Recession/Interest rates. This is going to end badly!

[yorke]

Also when you get you currency devaluating in half and your wages don't double in thesame timeframe you have a HUGE consumer drop in spending as import price soar, that is strongly recessionary and lot of job will be lost.

In the above scenario our locally manufactured goods become cheaper then the imports so we produce more of them here therefore more jobs will be created. And is not only the manufacturing industry that gains, our farmers and resources sectors also become more competitive therefore increasing our exports and creating even more jobs.

 

[see_change]

For those people that are in safe employement this environment is the opportunity of a lifetime.
The secret to investing is to enter a position before that investment becomes crowded out and the returns marginalised. [/B]

I'm in this camp at the moment , however ...... The deals have to be brilliant at this stage to consider entering.

We've recently bought an IP which I believe to be in that catagory . My accountants comment was he has seen deals that good in the past, but normally they get snapped up by someone close to the deal ( the agent , friends of the lwayer etc ) but maybe the current times means that there is more of a chance for outsiders

I've talked to a few people in the last week in upper levels positions in major financial / accounting firms and they are all very much in the worst is yet to come camp.

I'm not in a rush to go out and buy anything further at this stage , however we are keeping a much closer eye on the market at the moment.

Cliff

 

[Aaron Sice]

yeah good point shadow. those watching will see it coming.

 

[boomtown]

Seech

What are the essential elements of a deal that good?

 

[see_change]

Seech

What are the essential elements of a deal that good?

Significantly under current market value ( Probably 30 % ) - Main one

Very good location in a good central area in Sydney - Historically the Cycle starts centrally in Sydney - Given that Sydney currently has low 10 year growth rates means we're due for a catch up and for the same reason , centrally located Properties are likely to outperform.

A popular price bracket in that area which is selling well in the current market.

Very good prospect for long term growth.

Easily rental to good tenants.

Due to multiple factors , the sale was badly handled by the Vendor ( not the agent ).

We were in the right place at the right time and able to do a very quick settlement without having to organise finance ( we had a pre-existing LOC ) -For me this was an important factor on our side of the equation.

I posted to that effect in Sept.

http://www.somersoft.com/forums/showthread.php?t=45691&highlight=Cash+king

Currently we are renovating , and when finished we'll get a reval and stand alone finance ( hopefully enough to cover the cost of purchase and reno , maybe not ) , then pay back the LOC and watch out for the next one.

Given the nature of this deal we could sell it straight away for a nice profit , so we may even look around to find something to do that with.


Cliff

 

[nonrecourse]

yeah good point shadow. those watching will see it coming.

A watched kettle never boils

 

[BoatBoy]

A watched kettle never boils

Fantastic, they will stay low forever then

Dave

 

[AUSPROP...]

In the above scenario our locally manufactured goods become cheaper then the imports so we produce more of them here therefore more jobs will be created. And is not only the manufacturing industry that gains, our farmers and resources sectors also become more competitive therefore increasing our exports and creating even more jobs.

I have long argued against this theory about weak dollar = more exports. We don't manufacture anything of particular importance. all computers, software, intellectual property such as branding like coke, aircraft, military hardware are imported and we simply have to pay whatever they cost. For the stuff we export we are just price takers.

I would rather focus on high value exports than continue this obsession with farmers. a $950 subsidy for farmers... what on earth? who dreamt up this pearler. is a farmer more deserving than a property developer, a candle stick maker or the owner of the local coffee shop? time to get over jimmy barnes i think

 

[yorke]

I have long argued against this theory about weak dollar = more exports.

You can argue for as long as you like, doesn't make it any less true.
I think our bill for imported food & beverage is now around $1 billion a month and the reason for that is not because we can't produce enough food. Its just that our farmers can't compete with subsidized Canadian pork or US oranges but get our AUD down to $0.50 and its a different story.

We don't manufacture anything of particular importance. all computers, software, intellectual property such as branding like coke, aircraft, military hardware are imported and we simply have to pay whatever they cost. For the stuff we export we are just price takers.

True but we export the raw materials and the biggest costs in that are transport and labour costs. Half price dollar = half price labour cost

I would rather focus on high value exports than continue this obsession with farmers. a $950 subsidy for farmers... what on earth? who dreamt up this pearler. is a farmer more deserving than a property developer, a candle stick maker or the owner of the local coffee shop? time to get over jimmy barnes i think

Its not only for farmers, any taxpayer earning under $80Kpa is up for it... but why the obsession with the others ? Are you a candle making property developer who owns a coffee shop and is missing out on the $950 ?
As long as you paid your taxes and earned below $80Kpa on your last tax return you'll get yours, and if you earned to much last year then your wife & kids employed in your coffee shop will get it. Personally I would have made it 2x $500 a couple of months apart or 3x $300 to make sure more of it is spent but hey, its better then nothing.
The only way to escape the GFC is through a global inflation led recovery and free money.

 

[topcropper]

a $950 subsidy for farmers... what on earth? who dreamt up this pearler. is a farmer more deserving

Well, I'm not positive of the details, but isn't any income earner, making under 80k getting the handout, yet the only farmers getting the handout are those on drought support? So I sure as hell won't be getting it.

What are you talking about here..??

See ya's.





ps. A quick google brings up this,.....

http://www.theage.com.au/national/thin-spread-for-950-farm-cash-20090203-7wvk.html

........"The Federal Government's new "$950 Farmers' Hardship Bonus" will be a one-off payment. It will be paid to about 21,500 drought-affected farmers and farm-dependent small business owners who receive "exceptional circumstances related income support"........



So 21,000 drought effected farmers are getting the $950, and how many normal 9 to 5 workers?
For flip sake, the urban myth continues of farmers all on handouts and subsidised.
Hey! Why don't we shut down the last remnants of manufacturing, get rid of the pesky farm and mining sectors, and we can all work in services then. 100% services. Nearly there now anyway. We can have a services led recovery. What a bloody joke.

 

[turk]

Hi Topcropper

I might be completely wrong as I've only had a quick look at the handouts but I think the $950 to farmers on drought relief is in addition to the $950 to people earning less than $80000, so hopefully they receive 2 benefits.

Cheers

Pete

 

[AUSPROP...]

drought affected, special support, handouts, GFC - perhaps a few hints there that maybe it's the business model that is bad, not the weather

What was the cost of building the water canal from the kimberley to perth? and how much is being doled out for nintendos?

perhaps irrigating half the continent may allow farmers to run a successful business.

I was warned that Labor were always an economic disaster but I shrugged it off.... they will be just like the last stooges I thought. With the " print some cash for nintendos" thing now unfolding I can see first hand the devestation

 

[steveadl]

I was warned that Labor were always an economic disaster but I shrugged it off.... they will be just like the last stooges I thought. With the " print some cash for nintendos" thing now unfolding I can see first hand the devestation

I'll admit I'm biased, but I can't comprehend why so many people couldn't see Labor doing this all over again.

 

[granev]

I'll admit I'm biased, but I can't comprehend why so many people couldn't see Labor doing this all over again.

An Israeli doctor said " Medicine in my country is so advanced , we can take a kidney out of one person , put it in another , and have him looking for work in 6 weeks"

A German doctor said " In my country medicine is so advanced , we can take a lung out of one person , put it in another , and have him looking for work in 4 weeks"

A Russian doctor said " Thats nothing , in Russia we can take half a heart out of one person , put it in another and have them both looking for work in 2 weeks!"

An Aussie doctor , not to be outdone , says "Huh , thats nothing , we can take an @rsehole out of Queensland , put him in Canberra , and have half the country looking for work in 24 hours !"

 

[LynnH]

ROTFLMAO, granev!!!!!

Best joke I've heard all week ..... but, sadly, it's a little too close to the truth!

Cheers
LynnH

 

[steveadl]

Good one Granev!

 

[MichaelW]

OK, following on from Granev's excellent lead. Here's a little food for thought...

A Boss Who Tells It like It Is

Date: Wed, 5 February 2009

To All My Valued Employees,

There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job; however, is the changing political landscape in this country.

However, let me tell you some little tidbits of fact which might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Subaru Outback outside. You've seen my big home at last year's Christmas party. I'm sure all these flashy icons of luxury conjure up some idealised thoughts about my life.

However, what you don't see is the back story.

I started this company 28 years ago. At that time, I lived in a 2 bedroom flat for 3 years. My entire living area was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.

My diet consisted of baked beans, stew and soup because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a wonky transmission. I didn't have time to go out with women. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50,000 a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting David Jones for the latest hot fashion item, I was trolling through the discount stores extracting any clothing item that didn't look like it was birthed in the 70's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Subaru, the vacations... you never realise the back story and the sacrifices I've made.

Now, the economy is falling apart and I, the guy who made all the right decisions and saved his money, have to bail-out all the people who didn't. The people that overspent their pay suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.

Yes, business ownership has its benefits but the price I've paid is steep and not without wounds.

Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation. Unemployment taxes. Taxes on taxes. I have to hire an accountant to manage all these taxes and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a cheque to the Australian tax Office for $288,000 for quarterly taxes. You know what my "stimulus" cheque was? Zero. Zip. Zilch.

The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare cheque? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (Read: Stole) 50% of your pay you'd quit and you wouldn't work here. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.

Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had the government suddenly mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Canberra black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of Australia and always has been. To restart it, you must stimulate it, not kill it. But the power brokers in Canberra believe the poor of Australia are the essential drivers of the Australian economic engine. Nothing could be further from the truth and this is the type of change you can keep.

So where am I going with all this?

It's quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your 4WD and your child's future. Frankly, it isn't my problem any more.

Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalises the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

So, if you lose your job, it won't be at the hands of the economy; it will be at the hands of politicians who swept through this country and changed its financial landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about....


Signed,

Your boss

Michael

 

[nonrecourse]

OK, following on from Granev's excellent lead. Here's a little food for thought...




Michael

Kudos for that post Michael

 

[nhb74]

I like that.. makes alot of sense

 

[Red Car]

Business must REALLY be tough if a Subaru Outback is a "flashy icon of luxury!"

Was a good read and makes you think about what our Government is doing.