Positive thinking is good.

But don't be surprised if it turns sour pretty quick.

Working in the construction industry now and coming from the real estate industry.. things arnt looking good...

New homes had a boost in december, which is showing a little bit of a rise now as the plans make it through council and get to building stage...

Real estate wise in perth.. The standard market level, is usually met when theres about 8-10,000 homes on the market in perth.. during the boom there was like 4000. Before the crash hit, the market was sitting with 20,000 plus homes.. so I can imagine its still around there, if not more... So the prices you see are still over inflated based on what people are prepared to pay. Problem is, people are still in debt up to the eyeballs because of the excessive spending when the boom was on and now the assets arnt worth that much so its a loss...

And the one thing you didnt consider yet is there is a second recession wave meant to hit later on this year.. it hasnt even affected us yet.

I believe the reason why the australian dollar dropped even though our economy was ok at the time, was because of the balance sheets of australia as a country.. we have exports to sell and the buyers are all in recession, thus our dollar dropped due to australia not being able to trade efficiently with its counterparts.. especially in the commercial sector.. so even though WE may be travelling good, unless the world recovers, we're still headed that way.

So i try not to think about it too much, cause honestly, it can go either way right now and chances are, its out of australia's hands. It depends on the rest of the world which is a dubious thought to consider.

ps. 72 cents in a peak is not very crash hot.

We are not in a 'peak at the moment

For the past 4 months the AU dollar has been between 60-68cents.

I also work int he construction industry (IT Manager) and i get a good look at what major projects are coming up across the Australian region.

There are quite a few back on the cards, and now as you can see in the news, some Chinese companies are investing in the Australian Mining companies.

Im not sure it could have dropped any lower than what it did, (AU dollar).
We are still lucky enough to have major trade agreements in place with asian countrys which keeps our main source of revenue (Resources) continuing along.

Its been great for the past 5-10 years, It cant stay that way forever, otherwise wed end up with half the country millionares, the other half broke and homeless living on the streets eating out of garbage bins. 

Noticed some bargains though if your in the market for a boat lately, If youve got some spare cash laying around you can really get a good deal right now. Guess its the same for cars, houses anything luxury item really.

Goooooone Fishin!

Yes bodie, but what im saying is, its easy to think positive and just pick out all the positive "signs" but you need to look at everything holistically...

It is a peak, because it hit 72 cents and 74 cents a few times over the past couple of months and then dropped back to 64-68 cents.

As I said, I dont have an opinion, nobody can forecast whats going to happen, they can only look at the outlook and to hold an opinion that is positive to the point of thinking that we may be on a recovery, when there is clearly much more to consider than just the local economy and a few projects here and there - even this early..., without considering everything else.. is not entirely accurate enough for me or for a lot of people to think otherwise.

Keep an open opinion or dont keep one at all.. because realistically, thinking recovery is wishful and too early to tell yet.

I think we still have more hardship to come,  That being said I think Australia is is the best position to ride it out better than other countries.

The Chinese are investing in our mining companies partly because it is a good time to do so due to the downturn and they know it's onl;y a matter of time until things pick up again.  The problem with the mining sector at the moment is only finding someone to buy what we mine which will slow things down further - again only a matter of time until this picks up again.

Housing has had a bit of a boost as alot of people are entering the market before the first home owners grant is possibly ceased.  If the goverment stops this the housing market may suffer a bit of a dive due to lack of demand for a period.  (which is why I think they may extend it) Remember this recession (globaly) only started recently (in relative terms) and the building sector is still building things which were planned before the downturn started or before it started to affect Australia.  Again whilst housing may slow here further it will be nothing as has happened overseas (particularly the USA).

Our only real problem is the extent of personal credit. 

Again I think things will get slightly worse before it gets better (particularly unemployment) however the overall effect on Australia will be much less than other countries.  We will get through it thats a given. the time frame is the only thing we don't know.  My thoughts are mid 2010 things will start to pick up.

Good to see they (GE8 summit)  have just brought in new laws relating to limiting executive salries etc - about time.

Cheers

I agree, need to keep an open mind aboutt he whole thing.

Everyone who has a mortgage is in a position i believe to keep a close eye on what is happening.
Big key factor is when do you fix your interest rates on your home loan/s?

When the economy starts to recover, we will see interest rates start to change again. Now this may be a little while off (My partner works for ING and is involved in the ING and ANZ market analisis) and the talk is this year should be relitivaly quiet in terms of interest rates, BUT when the change comes it will come quickly, and the banks will tighten up and remove most of the good offers available for long term fixed rates.

Remembering a stronger dollar does help with our Export values :)

projects under construction or about to go into construction, with other to be approved for development over the next few years.
If you or your company target the right markets you may be about to head into the biggest Australian boom ever.

A tip - If you have some spare cash, have a look at investing in Onslow, Gladstone or Darwin.

Colin Hay
managing editor
Oil & Gas Australia

Colin

Do you mean Gorgen, Impex, and camalco :)

Think impex is the name for the Darwin LNG plant

Not sure what regulations they are bringing in re exec salaries.

I think they definately need to cut them when the company is in trouble and definately when the company is receiving gov bailouts for obvious reasons. 

If the company is going well and not cutting staff I see no real problem particularly if the general staff are also looked after as well.

Would be nice to see a company that when things are well shares the extras between normal staff as well as giving the execs a raise -even if it is a temp raise/bouns in case a down turn is experienced (now back to the real world).

Fortunately I work for my brother in law and he does look after the workers as much as possible (small business though rather than a large corp).

Re fixing interest rates if you fixed them now I don't think you can really go wrong as they are low in relative terms and can't really go much lower (reklatively speaking).  The main problem is the people who fixed them before the drop and are still paying high fixed rates.  If borrowing now you need to keep in mind the rates will go up and the fixed period will only last so long so be prepared to pay a higher rate eventually (if possible pay as much off now so when they go up or the fixed period ends  and it jumps suddenly to a higher rate you have a buffer.

 Cheers

Cheers

Its good to be confident but one thing everyone is forgettin is that the recession is governed by consumer and lender confidence. and unfortunately the majority of it isnt ours to start with. with such a big international influence in australia it is very hard to accurately predict what is going to happen as we suffer from what is known in the stock market as a catipiller effect. america has been suffering in hard times for 2-3 years whilst we have been for only 1 year, china is the same as america and unfortunately we are the wagging end of the catipillar, and they are the head. the stock market is generally a very good indicator as to how the economy is running and for around 1-2 months it has held at around 3500. america is also startin to steady its decline but we are fortunate enough to have enough independant strength within the country to see it through. although thats easy for the people that still have jobs to say. if RBA are still considering a rate cut next week then the financial sector is weaker than a lot of us believe and therefor it indicates we arent at the end of the recession yet. the lucky thing about people with jobs is unless they lose it their lives are only benefitting from lower mortgage repayments, but we must take a moment to think about the people who lost their jobs as its only gettin harder to find more work.

I work in iron ore exports

things seem to be going pretty well for us, but that is from a tonns out perspective, the price for comodoties is much lower than in the past so i guess we are still on the back foot some what

http://fishwrecked-reeltime.com/

Hate to be a pessimist but the economy is in much worse and I seriously doubt any meaningful recovery in the next 4 - 5 years.

The key to any recovery is the availability of finance and, bluntly, it has dried up - we in Australia are far better off than virtually every other country where finance remains unavailable, inventories of new vehicles are at a historic high (read total glut) and even if you want one you can't get finance.   

We are an island but not an island immune to the financial impacts consuming the rest of the world.  I fully expect iron ore prices to reduce by at least 30% with the only upside being that, in A$ given the fall in the value of our dollar the nett return will be the same.

Shipments will reduce markedly however - just look out to sea around ANY of our ports and you will see numerous vessels simply anchored up, none have cargo to load and it is cheaper to leave them where they are than use the fuel to go somewhere where there isn't a cargo anyway. 

I plan on retirement and that has now stretched another three years at least !

governments don't spend "their" money....

the money is the ordinary australians and their children's children

it is us who inherit the debt; not the politians making the decisions....

ever the pessimist; but good to see the G20 baling out the "people" again....

why reward compaines that can't manage themselves?

just recieved this email...pointed timing!

RECFISHWEST Member

I agree Damo, but how could the government swaller allowing a company to go bankrupt that employeos 10,000+ people?

They cant, all it would do is add to the unemployment rate.

Umemployment = less money spent by the consumer.

The governments should keep pumping money into the financial systems, with the slight except to Australia, as we are somewhat self sufficient at the moment.

Ash i think people with jobs still do think about people without, but i like to think i have worked hard to get where i am, and think that me being able to keep my job in such a harsh economic environment is some small part of appreciation.

I would think others are in the same boat.

I see your point and agree Damo but its a bit of a catch 22.

Bad management or not if the Goverments involved just sit back and let the companies collapse the workers employed by them no longer have jobs.  No jobs = less tax being paid to the goverment and more being paid out to support the unemployed, in effect the bailouts are more to keep people employed and the economy running rather than just solely supporting the company itself.

Looks like the sperm and blood banks collapsed a long time ago and they all got jobs in politics!!

bodie

sorry if i implied that the people with jobs are ungreatful, and i agree with you 100% as i studied for my degree and have now built a career from it, i was more leaning towards the people who have lost their jobs to be struggling in comparison to the ones who keep their jobs.

damo i think your right with the government spending. my personal opinion (which may or may not be correct) is that we will pay for it down the line when we get to the end of the downturn/recession. but at the same time it has to be done because if australia collapsed as much as say america and the government had enough tax money in the bank to prevent it, it would be almost criminal. so as paul says it is a catch 22 because we need to spend to lift confidence in the lenders which will lift confidence for spenders and have an upward compounding effect.

spot on ash..

The is no rigth or wrong answer with the government spending, as long as its not ending up in corporate expenses then it can only be helpful.

If we pay for it later, so be it, at this time something needs to be done. Its very easy to critisze the government on what they are spending it on, but hard to say 'good job done the right thing'

but I think we should be looking at "propping" companies that make money as opposed to companies that have lost everything only for the governent to give them more money to make yet more"poor" decisions.

because at the end of the day a "more secure" company offers greater employment potential and thus stasis is the economic climate..

yes I feel for the growing unemployed as the $$ seems to be more important than the very backbone of the economy (the people). many friends are in difficult situations.

 very frustrating....

I was always bought up on the philosopy of the "way of the warrior".

He who makes the decision is soley responsible for the decision (no one else).

To many scapegoats and not enough individuals accepting "their" responsibility.

I just hope our bean counters (and coffers) are prescient in their welfare economic projections for the coming years.....

RECFISHWEST Member

For some of us who have been around for a while, I say, "All this has happened before, and all this will happen again!"

I have relatives in the banking industry in europe and they say, "We have just gone through some good times, but now we're back to normal times"

Blue Sky! Blue Water! BLUETONIC

We all have to learn to live within our means! Ha Ha! That can be a bit hard with so much good fishing gear around these days!

Blue Sky! Blue Water! BLUETONIC

How many of us has saved money in the last 5 years. I would say only the minority. We borrow heaps because we can. And when we have to pay it back and we have a stuffed ecconomy, how are we going to do that. We are in the sh*t and please stop thinking we are ok because we like the rest of the world are  in deep you know what. best we can do is sell up to the Chinese [ is that all we can do to try and balance the bugget] Yep thats it. First home grant, where did that come from ? And hand outs, Money every where. Borrowed money. Man it is going to hurt when we have to pay it all back $50 billion gone and still looking for more to throw around except no one will lend us any more. this country like the rest of the capitalist world has tuff times ahead. just you watch it all unfold. So lets stop kidding yourselfs.  Watch Fox News and you willl see what is happening in the real world . Our Aussie MPs lick arse to the yanks with the best of them. [ Kev is very good at that, every pissing night on telly he is hard at it ] wont be long and more troops to war.  After kicking the Libs arse for sending them in, watch this poofter do the same. 12% Unemployment in 2010. And after that who knows. The USA and the Brits are churning out money 24 / 7 Trillions of dollars like never seen before in the history of man kind , fresh off the presses how bad is that. Isnt that the way it is in shit countries in the third world. Unfortunatly we in this tiny little economy just might tag along.

There will always be recessions and people have to not live beyond their means,

Life is short so live it fast

Nathan

This is just my opinion based on information I’ve received over the past 6 months;All indicators that I can see show a prolonged recession regardless of what happens at G20.

Most commercial building companies have no new starts and are letting project managers go as existing projects finish – their main problem is finance but here in Perth it’s also related to exorbitant construction costs vs the rest of Australia (Recent stats show apartment costs in Perth are up around $3500 p/sqm compared to under $2000 in the eastern states!) Speak to any recruitment agency and ask them who is on their books – that gives you a good indication as to how bad the problem is at the moment. What people need to realise is that by the time the ‘finance’ issue has been resolved it will still take months (and up to years) to get the wheels turning for the projects to have a positive influence on the economy.

As already discussed personal debt is at an all time high... that coupled with the loss in equity in homes and shares has severely limited peoples capacity to borrow. I’ve seen so many projects cancelled due to the change in borrowing capacity. One builder I know who turn over $30M p/a have just lost over $30M worth of contracts in the past 5 months (that’s massive guys and they’ll be lucky to stay afloat). We’ve lost $2-3M. One major builder in perth are down 65% in contracts since November. I’d estimate that as over $45M worth of contracts. Do you all see where I am going with this? (This effect is being realised immediately through redundancies but the long term effect over the next 12 months is a massive reduction in work for subcontractors and a huge drop in purchasing from suppliers).

After speaking with several suppliers of ‘end product’ for construction (such as ceramic tiles, plumbing fixtures etc...) they have confirmed their ‘new order placement’ has declined in some cases by over 60% primarily affected through commercial construction cooling off. (ETA for this to become relevant in the economy is 9-12 months when those orders would normally be realised)

The governments ‘stimulus’ package and first home buyers & shared equity scheme is lopsided and has some major flaws in its design. They need to assist 4 people to build a $150,000 home to generate the same positive effect on the economy as 1 person building a $600,000 home. Also land parcels on the lower end of the scale are now becoming scarce and because developers stopped developing due to high holding costs with current projects that stalled mid-last year new developments aren’t being brought online. Statistics show we need to be building approx 20,000 new dwellings each year and we’re only building 12,000. What does all the above mean in Perth; another land shortage.... = new price hikes... = unaffordability.... (forecast for this to come into effect is 18 months time but guys, it is coming).

Recession from other regions also takes up to 2 years to impact the Australian economy. We’ve been impacted quicker this time due to the global financial situation however we haven’t really seen the effect of recession in other regions. Last recession in the asia pacific didn’t translate to Australia for 18-24 months. So we’re in this situation for a lot longer to come.

There's a psychological impact that we’re also dealing with which is probably best summed up as consumer confidence. All the negative press, a new generation dealing with their first experience of adversity and word of mouth doom and gloom as more people lose their jobs has meant consumer confidence is at an all time low. That takes a significant time to recover from as people are also generally negative by nature. Hopefully the ignorant will be positively affected sooner with good news from the G20 and whatever eventuates globally there, but the reality of job losses and the recession may prove too influential – we’ll see I guess.

Sorry about writing a mini book on the subject!

fair call snort,

I am from the 'younger generation', only 26. Ive noticed with lot of people i know aorund my age, are handling this 'economic problem' quite well. Many are stayin their jobs, or if they are not, they have their minds more open than the older generation on 'how to' find employment, and are more willing to change.

I think this is the big thing in the future, people need to adopt to change quickly, as industries will come and go quicker than normal, and people will need to find a different or altered line of work.

Agreed we are in a recession (And Rudd and swan saying we were not for months was stupid) but Australia will climb out of it quickly.

as for people living beyound their means, i personally blame the banks partly for this. Most banks loosened their lending criterias which opened the flood gates for people with poor money management abilities and lower incomes to borrow more money.

The Rudd stimulis package, for those who say 'oh we have to pay 50 billion off for the next so many years'..... what do you think they should ahve done??
Do what the US is doing and pump money into different industries so high paying execs can take their big bonuses?

My uncle went out and spent his money he got from the government on a new motobike for his son. Now i first thought... how stupid you should be paying off some debt.... but then again, this is EXACTLY what this stimulus package is designed to do.. for people to buy new toys, or TV's or whatever.

as for people living beyound their means, i personally blame the banks partly for this. Most banks loosened their lending criterias which opened the flood gates for people with poor money management abilities and lower incomes to borrow more money.

I think you highlight whos fault this is in your comment when you say 'people with poor money management abilities'. We shouldn't blame a bank for lending in the same way we should blame a bottle for holding alcohol. At the end of the day i suppose i'm old school as i think people should be accountable for their own actions, instead of pointing the finger at others.

The Rudd stimulis package, for those who say 'oh we have to pay 50 billion off for the next so many years'..... what do you think they should ahve done??

If i put it to you that your taxes are going to pay off our contries debt for the next 10-20 years does it change your train of thought? Because thats the way the government gets its revenue. We're already one of the highest taxed people on this planet. Feel like dipping into your pockets and paying some more? I'd rather take my medicine now, feel a bit of hurt and in 3-4 years be back on the band wagon.

My uncle went out and spent his money he got from the government on a new motobike for his son. Now i first thought... how stupid you should be paying off some debt.... but then again, this is EXACTLY what this stimulus package is designed to do.. for people to buy new toys, or TV's or whatever.

This is what makes this package so interesting. The stimulus package was designed to make people spend, but some people just plain should NOT be spending. Your uncle could be in a great situation where he can afford a new motorbike and so good for him, buy it for his son and have a great time! But for so many others with personal debt racked up, they're better off just relieving their debt and buckling down and paying off as much as they can.

Ive heard that before 'we are one of the highest taxed countries' im not sure how accurate that is. There are alot of european countries up at 50% tax.

We still have a growing population, so over time the number of employed people, and tax paying people grows.

you said your willing to put up with 3-4 years fo hurt, well that might be the case, but what about people losing their jobs, unable to repay their mortgage (not just people who are living beyond their means), and endup selling, or unable to pay their mortgage.

Unfortunately its not just the people who borrow too much money who get caught up in it.

I spose the only concern i have with the stimulus package, was how much of that money goes over seas when its spent on imported products.

From memory wasnt the ideal place to be in terms of borrowed money at 30% of your mmonthly take home pay?? cant remember if this was it or not.

But if it is, how many people are in this bracket? Alot of younger people buying their first home wouldnt be.