Australian Economic Analysis

[It's Snake Pliskin]

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.

 

[Aussiejeff]

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.

 

[dhukka]

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.

 

[IFocus]

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

 

[Temjin]

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!

 

[dhukka]

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?

 

[Temjin]

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.

 

[grace]

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.

 

[Garpal Gumnut]

We'll all be rooned.

gg

 

[dhukka]

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.

 

[Julia]

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."

 

[Julia]

We'll all be rooned.

gg

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

 

[IFocus]

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..............

 

[chatty]

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

 

[dhukka]

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

 

[grace]

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

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.

 

[IFocus]

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

 

[Aussiejeff]

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]

 

[dhukka]

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]

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

 

[Glen48]

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...?