The Economic Outlook

[LanceDriver]

Originally Posted by ryan79

I am definitely wealthier today than ever before. Wages up, Rents up while mortgage costs down. Its definitely a happy place.

So, of course, Ryan makes baseless (and outright incorrect) statements with no data to back himself up. His "intelligence" is hearsay and conjecture with a nip of wishful thinking. Smart boy.

Anyway, see, basing beliefs on statements like Ryan made above is exactly why your average economist, like Andy, but not necessarily Andy, and mainstream commentators like Ryan and the rest of the average thinking proletariat would follow, don't get what's actually going on. They see figures that show that we are earning more than ever and assume that we are wealthier - but they, as usual, forget about the debt (and even asset prices).

You see, a couple of decades ago an average mortgage consumed less than 3 times the average salary and now it's around 6-9 times. So we may be getting paid more but we're spending way more to service our debts and this is taking money away from general consumption and, in the end, will destroy our economy (and is doing so right now even though your average economist, like Andy, can't seem to understand why and use stoopid meaningless cliches like "confidence" - BS!!). Our economy has also become adicted to credit for growth, something which the average economist, like Andy, still doesn't grasp.

We are actually poorer, not wealthier! Wealth peaked in 2007 and, after a moment of uptick, we're now well and truly falling.

http://www.macrobusiness.com.au/wp-c...012/07/RBA.png

But, of course, average people like Ryan and Andy can't fathom this.

Originally Posted by ryan79

Actually I'm more China China China Oi Oi Oi.

China is China's biggest customer now.

Nah, China is farked, but you wouldn't be able to comprehend how that's possible ...

http://blogs.telegraph.co.uk/finance...tionary-shock/

http://www.alsosprachanalyst.com/eco...wont-tell.html

Oh, and by the way, Perth is farked too!

http://www.abc.net.au/news/2012-07-1...766?section=wa

[ryan79]

My mortgage cost is less now then in 2007. meanwhile people renting have had to put up with massive increases.

My salary has gone up by over 60% since 2007. Inflation over the same period?

Even with tax increases I'm better off but of course would much prefer no tax increases.

The only debt I have is my house and it takes up a 3rd of my income after tax. No "peak" debt problem here and not for many of my mates. I have a mate who is a truck driver, has 4 kids, wife only works part time and he's got a fantastic mansion in a private estate with kids at a private school. Sure he's not holidaying to Hawaii every year but he's definitely not struggling.

The problem is YOU are not getting it Lance. Very few people are actually struggling, a lot less then your blog boys pretend to "know".

Sorry bro but your out of touch, things are good, people are happy, the sun is shining.

[ooh]

No, you're happy. You're happy, right NOW. Not everyone mate, a lot of people are suffering in Australia.

What happens if you lose your job Ryan? How long could you service your debt? Do you have income protection? What about if you became seriously ill and couldn't work, how long then? All well and good being "happy" now, but one thing to happen...

It's this sort of "I'm great, everything is great, things can only go up" attitude that is really scary for me. It's attitude the Europeans and the Americans had in 2006. Say no more.

Australia is the only country I know of in the world where $0 deposit, 100% mortgages on new homes are still promoted and offered. If that isn't a sign of blind ignorance to the wider global situation, I don't know what is.

[ryan79]

Just saying I'm better off now than I was in 2007, that was the point.

I could lose my job or get injured tomorrow, how is that different from any other day of my working life? Why is it more of an issue now than before?

And I have NEVER seen a $0 100% mortgage advertised anywhere. Granted I might not watch commercial TV much but even in 2007 during the height of the boom there was no way I could get that kind of loan, no bank I came across had them.

But I'm happy to be proven wrong if you can point me in the direction of one of these loans.

[Lightness]

Of course you're doing good Ryan, with iron ore prices are record level you're laughing mate. But I tell you what, as soon as China goes bust iron ore will be back at $20/tonne, you will possibly lose your job and your house will halve in value.

Like any bubble, it goes on a little longer than people expect it to, and that's when the smart boys get out. China's gone on longer than anyone expected, but it will soon come down. In fact, resources companies are getting hammered on the market as we speak and even Gina's Roy Hill is now looking more and more unlikely.

[Ultimate Hater]

Originally Posted by Lightness

Like any bubble, it goes on a little longer than people expect it to, and that's when the smart boys get out.

YEP.

[ooh]

Originally Posted by ryan79

And I have NEVER seen a $0 100% mortgage advertised anywhere. Granted I might not watch commercial TV much but even in 2007 during the height of the boom there was no way I could get that kind of loan, no bank I came across had them.

But I'm happy to be proven wrong if you can point me in the direction of one of these loans.

http://www.rams.com.au/resources/art...it-home-loans/
http://www.homestart.net.au/no-deposit-homeloans

2 examples straight off a quick google search. Doesn't even include the current TV ad that is running that I can't find...

[ryan79]

Nice try but the RAMS one requires a guarantor - nothing new here, always been available.

Not enough details on the Homestart one but I'm assuming similar.

[tic]

Originally Posted by Lightness

Of course you're doing good Ryan, with iron ore prices are record level you're laughing mate. But I tell you what, as soon as China goes bust iron ore will be back at $20/tonne, you will possibly lose your job and your house will halve in value.

Like any bubble, it goes on a little longer than people expect it to, and that's when the smart boys get out. China's gone on longer than anyone expected, but it will soon come down. In fact, resources companies are getting hammered on the market as we speak and even Gina's Roy Hill is now looking more and more unlikely.

Doesn't even need India/China to bust for this to happen. As more African mines come on line with their cheap labour costs, iron ore prices are predicted to halve - possibly within the next three years. Yikes.

[Mornnb]

http://news.smh.com.au/breaking-news...712-21xj2.html

Full-time employment drops by 33,500


The number of people in full-time employment fell sharply in June, suggesting the central bank may not have finished cutting the cash rate just yet.

Full-time employment tumbled by 33,500 last month, and was only partly offset by a 6600 rise in part-time workers, Australian Bureau of Statistics data reveals.

This pushed the jobless rate up to a three month high of 5.2 per cent in June compared with 5.1 per cent in May, as expected by economists.

The Reserve Bank of Australia left the cash rate unchanged at 3.5 per cent at last week's monthly board meeting, after making 75 basis points worth of reductions in the previous two months.

Advertisement
Among the states, South Australia posted the largest increase in unemployment, rising to 6.4 per cent in June from 5.2 per cent in May, followed by an increase to 7.4 per cent in Tasmania from 6.5 per cent previously.

Among the larger states, the jobless rate in NSW rose to 5.1 per cent from 5.0 per cent and Victoria increased to 5.5 per cent from 5.4 per cent.

However, in Western Australia it declined to 3.5 per cent from 3.8 per cent and in Queensland it fell to 5.3 per cent from 5.7 per cent.

In the Northern Territory, the jobless rate rose to 4.2 per cent from 4.1 per cent and in the ACT it was unchanged at 3.6 per cent.

[ooh]

Originally Posted by ryan79

Nice try but the RAMS one requires a guarantor - nothing new here, always been available.

Not enough details on the Homestart one but I'm assuming similar.

Yet again - unbelievably blind positivity! Because it has always been available, that's OK??? What about a sub-prime mortgage situation in the USA, that was available in 2007, should it still be allowed?!! You can hardly use historical situation to judge what should be allowed today!

So you think it's OK and a good thing to have someone, in this economic climate, on a 100% or even a 120% mortgage? The holder goes under and so do their poor guarantors, and that is a good thing?

When the advertisement runs on TV next I'll remember the name of the business and give you the link, as you're so blind to what is happening in our economy.

[ryan79]

In this economic climate? Give me a break. Be doom and gloom if you like, it doesn't effect. I'll continue to work hard, increase my wages and make a better life for myself financially.

[Mornnb]

Did you read the article above, you aren't in the same economic climate. Unemployment in WA is freaking 3.5%!

[ryan79]

Exactly!!

[Ultimate Hater]

Originally Posted by ryan79

Exactly!!

Yeah, those thirty three thousand people who lost their jobs last month need to work harder to increase their wages.

[mobus]

How on earth does end-of-the-world discussion make its way into a thread dealing with Australia's economy? Oh wow.

[Ultimate Hater]

...if the cap fits....

[Kelli]

Where has Mobus been? Some SSC happy place elsewhere. Where is that place?

[LanceDriver]

Wots a mobus?

[Kelli]

Don't know, what's a mobus, mobus?