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Re: Australian economy

Postby HBS Guy » 23 Oct 2014, 07:36

The Kouk sees the danger of deflation in near future with terms of trade in freefall, unemployment increasing, wage growth slowing and the rest of the world slowing:

http://thekouk.com/blog/inflation-is-sl ... EgbAIuUekR
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Re: Australian economy

Postby ele » 24 Oct 2014, 06:53

I think I saw a report of Reserve Bank warning the other day- 2 negative factors- one was to do with Chinese investment in housing market in Sydney and Melbournes (and Brisbane?) - corrupt- collapse of housing market bubbles there- also Chinese deliberate slowing of their economy and this will affect Australian exports- and commodity prices.
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Re: Australian economy

Postby HBS Guy » 24 Oct 2014, 15:32

Yup. Govt needs to run deficits for a while, not this idiotic drive for a surplus that targets the poor, the old, the sick and students and would–be students. Tackle the bloody excessive (Howard, still!) tax expenditures, kick asset millionaires off the Old Age Pension, tighten the FBT and a few things like that and they will have a surplus.

Roads of the 21st century is a slogan only a moron like Abbott could dream up! Roads are 17th century technology! When the economy picks up again—oil and so petrol prices will skyrocket—and people will want the telecommuting the real NBN could offer, want the public transport that the blithering idiot is refusing to build!
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Re: Australian economy

Postby HBS Guy » 28 Oct 2014, 17:32

Goldman Sachs sees recession and deflation ahead:

http://www.smh.com.au/business/markets/ ... 1chrc.html
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Re: Australian economy

Postby OldMate » 30 Oct 2014, 06:32

HBS Guy wrote:Goldman Sachs sees recession and deflation ahead:

http://www.smh.com.au/business/markets/ ... 1chrc.html


I hate to say it but "I told you so" (I'm on the record for describing the budget as recessionary). And it still is not fully implemented. And now they want increased GST.

Abbott the Rabbit and his croonies are not liberals but rather destructive reactionary Un-Australian ultraconservatives. :sad
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Re: Australian economy

Postby HBS Guy » 30 Oct 2014, 10:35

Ummmmm where are you on the record?
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Re: Australian economy

Postby HBS Guy » 05 Nov 2014, 07:42

The Kouk still lambasting the RBA for not cutting interest rates

http://thekouk.com/blog/rba-holds-at-2- ... FlAVfSUekR

I made a comment (not showing yet) that interest rates are a brake but not an accelerator. Scope for cuts is pretty limited with the rate at 2.5%—once you go below 2% you are in effective negative interest rate territory!

So monetary policy is useless ATM, fiscal policy is going the wrong way and way too much FEAR is being engendered—a recession is inevitable!
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Re: Australian economy

Postby OldMate » 06 Nov 2014, 14:59

HBS Guy wrote:The Kouk still lambasting the RBA for not cutting interest rates

http://thekouk.com/blog/rba-holds-at-2- ... FlAVfSUekR

I made a comment (not showing yet) that interest rates are a brake but not an accelerator. Scope for cuts is pretty limited with the rate at 2.5%—once you go below 2% you are in effective negative interest rate territory!


Further prove that if you ask 12 economist the same question you get 13 different answers. :bgrin :roll

And pollies can cherry-pick their response/policy according to their ideology/whim/needs. :mad


HBS Guy wrote: So monetary policy is useless ATM, fiscal policy is going the wrong way and way too much FEAR is being engendered—a recession is inevitable!


It is not a foregone and I hope that you and I are wrong but a .5% off would be prudent and helpful for the majority of Oz (and a different policy twig is needed for Sydney - maybe just a signalling a change (intending to or not) to foreign real estate investments or neg gearing would do the trick.
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Re: Australian economy

Postby HBS Guy » 06 Nov 2014, 18:33

maybe just a signalling a change (intending to or not) to foreign real estate investments or neg gearing would do the trick.


Why not? Economics is actually a behavioral science.
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Re: Australian economy

Postby HBS Guy » 06 Nov 2014, 21:41

ABS reports unemployment in Oct same as revised Sep figure, 6.2%.

Participation rate up .1%, hours worked up 1.6%

Need a few more months data to see how good the new surveys etc are—economists etc are certainly treating the data with a lot of caution!
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Re: Australian economy

Postby HBS Guy » 08 Nov 2014, 10:20

Stiglitz on the economic dangers of inequality:

http://www.smh.com.au/comment/inequalit ... zsxtk.html

Of course, the present idiotic govt is rushing headlong down the failed US path. Govt of rentseekers by rentseekers for rentseekers.
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Re: Australian economy

Postby HBS Guy » 11 Nov 2014, 07:05

The damage the stupid Lib govt, dregs of the dregs, has done to the economy:

The Senate and the deteriorating iron ore price have knocked a $51 billion hole in Treasurer Joe Hockey's first budget, an independent analysis has found. It says part of the problem is that the budget is seen as "unfair".
Presented as Mr Hockey prepares to meet international finance ministers in Brisbane to push for measures to accelerate world growth, it shows the growth outlook for Australia has slipped, with growth of just 2.1 per cent expected in 2015-16 instead of the 3 per cent forecast in the budget.
When the budget was struck in May the iron ore price was $US103 ($119) a tonne. It has since fallen to $US83 taking as much as $10 billion out of tax revenue and helping push wage growth to its lowest level in a decade.
So low has wage growth become that "it seems that not even bracket creep can get the budget back into surplus", says the Canberra consultancy Macroeconomics in a report delivered to clients on Tuesday.


Read more: http://www.smh.com.au/federal-politics/political-news/51-billion-black-hole-in-treasurer-joe-hockeys-budget-20141110-11jvo2.html#ixzz3IhSKTQxE
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Re: Australian economy

Postby HBS Guy » 12 Nov 2014, 07:39

Craig Emerson in a lively paper on tax reform:

http://craigemersoneconomics.com/econom ... -about-tax

Well worth a read!
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Re: Australian economy

Postby HBS Guy » 12 Nov 2014, 19:17

The weak wage growth overall is not good news for households or retailers, when combined with poor employment growth and Citi’s Joshua Williamson sees little chance of a turnaround

http://www.abc.net.au/news/2014-11-12/wage-growth-remains-at-record-lows/5885892
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Re: Australian economy

Postby ele » 15 Nov 2014, 12:12

Weak wage growth might keep interest rates down to try to support demand.
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Re: Australian economy

Postby HBS Guy » 15 Nov 2014, 13:23

Not even close. With the cash rate at 2.5% there is still no appetite in the household sector to take on more debt. The household sector has to deleverage, pay debt down, build up savings before there will be much demand. The interest rate will be irrelevant then.
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Re: Australian economy

Postby OldMate » 16 Nov 2014, 07:04

HBS Guy wrote:Not even close. With the cash rate at 2.5% there is still no appetite in the household sector to take on more debt. The household sector has to deleverage, pay debt down, build up savings before there will be much demand. The interest rate will be irrelevant then.


I think you're right. It is called consumer confidence. Many have taken the warning of GFC and the American experience to heart and are showing more prudence than rapacity. And I think many are smart enough and aware enough to know that the world generally is in a precarious economic situation and thusly Australia and their jobs are as well. I think the Mad Monks message that we now live in an uncaring 'dog eat dog' society is also impacting.
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Re: Australian economy

Postby HBS Guy » 16 Nov 2014, 07:57

Swan castigates Paul Kelly and News Carp:

http://www.thesaturdaypaper.com.au/2014 ... Ge_LPSUecx

I put it here because Murdoch is the enemy of real political and economic reform and lack of useful reforms over time stultifies an economy.
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Re: Australian economy

Postby HBS Guy » 18 Nov 2014, 23:12

Chart of govt spending:

http://www.tradingeconomics.com/austral ... t-spending

Pity it doesn’t show it in constant dollars or as %GDP etc.
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Re: Australian economy

Postby HBS Guy » 20 Nov 2014, 06:02

The Kouk: moribund wages growth depressing private sector spending.

http://thekouk.com/blog/consumer-sentim ... Gw36VeUecz
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Re: Australian economy

Postby HBS Guy » 20 Nov 2014, 21:16

How little we really got out the FTA with China.

Why am I not surprised?

Labor MUST cancel every single bloody FTA. Anybody wants an FTA with us HAS to give up as much as we do. FFS! Libs are HOPELESS at negotiating!
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Re: Australian economy

Postby Lefty » 21 Nov 2014, 18:11

HBS Guy wrote:How little we really got out the FTA with China.

Why am I not surprised?

Labor MUST cancel every single bloody FTA. Anybody wants an FTA with us HAS to give up as much as we do. FFS! Libs are HOPELESS at negotiating!


This thing is a dog. As usual, we do poorly from such agreements in general.

As part of the Australia-China Free Trade Agreement (FTA), concluded on Monday, the foreign investment limits on Australian commercial real estate will be increased from $54 million currently to $1.078 billion, effectively giving Chinese developers unfettered access to Australian land.

While many argue that increased participation by Chinese property developers will boost Australian housing supply, thereby improving rental availability and housing affordability, some local developers have accused Chinese developers of land banking – paying over the odds for lots and sitting on the land, with the explicit purpose of getting their money out of China.


A conversation with a Melbourne real estate developer earlier this year turned unexpectedly to his dislike of Chinese investors…

The local developer complained that Chinese investors were paying well above market prices for sites and then sitting on them in no apparent rush to develop. It’s a complaint that has subsequently been confirmed in other industry conversations and put on the record by Lang Walker, CBUS and the head of the ANZ bank’s head of commercial property.

Billionaire developer Walker said the logic behind the prices paid by Asian developers was questionable. “It is a little scary but at the end of the day I think it is just them getting money out of Asia as opposed to the fundamentals,” he said.


The foreign developers are routinely paying at least 25 per cent more than Australian developers are prepared to pay for sites in sought-after areas across Sydney and Melbourne.

As a result, local developers are effectively being priced out of the market.

“I am finding it difficult to get good sites,” says a Sydney developer, who requests anonymity…

In Melbourne, the situation is similar. “With the influx of Asian developers, the market for development sites here is very hot — prices have risen 25-40 per cent in the last two years,” says Ashley Williams, managing director of Evolve Development.

…those entering the market at the current point in the price cycle will have to build the higher land cost into the price of the end product.

Link here

Meanwhile......

China’s coal use will be permitted to grow by only 5 per cent over the next seven years after the world’s biggest polluter unveiled a cap on coal consumption for the first time.

The State Council – China’s Cabinet – said the country’s annual coal use would be halted at 4.2 billion tonnes by 2020.

Last year, China burned 4 billion tonnes of coal, with around 9 per cent being imported, according to the state-run China Daily.


Link here

Second comment down on that article - by a poster who is usually very calm, logical and measured - pretty well sums it up.
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Re: Australian economy

Postby HBS Guy » 21 Nov 2014, 18:29

Yup, one FTA we should not have signed—and Tone is responsible for all the crap by insisting the FTA be signed end 2014, giving away all bargaining power.
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Re: Australian economy

Postby Lefty » 21 Nov 2014, 18:32

It f ucks me why we keep falling over ourselves to sign these sorts of agreements when the benefits to us are so often dubious. The FTA with the US has ended up mostly one way with minimal benefit flowing to Australia.
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Re: Australian economy

Postby HBS Guy » 21 Nov 2014, 18:39

Yup, the Libs cannot negotiate.

They were using 2005 modelling FFS nearly 10 years later, thanks to the biggest idiot ever to be PM!
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