GDP shrinks 0.5pc in September quarter

Yes, with manufacturing down the sewer, flat wage growth, medium to long term inevitably of increased automation reducing overall employment prospects, increased workforce casualisation increased off shoring in white collar jobs (some people made redundant at my current employer, heard on grapevine that off shoring is happening at my previous job,) no grand plans on what new industries/technologies we are developing to take up the slack ....

To me it's just a cynical government increasing heads to get more tax revenue in, and help their big business mates out some more.

 

This would be a good strategy - if all the immigrants coming in were in fact getting jobs...this is not happening....the welfare dependency among immigrants is increasing, unfortunately.

 

lol i remember quoting how commodities and mining would have a big impact on the economy some time back and the counter argument was that services/tourism/etc. make up more of the economy and would help it hold up. Now people are saying mining will rescue us lol.. The big ass budget blackhole/deficit and ballooning debt doesn't seem to matter.

Whilst China is doing okish this year, its sort of treading water and propped up by the infrastructure stimulus inject in 1H of the year.

Base commodities seem to be rocketing up in prices, but a lot of that is speculative in nature, rather than real demand

Looking at Baltic dry index, its up, but thats really from major bankruptcy in the shipping sector hitting supply.
Oil up -> on OPEC and Non-opec cut speculation. once again artificial depression of supply.
Iron ore/coal -> yup CHina has another boom this year after their stimulus. For coal main driving factor was closure and decrease in workdays for CHina mines + chinese speculators. Policy changes in China can happen very quickly and prices could plummet back again very very quickly.

My other indicators still showing poor global economy.:
Caterpillar : heavy industries / mining investment, still continues revenue downtrend over a year now.
Swiss watch exports : Luxury market, So far only exports to China and UK show some growth. All other markets are slumping pretty badly from last year. exports to Aus are also down for the Year and month of october.

 

Its probably fair to see @Kangabanga that in terms of global economics you are a pessimist and I am an optimist and the truth may lie somewhere in between.

I still see a couple billion asians continuing to reach the middle class and beyond growing 5% + a year demanding goods and services.

 

Hey Radson, unfortunately I agree a lot with Kangabanga here.

I agree that a lot of asians/africans ect are reaching middle class, but what they want mostly aren't what we produce. They want cars, phones, tvs, clotheses ect none that we export. China has already built tonnes and tonnes of dwelling (eg all the ghost cities). Further there is over supply on the goods we export whether it be oil, gas, coal or iron ore. Unlike america who diversified into other areas such as internet startups, renewable energies even cannabis, we've done nothing in the last few yrs.

 

... and this is what impacts on property market sentiment.
When we get good news everyone is bullish, the opposite happens when we start to get negative reports in the media. This is exactly what is happening, its early days but no one should ignore the signs.

 

@hpresident, what do you think cars, phones and tvs are made of?

and nothing except tourism, education, agriculture, processed food, wines, meat, wool, financial services, insurance, media and advertising.

Where do you get oversupply from..do you think we are exporting a billion tonnes of iron ore a year because there is no demand? As said before iron ore is up 88% this yearr and some types of coal 200%

One of our LNG tankers supplies japan for 9 hours let alone what is required for the rest of the world.

 

Bring on the recession!.....hopefully it will wake some people up to how far beyond their own means they're really living.

Yes a recession hits us all financially in some way but it also provides a catalyst for government to make meaningful economic decisions rather than bickering about petty crap in parliament like a bunch of immature children....

 

Yep; the better part of a sitting week of Parliament squabbling over a backpacker tax adjustment.

It won't even touch the sides of the tax revenue issue.

And they wonder why people are leaving the two main Parties in droves, and heading across to One Nation?

 

I agree there are those sorely in need of a reality check , but have been through one recession and wouldn't wish another one on anybody.

We have done worse than nothing, The Abbott/Turnbull gov have actively continued to shrink diversity in the economy. My personal belief is this has been driven purely on ideology and not on economics.

Radson i share your optimism in the opportunities in global demand from middle class growth, and put my money where my mouth is by investing in equities heavily skewed on this theme.

Having said that i draw the line and am short on Mining. While mining is an essential primary industry, as an investment its a mugs game. There are to many uncontrolled variables, primarily currency/price fluctuation, geopolitical variables, huge internal operational inefficiencies, risk factors of natural/unnatural disasters and unfortunately a lot of cowboys sitting on the boards of these companies.

These factors and the way the last mining boom played out have diminished my view on the economic benefit of the industry. Former governments state/federal were very supportive of the industry and backed it in the way of subsidy. The industry grew rapidly and to use a vague term "boomed". The flow on effect was huge and the general economy benefited enormously. At this point i was in awe and excited by the boom in the industry.

Where it went sour for me was the unintended consequences that followed. When it become overheated Rudd saw the negative effect this was having on other parts of our economy, the term "Two speed" economy was coined. My belief is this was a nice way of saying our economy was infected with "Dutch disease". (for those unfamiliar with the concept of Dutch disease i highly recommend giving it a google). Rudd then proposed the mining tax, this was a tax that was structured not to take lucrative profit from the industry but place a ceiling on the industry and a safety net under the general economy. What followed was condemnation from from the gov opposition, the industry (cue mining magnate crying poverty from already paying too much tax, i am just an Aussie battler, etc) and an onslaught from the general media.

Now the dust has settled on the the boom i think there are a lot of lessons to be learnt but which will inevitably be ignored. Such as it has now come to light some of those same companies crying foul of the mining tax were actively involved in BEPS (base erosion profit shifting). I for one dont like seeing the tax from money earned digging up Australian resources paid to other countries.

I am all for a prosperous sustainable mining industry but another boom like the last, no thanks.

 

I am in the resource industry and thought the mining tax in principle was a great idea. I was naive to how effective the mining council and 'billionaires' were in lobbying about this issue to the detriment of the general Australian population.