It wasn’t that long ago when ex-Treasury Head Ken Henry talked about the Australian economy being in a ‘Golden Age’. I guess when you can retire on a lucrative public service pension and then parachute into a highly paid job as an advisor to the Prime Minister the future does probably seem bright. But now in early 2012 as unemployment appears set to rise and the economy is showing signs of weakness, Ken Henry’s ‘Golden Age’ comment might end up in the same category as Tim Flannery’s ‘Dams will no longer fill’ prediction.
Entries Categorised as 'Economy'
The economy, the Chinese property market & Jim Chanos.
December 16th, 2011 · 26 Comments
As we approach the end of another year we should not be surprised by the economic turmoil in Europe, the ailing U.S. economy or the rumblings of a major slowdown in the Chinese property market. The signs that all was not well with the global economy have been raised on this humble site going back more than a year. Simply put, borrowing vast sums of money and splashing it around did not fix the global economic imbalances highlighted by the market meltdown in 2008.
Japan’s economic morality play.
October 26th, 2011 · 3 Comments
World attention focuses on the problems of the Greek economy — no doubt with a large helping of schadenfreude added: There, but for the grace of God, go the rest of us is the thought.
A bear market, the G-20 circus & another report.
September 28th, 2011 · 38 Comments
This week the Australian stock market slid into what I would call a bear market although some would argue that it has avoided such fate by a whisker. The reality is however that the ASX All Ordinaries did close below 4000 recently and that represents a drop of just over 20% from levels seen in April. If it looks and feels like a bear market, then for me it is a bear market.
The stampede towards global economic pessimism
September 13th, 2011 · 29 Comments
A sure sign that an economic trend has been established is when the OECD finally jumps on the trend bandwagon and recently the OECD has joined the group of recently converted economic pessimists. Gone are the days when big borrowing, big spending governments would save the day – the theme of the day now is hang onto your hats because we might be in for a bumpy ride.
Time for a new Australian stock market investment strategy?
September 5th, 2011 · 12 Comments
Often finance writers comment that the investment world has changed since the Global Financial Crisis sent stock markets around the world tumbling in 2008 and 2009. Maybe that is true or maybe it’s just that investors stopped paying attention to the risks and focused too much on the possible profits? In any case, it’s time to think about what might happen in the next 5 years or so and contemplate making some changes to my Australian stock market investment strategy.
It’s the stupid Australian economy, stupid.
August 24th, 2011 · 19 Comments
Over the last few months media commentary regarding the Australian economy has turned decidedly gloomy. The wonders of the mining boom are now being questioned, the U.S. and European economies matter again and people are starting to wake up to the reality that an economic strategy that basically relies on China dragging Australia along for the ride might not be that clever.
A stock market rout, investor fear & the global economy
August 5th, 2011 · 69 Comments
As I write today the Australian stock market has slumped around -4% so far after the Dow Jones fell -4.3% and markets in Europe also ended sharply lower. As per usual, many finance journalists are hurriedly pumping out scary stories and dramatic headlines to gain readers attention so it’s time to grab a cup of coffee, relax and focus on the facts.
Recession watch and the Reserve Bank of Australia awakens
July 6th, 2011 · 24 Comments
As each week passes the moans of struggling businesses grow louder and finally it appears that the Reserve Bank of Australia (RBA) board members have woken up to the fact that the economy has been sliding backwards since late 2010. Once again the RBA had made a tactical blunder and raised rates too high just as they did as the global financial crisis was unfolding back in late 2007.
The Australian economy, the Twilight Zone and known unknowns
June 20th, 2011 · 14 Comments
On a daily basis, dozens of finance and business journalists try to convince the general public that they somehow have an insight into what the Australian economy is doing or how the economy will fare over the next six months or so. But the truth is, nobody has a clue what will happen for the rest of this year as we are still stuck in the Economic Twilight Zone.
Has the Australian economy peaked?
May 31st, 2011 · 14 Comments
Last year when I dared to suggest that the Australian economy was unbalanced and that 2011-2012 could be a period of economic contraction the mainstream financial reporters were churning out “miracle” economy stories. Back then they were obsessed with telling their readers how the mining boom would shower riches across the Great Southern Land, but today many of them have started to sound a lot more cautious.
Swan’s lazy 2011 budget and Australian economic madness
May 16th, 2011 · 6 Comments
On budget night Wayne Swan could have saved us all a lot of time by simply standing up and saying that his plan for the Australian economy was to simply sit back and hope the mining boom continued. As I have said for over a year now, Australian policy makers have set the economy up for a severe downturn if commodities prices slump and there is no Plan B.
The China property bubble and an economy hooked on growth.
April 27th, 2011 · 39 Comments
For around a year or so I have gradually become more cautious about the outlook for the Chinese economy despite the assurances from mining company executives, the RBA and Wayne Swan amongst others that all is well. Without doubt the rapid development of the major cities in China has been nothing short of spectacular but surely we must ask ourselves: is this rapid growth sustainable over the long term?
The Global Economy, Baltic Dry Index, Gold and China
April 18th, 2011 · 10 Comments
We are almost through a third of 2011 and the mood across global markets appears to be decidedly downbeat. The bullish voices of late 2010 have now faded and even the Reserve Bank of Australia and Federal Treasurer are sounding cautious. But don’t be fooled by the talk that recent events have caused the global economy to face headwinds because the reality is that 2011 was always going to be a tough year.
The Australian economy, house prices and economic outlook
April 5th, 2011 · 188 Comments
Back in April last year I suggested that the Australian economy was not quite as robust as most market commentators appeared to think and that it was quite possible for economic conditions to deteriorate quite markedly over the next few years. So now one year later after I wrote about a possible economic slump in Australia let’s have a look at how events have unfolded since then.
Economic indicators, the Australian economy and the stock market
December 15th, 2010 · 16 Comments
As the year has progressed I have noticed that my view of the Australian stock market and economy has become increasingly at odds with most of the mainstream market commentators back in Australia. Whereas they see reasons to be optimistic and feel the economy is robust, I feel the situation is quite different and believe the Australian economy is dangerously unbalanced and possibly primed for a nasty correction.
