Comments on: Carr: Got a safe job? 2009 could be party time

By: Johny

Johny — Thu, 01 Jan 1970 10:00:00 +0000

It seems to me that the author has decided on the outcome beforehand.
If you have a biased opinion - say, real estate investment will increase - then you can think of many "valid" reasons to sustain your view.
Too bad the school of economics does not teach students common sense. If it did, maybe today's economists would provide better advice and estimates.
The author fails to see that the AUD is weak for a reason - because the demand for our commodities has weakened considerably. So, yes, in theory the exporters would benefit - but in reality they are not better of, because the volume exported has and will decrease. On the other hand all importers will suffer, meaning much higher costs. Considering the negative balance of trade, Australia really needs a strong dollar, not a weak one to do well.
The other big negative is the down trend of asset values. So if the buyers know that asset prices are going down, why should they rush in and buy? We are in the midst of a de-leveraging process, and until it fully unfolds, I do not believe there will be a turn of sentiment.
Many people compare the current environment with the last x number of years and previous recessions. The problem is the current conditions do not have any recent comparison, too many things are bad concurrently.
Just look at the panic showed by RBA and our Government, and you will agree that we are in for a tough period ahead. I have no doubt we are headed for a recession, together with the rest of the world. The only questions are: how deep and how long?

By: Julius

Julius — Thu, 01 Jan 1970 10:00:00 +0000

I wrote this in response to Bernard Keane’s piece. Applicable here too I think and it would be good if you agreed and got behind it:

Good stuff as far as it goes, but what really needs to be said is that the government’s worthy but plodding efforts and the Opposition’s idea-free populism (as if it were Opposition politics as usual despte the financial crisis threatening the real economy) misses the need for imagination, creativity - and some old but not recently mentioned measures - to get today’s cash and credit from its private and corporate owners into the spending which will keep up GDP in 2009. So, how about a bandwagon for ideas (assuming that the Opposition die hards won’t keep the government frightened of deficits when now is clearly the time for a couple of years of deficits) which might start with an extra teacher for each 200 students in all schools, trainee nurses’ aids for every hospital, relief over the Christmas season for cooked and processed foods from GST (merely an extension of the uncoooked food exemption to encourage reasonably cashed up grandparents to give the famly a treat), vouchers tradeable online (for those who don’t have computers the local library will do) so anyone who aggregates say $8000 can get a subsidy for building renovations starting within two months, declining by $500 each two months, etc. etc.
And what about encouraging investment in things and shares by allowing a 15% reduction of the cost base for GST purposes in the next two months, declining by 3 per cent each two months.
Encouraging and enlisting private money to be spent NOW is the main game now and the $10.4 billion package is insufficiently targeted. Half of it will be nothing but a transfer from one lot of present and future taxpayers to people who don’t need to spend it and will simply add to savings or reduce debt. By contrast the incentive measures will get at least some money spent from that vast reservoir of credit, the unmortgaged or nearly paid off house

By: Merri

Merri — Thu, 01 Jan 1970 10:00:00 +0000

What a load of rubbish. If cash rates fall that low, yields will be too tiny to attract foreign capital.

We rely on foreign investment to keep our economy going.

By: xazron

xazron — Thu, 01 Jan 1970 10:00:00 +0000

So one chooses to save ones wages over a lifetime and keep it safe in a Bank. Interest rates pay modest returns, but one thinks,” well its in a bank , and it’s safe.” I chose to have a modest house. I chose to pay it off. I choose to live modestly. Now others chose hugh MacMansions and home loan and credit debt to match. And the Macmansionites borrow off the Bank-my money is part of that ‘loan.’ Now the Macmansion folk want my money to support their inflated house prices, and they want my money at cheap rates to support their greed. So my income goes down;dramatically, and Mr and Mrs Macmansion retain their inflated home at the expense of my fixed bank interest return. I’m so annoyed that my savings are propping up Manmansion greed. Pay the owner the Capital return via interest . Interest heading towards 0% ? Not with my money! I didn’t save hard for your benefit and cut my standard of living for you all to live in a home you can’t afford!