27 years of growth - hanging out for a good recession?

Discussion in 'Investor Psychology & Mindset' started by Scott No Mates, 28th Nov, 2018.

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  1. Scott No Mates

    Scott No Mates Well-Known Member

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    It's all doom and gloom out there if you listen to the headlines - property is dropping quicker than the Dow during the GFC, Interest rates are about to rocket, spiralling debt, job insecurity etc - yet things have never looked better.

    Who can recall the last recession? Yes, it has been 27 years since we were in the doldrums (much of my working life). Are we any better off for not having had a recession? When will we face another one?

    Linky (from SMH - Ross Gittins)

    Should we be hankering for another recession having seen the effects on the US, Europe, Japan etc? Have the structural reforms in our economy worn out their welcome/passed their use by date amd are no longer relevant to the current day economic climate?
     
    Perthguy likes this.
  2. scienceman

    scienceman Well-Known Member

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    Why would you rate lived experience (ie your first sentence) over a rather misleading statistic ie no recession or GDP growth? You mention Japan but things are quite good on the ground with low unemployment, respectable per capita GDP growth, excellent infrastructure. Growth only looks weak because their population is declining. Unlike here where over half our GDP growth is just the result of dumb population growth. Terry McCrann explained it well:

    "Double the population and, yes, you might double the economy — or even do better than that in macro economic terms; but once the — on balance, negative — tangible and intangible micro factors are included, it is arguably an overall negative…

    Sacrificing some excess growth for livability seems a worthwhile trade. Sacrificing livability for a bigger economy statistic does not. But in any event the greater part of Australia’s strong (per capita) growth was actually last century. Over the past 10 years — which included the peak and re-peak of the mining boom — Australia’s per capita growth rate was just 1.2 per cent a year.

    I note this period also includes the peak of negative livability. Further, that’s only going to worsen, especially in Melbourne and Sydney. We face the prospect of not even having the ‘‘high growth’’ partial offset.

    …over the last five years, Japan’s per capita growth rate has been higher than Australia’s — running at 1.35 per cent a year as against our 1.25 per cent. That’s to say, Japan’s been getting to have its zero population growth livability and getting to eat its bigger economic cake as well.

    We haven’t been getting much of the cake and a heap of negative livability…

    Look across the infrastructure board and across the nation: is there anywhere where the infrastructure has led?…

    That hopelessness actually lies at the core of the immigration stupidity.

    It means first, giving away our existing infrastructure free. It then requires the previously resident population to pay for most of the new infrastructure, even on the dubious assumption" that newcomers all get jobs and pay taxation relatively pro-rata to the previous population
     
  3. Perthguy

    Perthguy Well-Known Member

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    When things are too easy people become lazy. They start fussing about stupid things. When a recession bites they have to struggle. People are better for it. I remember before the last recession, people were complacent. After the recession they seemed more aware.
     
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  4. NHG

    NHG Well-Known Member

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    Words of the wisdomous.

    These times are when we prune the roses, and show our true selves.

    Shed that excess fat and become lean mean fighting machines.

    The bushfire the clears the way for the saplings.

    Can't think of more cliches.

    I think it's a good thing. Clearly, there will be many left unprepared. There always are. For the rest, new opportinities.
     
    kierank likes this.
  5. willair

    willair Well-Known Member Premium Member

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    Yes I can as it only seems like yesterday as all boom's go down the same road around the economic clock with sober homebrew drinkers regularity ..And after having a listen to all the speakers at BOQ AGM this morning and having a talk to one person on the risk management team that always has a smile as they work the crowd like normal looking for opinions till they see me and my old mate of 21 years pass-out bill who has over 112 different investments worldwide --something that person said sort of made me drop the corn beef sandwich and the glass of Brisbane tap water and it goes like this --every market exits around a vacuum as they stand in line and competes with every other forms of raw investments for the supply of funds ---and they think that maybe some think we have gone passed the point where rises are no longer sustainable and the correction is likely to be fairly dramatic ..All Pass--Out --Bill said the Irish Club is open 50 mts away and it's my shout..

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