Re The transport industry is the Canary in the Coal mine !
After ditching 380 contractors Kenworth are now laying off full time staff
Kenworth Trucks has announced it will cut 80 manufacturing staff from its Melbourne factory in a further blow to Australia's automotive industry.
The announcement comes just days after Ford Australia said it would cut up to 350 jobs, or 15 per cent of its Australian manufacturing workforce, by November because of slow large-car sales.
The cuts at Kenworth Trucks will be made from September 5, management told the 1,100 staff at its Bayswater factory in Melbourne's outer east
Australian Manufacturing Workers Union shop steward at Kenworth Les Takacs said the job losses would cut production from 23 trucks a day to eight.
The company had cut 380 contractors since last year, he said.
http://news.theage.com.au/national/kenworth-trucks-to-cut-80-jobs-20080826-429h.html
You lose. Renting a place in the bush makes sense, whether the city place is sold or rented out. Another way to frame the question is to ask if the risk of a price fall on the city place is greater than the risk of losing out on a price gain. Only I don't know how to quantify a risk like that, so I'm in the process of building a spreadsheet that will show the effects of every scenario on the overall financial position. Hypothetically. For my friend. Of course.If anybody is in a position to tell how long property downturn will last, could be of assistance it this dilemma.
If you believe the mob that property prices will keep rising you should wait, otherwise sell and rent the other property as price might drop too – bet you did not think of this possibility
I agree with that, but it might mean that city falls 5% and bush falls 15%, which might mean that the cost of the changeover in dollars goes up. I think. I haven't got that one in the spreadsheet yet.Rent both.
Inner west will outperfrm bush bo so much medium term its not funny.
I think a lot of the Sydney market must be at that point now, but I don't see a shadow of a sign of an upturn. Seems to me buying and renting are both financially ridiculous for most people, and the sensible thing to do is to forget about buying in Sydney. Oh wait... except for my friend's hypothetical house, of course.the property down turn will last till
a)rents rise too high
b)cost of borrowing becomes cheaper
C)both
when the market gets to that equilibrium point where its more financially sound to have a mortgage then pay the rent is when we shall see the next upturn, <snip>
Fairfax just announced to cut 550 jobs.
http://www.smh.com.au/news/national...across-business/2008/08/26/1219516472320.html
I think a lot of the Sydney market must be at that point now, but I don't see a shadow of a sign of an upturn. Seems to me buying and renting are both financially ridiculous for most people, and the sensible thing to do is to forget about buying in Sydney. Oh wait... except for my friend's hypothetical house, of course.
Cheers,
Ghoti
Old news - already posted on this thread a couple of days ago when first announced.
And just to contrast - here's a story about 300 jobs being CREATED: http://news.smh.com.au/national/300-jobs-to-be-created-at-vic-it-centre-20080827-43nh.html
Other jobs are being created all the time as well, it's just not big news right now. How many people do you think RIO and BHP etc are looking to hire right now for example???? My current employer is hiring. I'm not discounting the reality of job losses at the moment - the economy is slowing, and remember the regulators have deliberately engineered this situation. A consequence of that of course has to be job losses and an increase in unemployment.
However, the big question STILL is this all enough for us to actually be in recession? I've been in the work force through one REAL recession and also through the tech-bust (as an investor and technology professional working in Silicon Valley in the US). This, to me, does not feel like a real recession yet.... time will tell. There's still too many sectors and companies etc still doing quite well. Remember a downturn in one sector (say auto manufacturing or discretionary retail) does not necessarily a full blown national recession make..... the workforce is 10,000,000+ - so even 50 newspaper stories touting a few hundred job losses each only adds up to an increase in unemployment of < 0.2%, assuming NO new jobs are also created at the same time in the economy elsewhere to absorb those losses.....
Cheers,
Beej
The Victorian government has committed $5 million to support the construction of the 3,500 square metre centre.
recessions emerge not because of a general decline in the willingness to consume, but rather because a mismatch emerges between the mix of goods and services demanded in the economy, and the mix of goods and services that the economy has been supplying. Many industries experience continued growth during recessions (even if their stocks trade somewhat lower), while other industries experience profound demand shifts. In the late 1990's, there was clear overinvestment in telecom and information technology, and these sectors suffered disproportionately during the recession that followed. In the current cycle, the overexpansion has been in housing, debt origination, and leveraged finance, so a much different group of stocks will probably be hung out to dry this time.
Dhukka - an interesting definition/explanation of recession. Not sure I agree! To have a real recession (ie actual net economic output reduction for a prolonged perios > 6 months) I think you must have a broad slowdown across basically all sectors, and especially you need a huge slump in consumption, as most other activity (non export driven) ultimately derives off that consumption.
Re government providing cash to IBM etc, well, one of the things governments (at any level) can do and do in fact do with fiscal policy during economic slow downs is stimulate via increased spending, so there is nothing sinister or unusual in that. It helps if you run surpluses etc and have billions of $$$ invested in sovereign funds (as Australia does right now), as you can ramp up fiscal stimulus without even having to borrow! Particularly helpful if the slowdown is being caused by a credit crisis! We have not yet really begun to see the impact of this sort of fiscal stimulus.
Because Oz has so much cash on the side-lines in these government funds, plus scope to significantly loosen monetary policy as interest rates are currently high, plus the stimulus from our dramatically increased terms of trade due to the ongoing resources super-cycle, I don't think we will dip into any sort of prolonged retraction over-all. I reckon this will all go down in the end as a "growth slow-down" for a couple of years, with the *possibility* of it being labeled a mild recession, but I don't think it will end up being a bad one. The fact it is taking so long to play out seems to support my point of view at this time. Of course a complete collapse of growth in China and the corresponding resource sector impact is the "wild card" that would change everything. No one can predict the future, it's all about probabilities!
FYI - US consumer confidence UP in July (2 months in a row now): http://www.conference-board.org/econ...Confidence.cfm
Didn't see this reported anywhere! Only bad news sells newspapers at the moment, as that is what it seems everyone wants to hear!
Cheers,
Beej
Old news - already posted on this thread a couple of days ago when first announced.
And just to contrast - here's a story about 300 jobs being CREATED: http://news.smh.com.au/national/300-jobs-to-be-created-at-vic-it-centre-20080827-43nh.html
Other jobs are being created all the time as well, it's just not big news right now. How many people do you think RIO and BHP etc are looking to hire right now for example???? My current employer is hiring. I'm not discounting the reality of job losses at the moment - the economy is slowing, and remember the regulators have deliberately engineered this situation. A consequence of that of course has to be job losses and an increase in unemployment.
However, the big question STILL is this all enough for us to actually be in recession? I've been in the work force through one REAL recession and also through the tech-bust (as an investor and technology professional working in Silicon Valley in the US). This, to me, does not feel like a real recession yet.... time will tell. There's still too many sectors and companies etc still doing quite well. Remember a downturn in one sector (say auto manufacturing or discretionary retail) does not necessarily a full blown national recession make..... the workforce is 10,000,000+ - so even 50 newspaper stories touting a few hundred job losses each only adds up to an increase in unemployment of < 0.2%, assuming NO new jobs are also created at the same time in the economy elsewhere to absorb those losses.....
Cheers,
Beej
New gas power station in Victoria creates 730 jobs:
http://news.smh.com.au/national/new-gas-power-station-creates-730-jobs-20080821-3z65.html
Don't want to detract from what is obviously positive news, however it should be noted that Santos expects to make an investment decision on the project by the end of 2009 so those 730 construction jobs won't be created until 2010 at the earliest.
Surprise increase in business investment in the June quarter:
http://business.smh.com.au/business/surprise-jump-in-investment-20080828-44gh.html
Beej
Old news - already posted on this thread a couple of days ago when first announced.
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