The big picture in Australia

qldfrog · 11 March 2012

About the mythical job boom in mining
http://www.couriermail.com.au/business/mining-jobs-not-easy-to-unearth-with-jobs-boom-still-three-years-away/story-fn7kjcme-1226295874657
I work in mining (and have been for the last 15y) and yes the sector is looking for people but there is no golden goose;
workers are poached from one company to the others but for new opportunities?

Not the thousands we are told about;
Geologist graduates can now find a job, etc etc and good for them
We are talking only dozens per year.
How does this match in number vs the hundreds every weeks lost in retail, etc?
Mining saved us in the GFC I, but this was as good as it was, I see mining loosing jobs from now on, not adding some if this is to be a reflection of my sector (coking coal)

Starcraftmazter · 11 March 2012

Beej said:
Que? The first chart (by Steve Keen) shows that the UK and the US private debt to GDP ratio's tower over Australia's! (450%, 250% vs 150%). I have no idea how you can look at that chart and claim that Australia has higher private debt / GDP ratio that the US and the UK???

Your second chart doesn't even have Australia (did you just randomly post the 4 first charts you found?)

Your third chart shows that Australia clearly has the highest household (ie. private) debt along with Switzerland?

Your fourth chart again shows Australia being well ahead of both the US and UK, being 3rd behind Denmark and Netherlands.

McLovin · 11 March 2012

Starcraftmazter said:
Your third chart shows that Australia clearly has the highest household (ie. private) debt along with Switzerland?

Private debt is all non-government debt, not just household debt.

Beej · 11 March 2012

Starcraftmazter said:
Your second chart doesn't even have Australia (did you just randomly post the 4 first charts you found?)

That's right - I just posted it for context / more information.

Your third chart shows that Australia clearly has the highest household (ie. private) debt along with Switzerland?

Household debt DOES NOT EQUAL private debt - household debt is a subset of total private debt. Your assertion was "Australia has the HIGHEST PRIVATE debt / GDP ratio in the world" - that statement is wrong as shown by that chart and the first one that only has US, UK and Australia on it.

Your fourth chart again shows Australia being well ahead of both the US and UK, being 3rd behind Denmark and Netherlands.

No it does not! Private debt = corporate + household debt. From that chart (based on the claimed 2010 figures):

Spain: 284%
Sweden: 283%
Denmark: 271%
Norway: 268%
Portugal: 259%
Netherlands: 251%
Japan: 243%
Belgium: 241%
UK: 232%
France: 224%
Finland: 212%
Canada: 201%
Australia: 193%
US: 171%

Australia is maybe 13th on that list - and it's ratio is below average, and quite moderate compared to even the lowest numbers on that list for total private debt to GDP. The bottom line is that by any data source Australia is has far form the "highest" private debt to GDP in the world.

I think you are getting very confused about what you were actually originally talking about and asserting! Did you mean to write "household" instead of "private" debt originally? If so just admit that and we can move on. Your statement re Australia's private debt level being the highest in the world is demonstrably incorrect, regardless of the data source.

IFocus · 11 March 2012

qldfrog said:
About the mythical job boom in mining
http://www.couriermail.com.au/business/mining-jobs-not-easy-to-unearth-with-jobs-boom-still-three-years-away/story-fn7kjcme-1226295874657
I work in mining (and have been for the last 15y) and yes the sector is looking for people but there is no golden goose;
workers are poached from one company to the others but for new opportunities?

Not the thousands we are told about;
Geologist graduates can now find a job, etc etc and good for them
We are talking only dozens per year.
How does this match in number vs the hundreds every weeks lost in retail, etc?
Mining saved us in the GFC I, but this was as good as it was, I see mining loosing jobs from now on, not adding some if this is to be a reflection of my sector (coking coal)

Mining is a small employer and during the GFC dumped 19% of its work force it was retail that kept Australia in the game by not shedding workers at the same rate.

This is why treasury (Ken Henry) targeted retail spending because if retail dumped 19% of its work force it would have been game over

odds-on · 11 March 2012

Living in NZ i have an outsiders perspective, media coverage about the Australian economy focuses on your resources boom and your expensive property. When the music stops (and it will do at some point), where does an astute investor put their money?

What do people feel are going to be the key sectors in the next ten to twenty years in Australia? I want to get my money in before the sheeple get involved.

Also how do i short the property market?

Cheers

Oddson

Glen48 · 11 March 2012

I hear the ASX is setting the property market so you can trade shorting would be money in the bank, until you can short the banks.

Smurf1976 · 11 March 2012

craft said:
Despite all this the Macro numbers are still healthy which implies a lot of the pain is structual. The danger is that we mistake cyclical for structural and investment to much in resources and decimate everything and everybody else beyond being able to recover when/if the terms of trade fall. Diversity in Australia's economy needs weaker terms of trades and soon, but I doubt if the mining magnates see it that way.

Manufacturing is seriously in trouble and this is a sector that will have great trouble coming back (very, very rarely does a closed or "mothballed" factory ever re-open).

With the imminent shutdown of TEMCO, we are now in the position where Australia is no longer able to manufacture basic materials and equipment without dependence on others. Without these alloys, we will depend on imported ingredients in order to be able to produce steel at Port Kembla or Whyalla. And of course without steel you don't really have any industry. If there's a war then we're in serious trouble.

That isn't the only such example of course, but we're now pretty much at the point that Australia can no longer support itself. 20 years ago we had 10 oil refineries in Australia. Now there's 7, about to be 6 and the future of two others looks pretty grim which leaves us with 4.

Our entire strategy seems to be based on selling coal and iron ore (and to a lesser extent other minerals) and importing practically everything we consume. It's ridiculous when it comes to the point that a massive exporter of coal and iron ore won't even have a self sufficient domestic steel industry.

McLovin · 11 March 2012

Smurf1976 said:
Our entire strategy seems to be based on selling coal and iron ore (and to a lesser extent other minerals) and importing practically everything we consume. It's ridiculous when it comes to the point that a massive exporter of coal and iron ore won't even have a self sufficient domestic steel industry.

Sometimes this country feels like the Matrix. We're just being harvested for our natural resources until somewhere cheaper comes along at which point it's game over and we'll be left wondering what happened.

That we are now dependent on a totalitarian state that will do as it pleases is not a great sign of things to come.

There's wonderful irony in Clive Palmer dressing his team in "Free Speech" jerseys; who paid for the team Clive?...Who paid for the team?

poverty · 12 March 2012

Smurf1976 said:
Manufacturing is seriously in trouble and this is a sector that will have great trouble coming back (very, very rarely does a closed or "mothballed" factory ever re-open).

With the imminent shutdown of TEMCO, we are now in the position where Australia is no longer able to manufacture basic materials and equipment without dependence on others. Without these alloys, we will depend on imported ingredients in order to be able to produce steel at Port Kembla or Whyalla. And of course without steel you don't really have any industry. If there's a war then we're in serious trouble.

That isn't the only such example of course, but we're now pretty much at the point that Australia can no longer support itself. 20 years ago we had 10 oil refineries in Australia. Now there's 7, about to be 6 and the future of two others looks pretty grim which leaves us with 4.

Our entire strategy seems to be based on selling coal and iron ore (and to a lesser extent other minerals) and importing practically everything we consume. It's ridiculous when it comes to the point that a massive exporter of coal and iron ore won't even have a self sufficient domestic steel industry.

Great post Smurf, fat lot of good it will do tho. I don't think Juliar and Swanny read this forum Something needs to be done to arrest this slide into mediocrity or this country will end up royally ******.

Starcraftmazter · 12 March 2012

McLovin said:
Private debt is all non-government debt, not just household debt.

Be it household debt then. Business and financial debt are irrelevant.

McLovin · 12 March 2012

Starcraftmazter said:
Be it household debt then. Business and financial debt are irrelevant.

Irrelevant to what?

Starcraftmazter · 12 March 2012

McLovin said:
Irrelevant to what?

How people spend money and how much debt they choose to take on. You know...what drives the economy.

McLovin · 12 March 2012

Starcraftmazter said:
How people spend money and how much debt they choose to take on. You know...what drives the economy.

Maybe have a read about what happened in Japan because of a debt burdened corporate and financial sector.

I don't disagree with you, Australia's household debt is high, it's one of the reasons I don't think property prices are going anywhere real fast.

Starcraftmazter · 12 March 2012

McLovin said:
Maybe have a read about what happened in Japan because of a debt burdened corporate and financial sector.

Well I wasn't suggesting that it is particularly good, just that household debt is most relevant. Australia has little financial nor business debt, so it's not really noteworthy.

McLovin · 12 March 2012

Starcraftmazter said:
Australia has little financial nor business debt, so it's not really noteworthy.

The bar chart posted by beej "G10 Debt Distribution" would beg to differ.

Julia · 12 March 2012

http://www.businessspectator.com.au...tent=21197&utm_campaign=kgb&modapt=commentary

Hayman Capital were one of the apparently few who correctly predicted the GFC.
The above is their commentary about the current global situation, including for Australia.

Satyajit Das has said pretty much exactly the same.

Starcraftmazter · 12 March 2012

McLovin said:
The bar chart posted by beej "G10 Debt Distribution" would beg to differ.

I don't know how old it is but....

In terms of business debt, our companies have deleveraged strongly since the GFC and company debt is at a historic low.

Financial debt has been growing as a result of a housing bubble. There's not much else to say about it. Preferably it wouldn't happen - but this I have said many times, it is no secret that the taxpayer will bail out the banks when house prices plummet. Best to just get over it since it will not change and the repercussions cannot be stopped.

Starcraftmazter · 12 March 2012

Julia said:
Hayman Capital were one of the apparently few who correctly predicted the GFC.
The above is their commentary about the current global situation, including for Australia.

Satyajit Das has said pretty much exactly the same.

I don't have a subscription

Mind giving me the gist?

Julia · 12 March 2012

You can join for free. It's quite a long article and would take me some time to properly try to summarise it.
Here is the front page summary:

Hayman Capital saw the US sub-prime collapse coming before many others. Now its global strategist says the Euro is unlikely to survive in its current form, Australia is in a credit bubble, and a Japanese debt crisis is going to happen sooner rather than later

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