ARE THE GREEN SHOOTS OF THE GFC ABOUT TO WITHER ? – Some of my USA-Maverick "relatives" senior leaders in the USA financial world, have started to state that they believe that the USA is headed for a "double dip" – recession.
You won't hear this in the AUS main stream media until it actualy happens (maybe next year ?), they prefer to toe their paymasters line & pander to the whims of our political masters by ensuring that many of us remain socially controlled/misled by our current government, media & financial fraternity who prefer broadcasting the spruiking of their "spin doctors" (for their own short term benefit), to telling the average Australian the truth about what is really happening relating to the current GFC.
I am by nature an optimist however I still like to hear "the good the bad & the ugly" from our leaders & media,so I can then make an informed investment decision for the future. The average australian does not need to be patronised & only told what our political masters think would be good for us to know.
I hope the BIG "W" – recession does not happen ! (I like the present upswing in the AUS Property cycle) But ………if it does what effect will it have on Australia over the next few years, are the recent interest rate rises PREMATURE??. For your consideration …………….& comment.
Don't panic ! ………..I hope i am wrong on the BIG "W"
The only thing showing green shoots in the USA is the dow. Unemployment is still rising at 300k a month, house repossessions are still growing faster than they can be sold and any potential improvements in the economy are only due to printed money and adding huge debts. At some point either they stop borrowing, so the stimulus stops, or they keep growing their debts even more. Just look at Japan which followed this same path, 2 decades later and they are still in trouble, with huge public debts.
Interestingly, the biggest threat however is reportedly China. I read a very interesting article recently about the guy who exposed Enron’s accounts as fraudulent. He is equally convinced that the growth figures coming out of China are fabricated and that they are stimulating the economy with infrastructure projects that there is no demand for. If true, an eventual crash in China would be catastrophic for the world economy and especially so for Australia.
mattnz,
Great factual & realistic reply ! I concur with your comments (although the optimist in me has just sent out another search party looking to take a photo of the current green shoots ?) before they are overwhelmed & completely disapear………..by the reality of what IS really going on with the GFC.
Yeah ! China fudging the books cant last forever ? & ……….when they are forced to come clean will AUS get hammered ??
Maybe ……!!
Scary stuff happening in China right now
http://www.ft.com/cms/s/0/ea14130c-d46e-11de-a935-00144feabdc0.html?nclick_check=1
Fears of China property bubble
By Jamil Anderlini in Beijing
Published: November 18 2009 23:09 | Last updated: November 18 2009 23:09
A large bubble is forming in China’s property market as a result of Beijing’s credit-driven stimulus programme, one of the country’s most prominent real estate developers warned.
Zhang Xin, chief executive of Soho China, one of the country’s most successful privately owned property developers, told the Financial Times the asset bubble was leading to rampant wasteful investment in the sector, undermining the country’s long-term growth prospects.
“Real estate prices should only go up because people want to actually use the space, but at the moment we can see more and more empty buildings across the whole country and in every real estate segment,” Ms Zhang said. “The rising prices are a direct result of so much money coming from the banks and the Chinese banks should be very worried.”
Ms Zhang’s assessment was echoed by Fan Gang, a member of the central bank’s monetary policy committee, who warned on Wednesday that real estate in cities such as Beijing, Shanghai and Shenzhen was expensive and there was a growing risk of asset price bubbles.
Urban property prices in 70 big and medium-sized Chinese cities rose 3.9 per cent in October from a year earlier, accelerating from September’s 2.8 per cent rise, according to government figures.
Price rises in top-tier markets such as Beijing and Shanghai have been much faster. Analysts say the rebound has largely been driven by an unprecedented government-led expansion of bank lending. It is also being driven by government policies, including tax breaks, low interest rates and smaller down-payment requirements.
Investment in real estate development, a key driver of economic growth, rose 18.9 per cent in the first 10 months of the year on a year earlier, a marked acceleration from 17.7 per cent growth in January-September.
Ms Zhang said the current speculation should be a serious warning for the industry and the general economy.
“In Manhattan, they have vacancy rates of 10-15 per cent and they feel like the sky is falling, but in Pudong [the central business district in Shanghai] vacancy rates are as high as 50 per cent and they are still building new skyscrapers,” she said.
“If you look at GDP growth, then China looks like a new engine driving the global economy, but if you look at how growth is being created here by so much wasteful investment you wouldn’t be so optimistic.”
Believe it or not I am an optimist …
But we need to hear all the truth and what the governments have done to us average people …
China and India are in a GOLD buying frenzy …the USD is dropping and their debt is in the trillions and they want to pass in senate to obtain more CREDIT …
Banks in Australia have tightened their belts beyond reason … McBank has stopped all commercial lending …
St Leonard's in Sydney vacancy rate is over 40% … take a brive and look at the signs …
Sydney builders are not producing stock …
6 Real Estate agents in Bowen, Mission Beach, Proserpine, Airlie Beach have gone to the wall and more to come …
Every business is watching their money and cutting costs …
Credit Card debt is over 50 billion dollars in Aus …
At the end of the day I want to make money for my future retirement and to help my children and I personally hate all this doom and gloom however with all of these signs you would have to be an idiot to say we are on the bottom or guess where the bottom is …
I know that Kiyosakis new book the conspiracy opens to a lot of questions … today i read a storey about the Roman empire in 215ad when they devalued silver … that was the end of the run foir them and many are saying that the USA is not far behind … invest in USA ?? you tell me because i'm stumped …
Nouriel Roubini – Professor of Economics at Yale has ALWAYS said it will be a “W” recovery.
He is no bandwagon rider – he has been at the forefront of the predictions since I have been reading his blog since 2005.In Q1 Q2 2007 the NYTimes lampooned him as a “Dr Doom” has he was predicting a dramatic downturn for 2007. He was describing the US and global economies like the Road Runner who has already run of the cliff and is leg-cycling in mid-air prior to a catastrophic plummet to earth. The idea that the economy would plummet rather than rise like a hot-air balloon was idiotic nonsense according to the NYT and other puppet media.
At year end 2007 the NY Times was lionising him as a Guru and one of the few who had anticipated the Global Financial Crisis.
Roubini is not a pessimist or an optimist – just a realist. He analysis the data and makes judgments on what the numbers and data say.He as ALWAYS said “W” for this GFC Recession, and backs up his claim with pretty convincing evidence.
Google for his blog.Hi Kuradji,
i am about to google Roubini, so i may find the answer there, but does he talk about Australia or just he US's financial state?
cheers
Sonya"W" – ARE WE THERE YET ?? ……………. maybe not quite, however 2012 should deliver some arcing & sparking !! so with the stockmarket volatility & a flat/declining AUS property market, while we wait for this crisis to run its race, where should investers park their money?
How about GOV bonds or fixed term deposits ???
Maverick
"the same kind of thinking that got you to where you are, will not get you to where you want to go"
It’s great to read the insight/speculation of some of the above posts. Good to see it is being revisited in light of the current global situation.
The US is not out of the woods by a long shot as unemployment is still rampant, jobs growth virtually non-existent, they can barely agree to extend their support to their own economy, Afghanistan war is costing trillions with no end in sight etc…….
A lot of Europe is a basket case, Greece, Italy, Ireland etc all have massive problems.
While China & India are still buying our resources, they & others are also buying up the farms & rural producers in order to guarantee control over their own food supplies into the future.
We haven’t felt the pinch that other nation’s economies have suffered. Australian retail, internal tourism & non-mining exporters have struggled with locals travelling OS or not spending locally (keeping money not spending & not investing) evidenced by how well the banks are doing.
So much for green shoots.
Just came across this article: http://www.smh.com.au/national/tsunami-to-hit-australian-real-estate-20110911-1k413.html
yes it is sounds depressing already guys…
after reading this news in the News:
http://theage.domain.com.au/home-investor-centre/beware-of-the-false-profit-trap-20110909-1k0ek.html
it seems that the future of the property market next year is not looking good.
just to put back a little perspective, historically when the @rse drops out of the share market property generally performs well. At present, shares are shaky around the globe, financial woes abound throughout the us & europe & our property market sits in a bubble.
Are we going to see a flight to bricks & mortar or to bonds & cash?
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