It is not the same as fiscal stimulus, but it is still stimulus; Monetary stimulus. Agree though post gfc in much of the world when monetary policy lost its potency fiscal stimulus was the only one with legs.
Is Australia facing the first recession in 20 years?
- Thread starter hobo-jo
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It is not the same as fiscal stimulus, but it is still stimulus; Monetary stimulus. Agree though post gfc in much of the world when monetary policy lost its potency fiscal stimulus was the only one with legs.
Hi tom 32
Yes, much of the world with very low interest rates have lost potency when
attempting to stimulate economies using monetary policy, whereas the Chinese Gov. coming off interest rates of 6.56% along with other expansionary monetary policy such as lowering bank reserve ratios have much more fire power.
These expansionary monetary policies added to the expansionary fiscal policies make up the current stimulus package.
I know a few people who are tradies and work in various construction/renovation fields.... roofing, decking, brick laying, plumbing, etc. Last few years they have absolutely raked in the money via cash jobs, a couple relying almost solely on these. Most of this work has dried up the past 6-12 months. These sorts of examples are unlikely to be reflected in official unemployment/employment statistics, but will have an impact on the economy as they are mostly spenders not savers...
Anyone else experienced or heard of similar (cash/shadow employment reducing)?
Looking at recent data it looks like construction makes up around 8% of the (direct) employed. Would be interesting to know how big the "cashies" market is relative to the official size...
Anyone else experienced or heard of similar (cash/shadow employment reducing)?
Looking at recent data it looks like construction makes up around 8% of the (direct) employed. Would be interesting to know how big the "cashies" market is relative to the official size...
It's not just the cashies HBJ; a lot of the builders/tradies I come across each week are making noises about the slowing down now.
Just yesterday; one of our customers is a Solar Hot Water guy...came in for a puncture repair, and he asked me if I was busy. Reasonable was the reply, and I asked him if he was the same?
He said that his company had gone from 2 months of worked lined up to just days of work lined up; was getting a bit worried.
I've only been bangin' on about the whole employment climate for; oh....a year or more, now.
But the majority of folk on this site - who are seemingly in cosy office/IT/consulting jobs with apparently no future employment worries near cafe strips in the CBD...won't have it.
Yes have been hearing similar (those doing business by the book also getting reduced jobs), but I assume cash jobs would probably be the first to go in many cases.
Don't go slagging off the IT/office workers, not all of us wear blinkers
It seems I have been early with my suggestion of recession within 12 months when I first started noticing the slow down last year, but I think a lot more are suffering/struggling than the official statistics imply (such as GDP growth and official unemployment).
A bit hard to use the Solar Hot Water guy as an example since they are so dependent on government rebates/handouts that it isn't a true reflection on the economy. Although I do agree with the general trend of slower business activity - GST collections are slowing heavily which indicates much less compensation by everyone.
GDP is so easy to fudge - being done already.
look at the "nominal GDP" "growth" in the USA - bascially the US Fed buys US Treasury bonds with counterfiet money that the taxpayer will have to pay back plus interest.
then rig the LIBOR rate affecting that interest payable and yay!
He's just another in a long list that come through my life each week/month.
But hey; I know jack shoit; just ask the desk jockeys who've got the stats and are spendin' up..
Where's "China" these days?
It might also be people fed up waiting for a tradie.
Looks extremely doubtful that we are heading for a negative GDP in the June quarter.
http://www.businessday.com.au/busin...cision-20120807-23rnt.html?rand=1344314312233
http://www.businessday.com.au/busin...cision-20120807-23rnt.html?rand=1344314312233
For those that still believe that rate cuts are stimulus more news about more possible rate cuts in China with the benefits that will flow through to other countries.
Asian Stocks Advance as Wen Signals More China Stimulus
Asian stocks rose, with the region’s benchmark index erasing yesterday’s decline, after Premier Wen Jiabao said slower inflation has given China more room to adjust monetary policy
http://www.bloomberg.com/news/2012-...vance-as-wen-signals-more-china-stimulus.html
For those that prescribe to the economic theory that rate cuts are not stimulus I guess that this would have no effect on your outlook.
Asian Stocks Advance as Wen Signals More China Stimulus
Asian stocks rose, with the region’s benchmark index erasing yesterday’s decline, after Premier Wen Jiabao said slower inflation has given China more room to adjust monetary policy
http://www.bloomberg.com/news/2012-...vance-as-wen-signals-more-china-stimulus.html
For those that prescribe to the economic theory that rate cuts are not stimulus I guess that this would have no effect on your outlook.
Probably a more accurate question would have been
"Will Australian GDP exceed the average over the next 12 months?"
Australia's growth eclipses global doubts: RBA
With inflation expected to be consistent with the target and growth close to trend,
Read more: http://www.theage.com.au/business/a...-doubts-rba-20120821-24jmj.html#ixzz249hRD0J3
"Will Australian GDP exceed the average over the next 12 months?"
Australia's growth eclipses global doubts: RBA
With inflation expected to be consistent with the target and growth close to trend,
Read more: http://www.theage.com.au/business/a...-doubts-rba-20120821-24jmj.html#ixzz249hRD0J3
Depends which side of the transaction you're on.
As a seller; bad sentiment is bad. for you.
As a buyer; go shopping.
But; it's not as good for CG shoppers; it's better for cashflow shoppers (which everyone should be).
Cheers BayView
Your attempts at trolling amuse me turk.
You might be wondering why there aren't more Somersoftites joining you to lay in the boot when it's looking like my expectations of technical recession within 12 months won't come to pass. Here's a couple of reasons they are probably not joining you:
1. A majority of users on this site can have a discussion without the need to troll, harass and taunt. It is one of the reasons I hang around here even though I haven't had exposure to any property for nearly 3 years now. The majority of users here will discuss a topic amicably even when in disagreement. You might take a lesson from these other users.
2. Although a majority of those who have voted don't think we will have a recession (30% think we will see recession or worse in the near future), I think most here would have made anecdotal observations that the GDP print is not telling the whole story (ie economy is worse than GDP growth would suggest). Especially given all the recent resource sector activity, cancellation of projects and expansions (with commodity prices having taken a hit in the global slow down of GDP growth).
I note this article on possibility of Australian recession this morning and this comes before the apparent changes to the BHP Olympic Dam expansions...
http://online.wsj.com/article/SB10000872396390444443504577602690621428420.html?mod=googlenews_wsj
Here are some GDP growth charts from other countries which we could consider in relation to global growth (which is the driver of demand for our resources):
Charts from: http://theshortsideoflong.blogspot.com.au/2012/08/global-business-cycle-in-charts.html
Certainly growth on an almost global scale is looking very poor (relative to the good times).
As I've already admitted, it's looking very unlikely that Australia will enter recession within the 12 months I suggested, but I still think we are heading towards one albeit at a slower pace than I expected.
Correct Shadow, thanks for the support.Don't worry, at least you got your call on gold right. [URL="http://www.google.com.au/#hl=en&sclient=psy-ab&q=bullion+baron+horse&oq=bullion+baron+horse]Oh wait...[/URL]
(go on, now you can post all the things I got wrong in retaliation...
I have correctly called the bottom in the metals. Here on Gold. Gold priced in USD (basis of the post) hasn't been lower since:
http://www.bullionbaron.com/2012/05/good-chance-gold-and-silver-have.html
http://www.bullionbaron.com/2012/05/good-chance-gold-and-silver-have_20.html
And here on Silver. Silver priced in USD (basis of the post) hasn't been lower since:
http://www.bullionbaron.com/2012/07/ounce-of-gold-for-your-thoughts-on.html
http://www.bullionbaron.com/2012/07/potentially-explosive-upside-potential.html
Nice to have you on my side for once.
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