Recession etc, are things really that bad?

[Soft Dough]

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

Perhaps a more realistic representation would alter your viewpoint?

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

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

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

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

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

looks quite dependant on rural victoria to just me?

 

[GumbyLearner]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

- Transport Rail, truck, ships

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

- Import/Export hubs for manufactured goods

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

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

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

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

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

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

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

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

Cheers,

Beej

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

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

 

[Mr J]

The bias is strong in this thread.

 

[Garpal Gumnut]

The bias is strong in this thread.

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

gg

 

[Temjin]

The bias is strong in this thread.

No, just the ego part.

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

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

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

Section 9.3

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

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

 

[Smurf1976]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

[moXJO]

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

 

[AMC]

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

 

[Trembling Hand]

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

LOL. Well apparently not in your industry

plenty here did thou.

 

[Temjin]

LOL. Well apparently not in your industry

plenty here did thou.

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

 

[Julia]

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

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

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

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

 

[battiwallah]

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

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

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

 

[Aussiejeff]

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

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

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

Except for these ones...

Homelessness increases sixfold: Vinnies
* May 25, 2009 - 4:04AM

St Vincent De Paul has recorded a six-fold increase in homeless families looking for help in Sydney as the recession begins to bite.

The increase recorded by the charity is the biggest in 120 years, News Limited reports.

A researcher with St Vincent De Paul, Dr Andy Marks, said the trend showed working families were now being made homeless following job losses.

"It is sad when it happens to anyone, but the fact that it is happening to working families is scary," he said.

"Many people are only two pay cheques away from homelessness.

"I'm reluctant to put a figure on it, but it would be thousands. It is a really big problem."

There are 1800 people on a waiting list for a home in Blacktown in Sydney's west.

St Vincent's Emerton office in Sydney's west has already helped 679 people this year after assisting 110 homeless people in 2007.

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

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

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

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

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


aj

 

[Trembling Hand]

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

Oh please!! You are kidding!!

 

[doctorj]

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

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

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

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