Australia is living through a long recession

[Dr Jekkyl]

Originally Posted by Loud_Noises

Why oh why do people not realise that neither politcal party will fix the nation's woes. They both dance to the beat of the same drum!!!

I agree au3xr6, scaremongering can be a cause in and of itself. The problem is, the fundamentals are so messed up, scaremongering in this instance is screaming the bleeding obvious, despite constant reassurance from govco to the contrary.

A Loud Noise that needs to be heard!

Anyone who thinks that a change of Govt. will fix Australia's woes is delusional (or at least gullible).

Australia's economic trajectory over the coming decade is one that will be driven by exports. As such we probably will maintain positive growth rates of ~ 3%.

Yay, recession avoided - everything is going to be okay! Right?!

No. Exports will largely replace what was investment and it is the latter that generates jobs and employment growth. So no technical recession but many people will be feeling the pain. It may not be in the form of mass unemployment but already we are seeing increasing transition to part-time work, new contracts for same job for less money, etc. It probably would not be so much of a problem if Australians were not so indebted.

The best way for Australia to proceed is to enhance its productive capacity through infrastructure investment. The Govt should have no reservations about borrowing to do this - if well targeted and planned the debt will be self-liquidating. A responsible govt will also offset this by instituting responsible savings measures and look to windback tax rorts (like the recent FBT changes) and reduce middle and upper-class welfare. The Federal budget went into structural deficit in the mid 00's and this CANNOT be sustained

I cannot avoid saying, perhaps to my detriment, that in the last month one single political party appears to have acknowledged the challenges we will face. This party also has a major infrastructure project in the works but which is at risk of being white-anted. This party also has a history of undertaking structural economic reforms. The performance of this party in recent times has NOT been impressive however the alternative has provided nothing of substance in terms of policy, contradicts itself and, true to form, defends it's mates with their grotty snouts in the trough rather than YOU the taxpayer.

[vztrt]

Originally Posted by Loud_Noises

Why oh why do people not realise that neither politcal party will fix the nation's woes. They both dance to the beat of the same drum!!!

Agreed.

If the Libs win the election things aren't gonna change the slowdown in the economy. It is how they react to try help things along until things pick up.

[Dr Jekkyl]

I was having a discussion with a colleague about the economic situation in Aus.

He, like several of my colleagues, is Irish and are seeking economic asylum (at least temporarily).

Every single one of them says the same thing essentially:

Australia (at least WA) at present is just like Ireland before it's massive bust.

I wonder if anyone else has come across anything similar?

[zilo]

Originally Posted by au3xr6

I see you know what you are talking about! not ! you are talking about individual states but the term recession does not apply to states only to the nation as a whole.
the problem with scaremongers is that their moronic rants can actually talk the economy down causing economic harm , you get enough negative talk and the market takes notice despite the fact that the talk was started by know nothing fools who's "facts" were not facts at all.

Best you don't call me a clueless scaremongering moron else I might call you a low performing 20 dollar an hour public servant?

You definitely don't live in the Australia the rest of us live in.

[MAD]

I've had the feeling, just through watching listening and taking on board what has been happening around the country over the last 5-7 years, that things are not in a good way. But I don't have the economic knowledge to explain the process.


I'd like to see whichever gov buy back our primary services (power, phone, water, etc). If there isn't a need to meet the demands of shareholders, the companies can be run with a lower budget, and it is a constant stream of income for them which will only grow with population.
Where the money would come from is the problem though. Printing money probably wouldn't help, but it might in the long run.

[Polyal]

Originally Posted by Iggypoppin'

Not that I think polyal is foolish or stupid in anyway but he's not the oracle of truth when it comes to Australia's economy.

Polyal will know what I mean.

It's not going to be booming everywhere in aus all at once; just like it won't be slowing down everywhere at once.

Ive been called alot of things before, a Horse is a new one

I most certainly am not an expert in the field, but I work for one of the biggest resources companies in the country and it it wasnt for having LNG at the moment (that wont last for ever) then we would be in a world of pain.

The annoy thing for me is that everyone is happy to have massive profits when times are good, but they crap themselves when things go down and always apply kneejerk reactions.

The main issue is Greed, we need to be better at sustainable growth and not always chasing mega bucks...but when the cash is there try telling shareholders that.Its certainly a time for looking at your costs and seeing how badly you were being ripped off when things were good. But the saying I like to use is that when your so busy being busy it doesnt matter.

[XD 351 Ute]

Originally Posted by Dr Jekkyl

I was having a discussion with a colleague about the economic situation in Aus.

He, like several of my colleagues, is Irish and are seeking economic asylum (at least temporarily).

Every single one of them says the same thing essentially:

Australia (at least WA) at present is just like Ireland before it's massive bust.

I wonder if anyone else has come across anything similar?

One of our blokes at work is an Irishman, and he speaks of a similar tale.
He keeps telling me that Australia needs to have a recession, but I don't understand it.
Are there any economic geniuses here that would care to elaborate for me, the uneducated?
I only know how to pull stuff to bits & put it back together, mostly...

Ed

[GASWAGON]

Was talking to my dad last night he works for a big drainage company in Vic operating big excavators.....For about 5 years they had been flat out doing all the drainage in the Northern Melbourne estates that have been popping up left right and centre and they 'were' making good money in the boom times... (Soon to be Ghost towns I believe).....
Lately his bosses have been telling him there is NO work ahead for all the operaters and the only job going is two hours away in Geelong for him.
They have cut back on uniforms, no overtime, and no servicing of equipment (Ouch).
Bosses told him they do have one local job on but payment for the job will only be enough to cover the fuel costs for running the machinery..... They're working for cost!

[flappist]

Keep it civil guys

[Trump]

Originally Posted by XD 351 Ute

One of our blokes at work is an Irishman, and he speaks of a similar tale.
He keeps telling me that Australia needs to have a recession, but I don't understand it.
Are there any economic geniuses here that would care to elaborate for me, the uneducated?
I only know how to pull stuff to bits & put it back together, mostly...

Ed

In a nutshell, the Irishman is right. The debt and housing bubbles are near bursting point. Personal and national debt levels are at an all time high. House prices at 7-8 times the average income are not sustainable. As a result, a recession now is the only way to deflate these bubbles. Prolonging the life of these bubbles means no recession now, but a depression later. The only problem with any form of economic correction in the current climate is that the manufacturing base we once relied on is gone for all intents and purposes. The service economy is not able to pick up the slack nor is the high tech niche economy. This is because the brain drain from Australia has been huge, in part because the innovation and the ideas of our brightest was ignored. As such, said brightest went overseas to make a reality of their dreams and ideas.

[GASWAGON]

Originally Posted by Loud_Noises

In a nutshell, the Irishman is right. The debt and housing bubbles are near bursting point. Personal and national debt levels are at an all time high. House prices at 7-8 times the average income are not sustainable. As a result, a recession now is the only way to deflate these bubbles. Prolonging the life of these bubbles means no recession now, but a depression later. The only problem with any form of economic correction in the current climate is that the manufacturing base we once relied on is gone for all intents and purposes. The service economy is not able to pick up the slack nor is the high tech niche economy. This is because the brain drain from Australia has been huge, in part because the innovation and the ideas of our brightest was ignored. As such, said brightest went overseas to make a reality of their dreams and ideas.

Spot on.... Its already happened in Ireland and the U.K too.... The banks were in on all the dodgy loans and the gov at the time were making mountains of cash from land taxes.... Its ALL OVER now....Batten down the hatches!

[XD 351 Ute]

Thanks Loud Noises, that makes sense to me.
With the prices of real estate here already, I just don't understand how anyone working a normal job is ever going to pay their properties off...

Something will have to give sooner or later.

Ed

[Trump]

Originally Posted by EF_6

Spot on.... Its already happened in Ireland and the U.K too.... The banks were in on all the dodgy loans and the gov at the time were making mountains of cash from land taxes.... Its ALL OVER now....Batten down the hatches!

See, banks in Australia aren't as mired in dodgy loans as the UK, Europe and the US were/are. For what its worth, they were "lending" more responsibly than their overseas counterparts. I have framed my use of the term lending in quotation marks because under a fractional reserve banking system, the bank never really lends you anything, they create it out of thin air and deposit it into a bank account of your choosing. This sum of money they put in has just been added to their reserves and as such, they can create more money based on these phantom reserves.

Unless drastic action is taken, the monetization of debt will be the cause of the unraveling of the economic systems of the world, not only because the process in and of itself is sheer insanity, the derivatives markets have it as a foundation to their existence.

[Lotte]

Originally Posted by Loud_Noises

In a nutshell, the Irishman is right. The debt and housing bubbles are near bursting point. Personal and national debt levels are at an all time high. House prices at 7-8 times the average income are not sustainable. As a result, a recession now is the only way to deflate these bubbles. Prolonging the life of these bubbles means no recession now, but a depression later. The only problem with any form of economic correction in the current climate is that the manufacturing base we once relied on is gone for all intents and purposes. The service economy is not able to pick up the slack nor is the high tech niche economy. This is because the brain drain from Australia has been huge, in part because the innovation and the ideas of our brightest was ignored. As such, said brightest went overseas to make a reality of their dreams and ideas.

Sooo... Loud Noises for PM? Couldn't agree more mate.

[Dr Jekkyl]

Yet another good read from the Macrobusiness crew.

"Nobody could have seen it coming!"

Pfft. Yeah righto. Not acceptable!

Australia deserves better, it just has to wake up and realise this!

REAL reform, and NOW! Not pamphlets.

[Dr Jekkyl]

Originally Posted by Loud_Noises

See, banks in Australia aren't as mired in dodgy loans as the UK, Europe and the US were/are. For what its worth, they were "lending" more responsibly than their overseas counterparts.

Responsible? Maybe on paper and assuming the good times were going to last forever. These bankers have started believing their own lies. Foile a deux!

Australian banks are over-exposed (see pic) to any downturn in property and given the limited capacity of Australians to take on even more debt coupled with impending economic headwinds it in insensible that there won't be a downturn at least in real terms.

Isn't conventional wisdom such that one should diversify their investments? I suppose by diversify they mean buy shares in all of the big 4 rather than 1??

[Trevor 57]

the sky is falling, the sky is falling

[GASWAGON]

Gees that shut everyone up...... Maybe no ones brave enough to face the truth!

[flappist]

No actually it got the thread closed.