Comments on: What might an Australian economic slump look like? http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/?utm_source=rss&utm_medium=rss&utm_campaign=what-might-an-australian-economic-slump-look-like Views about the Australian stock market, shares, the economy, investing, politics and world events. Fri, 10 Feb 2012 09:23:14 +0000 hourly 1 http://wordpress.org/?v= By: Greg Atkinson http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-10043 Greg Atkinson Fri, 30 Sep 2011 06:47:34 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-10043 Well Wayne Swan is finally preparing to announce his target date to balance the budget will slip. According to a report in The Australian today: <em>Mr Swan said the government remained “determined” to deliver on its 2012-13 return-to-surplus commitment, but suggested overseas events could force the government to reassess the timetable.</em> Looks like even the Government will be unable to balance the books even after they raid the future fund. Well Wayne Swan is finally preparing to announce his target date to balance the budget will slip. According to a report in The Australian today:

Mr Swan said the government remained “determined” to deliver on its 2012-13 return-to-surplus commitment, but suggested overseas events could force the government to reassess the timetable.

Looks like even the Government will be unable to balance the books even after they raid the future fund.

]]> By: Biker http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-9937 Biker Mon, 26 Sep 2011 14:36:29 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-9937 npi: "..will translate to higher interest rates, which consumers and the media are screaming about a 0.25% rise…" First I've heard of this. Can you provide links, npi? npi: “..will translate to higher interest rates, which consumers and the media are screaming about a 0.25% rise…”

First I’ve heard of this. Can you provide links, npi?

]]> By: npi_tweet http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-9932 npi_tweet Mon, 26 Sep 2011 05:33:34 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-9932 I think your scenario is highly probable, I believe that higher inflation will be the prelude to problems to come. I would say if the world economy comes off the boil in the short term inflation in Australia may start to rise, mainly due to domestic industrial relations policy, and lower commodity prices excluding oil (AUD starts to decline). Either a falling dollar or domestic inflation, will translate to higher interest rates, which consumers and the media are screaming about a 0.25% rise...imagine 1% - 2%. Our big 4 banks may be forced in passing on higher rates irrespective of the RBA movement due to the higher cost of lending from overseas. Once this happens we will start to go in reverse. Consumers will stop spending (more so than now), house prices decline further and the RBA is now forced to drop rates dramatically where they will stay for several years while Australians try to reduce the private debt that they have accumulated over the past 20 years. Dropping rates will also make the AUD cheaper and exacerbate the problem. Australia really needs structural reforms NOW to survive the next 20 years, because relying solely on mining and monetary policy is a fools paradise. We will officially be a Banana Republic! The govt deficits are about to get larger after next year. I think your scenario is highly probable, I believe that higher inflation will be the prelude to problems to come.
I would say if the world economy comes off the boil in the short term inflation in Australia may start to rise, mainly due to domestic industrial relations policy, and lower commodity prices excluding oil (AUD starts to decline).
Either a falling dollar or domestic inflation, will translate to higher interest rates, which consumers and the media are screaming about a 0.25% rise…imagine 1% -- 2%. Our big 4 banks may be forced in passing on higher rates irrespective of the RBA movement due to the higher cost of lending from overseas.
Once this happens we will start to go in reverse. Consumers will stop spending (more so than now), house prices decline further and the RBA is now forced to drop rates dramatically where they will stay for several years while Australians try to reduce the private debt that they have accumulated over the past 20 years. Dropping rates will also make the AUD cheaper and exacerbate the problem.
Australia really needs structural reforms NOW to survive the next 20 years, because relying solely on mining and monetary policy is a fools paradise. We will officially be a Banana Republic!
The govt deficits are about to get larger after next year.

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-8884 Greg Atkinson Fri, 29 Jul 2011 04:04:53 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-8884 Indeed we have Grant. An inflation problem while at the same time the economy outside the mining sector is struggling. It therefore amazes me how the RBA or Government can claim they are doing a good job managing the economy. It also looks like property prices are sliding backwards now so if commodities prices start falling then the GDP numbers are going to look quite bad later this year or in 2012. Indeed we have Grant. An inflation problem while at the same time the economy outside the mining sector is struggling. It therefore amazes me how the RBA or Government can claim they are doing a good job managing the economy.

It also looks like property prices are sliding backwards now so if commodities prices start falling then the GDP numbers are going to look quite bad later this year or in 2012.

]]> By: Grant Musgrove http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-8847 Grant Musgrove Wed, 27 Jul 2011 03:52:44 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-8847 todays inflation numbers confirm we have a inflation problem todays inflation numbers confirm we have a inflation problem

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-8264 Greg Atkinson Sun, 26 Jun 2011 01:33:17 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-8264 Senator I think small business owners feel what the stock market has been telling us for a year or more and that is that the economy is struggling. Even the mainstream media are now starting to pump out articles about how the Australian economy (ex mining) is facing strong headwinds so if they have woken up then things must be getting bad ;) Senator I think small business owners feel what the stock market has been telling us for a year or more and that is that the economy is struggling. Even the mainstream media are now starting to pump out articles about how the Australian economy (ex mining) is facing strong headwinds so if they have woken up then things must be getting bad ;)

]]> By: Senator13 http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-7580 Senator13 Mon, 16 May 2011 08:27:55 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-7580 I found this was a very eye opening article: Australia shuts up shop: the effect the GFC has had on your local stores Read more: http://www.news.com.au/business/business-smarts/australia-shuts-up-shop-malcolm-farr-on-the-effect-the-gfc-has-had-on-your-local-stores/story-e6frfm9r-1226056709832#ixzz1MUes5tei I found this was a very eye opening article:

Australia shuts up shop: the effect the GFC has had on your local stores

Read more: http://www.news.com.au/business/business-smarts/australia-shuts-up-shop-malcolm-farr-on-the-effect-the-gfc-has-had-on-your-local-stores/story-e6frfm9r-1226056709832#ixzz1MUes5tei

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-6598 Greg Atkinson Wed, 01 Dec 2010 00:39:48 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-6598 Weaker than expected Australian GDP numbers out today. Maybe things are moving towards my Mid 2011 scenario above? Weaker than expected Australian GDP numbers out today. Maybe things are moving towards my Mid 2011 scenario above?

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-5338 Greg Atkinson Sat, 14 Aug 2010 00:20:52 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-5338 I have noticed of late some finance journalists and commentators are daring to talk about a possible economic slowdown in Australia. What we know now is housing finance has slowed, retail sales numbers are soft and just the other day unemployment crept up a touch. Could Australia's economic dream run be coming to an end? I have noticed of late some finance journalists and commentators are daring to talk about a possible economic slowdown in Australia. What we know now is housing finance has slowed, retail sales numbers are soft and just the other day unemployment crept up a touch. Could Australia’s economic dream run be coming to an end?

]]> By: Biker http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4764 Biker Fri, 25 Jun 2010 06:03:21 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4764 I'd missed this blog. On balance, we made quite a lot of money. Yes, we found we'd paid too much for one block, subsequently bought two very cheaply; won _real_ money playing Super games; and scored _bigtime_ with low interest rates. The latter enabled us to provide each tenant family with up to $14K worth of extras to reduce their costs and increase their comfort. Good to read about your wins, Ned! :) I’d missed this blog.

On balance, we made quite a lot of money. Yes, we found we’d paid too much for one block, subsequently bought two very cheaply; won _real_ money playing Super games; and scored _bigtime_ with low interest rates. The latter enabled us to provide each tenant family with up to $14K worth of extras to reduce their costs and increase their comfort.

Good to read about your wins, Ned! :)

]]> By: Ned S http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4533 Ned S Thu, 03 Jun 2010 15:05:19 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4533 "didn’t lose anything during the Great Crash" - There might have been a few who didn't lose anything Anon, but they were pretty few and far between I think? Sure, I've kept my capital basically intact to date, and on paper (in theory?) even picked up 10% maybe? But I'd be kidding myself if I pretended that the RBA dropping rates from 7% to 3% (or somesuch?) didn't severely damage my debtfree cashflow! Doubt there's many of us who've been really killing the pig lately? :) “didn’t lose anything during the Great Crash” -- There might have been a few who didn’t lose anything Anon, but they were pretty few and far between I think? Sure, I’ve kept my capital basically intact to date, and on paper (in theory?) even picked up 10% maybe? But I’d be kidding myself if I pretended that the RBA dropping rates from 7% to 3% (or somesuch?) didn’t severely damage my debtfree cashflow! Doubt there’s many of us who’ve been really killing the pig lately? :)

]]> By: Anon http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4532 Anon Thu, 03 Jun 2010 13:55:09 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4532 "As a boring old Oz property investor Anon, I’ll just be glad to see the Djia get back up to 12,500 maybe? – In the hope that the the masters of the universe may back off a bit on feeling the need to knick loot from all and sundry to recoup their losses perhaps – They are the most loathsome of scumbuckets!" Well Ned being boring isn't so bad - you didn't lose anything during the Great Crash! And i'm guessing if property tanks thru the floor, you will have all your bullets ready to pick up gems that rarely hit the market? As for the DJIA - 12,500 maybe who knows? But its inevitable this government debt situation will continue to evolve with it probably ending with a US debt disaster. Buffet has recently said Municipal debt could be an issue in a couple of years. So 2011-2012 imo will become the bear market to watchout for. However what we just experienced in 2008 is a statistical anomaly, so to bet on this happening again is basically gambling (excludes oz banks/housing of course). This is not advice (nor are any of my posts)! Always seek a financial adviser to tailor advice to your particular circumstances! “As a boring old Oz property investor Anon, I’ll just be glad to see the Djia get back up to 12,500 maybe? – In the hope that the the masters of the universe may back off a bit on feeling the need to knick loot from all and sundry to recoup their losses perhaps – They are the most loathsome of scumbuckets!”

Well Ned being boring isn’t so bad -- you didn’t lose anything during the Great Crash! And i’m guessing if property tanks thru the floor, you will have all your bullets ready to pick up gems that rarely hit the market?

As for the DJIA -- 12,500 maybe who knows? But its inevitable this government debt situation will continue to evolve with it probably ending with a US debt disaster. Buffet has recently said Municipal debt could be an issue in a couple of years. So 2011-2012 imo will become the bear market to watchout for. However what we just experienced in 2008 is a statistical anomaly, so to bet on this happening again is basically gambling (excludes oz banks/housing of course).

This is not advice (nor are any of my posts)! Always seek a financial adviser to tailor advice to your particular circumstances!

]]> By: Ned S http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4531 Ned S Thu, 03 Jun 2010 13:43:57 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4531 As a boring old Oz property investor Anon, I'll just be glad to see the Djia get back up to 12,500 maybe? - In the hope that the the masters of the universe may back off a bit on feeling the need to knick loot from all and sundry to recoup their losses perhaps - They are the most loathsome of scumbuckets! :) As a boring old Oz property investor Anon, I’ll just be glad to see the Djia get back up to 12,500 maybe? -- In the hope that the the masters of the universe may back off a bit on feeling the need to knick loot from all and sundry to recoup their losses perhaps -- They are the most loathsome of scumbuckets! :)

]]> By: Anon http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4530 Anon Thu, 03 Jun 2010 13:12:57 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4530 I'm raising my long term investment targets on the DJIA..i'm seeing very bullish patterns occuring. Investors Intelligence is not bearish enough, but this tends to only work at extremes - this indicator is useless here imo. EOY targets for DJIA raised to 11,500-12,000. So many people are on the absolute wrong side of this (being bearish). And my timing is generally pretty good, so be warned - severe under-performance comming if you sit this out ;). Sept-Nov correction may occur but will not be very deep imo (higher recent lows at worst). This is not advice (nor are any of my posts)! Always seek a financial adviser to tailor advice to your particular circumstances! I’m raising my long term investment targets on the DJIA..i’m seeing very bullish patterns occuring. Investors Intelligence is not bearish enough, but this tends to only work at extremes -- this indicator is useless here imo.

EOY targets for DJIA raised to 11,500-12,000.

So many people are on the absolute wrong side of this (being bearish). And my timing is generally pretty good, so be warned -- severe under-performance comming if you sit this out ;) .
Sept-Nov correction may occur but will not be very deep imo (higher recent lows at worst).

This is not advice (nor are any of my posts)! Always seek a financial adviser to tailor advice to your particular circumstances!

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4347 Greg Atkinson Fri, 21 May 2010 23:26:43 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4347 Ned I am sort of just sitting back and watching the show unfold. I am more of a big themes guy rather than a stock picker, so when a correction likes this strikes I try and see if my view of the world economy is holding up okay. Generally speaking I reckon Europe will drag itself out of this mess, slowly. They are just going to be a little more tough on themselves and stop having long summer holidays and retiring on generous pensions. I am bullish on Asia as you know but think the Chinese economic miracle will fizzle out. The days of rampant growth always come to an end. (It's like having a winning streak in Vegas) I believe the US has entered a period of long term decline. The US economy will pick up again, but I don't think we will see the US being quite as strong as it was ever again. Ned I am sort of just sitting back and watching the show unfold. I am more of a big themes guy rather than a stock picker, so when a correction likes this strikes I try and see if my view of the world economy is holding up okay.

Generally speaking I reckon Europe will drag itself out of this mess, slowly. They are just going to be a little more tough on themselves and stop having long summer holidays and retiring on generous pensions.

I am bullish on Asia as you know but think the Chinese economic miracle will fizzle out. The days of rampant growth always come to an end. (It’s like having a winning streak in Vegas)

I believe the US has entered a period of long term decline. The US economy will pick up again, but I don’t think we will see the US being quite as strong as it was ever again.

]]> By: Anon http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4345 Anon Fri, 21 May 2010 14:00:08 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4345 alot of buying when we had that big flash down. I didn't even get a chance to buy! Maybe rally here or small rally and another downleg. Keeping some gun powder ready ;) None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info. alot of buying when we had that big flash down. I didn’t even get a chance to buy! Maybe rally here or small rally and another downleg. Keeping some gun powder ready ;)

None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

]]> By: Anon http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4344 Anon Fri, 21 May 2010 12:46:29 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4344 And must admit it isn’t seeming that cataclysmic to me right now??? Nope, not at all! (well at least at the moment) None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info. And must admit it isn’t seeming that cataclysmic to me right now???

Nope, not at all! (well at least at the moment)

None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

]]> By: Anon http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4343 Anon Fri, 21 May 2010 12:44:26 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4343 4 levels of support below ~9,800 on the DJIA...i very much doubt it will break all those...and they are close together. The slope of this drop is looking like its on its last legs ! Maybe 200+ points FALL on DJIA...followed by a big snap back bargain hunting rally to only be slightly down? None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info. 4 levels of support below ~9,800 on the DJIA…i very much doubt it will break all those…and they are close together.
The slope of this drop is looking like its on its last legs ! Maybe 200+ points FALL on DJIA…followed by a big snap back bargain hunting rally to only be slightly down?

None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

]]> By: Ned S http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4342 Ned S Fri, 21 May 2010 12:39:25 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4342 "i’ll hedge my downside risk" - Thought you would. And must admit it isn't seeming that cataclysmic to me right now??? “i’ll hedge my downside risk” -- Thought you would.

And must admit it isn’t seeming that cataclysmic to me right now???

]]> By: Anon http://www.shareswatch.com.au/blog/economy/what-might-an-australian-economic-slump-look-like/#comment-4341 Anon Fri, 21 May 2010 12:30:32 +0000 http://www.shareswatch.com.au/blog/?p=2549#comment-4341 We dont want 1070 to breach (not intraday) at the close of trade on the SPX (SnP 500). If it does no doubt I will keep buying whilst everyone keeps selling. None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info. We dont want 1070 to breach (not intraday) at the close of trade on the SPX (SnP 500). If it does no doubt I will keep buying whilst everyone keeps selling.

None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

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