# Recession etc, are things really that bad?



## Pager (26 December 2008)

I see on the news, read in the paper and read on the internet about the economic crisis and how bad things are and set to get, falling stock and house  prices, unemployment, recession, depression………………….

But then I look around me and life goes on as normal?, most people I know are no worse off in there everyday lives if anything with falling interest rates and big ticket items like cars and whitegoods things are actually a bit better for some, so if  the average person has a job then yes there super may have taken a hit and the house has stopped going up in value, if you own stocks you may have taken a hit but your everyday life is pretty much unchanged or better due to lower interest rates.

They say unemployment may rise but even if it goes up considerably its going up from the lowest level in decades, so lets say to 10%, I remember growing up in the UK in the 80,s and the rate hit 13% or 14% and life still went on, although as well as high unemployment, the 87 crash followed by a property slump, the large majority came through it and the good times came again for home owners, workers and investors, like summer follows spring that followed winter and the cycle starts again

So what’s different this time? and haven’t you heard that said when the markets are going higher as well during the Tech boom, commodity boom etc.

This time its different is it?


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## tech/a (26 December 2008)

Its really hitting Governments and Bigger business.
They are all trying to pull up the out of control Elephant with a dog leash.

There will be a knock on effect and there will be some who lose jobs,houses,and fall on harder times.

But life does go on and whatever your experience in these times you'll carry it forward into the next period.

Hence the saying.

"I wish I knew then what I know now!"


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## kincella (26 December 2008)

I have a very simplistic diagnostic tool 10, 20, 100 year charts that showed house prices, covered most of the crisis of all those years.....and I use that as my guide for investing......use hindsight to chart your course for the future

Of course there are people and situations which fall along the road and for whatever reason fall outside the system.

With property it can rise, then stagnate and be flat for another 7 years, and then in the final 3 years triple in price....hence the age old attitude of holding for 10 years or until the cycle corrects again.

That why I do not wait for the bottom before investing, of course I would like to, but I have sufficient faith that it will restore its value and climb again.
Its an inflation busting tool. 
My timing is when it works for me to invest, depending on my financial circumstances and how many projects etc I am involved with, with existing properties .  Some are time consuming, large renovations , or a strata project etc.
I entered the property market in Jun 2000, after the tech wreck, looking for a stable  and I believe  safe investment, with a 10 year view.  Apparently a load of other investors did exactly the same thing, I was not looking for the bottom of the market, just believed if I held for 10 years i would make some nice profits.  Within 3 years some properties had tripled in value...blew my 10 year plans haywire.
I believe a similar situation is occurring right now.  But this time rates are coming way down, making it a stunning play for the future.
Ps I have lost all confidence in the stockmarket, and prefer to manage my own investments.
cheers


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## theasxgorilla (26 December 2008)

It's not that bad here either, _yet_.  Consumer goods and the car market (both new and used) have gone to hell.  Of course everyone thinks it's great that they can buy a better car or big screen LCD for less money.  Many shops here were running 30-50% sales weeks before Christmas.  The impact on business profits will filter through the real economy eventually.


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## basilio (26 December 2008)

It does seem to look reasonable on the surface doesn't it?

Unfortunately there are way too many big problems that are impacting through the economy. Some examples

1) Collapse of mineral prices is losing thousands of jobs and will cause very large drops in tax revenue and dividends

2) Loss of billions of dollars on share market is causing some widespread dumping of larger properties. I believe many of the wealthier people are going to find it harder to keep their lifestyles  together.

3) This will knock on to the retail and consumer market. There is simply much less discretionary income to spend.

4) The collapse in car sales is hurting the automotive industry and ancillary services . Layoffs, unemployment  and so.

5) The huge losses in the financial sector is causing  mass layoffs.

6) Finally much of the economy is geared to the gills.  Loss of income will be magnified as what little money people have is directed to house loans, debt repayments, food and basic bills.. That doesn't look good for the rest of the economy


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## Bill M (26 December 2008)

Pager said:


> So what’s different this time? and haven’t you heard that said when the markets are going higher as well during the Tech boom, commodity boom etc.
> 
> This time its different is it?




Nothing is different this time. I went for my daily walk today and the cafes were all full with people actually queuing to get in, seems no shortage of people willing to spend their money. The clubs and pubs were full over the whole Month of December. Record sales in shops too (link here for story). For me I am retired and living off my portfolio of shares, most are still paying good dividends.

The biggest lesson I learn't from the 87 crash and recession of the 90's was to buy good stocks at cheap prices, this time I am doing what I should have done in the 90's. I was short of cash then unfortunately. If a recession comes to Australia so be it, I will simply accumulate more shares to fund my retirement. Good luck to You all.


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## Glen48 (26 December 2008)

The down turn started in USA about 05-06 when we were just getting started. I guess most store owners are keeping their staff over Xmas thinking the Krudd  10.4B will boost sale and lay offs will start in 09.
I find what happens in USA will happen here it is like having you own connection to the future...so once USA turns give it a few yrs and we will do the same.
Even what happens NSW seems to take 12 mths to get to QLD.
Like that World famous woman said It won't happen over night but it will happen.
Once we come out of this it will be a new World, maybe back to corner stores, items to your door because the big centers have been vacant to long and will need to be knocked down and stared again.
The average OZ doesn't watch ABC or worry about finance matters or try to keep up with World events and sadly they are the ones who will suffer.
A pawn broker told me people are bringing stuff back to hock they bailed out last week and pokies had 10 fold increase.


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## doctorj (26 December 2008)

It's probably not that bad in Aus yet.  How bad it gets really depends on what field you're in.  FIFO staff for miners (particularly the ones that fly interstate), engineers and everyone else who works in support industries will suffer first.  Then there be natural flow on to the rest of the economy via reduced spending and investment activity.  Where or not 'G' makes up for the fall remains to be seen, but I doubt it.

For those who doubt it will get bad, take a look at the spread between contract & spot iron ore or the baltic dry shipping index (http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm).  All this means less economic activity around the world and less money flowing into Australia's pockets.

So far the world is trying to have an economic crisis where no body gets hurt. I doubt we'll see the end of it without a fair amount of pain.


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## kincella (26 December 2008)

Well I have hardly spent any money this xmas, negotiated with the family, since the govt handed over $1000 to each child, they agreed they did not need any more...so I suggested that I would donate money to animal welfare and charity on their behalf..
And now the boxing day sales,,, I cannot think of anything I may need for the next 12 months....it will be the first time in 20 years that I do not go out looking for bargains.
I usually only shop at boxing day sales and june 30th sales.....buy everything at between 75% to 50% off retail prices.

I guess I sound like scrooge, but the huge savings work for me...and I buy up big at those huge discounts.....plus I dislike shopping....

I played no part in the 38 billion spend up before xmas or the 14 billion post xmas bash.......am conserving funds for investment opportunites

Might take the dog for a walk along the beach and do lunch
cheers


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## gfresh (26 December 2008)

To me this seems like the "typical" reaction to a (possible) recession "it's not bad now, therefore it won't happen". 

I'm with basilio... things are probably not too bad now, but the worst is a few months away as there are many nasty fundamentals creeping in locally. 

I also find it hard to believe as an ageing population, a large number have not also found their retirement savings reduced by 20%+ in the last 12 months and this will effect their lifestyle and spending in the next while. As well as those who were close to retirement and now have to work longer, or those who will be retiring and will have less to spend each week. That spending capacity cannot be easily replaced, unlike the younger set. 

I think by this time next year, even despite the hope that it will have improved, the US will still be in recession - 2 years of recession to me makes it more like a Depression, but anyhow  if so, this will keep holding Australia back from better times.


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## numbercruncher (26 December 2008)

Yes patience young Grasshoppers, dramas in financial markets etc have hardly had a chance to hit our real economy yet ....

Wax up those surfboards ready for when your jobs gone


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## kincella (26 December 2008)

I agree, people have their head in the sands....unbelievably irresponsible to spend 38 billion on xmas and 14 billion post...on basically disposable items....and when they lose their jobs post xmas...they will be looking for more bailouts....unemployment benefits etc, family tax benefits...

it will take longer to recover than any guru estimated....
some of us saved for the rainy day....and will be ok.....
look half the kids cannot count, spell read, tell the time...education system stuffed for past 30 years....what can you expect ?

but luckily there are responsible families holding down jobs and budgeting for such a downturn....
and some angry baby boomers with good cash flows...
it will not revert to the 1930' and the horse and cart


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## Green08 (26 December 2008)

When in Sydney I see it in the car yards like the up market ones. Getting more difficult to sell a new car with tight financial credit lines.  Second hand cars have lost substantial value in the past 12 months.  

Just a look on Domain is a reasonable indicator of how many homes are for sale.  I've watched certain suburbs for about 8 months now as an exercise, prices are dropping and the stock is increasing.

I certainly see it in those about to retire in the next 12 months or those that have - there is fear in them due a lack of principle in their super.  

I think the roll on effect will be with us in the next few months.  Various people will be effected at different degrees but I do think it will be worse than we hypothesis.  

I too do 90% shopping at Boxing Day or end of June.  David Jones has been extremely quite during the year.  The sales today had bigger reductions than I anticipated - despite the advertisements.  I wouldn't be surprised if they start to close some of their stores not in the mainstream areas, the rent is a killer.

Due to pride most people will not admit to others their circumstances.  I think if you wait 6 months – the enrolments for private schools will drop significantly.


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## kincella (26 December 2008)

green..I am a baby boomer...have many friends and associates the same...most have multiple properties....and they are not selling, interest rates were hurting for past 12 months...but we all see it as rosy again with the big rate cuts coming, no problems renting...oh and none of us have purchased new cars, most are still savers....we all battered down the hatches last year.....stopped eating out so often etc.....most like me only buy at the biggest sales...june 30th and boxing day.....
or if we really must have a bargain...we go for the interest free period and pay off whithin that time...never pay interest on it etc and conserve our cash flow.....
I am actually planning a new car or a near new...6 months old this year if the price is right....
but then most of us boomers were never big spenders anyway.....well not the luxury cars you are talking about.....that must have been the gen y and gen x'ers
astounded at the speed some people will drop their bundles...and panic at the first hint of bad news...... the stamina gene gone missing?


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## numbercruncher (26 December 2008)

> but then most of us boomers were never big spenders anyway





Thats hilarious 


Your surely only speaking for your "circle" ?


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## Green08 (26 December 2008)

kincella said:


> but then most of us boomers were never big spenders anyway.....well not the luxury cars you are talking about.....that must have been the gen y and gen x'ers
> astounded at the speed some people will drop their bundles...and panic at the first hint of bad news...... the stamina gene gone missing?




Interesting response.  I think you have misread what I wrote and have not read any of my past threads.

I'm not looking at a prestige car. Merely stating a fact or observation and discussion with people.   I sold my car recently driving my brother's most unglamorous ute for the time being, does the job A to B, country or city.

That is a pretty wild assumption. Luxury cars for gen Y and Gen X'ers.  Might be good to stop pigeon holing people.  Not all youngsters throw money around. And some baby boomers have rather expensive cars.  

I was referring to indicators of a slow down in a general sense.

Ahh DJ's this morning was to buy wool under lays for the kids beds 40% off. Cash.  Kincella-might also be good to stop assuming all people are stupid.  

Assuming Kmart or Target are cheaper can be wrong.  I'm of the thinking when I can afford it - preferable pay cash, I would rather buy quality at a discount so it lasts.


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## chops_a_must (26 December 2008)

kincella said:


> green..I am a baby boomer...have many friends and associates the same...most have multiple properties....and they are not selling, interest rates were hurting for past 12 months...but we all see it as rosy again with the big rate cuts coming, no problems renting...oh and none of us have purchased new cars, most are still savers....we all battered down the hatches last year.....stopped eating out so often etc.....most like me only buy at the biggest sales...june 30th and boxing day.....




My mum is a boomer, has 4 properties, probably needs to sell one to pay down debt. Therefore all boomers have too many properties with too much gearing without sufficient income in return. 


Over the various christmas parties over the last week of friends I went to, I really was surprised at the amount of people that have lost jobs, or have been told there wont be a job for them when they return in January/ their contracts wont be renewed. About 20% I would say, being conservative.

But then again, it is my demographic in Perth, 20-28 year olds I suppose...


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## Smurf1976 (26 December 2008)

It's like a drought.

Before the drought, all is well and the farms seem unstoppable.

Then it stops raining. But not to worry, the dams are full so we'll just irrigate the crops until it starts raining again.

Then the dam levels start to drop. But not to worry, the're still at a reasonable level and the drought must end soon.

Then the dams get low, it's still not raining and people start to worry.

Then the use of water from the dams is cut in order to hopefully avoid them drying up completely. This is when the real impact occurs. Previously it was opening some valves, messing about with pumps, sprinklers, hoses and so on. A bit of hassle and expense but nothing too serious. Now we've got to let some of the crops go to ruin and that's serious.

Then we get the reduced harvest. This is the first real loss in financial terms, and yet it comes a long time (possibly years) after the drought started. 

Then, if it doesn't rain next season, we're all but stuffed completely. A bit of water left in the dams but we're facing massive losses. The farms will go broke if it continues and job losses are everywhere. The buffer (water in the dams) is gone and we're now at the mercy of whatever happens next with the weather. We're out of bullets.

Where are we now in our economic drought? The dam level is starting to drop, we're spending past surplusses, but the crops are still going fine at the moment. 

If it rains tomorrow then all will be fine. We turn off the sprinklers and the dams fill up again. Trouble is, the drought looks like getting worse...

Once the surplusses are spent, when the finanical dam is getting low, that's when the real cuts and the real impact on main street will occur. With not much going in and lots going out, the level is going to keep falling and do so rather quickly. 

Nobody's likely to tell you the dam level with any accuracy, but when unemployment starts to soar you know the dam is getting close to empty. If they start sacking police and closing hospitals then you know it really has run _completely_ dry.


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## Glen48 (26 December 2008)

IF the big shops make most of their money over Xmas break and they can offer 30-70 % off how much mark up is there or are they all in a fools paradise thinking it is short term and just get some money in.
Remember we have never had any thing this bad in in 80 yrs and most of the younger have never even seen a credit squeeze to them this will be like going from the Grand State Room on the Titanic to a life boat at midnight.
Thanks to our World leaders who wanted votes and let all this unregulated credit happen  we could be only just surviving for another 20 yrs in the Worlds first depression.
Also I heard a lot of people are in shops but how many are spending?


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## Julia (26 December 2008)

Green08 said:


> Might be good to stop pigeon holing people.



I expect Kincella was just reacting to having been pigeon holed himself/herself given all the generalisations usually made about baby boomers.  I can't think of any other generation which has been so classified.

Every generation has spenders and savers, stupid and sensible.


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## chops_a_must (26 December 2008)

Julia said:


> I expect Kincella was just reacting to having been pigeon holed himself/herself given all the generalisations usually made about baby boomers.  I can't think of any other generation which has been so classified.
> 
> Every generation has spenders and savers, stupid and sensible.




Gen Y seems to be getting a great ride as the "cause" of this credit crisis. Especially on here.


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## Green08 (26 December 2008)

Chops there is the same problem in areas here.

Now some baby boomers have geared themselves into oblivion, I do find it rather amusing those women at the coffee club will die out -anyone for nestle instant?

My friend a GP said there are more job losses than people are aware - across the board in age and career.  The shock of mortgage defaults from otherwise people of stability will hit early next year.  To assume all will be rosy is a bit naive.

When people have lost much of what they thought was untouchable the road ahead is far more difficult.  Getting confidence back, accepting a lower ranked and lower paid job maybe difficult for some.

Don't forget the amount of money Municipalities have lost in this too.  Certain counties in the USA are already bankrupt – one in Alabama can’t fix the sewage.

I noticed that the garbage man (8 months ago had 2 helpers) is now on his own to pull the bins out, get them emptied and put them back and he has about 30 streets to do on his own.  I always said thank you if I saw him, an unrewarding job and the slightest thank you meant alot.  Someone has to do it - be grateful for the utilities we have.


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## agathos (26 December 2008)

Dear Kincella,

I like your attitude. Though you are frugal, but you are kind hearted and am willing to part your K RUDD $$$ to charities and animal welfare!

way to go!!!! 

say hi to your dog..........Does he/she like Inspector Fex, i mean Rex?


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## Smurf1976 (26 December 2008)

chops_a_must said:


> Gen Y seems to be getting a great ride as the "cause" of this credit crisis. Especially on here.



Which major country leaders are Gen Y? None that I'm aware of.

Which major investment banks have a Gen Y as CEO? None that I'm aware of.

Which central banks have a Gen Y in charge? None that I'm aware of.

Few if any of the decisions causing this mess at the global level were made by Gen Y's. Look to Gen X and moreso the Boomers if you want to find the people running the world and making these ruinous decisions.


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## chops_a_must (26 December 2008)

Smurf1976 said:


> Which major country leaders are Gen Y? None that I'm aware of.
> 
> Which major investment banks have a Gen Y as CEO? None that I'm aware of.
> 
> ...




I know.

But Lancelot and others on here have actually said this.


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## sinner (26 December 2008)

Recession yet? No, not yet.


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## Green08 (26 December 2008)

> The global economic crisis is financially hurting up to 25 local councils in NSW and some face possible bankruptcy, says the Local Government Association (LGA).
> 
> LGA president Genia McCaffery says both metropolitan and rural councils are exposed to the collapse of US investment house Lehman Brothers.
> 
> ...




http://www.lendingcentral.com/2008/10/28/some-local-councils-may-face-bankruptcy-lga/


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## Smurf1976 (26 December 2008)

sinner said:


> Recession yet? No, not yet.



How does that chart show we're not in a recession? I'm no expert on T/A but I don't see it.


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## Wysiwyg (26 December 2008)

Smurf1976 said:


> How does that chart show we're not in a recession? I'm no expert on T/A but I don't see it.





I think it means once a recession is officially announced, the chart will show it.


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## wayneL (26 December 2008)

sinner said:


> Recession yet? No, not yet.



I would love to see that chart corrected for inflation.


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## psychic (26 December 2008)

numbercruncher said:


> Wax up those surfboards ready for when your jobs gone




Love this quote, but before you go surfing best to get into the swing of visiting you local (Missinglink) sorry that should read Centrelink office and dropping off that fortnightly dole form.  Mass unemployement is on its way folks and it will be the key to knock those sqealing high house prices into freefall. 

Aussie are obbsessed with housing, and that "shieeeell be right attitude" is going to take a beating very shortly when the guy on the street looses his job, and the nextdoor neighbour and the the other neighbour and so on and so forth. 

The local centrelink offices are going to be like poker machines hitting jackpots all day everyday, there will be that much government money being doled out over the 2009-2010 period.  Its gonna be a frightening time and I just don't understand why we are refusing to accept that we will not lose our jobs.  

WHY OH WHY IS THE AVERAGE AUSSIE SPENDING UP BIG NOW ON THESE PRE/POST XMAS SALES.  STOP SPENDING YOU DILLS!


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## Garpal Gumnut (26 December 2008)

psychic said:


> Love this quote, but before you go surfing best to get into the swing of visiting you local (Missinglink) sorry that should read Centrelink office and dropping off that fortnightly dole form.  Mass unemployement is on its way folks and it will be the key to knock those sqealing high house prices into freefall.
> 
> Aussie are obbsessed with housing, and that "shieeeell be right attitude" is going to take a beating very shortly when the guy on the street looses his job, and the nextdoor neighbour and the the other neighbour and so on and so forth.
> 
> ...




All the above comments indicate it is the opportunity of a lifetime to make a quid.

When the folk are flooding centrelink and you have a compliant government there is a lot of money floating about, you just need to have a high enough net.

gg


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## Glen48 (27 December 2008)

Mackay has the highest sales of HSV and High Performance Fords in OZ along with the necessary items of life like Jet ski's etc. once all those jobs go and the miners walk out with massive debt Mackay will be the first to go down hill.


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## theasxgorilla (27 December 2008)

psychic said:


> WHY OH WHY IS THE AVERAGE AUSSIE SPENDING UP BIG NOW ON THESE PRE/POST XMAS SALES.  STOP SPENDING YOU DILLS!




I just got back from the local mall.  It was insane, literally.  Democratic consumerism is alive and well up here in the north.  Here though, if you are terminated, your "centerlink" payments are based on your exit salary...in most cases folk will receive 80-90% of their exit salary in unemployment benefits.  I sense that the mother of all _moral hazard_ case studies just around the corner.


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## Pager (27 December 2008)

theasxgorilla said:


> IHere though, if you are terminated, your "centerlink" payments are based on your exit salary...in most cases folk will receive 80-90% of their exit salary in unemployment benefits.  I sense that the mother of all _moral hazard_ case studies just around the corner.




That i would imagine is capped and means tested so unless your on a low income and don't own anything it wont be paid.

But why not spend up on cheap goods, the impact of a weak A$ will come through soon on anything imported and particualy Japanese, also unemployment may go up but its been at record low levels, unless its going to the high 20,s or 30,s then most Aussies still arnt effected in the everyday lives, why this sudden media induced fear 

As i said in the opening post "Why is it different this time"


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## kincella (27 December 2008)

just wondering about the centelink payment, based on your exit salary.....if your exit salary exceeded between 62 pf and about 800pf  you may receive some tiny amount...you are allowed to earn 62 pf to receive the full benefit of about 434 pf....after that about 50 cents in the dollar of your income reduces the benefit.....doubt too many people would have an income that low....its more likely much higher....centrelink also takes into account any holiday pay and termination  payments..eg redundancy packages.....
so if you received a payout of between 1500 to 5000 say , there is no centrelink benefit....I believe centrelink expects you to support yourself or find another job in the meantime....

I am questioning the statement one would receive 80-90% of the dole....?

I do wonder how people can survive on only 434 pf....anyway....I could not and doubt anyone else could


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## Aussiejeff (27 December 2008)

chops_a_must said:


> My mum is a boomer, has 4 properties, probably needs to sell one to pay down debt. Therefore all boomers have too many properties with too much gearing without sufficient income in return.




My son's boomer father-in-law is quite wealthy - about $50Million in RE assets. Around 6 months back he paid $5Million for a mansion on the coast strip north of Scarborough Beach. He reckons it is only worth around $3.75Million now. Cest la vie - it's all relative. For people fortunate enough as him at this point in time, that sort of loss is totally sustainable and means little to him. He is still multi-millions ahead in other properties and developments courtesy of the recent boom in Perth. Though even he now is hoping this "temporary downturn" (as he calls it) will only last a few more months.  

Robots would love him - he hates the stock market! 


chiz,


aj


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## Aussiejeff (27 December 2008)

theasxgorilla said:


> Here though, if you are terminated, your "centerlink" payments are based on your exit salary...in most cases folk will receive 80-90% of their exit salary in unemployment benefits.




Eh? So, if some executive is sacked and their exit salary was $100,000 P.A. they would get $80-90,000 P.A. unemployment benefit?  Something doesn't sound right there.... 

If that was true, the whole work-eligible population of Australia would now be unemployed and living in Banana-Bender land!!


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## kincella (27 December 2008)

aussiejeff....I used to live in Wodonga...grew up on farm...could not get out fast enough.. did you move there by choice ?
and about the centrelink benefits....see my post this morning for more accuracy


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## kincella (27 December 2008)

> Dear Kincella,
> 
> I like your attitude. Though you are frugal, but you are kind hearted and am willing to part your K RUDD $$$ to charities and animal welfare!
> 
> ...



err...K Rudd did not give me any money.....it was the grandchildren.who were the recipients...
I am not eligible for any govt payments...and do not want it anyway....am self funded/ self employed

The dog says Hi to you to...she watches most animals on TV and sometimes barks at the dogs, jumps up to the tv looking for them,,,then looks around the back of the TV...she like the funniest home video shows' animals the best
cheers


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## kincella (27 December 2008)

quote....My mum is a boomer, has 4 properties, probably needs to sell one to pay down debt. Therefore all boomers have too many properties with too much gearing without sufficient income in return.  end quote....

hehehe...love the reasoning in this statement
 Just because your mum has 4 properties.....therefore all boomers have too many properties !

Do you know when the state and feral / federal govts stopped spending on public housing ??? or reduced spending to such an extent there is almost no money spent increasing  public housing.....or even maintaining public housing ???  I think it was about 1970 the last houses were built in Wodonga, Broadmeadows etc

The property investors out there have taken up the slack...hence there are rental props available....so you either pay more taxes for an inefficient govt to provide housing...or some tax for people like your mum to provide the housing.


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## Aussiejeff (27 December 2008)

kincella said:


> aussiejeff....I used to live in Wodonga...grew up on farm...could not get out fast enough.. did you move there by choice ?




Spent some time here in the late 60's at Bandiana training in R.A.E.M.E. corps. Met my better half here at the same time  

After living all over Australia since the 60's, came back in 2004 after my mum died in Sydney so we could look after my wife's mum (widow with dementia). Just moved her into a new dementia unit at Baranduda - she is adjusting ok but some others are not.

Having seen a lot of Oz (through myriads of DoD postings) I actually have come to love this place. As an ex-Sydney city-slicker, the rural atmosphere here agrees with me. Can't stand big city traffic, can't stand big city pollution, can't stand big city pace of life. Guess I'm getting too long in the tooth for that. 



> and about the centrelink benefits....see my post this morning for more accuracy




Yeah. That's what I thought. Which is why asxgorillas remarks about Centrelink paying 80-90% of exit salary sorta stunned me! LOL

When you consider that many of those recently un-employed miners in WA northwest were earning what, $100,000-200,000 P.A? - they are looking at a whopping come down in lifestyle on Centrelink Newstart allowance! The local towns & economies in WA northwest are going to suffer severely in the next 6 months or so as more high income mining staff are laid off and those bucket-loads of salaried cash that had been piling into the local economies (to filter down to Perth and some eventually interstate) evaporates to a bare trickle.

Is there really a recession? Maybe it hasn't started to hurt Mr & Mrs Average city slicker... but as BoneCruncher suggests, patience, grasshoppers - patience. It WILL come to pass.

Cheers,

aj


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## kincella (27 December 2008)

AussieJeff,
Ok...I grew up on a farm, the opposite to you, love the hustle and bustle of the city life., after what I determined was boring country life.... been in Melbourne 20 years now,, this is first time ever have not gone back to Albury for xmas......doing a de-stress thing now...like nothing...until I get bored. Have couple of resi props in  Albury and a shop .

A childhood friend had invited me out to his farm to stay over at Xmas....I stunned him by saying no....had enough country life to last me a lifetime...he loves the quiet, clean country air  etc..and he thought because I came from a farm I may enjoy reminiscing!

And those looking for an answer to tied them over from Centrelink will be in a for a big shock....who can live on 220 per week ????


----------



## gfresh (27 December 2008)

$220 is ruinous if you have absolutely any form of debt. It wouldn't be enough to pay even the most meager mortgage or rent. 

No wonder the government is looking to hand out cash left right and center -- beats paying it out on the other end. Speaking of which, Rudd is in the commentary box  

Back to the good old index charts.. Really depends on where you want to take things from, and where you wish to draw the trend lines. But if we look at a chart of the Australian index, what does this say about the general investor consensus for Australia? 

Either they've got it incredibly wrong, or 91 was a teaparty...


----------



## chops_a_must (27 December 2008)

kincella said:


> quote....My mum is a boomer, has 4 properties, probably needs to sell one to pay down debt. Therefore all boomers have too many properties with too much gearing without sufficient income in return.  end quote....
> 
> hehehe...love the reasoning in this statement
> Just because your mum has 4 properties.....therefore all boomers have too many properties !



Ummmmm!!!!

In case you didn't notice the bit that I quoted, I COPIED YOUR logic, and fit it into my post. 

Now please, keep this property dribble to the relevant threads.


----------



## kincella (27 December 2008)

oh dear chops......recession and housing discussed in the same thread...not allowed...???


----------



## robots (27 December 2008)

hello,

$220/wk is heaps for these professional individuals and ALL the benefits they get,

hows $3.00 pharmaceuticals, half price public transport, rent assistance, bill assitance

these people get down to welfare agencies to get free food all day long, they sit under an ATM machine peskering people for there hard earned and plenty hand it over

oh, i have a mental illness anymore for that would be a usual trait, and probably do one of Chops experiences, launch into a bit of a tirade in the Centrelink office and walk out with a smirk on their face

you get 3 of them in a flat and the $250/wk isnt a big deal

tough times in Australia, no way

thankyou
robots


----------



## Green08 (27 December 2008)

Land Tax

​

Some areas have gone up 600% in the last year! So if you own multiple properties be ready.


*Land tax shock for Victorians*

February 1, 2008

Page 1 of 2 | Single page 


THOUSANDS of Victorian business owners, property investors and holiday house owners will be stung by soaring land tax bills, after the Brumby Government dumped a cap limiting annual increases to 50%.

The change means Victorians will once again be vulnerable to massive land tax hikes — potentially reigniting a potent political issue that was extinguished when the cap was introduced in the 2006 state budget......

http://www.theage.com.au/news/natio.../2008/01/31/1201714153263.html?s_cid=rss_news


NSW Land Tax

www.hdy.com.au/attachments/NSWStateMiniBudgetAlert_Nov2008.pdf


----------



## theasxgorilla (27 December 2008)

kincella said:


> I am questioning the statement one would receive 80-90% of the dole....?




Sorry, by "the north" I meant Scandinavia, not Queensland.  And yes, this is normal.  But then again, when it come to cushioning the impact from events in the real economy on day to day life anything is possible up here.


----------



## theasxgorilla (27 December 2008)

kincella said:


> The property investors out there have taken up the slack...hence there are rental props available....so you either pay more taxes for an inefficient govt to provide housing...*or some tax for people like your mum to provide the housing.*




As Chops has pointed out this isn't one of our property threads (heck, we even have our own forum for that now too! shameless plug: http://www.aussiepropertyforums.com

On the bolded point though, I don't think everyone's parents have been participants here.  Some people's parents have more properties than kids.  From one angle they're doing more than their share of "service" for society. But over the last decade or more I don't think many would argue against saying that they've been adequately compensated (with capital gains) for providing that service and taking those risks.

But there are many folk in the boomer generation age group who haven't adapted to this new fact ie. property investors bridging the public housing supply gap (...and at the same time addressing their own pension funding gaps).  It's presumptuous to think of all boomers as investment property owners.  The _vanilla_ boomers, whose investing has been limited to sharemarkets via their superfunds are the group I'm most worried about at the moment.  Gen Y have plenty of time to figure it out and catch up.


----------



## Aussiejeff (28 December 2008)

theasxgorilla said:


> Sorry, by "the north" I meant Scandinavia, not Queensland.  And yes, this is normal.




OMG!! 

I have 2 responses.

(1) Does anyone work in Scandinavia?

(2) If the answer to (1) is YES, then WHY?


----------



## numbercruncher (28 December 2008)

> THOUSANDS of Victorian business owners, property investors and holiday house owners will be stung by *soaring* land tax bills, after the Brumby Government *dumped* a cap limiting annual increases to 50%.





Ouch !

Seems them pesky victorians are also addicted to the income of the Credit Boom era ...... now those 5x wealthier land owners that Robi talks about get to help plug the shortfall ?


----------



## robots (28 December 2008)

hello,

Chops has told us we not allowed to discuss property here Number

just bang the rent up another 14%, 

the stats show last year got that so i imagine all landlords out there will bang them up, fantastic

or alternatively, another set of bunk beds from Harvey's joint, might put them on the balcony

thankyou
robots


----------



## kincella (28 December 2008)

but you do have 2 threads...house prices to rise and another house prices to fall....I will try to be more politically correct regarding where and what I post....silly me..talk of a recession and I mentioned house prices....
cheers


----------



## theasxgorilla (28 December 2008)

Aussiejeff said:


> OMG!!
> 
> I have 2 responses.
> 
> ...




Good question.  Sweden are in trouble when it comes to hidden unemployment.  If it's included in their stats then the unofficial unemployment rate could be as high as 20%.  Might go a way to explaining why Sweden’s GDP has fallen from fourth highest in the world in 1970 to 17th in the world.


----------



## psychic (28 December 2008)

Double whamy for property holders as their properties go down in price and with that drags rent prices down.  I love a good recession


----------



## robots (28 December 2008)

psychic said:


> Double whamy for property holders as their properties go down in price and with that drags rent prices down.  I love a good recession




hello,

yes and you forgot drags down interest rates, petrol, food, coca-cola, cost for painter to paint walls, cars, anything else

it "appears" your $ is going further, but in reality its all just the same

thankyou
robots


----------



## kincella (28 December 2008)

well to answer the question...its not bad yet...but it will probably get worse....fed govt's world wide printing money will have a bigger effect in the long run....more money circling the globe will eventually mean your dollar is devalued...less buying power in the future...and when the economies do settle down and everything returns to stability again....your dollar will buy less in the future......

I am so against feds bailing out those exact same companies that have contributed to this global mess....good money after bad....
they should let the companies go under...including the car companies....who have insisted on building big gas guzzling cars...
use the money to start knew companies..or govt owned agencies to begin with...like banks for saving and lending the old fashioned way...the motor vehicle industry can be sustained building more energy efficient cars...when my old one breaks down I will still want another one....we are not going back to the horse and cart days...the building industry can contribute with greener materials etc
cheers


----------



## arco (28 December 2008)

Interesting slant on the Australian economy from Saxo Bank

_
AUDJPY to 40

The Australian economy is heavily influenced by the commodity market and a large part of the country’s economic expansion in the past year has been driven by the commodity boom. *We believe the whole commodity complex will be left dead in the water for the next ten years due to real demand destruction caused by the high prices over the past five years.* At the same time, we are bullish JPY with the big, Japanese Current Account Deficit and overwhelming domestic savings._


----------



## Smurf1976 (28 December 2008)

kincella said:


> I am so against feds bailing out those exact same companies that have contributed to this global mess....good money after bad....
> they should let the companies go under...including the car companies....who have insisted on building big gas guzzling cars...
> use the money to start knew companies..or govt owned agencies to begin with...like banks for saving and lending the old fashioned way...the motor vehicle industry can be sustained building more energy efficient cars...when my old one breaks down I will still want another one....we are not going back to the horse and cart days...the building industry can contribute with greener materials etc
> cheers



Exactly. There's no point propping up failed businesses that will never work in their current modes. Let them die and move on.

Likewise there's no point propping up a failed ideology. The whole deregulation / privatisation / globalisation thing failed nearly a century ago and seems to be failing again now. Let it die and stop trying to bring back an idea that clearly doesn't work.


----------



## Aussiejeff (28 December 2008)

Smurf1976 said:


> Exactly. There's no point propping up failed businesses that will never work in their current modes. Let them die and move on.
> 
> Likewise there's no point propping up a failed ideology. The whole deregulation / privatisation / globalisation thing failed nearly a century ago and seems to be failing again now. Let it die and stop trying to bring back an idea that clearly doesn't work.




But "globalization" is "politically correct".

For "globalization" to die, "political correctness" would have to die first.


----------



## chops_a_must (28 December 2008)

Smurf1976 said:


> Exactly. There's no point propping up failed businesses that will never work in their current modes. Let them die and move on.
> 
> Likewise there's no point propping up a failed ideology. The whole deregulation / privatisation / globalisation thing failed nearly a century ago and seems to be failing again now. Let it die and stop trying to bring back an idea that clearly doesn't work.




Seems exactly the point John Ralston Saul makes in 'The Collapse of Globalism'. Might be worth a read for you. 

Never have seen the point in privatising things that make money for the public.


----------



## numbercruncher (28 December 2008)

Wonderful to see more thinking people recognising the Globalisation experiment for what it is


----------



## chops_a_must (28 December 2008)

numbercruncher said:


> Wonderful to see more thinking people recognising the Globalisation experiment for what it is




Nothing at all wrong with globalisation per se, it's how you use it that counts.


----------



## numbercruncher (28 December 2008)

chops_a_must said:


> Nothing at all wrong with globalisation per se, *it's how you use it that counts*.





I look way way past the individual and self interest


----------



## Happy (20 May 2009)

> From ABC, 20 May 2009
> JAPAN'S ECONOMY CRASHES BY RECORD AMOUNT
> By Online business reporter Michael Janda
> 
> ...





We better get used to word *recession*, when population and industry gets ahead of itself in a finite world, without possibility of immediate expansion to other planets in our system.

Sooner we accept the necessary steps to stabilise our existence the better.

Simply if we keep thinking of % GDP rise year after year, sooner or later we will create hockey stick, unsustainable economy.

On this Forum I can use comparison to unsustainability of parabolic trend, as 5% this year is smaller than 5% next year or 5% year after that.


----------



## Aussiejeff (20 May 2009)

*Re: Recession etc, are things really that bad?*

Hmmm. *Japan reports that it's economy shrank by a much-worse-than-expected annualised 15% last quarter. The worst ever contraction in annualised terms after the previous Q's shocker!*

Surely, that BAD, BAD, BAD news from Japan must hit our economy too?

Yet our Shtock Market merely shrugs it's shoulders, utters _"Meh!"_ and continues gaily dancing The Boomtown Jig while popping the champers.

So, _things really aren't that bad at all_ if news like that can't even prod a response!

Maybe KRudd'nCo and their mates from Transparent Treasuries Ltd are right and the Lil' Ozzie Battler IS the best gig in town?


----------



## Happy (20 May 2009)

Aussiejeff said:


> ...
> Surely, that BAD, BAD, BAD news from Japan must hit our economy too?
> 
> Yet our Shtock Market merely shrugs it's shoulders, utters _"Meh!"_ and continues gaily dancing The Boomtown Jig while popping the champers.
> ...




It could be a sucker rally too, just give it time it needs.


----------



## Garpal Gumnut (20 May 2009)

Happy said:


> It could be a sucker rally too, just give it time it needs.




It is a sucker rally Happy.

Things are getting very very bad in North Queensland.

Projects closing down or going bust, all separate from the clowns at Storm Financial.

Real people who work and produce wealth for themselves and others going backwards.

Contracts being cancelled.

It is a suckers rally, but then there is one born every minute.

Just look at MQg's shareprice over the last few months, doubled. On what?

On financial five card tricks. 

We are in for a depression, because if North Queensland goes down, god help the rest of you.

gg


----------



## Real1ty (20 May 2009)

Garpal Gumnut said:


> It is a suckers rally, but then there is one born every minute.
> 
> Just look at MQg's shareprice over the last few months, doubled. On what?




Why does it matter what the "Suckers" doubled their money on?

Imo the suckers are the ones that have stayed out of this rally.

Trade the trend and make money or stay out and wail about recessions and depressions and miss out on it.

Who are the smart ones.....


----------



## kincella (20 May 2009)

The world knows Japan has been a basket case for years...so who cares now ?
the media believe they need to sell some more bad news.....like the boy who cried wolf...eventually no one takes any notice


----------



## -Bevo- (20 May 2009)

Garpal Gumnut said:


> It is a sucker rally Happy.
> 
> Things are getting very very bad in North Queensland.
> 
> ...




Whats the saying you know its a recession when your neighbor looses his job, well my neighbour lost his job few weeks back and my parents (retired) who also live in Townsville there neighbour also lost his job only recently.


----------



## Trevor_S (20 May 2009)

Garpal Gumnut said:


> It is a sucker rally Happy.
> 
> Things are getting very very bad in North Queensland.
> ...
> We are in for a depression, because if North Queensland goes down, god help the rest of you.




Interestingly my (Townsville) business is up and I still struggle to find staff.  Who woulda thunk it


----------



## Beej (20 May 2009)

Garpal Gumnut said:


> Just look at MQg's shareprice over the last few months, doubled. On what?
> 
> On financial five card tricks.
> 
> We are in for a depression, because if North Queensland goes down, god help the rest of you.




But why do you think the market fell 55% over the past year and a half? It's nowhere near back to growth/booming economy levels - not even close! The real economy can continue to tank hard and corporate earnings/profits can continue to fall, but the market might still go UP, because massive earnings/profit falls have been priced in. In Macquaries case, they were sold down massively on fear of potential insolvency - once it becomes more certain that insolvency is unlikely, then of course their stock price will rebound strongly back to a level more in line with their expected (and heavily downgraded) earnings. Remember they are still trading at 1/3 of their highs!

You can't just say "well the real economy/unemployment etc is getting worse so therefore the market should be falling and this is a suckers rally". Unless you want to miss out on some serious trading opportunities.

PS: And since when has North Queensland been the linch pin of the AU economy???? I'd be watching NSW and Vic generally first for signs of recovery or further deterioration as those two states represent more than half the AU economy just there, plus obviously watch the the mining/resource sector closely.

Cheers,

Beej


----------



## Temjin (20 May 2009)

kincella said:


> The world knows Japan has been a basket case for years...so who cares now ?
> the media believe they need to sell some more bad news.....like the boy who cried wolf...eventually no one takes any notice




Unfortunately, the world doesn't seem to remember (or really cared) what CAUSED Japan to go into their basket in the first place.

Let see...

- Massive boom in share prices and property prices. (the property was the fun part, try buying a small piece of land at peak of the boom in the imperial palace, you will have to exchange the New York city for it!) 
- Over-leveraged banks' balanced sheets
- Bust then major stimulus effort through bailouts and infrastructure building that incurred a public debt of almost 200% of their GDP (LAST YEAR ONE TOO) over the last 2 decades.
- The good thing is that the Japanese, like all Asians, are culturally biased toward saving for the hard day. So their purchasing power has never been that seriously eroded because of such savings. In addition, massive trade surplus and foreign reserve also maintained their ability to have such high public debt.

Some of them sounds familiar to us? 

With a lack of private savings and a sure bet of more deficit from the government, we may be worse off than the Japanese if the current economic policies do not change.


----------



## Soft Dough (20 May 2009)

Beej said:


> PS: And since when has North Queensland been the linch pin of the AU economy???? I'd be watching NSW and Vic generally first for signs of recovery or further deterioration as those two states represent more than half the AU economy just there, plus obviously watch the the mining/resource sector closely.
> 
> Cheers,
> 
> Beej




Townsville has to be one of the most stable cities in australia, large government, health, defence, mining, port.

If townsville is feeling it ( and from what my sources say, it is starting to look interesting ) then the places like melbourne, sydney, brisbane, and other cities with questionable industry are probably in a situation far worse than they realise.

Remember that an awful lot of the country's prosperity comes out of rural and regional areas, and that they heavily subsidise capital cities.


----------



## kincella (21 May 2009)

you crack me up....what are you smoking.....what a ludicrous proposition....

Townsville with a population  of under 100k is the linchpin of the OZ economy...compared to Sydney 4.5 mill and Melb 3.8 mill.....

hehehehehe....I can see your true colours shining through.....go on .....
you really need to ........aarrghh...what the heck...
hahahahaha....its too funny....


----------



## Garpal Gumnut (21 May 2009)

kincella said:


> you crack me up....what are you smoking.....what a ludicrous proposition....
> 
> Townsville with a population  of under 100k is the linchpin of the OZ economy...compared to Sydney 4.5 mill and Melb 3.8 mill.....
> 
> ...




And Lagos has a huge population as well and its just as stuffed as Sydney.

What does all that Sydney population do? except work at no hope shows like Macquarie Bank and failing IT companies?

By the way Townsville has a population of 180,000, and electricity 24/7.

Sydney is full of old money and new thrash and a lot of disaffected good folk planning to move to North Queensland.

And there is more to North Queensland than just Townsville.

gg

gg


----------



## Soft Dough (21 May 2009)

kincella said:


> Townsville with a population  of under 100k is the linchpin of the OZ economy...compared to Sydney 4.5 mill and Melb 3.8 mill.....




If you are referring to my post, please quote where I said it was the linchpin. If anything it is a much better barometer ( perhaps this is what you meant? ) than cities such as the gold coast ( population 600k) which is really up to it, and is just terrible at the moment, and I guarantee that the Gold coast is a drain on the Australian economy, even in boom times.

No, but it surely punches FAR above its 160k+ population in what it generates for the australian economy ( like a lot of north queensland cities like Mackay, for example which is quite a bit smaller than sydney, but generates squillions for the Australian economy ), but it is a great barometer for what is happening, as it is ridiculously stable during downturns usually, as it has diverse industry and high employment AND participation rates.

I always find it amusing when people who live in capital cities believe that capitals are anything but a burden on the economy. Seriously if you cannot see that mining and agriculture drive our economy, then it is you that are delusional.


----------



## moXJO (21 May 2009)

Was talking to a local mine worker where I am (coal) and he said they were flat out and putting on another 138 people. People still seem to be spending here.


----------



## Garpal Gumnut (21 May 2009)

moXJO said:


> Was talking to a local mine worker where I am (coal) and he said they were flat out and putting on another 138 people. People still seem to be spending here.




Yes, the mines with future contracts tied down are ok, and also the ones getting the top soil scraped and infrastructure for the ramp up again in 2-3 years time. 

Once Queensland approves uranium export we will boom again. Some of my Labor mates from the Right have it on their agenda.

gg


----------



## kincella (21 May 2009)

oh my goodness....you really are serious about the white shoebrigade in their 70-80's in a 2 town population of what was it...????? drum roll please....165,000....holding up the oz economy.....
just like all those storm investors......yes....I can see how bright and astute they all were....800 potentially to lose their homes....
sorry...you must be pulling each others legs...to see how far you stretch...


----------



## nunthewiser (21 May 2009)

LOL you truly have no idea kincella ........

unreal . um dear . you have any idea how much mining royalties put in the guvvy coffers year in year out ? and thats JUST royalties let alone taxes , employment and ALL flow on industrys . um without all these rural industrys there would be NO swanky city offices etc ..... 
any idea on the money that farming produces for this country ?


lol i give up replying to anything you say on any more threads m8 as you truly are delusional on the ACTUAL workings of anything . INCLUDING houseing.

have a great day and thanks for the giggles at least


----------



## Garpal Gumnut (21 May 2009)

kincella said:


> oh my goodness....you really are serious about the white shoebrigade in their 70-80's in a 2 town population of what was it...????? drum roll please....165,000....holding up the oz economy.....
> just like all those storm investors......yes....I can see how bright and astute they all were....800 potentially to lose their homes....
> sorry...you must be pulling each others legs...to see how far you stretch...




Mate, can I ask you a personal question.

Have you ever been outside Melbourne?

gg


----------



## kincella (21 May 2009)

I have been there...never to return...


----------



## Beej (21 May 2009)

This is so funny! Sorry I started a city vs country battle here 

On the one hand we have people from North Queensland massively underrating the productive economic output of some 8.5M people (Ie the 40% of the entire population that live in Sydney/Melbourne), while in all fairness, over-rating the impact of a few hundred k people who live in a couple of significant regional towns that are blessed with robust and unarguably highly productive resource sectors.

Yes the resource and to a lesser extent the agriculture sectors are economically highly productive; especially due to the export income generated, royalties etc etc. It is probably fair to say that relative to their populations, that some of the North Queensland towns (Townsville, Mackay, Gladstone) punch economically above their weight.

However, to then use this to discount the input of 40% of the AU population and claim that these few hundred thousand people are somehow carrying/subsidising the capital cities is complete bollocks! The reality is that Sydney/Melbourne and in a broader sense NSW and VIC have for more than a century subsidised the rest of this country economically speaking. This is just a simple fact. Just take a look at the GST contribution of each state vs what they get back from the commonwealth to see this as clear as day. It is only perhaps in the last few years at the peak of the mining boom that QLD and WA have become net contributing states to the commonwealth rather than needing subsidy/disproportionate commonwealth support - and it's about time! 

Bottom line nearly everyone here has myopic views and nearly everyone is wrong!

Cheers,

Beej


----------



## Garpal Gumnut (21 May 2009)

kincella said:


> I have been there...never to return...




Where did you go?

Moe ?

gg


----------



## Soft Dough (21 May 2009)

Beej said:


> This is so funny! Sorry I started a city vs country battle here
> 
> On the one hand we have people from North Queensland massively underrating the productive economic output of some 8.5M people




So, 
1. What actually do they produce?
2. What is the net effect of these cities on the prosperity of Australia?




Beej said:


> over-rating the impact of a few hundred k people who live in a couple of significant regional towns that are blessed with robust and unarguably highly productive resource sectors.





So please tell me again where did the $300billion go?



Beej said:


> The reality is that Sydney/Melbourne and in a broader sense NSW and VIC have for more than a century subsidised the rest of this country economically speaking.




Yes, we were a country that was supported by wheat and sheep, but you can now rate them as second to mining.



Beej said:


> This is just a simple fact. Just take a look at the GST contribution of each state vs what they get back from the commonwealth to see this as clear as day. It is only perhaps in the last few years at the peak of the mining boom that QLD and WA have become net contributing states to the commonwealth rather than needing subsidy/disproportionate commonwealth support - and it's about time!




You are basing your assumptions around government debt and spending, vs the net inflows and outflows of money into and out of Australia.

I know which one is by far more important in the living conditions, and standards of this country, and which regions are the epicentres that generate this.


----------



## Beej (21 May 2009)

Soft Dough said:


> So,
> 1. What actually do they produce?
> 2. What is the net effect of these cities on the prosperity of Australia?




This view really makes me wonder have you ever actually been to Sydney or Melbourne and driven around the cities a bit - actually gone out to the industrial area's etc and seen the scale of them compared to what you would be used to in a regional town?

Where to start?????  Let's see, off the top of my head are is a list of industries that all produce something that are located in Sydney/Melbourne:

- *Manufacturing* (a large portion of manufactured goods are exported too). Below list is just based on things that I personally have seen the factory for, or bought knowing where it was made, or where someone I know works or has worked etc etc, and therefore know that they make this stuff in Sydney or Melbourne or immediate surrounds somewhere:

  * Cars and other vehicles
  * Car/Vehicle spare parts
  * lawn mowers
  * Foodstuffs (processed/packaged etc)
  * Trains/Locomotives
  * Agricultural machinery
  * Furniture
  * Textiles
  * Explosives
  * Building materials
  * Plastics
  * Steel
  * Medical and surgical equiment
  * Motors/Generators/Pumps
  * Electrical goods
  * White-goods
  * Gaming machines (think Aristocrat)
  * Jewelery
  * Sporting goods
  * Electronics
  * Pharmaceuticals
  * This list just goes on and on and on.....

- *Education* Where do you think geologists/mining engineers etc get educated? How would the mining and energy sectors go with out them? Where are the major universities of this country?

- *Telecommunications* Do you use your mobile phone? Fixed line? Where do you think all the major exchange hubs are etc that connect Australia together and to the rest of the world?

- *Datacommunications* (ISPs etc) - you know this new fangled internet thing we are using right now? Where do you think the bulk of the gear is located that makes this thing work? Who do you think put it there? Who keeps it running? Who designed the equipment and the networks in the first place?

- *IT* Massive industry that provides huge amounts of services both locally and also internationally to generate export income

- *Medical and Health Technology and Services* Think major hospitals etc + think companies like Cochlear and Resmed who export home grown medical technology throughout the world. If you needed major complex surgery (neurosurgery etc) where do you think you might end up?

- *Defence* Eg: shipyards - largest dry dock in Southern Hemisphere is in Sydney Harbour! Many contractors producing all sorts of things needed for defence force are based on Sydney/Melbourne

- *Banking Services* Allocating the countries capital! They might be out of favour but try running an economy without banks.....

- *Financial Services* Managing/investing the countries money, insuring the countries goods/property/people

- *Stock exchange* Who built and runs the good old ASX? SFE? Etc? Where do you think they live? How would you go trading without that?

- *Building/construction/engineering industry* Well the products of this industry are there for the eye to see - city buildings, factories, houses, bridges, roads....

- *Legal Services* Even resource companies need law firms (think contract negotiation for bulk commodoties with Chinese government)! Let alone everybody/everyone else!

- *Transport* Rail, truck, ships

- *Petrol Refineries* Yep, try running your mine truck without fuel....

- *Import/Export hubs for manufactured goods*

- *Entertainment/Leisure/Media* Movies, TV shows, TV stations, radio stations, music industry. Life would be pretty dull without all the people who produce all the output of this industry! Generates export $$$ as well.

- *Advertising*
- *Newspapers/Journalism*
- *Government*
- *Tourism* Practically every tourist visiting AU visits Sydney - export income!
- *Science/Research (CSIRO etc etc)*

- *Retailing* Let's not forget this behemoth! Pretty hard to have prosperity without a retail industry.....

- Numerous related service industries that are all essential for any/all of the above including mining/agriculture
- Numerous other exporting service industries

This list goes on and on - it's actually quite hard to cover the work of 8.5M people!!!. I quick web search found this website: ( http://www.ibisworld.com.au/industry/home.aspx#aIndustryList ). It provides links to reports on various industry sectors and the major players with revenue/export figures, location of businesses etc etc. See how many industries lead you to a Sydney/Melbourne hub vs one in North Queensland!

As for what net effect to these cities (and all the people and industries based therein) have on the prosperity of the country? They CREATE the majority of the prosperity - that's the effect!

Without Sydney and Melbourne Australia would be nothing. Again, that's not to downplay the importance of regional area's and industries, especially the resource/energy and ag sectors which export a large proportion of their output, but honestly, if you took Sydney and Melbourne away, these regional industries would just not exist. And what's more, even if they did, the countries prosperity would be far lower as most of the other industries I listed would not exist.

For a stock trading/investment site, the low level of general knowledge about our $1Trillion+ pa economy here astounds me sometimes.....

Cheers,

Beej


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## nunthewiser (21 May 2009)

ahem.


and where do all thos raw materials come from to produce said items ?


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## Aurum (21 May 2009)

nunthewiser said:


> ahem.
> and where do all thos raw materials come from to produce said items ?




China. We send then shi*p*loads of dirt and they send back raw materials. 

Mike.
Edit, sorry, couldn't resist.


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## Soft Dough (21 May 2009)

Your list of "industries" is extremely questionable, and I think you fail to recognise that we import a vast majority of manufactured goods.

A lot of those industries are to do with consumption = net negative, or are presented with an inference that it is actually produced in Australia eg pharmaceuticals, machinery etc lol  OR are heavily subsidised as they run at a loss.

eg your port in sydney.... does it bring stuff in or send stuff out... lol

Oh and thanks for acknowledging that the industry that is present is just ancillary support services for rural and regional activities, you know, the driving force of the economy.

I must say one thing to put things into perspective.  You say taking away melbourne and sydney would ruin Australia. What would happen to Australia's economy if you took away mining and agriculture?  The same services could be run in any city in Australia if required.

A lot of services you say are support services, and do not directly generate any income for the country, oh and btw, there are hospitals, telephone exchanges, supermarkets, clean water and manufacturing in regional areas, they just don't need so much of it to support people in their unproductive consumption habits, service requirements and job activities.


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## kincella (21 May 2009)

sounds like it all happens on Planet Townsville.....unbelievable.....


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## Beej (21 May 2009)

kincella said:


> sounds like it all happens on Planet Townsville.....unbelievable.....




Yep - I give up! I'll just slink back to whatever I was doing which is clearly of no net economic value whatsoever as I'm doing it in Sydney!


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## Soft Dough (21 May 2009)

kincella said:


> sounds like it all happens on Planet Townsville.....unbelievable.....




not all.... just most of it 

and Tsv is just an example, I am referring to many regional and rural areas, and their relevance as a barometer for what is really happening, perhaps some city slickers need to go to a real export port and see where the money for australia comes in.


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## Beej (21 May 2009)

Soft Dough said:


> perhaps some city slickers need to go to a real export port and see where the money for australia comes in.




Ok I have to make one more comment on this! As it seems nobody is willing to let THE FACTS get in the way of their regional town myopic viewpoint:

From http://www.innovation.gov.au/Section/AboutDIISR/FactSheets/Pages/Australia'sExportsFactSheet.aspx



> Total industry exports (current prices) totalled $279.3 billion over 2008—this is 140.0 per cent higher than the total for 1998.
> 
> * Agricultural exports accounted for 3.8 per cent of total exports in 2008, down from 8.5 per cent in 1998.
> * Mining exports accounted for 39.2 per cent of total exports in 2008, well above the 18.8 per cent in 1998.
> ...




Ie, in 2008, while agricultural and resource exports totalled 44% of AUs total exports, *manufactured goods + services + other accounted for the remaining 56%*

The majority of these manufactured goods and services exports originate from the industrious folks of Sydney and Melbourne - so please don't tell us that we have never seen what an "exporting" port look's like.....

PS: And prior to the mining boom of the last few years the picture looked even better re the contribution of all us city-slickers, as mining exports as a proportion of exports have grown significantly in that time. So take your prosperity and enjoy it, as it has MOSTLY been created down here.....unsurprisingly given this is where 8.5M people live....

Beej


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## kincella (21 May 2009)

Beej....on another forum, which I no longer visit, we encountered similar groups who would rather sidetrack the discussion to, IMO, rather ridiculous and outlandish remarks, of a miniscule nature, then demand we reply and provide a response or an answer to such claims. Some posters were actually  akin to stalking some of us, with hundreds of posts...it appeared they just wanted to argue, argue about anything....the point being to deter discussion away from the facts....
in the end I just gave up...my time is far too valuable...
maybe they are the same posters....
I could not believe  the trouble you went to today....and wondered what are you  dealing with here....??????
I suspect it will fall on deaf ears....
just detracts the thread away from any intelligent discussion
at least you provided a brief for the young ones out there, in case they did not know, or aware of what we australians do here...
cheers
as another blogger, now missing, Clark Kent would say....the Hoaxometer is ticking over, running full strength today


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## Trembling Hand (21 May 2009)

Beej said:


> For a stock trading/investment site, the low level of general knowledge about our $1Trillion+ pa economy here astounds me sometimes.....




You should of just left it at this.

Not sure why it surprises you.


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## Garpal Gumnut (21 May 2009)

Garpal Gumnut said:


> Yes, the mines with future contracts tied down are ok, and also the ones getting the top soil scraped and infrastructure for the ramp up again in 2-3 years time.
> 
> Once Queensland approves uranium export we will boom again. Some of my Labor mates from the Right have it on their agenda.
> 
> gg




Just to get this back on track I'll quote my original thoughts on how I see the recession panning out in North Queensland.

Manufacturing and services are important, I agree, but in my opinion it will be a resources led recovery.

gg


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## GumbyLearner (21 May 2009)

Garpal Gumnut said:


> Just to get this back on track I'll quote my original thoughts on how I see the recession panning out in North Queensland.
> 
> Manufacturing and services are important, I agree, but in my opinion it will be a resources led recovery.
> 
> gg




I'll second that.

And plenty of manufacturing jobs fail-out funded to go offshore.


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## Soft Dough (21 May 2009)

Beej said:


> Ie, in 2008, while agricultural and resource exports totalled 44% of AUs total exports, *manufactured goods + services + other accounted for the remaining 56%*




Perhaps a more realistic representation would alter your viewpoint?

http://www.dfat.gov.au/PUBLICATIONS/stats-pubs/mtd/australia_trade_0903.pdf

Showing that you some real percentages, and how STM and "others" includes products of mining.  



Beej said:


> The majority of these manufactured goods and services exports originate from the industrious folks of Sydney and Melbourne - so please don't tell us that we have never seen what an "exporting" port look's like.....




OK, but then again, there would be a significant proportion made outside of melbourne / capitals. How much mining and farming occurs in Melbourne city and Sydney city?

Port of melbourne : In 2007-08, the ten main containerised commodity exports, in decreasing quantity, were: miscellaneous manufactures, cereal grains, beverages, dairy products, pulp and wastepaper, fruit and vegetables, meat, papeboards & fibreboards, paper and newsprint, stockfeed.

looks quite dependant on rural victoria to just me?


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## GumbyLearner (21 May 2009)

Beej said:


> This view really makes me wonder have you ever actually been to Sydney or Melbourne and driven around the cities a bit - actually gone out to the industrial area's etc and seen the scale of them compared to what you would be used to in a regional town?
> 
> Where to start?????  Let's see, off the top of my head are is a list of industries that all produce something that are located in Sydney/Melbourne:
> 
> ...




You know Beej raises some valid points. Yesterday he was talking about the mininum wage earning LOSERS and their prospects for property ownership over on the deniers of Isaac Newtown's theory of gravity thread. At least he is willing to acknowledge contradicting himself that most of those same LOSERS reside in Sydeny or Melbourne. That's why they same LOSERS are vital to Southern State economies.  Anyway I'm off to study a *condescending* wave chart pattern. 

Just to add another note on the education part, historically The School of Mines in Ballarat and later Bendigo were the first geological schools with any notoriety in Australia. Just ask the Directors of BDG or LGL how much stuff they can discover around those areas these days. And of course Ballarat is smack bang in the middle of Melbourne right?


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## Mr J (21 May 2009)

The bias is strong in this thread.


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## Garpal Gumnut (21 May 2009)

Mr J said:


> The bias is strong in this thread.




I think we need the Lord High Executioner from The Mikado to sort this thread out.

gg


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## Temjin (21 May 2009)

Mr J said:


> The bias is strong in this thread.




No, just the ego part. 

I'm amazed at how much time Beej took to write all that just to defend two states. Well done! 

The whole argument can simply be compressed to the following figures. Gross State Product - ABS - 2007-2008 (in millions) 

http://www.ausstats.abs.gov.au/auss...944CCA2575A70020D18E/$File/13500_may 2009.pdf 

Section 9.3 

New South Wales - $345,336 
Victoria - $255,705 
Queensland - $209,050 
South Australia -$70,922 
Western Australia - $146,444 
Tasmania - $20,907 
Northern Territory - $14,555 
ACT - $22,287 

Can't we just be friends? Every states need other states? Let the ego go please.


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## Smurf1976 (21 May 2009)

Beej said:


> Without Sydney and Melbourne Australia would be nothing. Again, that's not to downplay the importance of regional area's and industries, especially the resource/energy and ag sectors which export a large proportion of their output, but honestly, if you took Sydney and Melbourne away, these regional industries would just not exist.



Without politicians in Canberra doing whatever wins votes in Sydney and Melbourne we'd have a heck of a lot more manufacturing industry still operating down here in Tasmania.

Aluminium
Pulp
Paper
Tools
Footware
Textiles
Steel alloys
Automotive components
Glass
Zinc

All of those and more have been either wiped out completely, downsized or constrained in their growth as a direct consequence of decisions made in Canberra, Sydney or Melbourne.

What decisions? Well it's a bit hard to actually run any kind of productive industry when even the highest environmental standards in the world aren't good enough, you aren't allowed to build the required infrastructure, decisions take years and you're then somehow expected to compete with foreign countries with no such restrictions and where workers are paid effectively nothing.

And yep, those making the rules then allow the exact same things effectively ruled off limits in Tasmania to be done with little or no restriction in their own states. A situation that sounds more like economic bullying than objective policy formation to me...

It's not Sydney or Melbourne per se that are the problem. It's the head in the sand mentality that seems to only exist in those places that is the problem. Sadly, an awful lot of people in those two cities just don't seem to get it in terms of how just about anything is actually produced. Then they hear some lobbyist with a vested interest, decide to stop anyone producing it in Australia, and we end up importing it instead. Sad but true and the economic cost is huge.

You have milk because someone clearfelled a forest, planted grass, put cows on the land, milks the cows, transports the milk in a truck running on diesel and puts it in containers made from plastic or cardboard.

You have diesel and petrol because someone drove thumper trucks across the landscape, spent a fortune drilling holes, made a mess in the process and then found some oil.

You have your morning paper because someone logged a forest, put the trees on a log truck that weighs 43 tonnes, turned the trees into woodchips, pulped the chips, turned the pulp into paper in a mill that uses massive amounts of power and even more water, put the paper onto trucks which took it to the printers who then printed the paper.

You have water because someone put huge holes in the ground mining limestone and coal, put those into a furnace to produce concrete and used that concrete to dam a river, flooding some scenic area in the process.

Your car is a 1.5 tonne lump of steel, aluminium, copper, sand, petroleum and a range of minor components. And the roads you drive it on are built from blue metal that came from a quarry plus bitumen that comes from oil.

Your house is built on what was once an old growth forest that someone clearfelled. And the house itself came from clay, coal, trees, iron, copper, sand and a few other bits and pieces. 

Sitting in an office shuffling money about isn't productive industry. It has a role to play yes, but when those doing it seek to destroy productive industry either for financial gain or because they simply don't like what it involves, well that's ultimately the path to economic ruin. Mines, mills and smelters actually create wealth. Trading and financial engineering doesn't.


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## moXJO (21 May 2009)

You have just been schooled hillbillys now go back to drinking XXXX


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## AMC (22 May 2009)

The reality is no-one saw it coming...Unscrupulous lending called NINJA loans ( No Income No Job Applicants were rife in USA..as investors just kept pouring money into the fiscal system and brokers creating loans funded by these lenders..Now we are faced with the worst recession in living history , and one not to be ever seen again...The good news is we will come out of it around the end of 2010 once investor confidence and big business comes back...The biggest issue our Gov will face is making sure property prices do not crash as the employment rate increases towards the end of this year...At least we are all part of the history books as the nation that lived through the greatest world recession....


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## Trembling Hand (22 May 2009)

AMC said:


> The reality is no-one saw it coming...




LOL. Well apparently not in your industry 

plenty here did thou.


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## Temjin (22 May 2009)

Trembling Hand said:


> LOL. Well apparently not in your industry
> 
> plenty here did thou.




Yep, TONS of people saw it and some of them have documented it pretty well.


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## Julia (22 May 2009)

AMC said:


> The reality is no-one saw it coming...Unscrupulous lending called NINJA loans ( No Income No Job Applicants were rife in USA..as investors just kept pouring money into the fiscal system and brokers creating loans funded by these lenders..Now we are faced with the worst recession in living history , and one not to be ever seen again...




Really?   So far we are seeing nothing like the dire misery of the Great Depression and are unlikely to.

"One not to be ever seen again":   how do you know?     Why would we be immune from the effects of greed and stupidity in the future?

And as has already been noted, plenty of us saw it coming and took the appropriately protective measures.


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## battiwallah (24 May 2009)

Anyone who has any lingering thoughts about where we are headed and whether or not we have seen a market bottom will have their doubts dispelled by John Mauldin:

http://www.investorsinsight.com/blo...chive/2009/05/23/the-paradox-of-deficits.aspx

Just a sample: To February 2009 - China's exports down 41%, Japan's down 38%, US down 22% etc. etc.  Also you might like to think about the enormous deficit that the US and other countries are facing.  We are a long way from the market bottom.  Chris Leithner ( http://www.leithner.com.au/newsletter/jun09_newsletter.pdf ) has made a strong case that the ASX could fall as far as 2100 or more and I fear he may be right.


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## Aussiejeff (25 May 2009)

Julia said:


> Really?   So far we are seeing nothing like the dire misery of the Great Depression and are unlikely to.
> 
> "One not to be ever seen again":   how do you know?     Why would we be immune from the effects of greed and stupidity in the future?
> 
> *And as has already been noted, plenty of us saw it coming and took the appropriately protective measures.*




Except for these ones...



> *Homelessness increases sixfold: Vinnies*
> * May 25, 2009 - 4:04AM
> 
> St Vincent De Paul has recorded a six-fold increase in homeless families looking for help in Sydney as the recession begins to bite.
> ...




As usual, you would only know it is a recession for sure if you are one of those unfortunate enough to be directly impacted. 

If you are really unfortunate, you might have (a) lost your job through no fault of your own, (b) lost most of your cash/share investments through no fault of your own, (c) lost your home through default as a result of (a)+(b) & even lost your family as a result of (a)+(b)+(c).

If you ARE in that worst-case-scenario category, for sure you would liken your personal circumstances to the 1930's gloom.

I presume not many of those 1,800 waiting for "affordable" public housing in Blacktown are members of this forum.

Best of luck for us then, eh??....


aj


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## Trembling Hand (25 May 2009)

Aussiejeff said:


> If you are really unfortunate, you might have (a) lost your job through no fault of your own, (b) *lost most of your cash/share investments through no fault of your own*, (c) lost your home through default as a result of (a)+(b) & even lost your family as a result of (a)+(b)+(c).




Oh please!! You are kidding!!


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## doctorj (26 May 2009)

AMC said:


> At least we are all part of the history books as the nation that lived through the greatest world recession....



I really don't think it's that bad yet in the real economy.  I'm sitting in Budapest at the moment and the town is still rather unaffected.  People are shopping, dining in expensive restaurants, there's still a bank branch in every second store and there's still plenty of new investment coming in. 

And this in a country that's already received a USD 25 billion lifeline.

If this is as bad as it gets, then its either not that bad or we've got a long way to go yet.


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