Potential Big GFC Discussion Thread

[trippytaka]

2% lost on opening in AUS

http://www.smh.com.au/business/marke...808-1ihzr.html

Australian stocks have fallen sharply this morning after America's credit rating was downgraded for the first time in its history over the weekend.

At least $27 billion was wiped from the value of the market in the opening minutes of trade, adding to the $100 billion that was shed last week.

In early trade, the benchmark S&P/ASX200 index dropped 83.8 points, or 2.04 per cent, to 4021.6 and the All Ordinaries fell 89.1 points, or 2.14 per cent, to 4080.6.
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It was the fifth day of falls for the local market.

Following the huge losses on global sharemarkets last week, ongoing concern about the strength of the US economic recovery and debt problems in Europe, interest rate futures today point to a rate cut in September.

US stock index futures opened sharply lower on Sunday in the first trading for domestic equities after the Standard & Poor's cut. Futures for all three major indexes sank more than 2.5 per cent.

The Aussie dollar showed some resilience in early trade, dipping to $US1.039 before climbing back to $US1.0437 at 7.15am, it lowest mark since April.

Read more: http://www.smh.com.au/business/marke...#ixzz1UOPesouw

[dave289]

The problem we face both today and tommorow is one where many aussie investors are now concerned about what happens when the us market opens for monday trading at around midnight tonight , many will be concerned that the american market will tumble on monday trading and will be wanting to sell up before we see what happens here as it is not looking good, we may also have another day of smashing tommorow after what happens in the us market which will close at 6.00am our time tommorow morning just proir to our next market opening for trading for tuesday , so I am expecting a smashing for both today and tommorow .

[GT0132]

I was one of the optimists in the house price thread, but after absorbing what's been going on economically over the past week it's fair to say that things are not looking good at all. One thing that's in our favour though is that we can use interest rates to fight off a recession and stimulate the economy. The US doesn't have that luxury unfortunately.

The Eurpoean situation is also a mess with Spain, France and Italy now having monetary problems of their own

[SB076]

Aussie market has actually come back its only 17 points down at present. JB Hifi didnt have a good annoucement (profit down 7.5%) Suggest our market wont do a lot today - it will wait to see what happens in the US tongiht and react tomorrow.

[atec77]

Originally Posted by GhiaEB

As someone who is looking at getting my first house, I am very worried about it. I've factored in a 2% rate rise into my affordability but if it goes higher I could be in a spot of bother.

Add to it a loss in value (if the housing market drops) and I'll be in real trouble. I might just wait another 6months. I'll have a bigger deposit as a bonus.

Cheers

2% wont be enough , I lived through 17.8% and nearly lost everything we had worked for

[castellan]

I keep getting comments like we hear in Australia are such a wealthy country! from mainly ALP faithful and doll bludgers and some young people.
That it does not matter to them at all about whether our gov mismanage money.
I think we are a bustard arss country that can't even look after our infrastructure let alone our old people and veterans but we look after all the a-se wipes in our society like criminals in jail have it better than a lot of others.
why do we roll out the red carpet for people who don't even want and have no intention to become aussies.
I was talking to a aussie bloke who called one of these people mate on the job site, only to be informed by this moron 'that we can never be mates' ? So what type of society is this foolish Government pushing on us.
When my mum came to this country in the 50's to become a citizen you had to agree to become as one people and she was proud to do so and did...
I think nation building has all got to do with building on solid foundations and everything will be fine but it's all the Goats that start all the problems as history has proven it time and time again.

[Yellow_Festiva]

Originally Posted by castellan

I keep getting comments like we hear in Australia are such a wealthy country! from mainly ALP faithful and doll bludgers and some young people.
That it does not matter to them at all about whether our gov mismanage money.
I think we are a bustard arss country that can't even look after our infrastructure let alone our old people and veterans but we look after all the a-se wipes in our society like criminals in jail have it better than a lot of others.
why do we roll out the red carpet for people who don't even want and have no intention to become aussies.
I was talking to a aussie bloke who called one of these people mate on the job site, only to be informed by this moron 'that we can never be mates' ? So what type of society is this foolish Government pushing on us.
When my mum came to this country in the 50's to become a citizen you had to agree to become as one people and she was proud to do so and did...
I think nation building has all got to do with building on solid foundations and everything will be fine but it's all the Goats that start all the problems as history has proven it time and time again.

While I agree with some of what you say, other bits show that you haven't been to many 2nd or 3rd world countries.

I have... heaps. And trust me, we have it better than most (even with all our other shortcomings).

[FGII-XR6]

Gold is an extremly good conductor of electricity , far better than copper and is used for microscopic connections inside integrated circuits ( the chips in all your electronic goodies). it is also used for high quality electrical contacts and many othe industrial uses. this useless "rock" ( it is a metal) is far from useless and it's value is driven by demand V availability

Originally Posted by Big Damo

I seen the AUD falling heaps against the USD in the last few days, not too happy now its going to start costing more to import stuff from the USA.

Also whats the deal with gold prices? When I was in Grade 3 in 2000 it was like $300 something an ounce, looking the other day it was $1600+ Is a shiny rock which you can't do much with really worth that much?

Also its going to be interesting with work considering we keep getting told we're not doing our jobs fast enough, as far as our boss says, we're one step away from the chopping block by the board of investors who bought into our company. I wonder if this downturn is enough to tip us over the edge? Might be the time and perfect chance for the career change we where all dreaming about if we all get the sack?

[Yellow_Festiva]

Originally Posted by au3xr6

Gold is an extremly good conductor of electricity , far better than copper and is used for microscopic connections inside integrated circuits ( the chips in all your electronic goodies). it is also used for high quality electrical contacts and many othe industrial uses. this useless "rock" ( it is a metal) is far from useless and it's value is driven by demand V availability

And unlike cash, it cannot be made from worthless materials. The more something is available, the less it's worth.

[dave289]

I have been watching bhp this morning. Not that I have any shares any more , but it is a strong bluechip involving mining so you would think it to be one of the strongest on the share market. This morning I have watched mind games, it struggled early in the day and was looking to go under the $37 mark , it started to come good toward midday but is now looking to drop below the $37 mark . bhp have not closed below $37 dollars for over two years. This is the mind game , a thinking and hoping that this will not go below the $37 dollar mark , once it does and will , then it will be hard to pull back from and we will see further declines.

todays prices below

http://www.asx.com.au/asx/markets/eq...s&asxCodes=bhp

prices over last two years below.

http://hfgapps.hubb.com/asxtools/Cha...0&TimeFrame=M2

[mr smith]

Big hello to the guys from the house price thread.

It looks like alot that was talked about there is panning out.

[dave289]

Originally Posted by mr smith

Big hello to the guys from the house price thread.

It looks like alot that was talked about there is panning out.

Hello Mr.smith

As for your second comment ... ........................

[Gobes32]

Everyone on their best behaviour. We don't want this thread locked as well.

[trippytaka]

Worrying news: Job market shows signs of softness

Job advertisements declined in July suggesting employment growth will moderate in months to come, a survey shows.

The ANZ job ads index, which offers a forward indicator of job market strength, fell 0.7 per cent in July following a 3.7 per cent rise in June. Newspaper job ads fell 0.5 per cent to 8318, while internet ads slid 0.7 per cent to 178,833, hinting at looming job market softness through the second half of the year.

"This has left the trend for job advertising in slight decline for four successive months," said Ivan Colhoun, ANZ Head of Australian Economics and Property Research.
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On a trend basis, the index has fallen by 2.2 per cent in July, matching June's fall.

"Historically, declining trends for job advertising have been consistent with rising unemployment and declining interest rates, though the trend to date is quite modest," he said.

Job advertisements began slowing in January and the trend turned negative from April this year, said the ANZ survey. It showed the labour market is not as tight as back in 2008, when unemployment was at 4.2 per cent, said Mr Colhoun.

Near record-low unemployment has been one of the hallmarks of Australia's economy since the financial crisis, underpinning growth in the economy and only moderate falls in home prices. The official unemployment rate has been 5 per cent or lower since December last year.

Analysts believe the economy will have generated 10,000 new jobs in July, according to Bloomberg data, keeping the rate steady at 4.9 per cent.

Markets this morning tipped two interest rate cuts at the Reserve Bank meeting in September in response to the plunge on global markets last week and increased worries for the state of the global economy. The cash rate currently stands at 4.75 per cent.

Slower job growth could weigh on overall economic activity, analysts have predicted.

"Job sentiment is a key driver to the consumer spending cycle," Westpac said last week in its latest assessment of the economy. It predicted the unemployment rate will climb to 5.5 per cent over the next year, while interest rates will tumble to 3.75 per cent as the Reserve Bank responds to a slowing global economy and sharemarket jitters.

"Spiking job loss fears are typically the initial trigger for a sudden stop in spending as consumers cut or defer purchases of discretionary and or ‘big-ticket’ items," Westpac said.

Some sectors have already shown weakness as the consumers rein in spending. Just Group, which owns more than 900 mainly-fashion stores, announced that 50 outlets would close in response to the slowdown which has hit the retail sector. Weeks earlier, the final Borders and Angus & Robertson shops were closed, putting thousands out of work. June retail spending, on an annual basis, was the weakest in 50 years.

[StrokedXT]

You know what will fix everything- a carbon tax ;)

[SB076]

Originally Posted by StrokedXT

You know what will fix everything- a carbon tax ;)

Or a recession tax...

Shares have dropped again and are now down 100 points - not good
Will be interesting to see how the US markets handles the downgrade.
Italy is in a bit of a mess (to put it nicely) - I think this will take some time to sort out (unfortunately)

[FTe342]

Originally Posted by atec77

2% wont be enough , I lived through 17.8% and nearly lost everything we had worked for

Different era and different circumstances. This isn't a Keating Banana Republic recession we have to have we are talking about here.

Ever heard of fixed rates? They weren't available for H/L until after the rate hike you mentioned, but have been ever since.

Why anybody worries about having to pay even 10% these days is beyond me. If variable rate moved up quickly even 2% from the 6.9% you can get almost anywhere at present, why the hell wouldn't any borrower fix all or most of their mtg before it got to say, 9%.

[trippytaka]

Originally Posted by SB076

Or a recession tax...

Shares have dropped again and are now down 100 points - not good
Will be interesting to see how the US markets handles the downgrade.
Italy is in a bit of a mess (to put it nicely) - I think this will take some time to sort out (unfortunately)

A recession tax

Yeah, the Euro situation is scary... Italy is a big chunk of coin to go south. The Euros are saying they will do what ever it takes to bail them out if need be, but the reality it that we are just throwing good money after bad. It has to stop some time and when it does it will hurt. All we can do is to try and minimise the pain a bit.

[BA GT-HO]

Originally Posted by dave289

Hello Mr.smith

As for your second comment ... ........................

Not necessary.

This is what got the other thread locked.

[mr smith]

Originally Posted by trippytaka

It has to stop some time and when it does it will hurt. All we can do is to try and minimise the pain a bit.

I agree, the longer they let the rot set the harder the fall will be.
Australia's position could do with a bit of pain, just to sort the wheat from the chaff.
I feel the first rounds of stimulus were bought in to early and contribted to our current inflation issues. The money should have been at the ready for now, allowing the govt (if required) to spend on big infastructure projects that would offer decades of benefits along with skilled jobs.

[Charliewool]

Anyone know what Julia's "Big announcement" is all about?
(Just about to be aired on Sky News, so 3AW says)

[trippytaka]

Originally Posted by Charliewool

Anyone know what Julia's "Big announcement" is all about?
(Just about to be aired on Sky News, so 3AW says)

Only thingn I saw her do was a report on productivity and aged care.

[XESP351]

She's scrapping the carbon tax and resigning...I hope...

[GhiaEB]

Originally Posted by atec77

2% wont be enough , I lived through 17.8% and nearly lost everything we had worked for

We've been saving for along time. I've just factored in a 2% rate rise to maintain our standard of living. We could go beyond that but it will mean we will have to drop our standards.

If it ever went to 17.8% again I think you'll find the housing market would crash. Hell, people might have to sell their investment homes and housing might just become affordable again.

[T3ts50]

Originally Posted by GhiaEB

We've been saving for along time. I've just factored in a 2% rate rise to maintain our standard of living. We could go beyond that but it will mean we will have to drop our standards.

If it ever went to 17.8% again I think you'll find the housing market would crash. Hell, people might have to sell their investment homes and housing might just become affordable again.

Its good to hear you have factored in that extra 2%.

As a banker, we usually set a benchmark rate for assessing new loans, which is just over the 2% mark.

[GasoLane]

Originally Posted by Charliewool

Anyone know what Julia's "Big announcement" is all about?
(Just about to be aired on Sky News, so 3AW says)

She's having Kev's love child ?

[trippytaka]

At close, 2.9% drop... the rest of Asia has been giving up ground too - HK was down 4.1% a while ago.

Close Australian shares gave up another $35 billion in value as jitters over the state of the economy sank stocks for a fifth consecutive day.

The benchmark S&P/ASX200 index closed below the 4000-point level for the first time since July 16, 2009, ending the day down 119.3 points, or 2.9 per cent, at 3986.1. The broader All Ordinaries Index fell 113 points, or 2.7 per cent, to 4056.7.

The losses add to the $100 billion that was shed last week, with today's drop attributed in part to the decision by Standard & Poor's to cut the rating of US debt from its top level for the first time.
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need2know
Australian dollar drops to $US1.03
Dow futures down 2.6% to 11,108
Gold hits record $US1715 an ounce
Oil futures drop to $US83 a barrel

Gold, meanwhile, rose to its latest record level in US-dollar terms, jumping to $US1715 in afternoon trade as investors scrambled for havens.

The Australian dollar lost more ground, trading near four-month lows against the yen, euro and the UK pound, and sinking to just over $US1.03.

[trippytaka]

As a bear, I would alway sback Oil to come back in the long term... it's a finite resource after all.

[GasoLane]

Originally Posted by castellan

content deleted

Please keep religion out of it. It has nothing to do with this thread.

[JACK250]

Originally Posted by GTP owner

Depression no, recession yes. So people may have to let their second or third car go, and their internet connection, and their mobile phone, and austar subscription, and magazine subscriptions, and eating at nice restuarants, and buying everything new, or not replacing their huge plasma TV when it blows up....so what? It's just things. It is highly unlikely we will struggle to put food on the table. People really don't know how lucky we are. Those that complain and beg for food handouts rarely give up their fags, grog and pokies. Maybe we all need a reality check to focus on living within our means. A recession will be good for us.

Funnily enough last time things were looking bad the government stimulus money went towards exactly that...