By: belantos
14/06/2009
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An interesting comparison can be made with the late 20's.
Normally 1% of the population owns 10% of the wealth. It means there is a strong middle class, and a healthy, competitive economy.
In 1929 at the height of the boom 1% of the population owned 40% of wealth. The remaining 99% shared the other 60% wealth. There was no middle class. And guess what, the 99% should have driven the demand for goods and services, but they could not because they were too much in debt. This kind of wealth disparity is like cancer. It kills the healthy body. It destroys purpose, hope, the meaning of life, drives people into the slavery of working just to pay bills, mortgages or rents but they cannot have anything else apart from buying it on credit, so they go deeply in debt. Crunch time comes when they can no longer borrow and then demand drops sharply.
I was alarmed when a few years ago a news report announced that in Australia 1% of the population owned 40% wealth. When the sub-prime bubble burst I told my work mates that economic depression was coming. They laughed at me. The smarter ones don't laugh now.
Depressions deflate bubbles and restores wealth disparity to its normal level. If enough money can be found to keep the bubbles inflated, the next time around there will be a far greater crisis, because the problem caused by too much debt remains unsolved.
(Coming soon: http://www.lantos.com.au) |
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By: akdoc1
14/06/2009
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dr.xingli; sound like you were lucky steve b wilson was not with you or both of you could have been lynched. Contrary to common belief even the Ostrich does not hide its head in the sand and will attack if you upset it. People are the same if you upset them by challenging their beliefs and values without giving good reason they will become aggressive, so why be surprised.
Just because you believe some thing does not make it a fact and to suggest that people are afraid to face "your truth" is just being elitist. By upsetting people you showed that you lacked the skills to get your message across and that you lack empathy towards concepts held by others. Accept the blame for your own failure, people do listen when arguments acceptable to them are placed before them, if you can not present an acceptable argument then your premise is most likely false. |
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By: ancientsong
14/06/2009
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Hi Belantos,
the 1st graph you posted, debt and house prices go hand in hand,
that's what I've been trying to say on here many times, that debts increasing not wealth, I just never had a graph to show it visually,
good post mate ;)
btw, whats with the surge of these "christian" hecklers..
this finance forum is becoming more messed up than our world economy...lol
good post |
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By: kingat33
14/06/2009
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| haha good one belantos, but I'm afraid that alot of people are still living in denial and would perceive that living a life of debts is the way to go. They are either motivated by greeds and thinking that property price only goes up all the time. Even mirvac is worried in saturday sydney morning hearald that once the grant expire, so will the price. |
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By: belantos
14/06/2009
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Do you think a bit of cheer can stop the collapse? Can a good season undo the financial sins of a whole generation?
We have been living on the wing of DEBT, well beyond out means. Taking on more debt now will solve the problem of debt, it only makes things worse and delays the day of reckoning. The generation that lives beyond its means steals the future of the next generation, that will suffer because of the indulgence of their parents.
You built wealth on borrowed money, but you only built perceived wealth. Speculation in housing created nothing new, but pushed prices beyond the reach of young families. Why didn't you invest in creative activity? For example, manufacturing or research, that create something new, and REAL wealth? No, you wanted brick and mortar investment and suck renters dry for your own good. Now the time has come and there will be a lot of red ink flowing...
Australia has the biggest housing bubble in the Western World, but also the biggest in the history. Here are a couple of charts:
http://i144.photobucket.com/albums/r165/hiredgoona dl/handinhand.gif
The full thesis of Nigel Stapledon of UNSW:
http://unsworks.unsw.edu.au/vital/access/services/ Download/unsworks:1435/SOURCE02?view=true
This one compares the US and the Australian real home prices:
http://www.whocrashedtheeconomy.com/ausrealhomepri ces.gif
In times of credit booms real estate prices shoot up. The end of it is an enormous bubble. Do you suppose bubbles never burst? Especially when the world economy is collapsing? No amount of borrowing can keep a bubble inflated once it bursts and pumping more money into it is like flushing it down the toilet. Use the money for research and to create tangible goods, not for speculation.
Who is troubled by falling house prices? The Banks and investors that are guilty of creating the bubble. Nobody shall cry for them. And retired people who borrowed against their equity in the home. They have been deceived. |
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By: dr.xingli
14/06/2009
7:31 am |
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By: wealthforlife@rocketmail.com
4/06/2009
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Thursday June 4, 2009
Australia dodges recession Q1 growth of 0.4% lessens need for rate cuts
SYDNEY: Australias economy expanded last quarter as the best trade performance in 48 years helped offset a slump in business and housing investment, putting it among the very few developed nations to have avoided a recession.
The Australian dollar hit eight-month highs as the economys resilience was seen lessening the need for further easing from the Reserve Bank of Australia (RBA).
'Weve dodged the recession bullet for the time being,' said Michael Blythe, chief economist at Commonwealth Bank. 'Its stronger than the RBA was expecting, and it reinforces the 'onhold for the time being' message.'
Wednesdays report showed GDP, the value of all goods and services, rose 0.4% in the three months to March, from the previous quarter when it fell a revised 0.6%. Recession is typically defined as two consecutive quarters of contraction.
Any growth at all was a rare performance among rich nations. The US economy contracted by around 1.6% in the first quarter, Canada by 1.4%, Germany 3.8%.
'The Australian economy has outperformed every other advanced economy in the March quarter, recording positive growth in the face of a savage global recession,'
Australian Treasurer Wayne Swan said in a statement.
Australias outperformance owes much to aggressive policy action from the central bank, which cut its key cash rate by 425 basis points in just seven months, taking it to a record low of 3.0%. The Labour government also weighed in with over A$52bil in fiscal stimulus.
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By: mikeh_505
4/06/2009
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| Dec 08 qtr negative 0.6, Mar 09 qtr positive 0.4 ...., average negative 0.1! Sounds like two consecutive quarters of negative growth to me! |
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By: wealthforlife@rocketmail.com
4/06/2009
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I like annoying negative posters with positive info re the current economy,eg
3rd Jun 2009
The Australian economy expanded by 0.4 per cent in the March quarter, meaning we are not in a recession! Technically a recession is two consecutive quarters of economic contraction, so these latest figures prove that our country was never actually in the recession that all the doom and gloom 'experts' said we were.
The Australian economy was certainly affected by the global financial crisis but it is clear that it has avoided the sort of downturn experienced by other major developed economies. Much of the credit for Australia,s resilience must be given to the swift actions of the Reserve Bank and the Government in stimulating our economy.
Some words of wisdom from the experts at CommSec who have consistently been a source of positive opinion -
Gloom and doom reports in the media almost caused Australians to talk themselves into recession. The important thing now is that commentary and analysis of our economic situation becomes more balanced. While the tough times abroad must be acknowledged, the strong position of our economy must be similarly recognised.
One thing is clear , Australia went close to talking itself into recession. Our economic conditions were nowhere near as bad as other parts of the globe, but somehow we all thought they were as bad. If Australians focus on the opportunities that lie ahead then the rebound could be much quicker and stronger than envisaged only a month ago.
CommSec expects the Australian economy to rebound far quicker than Federal Treasury. In 2008/09 the economy will probably grow by only 0.6 per cent, but 2.1 per cent growth is tipped for 2009/10 and 4.1 per cent growth is expected in 2010/11.
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By: wealthforlife@rocketmail.com
3/06/2009
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DONT WORRY STEVE,THIS SHOULD CHEER YOU UP!
OR ANNOY THE CR P OUT OF YOU!
Govt: Positive growth for the Australian economy
3rd Jun 2009
Today's National Accounts show the Australian economy has outperformed every other advanced economy in the March quarter, recording positive growth in the face of a savage global recession.
GDP rose by 0.4 per cent in the March quarter to be 0.4 per cent higher through the year, boosted by early and substantial policy actions by the Rudd Government and the Reserve Bank.
This positive outcome is a testament to Australia's resilience amid the global recession, and compares starkly with nearly all other advanced economies.
Of the other 22 OECD economies that have reported March quarter outcomes, 20 have contracted. G7 economies contracted by an average of 2.2 per cent in the March quarter.
Despite broader weakness in the economy, household consumption spending rose 0.6 per cent in the quarter, contributing 0.3 percentage points to quarterly GDP growth.
Crucially, without the Government's stimulus payments, Treasury estimates the Australian economy would have contracted in the March quarter by around 0.2 per cent.
Household consumption has now grown by 0.8 per cent through the past year. By comparison, private consumption in the G7 area (excluding Italy, due to lack of equivalent data) has contracted by 1.4 per cent over the same period.
As planned, the Government's economic stimulus payments are helping to support demand and employment until direct public investments come fully on stream. Public investment recorded a small negative contribution to growth in the quarter, but should pick up in coming quarters as the next phase of the Government's stimulus plans take effect.
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By: steveb_wilson
3/06/2009
6:48 pm |
Message deleted. Reason: Breach of terms of service |
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By: wealthforlife@rocketmail.com
3/06/2009
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Good news bulletin - Australia is not in recession!
The Australian economy expanded by 0.4 per cent in the March quarter, meaning we are not in a recession! Technically a recession is two consecutive quarters of economic contraction, so these latest figures prove that our country was never actually in the recession that all the doom and gloom 'experts' said we were.
The Australian economy was certainly affected by the global financial crisis but it is clear that it has avoided the sort of downturn experienced by other major developed economies. Much of the credit for Australia� s resilience must be given to the swift actions of the Reserve Bank and the Government in stimulating our economy.
Some words of wisdom from the experts at CommSec who have consistently been a source of positive opinion -
Gloom and doom reports in the media almost caused Australians to talk themselves into recession. The important thing now is that commentary and analysis of our economic situation becomes more balanced. While the tough times abroad must be acknowledged, the strong position of our economy must be similarly recognised.
One thing is clear � Australia went close to talking itself into recession. Our economic conditions were nowhere near as bad as other parts of the globe, but somehow we all thought they were as bad. If Australians focus on the opportunities that lie ahead then the rebound could be much quicker and stronger than envisaged only a month ago.
CommSec expects the Australian economy to rebound far quicker than Federal Treasury. In 2008/09 the economy will probably grow by only 0.6 per cent, but 2.1 per cent growth is tipped for 2009/10 and 4.1 per cent growth is expected in 2010/11.
Head to www.goodonyaaustralia.com .au for more positive news stories.
Thanks for your continued support of our initiative.
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By: mentawaisurf
3/06/2009
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| straightarrow, it may surprise you to know that i was selectively long during this rally over the last few months. And as i mentioned previously on another thread; my short positions on Australian diversified financials already stopped out last Friday (with a limited profit due to the markets short squeeze). Once this corrective rally exhausts the bear market will resume then hedge funds et al will short the weakened players - until regulators ban it again. But by then it will be the invested who lose faith and clamber to sell their shares that will drive markets lower. Importantly, this is a traders market still - not an investors market. |
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By: straightarrow34
2/06/2009
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| Mentawaisurf, have you had a chance to short MQG and NAB yet? Monday last week you told us you wanted to short them but your broker disallowed it on the day (for some reason). Surely you've been able to short the financial since then. How'd you go? Make any money? |
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By: mentawaisurf
2/06/2009
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| My sentiments exactly Al. |
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By: almurrie1@y7mail.com
2/06/2009
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Just yanking the chain Menta, I know the figures are poor and by no means shine a rosy light. Nice that we haven't gone into more debt on the balance of trade, it is way too much and needs to be corrected. Buy Australian, yay.
I predicticted the market would hit 4000, and it is close but I am wavering, and I think I will get out tomorrow. It possibly has a bit more, but not much, before "profit taking" sets in, and every one takes a loss.. What a euphemism, a bit like "negative gains" and "military intelligence"!
Al |
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By: mentawaisurf
2/06/2009
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| Al, at first glance the trade figures released today appear positive. However, on closer look you'll notice that the trade figures only appear strong because imports plummeted. This is a clear indication that Australia is entering a domestic consumer driven recession. The last time this occurred was in 1991 only this recession will be more severe and protracted. |
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By: almurrie1@y7mail.com
2/06/2009
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Looks like we were in recession last year, but didn't know about it until now, and now due to a big drop in imports and a lesser drop in exports, we are tecchnically NOT in recession. Menta will go mental.
Al |
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By: wealthforlife@rocketmail.com
2/06/2009
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ON TO SOME GOOD NEWS;
Australia 'doing best' in recession
26th May 2009
AUSTRALIA is an island of calm amid the global economic storm despite pessimistic government and media responses, an international global business confidence survey shows.
One in five international businesspeople cited Australia as the country best surviving the recession in a survey of 7,500 people in more than 24 nations.
Australia placed first in the survey, ahead of China, with India and Singapore in equal third place. New Zealand also fared well, ranked ninth.
The survey conducted in April was aimed at gauging business sentiment and what impact the economic downturn has had on businesses globally.
Australian businesspeople appeared relatively unaffected, according to the poll conducted for Servcorp, a provider of virtual and serviced offices that operates in 61 nations.
"In my experience working with international businesses around the world, especially during the last six months, I've noticed how relatively unaffected (are) Australian businesses and... business persons' attitude by the economic downturn," Servcorp executive director Taine Moufarrige said.
"Over 71 per cent of Australian businesspeople believe we are the lucky country, and it's interesting to see that the rest of the world agrees."
Pessimistic media reports were the number one concern among Australian businesses, the survey found.
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By: wealthforlife@rocketmail.com
2/06/2009
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ON TO SOME GOOD NEWS;
Australia 'doing best' in recession
26th May 2009
AUSTRALIA is an island of calm amid the global economic storm despite pessimistic government and media responses, an international global business confidence survey shows.
One in five international businesspeople cited Australia as the country best surviving the recession in a survey of 7,500 people in more than 24 nations.
Australia placed first in the survey, ahead of China, with India and Singapore in equal third place. New Zealand also fared well, ranked ninth.
The survey conducted in April was aimed at gauging business sentiment and what impact the economic downturn has had on businesses globally.
Australian businesspeople appeared relatively unaffected, according to the poll conducted for Servcorp, a provider of virtual and serviced offices that operates in 61 nations.
"In my experience working with international businesses around the world, especially during the last six months, I've noticed how relatively unaffected (are) Australian businesses and... business persons' attitude by the economic downturn," Servcorp executive director Taine Moufarrige said.
"Over 71 per cent of Australian businesspeople believe we are the lucky country, and it's interesting to see that the rest of the world agrees."
Pessimistic media reports were the number one concern among Australian businesses, the survey found.
> |
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By: wealthforlife@rocketmail.com
1/06/2009
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| Thanks Lasty |
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By: wealthforlife@rocketmail.com
1/06/2009
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| Thanks Lasty |
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By: ancientsong
1/06/2009
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| not true lasty49, I'm a housing bear but a gold and silver bull, the precious metals have and will continue to rise due to all the goverments around the world borrowing and printing money, this will cause high inflation, so I would say get ya money out of cash and in to gold/silver or proprety IF you can afford it,my view on property is that of a "gloomer" but it is a finite resource which has intrinsic value at the end of the day but so does gold and silver ;-) |
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By: lasty49
1/06/2009
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Ask a gloomer the time and they will say "not the time to buy anything".
Rather than feeling sorry for them, some clever geek has come up with a site that would make any "Emo" put on a smile.
Enjoy gloomers !
http://www.usdebtc lock.org/
Please note there is a gap between the c and l because of censorship.
ou will need to close the gap to get to the site. |
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