World Bank Report Paints Bleak Picture for Australia

[UBIQUITOUS]

Ummmm ... I would have thought that when the economy slows that the tradespeople will bring their prices back to a more "normal" level due to lack of work rather than pricing themselves out of the market? I understand that rates need to go up for other fiscal reasons and not to kerb the spending habits of the proletariat. Has something to do with the Govt stimulus spending I think.

In an ideal world, that is the way it would work. However, I have seen no wage decreases, even during last year's downturn. Why is that? Can you point me to any wage cuts during that time?

2) Why would you constantly want to move?? HUH ?? I like where I live and go to Bunnings to buy some fertiliser for the lawn. The occasional tin of paint to change a room colour. A leaky tap every now and then as well. Some people do not have the urge to move every 5 years or upgrade or whatever.

A lot of people do like to upgrade homes, but prefer to stay put if they cannot afford that move. Instead they 'do up' their own homes. Bunnings no doubt benefit from this.

 

[trainspotter]

In an ideal world, that is the way it would work. However, I have seen no wage decreases, even during last year's downturn. Why is that? Can you point me to any wage cuts during that time?

A lot of people do like to upgrade homes, but prefer to stay put if they cannot afford that move. Instead they 'do up' their own homes. Bunnings no doubt benefit from this.

Nope ... sorry Ubi ... can't say I have seen any wage decreases in this time but I can tell you that I am noticing that subcontractors are being more reasonable in their pricing structure and it has become slightly more competitive as the work dries up. I think that in "certain" areas that tradespeople still have work to finish for the larger builders or contractors and really do not need the extra work (right now that is). Maybe more of a plateau in the prices they are charging instead of a steady increase.

I concur Ubi that there are those people that prefer to upgrade and keep up with the Jones's and move to more "hoity toity" areas. There are also the majority that prefer to stay put due to the location of their purchase. Close to schools, hospitals, work etc. and I agree Bunnings will benefit from these people who become the "weekend warriors" of the garden/home DIY variety.

 

[robots]

I guess that means that you are understanding as to the reasons why interest rates will need to rise further?



You go to Bunnings because:

1) You can't afford a tradesperson (as you have mentioned)
2) You are deciding to stay put in your house as you cannot afford to move

DIY means DIC (Do-It-Cheaper),

I expect Bunnings to be one of the few companies that continues to do well while the RE market and general economy suffers.

The last time I saw so many shops for sale or up for lease in Bourke Rd, Camberwell, Collingwood, Fitzroy, Richmond Victoria was during the early 90's.

Talking with friends in the retail game, they are having to discount heavily to get sales at the moment. Yes they might be getting some sales, but their profit margins have been greatly reduced.

Only time will tell.

Cheers

hello,

oh yeah, high interest rate environment coming too

for sure, banks already cut fixed rates

thankyou
associate professor robots

 

[moXJO]

The malls have been packed up here for the last fortnight, for the simple reasons that is was school holidays and the weather has been too lousy to go to the beaches.

I'm talking last few months

 

[tech/a]

World Bank Report Paints Bleak Picture

This heading is more appropriate.
Checkout the names on this list!

Now check out the names at the bottom.

We have it----they want it!
They produce it the rest of the world want it.
The grass really IS GREENER on the other side!
Click to EXPAND
And of course incase you wondered where the US of A faired.

 

[trainspotter]

But but but sinner posted a graph showing AUSSIES were at 100% of GDP?

 

[tech/a]

Where?
And from which scource?
I have seen this from 3 sources just do a google.
GDP V DEBT.

 

[wayneL]

World Bank Report Paints Bleak Picture

This heading is more appropriate.
Checkout the names on this list!

Now check out the names at the bottom.

We have it----they want it!
They produce it the rest of the world want it.
The grass really IS GREENER on the other side!
Click to EXPAND
And of course incase you wondered where the US of A faired.

Check external debt. A slightly different picture.

Aus is 92% of GDP

http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

 

[UBIQUITOUS]

World Bank Report Paints Bleak Picture

This heading is more appropriate.
Checkout the names on this list!

Now check out the names at the bottom.

We have it----they want it!
They produce it the rest of the world want it.
The grass really IS GREENER on the other side!
Click to EXPAND
And of course incase you wondered where the US of A faired.

Thanks, I checked it out. Do you think that one day, Australia's public debt % can be as low as Iran and Nigeria's? Perhaps we can aspire to be like those countries.

Australia not faring nearly as well on this even more important list ($920billion):

http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

 

[tech/a]

Check external debt. A slightly different picture.

Aus is 92% of GDP

http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

I was referring to

 

[wayneL]

I was referring to

Gu'mint debt as a comparison does not give a complete picture because of differing state involvement in the economy. Total external debt i.e. combined public and private debt owed in foreign currency gives a better, though still not complete picture.

 

[tech/a]

Gu'mint debt as a comparison does not give a complete picture because of differing state involvement in the economy. Total external debt i.e. combined public and private debt owed in foreign currency gives a better, though still not complete picture.

Personally I have a problem with debt thats being covered by IOU's (bonds).
Debt which has no such luxury tends to be contained and if its not and doesn't affect the money printers interests to a great extent then they go broke. Debt is written off.

Its the only way I see the majority of Governments recovering from crippling debt.
AUST fortunately isn't one of them.

 

[lianeisme]

Nope ... sorry Ubi ... can't say I have seen any wage decreases in this time but I can tell you that I am noticing that subcontractors are being more reasonable in their pricing structure and it has become slightly more competitive as the work dries up. I think that in "certain" areas that tradespeople still have work to finish for the larger builders or contractors and really do not need the extra work (right now that is). Maybe more of a plateau in the prices they are charging instead of a steady increase.

I concur Ubi that there are those people that prefer to upgrade and keep up with the Jones's and move to more "hoity toity" areas. There are also the majority that prefer to stay put due to the location of their purchase. Close to schools, hospitals, work etc. and I agree Bunnings will benefit from these people who become the "weekend warriors" of the garden/home DIY variety.

As a Mortgage Broker with my own company during the GFC all broker commissions was dropped back by 30 / 35% all trail commission was also dropped back 30 / 35%. So yes our income was cut quite dramatically. You will probably find that wages as per say were not dropped. How ever people working on commission have suffered quite considerably.

 

[trainspotter]

As a Mortgage Broker with my own company during the GFC all broker commissions was dropped back by 30 / 35% all trail commission was also dropped back 30 / 35%. So yes our income was cut quite dramatically. You will probably find that wages as per say were not dropped. How ever people working on commission have suffered quite considerably.

Thanks lianeisme for the info ...... I forgot about the commissioned Mortgage Broker industry and the trail setup. I am guessing there would be quite a few more that have had to feel the pinch in regards from those who make a living in the finance and securities industry.

I find it quizzical that the GFC has slaughtered the finance industry and decimated lending institutions globally but our banks are still making RECORD profits?

http://www.smh.com.au/business/anz-upbeat-after-cash-profit-jump-20100226-p6hm.html ANZ - underlying profit after tax of $1.6 billion for the four months to end-January. February 26, 2010

CBA recorded a $2.94 billion cash profit for the first half, placing it as one of the most profitable banks in the world. (From: The Australian March 01, 2010 12:00AM )

Yeahhhhhhhhh ....... we really needed the Govt to guarantee the safety of our banks !

 

[explod]

Personally I have a problem with debt thats being covered by IOU's (bonds).
Debt which has no such luxury tends to be contained and if its not and doesn't affect the money printers interests to a great extent then they go broke. Debt is written off.

Its the only way I see the majority of Governments recovering from crippling debt.
AUST fortunately isn't one of them.

Some is written of by currency debasement, dilution as you say and and a lack of productivity (tangible value) as the backing, if you like a lack of assets. Yes the aussie is okay but what will cripple all of us for awhile will be the untangling of the US markets in my view.

But we have said for a number of years on ASF that the bond market is a time bomb yet so many still say they are putting thier money into bonds for safety. The bonds of enterprises that go broke are worthless and as we learnt by the 1929 crash that includes soveriegn states as well.

 

[explod]

On a bright note, Chuck Butler today talks of the strength in the Chinese and Indian economies. For Aussie busineses the outlook longer term is rosy folks.

http://www.dailypfennig.com/

Who controls the jargon from the World Bank I wonder?

 

[doctorj]

So the conclusion is that Australia will sail through unaffected? OK good luck. So China have low Debt to GDP or whatever it is that's mentioned below. They will keep buying Australia's raw materials, to turn it into what and sell to who?

 

[explod]

So the conclusion is that Australia will sail through unaffected? OK good luck. So China have low Debt to GDP or whatever it is that's mentioned below. They will keep buying Australia's raw materials, to turn it into what and sell to who?

To the emerging billions across Chindia who are looking for thier fair share of the good things (like we had) under expansionism.

The hunderds of millions from the developed areas will have but little effect. Just imagine every family in China and India with a motor car, computer, TV and brand new 4 bedroom home, low interest and nothing to pay for 12 months etc.

Dont' you worry about the little Aussie, we in fact are even having a big hand in educating their acedemia.

 

[UBIQUITOUS]

To the emerging billions across Chindia who are looking for thier fair share of the good things (like we had) under expansionism.

The hunderds of millions from the developed areas will have but little effect. Just imagine every family in China and India with a motor car, computer, TV and brand new 4 bedroom home, low interest and nothing to pay for 12 months etc.

Dont' you worry about the little Aussie, we in fact are even having a big hand in educating their acedemia.

I like it! The American dream for the whole world to enjoy!

 

[wayneL]

Personally I have a problem with debt thats being covered by IOU's (bonds).
Debt which has no such luxury tends to be contained and if its not and doesn't affect the money printers interests to a great extent then they go broke. Debt is written off.

Its the only way I see the majority of Governments recovering from crippling debt.
AUST fortunately isn't one of them.

Either way the debt has to be paid for from production.