Recession likely in Australia
- Thread starter greedy saffa
- Start date
Today l went into a hardley normal store just to see if anyone is buying. You would be forgiven if you thought it was a post xmas sale, the store was chocker block and all reps had a line up of customers buying everything and anything.
I was quite surprised to say the least, obviously there are many who do not realise what is happening in the world around them.
Each and every day l am getting a little more worried of what will happen. At least l know that my job is secure along with hubbies. However there is at least 20 work mates that we can see will be given their marching orders within 12 months if not a lot sooner.
My wallet is closed tight for now. I am shopping like my Granny did. Buy only what we really really need.
Time to well and truly batten down the hatches.
cheers
yadreamin
I was quite surprised to say the least, obviously there are many who do not realise what is happening in the world around them.
Each and every day l am getting a little more worried of what will happen. At least l know that my job is secure along with hubbies. However there is at least 20 work mates that we can see will be given their marching orders within 12 months if not a lot sooner.
My wallet is closed tight for now. I am shopping like my Granny did. Buy only what we really really need.
Time to well and truly batten down the hatches.
cheers
yadreamin
YaDreamin
Most people do not understand finance. My personal trainer asked me the other day what "all this global credit crunch garbage means". People generally are quite uneducated when it comes to financial matters.
I have had discussions with a number of our high net worth clients. I can only tell you that the feedback is quite concerning. These are individuals with net worth over $20M. Not your average punter.
I am also holding off any unnecessary expenditure.
Most people do not understand finance. My personal trainer asked me the other day what "all this global credit crunch garbage means". People generally are quite uneducated when it comes to financial matters.
I have had discussions with a number of our high net worth clients. I can only tell you that the feedback is quite concerning. These are individuals with net worth over $20M. Not your average punter.
I am also holding off any unnecessary expenditure.
That certainly hasnt been reflected in their share price, which has been absolutely hammered lately. 
http://au.finance.yahoo.com/q/bc?s=HVN.AX&t=3m&l=on&z=m&q=l&c=
http://au.finance.yahoo.com/q/bc?s=HVN.AX&t=3m&l=on&z=m&q=l&c=
My work is also laying off some staff - around 15% of a small-ish company (around 50 staff). Only the second time they've had to do that for financial reasons in the nearly 20 years I've been there (and the first time was a lesser percentage).
I can see it becoming even more down the track if things don't pick up.
GP
I can see it becoming even more down the track if things don't pick up.
GP
That certainly hasnt been reflected in their share price, which has been absolutely hammered lately.
http://au.finance.yahoo.com/q/bc?s=HVN.AX&t=3m&l=on&z=m&q=l&c=
It's nothing unusual, it was hammered like everything else, I think we will be buying some very cheap shares soon, I am ready to buy the banks...
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GP which industry are you in?
Cheers
It's hard to believe that Australians are doing it tough, it doesn't look like it.
Resourse companies until now were screaming for staff and a temporary slowdown means that they could stop hiring new staff or lay off some excess staff.
Our company is still advertising positions.
Not as many as 1 year ago but we do have vacancies
mainly in Engineering in Sydney, Newcastle and Melbourne.
The markets are quite strange though, some departments are screaming for staff and others have nothing to do.
We are unusually busy and will be like this for at least 6 months so we did hire many contractors last week and we are also borrowing resourses from dept's which are not busy.
Anyway, I hope interest rates continue to fall so that I can fix my loans...
Resourse companies until now were screaming for staff and a temporary slowdown means that they could stop hiring new staff or lay off some excess staff.
Our company is still advertising positions.
Not as many as 1 year ago but we do have vacancies
mainly in Engineering in Sydney, Newcastle and Melbourne.
The markets are quite strange though, some departments are screaming for staff and others have nothing to do.
We are unusually busy and will be like this for at least 6 months so we did hire many contractors last week and we are also borrowing resourses from dept's which are not busy.
Anyway, I hope interest rates continue to fall so that I can fix my loans...
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GP
Large financial institutions (despite their falling share prices) have sound financial position and when the worries go away they will start spending again.
Cheers
Dear All,
1. Shane Wright, the Economics Editor for the "West Australian" Newspapers has recently expressed his optimism that Australia is unlikely to fall into a Recession in the immediate near future.
2. In his article, entitled, "WA Set To Ride Out Economic Storm", Shane makes his own observations that
a. "This thing is going to get worse before it gets better. I’m not talking about the movements on sharemarkets, but in the real economy."
b. "Ultimately, whether WA (and for that matter the rest of Australia) survives will depend on the economies of South-East and northern Asia. Perhaps the most amazing aspect of what’s going on is just how little it has affected day-to-day Australians so far."
c. "Remember, we’re more than 12 months into the global financial crisis (which dates from early August last year), yet apart from superannuation returns collapsing (linked to that turmoil on share markets) you would be hard pressed to identify a real impact on the domestic economy."
d. "Indeed, there’s plenty of prognostications about the impending disaster — but no disaster, yet."
e. "For instance, there has been a big fall in job ads that suggests the tight jobs market is about to loosen. Last week, the unemployment rate moved up to 4.3 per cent from 4.1 per cent."
f. "But even among the most pessimistic economic forecasts, the worst anyone can come up with is a jobless rate about the 6 per cent mark... If it gets to 6 per cent, that is still well below the long-term average jobless rate of this country."
g. "People have definitely cut the use of their 14 million or so credit cards. Repayments hit a record $19.4 billion in July (the latest available figures) as people used their mid-year tax cuts to reduce their debt holdings."
h. "Also, as most Australian mortgage holders have variable interest rates, the sharp cuts we’ve seen in the past four weeks will quickly translate into extra cash in family budgets."
i. "Further helping is that petrol prices have somewhat stabilised. Although they have not tumbled in line with the global oil price, largely because the Australian dollar has fallen just as far as oil, they’re not going up like they were through August. And that falling dollar, while terrible if you’re planning a skiing trip to the US in the next couple of months, is an absolute saviour for the mining sector."
j. "All experts expect commodity prices to come off their recent record highs on the back of slowing demand, although the fall is not forecast to be the dramatic collapse we saw in the early 1980s...But even if the volume of exports of commodities such as coal and iron come back, the 30 per cent or so fall in the dollar will more than offset this. Some coal producers reckon that on top of the 100 per cent or so increase in prices, total income will skyrocket close to 180 per cent because of the weaker Aussie dollar."
k. "Combined, this is why that IMF report, while knocking down Australia’s growth rate, still forecast the economy to grow 2.5 per cent this year and 2.2 per cent in 2009. "
l. "Only the BRICs — Brazil, Russia, India and China — and a couple of other small economies are expected to grow faster than Australia over the next 18 months."
m. "In other words, the IMF expects a repeat of the 2000-01 global recession which left relatively unscathed a group of nations that were closely tied together. They were the emerging giants and commodity suppliers."
n. "But with this good news, we have to recognise the problems of the past. It was the super-low monetary policy settings of major economies (the Federal Reserve took American rates down to one per cent and left them there way too long), coupled with pretty poor regulation and too-smart-by-half bankers and traders, that has got us into this mess."
o. "Central banks are again slashing interest rates (fortunately Australia’s is still relatively high at 6 per cent) to boost confidence and pump money into financial systems to keep economies afloat."
p. "Will they have learnt from the mistakes of 2000-01?... Or will the fate of Western-style capitalism rest in the hands of Chinese communism? "
http://www.thewest.com.au/default.aspx?MenuID=9&ContentID=102459
3. Do you share Shane Wright's optimism regarding the Australia's immediate future prospects? Why?
4. for your further comments and discussion, please.
5.Thank you.
regards,
Kenneth KOH
1. Shane Wright, the Economics Editor for the "West Australian" Newspapers has recently expressed his optimism that Australia is unlikely to fall into a Recession in the immediate near future.
2. In his article, entitled, "WA Set To Ride Out Economic Storm", Shane makes his own observations that
a. "This thing is going to get worse before it gets better. I’m not talking about the movements on sharemarkets, but in the real economy."
b. "Ultimately, whether WA (and for that matter the rest of Australia) survives will depend on the economies of South-East and northern Asia. Perhaps the most amazing aspect of what’s going on is just how little it has affected day-to-day Australians so far."
c. "Remember, we’re more than 12 months into the global financial crisis (which dates from early August last year), yet apart from superannuation returns collapsing (linked to that turmoil on share markets) you would be hard pressed to identify a real impact on the domestic economy."
d. "Indeed, there’s plenty of prognostications about the impending disaster — but no disaster, yet."
e. "For instance, there has been a big fall in job ads that suggests the tight jobs market is about to loosen. Last week, the unemployment rate moved up to 4.3 per cent from 4.1 per cent."
f. "But even among the most pessimistic economic forecasts, the worst anyone can come up with is a jobless rate about the 6 per cent mark... If it gets to 6 per cent, that is still well below the long-term average jobless rate of this country."
g. "People have definitely cut the use of their 14 million or so credit cards. Repayments hit a record $19.4 billion in July (the latest available figures) as people used their mid-year tax cuts to reduce their debt holdings."
h. "Also, as most Australian mortgage holders have variable interest rates, the sharp cuts we’ve seen in the past four weeks will quickly translate into extra cash in family budgets."
i. "Further helping is that petrol prices have somewhat stabilised. Although they have not tumbled in line with the global oil price, largely because the Australian dollar has fallen just as far as oil, they’re not going up like they were through August. And that falling dollar, while terrible if you’re planning a skiing trip to the US in the next couple of months, is an absolute saviour for the mining sector."
j. "All experts expect commodity prices to come off their recent record highs on the back of slowing demand, although the fall is not forecast to be the dramatic collapse we saw in the early 1980s...But even if the volume of exports of commodities such as coal and iron come back, the 30 per cent or so fall in the dollar will more than offset this. Some coal producers reckon that on top of the 100 per cent or so increase in prices, total income will skyrocket close to 180 per cent because of the weaker Aussie dollar."
k. "Combined, this is why that IMF report, while knocking down Australia’s growth rate, still forecast the economy to grow 2.5 per cent this year and 2.2 per cent in 2009. "
l. "Only the BRICs — Brazil, Russia, India and China — and a couple of other small economies are expected to grow faster than Australia over the next 18 months."
m. "In other words, the IMF expects a repeat of the 2000-01 global recession which left relatively unscathed a group of nations that were closely tied together. They were the emerging giants and commodity suppliers."
n. "But with this good news, we have to recognise the problems of the past. It was the super-low monetary policy settings of major economies (the Federal Reserve took American rates down to one per cent and left them there way too long), coupled with pretty poor regulation and too-smart-by-half bankers and traders, that has got us into this mess."
o. "Central banks are again slashing interest rates (fortunately Australia’s is still relatively high at 6 per cent) to boost confidence and pump money into financial systems to keep economies afloat."
p. "Will they have learnt from the mistakes of 2000-01?... Or will the fate of Western-style capitalism rest in the hands of Chinese communism? "
http://www.thewest.com.au/default.aspx?MenuID=9&ContentID=102459
3. Do you share Shane Wright's optimism regarding the Australia's immediate future prospects? Why?
4. for your further comments and discussion, please.
5.Thank you.
regards,
Kenneth KOH
I do, for the reasons outlined in his article.
btw, I doubt that the global slowdown will be long lasting because there is plenty of money to go around.
It's fear stopping people from spending but fear does not last forever.
I am over it and have already started spending
Cheers
Bystander..
At the risk of sounding like an apologist - please don't mix Western-Style capitalism with Chinese communism in the same sentance! There are negative connotations with both - and on both sides of philosophy...
In Australia, I can't simply open a shop in the front of my house because I am a capitalist, and in China, you should know, no individual makes a decision unless it is put to a commitee (aka vote)
Thank goodness for Australia, that China has 'voted' for improved lifestyle and therefore requires our goods - satisfying both requirements. I don't want to go down the path of ideology because both are just ..... different!
As a capitalist - whatever happened to .. "The customer is always right ?"
Thankyou for your analysis however - over the years!
Cheers
J
At the risk of sounding like an apologist - please don't mix Western-Style capitalism with Chinese communism in the same sentance! There are negative connotations with both - and on both sides of philosophy...
In Australia, I can't simply open a shop in the front of my house because I am a capitalist, and in China, you should know, no individual makes a decision unless it is put to a commitee (aka vote)
Thank goodness for Australia, that China has 'voted' for improved lifestyle and therefore requires our goods - satisfying both requirements. I don't want to go down the path of ideology because both are just ..... different!
As a capitalist - whatever happened to .. "The customer is always right ?"
Thankyou for your analysis however - over the years!
Cheers
J
Dear All,
1.The Brisbane Times Newspapers today reported:"an increase in the first home buyers grant is helping renew interest in the housing market, federal Housing Minister Tanya Plibersek says."
"First-time buyers who purchase a newly-built home are eligible for grants of up to $21,000 as part of a package of measures to boost the slowing economy."
"Ms Plibersek today said anecdotal evidence suggested the package, combined with lower interest rates, was boosting interest."
"I think we're seeing the beginning of a positive trend in housing, the restoration of people's confidence," she told reporters at the Sydney Housing Expo.".
"That increase in interest is very encouraging and I very much hope it translates into an increase in building."
http://www.brisbanetimes.com.au/new...n-the-mend-govt/2008/10/25/1224351604380.html
2. Similar increase in the first-time homnebuyers' house purchase activities has similarly been observed in the Perth Property Market and reported by REIWA recently.
3. According to REIWA, "the sales volume is up 13 per cent on the June quarter, with much of this increase attributed to first home buyer activity, which in turn has contributed to the decline in median price, given that first home buyers purchase cheaper property."
http://reiwa.com/Art/Art-Public-Vie...52a567f5647-25-Oct-2008-11:28:47:396&Id=11303
4. Are the various housing markets in Australia, truly on the mend already or/and about to go on the mend soon within the next 6-9 months period, following these reported recent increases in the first homebuyers house purchase activities?
5. For your further comments and discussion, please.
6. Thank you.
regards,
Kenneth KOH
1.The Brisbane Times Newspapers today reported:"an increase in the first home buyers grant is helping renew interest in the housing market, federal Housing Minister Tanya Plibersek says."
"First-time buyers who purchase a newly-built home are eligible for grants of up to $21,000 as part of a package of measures to boost the slowing economy."
"Ms Plibersek today said anecdotal evidence suggested the package, combined with lower interest rates, was boosting interest."
"I think we're seeing the beginning of a positive trend in housing, the restoration of people's confidence," she told reporters at the Sydney Housing Expo.".
"That increase in interest is very encouraging and I very much hope it translates into an increase in building."
http://www.brisbanetimes.com.au/new...n-the-mend-govt/2008/10/25/1224351604380.html
2. Similar increase in the first-time homnebuyers' house purchase activities has similarly been observed in the Perth Property Market and reported by REIWA recently.
3. According to REIWA, "the sales volume is up 13 per cent on the June quarter, with much of this increase attributed to first home buyer activity, which in turn has contributed to the decline in median price, given that first home buyers purchase cheaper property."
http://reiwa.com/Art/Art-Public-Vie...52a567f5647-25-Oct-2008-11:28:47:396&Id=11303
4. Are the various housing markets in Australia, truly on the mend already or/and about to go on the mend soon within the next 6-9 months period, following these reported recent increases in the first homebuyers house purchase activities?
5. For your further comments and discussion, please.
6. Thank you.
regards,
Kenneth KOH
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The $21,000 building first home grant seems to be an interesting one.
I've heard both sides of the debate. It's a great thing and something to take up on, also heard it's bringing lambs to the slaughter.
Guess time will tell.
The hard thing for me to work out, is this downturn a good opportunity or are we in unchartered waters and just hoping it will all blow over eventually.
I've heard both sides of the debate. It's a great thing and something to take up on, also heard it's bringing lambs to the slaughter.
Guess time will tell.
The hard thing for me to work out, is this downturn a good opportunity or are we in unchartered waters and just hoping it will all blow over eventually.
&&&&&&&&&&&&&&&&&&&&&
Dear Red Baron,
1. IF we honestly are prepared to look inwards into ourselves and to truthfully and honestly examine into our own thinking, it is FEAR (False Expectations Appearing Real) per se, rather than the market development per see that this actually stopping us from taking action.
2. One of major hurdle against investing into the Australian Housing Markets which many investors may have is founded on the following FEAR:
a. that the Australian housing prices are presently "over-valued" by some 20%-30% and are among the world's most un-affordable one.
b. Most of the Western World/OECD countries are presently undergoing the rapid debt and asset de-leveraging process, why not Australia, in the first place?
c. Likewise, since the various housing prices have been collapsing in most of these Western World and OECD countries, why will not the same process also occur in Australia?
d. The global financial crisis is soon developing into a global Recession in many OECD countries and one can reasonably expect Australia to similarly fall into a Recession soon. Consequently, it is safer to stay away from investing into the various housing markets, for the time being and watch will happen next.
3. While these concerns are basically valid and sound, we must always realise that there is always another counter-side to our own perceptions.
4. Similarly, in every crisis, there is opportunities and that in every opportunity, there is risks.
5. No venture, no gains. The higher the risks, the higher the potential profits that can be made. Do we actually have the level of "courage" to venture out of our own present comfort zone and realise these potential profits for ourselves, in the first place?.
6. Jan Somers say, "the best TIME to invest is NOW when we can best afford it" But hear the number of "but"s and qualifications that we give ourselves in following her investing atruism.
7. Despite what the Kevin Rudd's Government recent Economic Stimulus Security Package, ultimately the various housing markets in Australia, are driven primarily by Economics Laws of Supply and Demand and its true underlying housing fundamentals.
8. For your further comments and discussion, please.
9. Thank you.
regards,
Kenneth KOH
Define "long lasting".
Not more than 12 months
Well, there is plenty of money looking for a home.
What do you mean by "plenty of money to go around".
The problem so far has been that everyone is afraid to lend to others but this will change, confidence will come back and things will get back to normal.
IMHO
