Getting that sinking feeling

You really can’t turn your back on this Government and things fall apart. Let me ease my way back into this with a look at the economy. The National Bank Survey is now showing the same as the ACCI Survey of Investor Confidence. Here is ACCI:

The actual indicators for National Economic Conditions and Climate For Investment fell further into contractionary territory over the December quarter. . . . Forward projections for GDP growth and Business Investment remain negative suggesting that businesses are not confident that the Australian economy is in full recovery mode.

“Not confident” is putting it mildly. We’ve never had a serious recovery outside mining and the government has gone out of its way even to kill that off through mining taxes, the carbon tax and the Fair Work Act. There’s more but who can keep up.

With Prime Minister Rosa Luxemburg at the helm, there’s no telling what might happen next.

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51 Responses to Getting that sinking feeling

  1. stackja

    “…there’s no telling what might happen next.” It will get a lot worse.

  2. Gab

    Damn your relentless negativity and talking down the economy, Steve! Swan has told us all that everything is just hunky dory.

  3. H B Bear

    Relentless negatividdy.

    Its time for stock-pickers to back management teams and industries they like because the upswing will come, it’s just a question of when.

    Anyone have a clue when that might be. Windsor, Oakeshott … Bueller?

  4. 2dogs

    Is this coming recession global? How widespread is it?

    India seems relatively unaffected at this stage, as well as the emerging economies in southern Africa.

    My gut feeling at this stage is that it seems more to do with international competitiveness of particular countries than exogenous factors like technological change.

  5. I think the amount of cash floating around in the economy has increased a little as there are some freshly minted notes floating about. This could be just replacing worn out notes but I tend to think not so for retail things should be ok.

  6. I mean until recently uncirculated as they have been printed a while ago.

  7. Carpe Jugulum

    With Prime Minister Rosa Luxemburg Eva Peron at the helm

    Seems familiar with TLS;

    Then there was the Eva Peron Foundation. She had set this up when she had been refused the Presidency of a national establishment charity sponsored by upper class women, shortly after Peron became President. From a show of egotism, the Foundation developed into a kind of welfare state, which built hospitals, schools, orphanages and old peoples’ homes, distributing food, medicine and money. But each act of the Foundation was used as a publicity stunt to show how benevolent Eva Peron was.

    At the same time many gimmicks were used as grist for the publicity mill. Very poor children were housed and fed for a few days and then flung back into poverty, peso notes were flung at random into the crowd. At the same time money was raised by the Foundation by a compulsory levy on union members (three days’ pay) a national lottery and enforced contributions from the industrialists. The Foundation gained publicity for Peronism for its good deeds, it bolstered popular support through its “good deeds” – and Eva was able to divert up to $700 million into overseas accounts!

  8. H B Bear

    ^ Now that’s what I call a slush fund.

  9. Econocrat

    Quick, someone call Canberra and get taxes raised and a few more public servants employeed.

  10. Carpe Jugulum

    Now that’s what I call a slush fund.

    Hell Yes, but i did find some similar behavior patterns with both, except one was reasonably articulate and attractive and the other was a vuvuzela strapped to a mallard.

  11. Gab

    the other was a vuvuzela strapped to a mallard.



  12. Biota

    a vuvuzela strapped to a mallard.

    Thanks for the laugh, what an image!

  13. Pickles

    “The leadership has failed. Even so, the leadership can and must be recreated from the masses and out of the masses. The masses are the decisive element, they are the rock on which the final victory of the revolution will be built. The masses were on the heights; they have developed this ‘defeat’ into one of the historical defeats which are the pride and strength of international socialism. And that is why the future victory will bloom from this ‘defeat’.

  14. Anne

    ….. the other was a vuvuzela strapped to a mallard.

    That’s hilarious! Funniest comment this week! I’ll be casually dropping that line at dinner parties this season.

    Watch the cartoonists steal that one!

  15. Bruce

    Now how can you all blame poor Ms O’Gyny like that? Don’t you know she is welsh?

    welsh /welSH/ (verb): to go back on one’s word: She welshed on her promise to not bring in a carbon tax.

  16. Mundi

    There are some very scary indicators. International incoming advertising spendings has plummeted by 50% nov to nov, which is unprecedented, a lot of big money has suddenly decided Australians won’t have much to spend for much longer.

  17. Carpe Jugulum

    Australians won’t have much to spend for much longer.

    That could account for why some posters here have already moved offshore & why i’m out of here in the new year.

    We’re,(Oz), broke. Feel good bribes to the lazy and feckless & wasteful spending continue, an irresponsible government led by a headless Rhode Island Red with the dumbest treasure in the history of this country as a 2IC & suprised we have any sort of discretionary spending left now.

  18. Samuel J

    Rosa Luxemburg? She might have been a Marxist, but it insults her memory to compare her to Gillard. Luxembug was an intellectual well beyond the reach of Gillard.

  19. Louis Hissink

    Mineral exploration last qtr has dropped by 15.6% in $’s. Last time this level occurred was during the GFC.

  20. Carpe Jugulum

    Dead right, I am looking now with the view to maybe move in 2013

    Do your homework early, it has taken a year longer than i anticipated and my wife is a foreign national, your qualifications need to be recognised (a lot of mine weren’t), spousal visas do not necessarily mean you have a working visa and be careful because if you get made redundant or unemployed you may have to leave the country.

    Other than that it is an adventure.

  21. Megan

    the other was a vuvuzela strapped to a mallard.

    Perfect! Am also pinching this one for use in any discussion of the Antipodean Screecher.

  22. Alice

    No shit sherlock. Ask any business what is happening in the economy. Dont ask either Glen Stevens or Wayne Swan because they are both full of it.

    Latest crock from the RBA
    “A continuation of moderate wage outcomes and improved productivity performance will be needed to keep inflation low”

    Yes like inflation is the problem???? – are they so fucking disconnected from reality?

  23. Carpe Jugulum

    are they so fucking disconnected from reality?

    Is this a rhetorical question?

    If not i’ll try to think up something punny or witty.

  24. Skuter

    Alice, with the current government partying like it’s 1974 (or at least taking our IR system, industry policy, etc. back to the 70s), sluggish productivity growth means that we could be heading for slow growth and rising inflation (i.e. a stagflationary environment). It is like they are actually trying to be Australia’s worst ever government.

  25. squawkbox

    With Prime Minister Rosa Luxemburg Kleb at the helm


  26. 2dogs

    “Mineral exploration last qtr has dropped by 15.6% in $’s.”

    In Australia, not globally. Again, it’s about the competitiveness of specific countries.

  27. HRT

    A bit too much unhappiness on this site.

    It is as clear as crystal the only reason for the increasing number of closed factory and shop doors on the Gold Coast is the speeding economy.

    Small business people have made so much they can’t be bothered selling their businesses. They are simply closing the doors and staggering off under the weight of their profits.

    This must be the interpretation the illustrious Swan puts on all the “Closed” signs – there can’t be any other explanation.

  28. TonyO

    It’s all about destroying the middle-classes and, with it, democracy to bring in their socialist/communist state. That end can’t be achieved with a strong middle class. Very simple. And all done for that reason.

  29. Leigh Lowe

    The Mallard and the Swan.
    Sounds like a Disney movie title to me.

  30. H B Bear

    Despite having grave concerns about Abbott’s economic credentials (unless the Treasurer’s job goes to a real hard head) I think sentiment could turn around fairly quickly once people see clowns like Swan, Roxon, Conroy and Plibersek turfed out.

    They should televise Swan clearing out his office after he loses Lilley – that is probably worth 3% increase in the ASX200 right there. Better still, get Michael Kruger to go in and help him pack.

  31. Leigh Lowe

    The business I work for is dependent upon mining.
    Everyone has just been put on a 4 day week.
    Headline unemployment won’t move a jot as a result, but I can say with certainty that things are going pear-shaped ….. and fast.

  32. mareeS

    Our son has been working as a rigger with Toll Energy on a gas project near Chinchilla this year. Three weeks ago his crew and most of the others on the site were laid off, no more work until the end of January, or later if the wet season kicks in.

    He’s back in the Hunter at present, no work available here either, as the mines are laying people off in large numbers over the Christmas break. He has several mates who have been laid off from the open-cuts mines and coal loaders until after January.

    Wayne the Goose still maintains the fantasy that the minerals boom is never-ending. It ended a year ago, but nobody in government was listening then, and they’re still not listening.

    Canada is the spot at present, the resources industry there is recruiting like mad from Australia for skilled workers. Our son is due to begin work in Alberta in February at higher pay than the rate he has been earning in Queensland, and that was very good money.

  33. Infidel Tiger

    Spoke to a manager at BHP who told me there is a company wide program called Operation Reset. Every department has to cut costs back 2009 levels.

    The only way to do that is to give all the subbies arse.

  34. H B Bear

    Stubbies at half arse out of respect.

  35. Anne

    The only way to do that is to give all the subbies arse.

    “the arse”.

    Ha ha IT, glad you clarified that one.

  36. .

    Wayne the Goose still maintains the fantasy that the minerals boom is never-ending. It ended a year ago, but nobody in government was listening then, and they’re still not listening.

    It was, until he bent it over and pounded it.

  37. C.L.

    With Prime Minister Rosa Luxemburg Kleb at the helm

    Damn you, squawkbox. That was to be my contribution. 😡

  38. Alice

    Skuter the only thing I object to in this comment of yours

    Alice, with the current government partying like it’s 1974 (or at least taking our IR system, industry policy, etc. back to the 70s),

    Is that the government has the decade completely wrong. They should be taking our IR system back to the 60s so the middle class can actually earn decent money again.

  39. C.L.

    Hey, maybe that’s why she’s always losing a shoe.

  40. Alice

    “Dead right, I am looking now with the view to maybe move in 2013”

    Where you gonna run to?

    Its not just the Oz economy on the skids. The great global capital roaning experiment has put half the world on the skids. If you run away you will only be stampeded on by the greeks and spanish and italians running here (or get swamped by a boatload from somewhere coming in).

    I am interested – “Where you gonna run to?”

  41. 2dogs

    “Where you gonna run to?”

    Good point, none of the places I think will be spared (such as India, southern Africa, South America) are ones I’d consider safe places to live.

  42. mareeS

    I’m starting to look at agriculture as an investment prospect now, the way mining looked back in 1999. Straw hats etc. Especially if the LibNats get in next year and follow through on their plan to open up the Top End. That will be a bonanza for some of the diversified companies, now that the greens seem to have a foot on the throat of the gas industry.

  43. Pickles

    Yes Maree but be careful. Must concentrate on production.

  44. And Another Thing

    Well, who could be confident with a government so hopelessly out of it’s depth. A bunch of trade union officials who bypassed any of the actual work their unions are engaged in, mediocre industrial lawyers and political factotums who rely on an environmental cult and three so-called independents who would be better employed at Ringling circus.

    With a tiny majority this crowd has embarked on a program of meddling and micro-management of people’s lives that I could never have seen Australians accepting.

    Evey policy they have produced has been a disaster. Abbott should have a long field day in an election year. How long could this have lasted without Labor’s publicity arms the taxpayer-funded ABC and the Fairfax press?

  45. mareeS

    Correct, Pickles. That’s why I’m looking carefully at this sector. My husband’s cousin is an agricultural economist, lately retired from his work with international agencies, and we have nephews in agribusiness who are very positive about their prospects. One is in the bio-research side, the outher is on the economics side. Our son just digs things up.

  46. DC

    So what’s the best way to invest in agricultural production?

  47. mareeS

    I’m still checking it out, but there are oppotunities that I can see. AACo has some interesting things going, and there are some specialised agriculture and animal husbandry funds around, but it’s a bit like resources in 1999, you just do a nibble here and there. Gold was my first punt, and then rare earths and coal, then iron ore when things started to kick along.

    We’re a bit into vineyards at present because China is buying in our locality, just seeing what happens, but I expect there will also be an opportunity to invest in the Chinese lease for sugar cane at Ord River now that the extension has been approved.

    Also, we have acquaintace with aquaculture. Now that Labor and the greens are locking up vast coastal fishing grounds, the seafood is going to have to come from farming if you, like us, refuse to eat basa fish and vanamai prawns.

    We catch our own stuff from the sea, but most people can’t do that, and they won’t want to eat polluted frozen product from the Mekong. I certainly won’t, having had direct experience of it.

  48. Pickles

    Just be careful of funds that build in an assumed increase in the capital value of the land asset and sell the fund on that basis, whilst pretty much ignoring production capability. With these land plays, they only use production as a way to meet holding costs. This is fine if you are just looking at land speculation (a lot of people have made a lot of money doing this in the last 200 yrs, but a lot got burnt).

    AACO’s abbatior near Darwin will be interesting if it gets up. There’s going to be about 500,000 cattle that can’t go on the boat and will need to get their heads cut off. If AACO can get them into the US burger beef trade it will be a goer.

    I don’t like vineyards or forestry, but I like rice, pulses and moo cows.

    As for the whole “food bowl of Asia” thing, that’s been sung for years.

    Not sure if you will be able to get a chew at the Ord stages 2 & 3. Initially they were talking about sugar and an abbatior over at Kununurra, but that seems to have gone quiet and all the talk is sugar. The majority of Ord 1 is covered in Sandalwood, some of which is ready to cut. Will be interesting to see how it goes as the prospect has driven land prices way up. If Sandalwood is no good then prices might come back a bit.

    There were some opportunties in the North leasing aboriginal owned stations, but since someone gut shot the boat job they’re not as good.

    Maree your rellies in Ag Eco & Agribusiness will be good helpers.

  49. .

    I would have thought increasing agricultural productivity would have increased land values…

  50. Pickles

    Yes Dot, but land values parted ways with production and productivity long ago, if they were ever linked. Ag land values are what the market will pay and only rarely will that number be a reflection of the productive value of the farm. In most competitive sales production and productivity figures (the rational view) comes second to the pissing contest between the boys.

    Added to that the distortion of value that “tax incentives” place on the market, means that a really hi tech farmer can increase productivity all he or she likes but that will not keep pace with non productive drivers such as competing land uses like urbanisation and the environment.

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