Recession Cancelled.
- Thread starter keithj
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- recssion cancelled
For all those unemployed or soon to be....I hope you feel better!
Politically good news for the government, but alas this hides the poor news.
Every state, SA aside, went backwards in terms of their growth measure (state aggregate demand)
High imports is not necessarily a bad thind, as it shows we are spending & investing as an economy. A massive drop in imports is actually a signal of poorer demand levels in the future.
So since September 08, our economy has had 0% growth, in the presence of a growing population and modest inflation. So real GDP per head is going backwards
And hey, I am sure those who have joined the ranks of the unemployed and(touch wood) those who will later this year, I am sure will beg to differ with the technical definition.
As for house prices and unemployment, the muted outlook remains at least until 2010 and interest rates, well, my spider senses tell me they might throw in one rate drop later this year. Bottom line, politics aside, these set of figures aren't great.
Politically good news for the government, but alas this hides the poor news.
Every state, SA aside, went backwards in terms of their growth measure (state aggregate demand)
High imports is not necessarily a bad thind, as it shows we are spending & investing as an economy. A massive drop in imports is actually a signal of poorer demand levels in the future.
So since September 08, our economy has had 0% growth, in the presence of a growing population and modest inflation. So real GDP per head is going backwards
And hey, I am sure those who have joined the ranks of the unemployed and(touch wood) those who will later this year, I am sure will beg to differ with the technical definition.
As for house prices and unemployment, the muted outlook remains at least until 2010 and interest rates, well, my spider senses tell me they might throw in one rate drop later this year. Bottom line, politics aside, these set of figures aren't great.
Looks like the SMH agrees:
http://business.smh.com.au/business/australia-dodges-recession-20090603-buyq.html
Proof the various stimulus and low rates are working?
http://business.smh.com.au/business/australia-dodges-recession-20090603-buyq.html
Proof the various stimulus and low rates are working?
proof the stumulii aren't working - stimulus means "to stimulate", not "hold 'er steady".
i still am waiting for NR's predictions of AUD0.35 and 2200 all ords....
i still am waiting for NR's predictions of AUD0.35 and 2200 all ords....
Rates to stay the same, business confidence improving.
Housing to stablise (using ABS figures), helped by FHOG
$A to keep rising, I cant see why it fell so much
ASX200 to keep rising
In a word, worse.
If Rudd can go to the next election saying he is the only western government to avoid a technical recession, I cant see him losing.
Agreed. By November 2010, unemployment (well the experts say in ayway) would have peaked/stabilised. The threat of people losing their jobs would have subsided and the government will take kudos for that in the face of the GFC - ie having saved them from worse.
Debt as the opposition go on about is too much of an intagible concept for the electorate to punish the government on irrespective of the economic implications and future budgetary constraints that it imposes. Add to that a pretty ineffectual opposition team, then the words of an ex-GG come to mind about a a drover's dog...
Recession cancelled? ........or possibly deferred.
Apparently there is a second tranche of mortgage re-sets to come out of the US in 2010 and 2011. Whilst interest rates may have fallen, assuming that most of the re-sets default to the rate of the day (which is low at present), with values still upside down for most US property, they'll be caught out with fat LVR's and if they cannot cash inject, there may be another wave of fire sales.
Certainly we don't follow every move they make, however Oz isn't totally free of the US apron strings either. There may still be some effect here, in a generic sense; as there are some strong markets/sectors in Aus and some not so strong.
........or possibly deferred. Apparently there is a second tranche of mortgage re-sets to come out of the US in 2010 and 2011. Whilst interest rates may have fallen, assuming that most of the re-sets default to the rate of the day (which is low at present), with values still upside down for most US property, they'll be caught out with fat LVR's and if they cannot cash inject, there may be another wave of fire sales.
Certainly we don't follow every move they make, however Oz isn't totally free of the US apron strings either. There may still be some effect here, in a generic sense; as there are some strong markets/sectors in Aus and some not so strong.
Politically good news for the government, but alas this hides the poor news.
Every state, SA aside, went backwards in terms of their growth measure (state aggregate demand)
High imports is not necessarily a bad thind, as it shows we are spending & investing as an economy. A massive drop in imports is actually a signal of poorer demand levels in the future.
So since September 08, our economy has had 0% growth, in the presence of a growing population and modest inflation. So real GDP per head is going backwards
And hey, I am sure those who have joined the ranks of the unemployed and(touch wood) those who will later this year, I am sure will beg to differ with the technical definition.
As for house prices and unemployment, the muted outlook remains at least until 2010 and interest rates, well, my spider senses tell me they might throw in one rate drop later this year. Bottom line, politics aside, these set of figures aren't great.
Guys i think you are reading too much into the figures. Who cares if the figures are not 'great', expectations of the last 6 months where for the worst economic conditions since the great depression (and in 2008 the share market fell more in one year than in any period from its inception).
As to imports, again who cares. We had a low aussie dollar which makes import prices expensive. On top of this we had businesses reducing inventory, so of course they would be reducing purchases (coupled with the fact that import prices would have been rising due to the fall in the AU$ from late 08 to early 09). On top of this we had the problem with bank lending on stock purchases late last year (i cant remember the technical name for this, but basically remember when ships wouldnt transfer without a paid letter of credit, and the banks wouldnt issue them until money was deposited etc).
Now the climate of fear is receeding, AU$ is going up, businesses will have to start restocking globally.
The headache i see is the appreciation of the AU$ on our domestic exporters, but this wont effect the import component.
ASX200 cracked 4000 this afternoon.
While I don't doubt that we have some lean times ahead, I really don't think we are in as much trouble as many other countries.
While I don't doubt that we have some lean times ahead, I really don't think we are in as much trouble as many other countries.
I used to scratch my head at this one too. The whole "flight to safety" argument touted in the media was a crock AFAIK when US equity and debt markets were on such shaky ground.
Hugh Hendry hypothesised that the USD rallied across the board because trillions of US dollars evaporated almost overnight in USD denominated assets. Makes sense to me.
You are right, the opposition is useless and Rudd has brilliant PR. Government receipts are down $13B this year, but we even had somebody on this forum claim there's a $210B tax black hole. Rudd has convinced the electorate we need the current spend-a-thon & they're buying it.Debt as the opposition go on about is too much of an intagible concept for the electorate to punish the government on irrespective of the economic implications and future budgetary constraints that it imposes. Add to that a pretty ineffectual opposition team, then the words of an ex-GG come to mind about a a drover's dog...
that's it - i'm long!!!
i think i paid less than 2.5k in tax last year - all legit.
he aint getting ANY money from me
Not much help if the Banks have taken their bat and ball and gone home - which they primarily have done.
You aint gunna see no easy credit for many a day, pardners.
Whilst i personally dont use the following (i concentrate soley on an individual company's strategic outlook vs its share price, i dont give too hoots what the overall market is doing):
The Dow Jones, S&P500, Nasdaq, and the ASX200 are now all crossing their 200 day moving averages (for many markets this is the first time since 2007). For technical traders and asset allocaters this is a very bullish sign. So you could see more money allocated to the market in the short term.
I wrote this for somersoft in early may, suggesting why the market wouldnt have a significant pull pack (as at early May):
http://www.somersoft.com/forums/showpost.php?p=544730&postcount=33
I think it still applies. With relevance to the comments regarding movements above 3900 (and im only concerned about movements above 3900), we have now had 6 weeks of sideways movements to provide a base. Green shoot economic indicators are becomming stronger. So i feel from a fundamental viewpoint, the market can justifiably go higher in the short term, however as Blue Card correctly pointed out, if this market does move significantly higher than 3900, then the up and comming earnings season (and the related managements comments on performance and more importantly outlook) will become more influential, as higher equity prices will eventually need to be supported by a fundamentally better outlook.
Markets do care a lot about these data and the AU$ was greatly effected.
Anhow, GDP data should take count of exchange rates and pretty much everything else, the import data is quite odd in my opinion with the AU$ soo low in the first quarter and import dropped 7%
this while retail sales holding up, also inventory changes I think are included in GDP data. I wonder what kind of import pricing ABS used. Anyhow I think the GDP number in the long term are correct and if it was high last quarter they'll compansate in the next one and the one afterwell, should be clear by now as also WW was point out several time about the problem of australian foreign debt. The fate of the AU$ is definetly not in the hand of Australia or RBA
Anyhow I see the AU more in a bubble now and last year then during the GFC, I think things would change if China will unpeg the currency with the US$ (I think they'll have to do it and send the US$ to the gravel if commodity will keep rising)
Well, you have be carefull, you never know if NR is a good friend of the chinese government that alone can easily send the AU$ to 35 cent and the ASX to 2200
Ouch!
Yeah, imagine having to help pay our share to run the country. Nothing like a free ride hey?
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