The state of the economy at the street level

[moXJO]

China, not the house price downturn, the major risk to Australia's economy, says Deloitte

https://www.abc.net.au/news/2019-01...ice-downturn-the-major-risk-deloitte/10750342

We have a perfect storm brewing in Australia. And this is just one in many things that will sink us.

Government intervention will decide if we get sunk. Under libs I think we would eat a hard recession. Under labor they would spend their way out of it and kick the can down the road.

Both options have pros and cons. But the government (local, state, fed) is too reliant on charging high fees, or high wages. Something would have to give.

 

[PZ99]

There's also the role of the reserve bank - whether they cut rates or resort to printing money as previously alluded.

 

[sptrawler]

There's also the role of the reserve bank - whether they cut rates or resort to printing money as previously alluded.

If they did that (money printing), with us being such a small economy, our $ would crash.
Which would bring on a whole new level of pain, imagine if our $ went to 40c/U.S, the Chinese would just come over and buy Sydney and Melbourne, then evict everyone.

 

[qldfrog]

https://www.abc.net.au/news/2019-01...is-the-latest-retail-brand-to-enter-/10767230

 

[PZ99]

If they did that (money printing), with us being such a small economy, our $ would crash.
Which would bring on a whole new level of pain, imagine if our $ went to 40c/U.S, the Chinese would just come over and buy Sydney and Melbourne, then evict everyone.

I think it would be worse if we went into recession or lost the AAA rating from horrendous debt.

Or both.

 

[sptrawler]

I think it would be worse if we went into recession or lost the AAA rating from horrendous debt.

Or both.

Certainly interesting times IMO, I think it will come to a head, in the later half of this year.
Hopefully it doesn't pan out, the way it looks like it will, it's o.k if you have a secure job.
Difficult if that isn't the case, gig economy here I come for many, engineers working as couriers etc.

 

[Smurf1976]

We have a perfect storm brewing in Australia.

The number of significant businesses, and by that I mean things big enough to have a management structure and turnover valued in $ millions not just a few small jobs etc, is starting to become rather noticeable.

Most concerning, it's the same sort of businesses that hit the headlines last recession. Retailers and various businesses involved with construction.

I'm no permabear but one thing that comes to mind is that back in the 1990's and prior there was an awful lot of talk about "the need for Australia to be internationally competitive" usually expressed in those exact words. Looking at the past few years I don't think I've heard even one single mention of that concept from anyone in politics, it has been abandoned completely as a concept.

Another thing which I see may be of relevance is that our institutions are pretty much all at least somewhat discredited these days. Everything that was rock solid and beyond doubt, things like banks, universities, public utilities, the church, the federal government itself, are all somewhat degraded now in one way or another, they're not the unshakable pillars they once were. That's more a confidence thing than an outright economic one but I think it has some relevance.

 

[Garpal Gumnut]

The number of significant businesses, and by that I mean things big enough to have a management structure and turnover valued in $ millions not just a few small jobs etc, is starting to become rather noticeable.

Most concerning, it's the same sort of businesses that hit the headlines last recession. Retailers and various businesses involved with construction.

I'm no permabear but one thing that comes to mind is that back in the 1990's and prior there was an awful lot of talk about "the need for Australia to be internationally competitive" usually expressed in those exact words. Looking at the past few years I don't think I've heard even one single mention of that concept from anyone in politics, it has been abandoned completely as a concept.

Another thing which I see may be of relevance is that our institutions are pretty much all at least somewhat discredited these days. Everything that was rock solid and beyond doubt, things like banks, universities, public utilities, the church, the federal government itself, are all somewhat degraded now in one way or another, they're not the unshakable pillars they once were. That's more a confidence thing than an outright economic one but I think it has some relevance.

The regions could usually be relied upon to keep our economy going when big business went belly up.

Since the victory of the Socialist Greens in southern state politics this is no longer the case, with their anti agriculture and anti mining stance.

There is going to be one hell of a depression by the fourth quarter of 2019.

gg

 

[SirRumpole]

The Libs reckoned they created a million jobs in 5 years during the Abbott/Turnbull years, so why has the unemployment rate remained static ?

Immigration means a lot of those jobs were either sucked up by migrants or they added to the dole queues.

It makes one wonder about the priorities and the selling of policies. A million jobs in 5 years (no one mentions whether that is gross or net) sounds a big deal, but it's reckoned to be just normal growth. ( https://www.abc.net.au/news/2019-01...e-years-is-not-as-tough-as-it-sounds/10760098).

So really the priority should be getting unemployment and underemployment down, but the pollies don't want that to happen in case wages break out.

So really the voters are being taken for a ride and being sold b.s.

 

[sptrawler]

The number of significant businesses, and by that I mean things big enough to have a management structure and turnover valued in $ millions not just a few small jobs etc, is starting to become rather noticeable.

Most concerning, it's the same sort of businesses that hit the headlines last recession. Retailers and various businesses involved with construction.

I found this interesting smurf.

https://thewest.com.au/business/inf...of-11-billion-metronet-contest-ng-b881091024z
When a company pulls out of a race for a $1B+ contract, you know something is wrong, they are getting nervous.

From the article:
Applications closed in October, and the Government planned to announce the short list by last month and award the contract mid-year.

The December deadline was missed.

Transport Minister Rita Saffioti said last month that multiple proponents had applied and more details would be made available when they were short-listed “within the next few months”.

She said by the end of this year the final contract would be awarded and work would start.

 

[moXJO]

Everything that was rock solid and beyond doubt, things like banks, universities, public utilities, the church, the federal government itself, are all somewhat degraded now in one way or another, they're not the unshakable pillars they once were. That's more a confidence thing than an outright economic one but I think it has some relevance.

We are a small fish, Australia needs confidence in its economy and business. World investment funds will happily stop investing in Australia. And thats when it starts hitting the fan.

I remember the last recession and how bad the suicide rate was, even amongst friends and associates. Not something you hope for, but we have become fat, lazy and privileged. Makes me wonder if the youth of today could handle it.

 

[sptrawler]

This IMO, really sums up the problem, in Australia at the moment.
https://www.smh.com.au/business/ban...for-lending-to-the-naive-20190203-p50vfw.html

Maybe it is me, but how the SMH can print this, is unbelievable IMO.

 

[Smurf1976]

Just reading the ASF market news topics I see quite a bit of negative stuff starting to emerge globally.

Toyota profits down 30%. Commonwealth Bank profits down. GE not hiring as many workers in France as they said they wood. UK car sales down. Etc.

There does seem to be an increase in bad news lately.

 

[moXJO]

Valentines day I went out to eat and every restaurant was packed. Thursday night shopping as well and there were people everywhere.
I'm getting mixed reports from retail. Some quiet days and other times they are flat out.

Lot of FUD over housing though. House next door to me is still for sale as well.

 

[basilio]

Looks as if pay day loans and similar lenders are having a field day with desperate people. Perhasp an indicator of more over stretched people.
There will be tears before bedtime.

Payday loans increase as households pushed into risky credit from non-bank lenders
By Kathryn Diss
Updated about 2 hours ago

Photo: Online payday lenders offer easy access to quick credit as traditional lenders pull back. (AAP: Alan Porritt)
Related Story: Cash Converters grilled by Senate inquiry on 'responsible lending' credentials
Related Story: How a Perth mother living on a disability pension was charged $760 for a $175 loan
Related Story: Could financial plain packaging break Australia's debt addiction?
Debt-stressed home owners and renters are increasingly turning to alternative lenders offering so-called "payday" loans and consumer leases, as falling property prices plunge more households into negative equity and banks crack down on credit.

Key points:

• Payday lenders are growing faster than banks as mainstream credit tightens
• Ease of access to online lenders is pushing households into risky debt situations
• There are calls for tighter regulation of the burgeoning sector

A combination of cost of living pressures outstripping CPI, stagnant wages growth and rising levels of mortgage stress is being blamed for putting immense pressure on homeowners, with Australia's household debt to disposable income levels hitting record highs.

https://www.abc.net.au/news/2019-02...-households-pushed-into-risky-credit/10827342

 

[basilio]

Another indicator on the state of the economy.

Australian retailers shut down by foreign competition
By business reporter Andrew Robertson
Updated 8 minutes ago

Photo: Roger David blamed global competition, stagnant sales and rising fixed costs for its collapse. (Westfield)
Related Story: RBA keeps rates on hold despite slowing economy and crumbling retail sales
Related Story: Napoleon Perdis blames 'enormous costs' and economic downturn for makeup shop woes
Australian retailers are currently going under at the rate of about one a month, making everyone in the industry nervous.

Over the last couple of years about two dozen chains have collapsed, with the makeup empire of Napoleon Perdis the latest in an increasingly long line of failures.

It is not just Australian-owned retailers that are struggling, but also some established local outlets of big international players.

Among the big names that have fallen are Roger David, Marcs, Pumpkin Patch, Metalicus, Laura Ashley, Ed Harry, Top Shop, Toys'R'Us, Doughnut Time, Blockbuster Video, David Lawrence, Herringbone and Rhodes & Beckett.

Not only is low wages growth starting to bite consumer spending, but a big wave of foreign raiders is also taking its toll.
https://www.abc.net.au/news/2019-02...ers-shut-down-by-foreign-competition/10832062

 

[moXJO]

Went out to the shops tonight and the center was empty. Different location from last week and probably the lower middle class area compared to the mid to upper middle class last week. Weather is a bit off though.
Walked past one of those nail and beauty stores. And one staff member was giving the other staff member a foot rub.

I don't know how some of the smaller retailers afford to stay open.
Specialty stores must do it tough.

I'm finding it difficult to decide how things are fairing out there. Really mixed messages when I look around.

 

[sptrawler]

Yep, it looks like the only ones that are going to survive this, are the ones on welfare.
Cant be sacked, gauranteed income and the tax man cant hit them.lol

 

[jbocker]

Was talking to a neighbour at my daughters house yesterday. The guy said his wife works at a bank (one of the big 4) had a couple in trying to juggle their loans 3 investments and a home. From my understanding had held them for a while, but were soon to go P and I payments which was seriously going to impact their costs. Their market prices have slumped.
It looked like that there very likely option was to sell the lot and still owe the bank.

I know I have read this thing happening many times but when you talk with someone having to deal with it confirming what I have read, it starts to hit home how close many must be.

 

[basilio]

Yep, it looks like the only ones that are going to survive this, are the ones on welfare.
Cant be sacked, gauranteed income and the tax man cant hit them.lol

Really ? I don't think that will be allowed to happen. If/when SHTF welfare payments will be on the chopping block as well.

The sad fact in 2019 is that unemployment benefits won't keep any normal family afloat for any length of time. House and or rent payments almost always as much as current Newstart payments.

Then of course if one person in a two income household loses their job the household income is no longer capable of supporting them - and they cannot claim Newstart.