Damson

I do think that the doom and gloom mongerers should shut the hell up as they are making an already horrible situation worse. I heard recently of a large construction company whose shares had plummeted dramatically from £'s down to 11p. They gradually rose to the heady heights of 18p (still rubbish, but a bit better) and then they announced that there were major bad times ahead, that there were challenges and that staff would have to be laid off etc. Surprise, surprise the shares very quickly fell to 10p. I'm not saying they should pull the wool over peoples' eyes, but to shout it from the rooftops I'm guessing doesn't help matters. In fact, there was a move to get rid of Robert Peston (the BBC economics editor) as he was giving such negative reports to the point where the phrase 'they've been Pestoned' was introduced.

Things are bad, nobody is denying it, but by now even people in the Outer Hebrides (no offence intended to them) now know just how much of a mess things are in. A positive outlook I think is badly needed to inspire more confidence and get people spending again. That, and getting the bloody banks to start lending again after us all pouring millions into them - it's outrageous.
Lorraine

Wol

You are correct that negative reporting doesn't make things any better - but I think we are all in a much much more dangerous state than many imagine.

For years millions of people have been living beyond their means and trillions of dollars have gone AWOL through creative investment schemes, derivatives, CDOs and the like. The result we can see around the world, with credit impossible and schlerotic economies. Pouring billions into increased consumerism is like throwing petrol on a fire - it was overconsumption that got us in this mess to start with: people spending more than they could afford, borrowing to "invest" in property and the stock market and so forth.

Commenting that this has been the state of affairs isn't being "negative" for its own sake, it's stating the obvious. And saying that encouraging even greater expenditure is irresponsible is IMO stating a fact.

Toe Dipper

When considering the comparable positions of the Uk and Aus, I find it interesting on statements given by those who we think are in control.

After 10 years of having a ball in the Uk, extolling the increased dependence of the financial sector and its input in the GDP, how good the global economy is etc, we are now told by the govt that the cost of the economy baleout will add £40bn+ to the already huge £bn deficit. This is drawing comparisons with the levels that the country experienced before the IMF stepped in during the 1970s.

Meanwhile Rudd, albeit with his "she'll be right" hat on, recently announced that the country might be heading for a deficit. Now we all know that in politicspeak this means that it will, but what a wonderful start off position to be in.

I know where I would like to start from if I was going to have to experience a major finance shock! And yes we all have to change our mindset on funding our dreams.

So roll on a few years and we will all have 20/20 hindsight vision and be able to tell our mates that we could see it all coming!

Exile

Too much debt is the problem here Lorraine. More lending/borrowing will not solve the problem, it will exacerbate it. Although viable companies should have access to working capital, trying to prop up the housing market, which many people are thinking of when they talk about getting the banks to lend, is futile.

Some of the schemes and positive spin that are being used to suck ignorant people back into extremely overpriced and falling housing markets seem almost criminal to me.

NKSK version 2

I particularly like this one from Rob Druitt:

"We are very lucky here in WA...we have very unique particular circumstances that Victoria and New South Wales did not have. We have got a sustainable booming state economy and while you have booming state economy, with people flooding into the state, you can't have property price going backwards.''

But the succession of news does get a bit boring.

1. REIWA says there's never been a better time to buy - get in quick.
2. Government announces negative growth outlook, house prices go down...
1. REIWA says that now there has definitely not been a better time to buy - get in quick.
3. Mining industry announces big slowdown - house prices go down.
1. REIWA says etc etc

It's all so predictable.

Perth's market is certainly looking ever more out of line with the rest of the world

Exile

But it's different here

Catch

are accusing Rob Druitt of lying to benefit REIWA

Kalenge

Well said. The last few months have been a smorgasbord for those people who love to feed on anything that's negative.

Damson

I would in no way attempt to suggest that the global economy is not up the swany, but my issue is with how it is being reported; it's not as if we don't all know about it - you've only got to look at the advert at the bottom of this thread to see that.

I do agree that to me it seems fundamentally wrong to spend, spend when it's largely spending beyond means that got us into this mess. Having said that there isn't much encouragement to save either with the miserly interest rates that are being earned. Some have said that there may well be negative interest on savings with us having to pay to have our savings housed by some of the institutions that got us in this mess in the first place. Or is this just more doom and gloom rumours I wonder? It's always interesting to get other peoples' perspectives and information.
Cheers
Lorraine

MartinLuther

Is that a recent statement?

NKSK version 2

No Oct 06. He would sound pretty stupid to be saying that at any point over the last year.

NKSK version 2

But this is from last week:

Mr Druitt said the slump should not spook those who were looking to buy in 2009 because the worst was over. “The signals are there that the time to buy is now,” he said. “The most important dynamic in the market now is that interest rates are down and it’s a completely different situation to the early 1990s when interest rates were on the upward cycle.”

My underlining.

renth

Saw on the news last night that HALF the workforce of the Argyle diamond mine (over 200 people) got laid off yesterday. That's really shocking news about the state of WA's "boom"

DrWho

Watched a TV program several months ago that we got off UK Nova... Can't remember what it was called but something like "World economy on the brink". Featured the city venture capitalist that almost bought Jaguar, etc some time ago... Now, this program was recorded in autumn 2007 and it was absolutely uncanny watching it... basically, everything this bloke said was going to happen has... I'll have a look for it at home tonight and see if it's still on any of the torrents... fascinating watching, and if he knew then for sure the city bankers did too...

Devlin

I disagree. Australia's debt problem is far more serious than the UK (or even the USA!). Also due to the importance of commodities to Australia the economic booms and busts have historically always been larger than the UK and USA.

Having said this I don't think it's going to be a walk in the park anywhere in the world for the next few years. I just think Australia may end up being worse off than most of the rest of the developed world.