Australian (ASX) Stock Market Forum

Australian economy heading for meltdown!

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greggles said:
My concern is the massive level of personal debt in Australia. If the housing market drops 15% to 20% it could be like the first domino falling. That will push distressed sellers into the market driving down prices further and sending people to the wall financially, especially in Sydney and Melbourne.

Add into that declining commodity prices, slowing economic growth, stagnant wage growth, a rising unemployment rate and you could have a serious economic situation on your hands. If overseas financial markets take another serious dive that will just be the coup de grâce.

Too many people in Australia expect the good times to keep on rolling and that the high standard of living we enjoy will always be there. I reckon inevitably we're going to have to eat an economic sh*t sandwich. The only question I have is when.
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My guess is within the next 2-3 years, at least then it will get climate change off the front page and it will give people something to really worry about.
The good thing is, it will reduce emissions, when people cant afford their energy bills.
There is a silver lining in all clouds, you just have to look for it.
 
greggles said:
My concern is the massive level of personal debt in Australia. If the housing market drops 15% to 20% it could be like the first domino falling. That will push distressed sellers into the market driving down prices further and sending people to the wall financially, especially in Sydney and Melbourne.

Too many people in Australia expect the good times to keep on rolling and that the high standard of living we enjoy will always be there. I reckon inevitably we're going to have to eat an economic sh*t sandwich. The only question I have is when.
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I hear your concerns Greg.

Economics is not my strong suit, but looking at all the World Index's at the moment … I see some early topping patterns …….

Everything in financial markets tends to cycle … I'd say disregard those cycles at your peril, particularly if you are not young and don't have time to ride out the storms (I'm old … "ish" lol:mad::D)

On the flip side .. topping patterns and "impending doom cycles" can sometimes take years to develop so who really knows when the crap will hit the fan.

Because I'm old … "ish":p ….. I tend to be fairly blasé about wealth and all things associated with it …. I have come to the conclusion that life is just a bit of a game … as long as you have enough friends, family ..... and enough cash to keep your friends and family living the lifestyle they are accustomed to:rolleyes: ….. you will be ok:)

We are fortunate to live in Oz … For most, even when times are bad, they are still a lot better than most other places.
 
SirRumpole said:
There is quite a fashion to knock down 1960's houses and put up more modern premises to keep up with the Joneses.

I don't have a problem with this as it creates work in the construction industry
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It created work, though it seems an incredible waste of natural resources, but in the context of the thread it seems very symptomatic of bubble mentality that the assumption is that anyone buying a house / land is doing so purely to make a profit.

In the past, houses were for living in and if you were going to make a profit out of it then that was known as being a landlord with your real profit being largely from the rent collected.
 
Smurf1976 said:
It created work, though it seems an incredible waste of natural resources, but in the context of the thread it seems very symptomatic of bubble mentality that the assumption is that anyone buying a house / land is doing so purely to make a profit.

In the past, houses were for living in and if you were going to make a profit out of it then that was known as being a landlord with your real profit being largely from the rent collected.
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I don't think you can assume all or even most knock down/ rebuilds are for rent. Many of them are for owner occupiers.

A relative of mine bought a 60's house in Melbourne, moved into a flat then knocked his house down and rebuilt it then moved in to the new house.

As people move up the income scale and can afford to do this it's becoming more popular.
 
Smurf1976 said:
I've zero intention of knocking anything down - I bought it to live in which to my thinking is the purpose of a house. :2twocents
Such is the mentality at present with people seeing property as a way to make money rather than somewhere to live.
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SirRumpole said:
There is quite a fashion to knock down 1960's houses and put up more modern premises to keep up with the Joneses.
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True statements. Even undeveloped you will still be building equity, probably at a faster rate than knocking over and rebuilding requiring large capital / debt. Remember that a lot of these houses, can have both. Keep the old and build some new on the same site. That's a good thing for wanting to densify and not add to the sprawl, sprawl needs new infrastructure. Over densifying has its problems too as infrastructure is stretched. Having an area with the right mix can make exceptional lifestyle areas. Ultimately houses making great homes.
 
greggles said:
My concern is the massive level of personal debt in Australia. If the housing market drops 15% to 20% it could be like the first domino falling. That will push distressed sellers into the market driving down prices further and sending people to the wall financially, especially in Sydney and Melbourne.
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Yep that is exactly what is needed and unfortunately due to the 28 year bull market there must be a bust of sorts, people being forced to sell thus driving prices down - wealth destruction.
 
greggles said:
Back in the 70s (when I was a young bloke) the choice was far more limited and consumerism was somewhat muted. Now it's a raging beast that threatens to devour us all. Spend we can and spend we apparently will, mostly on stuff that will be obsolete in a couple of years.
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Back in the 70s (when I was a young woman) I had no problem finding things to spend my money on. We had cars, clothes, motorcycles, jewellery, art, movies, colour televisions, microwaves stereo systems and forget smashed avo on toast, it was Grange wine at city restaurants. Ah yes, those were the days. Nowadays, smashed avo is a luxury! :p
 
Ann said:
Back in the 70s (when I was a young woman) I had no problem finding things to spend my money on. We had cars, clothes, motorcycles, jewellery, art, movies, colour televisions, microwaves stereo systems and forget smashed avo on toast, it was Grange wine at city restaurants. Ah yes, those were the days. Nowadays, smashed avo is a luxury! :p
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Ah yes, the Honda 750/4, Holden Sandman, the Rolling Stones without wrinkles at the WACA, Led Zeppelin at Beatty Park swimming pool, those were the days.
Not a lot of t.v in the mining towns though, hamburgers and Southern Comfort was more the go, you would have been bashed asking for smashed avocados. :roflmao:
 
sptrawler said:
... you would have been bashed asking for smashed avocados. :roflmao:
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Glad that has changed.
I didn't eat an avocado till 1986/7, (did they exist in Perth before then?) and I ate it like an apple. Crisp bite and didn't think much of it. My Kiwi neighbours for 10 minutes wet their uggs boots with gut roaring laughter when I told them.
Did like it better when I ate a ripe one!
 
As the baby boomers grew up throughout there lives many things changed to accommodate their new requirements and sheer numbers. These were all very significant, schools, tertiary education, then the sprawl of housing along with jobs and earnings and the evolution of finance, lifestyles, then the big money years in high paid positions (kids grown up) and LOTS to spend. Now retirement has kickers, no work no tax and less spend, bubbles burst making drops in value. How much is the effect of the retiring boomers on the economy. I think it is very significant.
 
sptrawler said:
Ah yes, the Honda 750/4, Holden Sandman, the Rolling Stones without wrinkles at the WACA, Led Zeppelin at Beatty Park swimming pool, those were the days.
Not a lot of t.v in the mining towns though, hamburgers and Southern Comfort was more the go, you would have been bashed asking for smashed avocados. :roflmao:
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You know sptrawler, all the young ones had better figures back then, hamburgers-with-the-lot were a million times better than they are now and why oh why don't those poor old Rolling Stones retire, it is cringe-making to watch Jagger thrust his groin at an audience of seventy year old women....urgh! :)
 
Ann said:
Back in the 70s (when I was a young woman) I had no problem finding things to spend my money on. We had cars, clothes, motorcycles, jewellery, art, movies, colour televisions, microwaves stereo systems and forget smashed avo on toast, it was Grange wine at city restaurants. Ah yes, those were the days. Nowadays, smashed avo is a luxury! :p
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Perhaps my perspective is skewed somewhat as I was a young whippersnapper back in the 70s whose biggest concern was when my next bag of mixed lollies would be in my hands and then two seconds later in my gob. My next biggest concern was when we'd get a colour TV and later in the 70s one of those newfangled top loading VCR thingies.

I do remember the choice as being much more limited than it is now and the number of purchases generally being far fewer. Cars lasted longer, as did TVs, and as for phones... well Telstra (Telecom?) provided you with one of them gratis if one wasn't already there where you got your line connected.

Anyway, I didn't mean to take this thread off topic but I feel that consumerism is far more rampant these days and most consumer goods are built to be obsolete very quickly. We now live in a culture of replacement rather than repair and I think that despite having more disposable income, it tends to disappear faster IMO.
 
greggles said:
Anyway, I didn't mean to take this thread off topic but I feel that consumerism is far more rampant these days and most consumer goods are built to be obsolete very quickly. We now live in a culture of replacement rather than repair and I think that despite having more disposable income, it tends to disappear faster IMO.
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I don't think you are off topic young greggles. :)
We always have plenty of things to spend our money on, in any generation but I have to agree with you about obsolescence. Electricals are no longer solid but lightweight. I have a blender away in an attempt to get it repaired, so far no spare parts have turned up, it may end up as a waste of time. Fashionable clothing has become so cheap the stuff is worn once or twice and then tossed. Paying with a card can be a real trap as you don't see money diminishing in your wallet. I have gone back to using cash, I can budget better that way. I think the Afterpay style of purchase may end in tears for a lot of people.
 
dutchie said:
Negative interest rates won't be too far away.

https://www.news.com.au/finance/eco...y/news-story/ceeae471597adc5de3490d78a8f6e0e9
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Yep!

And the question I asked myself is why in the Hell? This is Frankenomics of the worst order, with some other unstated goal that we the plebeians are not privy to.

One of my good clients is a left-wing economics professor at UQ. Well we disagree on almost everything we do have amazing and respectful discussions on a range of topics, especially economics.

(NB if I do say so myself, we are an absolute model of how to have respectful disagreement)

But I am not an economist and much less a professor of the same, I managed to get him to admit that there are some other sinister motives with world economics at the moment.

And you can back it won't be for the benefit of we plebeians.
 
My view is... don't play the game !

Don't allow yourself to be conned "owned" by the corporatocracy by putting yourself in a truckload of debt that you can't repay just because of cheaper rates. If you do you face two options - sink or swim. Or you can take the third option - don't do the dive in the first place.

Oh yeah, and tell your kids that smoking is bad for them. LOL
 
PZ99 said:
My view is... don't play the game !

Don't allow yourself to be conned "owned" by the corporatocracy by putting yourself in a truckload of debt that you can't repay just because of cheaper rates. If you do you face two options - sink or swim. Or you can take the third option - don't do the dive in the first place.

Oh yeah, and tell your kids that smoking is bad for them. LOL
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Bingo.

But one must be able to resist the elitist psychology in order to do so.
 
Drought.

Reliance on mineral resources that we sell to the lowest bidder in a climate made world.

Stupid unskilled population, with an even more stupid education system.

Ballooning debt.

Expensive energy.

Technology advances rendering industries obsolete.

I have a feeling the drought will hurry the crunch along
 

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