Olibeneli

Come guys get real..........yes you'd sooner be riding out this downturn in Oz because your job is directly linked to a strong performer sector. You may not be saying this if you were employed elsewhere such as in hospitality.

Conversely, if you were employed in UK tourism you would be smiling as many people are ditching the 2 weeks in the sun in Spain in favour of a caravan or camping holiday somewhere in the UK (and no doubt praying for sun). Caravan and camping parks here have just had a bumper season to end all others.........

So..........temper your broad statements as different sections of the economy are affected differently by this financial situation.

Not everyone works in a resources led sector........which itself has fed the Australian inflation and created problems........

Nuff said.

Kalenge

I disagree. You don't have to work directly in the resources sector to benefit from it. The Oz economy and the surplus budget are great benefactors from the industry.

autorock

My work isn't related to mining at all. I'm a graphic designer and animator. My clients are UK based so moving to Oz won't isolate me from issues in the UK market anyway...

If an economic tsunami hits and all my work dries up, I'd rather be cleaning toilets (did that when I was at Uni!) in Oz during a severe downturn than cleaning toilets in the UK for one simple reason: if I have one day a week where I'm not working, I want to be able to enjoying it doing something free: bushwalking, hanging at the beach, sunbathing, picnicking or the million other things you can do practically every day of the year in a place like the Gold Coast.

Right now I'm in London (and despite planning to leave real soon, I still love it!!). try to do something free or even cheap on a Sunday (or any day for that matter) and it usually ends up being East Enders (not a favourite of mine!)

Also, a nice cheap holiday in Oz is in a tent - cheap or free - well, maybe a little petrol - which is (you guessed it) cheap!!

BATS666

Nope, they just stay in the ground.

IvanM

Markets can be self regulating when there is perfect information but like perfect markets such things exist in academic minds and not the real world. The failures in todays markets started with imperfect information ie debt that was lent to people on benefits was packaged up as AAA and sold on and on and insured by the like of AIG as though it was a AAA debt. Unregulated hedge funds bought and sold the instruments and for a while it was a viable liquid market. Now no one wants to touch these instruments they have a market value of zero even though they do have some value as some of the debt will be repaid.

A number of Australian councils have been caught out with these instruments as they were sold as AAA investments. The company that sold them these investments was bought by Lehmans. The councils then started suing Lehmans but are now in the back of the q of creditors as Lehmans is bust.

Commodities nearly always require vast amounts of capital to get out of the ground and to the customer. Many a company has gone bankrupt because they over capitalised during a boom only to find the economics do not add up during the subsequent downturn. But yep right now commodities are propping up the Australian service sector and probably helping Australian banks hide nasties on their balance sheets.

Right now I would rather be job hunting here than in the US or UK.

IvanM

The boost to the treasury has fuelled all the tax cuts over the last few years. Those tax cuts benefitted the wealthy. In the meantime high fuel costs, building costs and food costs have wiped out those gains for the low paid. Basically the wealthy benefitted and the poor suffered.

IvanM

Harvey has never seen it so bad
http://business.smh.com.au/business/...1014-50mr.html
THE executive chairman of Harvey Norman, Gerry Harvey, says his stores' sales in the past month were the worst he has seen, and he expects his company will suffer a 20 per cent drop in profits this year.

He added that prices of most products sold in stores would rise in coming months because of the falling Australian dollar.

"The manufacturers are not making any money, the retailer is not making any money, and the consumer is complaining because they are paying more."

Amazulu

I think Gerry is being a bit of a drama queen. 'The retailer is not making any money'? His profits are down 20% but he is still MAKING money.

sonlymewalter

Exactly, which is why is Aus is not out of the water yet.

I've seen enough council annual reports to know this is bigger than KRudd & his government is letting on. Either he doesn't know [hard to believe his respective council offices haven't told him] - or he does know [more believeable] .......and he's playing the knock on effects down

Agree. Retailers and bankers are all the same, in fact all private enterprises are in it for the money and the minute shareholders and big bonus earners look like getting less than they previously did, they scream like babies with their dummies out. Understandable to be fair, but that doesn't mean they will be poor. It could mean job losses though, which is why this might be a message he's sending i.e. we'll make as much as we can by squeezing our assets and lowering our variable costs - which in real terms means getting rid of staff and making those left, work twice as hard

bcworld

Not anymore they don't!

Rio no longer riding China's back

Rio down 17% in London overnight after:

Rio Tinto chief executive Tom Albanese said yesterday a post-Olympics slowdown in commodities demand would drag on longer than the company had thought just two weeks ago and the company may slow mine expansions

Evelin

maybe he doesn't make any money, cos he spents too much on advertising. in Sat paper 2 big catalogue (electrical and furniture). Yesterday, with the local rag came a big catalogue for outdoor furniture. Plus the full page ads in the West Australian.

NKSK version 2

And this from The Times (about the FTSE fall yesterday):

Many of the casualties were miners, industrial groups and oil companies that provide the nuts and bolts of the global economy. They suffered after Rio Tinto, one of the world’s leading mining groups, gave warning of falling demand for metal from China’s mills and factories — a grim forecast of a near-certain global recession.

Oil fell yesterday below $75 a barrel to its lowest level this year, amid concerns that demand would dry up as the recession begins to bite.

The signal from Rio confirmed the worst fears of investors that the credit crisis would spread not just to the economies of Europe and America but also to the Far East, which has been underpinning global demand for raw materials

iamthecreaturefromuranus

Footsie currently in freefall... the big loosers?. Mining and minerals.

Budawang

Devlin is a serial whinger with a chip on his shoulder about all things Australian. I don't take much notice of what he says. The drop in the AUD is actually a good thing as it is cushioning us from the US dollar drop in commodity prices and general deflation due to worldwide recession.The real irony is that the US dollar is quite strong in the face of very poor economic fundamentals. This is due to the US dollar's role as a the world's reserve currency, not because of US economic strength.

Budawang

Commdodity prices will continue to slump but volumes won't go down nearly as much. Company profits and tax revenue will take a hit but they'll still be paying people to dig the stuff out of the ground and ship it overseas.