Somersoft Economic Confidence Survey - December 2008

[BayView]

I voted SAME, but then I realised we are talking about S.S confidence; not the community.

The community mindset is bad now, so I don't think it will get a lot worse; more major job losses on the news yesterday from Macquarie and that other German sounding company with the un-pronounceable 2-barrel name. Starts with H. It was on the news last night.

I think the economy confidence will continue to be cr@p for about another 6-12 months.

Not that this is going to stop me; it's an opportunity for us (investors) as most people will be out of action and scared.

News will be bad for a while longer, but interest rates will be low, and rents will be high, property will be lowish in price.

That's a green light for the cashed-up cashflow and buy/hold investors.

Not much good for the flippers and cap gain investors.

 

[joeExpat]

The real economy has hardly been effected yet. The share market predicted what's coming.

Hit the nail on the head there.
Sold partially out of property this year, but not enough out of the stock market unfortunately, didn't see that coming to the degree that it did. 2009 is a time to hunker down and ride it out I think. Could be a few fake bounces along the way, don't be fooled. I won't be looking at buying Oz or UK property again for at least a year.

 

[LynnH]

I think the economy, generally speaking, will get worse over the coming 6 to 9 months - there would still appear to be more bad news which is yet to come to light. The job situation is a real worry, and I'm noticing an increased number of forced property sales in our area.

On a personal level, I doubt whether it will affect us much at all - hubby's job is secure (although the industry in which he works is facing a downturn, companies are reverting to asking staff to take leave, etc). Interest rates can only be a positive, our LVRs are fairly low, and our property activities over the next year will consist of "adding value" to existing properties and, hopefully, picking up new properties from about mid-2009 as opportunities present themselves.

But as I've said before, my crystal ball broke a long time ago .....

Cheers
LynnH

 

[our obsession]

I voted for better.

I cannot change the fundamental basic makeup of my personality-outlook on life (including economy ). Optimistic.

I am still trying to figure out why I think and feel like this. Bit of self research. And that is quite fun, too.

It doesn't mean I don't have empathy for anyone undergoing tough times, or don't recoginse muck and mud when walking through it, (for me, that is interval training-bound to make you fitter )...or dealing with it....but I just see opportunity raining.

My personal belief.

Actually it maybe more, my self belief, whatever is dished up is something I always deal with to the best of my ability, lateral thinking and determination...I never, ever give up, there is always a way around obstacles and slowdowns and challenges.

That would include economies.

 

[chilliaa]

The real economy has hardly been effected yet. The share market predicted what's coming.


As for me, the last cropping season, at the finish of harvest in May 08 was the best ever, and I doubt I will ever see another like it in my lifetime in regards to profitability.

In contrast, this year could very well be the worst, and it has nothing to do with drought or flood or pest or disease. Simply crashing commodity prices.


See ya's.

But would you agree that commodity prices are normally quite volatile. Last year you received excellent prices, this year bad prices, every year prices seem to swing around alot?

 

[chilliaa]

The real economy has hardly been effected yet. The share market predicted what's coming.


As for me, the last cropping season, at the finish of harvest in May 08 was the best ever, and I doubt I will ever see another like it in my lifetime in regards to profitability.

In contrast, this year could very well be the worst, and it has nothing to do with drought or flood or pest or disease. Simply crashing commodity prices.


See ya's.

PS Topcropper,
You have my respect being a farmer. One of the hardest professions out there.

 

[The Red Baron]

Job cuts will be the big one next year. You won't want to be unemployed and playing muscial chairs.

Only up until a few weeks ago most of my friends were cheering the interest rates coming down, and petrol prices. Saying this finanical crisis is a great thing!

Now seems a few companies have had talks with their employees, cancelling Christmas Parties, bonuses, gifts. Wonder when the real impact will hit companies and what their measures will be?

 

[sunshine]

I expect next year to be a growth year for property, leading up to possibly the mother of all booms in 2010 - 2011. Too many people are sitting on the fence waiting to buy, all they need is a sniff that property is not heading south and then they will pounce.

On a voodoo point of view, a Numerologist recently told me that 2008 (number 1) is a consolidating and changes year. 2009 (Master number 11 or 2) is a growth year. It will be very interesting to see how it turns out.

On a personal note, interest rate decreases have saved our bacon in the nick of time. There is no way that next year can be worse than this year.

We normally don't go out on New Year's Eve, but this year we can't wait to boot out 2008 and ring in 2009. I can feel it in my bones - its gonna be a good one!

Sunshine

 

[urchin]

There is no way that next year can be worse than this year.

Hmm.... sounds like "famous last words" to me

While I am not one to argue with numerology, and while optimism is an admirable trait in a human being, the idea that the worst is now behind us is wishful thinking.

The financial markets just imploded a couple of months ago. The effects of that massive destruction of wealth is only just beginning to be felt by the "real economy". It is not just shareholders that lost wealth, the corporations themselves are now worth significantly less than they were a couple of months ago. That impacts their ability to borrow, to expand, and to fund various projects. If there is one thing that is certain in life it is that doo-doo runs downhill. Whenever the boys at the top take it on the chin, you can be pretty damn certain that the little people are going to feel some real pain.

To say that the economy will just shrug this off is like saying that someone who just had a massive heart attack will be up and running a marathon next week. He might still be alive, but it is going to take time to nurse the patient back to health.

Best case scenario--this would be if the govt does everything absolutely perfectly and nothing awful happens--is that we manage to stay more or less stagnant for a year or two and then slowly pick up again, although this time with a substantial national debt.

Worst case scenario is that govt policies have no effect, unemployment spikes, and this causes lots of bad things to ripple through the economy (i.e., unemployment leads to bad things in housing market leads to bad things for banks leads to tighter credit leads to even more unemployment).

not being an evil person, i don't want to see the worst case scenario but my wants have little to do with what is going to happen anyway. we are all just spectators in the end.

(ps - I am not denying that some people will continue to prosper regardless of the macro economic trends, so please don't flame me saying that you are going to be fine--i am very happy that you are going to be fine, but I am talking to the larger economy as a whole).

 

[want2bewealthy]

I think it will be worse for the population in general as job losses begin to bite and others feeling uncertain about the future. I think until now much of the population thought the subprime was purely a news item rather than something that was impacting them personally.

For me personally I think things will improve with interest rates being our our by far biggest expense. Our living expenses are also falling so we are feeling ready to spluge a little for the first time in years.

Well said

 

[our obsession]

Urchin:

To say that the economy will just shrug this off is like saying that someone who just had a massive heart attack will be up and running a marathon next week. He might still be alive, but it is going to take time to nurse the patient back to health.

Yes, urchin, agreeance.

Urchin:

not being an evil person, i don't want to see the worst case scenario but my wants have little to do with what is going to happen anyway. we are all just spectators in the end.

Yes, economies, societies...rise and fall, decay and regenerate....we are the observers, some of us a little more interested than others, it is fascinating theatre. (No disrespect to folk hurting bad in it).

But, I get to control how I respond, how I react to all the good, bad and the ugly.

Brick walls and shifting sands can come from any direction, they can from any walk of life, any flavor....I control how I react to brick walls, economies, governments, shifting sands, flooding rivers, mountains.....all the challenges....I choose my response, my self belief and optimism, my knowledge of my strength of character and mind...my ideas, my creativity, seeking information, my determination, that is something I know very well, I work at that, I am a constant work in progress..

Economies are not something I know a lot about, (although am very interested in), nor do I control.

I just know me.

It's all good.

 

[topcropper]

But would you agree that commodity prices are normally quite volatile. Last year you received excellent prices, this year bad prices, every year prices seem to swing around alot?

Yes. Quite right.

I was silly enough to think the food crisis of last year would mean that grain would start to be treated with a bit more respect. But no, all the speculators and hedge funds piled in and created an enormous bubble [that I made a killing from] and now they are all piling out again and grain is just being a slave to the oil price.

There would not be many farmers in the world who made much from grain this year, as we all paid top dollar for the inputs and suffered from the crash before harvest. There would be a few smart cookies who locked in all their crop at the top dollar, but I just did my usual thing and locked in a bit, about 25%.

See ya's.

 

[Bricks & Mortar]

Seems to me that we are always doing catch up in regard to details of what the economy is actually doing from the experts...last details for the land of OZ is we had a minimal growth in Sept. and the Pollys seem to be proud to broadcast that we had a growth compared to our o/seas neighbours who are negative and facing recession. The news cames in late November and I'm guessing that month took another dip and most likely into the red ...hence the reason for the reserve to further drop interest rates beyond the anticipated/expected .75points. which places us far square with the rest of the world.
I guess the politician are trying up talk the economy as the media is dragging it down (bad news sells papers)
Everything is also so interlinked with the world that what happens overseas nowdays does directly effect us in some way. I really think that having the services of the internet and news straight on hand somehow helps feed the advertising of the media.

Daytime shows like Dr Phil and Oprah now are on Finance now too.
We are spending too much!
We need to save.
We need get the economy going
(I know need to watch another program or DVD)

But it's true, every country has the population overspending and not saving
and yet every government has for years encouraged saving rather spending
opps!
Yes perhaps the taxing on savings wasn't the brightest thing to bring in the revenue and the compulsory super ain't looking too flash after the prime shock wave that hit the stockmarket and lets not forget those banks overlending to its citizens, buisness and investors...

but it is a cycle,
this happens on a regular basis
the stockmarket will rebound, maybe not during 2009 but it will eventually get back to the highs of 2006 and beyond.
Property will drop and rise again in value....we could have a long flat period or perhaps as Sunshine suggests a mother of a boom in 2010-2011.

Only time will tell when
but it will happen.

OK I have no crystal ball on the subject or poll but my gut feeling is that there will be an further problems in the beginning of next year as we continue in the short term along the same as the last quarter of this year.

Government spending will take a while to filter through the system and partially due to that delay, the already mass negative sentiment and the over-exaggeration of anything else that's bad news, we will all continue in the downward trend till mid year.

People will become more careful with spending and some will have the inability to spend due to job losses so the recovery trail will be very slow to start but people being what they are will continue to do what they have done in the past... I believe that perhaps they will tighten their belts in the short term but that wont last.

They are addicted to spending and having the new items
Having the latest and greatest, buying the 4WD despite never leaving the bitumen roads etc etc.
all despite the credit crunch we are having.

Unless they personally lose their jobs their spending habits will return,
perhaps a lot more cautiously at first but we live in a society that seems to want it all. And nowdays despite the credit squeeze globally,
money or should I say credit is too easy to obtain.

Today in the midst of the problems
Banks still want to up your credit card limit
Loans are still far easier to obtain that when we went for our first loan.
Stores try to sell you not only goods, but store cards as well.

so in summary my guess is.... It's all three
worse, then change to the same for a while with the start of a recovery very very late in the year

 

[willair]

Fwiw, I voted worse, mostly because I think Australia will go into recession in 2009.

After going for a walk around a small commercial section of Southport
today and looking at several properties that are for sale,up for tender
ect ,you may well be right ,i was shocked one large main highway corner that i had a look at 6 weeks ago is now vacant and every window-door -wall is kicked in and broken, with the sign up any offers,makes me think if the smart people are right about next year,i would not like to be holding any comm property if that's how fast the tide can turn,i'm glad i just rent run down properties to people on welfare payments,and the way "Kev from Queensland "is giving money away,then the rental payments are safe, the only one left is property,everything else has been cut in half,if the ASX goes into the 2500-2800 range then it's time..willair..IMHO,

 

[Twitch]

I voted "worse".

Job loses are unfortunately going to snowball next year. How bad it will get no one knows, but we're still in a nose dive with the government madly pulling back on the stick... and it's not working yet....

 

[buzzlightyear]

I voted "worse".

Job loses are unfortunately going to snowball next year. How bad it will get no one knows, but we're still in a nose dive with the government madly pulling back on the stick... and it's not working yet....

You need to give some time lag for reduced interest rates to kick in. Of course by the middle of 09, you may indeed be right.

 

[MarkB]

Do you think the economy will get better or worse over the next 12 months?

n = 148

Better 33 (22.30%)
Same 36 (24.32%)
Worse 79 (53.38%)

Many thanks to all who voted.

Depending on how you want to cut the results:

• 45% think the economy will either get better or at least no worse in the next 12 months
• 78% think the economy will either get worse or at least no better in the next 12 months
• A net 31% think the economy will get worse (those who think it will get worse less those who think it will improve)

A few people have commented (in regards to the self-imposed departure of a particular member) that this place will become dominated by those with an unjustifiably positive view of the world (or words to that effect). With over 50% of people feeling negative about the economy over the next 12 months, it is hard to see how that is the case.

I'd like to do the survey at least every 6-8 weeks to see how the results evolve.

In retrospect maybe I should have asked:

Do you think the economy will get better or worse over the next 12 months?

• Alot Better
• A Bit Better
• About the Same
• A Bit Worse
• Alot Worse

Any thoughts appreciated.

 

[lizzie]

a year is a long time in the current financial market.

just look at what's occured over the last 12 months - most of it unpredicited or overlooked by the masses (me included).

perhaps need to break up the poll into 6 month periods, or ask what you believe it will be like "in" 12 months rather than "over" 12 months.

hope that makes sense.