Feckless Australians. Remember all those calls/forecasts predicting that Australia is heading for a possible recession, or that the gloomy offshore events would conspire to drain Australia’s economic vitality and plunge us into years of doom and gloom, or how we are frittering away all that we have worked for? In other words, we are a feckless lot for not ignoring the brigade of Hennies Penny. And, yes, the outlook around the world isn’t rosy (when has it been so since 2007, is that new?). And yes, Asia and China are sluggish to slow, and that hurts us (tell us something new). And yes, the IMF will downgrade its World Economic Forecast tonight for the third or fourth time this year (IMF downgrading forecasts isn’t “new” news, though). But can all those gloomsters explain a couple of things, such as the continued growth in the jobs market, despite the slow growth in the economy (which isn’t all that slow when you look at what is happening offshore)? And why are employers are looking for more employees?
The ABS vacancies report for August showed a three-year high last week and were up 8.5% over the year. Yesterday, the ANZ job ads report for September showed a 3.9% jump in the month, one of the strongest monthly rises in a year and the number of jobs advertised on the internet and in newspapers are now 12.8% higher than a year ago. In fact, the seasonally adjusted 150,822 jobs advertised last month marked the highest since August 2012! Of course retail sales grew 4.3% in the year to August, car sales so far this year are up 3.6% (862,832 vehicles sold in the first nine months of the year) and heading for a record figure of close to 1.2 million for the year. — Glenn Dyer
Lucky Australia … sort of. We in Australia rightly complain about the $2 transaction fee banks charge us for using their ATMs (when we are not customers of that bank). It’s extortionate and there’s no need for it, despite what the banks say about “covering costs”. In fact many ATMs in the UK are free to foreign cards (a close friend has just been there and used several ATMs of UK banks to access his Australian accounts for cash). But I suppose we should thank ourselves for tender mercies — we could be in the US, where a report published overnight by data provider Bankrate shows that Ned Kelly is alive and well among US banks, which are charging customers using foreign ATMs (not their own bank) an average of US$4.52 a transaction (that’s more than US$6.40 at current exchange rates). Bankrate says that’s up 21% in five years.
Banks charge non-customers an average of US$2.88 for ATM withdrawals, up 4% since last year. And those people are then charged by their own bank for that same withdrawal — an average of US$1.64. That means the entire transaction costs an average of US$4.52 in fees. Bankrate said financial analysis firm SNL Financial, found that the five largest banks in the United States made US$283 million from ATM fees in the this year’s second quarter alone. Willie Sutton was a legendary US bank robber who, when asked why he robbed banks, simply said, “because that’s where the money is” — or so the legend goes. He’s not far wrong. — Glenn Dyer
Bad taste costs in the end. At its height, US clothing chain American Apparel was known for its edgy advertising and marketing approach to its target audience: 20-something men and women. At its worst, that edginess sank into a crudeness that over-emphasised sex, and that, when combined with the years of sexual harassment claims around founder Dov Charney, spelled eventual failure. The battle by the board and some shareholders to remove Charney took a lot from its reputation and its sales growth. Eventually it had too many stores, too many staff and not enough sales. So the chain filed for bankruptcy protection overnight Monday.
Now in Chapter 11, American Apparel plans to restructure its debt, and creditors have committed US$70 million of new capital to support the revamping of the business. The company had about 10,000 employees in June, just on US$7 million in cash and US$38.4 million outstanding on its credit facility as it struggled to avoid bankruptcy. Why file for bankruptcy now? Well, there’s a US$13.9 million bond that comes due for repayment on October 15, and no one would put up the money or renew the credit line. In fact, there seems to have been a falling out among the sharks who had kept the company alive for so long. — Glenn Dyer