Recession likely in Australia

[WinstonWolfe]

p.s. Other tiresome cliches - I'm making a list:

Don't forget "this country" when referring to Australia.
What's wrong with saying Australia?

I want to puke every time I hear it. And it is well entrenched in ABC reporters and Labor polies lexicon.......bloody chardonnay socialist urban intelligentsia think they're smart using such unconscious unnecessary cliches.....but it just shows they don't think for themselves but follow each other around trying to score "up with the times" Brownie points.

 

[Nathan]

So the idea is to kickstart the "global economy" (oh God not another of those tiresome cliches) by getting Australians to spend Asian savings.

It used to be the Americans spending Asian savings (post 9/11 when the flood of cheap Asian credit hit the USA) - is KR and co. taking our heads to the table?

So after we have bought the 3rd new plasma in a row (post baby bonus plasmas) and gorged ourselves on another gas guzzler (that should help get the oil price back up again - we're just doing our bit)...

what will we really have contributed/produced vs. CONSUMED ??

Instead of giving tax breaks Mr PM, why don't you invest the money in building new industries/jobs - sustainable energy, better water management infrustructure, etc. This will naturally increase spending anyway, but we will be spending Australian money on Australian national priorities.

(Actually that is a rhetorical question - it is because his horizon is only the next election)

p.s. Other tiresome cliches - I'm making a list:

"Can I just say..." (well bloody say it!)

"Working families" (that would be all of us mate, except the buggers collecting Centrelink...who I suspect you are really appealing to)

"The Global Financial Crisis" (Let's just call it the "GFC" so we can shorten your rhetoric)

"The Uncertain Economic Times" (Just the "UET" (pronounced "ute") will do actually)

"On a go forward" (well until they invent a time machine, it's the only way open to you)

Thank heavens for Pollies - I get a smile out of every day

I second all the above.

 

[Aaron Sice]

y'know what? i'm over it. i'm switching off the news now and CBF'd listening anymore. just heard some bulls_t mainstream news repot about "a recession likely."

for all those journo's out there

recession = "...2 consecutive quarters of negative growth..."

who's calling a recession? 3 consecutive quarters? 4? how long will it go for?

how deep will the recession be? 0.1% 1%? 5%?

a depression is where REAL GDP fall by 10% - regardless of the timeframe.

so, are we looking at mid-70's USA recession of nearly 5% which hurt a lot of people, or the "recession Australia had to have" or are we talking a recession in the technical term only, like Singapore?

there is SO much evidence to the contrary regarding a possible recession, and SO much evidence pointing to a possible recession.

the way i see it, if Australia is taken at face value, there will be no recession.

if Australia is taken as part of a global face value, then yes, there will be.

so, as an investor, how do you see the world? because ultimately, the way you invest could change the outcome.

 

[quoll]

so, as an investor, how do you see the world? because ultimately, the way you invest could change the outcome.

It's all the different groups of people and how they percieve it, the property investors should be able to snap up a few nice bargain properties, the share investors .... well the hard bit is working out when to buy .. is this the bottom, is it going up or down, but compared to last year there are some bargains to be had. Now the average Aussie? Most are still employed on the same pay as 1 year ago, mortgage has just got cheaper, petrol is similar price to 1year ago maybe a fraction cheaper, food hasn't gone up much more. Imports are going up so the cheap consumer electronic stuff will be impacted.

For most people the only issues they have are the media telling them Australia / the world is in economic trouble and they need to be scared.

I'm going to continue with the current plan but if things change I will adapt and my plan with alter a little bit.

Cheers
Graeme

 

[Aaron Sice]

It's all the different groups of people and how they percieve it, the property investors should be able to snap up a few nice bargain properties, the share investors .... well the hard bit is working out when to buy .. is this the bottom, is it going up or down, but compared to last year there are some bargains to be had. Now the average Aussie? Most are still employed on the same pay as 1 year ago, mortgage has just got cheaper, petrol is similar price to 1year ago maybe a fraction cheaper, food hasn't gone up much more. Imports are going up so the cheap consumer electronic stuff will be impacted.

For most people the only issues they have are the media telling them Australia / the world is in economic trouble and they need to be scared.

I'm going to continue with the current plan but if things change I will adapt and my plan with alter a little bit.

Cheers
Graeme

thank god - finally some street level advice. kudos for the level headed thinking.

maybe this is the reason aussies are so apathetic when it comes to money - talktalktalktalktalk and nothing really changes.

 

[Peter 14.7]

I second all the above.

And I vote for the motion. An opportunity lost......

I voted for Rudd on his promise of nation building, not encouraging the import of Plasma screens from China.

He could and should have done sooooo much more.

Where are the abolition of the states?
Rationalisation of services?
My god, we don't even have national driver licenses or baby registration.

And what do we get....

$1400 for pensioners to spend on plastic rubbish for the grandkiddies at Xmas.
$1000 per child for bogans to spend on bundy rum and V8 commodores.

I care for a pensioner and I would rather see her get her dodgy knee operated on.

I have a child I would rather have seen $1k for free extended kindergarden care.

Harvey Norman, Nokia, Apple must be so happy.

This recession was the one chance we had to change the mindset of the GenY and X types to think savings and not spending. Todays action has rewarded largess over thrift.

We are building a nation like the US.

So disappointing.

Bring back the Libs. They may not have understood Greenhouse but they gave $8k to anyone for solar panels where Labour restricts it so effectively no-one can get it.

Peter

 

[Nathan]

And I vote for the motion. An opportunity lost......

I voted for Rudd on his promise of nation building, not encouraging the import of Plasma screens from China.

He could and should have done sooooo much more.

Where are the abolition of the states?
Rationalisation of services?
My god, we don't even have national driver licenses or baby registration.

And what do we get....

$1400 for pensioners to spend on plastic rubbish for the grandkiddies at Xmas.
$1000 per child for bogans to spend on bundy rum and V8 commodores.

I care for a pensioner and I would rather see her get her dodgy knee operated on.

I have a child I would rather have seen $1k for free extended kindergarden care.

Harvey Norman, Nokia, Apple must be so happy.

This recession was the one chance we had to change the mindset of the GenY and X types to think savings and not spending. Todays action has rewarded largess over thrift.

We are building a nation like the US.

So disappointing.

Bring back the Libs. They may not have understood Greenhouse but they gave $8k to anyone for solar panels where Labour restricts it so effectively no-one can get it.

Peter

BRING BACK LIBS I SAY TOO!!!! *Dont blame me i vote Liberal*

I am still scratching my head as too why Labor got in now, i guess Kev 07 is a good salesperson.. thats about it.

i think our economies are all very similar and will naturally follow this route of disaster, for d day... who knows when...

Lets hope our props get hit by the inflation genie...

 

[yadreamin]

Peter 14.7
l couldn,t agree more with you.
How very very dissapointing and what an absolute waste of money .
I believe a fortnightly increase would have been far more beneficial to many children,careers, pensioners.
This one of payment will go straight to the crap plastic isle in the shopping centre. It will be all gone within days. Retailers will be happy.
I bet all the bogans will be lining up for handouts for xmas as well.
It must be really tough for those who try so hard to make do to stand in line with these people.
I was just starting to think Rudd was doing ok.
cheers
yadreamin

 

[boomtown]

My god, we don't even have national driver licenses or baby registration.

I strongly agree. All babies should be required to wear a leather collar with their local shire registration tag attached.

 

[greedy saffa]

Thanks Boomtown - I nearly wet myself when I read your last post!

 

[Peter 14.7]

The Libs lost because Howard failed to give over to Costello in 04 against Latham.

Malcolm Turnbull will make an excellant option. He prempted the Pensioner Bonus.

Peter

 

[Peter 14.7]

I strongly agree. All babies should be required to wear a leather collar with their local shire registration tag attached.

The irony of your above wit ( which by the way is very good) is that it is illegal to fail to register your dog in NSW and it is not to fail to register your child!

Peter

 

[Peter 14.7]

I wrote this on another post, but may as well add it here.

(I think I am going to have to get involved in Victorian Liberal politics - and kick out the chief tosser and his impotent bag of sheep. We have got to start changing things!!!)

KR & Co. are dreaming if they believe that their doubling of the first home owners grant is going to help first home buyers.

If anything, the grant increase will just be built into the selling price of homes that are in the FHB bracket.

If KR & Co had any sense, they would let the market do its work - it is not as if property prices are grossly undervalued. The stimulus that is required is on the supply side.

I have made a tongue in cheek comment on this on my continuing thread in "property market economics".

Why not invest in long term infrastructure which will create employment (through building and use) and stimulate the economy in a way that will be of lasting benefit to all Australians - why do our govts continue to prop up short-term consumer gluttony?

Food prices are high because there are fears about world food shortages. What is the smartest thing we can do? Well we have an abundance of sunlight and good soil. We don't have water..!!! (well - we don't manage our water well enough).

Do you think we will see the day when an Australian govt stops and thinks "If we secure our water future, we secure our economic future" ???

Stomwater harvesting, improved dams, mandatory rainwater tanks, grey water recycling, piping water from QLD and NT through to the Murray River...

Australia could be a food basket for the world - leaders in agriculture (so we don't simply rely on a minerals boom), energy - instead we are becoming overweight, under-skilled, maxxed-out consumers - MINI AMERICANS!!!!

We look down on the Americans as pampered, obese, poorly skilled (they have no competitive manufacturing any more), locust-like, "supersize me" consumers - are we so different?

Our government is not pursuing policies that are in any ones long term interest (well perhaps Asia - they can pick us up at a bargain price one day when crash like the Americans just have)

Agree, agree, agree and kudos on the way.

Where are our diverted Qld rivers to parched NSW Murry Darling? Where are mega solar plants? Where are very fast trains? Were are our Snowy Mountain Schemes?

$10BN spent on consumer goods!

Latham could have come up with that!

Peter

 

[greedy saffa]

Sorry - was mucking around re-reading this so just re-posted it.

(I think I am going to have to get involved in Victorian Liberal politics - and kick out the chief tosser and his impotent bag of sheep. We have got to start changing things!!!)

KR & Co. are dreaming if they believe that their doubling of the first home owners grant is going to help first home buyers.

If anything, the grant increase will just be built into the selling price of homes that are in the FHB bracket.

If KR & Co had any sense, they would let the market do its work - it is not as if property prices are grossly undervalued. The stimulus that is required is on the supply side.

Why not invest in long term infrastructure which will create employment (through it's building and use) and stimulate the economy in a way that will be of lasting benefit to all Australians - why do our govts continue to prop up short-term consumer gluttony?

Food prices are high because there are fears about world food shortages. What is the smartest thing we can do? Well we have an abundance of sunlight and good soil. We don't have water..!!! (well - we don't manage our water nearly well enough).

Do you think we will see the day when an Australian govt stops and thinks "If we secure our water future, we secure our economic future" ???

Stomwater harvesting, improved dams, mandatory rainwater tanks, grey water recycling, piping water from QLD and NT through to the Murray Darling Basin...

Australia could be a food basket for the world - leaders in agriculture (so we don't simply rely on a minerals boom), energy - instead we are becoming overweight, under-skilled, maxxed-out consumers - MINI AMERICANS!!!!

We look down on the Americans as pampered, obese, poorly skilled (they have no competitive manufacturing any more), locust-like, "supersize me" consumers - are we really so different?

Our government is not pursuing policies that are in anyone's long term interest (well perhaps Asia's - they can pick us up at a bargain price one day when we crash like the Americans just have)

I should probably point out that, as a South African who has chosen to make Australia home, it frustrates the hell out of me to see such golden opportunities wasted. Life can, and will, get a lot tougher than this.

We, and our leaders in Australia, are not demonstrating the intelligence or resilience needed to deal with tougher times.

 

[quoll]

Why not invest in long term infrastructure which will create employment (through building and use) and stimulate the economy in a way that will be of lasting benefit to all Australians - why do our govts continue to prop up short-term consumer gluttony?

Short term will help them get re-elected.

Do you think we will see the day when an Australian govt stops and thinks "If we secure our water future, we secure our economic future" ???

Long term plan - too hard, won't help with next election.

Stomwater harvesting, improved dams, mandatory rainwater tanks, grey water recycling, piping water from QLD and NT through to the Murray River...

Australia could be a food basket for the world - leaders in agriculture (so we don't simply rely on a minerals boom), energy - instead we are becoming overweight, under-skilled, maxxed-out consumers - MINI AMERICANS!!!!

Agree with all of it.

Our government is not pursuing policies that are in any ones long term interest (well perhaps Asia - they can pick us up at a bargain price one day when crash like the Americans just have)

That long term planning thing again, Gov just doesn't seem to care about long term, doesn't help with re-election.

Way too many short term solutions by Federal Gov, State Gov and outsourced ExGov departments.

I'm getting very depressed now, will have to go and read some happy posts.

cheers
Graeme

 

[Bill.L]

Hi all,

$1000 per child for bogans to spend on bundy rum and V8 commodores.

I'll drink to that, but I have to drive down to the bottle shop first.

On a more serious note, did anyone really expect anything different?? It probably does not matter which side of politics is in power, they would have both done similar. I mean after all, how do you win over the electorate with only 2 years to go to the next election???

The economic advice the politicians get/listen to tells what to do in such circumstances as impending recession, namely spend more on consumption and lower interest rates.
Nobody mentions that the current economic thinking could be wrong, I mean afterall it is only theory.

bye

 

[Peter 14.7]

Hey Bill

I am glad my rant ( I usually class myself as moderate) hit a chord.

Sadly, you are probably right especially as Turnbull is in agreement.

I just dont understand why they didnt apply in another format like every payments in installments via Centrelink for pension and child care allowance?
50% of these amount willgo direct to Harvey Norman, Toys R Us, etc..

Lump Sums will be spent as lumps. It is proven when people are down they want to spend on a pick me up and they means something special. I bet they will not put the $1k into the mortgage for rainy day.

And on your last point that is very pertinent.

Six months ago it was "inflation is out of control, rates to rise, STOP spending!!!!" now a short while later, START spending!

I am not totally convinced we willnot see a reversal in may 2009 when rates tigthen again and the affairs of today as all forgotten. Inflation at 5% and rising.

Peter

 

[WinstonWolfe]

I think Ron Paul's view is just as applicable to Rudd's short sighted economic stimulus as it is to the USA. Rudd and many supporters aren't weighing the opportunity cost and the lack of options they'll have for further problems in 6 mths.

Capitalism Without Capital?


It has been long understood that our federal government is going deeper into debt, consistently raising the debt ceiling and demonstrating no fiscal restraint. In recent years, debt ceiling increases have been placed in “must pass” legislation as a means to guarantee that Republicans as well as Democrats would vote for them when Congress was under Republican control.

We also know our nation’s “negative savings rate” reflects the habits of private citizens, showing those habits to be not tremendously different than the habits of the public sector. Yet, the signs of decline are becoming ever more apparent. So apparent, in fact, that it seems unlikely that bailouts or other gimmicks will have even short term success. More inflation, and creating moral hazard by bailing out egregious offenders, is a recipe for disaster. These activities can seem to provide some short term relief, but it seems we are now at a significant crisis point, where monetary policy gimmicks don’t provide the band-aids they did in the past.

Not only is our nation on the verge of bankruptcy, but so are its people and private institutions. We are now repeatedly hearing about businesses “needing to access the credit market to make payroll.” This is an unmistakable sign of more dire consequences ahead for the economy. If businesses must borrow just to make payroll, this is evidence of a severe undercapitalization that cannot be sustained, even for the short run.

Couple these facts with items such as the explosion of the “pay day loan” industry and the unmasking of the false sense of economic well-being is nearly complete. These pay day loan companies use preferred access to easy credit to inject cash into the hands of the working poor. They are nearly always set up in lower-income neighborhoods. These people, who are struggling to buy food and pay rent, get addicted to the credit drug. Their standard of living is only further depressed by the interest payments on these loans that make them profitable to their providers. Thus, the recipients are left even less capable of paying for items such as food and housing in the long run, without using this credit again and again.

These people are often the very ones being paid by businesses who “borrow to make payroll.” This is the dark underbelly of the fiat money, borrow and spend economy this nation has been building. As the government takes over more and more functions of the economy many see the rise of socialism as an antidote to this failure of “capitalism”. However, the fact remains that our economy has been increasingly running on debt, not capital. Capitalism does not exist without capital and debt is not, has never been and will never be a form of capital. Only now are we seeing the more dire implications of an economy without capital.

 

[Aaron Sice]

i think the 10b is proof that Labor have NFI about what is a "stimulus" and what is a "handout" package.

the FHOG didn't affect house prices at $7000 - and it won't at $21,000. why? because it's at the wrong end of the scale. a FHB can go and get a $180k property with that, or a $350k property. to say that $180k property is now worth $200k is just ludicrous...a second HB won't pay $200k.

what DOES affect houses is when you get stamp duty relief up to $x - demand rises for anything under that value so everything under that value rises to meet the bracket.

period.

 

[BV]

i think the 10b is proof that Labor have NFI about what is a "stimulus" and what is a "handout" package.

I agree, I think it shows that they lack experience.
10b would have been better spent doing essential infrastructure work.

If they wanted to help people and to make us spend more they could have done it by making sure interest rates dropped faster.