# Australian Economic Analysis



## dhukka (5 August 2008)

I thought I would start a thread on Australian economics. Whilst the Aussie economy gets plenty of play on this forum the actual data coming out of Australia each week doesn't seem to get discussed much on this forum. That may be because it is not as widely disseminated and easily available as the US data or it maybe that noone really gives a toss.  

Anyhoo, a couple of pieces of data in recent days on the state of the Australian economy shows little doubt the economy is slowing. Last week, the monthly Performance of Manufactuing Index (PMI) was released and showed contraction in the Australian manufacturing sector for the second straight month. 

Today the Performance of Services Index (PSI) was released and showed its second straight month of contraction in the Australian Services Sector. In fact the index hit its lowest level since its inception in Feb 2003. Weakness was broadly based. The employment component plunged 6 points to 42.2, clearly slowing contraction in service sector employment. 

Added together with sluggish retail sales, sharply slowing credit growth and business and consumer confidence at lows last seen in the early 1990's, there is little doubt the domestic economy is slowing. 

The RBA signaled to the market that interest rate cuts may be not far off in today's statement. As seen below the cash futures market got excited and has now priced in 50 bps of easing by November. The yield curve has well and truly inverted. 

The future of interest rates are now headed lower in Australia but how much lower? I think they will go much lower than most expect. No doubt we will get equity market rallies as interest rates are cut but they will suffer the same fate as those in the US. That is, they will fail to prevent the economy from slowing significantly and be unable to prevent equity markets from going lower.


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## CanOz (5 August 2008)

Great to see this thread Dhukka, I'll be taking a keen interest as long as my access to this site holds up....should be about 30 days from Friday i reckon!

If they do as you feel they may, then the AUD could be in for a slide...unless the US stays on hold or cuts...with energy and commodities coming down, could inflation start to ease globally and in Australia? If not, then the RBA cannot be cutting rates yes?

Cheers,


CanOz


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## IFocus (5 August 2008)

Good thread dhukka

Currently I cannot see any other out come other than what you have already pointed out.

After the Olympics are out of the way the full effects of prevailing issues world wide will feed back into the Oz economy. This of course will impact on the resources boom which is only now in our materials market starting to price in risk (anyone remember the financial's last year?)rather than speculation.


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## dhukka (6 August 2008)

CanOz said:


> Great to see this thread Dhukka, I'll be taking a keen interest as long as my access to this site holds up....should be about 30 days from Friday i reckon!
> 
> If they do as you feel they may, then the AUD could be in for a slide...unless the US stays on hold or cuts...with energy and commodities coming down, could inflation start to ease globally and in Australia? If not, then the RBA cannot be cutting rates yes?
> 
> ...




From the RBA's perspective, their interest rate rises have worked in slowing domestic demand and with oil and other commodity prices coming down their inflation fears are dissapating. Leaving aside the idiocy of inflation rate targetting, my concern is that they went too far and they will end up slashing rates fairly aggressively into next year to prop up a significant slowdown in the economy. 

More data released today showed that credit growth for owner occupied housing continues to contract, the number of loans for owner occupied homes excluding refinancings fell a seasonally adjusted *-4.9%* in June and represents the fifth straight month of falls. On a year over year basis they are now down *-30%* whilst the toal value of owner occupied home loans is down *-29%* year over year.


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## professor_frink (6 August 2008)

good idea for a thread dhukka, I'll be following along hoping to pick up a few things

Caught the late news last night and the talk was about the possibility of the big 4 not playing ball when the RBA starts cutting. I can't imagine that the RBA is going to be too happy about this, but the question is what could they do if the banks leave their rates the same as they begin lowering?


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## dhukka (6 August 2008)

Also today, the June Performance of Construction Index was released showing the fourth straight month of contraction although up from the 33 month lows of May. Australian manufacturing, services and construction are all showing contraction. In coming months you can expect that to start showing up in the monthly employment figures.


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## dhukka (6 August 2008)

professor_frink said:


> Caught the late news last night and the talk was about the possibility of the big 4 not playing ball when the RBA starts cutting. I can't imagine that the RBA is going to be too happy about this, but the question is what could they do if the banks leave their rates the same as they begin lowering?




It's an interesting point. Take a look at what happened in the US. 1 year ago an average 30yr fixed mortgage was *6.25%* while the Fed funds rate was *5.25%*. Today we have a Fed funds rate of *2.00%* and what have 30 year mortgage rates done? Currently the average rate is around *6.35%*. 

That may be a little misleading, whilst the Fed was cutting rates, 30 year mortgage rates got as low as 5.25% but given the slashing of the funds rate mortgage rates hardly budged.


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## CanOz (7 August 2008)

I have a couple of questions Dhukka...

Given the Big Ben has not really targeted inflation, do you agree with the Fed's monetary policy? Slight off topic, but I'm just curious as he's had allot of critics, and very few supporting his/their policies.

Also, what wrong with the Australian economy contracting? Should we consider this normal? Or do we just want to see the pain minimized? Can a contraction help to control inflation?

Cheers,


CanOz


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## Real1ty (7 August 2008)

*Unemployment rate steady in July *
August 07, 2008

THE number of people in full-time employment grew by 53,700 in July putting employment figures at odds with other data suggesting the economy is slowing sharply.

The Reserve Bank of Australia indicated this week that it was on the brink of ending a six-year run of interest rate hikes in light of evidence of an economic slowdown.

The total number of people employed in July rose by a seasonally-adjusted 10,900, but part-time jobs dropped 42,800, the Australian Bureau of Statistics (ABS) said.

The jobless rate was 4.3 per cent, unchanged for the fourth straight month after revisions.

Economists had expected total employment to rise by a slim 1300.

Still, the ABS has warned its jobs series could prove more volatile after it had to cut its labour force sample size by 24 per cent due to the bureau's enforced cost-cutting exercise.

South Australia reported the largest fall in unemployment in July, easing to 4.6 per cent from 4.8 per cent, while in Queensland it declined to 3.7 per cent from 3.8 per cent and in Western Australia it fell to 3.1 per cent from 3.2 per cent.

The jobless rate was unchanged at 4.6 per cent in Victoria, but rose to 4.5 per cent from 4.2 per cent in Tasmania and was up to 4.7 per cent in NSW from 4.6 per cent the previous month.

In the territories, the unemployment rate fell to 2.9 per cent in the Northern Territory in July from 3.2 per cent, while in the ACT it was unchanged at 2.7 per cent for a fourth straight month.

http://www.theaustralian.news.com.au/story/0,25197,24141722-12377,00.html


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## dhukka (7 August 2008)

Real1ty said:


> *Unemployment rate steady in July *
> August 07, 2008
> 
> THE number of people in full-time employment grew by 53,700 in July putting employment figures at odds with other data suggesting the economy is slowing sharply.
> ...




Whilst full-time employment grew strongly in July part-time work took a dive. Part-time employment falls are usually a harbinger of drops in full-time jobs. That said, this is just one month of data so not much can be read into it. Also the abs has revised the way it does the survey for the employment report and has basically reduced the sample size by about 25%. That means the standard error has increased. So basically, less stock can be put in the current months data and more attention should be placed on the revisions.


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## dhukka (7 August 2008)

CanOz said:


> I have a couple of questions Dhukka...
> 
> Given the Big Ben has not really targeted inflation, do you agree with the Fed's monetary policy? Slight off topic, but I'm just curious as he's had allot of critics, and very few supporting his/their policies.
> 
> ...




Hi CanOZ, basically I think Helicopter Ben and his Fed mates blinked. They cut rates too far too fast. I was on record as saying 12 months ago that the Fed rate cuts would be largely irrelevent and not prevent the economy sinking into recession. I think the fact that the US economy probably slipped into recession in the 4Q07 or 1Q08 confirms that view. I don't think they should have cut rates at all or at most to about 4%. At 5.25% the Fed was hardly what you would call tight. By slashing rates and trying to reflate the economy the Fed just prolongs the pain. This assymentric approach to monetary policy where they inflate bubbles on the way up but try their best to stop them deflating on the way down is simply madness. If I had to propose an alternative monetary policy it would be abolish the Fed and let the market determine the level of interest rates. 

In my view there is nothing wrong with the Australian economy contracting. Despite central banks around the world best efforts they cannot abolish the business cycle. On top of that I earn the vast proportion of my money in yen so I'm hoping the RBA cuts rates aggressively pushing the AUD down. 

Yep inflation usually disappates during a recession. Actually I never saw inflation as much of a problem, the bigger risk as I saw it was deflation brought about by a contraction in credit, and falling asset prices.


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## professor_frink (8 August 2008)

dhukka said:


> It's an interesting point. Take a look at what happened in the US. 1 year ago an average 30yr fixed mortgage was *6.25%* while the Fed funds rate was *5.25%*. Today we have a Fed funds rate of *2.00%* and what have 30 year mortgage rates done? Currently the average rate is around *6.35%*.
> 
> That may be a little misleading, whilst the Fed was cutting rates, 30 year mortgage rates got as low as 5.25% but given the slashing of the funds rate mortgage rates hardly budged.




So what do you think the most likely course of action would be if this happens here? Outside of the govt stepping in and cutting taxes for all to try and stimulate things a bit, I can't think of much


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## dhukka (8 August 2008)

professor_frink said:


> So what do you think the most likely course of action would be if this happens here? Outside of the govt stepping in and cutting taxes for all to try and stimulate things a bit, I can't think of much




If the U.S is anything to go by you probably get some hairbrain fiscal stimulus package that includes rebate checks, corporate tax deductions etc.


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## CanOz (8 August 2008)

dhukka said:


> If the U.S is anything to go by you probably get some hairbrain fiscal stimulus package that includes rebate checks, corporate tax deductions etc.




So why not infrastructure development? Even if its partially/mostly privatly funded? Its a good way to create jobs during contractions, and give the current infrastructure a lift.


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## dhukka (8 August 2008)

CanOz said:


> So why not infrastructure development? Even if its partially/mostly privatly funded? Its a good way to create jobs during contractions, and give the current infrastructure a lift.




Absolutely, why not infrastructure development indeed. I was just postulating 'the likely course of action' by government.


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## Timmy (8 August 2008)

Real1ty said:


> THE number of people in full-time employment grew by 53,700 in July *putting employment figures at odds with other data* suggesting the economy is slowing sharply.




Something to note is that employment figures are generally accepted to be a lagging indicator, so the fact these figures are 'at odds' with other data is not unusual.


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## dhukka (8 August 2008)

Interesting comments from ANZ:



> *ANZ may not pass on interest rate cuts*
> The ANZ Banking Group Ltd has admitted there is no certainty it will pass on in full any interest rate cut made by the Reserve Bank of Australia.
> 
> As the first of the major banks to front a Parliamentary inquiry into competition in banking, the ANZ was grilled over its stance on interest rates.
> ...


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## dhukka (11 August 2008)

If you are bored (and I mean really bored) the RBA statment on monetary policy released today may be worth a read. However if that doesn't sound like fun, below is the important part of the statement which, at the end of the day doesn't say much more than they did last week. 



> In its recent policy deliberations, the Board has focused on both the risk that inflation may remain uncomfortably high, and on the accumulating evidence of a slowing in domestic demand and activity. Given the earlier background of strong growth in domestic spending and increasing pressure on productive capacity, the Board has for some time been seeking to restrain demand, and this has required a period of quite restrictive monetary policy. The evidence to date is that a significant moderation in demand is now occurring, and it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, in the period ahead.
> 
> While inflation is likely to remain high in the short term, the Board judged at its August meeting that demand was slowing to an extent that could be expected to bring about a significant reduction in inflation over time. On this basis the Board decided that the existing monetary policy setting was appropriate for the time being. On the assumption that the subdued demand conditions are likely to continue, scope to move to a less restrictive monetary policy stance in the period ahead is increasing. The Board will continue to monitor developments and make adjustments as required in order to promote sustainable growth consistent with the medium-term inflation target of 2–3 per cent.


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## dhukka (12 August 2008)

Today saw the release of NAB’s Monthly Business Survey & Economic Outlook for July 2008. Key points include:



> *July Survey – Key Results*
> • Business conditions fell by 5 points to an index of -5 in July – 25 points lower than its recent peak in October 2007, a rate of slowing now faster than that leading into the post Olympic 2000 slowdown (and not seen since the early 1990s).
> • Profits fell a further 10 points to -9 index points, while employment was negative for the second month in a row – a fall of 3 to -5 points. Trading also fell 3 to -2 index points. All these measures are at their lowest readings since late 2001.
> • The fall in conditions was very broadly based – with all sectors falling, except personal and recreational services which was up marginally but remains at very low levels. Particularly large falls recently have been in mining, manufacturing and wholesaling. Confidence was marginally better in transport and personal & recreational services but weaker in mining, finance & business services, construction and wholesaling.
> ...




The commentary is even more interesting:



> The key message from this month’s Nab Business survey is that the sharp slowdown in domestic demand continued through July and more importantly, that the rate of slowing has, in recent months, accelerated. The now large falls in sales and especially profits have begun to reflect in reduced labour hiring and a significant easing in capacity utilisation. As well as the speed of the deceleration, the view of business that the process is far from finished is somewhat concerning – with forward orders still slipping and confidence remaining at low levels. A profit squeeze on business is further highlighted by the continuing rise in purchase costs which, in current circumstances, is not able to be fully passed on – albeit inflation has edged higher. Clearly this cyclical slowdown is significant and far from finished. Global uncertainties are also not helping. For the rest of 2008 the die has already been cast, but if a hard landing is to be avoided in 2009, it is clear that domestic policy – especially monetary/financial - settings need to be eased significantly.


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## dhukka (19 August 2008)

The minutes of the RBA's August 5th meeting were released today. click here for the full statement. Below are the important points IMO.

I thought this comment on consumer spending was noteworthy, previously they had just said "slowing"



> *They observed that consumption spending had weakened considerably in 2008*, with retail sales being essentially flat in value terms over the first half of the year. In volume terms, retail spending had fallen in this period, with both large and small retailers exhibiting weaker trends in sales.




Then the money quotes:



> Given there had been a significant change in borrowing behaviour, confidence was weaker, asset prices had declined and slower overall growth was in prospect, tighter financial conditions were not warranted. *Indeed, less restrictive conditions could soon be called for, otherwise the risk of a deeper and more persistent slowing in the economy would increase.* On these considerations, a case could be made for an early reduction in the cash rate.
> 
> Weighing up all these considerations, members judged that the current stance of policy was appropriate for the time being. *Nonetheless, given the slower trend in demand, scope to move towards a less restrictive setting of monetary policy was judged to be increasing.*




Clearly the bias has changed but we knew that already. What isn't clear is if they will cut in September. The RBA seems a little surprised by how quickly the economy has cooled and therefore they may cut in Sept. If they do it will be a subtle admission that they tightened too much.


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## dhukka (27 August 2008)

The abs released a report on Construction today which showed the value of construction work completed fell in the Jun08 quarter by a SA *-2.7%*. Now surprising given the slowing economy however 1 quarter of data is not enough to see a trend. Listening to companies like LEI it seems there are still plenty of construction projects in the pipeline for the next 12 months.


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## dhukka (28 August 2008)

Strong numbers on private new capital expenditures released by the abs today showed a *5.7%* increase from the previous quarter. In addition the expectations for 2008-09 were revised upwards to show a *26.2%* increase on the same estimate for 2007-08.


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## dhukka (29 August 2008)

Private Sector Credit growth continued to slow in July rising *0.5%* but still showing a healthy *11.2%* year over year growth rate.


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## Sean K (29 August 2008)

dhukka said:


> Private Sector Credit growth continued to slow in July rising *0.5%* but still showing a healthy *11.2%* year over year growth rate.



Things are going bad Dhukka.

When's the time to buy?

Is it at the top, on the way down, or at the bottom?

Let us know the right time to get back in....

Would be of great benefit to us ASF'ers with some cash laying about.

Looking forward to some helpful advise....


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## dhukka (2 September 2008)

kennas said:


> Things are going bad Dhukka.
> 
> When's the time to buy?
> 
> ...




Ahh poor old kennas, I can see you coming a mile away. But wait a minute, I think I have some useful advice for ya I read somewhere on here....oh yeah, the stockmarket always goes up over the long term, at some point, it will be time to buy!


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## Sean K (2 September 2008)

dhukka said:


> Ahh poor old kennas, I can see you coming a mile away. But wait a minute, I think I have some useful advice for ya I read somewhere on here....oh yeah, the stockmarket always goes up over the long term, at some point, it will be time to buy!



 LOL

Thanks! 

Let's just hope there's a stockmarket left by the end of it all. 

Whenever that is..

Sorry if there was a hint of sarcasm in that post. It was a bit late...


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## dhukka (2 September 2008)

Anyhoo, back to the boring economics stuff. Yesterday's Performance of Manufacturing index showed contraction for the third month in a row. Recent manufacturing job cuts seem to confirm this trend.


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## dhukka (3 September 2008)

the Performance of Services of Index was released today showing the services sector has been in contraction mode for the 5th straight month. This month's readng was the lowest in the 5 and half year history of the index.


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## dhukka (3 September 2008)

Australian GDP figures for the June quarter were released today shoing that the economy grew 0.3% in the June quarter, the slowest since Decemeber 2004.  The highlight for me was the first contraction in Household consumption since 1993.


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## dhukka (5 September 2008)

The Preformance of Construction Index released today showed a small improvement but it is still firmly in contraction mode for the 6th straight month. Highlights from the report:




> *Key Findings*
> 
> ■ The national construction industry continued to decline in August
> 2008, although the rate of contraction moderated for a third
> ...


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## IFocus (5 September 2008)

Thanks for the charts Dhukka the trends are obvious.....


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## fimmwolf (5 September 2008)

I found this site useful, because it not only gives you the latest economic data, but also rates them in terms of importance. (which is useful for a noob like me)

http://www.dailyfx.com/calendar/

scroll down the page for more recently released figures


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## dhukka (8 September 2008)

ANZ job advertisement data released today suggests a softening on the employment front going forward.


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## dhukka (9 September 2008)

Both the number and value of loans for owner occupied housing are now down *-30%* from their respective peaks in June 2007 according to the abs data released today. This will be the Spring selling season that never was.


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## dhukka (9 September 2008)

Retail Sales were up a tepid *0.1%* in trend terms in July. It's important to note, that because of changes to the way retail sales are calculated (that is, they are using a smaller sample size) that the abs now considers the trend data to be a more accurate measure of month to mnth movements. From the abs



> Due to the smaller sample size and new sampling methodology introduced from July 2008, there will be increased volatility in all series. The original and seasonally adjusted series will be most affected, as a result, the original and seasonally adjusted series are considered of limited use for measuring month to month movements. The ABS recommends using the trend series for this analysis


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## dhukka (10 September 2008)

All Catergories of Lending finance fell in July on a Seasonally adjusted basis. From their peaks, Housing finance is down *-24.7%*, Commercial Finance *-35.5%* and Personal Finance *-9.1%*


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## CanOz (10 September 2008)

This though, is really good news right Dhukka, the sooner we stop spending credit and saving the quicker we'll get this downturn over with and can out of recession? At least credit is not expanding.....


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## dhukka (10 September 2008)

CanOz said:


> This though, is really good news right Dhukka, the sooner we stop spending credit and saving the quicker we'll get this downturn over with and can out of recession? At least credit is not expanding.....




It's good news, but remember we are coming off unsustainable high levels of credit. As you can see in the graph below on housing finance, we have only retraced to August 2005 levels. 

The economy thrives on the extension of credit to businesses and households for growth, so clearly a contraction forces changes in habits of both businesses and households. The RBA of course was pleased to see this to reign in domestic demand however the fear for them is that it goes too far the other way.

If it does go too far the other way we'll see the RBA trying to reflate, just look at the US for a model of what to expect, monetary easing, fiscal stimulus and if it gets bad enough government intervention. That would not be good news because it will make the process more drawn out and protracted.


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## Sean K (10 September 2008)

This all seems to be pointing to a great buy opportunity shortly.

Or, how long does this slide go?

Is it a slippery dip to oblivian?


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## bowseruni (10 September 2008)

kennas said:


> This all seems to be pointing to a great buy opportunity shortly.
> 
> Or, how long does this slide go?
> 
> Is it a slippery dip to oblivian?




I agree, I am seriously looking at buying a house closer towards the end of the year, hopefully interest rates will drop once, maybe twice before then which will help.

does this sound like a good plan?

are we heading for recession or already in one and just don't know it yet?


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## dhukka (11 September 2008)

Australian employment data released today shows the economy is still creating jobs a decent rate. *14,600* jobs were added in the month of August on a seasonally adjusted basis.  Remember the Australian economy needs to create approximately *15  - 20k* jobs per month just to keep up with population growth and immigration. The fall in the unemployment rate reflects a drop in the particpation rate or a drop in the number of people looking for work. 

Recession has become a hot topic of debate in recent months. If you are looking for confirmation of recession in the jobs numbers, by the time you get it, the recession will likely be more than half over. As you can see from the chart below, the last two recessions started whilst the 6 month moving average change in employment was still positive. You only got real confirmation once the 6MMA fell below *-15k *per month. In order to get there you would need a number of consecutive month declines in employment. We are unlikely to see those kinds of numbers until the first half of 2009 at the earliest IMO.


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## dhukka (6 October 2008)

The Australian Manufacturing sector contracted for the 4th consecutive month in September whilst the Services sector contracted for the 6th consecutive month. Combined the current credit freeze I don't see how Australia can avoid a recession. Futures are pricing in a *96%* chance of a 50bps rate cut by the RBA tomorrow. Even if that happens, it's doubtful the banks will follow given funding costs.


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## nunthewiser (6 October 2008)

Thanks Dhukka, very informative


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## dhukka (8 October 2008)

Housing commitments continued to fall in August. This is shaping up as the spring selling season that will not be.


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## Glen48 (8 October 2008)

Things are changing so quickly by the time the info is collated and sent of to the Feds its out of date.
I predict another 1% drop soon and not during the First Tuesday of the month format.


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## Aussiejeff (9 October 2008)

This is the guts of an announcement by Mount Gibson Iron Ore today - which has seen it's stock price plummet over 25% since open.

Chinese customers are trying to cutback on their orders over coming months.

So much for the politicians and treasurers of Australia pumping up our economic credentials on the back of the "China Miracle". This is just the start....

_*"Customer and iron ore sector analysis indicates a slow down in demand for iron ore in China due to current economic uncertainty and the tightening of credit facilities, leading to reductions in steel production [size=+1]and the current significant build-up of iron ore stockpiles at Chinese ports"[/size].*_


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## MS+Tradesim (9 October 2008)

Thanks for your thread Dhukka. I respect your views and thank you for putting me on to Nouriel Roubini last year. His updates are very useful.


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## dhukka (9 October 2008)

Aussiejeff said:


> This is the guts of an announcement by Mount Gibson Iron Ore today - which has seen it's stock price plummet over 25% since open.
> 
> Chinese customers are trying to cutback on their orders over coming months.
> 
> ...




Yep, whilst I am a long term commodity bull, I think this pullback will be longer and deeper than most suspect. Something that flew under radar this week also was the fact that China did not import any oil for the second consecutive month in a row.


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## Aussiejeff (9 October 2008)

dhukka said:


> Yep, whilst I am a long term commodity bull, I think this pullback will be longer and deeper than most suspect. Something that flew under radar this week also was the fact that China did not import any oil for the second consecutive month in a row.




Yeah. That must have an effect on world oil prices you would think.

Meanwhile, we here in God' Own Country are having to import more and more with a slumping BananBuck. One wonders how badly the falling Banana will prove to be for our spiralling Foreign Account Deficit over the coming months.  

Who cares whether the local mini economy is in surplus or not. Pollies can beat their chests about that one all they like. I think the bigger picture is what matters!


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## dhukka (9 October 2008)

Australian job market added just *2,200* in September. In addition August was revised downward to a gain of *10,200*. Remember that the Australian economy needs to create between *15 - 20k* jobs per month just to keep up with new entrants into the labour force. Thus the unemployment rate rose to *4.3%* 

Probably the most notewothy data point in today's numbers was that *15,400* full time jobs were lost, the most in 2 years, whilst *17,700* part-time jobs were added. Too early to see a trend and it should also be noted that these numbers are subject to large revisons. That said, given the sharply deteriorating economic picture we can expect the unemployment rate to rise substantially next year. 

Employment is a lagging indicator so I would't expect large consecutive monthly drops in payrolls until next year. However I expect the unemployment rate to reach *6%* or higher by the end of 2009 as we enter our first recession in 18 years.


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## pistol72 (10 October 2008)

Hi dhukka
Great stats,would really like to know how many small businesses started up and folded over the last 6/12 months.Can you or anybody help answer that one or point me in the right direction.
cheersP


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## Aussiejeff (10 October 2008)

The biggest beef I have with the unemployment stats is that now, anything over 2 hours per week is regarded as "part-time employment". 

AFAIK "once upon a time" in the not too far distant past, the stats only showed "full-time job unemployed" - small-hour part-time workers were essentially regarded as "unemployed". 

So now, the figures are skewed way down (on purpose) to give the impression of "very low unemployment".

It's crap, really.


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## dhukka (10 October 2008)

pistol72 said:


> Hi dhukka
> Great stats,would really like to know how many small businesses started up and folded over the last 6/12 months.Can you or anybody help answer that one or point me in the right direction.
> cheersP





Hi pistol, those statistics probably exist but I don't know where you could obtain them. One of the great things about the US market is the availability of statistics on just about everything. Unfortunately they are much more scarce in Oz.


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## dhukka (10 October 2008)

Aussiejeff said:


> The biggest beef I have with the unemployment stats is that now, anything over 2 hours per week is regarded as "part-time employment".
> 
> AFAIK "once upon a time" in the not too far distant past, the stats only showed "full-time job unemployed" - small-hour part-time workers were essentially regarded as "unemployed".
> 
> ...




Yeah good point. You can find the same type of fiddling with statistics in the US as well. You often hear the bromides that unemployment is much lower than compared to the early 1980's but it's a false comparison.


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## dhukka (13 October 2008)

Credit contraction continues apace with the latest lending finance numbers for August. Seasonally adjusted, Housing finance was down *-2.1%* in August, Commercial finance *-7.9%* and personal finance *-5.2%*. From their peaks Housing finance is down *-26%*, personal finance *-18%* and Commercial finance a whopping *-41%*. The decline in Commercial finance is even more staggering considering that it only peaked in January 08 whilst personal and housing finance peaked in Jun 07.  

Whilst it has been a precipitous drop, commercial finance has only reverted to levels last seen in October 2005. However, given what happened to credit markets in September and the first half of this month the worst is yet to come.


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## CAB SAV (13 October 2008)

Should see slowing next year. Lost staff member last week, not replacing ATM, Saturday night best mate said putting one person off straight after Christmas(retailing) and review for further cuts approx March. and another mate sat. night said four out of eighteen will be laid off in Jan.(kitchens etc.)With 800,000 odd small business's in Oz, you wouldn't want too many laying off. Will be worse in US.


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## dhukka (13 October 2008)

ANZ job as fell again in September and are showing year over year declines for the first time in 6 years. Job ads are a decent indicator of future employment growth.


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## dhukka (3 November 2008)

A raft of economic data out today on the Australian economy, none of it positive. Recession is looking more of a certaintly, could even begin in the current quarter rather than next year as anticipated earlier. Firstly Retail sales, up *0.2%* in September, with downward revisions to prior months. Retail Sales ar up 2.3% yoy, equaling the lowest year over year gain since the abs data began in 1982.


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## dhukka (3 November 2008)

Also out today the ANZ job ad series, showing both internet and newspaper job ads both clearly in negative territory year over year. Newspaper ads are down *-34.7%* year over year whilst internet job ads (which make up more than 90% of the total) are down *-5.5%*. Internet job ads are down approximately *-15%* from their highs of April this year.


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## dhukka (3 November 2008)

Probably the worst looking indicator out today was the Performance of Manufacturing Index which fell to it's lowest reading in *16* years and represents five straight months of contraction. The overall PMI reading hit a level of *40.4*, well below the dividing line of *50* that seperates expansion from contraction. The employment index was particulary nasty plummeting to *37.6*


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## Glen48 (3 November 2008)

exam financial advisers should have to pass

What do you do when a client says he’s going to replace you with a new broker? Remind him he’s your son.
By Chuck Cohen | October 31, 2008 edition

    A client asks you if the 400-point-an-hour loss in the stock market the past seven days should make him nervous. Your answer is:

A. “Did you watch Letterman last night?”
B. “Did you watch Leno last night?”
C. “Do you have any quarters for the meter?”
D. “You’re still talking to me?”

Answer: C. This shows you still have a car, which indicates your confidence in the market.

2. You are invited to a client’s house for dinner to discuss his shrunken retirement portfolio. Your reply is:

A. “Thank you, but I’ve given up food.”
B. “Your best years are ahead of you. Eighty is the new 60.”
C. “I never eat without my personal food taster.”
D. “Do I know you?”

Answer: D. Never admit to knowing anyone except Warren Buffett, who is always referred to as Uncle Warren.

3. Your client asks why he should buy more stock when the market has declined 40 percent in two weeks. Your answer is:

A. “You’d rather buy paper towels?”
B. “Stocks can’t go any lower. Can they?”
C. “Because the Indian casino is closed today.”
D. “I really need the commission.”

Answer: D. Creating empathy with your client is important. Always have pictures of your children on your desk, assuming you still have a desk.

4. Your client asks why he shouldn’t find another adviser to replace you. You should:

A. Tell him that you’ve been practicing and will definitely get better.
B. Tell him if he does find another adviser to give you the phone number.
C. Become hard of hearing.
D. Remind him you’re his son.

Answer: C. Try the time-honored, “I’m sorry, did you say ‘buy’ or ‘why?’ ”

5. You have a meeting with a potential new client. He asks your “financial strategy.” You answer:

A. In Korean.
B. “I generally move my queen to rook four and then yell ‘checkmate’ no matter what.”
C. “Strategy? We don’t need no stinking strategy.”
D. “I think Trollope said it best.”

Answer: D. As Al Roker likes to say, “When in doubt, quote Trollope.”

6. The SEC accuses you of insider trading. Your best defense is:

A. A missile shield.
B. “did it for the lovely wife and two gifted children I plan to acquire some day.”
C. “Do you have my phone number in Rio?”
D. “Can’t we all just get along?


----------



## Ageo (3 November 2008)

Thanks Dhukka for the info, keep it up as its very informative indeed


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## dhukka (6 November 2008)

A couple of data points yesterday. Building Approvals fell *-7.2%* in September and year over year are now down approximately *-22%*.

Also out the Performance of Services Index contracted for the seventh month in a row. In line with a lot of the statements by discretionary retailers at recent AGM's, retail sales from discretionary retailers fell sharply in October.


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## dhukka (6 November 2008)

The headline employment number of a rise of *34k* jobs in October looked good until you take a closer look at the details. Full time employment fell *-9.2k *after a downwardly revised fall of *-23.3k *in September.  Part time jobs grew by *43.5k* during October. 

A sharp divergence between part-time job growth and full-time job growth are shaded below in previous economic slowdowns. Even in the early 1990's recession, part-time employment continued to grow year over year whilst full-time employment contracted sharply. The shaded area on the far right of the graph, whilst hard to see, is starting to show that divergence again.


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## dhukka (11 November 2008)

Anyone catch NAB's monthly business survey today? From the shm.com.au



> *Business hopes collapse*
> 
> Business confidence in Australia collapsed to a record low in October as fears of a global economic slowdown crushed optimism at home.
> 
> ...


----------



## Aussiejeff (12 November 2008)

dhukka said:


> Anyone catch NAB's monthly business survey today? From the shm.com.au




As I mentioned in another thread, I have a feeling the promises by Gordon Brown, KRudd and their G20 ilk to apply a "Fiscal Stimulus" to the world financial markets (ie: SPEND, SPEND, SPEND) might actually have the reverse effect on investor's nerves. 

Is THAT the best they can come up with? Like a game of snakes and ladders, slip down back to where this mess all started, with excessive money printing and SPENDING? 

World leaders are in a total tizz ATM. Business confidence can sense it. Pollies back-slapping each other and making outlandish promises just exacerbates the problem over time. Like a massive tsunami, I have a bad feeling that a "second wave" is just over the horizon and the Captains are preparing to jump ship...


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## Glen48 (12 November 2008)

History shows when this sort of bubble bursts it just snowballs and there is no cure yet they still keep trying by throwing money at it, look at our car industry no car yard or buyers soon yet they want to support the workers because 200K on the dole is not good for their image and with HQ in USA about to go under what the point?


----------



## Aussiejeff (13 November 2008)

Just finished watching a recording of SBS's last Insight program, which talked about the economic outlook for Australia and how it might affect business and consumers.

I was bemused by the overly optimistic assesment by AIG CEO Heather Ridout - essentially that she felt the plunge in the $AUS was "great for our export and tourist industries since more countries will want to buy our raw materials and come here for holidays" and as a result, Australia won't fall into recession.

Funny how many "economic optimists" in Oz seem to think the plunge in the Lil' Ozzie Bleeder is the best thing since sliced bread. They completely ignore the following substantial NEGATIVE outcomes:

(1) The cost of funding Australia's already massive international foreign debt skyrockets with a falling dollar.

(2) The cost of ALL imports must eventually go through the roof. 

(3) The $AUS dollar becomes a Banana currency - at the whim of the money market gamblers and the first to be dumped in any "crisis".

(4) It sets us up for a massive crunch when the price of a barrel of oil suddenly resumes a rapid upward spiral. I figure one of the primary reasons oil is plunging right now is because hedge funds are selling out to cover their immediate cash flow problems. It has little to do with everyone suddenly parking their cars and walking to work (ie: the demand has not fallen off a cliff, but the hedgie punters have withdrawn some sorely needed cash to fund early retirement in the Bahamas!) 

I comfortably predict in the near term the world will wake up to jolting news something along the lines of "Oil prices rebounded strongly overnight as new data shows reserves have depleted significantly due to unforeseen higher demand as well as the effect of significant cutbacks in oil exploration and production brought on by recent hedge fund selling".  

If our BananaBuck is still languishing around the 50c-60c mark at that inevitable time when the oil price spiral takes off again, our by then battered economy better be prepared for a crash landing. Anyone care to guess what a litre of unleaded will cost with oil at, say, $140 a barrel and our BananaBuck at $USD 0.55?


Enjoy your flight in the meantime.



aj


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## Glen48 (13 November 2008)

We all now have bit parts in Australia horror movie.
You know how some " _The day the World iced over_" type movie starts the Hubby is fighting with his wife and kids jumping up and down and in the back ground the TV saying this is the 3rd week in a row were we have had record snow falls, then the Hubby goes to work and see cars off the road and people complaining about the snow and ice and so it grows from there more bad news every few minutes...only He saves the World and we have Krudd etc to save us.


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## gfresh (13 November 2008)

Aussiejeff said:


> If our BananaBuck is still languishing around the 50c-60c mark at that inevitable time when the oil price spiral takes off again, our by then battered economy better be prepared for a crash landing. Anyone care to guess what a litre of unleaded will cost with oil at, say, $140 a barrel and our BananaBuck at $USD 0.55?




Good thoughts.. I think there is heavy shock coming, and this is very much false confidence now that the "petrol shock" is off the front pages. The oilers are also starting to scale back production, they know how to keep the price where they like. This will eventually help stabilise, and raise the price back over $60/bbl. 

A low dollar could also lead to the twin evil of higher interest rates. Overseas lenders are reluctant to lend their dollars to Aussie lenders due to several factors - 

a) if the locals (us) have to work harder and harder to service the loans in the lenders currency 

b) they have less money to lend with less exotic leverage on leverage available

c) they don't trust the Oz housing market will not implode like their own. On the outside looking in they just see what their market was like 12-18 months ago and see Risk with a capital R. 

If so, interest rates may have to return to higher levels, and petrol prices were to go sky-high, we are really in big trouble. The situation we were at 12 months ago "when everybody was hurting" but *without* a strongly growing economy to keep things in check.


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## Wysiwyg (13 November 2008)

Aussiejeff said:


> Anyone care to guess what a litre of unleaded will cost with oil at, say, $140 a barrel and our BananaBuck at $USD 0.55?




The p.o.o. will only spiral up if world economic growth increases to the pace of the 2003-2007 years.That is unless you believe the peak oil story which seems to have faded with less demand for the crude.

My charts below show the correlation between currencies and crude oil which suggests any rise in crude will be accompanied by a rise in the AUD/USD , EUR/USD.

Firstly the EUR/USD correlation chart and then the AUD/USD to compare.


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## dhukka (9 December 2008)

Paul Keating once remarked that the 1990's recession was "the recession we had to have", I'm calling this one, the recession we couldn't avoid. A couple of recent data points. ANZ job ads fell the most ever in November. NAB business survey also plunged in November, NAB now sees a recession at least in the non-farm economy. The manufacturing sector has been contracting for 6 months, the services sector for 8 and the construction industry 9 months. Welcome to the  recession we couldn't avoid.


----------



## Aussiejeff (10 December 2008)

dhukka said:


> Paul Keating once remarked that the 1990's recession was "the recession we had to have", *I'm calling this one, the recession we couldn't avoid*. A couple of recent data points. ANZ job ads fell the most ever in November. NAB business survey also plunged in November, NAB now sees a recession at least in the non-farm economy. The manufacturing sector has been contracting for 6 months, the services sector for 8 and the construction industry 9 months. Welcome to the  recession we couldn't avoid.




Uh-uh!

Metinks this is officially *"The Recession We Won't EVER Admit To"*. 

KRudd, Swannie & trusty sidekick Little Stevie will have to be dragged kicking and screaming to the stocks and pelted with logic by the hoi poloi until they turn blue with embarrassment before they stammeringly admit to the unmentionable existence of a "R-r-r-r-r-r-r-r....." 

They have given their (sic: "our") all in their efforts to keep our (sic: "their") Li'l 'conomy's head above the poo...

*sniff*

_"Oooh. That foul stench seems to be getting worse....   "_


----------



## Aussiejeff (10 December 2008)

Seriously, this article today by Bloomberg paints a rather disturbing outlook for China that IF and WHEN it comes to pass would have pretty horrendous implications for the Oz economy.

-------------------------

[size=+1]*China Boomtown Withers as Buyers Push Worker Rights* [/size]

Dec. 9 (Bloomberg) 

-- Li Wencheng chain smokes in the office of his candy factory in China’s southern manufacturing belt and frets over diminishing returns.

“The U.S. is really putting us into a dilemma,” says Li, who employs 100 people at his plant in Dongguan, Guangdong province, which makes candy versions of Winnie the Pooh and other Walt Disney Co. characters. “Clients talk about high-quality products and human rights in one breath, and in the next they’re telling us we have to cut prices.”

Chinese exporters are the latest victims of the global recession as sales slow and buyers in the U.S., Europe and Japan drive prices lower. At the same time, employee wages and benefit costs are rising following demands from customers, including Wal- Mart Stores Inc., that they enforce new labor laws.

*The crunch may close a fifth of Guangdong’s factories and leave 6 million migrants without work next year*, according to the Institute of Contemporary Observation, a labor rights group in the province. That would further slow the world economy because Guangdong accounts for 12 percent of the nation’s gross domestic product and China is the biggest driver of international growth.

The World Bank last week slashed its forecast for China’s economic expansion next year to 7.5 percent, the lowest in almost two decades, citing reduced overseas demand. China has averaged 9.9 percent annual growth for the past 30 years.

Exports Fell

*Two-thirds of China’s small toy exporters closed in the first nine months of 2008, according to government statistics*. Exports in November fell for the first time in more than seven years, Fan Gang, an adviser to China’s central bank, said at a forum in Beijing today.

“The bankruptcy of small and medium-sized exporters is going to have a huge effect on China’s economy,” says Guan Anping, a former trade official who is now managing partner at the law firm Anjin & Partners in Beijing.

*Some 95 percent of exporters with assets of less than 40 million yuan ($29 million) may fail in the next three years, Guan estimates. China’s 42 million businesses of that size provide three-quarters of China’s urban jobs and 60 percent of GDP, according to the government*.

Growth in Guangdong slid to 10.4 percent in the first three quarters, 4.3 percentage points less than the same period last year. Signs of the squeeze are littered across Dongguan, which is dotted with factories sitting empty behind padlocked gates. 

----------------------

Cheezus! So, up to 60% of GDP could be lost within 3 years. OUCH!!! 

**Abandon ship!!!!** (Oh! There's no-where to hide...  )

Full article - http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aPWSbqzzJlG4

Chiz,

aj


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## Sean K (10 December 2008)

Australian economy must be in great shape...


*Rudd offers Indonesia $1bn loan *

December 10, 2008 
Article from:  Australian Associated Press 

AUSTRALIA will provide $1 billion to Indonesia as a stand-by loan to help tackle the global financial crisis if it's needed.

Prime Minister Kevin Rudd's bilateral talks with his Indonesian counterpart Susilo Bambang Yudhoyono in Bali have included discussions on a facility for a stand-by loan if needed by Indonesia. 

Indonesia is also seeking potential assistance from Japan, the European Union, the Asia Development Bank and the World Bank.

"The scope ... of our proposed participation is in the vicinity of $1 billion," Mr Rudd said in Bali.


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## chops_a_must (10 December 2008)

On what will it be spent on?

State of the art Russian fighters that piss all over ours? Lol...

Can't believe it's not attached to them reducing military spending.


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## Aussiejeff (10 December 2008)

chops_a_must said:


> On what will it be spent on?
> 
> State of the art Russian fighters that piss all over ours? Lol...
> 
> Can't believe it's not attached to them reducing military spending.




Might be attached to them reducing the output of boat people.


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## Aussiejeff (10 December 2008)

kennas said:


> Australian economy must be in great shape...
> 
> 
> *Rudd offers Indonesia $1bn loan *
> ...




Of course, Mr KRudd will seek permission from his voters before committing OUR hard earned to prop up a failing despo.... errr ... democracy, won't he?

Or not.....


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## Sean K (10 December 2008)

Thinking bigger picture, the well learned government must believe that propping up our neighbours will ultimately result in our economy, and probably more importantly - our security, will be enhanced. That is probably the strategic reason for the assistance. Just like all the money we've flushed down PNG, Solomans, Bougainville, East Timor, New Zealand and South Australia. Without stable economies around us, there is no security. Just think what would happen if Indonesia falls completely in the Poo right now, with their Islamic Extremists, tripletted with Malaysia and South Phillipines.

Maybe I'm just clutching at straws...


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## Julia (10 December 2008)

Umm, Kennas, what funds have we flushed down New Zealand?


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## It's Snake Pliskin (10 December 2008)

chops_a_must said:


> On what will it be spent on?
> 
> State of the art Russian fighters that piss all over ours? Lol...
> 
> Can't believe it's not attached to them reducing military spending.




We still have the F111 but not for much longer.


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## Aussiejeff (10 December 2008)

kennas said:


> Thinking bigger picture, the well learned government must believe that propping up our neighbours will ultimately result in our economy, and probably more importantly - our security, will be enhanced. That is probably the strategic reason for the assistance. Just like all the money we've flushed down PNG, Solomans, Bougainville, East Timor, New Zealand and South Australia. Without stable economies around us, there is no security. Just think what would happen if Indonesia falls completely in the Poo right now, with their Islamic Extremists, tripletted with Malaysia and South Phillipines.
> 
> Maybe I'm just clutching at straws...




Aaaah. I see. Domino Theory... 

KRudd certainly knows his parlour games.


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## dhukka (12 January 2009)

ANZ job ads for December out today, the trend is clearly pointing to rising unemployment in Australia. Below are comments from the report from ANZ's Australia head of economics. Click this link for the full report.



> “The rate of decline in job advertising intensified in the month of December, providing further evidence that the demand for new labour across the Australian economy is now at recession levels. Newspaper job advertising, which had experienced the largest two-month decline on record in October and November, fell by another 13.9% in December, taking the annual rate to -51.8%. This is the weakest annual rate of growth innewspaper job advertising since December 1982, including the recession of 1991. Newspaper job advertising has slumped since the intensification of the financial crisis in mid-September last year, having declined by more than 30% over the course of the final three months of 2008.”
> 
> “Internet job advertising has also weakened substantially, experiencing a 9.5% decline in the month, the largest decline since we commenced surveying internet job advertising in 1998. Internet job advertisements peaked in April 2008, averaging 255,456 a week and have since declined by 30% to a weekly average of around 180,000 in December. Internet job ads are now 28.1% below year ago levels, also the weakest outcome since the survey began in 1998.”
> 
> “Australia has no experience of recession since we started collecting internet job ads, so all our longer-term historical comparisons are based on the newspaper series. A 50% decline in newspaper job advertising in a year is historically consistent with economic recession within the next nine months and a rise in the unemployment rate over the following years.


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## IFocus (12 January 2009)

Interesting 6% has been thrown up as a target by year end 

Mining is getting knocked around a bit here in the West Rio to announce job cuts this week, hope is gold mines may take up a little of the slack


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## Temjin (12 January 2009)

Yeah? I say property prices will continue to rise because unemployment does not matter because we still have a under supply and lower interest rates!


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## dhukka (4 March 2009)

dhukka said:


> Paul Keating once remarked that the 1990's recession was "the recession we had to have", I'm calling this one, the recession we couldn't avoid. A couple of recent data points. ANZ job ads fell the most ever in November. NAB business survey also plunged in November, NAB now sees a recession at least in the non-farm economy. The manufacturing sector has been contracting for 6 months, the services sector for 8 and the construction industry 9 months. Welcome to the  recession we couldn't avoid.




Whilst GDP shouldn't be taken as the sole measure of recession, today's GDP number backs up an already deteriorating Australian economy. Year over Year GDP growth of *0.3%* is the worst since 4Q1991, which surprise surprise, was just after the last recession finished. 

The question is not whether Australia will avoid a recession but rather how long and severe will it be?


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## Temjin (4 March 2009)

> A recession is a pause in an otherwise healthy, growing economy.
> 
> A depression is when the economy drops dead. And when it drops dead, the assets that people owned - stocks, bonds, houses, derivatives, debt - are called into question.
> 
> By Bill Bonner




So do everybody still think we will be in only a recession? 

When the de-leveraging process accelerates here in Australia, we may then see a depression.


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## grace (4 March 2009)

Temjin said:


> So do everybody still think we will be in only a recession?
> 
> When the de-leveraging process accelerates here in Australia, we may then see a depression.




It is quite funny how when you talk to people (who don't follow the markets) and you suggest how bad things are going to be, they think you are absolutely crazy.  Are we the crazy ones?  Or are we watching the big event unfold, and those others are just too silly to listen?  Or perhaps they are so deep in debt, they can't afford to listen to you?

I did tell some people about 18 months ago that we were headed for a global recession that will follow with the US being insolvent.  They looked at me as if I was joking.  I said I wasn't.  Now they wished they had listened.  Not that I can talk, I don't even listen to my own advice when it comes to shares.  I am still a fundamental investor.  Mind you, I am doing okay.


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## Garpal Gumnut (4 March 2009)

We'll all be rooned.

gg


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## dhukka (12 March 2009)

Employment was basically flat In February after flat results in January and December. The unemployment rate jumped in large part due to a jump in the number of people looking for work. However, it should be remembered that the Aussie economy needs to create between *15 -20k* jobs per month just to keep up with new entrants into the labour force. Thus even flat jobs growth will see the unemployment rate continue to rise. 

The interesting trend is the divergence between full-time and part-time employment. *-53.5k* full-time jobs were lost in February, the most since November 1991 whilst *55.6k* part-time jobs were added. Year over year full-time employment is now down -0.5% whilst part-time employment is up 3.6%. This is obviously not a good trend if full-time jobs are getting replaced by part-time jobs. 

Economists, from both NAB and ANZ raised their unemployment forecasts earlier in the week, not that that means anything, economists themselves are lagging indicators.


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## Julia (12 March 2009)

grace said:


> It is quite funny how when you talk to people (who don't follow the markets) and you suggest how bad things are going to be, they think you are absolutely crazy.  Are we the crazy ones?  Or are we watching the big event unfold, and those others are just too silly to listen?  Or perhaps they are so deep in debt, they can't afford to listen to you?
> 
> I did tell some people about 18 months ago that we were headed for a global recession that will follow with the US being insolvent.  They looked at me as if I was joking.  I said I wasn't.  Now they wished they had listened.  Not that I can talk, I don't even listen to my own advice when it comes to shares.  I am still a fundamental investor.  Mind you, I am doing okay.




Remember when everyone was saying that the US subprime crisis wouldn't affect us down here because, hey, we were decoupled from the US?

I think the following quote fits more or less into this thread:



> The following quote by an American, Dr. Rogers is an interesting insight for Australia:
> 
> 
> 
> "Friend, you cannot legislate the poor into freedom by legislating the wealthy out of freedom.  And what one person receives without working for, another person must work for without receiving. The government can't give to anybody anything that the government does not first take from somebody. And when half of the people get the idea they don't have to work because the other half's going to take care of them, and when the other half get the idea it does no good to work because somebody's going to get what I work for.  That, dear friend, is about the end of any nation."


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## Julia (12 March 2009)

Garpal Gumnut said:


> We'll all be rooned.
> 
> gg



And if we are, it will be at least partly because we all believe we'll be rooned.


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## IFocus (12 March 2009)

It reminds me of an impending car crash in slow motion, the brakes have been applied, smoke is coming from the screeching tyres and impact is coming..............


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## chatty (13 March 2009)

grace said:


> It is quite funny how when you talk to people (who don't follow the markets) and you suggest how bad things are going to be, they think you are absolutely crazy.  Are we the crazy ones?  Or are we watching the big event unfold, and those others are just too silly to listen?  Or perhaps they are so deep in debt, they can't afford to listen to you?
> 
> I did tell some people about 18 months ago that we were headed for a global recession that will follow with the US being insolvent.  They looked at me as if I was joking.  I said I wasn't.  Now they wished they had listened.  Not that I can talk, I don't even listen to my own advice when it comes to shares.  I am still a fundamental investor.  Mind you, I am doing okay.




I did exactly the same and the response from people around me is "I AM AN IDIOT". 
Anyway, I hope these people still believe that I am an idoit and keep spending and live their life as if there will be no recession and depression coming. Because if they believe now it will fulfill the prophecy. DEPRESSION!!

Hope we can get out from this crisis


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## dhukka (31 March 2009)

Out today, Private Sector Credit Data from the RBA:



Private Sector Credit flat in February, up *5.4%* over the past year, slowest year over year growth in 15 years.


Housing Credit up *0.6%* in Feb, up *7.1%* year over year, equal slowest pace ever, last time was Jan. 1983


Business Credit down *-0.6%* in Feb, up *5.5%* year over year, slowest pace since Dec 2002


Other Personal Housing Credit down for fifth straight month, down *-6.0%* year over year, equal slowest pace ever, last time was May. 1992

Charts and commentary at link below:

Private Sector Credit Growth Hits 15 Year Low


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## grace (31 March 2009)

dhukka said:


> Out today, Private Sector Credit Data from the RBA:
> 
> 
> 
> ...




Yes, it says it all really.  We are in a time-delay capsule.  Just watch the US/UK and wait for 6-12 months for the repeat here.  It is turning up on our shores, like the plague.


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## IFocus (31 March 2009)

Thanks dhukka I must say that the numbers coming out continue to be better than I expected still the trend appears down


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## Aussiejeff (1 April 2009)

grace said:


> Yes, it says it all really.  We are in a time-delay capsule.  Just watch the US/UK and wait for 6-12 months for the repeat here.  It is turning up on our shores, like the plague.




See?

KRudd woz right. We must spend, spend, spend MORE and FASTER!

So what are you waiting for? [size=+2]SPEND IT ALL NOW!![/size]

[size=+1]It's not what your country can do for you - it's what YOU can do for your country![/size]

[size=-4]This has been a community announcement by KRuddBank Ltd. Authorized by the Oztralian Laborious Party[/size]


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## dhukka (1 April 2009)

Aussiejeff said:


> See?
> 
> KRudd woz right. We must spend, spend, spend MORE and FASTER!
> 
> ...




It appears the little Aussie consumer was a tad unpatriotic in February:


Feb Retail Sales down -2.0%


Feb Building Approvals up 7.8%


DEEWR Leading Employment index, down for 15 straight months and is accelerating.


Aust PMI contracted for 10th straight month

Charts and commentary at link below:

Australian Economic Roundup


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## Glen48 (1 April 2009)

Could this recession/depression be caused by Bin Liner after all he started 9/11 and the World panicked and then the IR rates came down to get the USA economy moving again and away we went...?


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## GumbyLearner (1 April 2009)

Glen48 said:


> Could this recession/depression be caused by Bin Liner after all he started 9/11 and the World panicked and then the IR rates came down to get the USA economy moving again and away we went...?




Bin Liner??

Dont you mean the good ol' Jet Airliner song by the Steve Miller Band? :

I'm hearing you, but just keep your mouth shut. In the words of Colonal Klink's deputy..I know nothing..nasing!


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## Aussiejeff (2 April 2009)

GumbyLearner said:


> Bin Liner??
> 
> Dont you mean the good ol' Jet Airliner song by the Steve Miller Band? :
> 
> I'm hearing you, but just keep your mouth shut. In the words of Colonal Klink's deputy..I know nothing..nasing!




Strewth! And here I was thinking the chappy was a FBI/CIA double agent? 

Anyhoo, my crystal balls tell me the crisis is now well & truly behind us. Why?

(1) Big Banks are getting bigger, thanks to overwhelming gummint support.

(2) Big Banks are becoming bigger stakeholders in many Oz stocks. Almost every major stock has a major bank or two as major shareholders. With all the cash handed to them via guarantees & printing presses, the Big Banks can & will buy up big name stocks big time, thus ensuring they become even bigger shareholders with even bigger control over those stocks and ensuing bigger influence on market direction.

(3) Big Kevin & his Big Bro Swannie are rumored to be getting ready to splash another Mega-BIG Fiscal Stimulus in the merry month of May Budget. It will be BIG spending for all!!

and finally...

(4) The BIG World Gee Whizz Summit has lots and lots of really BIG ideas that will spark a BIG rally in world confidence, markets and economies, thus bringing BIG smiles to everyone's faces.

See?

BIG optimism is all that is needed!


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## Glen48 (2 April 2009)

From what I can work out it looks like the FX market stopped or slowed while the Gee 20? goes on..its like waiting for the Bomb squad to gives us the all clear.


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## dhukka (9 April 2009)

March Employment data out today, get used to sharp jumps in the unemployment rate:


*-34,700* jobs lost in March


*-38,900* full-time jobs lost, *4,200* part-time jobs added.


Unemployment rate *5.7%*, highest in five years.

More data and analysis here


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