Boz, have a look at the steepness of the drop in car sales.....12% decline in 6 mths...
Here's building approvals, down about 10.5% over last 8 mths.
Yes, I know about it, they are a good indication of where the economy is heading to and it is one of the main reason on why the RBA is going to cut rates.
On the other hand as was pointed out on this forum the builder and trader are still flat out with jobs and car producer are not based in australia (and after all having less car driving around might be a good thing for trafic and that consumer might put their money in better use like paying debt and credit card).
Today came out the
trade balance numbers that are better then expected of 1.3 bil of positive balance. That is because of falling AU$ that increased the export value of resources denominated in US$ and import got quite steady that would mean a reduced import in US$ which I believe would probably lead to reduced retail sales and consumer-business spending in the future.
By the way have you checked the car retail sales in country like Europe or US? car makers would jump of joy to get Australian numbers over there
About which governor you are getting, in US there was quite a bit of different approach to economy, while Greenspan lower the rate to 1% for something around 1 year in 2002 fueling the house bubble, governor like
Paul_Volcker that is a mith for having ended the 70's stagflation with high interest rates. THen you have King that over one year ago was heavily critizised for playing down the credit crunch in UK and pretty much he got right what was happening once the Northern Rock failed. Then you get Bernanke that I think he is doing ok but 2 years ago say the US house prices respect the US foundamentals and failed to see the bubble. Then you get politicians like Costello that I was reading today on The Age his view of how better is Australia banking system compare to US and how much better regulation you have in Australia
Then you get Swan that is a bit like King and keep saying how Australian foundamental are very strong
. I believe he won't be able to handle well a downturn in the Economy but I think that unlike Costello he would know his limits and would get good advising on what to do.
Anyhow Glenn Stevens has been around as governor for 2 years and haven't had a thought he is an idiot from any of his interview and reports.
I also think the RBA and govt allowed a global credit bubble cause an asset bubble in Australia. And this is going to cause a lot of real pain to many Australians for years to come. This is why I don't think these guys should be put on pedestals. They say we have a free market but they still interfere with it when it suits their analysis. And I think allowing the property bubble was a gross error of judgement on their part.
I agree with that, and the pain for years to come is the most likely scenario.
The reason of a more likely long pain then a sharp short pain is the good Australian budget and the possibility to run a deficit for the future. Countrys like UK at the moment run a deficit of around 4% of GDP (even more in the near future), Australia if necessary can do the same and that would mean an extra 40 bil$ availabe every year. That would be enough to keep the economy in a good shape and avoid house prices to have any hard landing.
Fianally I agree that last year the M3 increased too much in Australia, but this year is going to increase as well even if not as much as 20% despite the high rates. Also in Europe the M3 is increasing to reasonable level. That justify the RBA and ECB in setting their rates in the last year.