COVID-19 impacts on the Australian economy & housing market

I suspect allied health and dental care will see some pain as well.

 

It was only about 12 years ago when we thought we were about to have another massive recession.
I remember seeing a big front page notice in one of the Aussie daily newspapers stating that "We had just taken on to much debt and never again ,Australia had learnt its lesson"
unfortunately how wrong they were, sadly helped along by successive governments unwilling to make the really hard decisions.
And about to stare into the abyss of another liquidity crisis.

 

It seems not.. in fact the rest of the world is taking on a lot more than us right now. Australia was still very lowly indebted at the Government level compared to most countries, but those days are now done.

RBA about to embark on QE(1), never before seen in Australia... US is about to embark on QE5. Buying government bonds, and poor RMBS (the **** loans) from banks. That allows our banks to then borrow more.

 

Problem is no one will buy your bonds if you have a bad economy.

 

The RBA buys the bonds... they no care for quality. It takes it off their sheets, to fill it with the next rubbish they want to load up on

 

quick edit on my above post, my mistake.. US about to embark on QE5, not 4..

 

Our households are one of the most indebted in the world , hows that going to work if we see unemployment shoot up to levels not seen since the late 80s.
The GFC happened well over 10 years ago , and were still dealing with the same **** , simply to much debt.
Just to make the problem even worse than the GFC we have interest rates at almost zero , compared to 6-7% just prior to the GFC and then watched rates drop by about 400 pts with massive stimulus from the government.
Were now trying to do from about 0.75%, and any high school dropout could tell you that we are going to have a problem.

 

How does this work, I didn't think that the law allowed an employer to force a permanent employee to take unpaid leave? Is it being done by 'agreement' with the tacit threat that redundancy is the alternative?

 

Redundancy has not even been offered for many, so go figure.

 

This is likely emergency stand down provision. It’s not leave without pay, but the effect is the same. Sit at home with no pay and dont call us, we’ll call you ! And fair enough too, the company cannot just create money out of thin air if there is no business. Look to Govt for safety net here.

 

And the issue they are having is no cash flow but still employed. So no doll unless they quit?

 

Pandemics, panics and property markets

Has anyone got any other data? Comparing the economy against 100 years ago is a bit of a stretch...

He's got obvious reasons to keep people interested in property.

 

Most of the debt are in real estate so when the crunch time comes the over leverage will get wiped out
the whole market will get a hit, it reset to a low and works it way back up.

Those that don't have debt will get richer and those that are over leverage will get force to sell at the bottom.

Those that takes on excessive risk will learned a lesson that they will never forget and be more conservative until the new generation turn up that have not experience of such a down turn, they in turn take on excessive risk and the cycle continue.

Market cycle, nothing new you can either learn

1. from other people mistakes
2. from your own mistakes

I rather do #1

 

Yes, thats the choice.

 

Australia sailed through the GFC relatively unscathed. The RBA and the federal government will throw the kitchen sink at sustaining property prices in Australia.

Federal Treasurer Josh Frydenberg spoke in relation to banks this morning:

"They're going to announce a very significant package of measures which are designed to support the Australian economy at this difficult time.

"The banks have an alignment of interests with their customers. They want their businesses that they lend money to, they want them to survive."

 

That means that whoever quits does not get any redundancy pay too I gather?

 

You can’t resign AND get redundancy.

 

Universal Wage System!.. this has to be a reality moving forward. I believe that as a result of this pandemic/economic downturn, we will have more flexible work from home option which will help to de-clog cities. Further we will have to have a universal wage system if the economy get really badly hit.

 

No one is losing job, Union asking for a pay rise

Unions call for 4pc increase to minimum wage

Unions have asked for a 4 per cent increase in the minimum wage this year, or almost $30 a week extra, despite the potential for a recession from the coronavirus.

The increase would lift the minimum weekly wage from $740.80 to $770.43 and the hourly rate from $19.49 to $20.27.

The ACTU described its claim on Friday as “modest, sensible and firmly supported by the international evidence”.

 

Average joe in the streets is not listening to the measures all around you every day , it’s like no one cares

I’m also hearing from everyone how we didn’t have an impact in the gfc, even a y2k bug comment

this is not going to end well, unless attitude change and quickly and acceptance of the financial realities

3 articles today about panic buying property
Westpac saying 7% unemployment

disgusting and disgraceful