we are not allowed to buy into their lands wealth.

http://www.radioaustralia.net.au/in...australian-coal-mine-to-china-touches-a-nerve

We rightly apply rules and safeguards to food production here but accept food from OS where rules are non existents.

http://newsweekly.com.au/article.php?id=3626

We allow the importation of subsided food products thereby destroying our own agriculture base. When gone, prices will go up.

http://www.abc.net.au/rural/news/content/201202/s3441240.htm

All of the above are real issues, that is why if our economy dies, the level of rates is irrelevant.

Regards Peter 14.7

PS Coupled to the fact we have small population, large land and sea mass to protect where our neighbours have the reverse, high population and much less resources per capita.

So when we are bankrupt, with the USA looking after it self, how do you tell China not to fish in our waters when they have more warships and economic power to bring to bear?

 

[Ed Barton]

My original claim I stand by as overall gay ownership is less than straight in my observation but not statistically enough to influence our comments about price rises.

Being gay, I have a lot of gay friends. From my observation I don't think home ownership rates are any different for gays, so I disagree.

Out of my circle of friends:

• One thinks you're mad to buy, renting is cheaper and he lives week to week on a median wage. I'm sure we all know someone like this.
• One never has any money because he is a PI negative geared to the max. I'm sure we all know someone like this.
• A couple who bought ~ 5 years ago and paying the mortgage down quickly so they can comfortably afford to have kids. I'm sure we all know someone like this.
• Around 3/4's own, and the rest rent.

I see a masters research topic in it!