Recession is on the way - Part IV

[yibbida]

The usual cheerleading fanbois on here cant quite comprehend that commodity prices are now back to 2002 levels.

 

[Power Raid]

Will be hard from 2017 onwards - manufacturing shutdowns kick in, flow on effects... one analysis estimated 200k jobs in total for the new government (post next Fed election) to deal with.
Headache time - not many signs of a new-world led recovery for bulk commodities either, we could be in for some serious pain.


Some trials in the US have focused on a 36 hour, 4 day week. I'd love that

The lack of investment in our nations infrastructure due to the uncertainty created by carbon tax will continue to pinch. We are in for a tough decade or two simply because a government cut a deal to gain power.

We saw SA lose the Olympic Dam expansion, we saw manufacturing close or set in course closure and we saw refineries shift over seas. It is of course harder to measure who didn't start or shift here because of the uncertainty but nevertheless feel the pain.

It is a shame those most effected will be blue collar jobs which are essential for those not inclined for white collar work.

 

[medusala]

LOL what does falling commodity prices have to do with a recession?

Wow, you cant even grasp that. Why do you think Canada, Brazil and Russia are in recession?

The boom in prices drove a massive investment surge. Now that is about to/ has already hit a wall.

http://www.rba.gov.au/publications/rdp/2014/pdf/rdp2014-08.pdf

The pink line in Figure 4 represents an estimate of the increase in the volume of goods and services produced arising from the boom. Higher mining investment directly contributes to higher aggregate demand. Furthermore, higher national 1 We weight the trading gain using volume weights from the historical baseline. The estimate is not sensitive to this choice of weights. 11 purchasing power boosts consumption and other spending components. Higher mining investment also increases the national capital stock and hence aggregate supply. There are many further compounding and offsetting effects which are discussed below. However, the estimated net effect is to increase real GDP by 6 per cent (Figure 4).

 

[Ratts of Tobruk]

France. Not a raging success.

Dude, it was a joke saying that Power Raid should try to limit his time on BF to 35 hours. As a start.

Is there anything you can't misinterpret?

 

[medusala]

Dude, it was a joke saying that Power Raid should try to limit his time on BF to 35 hours. As a start.

 

[yibbida]

Wow, you cant even grasp that. Why do you think Canada, Brazil and Russia are in recession?

The boom in prices drove a massive investment surge. Now that is about to/ has already hit a wall.

http://www.rba.gov.au/publications/rdp/2014/pdf/rdp2014-08.pdf

The pink line in Figure 4 represents an estimate of the increase in the volume of goods and services produced arising from the boom. Higher mining investment directly contributes to higher aggregate demand. Furthermore, higher national 1 We weight the trading gain using volume weights from the historical baseline. The estimate is not sensitive to this choice of weights. 11 purchasing power boosts consumption and other spending components. Higher mining investment also increases the national capital stock and hence aggregate supply. There are many further compounding and offsetting effects which are discussed below. However, the estimated net effect is to increase real GDP by 6 per cent (Figure 4).

 

[medusala]

Backward looking

http://www.bbc.co.uk/news/business-34182693

China's imports in August fell 14.3% in yuan-denominated terms from a year ago, while exports fell by 6.1%

 

[yibbida]

Why do you think Canada, Brazil and Russia are in recession?

The Australian Labor government from 2 years ago?

Each of those countries have a number of issues that contributed.

Russia - International sanctions, Currency decline, lower household consumption.
Brazil - Austerity government, inflation, lower household consumption, currency decline
Canada - Business investment, currency decline, reduced construction activity (meanwhile the Canadian Tony Abbott is denying they are in recession).

 

[medusala]

A floating currency helps offset commodity price drops not vice versa.

"austerity government". Humour.

 

[its free real estate]

Time to revive this classic thread

Australian home prices have fallen for 12 consecutive months, with the pace of price declines accelerating nationally in September, largely reflecting a steep drop in Melbourne and continued modest declines in Sydney.​

https://www.theage.com.au/business/...980s-says-morgan-stanley-20181011-p5091w.html

 

[Patrick Bullet]

Well you have to hand it to morgoth who called it early! 12 years early in fact. Well played sir! You said it was on the way and here it is.
If you're still here can you tell us who will win the 2032 AFL Grand final?

Recession is on the way

You can pretty much lock it in that the states of Vic, NSW, SA and Tasmania will go into recession late this year, early next. The stupidity of the RBA has condemned us. These idiots have pushed the interest rate button, too hard and too fast. End result is they will have a far greater...

www.bigfooty.com

You can pretty much lock it in that the states of Vic, NSW, SA and Tasmania will go into recession late this year, early next. The stupidity of the RBA has condemned us.

These idiots have pushed the interest rate button, too hard and too fast. End result is they will have a far greater impact on growth than they think. Consumer confidence had already fallen, retail spending was falling and economic growth was lower than expected.

Throw in the problems in the global credit markets which will not go away and will lead to the banks increasing rates more than the official rate increase (Adelaide Bank has lifted them by .4%) and the economy in these states is going to take a major hit.

Faceless men and women sitting in an ivory tower combined with a new govenrment too scared to rock the boat or show any initiative has condemned the Australian people to a recession we did not have to have.

 

[HairyO]

Its not technically here yet though is it?

2 quarters of negative? I thought we only had 1.

 

[Power Raid]

Its not technically here yet though is it?

2 quarters of negative? I thought we only had 1.

yep

an early call but one that will prove correct next quarter

the good news is recessions usually only last a short time once called (60-120 days from memory)

 

[Patrick Bullet]

yep

an early call but one that will prove correct next quarter

the good news is recessions usually only last a short time once called (60-120 days from memory)

Is that like a law of physics or something?

 

[Power Raid]

Is that like a law of physics or something?

more of a law on prime ministers trying to save their job

 

[bresker]

yep

an early call but one that will prove correct next quarter

the good news is recessions usually only last a short time once called (60-120 days from memory)

What like the one in the UK from 1978 - 1983 circa?

 

[Power Raid]

What like the one in the UK from 1978 - 1983 circa?

we aren't a socialist economy, so it is better to compare to our own post late 80s history

however your example, highlights the difference between socialist and capitalist economies. Both can fail but one is faster to rebound and has greater flexibility inbuilt such as bankruptcy.

 

[bresker]

we aren't a socialist economy, so it is better to compare to our own post late 80s history

however your example, highlights the difference between socialist and capitalist economies. Both can fail but one is faster to rebound and has greater flexibility inbuilt such as bankruptcy.

The second part of the recession happened under the neo-liberal policy of Margaret Thatcher. She was saved by the Falklands war or she may well have been voted out.

No offense, but you clearly know nothing about history. The Great Depression was caused by capitalist over-confidence & in America was allevaited by the Keynsian intervention of Roosevelt. The prevailing Chicago school of economics is more likely to cause depressions as much as end them; if it does end them the resultant wealth is not distributed evenly.

 

[Power Raid]

The second part of the recession happened under the neo-liberal policy of Margaret Thatcher. She was saved by the Falklands war or she may well have been voted out.

No offense, but you clearly know nothing about history. The Great Depression was caused by capitalist over-confidence & in America was allevaited by the Keynsian intervention of Roosevelt. The prevailing Chicago school of economics is more likely to cause depressions as much as end them; if it does end them the resultant wealth is not distributed evenly.

Please learn you history rather than bouncing around sprouting all kinds of nonsense not related to the initial issue of recessions typically lasting 60 to 90 days once called in Oz.

Further the recession was not as you claim and was 3 quarters once called. Let’s not forget this was caused by strikes shutting down the economy, protesting the shutting of government owned and or subsidised industries like dirty coal.

Next thing you’ll be talking about perestroika