For those that are interest, attached it analysis from Variant Perception on the future for Australia and the impact on the AUD, stocks, banks, interest rates and a whole lot more. Interesting read that draws comparisons between Australia and Spain and Australia and the EU Periphery.
China Retailers Lose Steam, Deepening Wen’s Challenges
China’s retailers from clothing to computers are reporting weaker sales growth, undermining Premier Wen Jiabao’s goal of relying more on consumer spending for expansion as the economy cools.
Passenger-vehicle sales trailed analysts’ estimates in July. Sportswear seller Li Ning Co. shut 1,200 stores in the first half and department-store chain Parkson Retail Group Ltd. (3368)’s same-store sales rose at less than a quarter the pace of a year earlier. Gome Electrical Appliances Holding Ltd. (493) said it would report a first-half loss on lower sales.
For those that are interested, attached it analysis from Variant Perception on the future for Australia and the impact on the AUD, stocks, banks, interest rates and a whole lot more. Interesting read that draws comparisons between Australia and Spain and Australia and the EU Periphery.
http://variantperception.com/track-record said:JANUARY 2009
“Governments around the world are drawn towards beggar thy neighbour currency devaluations and protectionism in times of crisis.” “The unwinding of leverage, consumption and excessive construction will take years to play out. An increase in savings rate will replace excessive consumption. A shift towards retail and finance in the US economy will be reduced.”
“Industrial production is negative almost everywhere in the world and in many places is down almost 20%. Exports from countries like Japan, Korea, and Taiwan are down almost 50% year over year! This will lead to a negative GDP for the first time in almost 50 years.”
“The burden of adjustment in many countries around the world will have to fall on employment, and in 2009-10 we will see a very large spike in unemployment.”
I remember reading some "Dutch disease" analysis about 2 years or so ago, so nothing new there..while its hard to argue against the broad strokes of the report, its really all a bit same old same old....
For those that are interested, attached it analysis from Variant Perception on the future for Australia and the impact on the AUD, stocks, banks, interest rates and a whole lot more. Interesting read that draws comparisons between Australia and Spain and Australia and the EU Periphery.
AUSTRALIA faces a run on its currency, a deeper collapse in housing prices and a bank funding crisis to rival Europe's as it attempts to come to grips with life after the mining boom, according to a widely circulating report from a boutique US advisory firm.
Entitled Australia: The Unlucky Country, the report from Variant Perception argues Australia faces a classic case of Dutch Disease, the erosion of capability that flows from a resources boom and an overvalued exchange rate.
"The mining sector has crowded out almost all other sectors of the economy and also funnelled credit and liquidity into a housing bubble in the real estate sector," the report says.
The Australian dollar is overvalued on most metrics, one being the hamburger-based Big Mac Index, which has the Aussie 15 to 20 per cent above par, Variant says. But it will need to fall well below par and stay there for some time for the rest of the economy to come to the fore after mining retreats.
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"It will be almost impossible to move mining capacity to other sectors in Australia," the report says. "This is a classic problem for economies which suffer from Dutch Disease.
''When the hangover arrives, writing off production capacity is often done at a considerable discount to cost. In addition, the manufacturing sector is under-developed and will not be able to take up the slack for the loss of momentum in construction and mining."
September Offers 15 Days To Cement Crisis Solutions: Euro Credit
European policy makers end August with 15 days to justify bondholder optimism that they can deliver lasting solutions to the debt turmoil.
September offers a microcosm of three years of crisis- fighting. The next two weeks may feature fresh anti-contagion measures from the European Central Bank, a possible aid request from Spain and insight into whether creditors will ease Greece’s bailout terms. German judges and Dutch voters also get to proclaim on the euro’s future.
http://www.bloomberg.com/news/2012-08-29/september-offers-15-days-to-cement-crisis-solutions-euro-credit.html
China Economy’s Deterioration Raises Risk Of Wen Missing Target
China’s economy is showing mounting signs of deterioration from manufacturers to banks, raising the risk that outgoing Premier Wen Jiabao will miss his growth target for the first time since taking office in 2003.
Manufacturing unexpectedly contracted for the first time in nine months in August as orders shrank, a government survey showed Sept. 1. The reading adds to evidence of weakness after a surfeit of unsold goods left near-record rubber stocks at China’s main shipment port and deepening financial strains saw a 27 percent jump in overdue loans at the five biggest banks in the first half.
Sweden tells Greece to quit eurozone
Sweden's Finance Minister has told Greece that it would be best advised to quit the Eurozone and revert to the drachma if its economy is to stand any chance of recovery.
In remarks that are certain to cause consternation in Brussels and Berlin as well as Athens, Finance Minister Anders Borg said that abandoning the euro would probably allow Greece to "find its competitiveness once again" and "get itself back on its feet".
The minister's remarks were quoted by the Swedish newspaper, The Local. He was speaking on the sidelines of a summit of the International Monetary Fund (IMF) in Tokyo on Friday. Borg acknowledged that quitting the eurozone would be a difficult and complex road to tread but argued that, "it is difficult to see another that could work."
Sweden is a member of the European Union but not of the eurozone. Nonetheless, as a successful northern European economy its voice carries considerable weight across the continent. At a time of deep austerity in Greece designed to keep that country inside the eurozone, comments from a respected European finance minister clearly implying that belt-tightening measures are effectively an exercise in futility are unlikely to be well received by the country's government.
Earlier this week, official figures showed Greek unemployment rising beyond 25 percent with the youth unemployment figure now at over 54 percent. The economy continues to contract rapidly with no sign of growth on the horizon.
http://www.thecommentator.com/article/1803/sweden_tells_greece_to_quit_eurozone
I work at a big 4 firm with a mining and oil & gas focus and I have to admit for the first time I am starting to get slightly nervous - I get the feeling the real GFC is around the corner.
Bad time to have a mortgage and be building a house heyAggressive job cuts and even further drops in house prices are just around the corner IMO.
Sorry, have been slack in this thread.....
Anyways.......
Three years after industrializing nations led the world out of the U.S. mortgage meltdown-induced recession, the reliability of the power source is waning as Europe’s debt crisis persists. The International Monetary Fund sees them growing an average 5.8 percent in the half-decade through 2016, almost two percentage points less than the five years before the 2009 slump.
Finance chiefs at the IMF and World Bank annual meetings left Tokyo this weekend at odds over how to address the issue, with South Korea’s central bank chief urging Asia to add stimulus as Russia and Brazil called on rich nations to fix their own challenges. At stake is a world economy Bank of Israel Governor Stanley Fischer calls “awfully close” to recession.
My personal thoughts are, it depends on Trump, if he can keep the U.S growth going they will keep China going.For the longest time Ive been half bullish since GFC, central banks having punted the can way down the road.
I'm starting to worry again.
I usually do this far too soon, so what's y'all's thought at this point.
Firstly $158b of money into the economy, is better coming from tax cuts, than pay rises. IMOWell summed up SP.
So is now the time to lock in $158B of tax cuts ? The government is so determined to appease its wealthy backers it can't/won't recognise the dangers inherent in the long term con sequences of the third tier of its tax cut proposals..
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