I think it’s become quite clear that “CHINA’s rapidly deteriorating economy, with trade volumes collapsing and a trend towards deflation, is fracturing Australia’s resources industry and support sectors,and increasing the chances of a local recession.”
Just to dispel one outstanding myth before I proceed further : Mr’s Howard and Costello laid claim to being the masters of the economy and interest rates but that is simply no longer a viable claim, and it never really was. They were simply riding a favourable economic wind.
Now it’s time to get down to some serious economic thinking if we ever hope to make up the lost ground courtesy of the Howard Years , as Michael Stutchbury points out:
This China crash challenges the national conceit that, while the global financial crisis is producing the deepest worldwide economic downturn since the 1930s, Australia will be spared the worst of it. Sure our banks are holding up, in part because Australia’s resources boom meant they didn’t have to get exotic to turn big profits over the past half decade. But now our blessed strength in mineral resources is turning into a Lucky Country curse. For Australia, the transmission of the US-sourced global financial crisis is being amplified via China through a sharp fall in commodity export prices, the exchange rate and national income.
“We have gone from the phase where China was protecting us to the phase where China is dragging us down,” says Access Economics director Chris Richardson.
In time, Australia’s China crash will force some needed national soul searching. What is Australia left with after half a decade of the mother of all commodity export booms? How much of this temporary bonanza have we invested in the future? How much have we put aside for a rainy day? What should we do if the China growth machine picks up again? What if it doesn’t?
The answers won’t be pretty. In the meantime, two successive quarters of declining output of goods and services won’t be the worst of it. “We do forecast a recession for Australia,”Richardson says.
“It is now inevitable.”
Filed under: Uncategorized
Without aspiring to reside in the stratosphere inhabited by resident forecasters JMc and TB – both from the east midlands if memory serves – I wish to predict the imminent demise of China. No particular insight is invoked here, apart from the consistent historical failure of all centrally planned economies. It is, in my humble opinion, inevitable.
Mr’s Howard and Costello laid claim to being the masters of the economy and interest rates but that is simply no longer a viable claim, and it never really was.
By whoever
This is the great leftoid perversion. If a monkey was elected in 1996, unemployment would have dropped from 8% to 4% blah, blah ,blah
leftoid perverts believe whatever you want.
The mining boom did not start until at least 2001, maybe 2002 and perhaps as late as 2003.
A large chunk of the ALP debt had been paid off by them and unemployment had fallen from 8%.
Wlecome to leftoid la la land.
Hey…WTF is going on here and everywhere?
I’m not going to roll over on this prediction of doom…it ain’t happening folks…not from where I sit anyway!
Hey, if the fluckers of despair want to peddle this shite then I call them…they are perpetuating this line but is it fact???
This is all about maintaining the status quot in the culture that sees profit ruling regardless of the societal influence…confluence is a better option but that is far out the window…a shame really that will be exposed!
What lesson will be learned from this…jack flucken shite…I’m getting a little bit pissed off…I seem to feel alone…what can a shit kicker achieve???
Going public soon…more morsels for the vultures?
1. Tony of South Yarra
ToSY – in my case its West Yorkshire (North West!) and if memory serves – JMc too…
As for China – if it “falls” as you predict, it will be a bloodbath…
…and this gloom and doomer doesn’t think so…
…I suspect that China may have a winner. Quite different to the USSR (communism is dead, long live capitalism! DUH!)
…China has managed to combine a socialist political system…NOTE: everyone still votes but for their representative on the Council – that’s why people in Australia keep saying we would be better off with Independents rather than Party politics (the westminster system simply promotes confrontation and argument) – not realising that they actually prefer an independent “one party” political system” – think about it!
…combined with a free market earning system…providing greed is controlled they may have the better system…
…this is where all the human rights activists get hot under the collar…
…how do you control 1.3 billion people? Answer – closely!
…and for those who don’t believe me go to any western news outlet and look at what is happening with murders, robberies, rapes and any other ant-social behaviour you can think of – IN AUSTRALIA! (20 million+ people!) We do not do it well!
…China will survive – but it will screw the West – thanks to GWB and JWH we will get screwed big time!
…you may reacall that I have posted on a number of occasions that China has a covert insertion plan already in place – its called China Town – every country – every major city – its so obvious its laughable…
No particular insight is invoked here, apart from the consistent historical failure of all centrally planned economies. It is, in my humble opinion, inevitable.
Tony, you are just regurgitating the stuff I was taught at business school – China is not a centrally planned economy – it has adopted the West’s free enterprise…(a system BTW that was always operating “underground” in China according to my Chinese sources in Oz)…
…the USA has lost this major battle for the West to China they will emerge in 2010 as the victors…
…Australia and the rest of the world has been well and truly screwed by one moron/puppet in Washington DC and a many others – including our own politicians and business leaders chasing money…
…China won’t fall – it will simply become more powerful – its the plan…
…for the West – xiāowáng
Tony@1
George Soros point out some years back:
“Communism sought to abolish the market mechanism and to impose collective control over all economic activities. Market fundamentalism seeks to abolish collective decision-making and to impose the supremacy of market values over all political and social values. Both extremes are wrong. We need to recognise that all human constructs are flawed. Perfection is beyond our reach. We must content ourselves with the second-best; an imperfect society that opens itself open to improvement. Global capitalism is badly in need of improvement. ”
China are in that place of transition where they’re a communist country trying to adapt to a global capitalist system. It’s unfortunate that the capitalist system is now being challenged by a major crisis of it’s own making.
2. Neil of Sydney What?
3. scaper… just keep doin’ yer thing…I went into business in 1992 – middle of a recession – OK – did well more work than I needed – if we reach high levels of employment, businesses will still operate (some of us still have cash – easy)…
…we are talking “global” or “national” not local…
…as has been suggested – chill, ‘ole mate, chill…ice packs on the face are good
WT in the mouth is soothing…trust me I used to work for the government…(2 years NS DOES count – OK!)
LOL TB – Yep, yours is the longer version @4 And yes, I was born in South Yorkshire.
“Mr’s Howard and Costello laid claim to being the masters of the economy and interest rates but that is simply no longer a viable claim, and it never really was.”
Neil
So you’re saying they were masters?
Not into chill…I’m making my move and if I crash I will pick myself up and have another go!
It is a matter of thrive or survive…we will see.
“So you’re saying they were masters?
8. John McPhilbin | December 13, 2008 at 8:50 pm”
Well they must have been doing something right. You do not get 4% unemployment by chance.
However if i am wrong i guess we have nothing to worry about. Your heroes the ALP are in power just about everywhere.
According to TB this means that integrity should be increasing and increasing.
9. scaper
…course you’ll survive, yer dick, I meant right now this minute…chill…
…mate, that’s what I meant when I said we need to have a beer…hey!
10. Neil of Sydney
What are you burbling about, NeiloS? Politicians and integrity are an oxymoron – obviously got a bee in yer bonnet about something I posted (whenever) shall I go back and minutely dissect everything you have posted for the last year, GMAB!
Make some statements, take a risk, stick yer #ick out and let us challenge you…if you can’t take, it don’t send it!
Common knowledge about Trolls – but I propose a new description on blogs – SNIPERS -ie Neil
…that’s new, innovative and proactive – not reactive, negative, and cowardly…oh! That’s just like John Howard & The Private School Bullies – and we all know what happened to them! Mate, give it a REST! (Unless you want to tell me what your bitch REALLY is!)
“What are you burbling about, NeiloS?
11. TB Queensland | December 13, 2008 at 9:22 pm”
Well you were the one banging on about prosperity with integrity. My interpretation of this statement was that we were doing O.K. but the Howard govt was not offering any integrity.
The alternative(ie the ALP) had lots of integrity. Anyway that the way I took your statement “prosperity with integrity”
Only the ALP can give integrity.
Neil
“Well they must have been doing something right. You do not get 4% unemployment by chance.”
Growing economy = lower unemployment – as I said, riding a favourable economic wind. Low inflationary environment also equals low interest rates. This phenomenon was global and not just local.
My point Neil, is that the Howard Government harped and harped that they were superior economic managers and were responsible for the results. (just for the record ‘State Labor Governments haven’t done us any favours neither – they’ve squandered billions through there incompetence – I cite NSW as a prime example)
Think of the boom in the building, housing, mining and financial, and retail sectors alone. Unemployment was bound to be down from previous levels. The reason? All were experiencing unprecedented growth as the result of cheap credit and a resource hungry China.
Jacob Saulwick of the London Telegraph wrote on June 26 2007 that highlights what had been happening:
“THE risk of a 1930s-style economic slump” he claimed “has been heightened by “euphoric” markets tapping cheap global credit, one of the world’s pre-eminent financial institutions has said.
In its annual report the Bank for International Settlements noted that the conditions which led up to the Great Depression of the 1930s and the Asian crises in the 1990s were reflected in the current environment.
“Each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a ‘new era’ had arrived,” the bank said.
The BIS, the central bankers’ bank, pointed to a confluence of worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.
“There is a high degree of complacency, coming out of the long period of low interest-rate environment, and a low volatility environment,” Singapore’s Second Finance Minister, Tharman Shanmugaratnam, said. “
“This phenomenon was global and not just local.13. John McPhilbin | December 13, 2008 at 10:30 pm”
Then why in a time of global prosperity was the US running enormous budget deficits while we were running surpluses??
And why was our unemployment rate much lower than the US, France, Germany???? I belive the unemployment rate in France and Germany is around 7-8%.
How many other countries have no federal govt debt??? Please tell me.
but neil, we do have a large federal debt! we proved that a few weeks ago using costello’s last budget papers.
and sorry for my one handed/fingered typing…. in much pain here
“but neil, we do have a large federal debt! we proved that a few weeks ago using costello’s last budget papers
15. joni | December 13, 2008 at 11:01 pm”
Well if this is true why isn’t the ALP govt preaching this from sea to shining sea??? How come only blogocrats know about this and the ALP govt doesn’t???
How come you, Joni, know about this and Tanner doesn’t???
Chris Richardson also points out that China will soon be paying a quarter of the price for our coal and iron ore than they were during the resources boom.
That’s going to hurt.
Neil
Given you’ve got a limited capacity to view the big picture concerning debt in this country, let me paint a picture.
Running up to his electoral defeat last year Mr Howard kept repeating the same dangerous mantra “interest rates are lower and people can borrow more.”
John Howard said the heavier debt burden reflected rising affluence.
“It is the case that people are buying ever more expensive houses, and they are doing that because of a number of factors,” the Prime Minister said. “One of them is that interest rates are lower and people can borrow more.”
Yes, our hero was pushing a dangerous mantra indeed. In his opinion, it seemed as though a new era had arrived under his leadership.
He then went on to say: “Debt levels are rising, but we are choosing to use the debt more productively to buy assets that traditionally rise in value, like shares and property.”
At around the same time the Reserve Bank’s figures on household finances showed that assets were rising faster than debt (in spite of many Australian’s carrying record levels of debt). Households, they claimed had assets, including housing, superannuation and other investments, that are equal to eight times their annual income.
I guess now it’s all Kevin’s fault that the bubbles have burst?
Mark Davis, author of The Land of Plenty writes:
“Australia’s ‘age of prosperity’, as Peter Costello calls it in his memoirs, has been underwritten by the mining boom (even as manufactured exports stagnated during his tenure) and massive increases in household debt (now more than $1 trillion – about the same as the annual national output), even as the government has wound down its own debt. The national debt has in effect been privatised while, at the same time, risk has been shifted away from government and business onto the shoulders of ordinary people, in the shape of long working hours, casualisation, and the sort of uncertainty that is written in the fact that Australians take the least holidays of any western nation.”
It just doesn’t get anymore succinct and to the point than that. And it was the Howard Government that have left us in this precarious position.
In fact it was reported just recently that our “economy is even more vulnerable to an economic downturn than the struggling US, leaving us facing the spectre of soaring unemployment, falling house prices and a long-drawn out economic slump.
The bleak picture is painted by economists who point to a series of data showing how we compare to the US.
Australia has some of the most expensive property in the world, relative to incomes, according to the Demographia International Housing Affordability Survey.
It says the median Australian house price is 6.3 times median household income, higher than the US, Canada, New Zealand, Ireland and Britain. A median Sydney property will cost nine times the average Sydney income.
Australia also has more debt per household than the US, with Australians owing 177 per cent of household income in mortgage and other debts compared to 138 per cent in the US.
This is coupled with the fact Australians save an average of 0.5 per cent of their income compared to 2.6 per cent in the US.”
Oh, and you could blow a feather and our economy would fall over. That’s how precarious things have become.
Unemployment for many will mean they lose everything – this was never the case previously because personal debt levels were never as high as they have become under the Howard Government’s misguided leadership.
What’s insulting is that they were the cheerleaders simply because the figures made them look like geniuses. History, of course, tells a much different story of how Howard and Costello had no idea and were ‘winging it’.
Recessions & depressions are like forest fires. They clean out the dead wood & underbrush, destroying diseased & sickly plants as well as some healthy growth. This inevitably leads to reinvigorated new growth.
America will survive & prosper again as it did after the great depression.
The stock market will rebound. Some good stocks will fail through bad luck but the majority of well managed ones with good products will prosper again.
If you want to prevent revival, just bring in a swag of new regulations & burden the economy with a new climate religion that scares people & misdirects precious resources. Burden our society with misplaced guilt that leads to claims against the taxpayer from those who fail to help themselves both nationally & internationally. I see India is calling for the west to take responsibility for their drought. We have invited this nonsense. India has always suffered periodic drought & flood. Just as we have. It is the natural order of things. Just like recessions & depressions & bush fires. Our greatest threat comes from within. Defeatist attitudes & a willingness to make excuses for bad, even appalling behavior.
They’re not called “whinging poms” for nothing.
If it wasn’t that “the whole world is about to collapse” then it would be something else, like the price of tea.
Yes, there is a global economic crisis. Is it the end of the world? No.
Why? Because people are always going to need to buy stuff. Partcularly pharmaceauticals and aged care industries as the population ages. Just watch thoese stocks soar once the “hysteria” passes. Likewise “green” industries and the alternative fuel and autmotive industries after the inevitable washout of the US car industry leaves only those that are no longer making cadillacs that no one wants.
China is not heading for economic ruin. They are still heading for strongth growth.
Note how, when they assumed control of Hong Kong in 97, the Chinese authorities were quite happy to leave it as one of the most thriving economies in the world. So much so that the Hong Kong Jockey Club (their equivalent of Randwick racecourse) turns over more money than the national Australian economy!
Funnily enough, they’ve happily allowed this prosperity to rapidly permeate the rest of China.
I still can’t believe that in light of many economic forecasters getting their predictions about what’s going to happen in the next 3, 6 or 12 months so completely wrong, there are still so many people prepared to believe their absolute nonsense.
I happen to be privvy to some of the best financial minds in Australia, and every one of them without fail will tell you never pay any attention to anyone that says they can tell you what’s going to happen tomorrow – never mind in six or eight months!
(and apologies TB and John McP for the whinging poms remark. I couldn’t help it, but you knows I luvs ya. Anyway, TB you deserve it since you’re always complaining that my wallet’s full of moths!
)
The real China Crisis.
At least they plan for the future and I don’t mean electoral cycles.
http://www.water-technology.net/projects/south_north/
Still on the natural order of things I see Carlyle despite all the evidence that shows it is no where near natural or in order.
Also on the deregulate bandwagon, which doesn’t surprise me at all with you. Even though it’s now shown deregulation is a failure and what is needed is more better regulation.
What you aver is that we should go through this all again in 10 to 20 years and have even a much larger and more damaging crash then, just to repeat it all again to cull out the “bad stuff’, after all its the natural order of things. Of course all the stuff that’s needed to keep doing this is finite and rapidly running out, with China and India never being able to attain the level of consumerism the West has, yet that is what the deregulators are saying should happen.
What nonsense.
As that LNL piece I linked to illustrated through the Indian spokesperson, the West has to completely change the way it consumes and to retract its consumption. There is no other way. Business as usual and more of the same is an absolute recipe for disaster. Yet that is what you seem to want, just keep going, keep destroying the planet, don’t spend time on nonsense like climate change because that’s wasted time and effort. That is until it is becomes an irrecoverable global disaster.
A great threat does come from defeatist attitudes and the climate change and financial crisis regulation denialists show it in spades, they have given up in attempting to do anything about them and just want to go on business as more and more of the same so the next disasters can be bigger and better. Greed is after all good.
The problem of central planning as it relates to China can be illustrated by the following anecdote:
A colleague was recently in China on business. He had reason to travel from one major centre to another along a newly constructed freeway. The most striking feature of the freeway was not the beautifully paved lanes, or the fact that there was hardly any traffic using it; the most striking feature by far was the large number of petrol stations he encountered along the route – none of which were open, or needed, apparently.
In a capitalist economy like ours, an entrepreneurial individual – or company – would recognise whether and where a petrol station was required, and build one, thus supplying the inherent demand.
In China’s case, a committee guesses what is required for its next five-year-plan. Some of those guesses will be right, some wrong. It is when these committees make more wrong guesses than right that the centrally-planned economy meets trouble. Exactly like – history tells us – all others before it which have entrusted their future welfare to such a fundamentally flawed sytem.
25. Tony of South Yarra It is when these committees make more wrong guesses than right that the centrally-planned economy meets trouble. Exactly like – history tells us – all others before it which have entrusted their future welfare to such a fundamentally flawed sytem.
Then there is JWH and The Private School Bullies approach – sit on your hands for 12 years count the money do nothing and watch the sixty coal ships waiting to enter harbour…or blink when roads are mentioned…railways, health, education the list just goes on…
I always remember being told what foresight our city planners in Brisbane had to build roads as wide as they did – no cars then just the occasionally horse buggy – its often referred to as “forward planning” – mines do it all the time…
…and with all due respect to your friend…I reckon the Central Committee will have access to far more information than he…I wish we had had a Central Committee design the Gateway Bridge Access Roads – when I first travelled them (Northside) at six in the morning going to work just a few cars – now…its comes to a standstill most days…
…and right now I wouldn’t be claiming that democracy and capitalism are not flawed…
…and no I am not advocating communism but there are good points in socialism, communism and democracy, capitalism and a command system…we need to be selective…the Chinese are…
…I might also remind you, Tony, that China HAS embraced the free market concept…as referred to above…
…………………………………………….
In defence of “waiting” however, there was a university built in the USA that decided not to build any pathways for two years – until the studenst had worn tracks that they then concreted…
Nine Network this morning Tony Abbott wants Peter Costello back on the front bench,his prediction is Smirking Pete will be one of best Prime Minister’s Australia has ever had.Joe Hoc opp’s(Neil of Sydney) what are your thought,s on this matter.
TB, actually if the survey pegs were not moved Brisbane’s CBD streets would not have catered for future traffic.
I’ve tried to find the information but have yet to find it.
I did find the history of the settlement of Brisbane though…might be of interest to you and your grandkids.
http://www.ourindooroopilly.com/brisbane-history.html
28. scaper
Interesting stuff there, scaper, thanks…
Re: the width of the streets – my understanding was that it was a deliberate plan – ie no fluke?
Reb
(and apologies TB and John McP for the whinging poms remark. I couldn’t help it, but you knows I luvs ya. Anyway, TB you deserve it since you’re always complaining that my wallet’s full of moths!
So is mine unfortunately LOL
Reb
Re: China – I think their system is going to have some major teething problems, however, long term you may even look at some of the very real investment opportunities that will most certainly become more and more available.
And, we’re most certainly going to thrive once again, however, we too have some major obstacles to overcome.
As you know, I’ve maintained a simple view for some time (around 8 months), which I call ” My sanity saving approach and it has led me to look at the whole problem in more general terms (18 months was being optimistic), simply because there is no avoiding the pain brought about by our addiction to debt:
We will, in my opinion, continue getting ‘snapshots’ that are aimed at providing greater hope and optimism about the economy and our wealth status. I’m just hoping people take a more realistic view of what is really happening. Nobody wants to see a major panic or excessive pessimism, however, we’ve had well over a decade where it seems nothing could stand in our way.I personally think that our average wealth will decrease (taking away previous gains through heated housing and stock markets), credit card spending will have to slow significantly and therefore consumer spending will decline, and housing prices will continue to fall. For how long? anywhere from between 18 months to 5 years – seriously (and the 5 years is a conservative guess). The problem that some people are not seeing clearly is that many of us are leveraged to the hilt with debt and we now need to start shedding much of the excess debt we’ve been carrying – this could be a lengthy process. ”
And until I see fundamental changes occur I’m likely to hold this view. Like Keynes once said “When the facts change, my mind changes, what do you do sir?
Neil
Employment figures can be a fickle thing when economic conditions change, as this example illustrates:
Job risks in finance, retail
http://www.news.com.au/dailytelegraph/story/0,22049,24796036-5006009,00.html
By Nick Leys and Sharon Labi
December 14, 2008 12:00am
THE financial and retail sectors have a nail-biting Christmas period ahead, with further job cuts expected in late January.
The finance industry is already reeling from initial rounds of job losses as a result of the global economic crisis, with conservative estimates putting the figure at 5000.
But industry analysts say the number of jobs cut is more likely to be between 15,000 and 20,000 once redundancy and employment reduction schemes are finalised.
The retail sector is banking on healthy sales during the Christmas period, fuelled by the Federal Government’s fiscal stimulus package. Increased spending in that sector may be enough to push back job cutbacks and avoid a flow-on effect to the rest of the labour market.
JPMorgan chief economist Stephen Walters said media reports and company briefings indicated as many as 20,000 jobs would be lostin the finance sector alone.
Cutbacks already announced include 1000 jobs at the ANZ bank, 850 at Babcock&Brown, 600 at IAG and 647 at Suncorp.
Macquarie Bank has announced 200 jobs will be cut, but that figure is predicted to blow out to 1000.
Mr Walters said forward estimates by JPMorgan indicated unemployment would double by the end of 2010, pushing it to about nine per cent nationally.
Job figures for November, released last week, showed 15,000 jobs were lost nationally in that month. Mr Walters said most of those cuts were in the finance industry.
Australians were largely in denial about the situation because the job losses had not yet had much impact on the real economy, he said.
“Traditionally, what happens to employment in a recession is that blue-collar workers and low-skilled industries lose jobs first. Unemployment then flows up to high-income earners,’ Mr Walters said.
“This time, it’s reversed. It’s the high-income earners who are losing their jobs first, and this will flow down into the real economy.”
Mr Walters warned that the trickle-down effect was still to come, and said restaurants and retail outlets were generally still trading well. He said: “Retailers will have their fingers crossed hoping that the government’s fiscal stimulus package will actually stimulate spending.
“Staff have been retained in anticipation of sales going up, but if that doesn’t happen we’ll see job cuts as soon as February or March.”
Rod Masson, national policy director for the Financial Services Union, said the financial industry needed to “stop and take a breath and consider what it is doing and what its other options might be, instead of introducing job cuts in the short term”.
Despite AMP shedding another 200 jobs last week and sub-leasing part of its Bridge St building in central Sydney to generate revenue, it hired Luna Park on Friday for a Christmas bash estimated to have cost as much as $1 million.
This comment on another blog argues that the current crisis is not a failure of capitalism per se because important parts of our economy – money supply by central banks – are centrally planned:
Everyone knew the economy was turning bad at the time of the last election. Remember Labor was attacked by Turdball soon after coming to office for ‘talking down the economy’ and scaring people/investors.
What was Howard’s answer? No changes, no preparations, it was Workchoices – we were all going to work for next to nothing under whatever conditions employers felt like, so that they could keep their profits.
Workers vote for the Tories at their own peril.
Tony
It’s only recently that I obtained a copy of Hyman Minsky’s Stabilising and Unstable Economy (and it was like I’d finally found the answers and confirmation of my own view) which was published in 1985. He essentially argues that instability is inherent in capitalist economies and that external shock factors alone are not their undoing. His instability hypothesis focuses on the role debt plays on the system (lending and borrowing) which places banks front an centre and especially their roles in the types of crises we’re now seeing.
In 1985 wrote:
“To be exact leadership does not seem to be aware that the normal functioning of our economy leads to financial trauma and crises, inflation, currency depreciations, unemployment and poverty, in the midst of what could be virtual universal affluence. In short, financially complex capitalism is inherently flawed.”
And here is an interesting piece that expands on Minsky’s view::
ABC’s Perspective
To intervene or not to intervene
http://www.abc.net.au/rn/perspective/stories/2008/2408838.htm
When he ran the US Federal Reserve, Alan Greenspan received almost reverential treatment from Congress. Last week, he went from oracle to toast, as the House Committee on Oversight and Government Reform took him to task over the current crisis.
Greenspan not only conceded that he had made mistakes, but even ventured that his entire worldview may be wrong. In reply to Committee Chairman Waxman’s proposition that his ideology “was not working”, Greenspan replied:
That’s precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.
The wellsprings of Greenspan’s ideology were the Austrian economist Friedrich Hayek, and the Libertarian philosopher Ayn Rand-both of whom were champions of free market capitalism. Greenspan applied that ideology throughout his tenure as Chairman of the Fed, by opposing regulation, and by rejecting the claim that markets could make mistakes in pricing capital assets.
Greenspan is famous for parroting Robert Shiller’s statement that the market was subject to “irrational exuberance”. But he went on to deny that claim, and in fact to actively work against it. As Committee Chairman Waxman put it last week, “Over and over again, ideology trumped governance”.
In fact, Greenspan’s belief that markets couldn’t misprice assets led to a conflict with his ideology. The man who believed that market always get it right, spent much of his tenure rescuing the stock market from its bouts of irrationality. In October 1987, just two months after he took over from Paul Volcker, the Market dropped 20 percent in one day. Greenspan’s Fed did everything possible to prevent the crash going any further-with reassuring words, reductions in the reserve interest rate, easy provision of credit, and large scale purchases of commercial bonds.
Similar interventions occurred with the Savings and Loans crisis, the collapse of Long Term Capital Management, the Dotcom bust of 2000, and Enron’s failure. Greenspan then retired from the Fed in February 2007-just under 20 years after he first sat in the chair, and six months before this Daddy of all financial crises began.
Greenspan’s history of activist intervention, when his ideology should have led him to leave the markets to themselves, has clouded our capacity to judge just what went wrong. Was it really his free market ideology that failed, or did his faith in markets lead him to intervene-with all the powers of The State-when he should really have left the market to sort out its own woes?
The ideology that the free market always works out the right price for everything-including assets-is manifestly false, as any reasoned appraisal of the 19th century trade cycle will attest. There was a major financial crisis every 20 or so years, when speculative excess led to overborrowing, a crisis, and ultimately a recovery. Hayek’s ideology of markets that price everything with approximate accuracy is no match for Hyman Minsky’s empirically-derived hypothesis that finance markets destabilise the real economy.
But the levels of overborrowing that were reached prior to Greenspan’s activist Federal Reserve were nothing, compared to the level of debt that has run up on Greenspan’s watch. The irrational exuberance of the Roaring Twenties was financed by private borrowing that peaked at 150 percent of GDP in 1930-and then blew out to 215 percent, as output and prices collapsed during the Great Depression.
Coincidentally, the US reached that same debt to GDP ratio in 1987-the year Greenspan first tried his interventionist hand at a rescue. But all that rescue really did was encourage the private sector to keep on borrowing. By the time Greenspan retired, that debt ratio was 280 percent, and it is now 290 percent.
We have now reached such an excessive level of indebtedness that there is no prospect for another debt surge to restore the illusion of prosperity. Instead now we have to de-lever: to reduce the excessive debt that was run up, not only under Greenspan but before him-ever since the mid-1960s, it has not been free market ingenuity that has driven America’s economic performance, but rising debt.
As that painful process unfolds, Greenspan and his intellectual heroes-Hayek, Rand, and Friedman-should be tossed into the dustbin of history. We need to replace ideology-whether of the right or the left-with an empirically grounded understanding of the workings of a market economy, warts and all.
The new, realistic economics, will be built on the shoulders of Schumpeter, Keynes, and Hyman Minsky.
Tony of South Yarra,
Anybody who continues to blame “capitalism” for this latest fiasco simply doesn’t understand the system to begin with. The “deregulate” everything crowd likes to go on about markets and capitalism but they certainly have a warped idea of what it entails. Capitalism by its very nature is reliant on human wants and needs (a.k.a. greed) but only works under a watchful “regulatory” eye. When that watchful eye itself is tempted to look the other way, then capitalism has ceased to be. No, this was simply greed pure and simple. Human nature is to blame here, not the system which was circumvented. It is the same instinct that drives people to cut in line, back-stab a fellow colleague, cheat a bit on their taxes etcetera. We are all guilty of acting on behalf of our own self interests at some point in our lives but still some continue to blame others whether it be governments, politicians or corporations. Nobody wants to really acknowledge our own failings and this mess is no different. Life is so much easier when there is a boogey man.
John,
Far be it from me to criticise the messenger, rather than the message. But, I must make this the exception. That article was written by the house-seller himself – Australia’s biggest doom and gloom merchant – Steve Keen.
One of the distortions that has led to the present financial crisis has been Chinese central planing. Their refusal to allow their currency to float has distorted world markets for years, enabling them to flood the world markets with artificially low priced goods to the detriment of intrinsically efficient western industries that have been forced to compete with one hand behind their back. Now, many in the West want us to tie our other hand behind our backs with environmental rules that the Chinese have openly vowed to ignore, negating any possible benefits that might occur if such actions were universal. We are doing the same thing with nuclear power.
As for central planning, isn’t that what we have in each state with health, education, water supply & public transport? Shining examples.
“Everyone knew the economy was turning bad at the time of the last election.
35. kittylitter | December 14, 2008 at 1:55 pm”
Is that so Kittypooo. All I remember Showpony and Daffy Duck saying was Costello has let the inflation genie out of the bottle blah,blah,blah.
Reckless spending leading to inflationery pressures blah,blah,blah. Surplus was too small, it should have been $30B not $20B blah,blah,blah.
Labors first budget was proclaimed to be an inflation fighting budget blah,blah,blah. Working families blah,blah,blah.
Labor proclaimed their budget as an inflation fighting budget and that was not long ago. Looks like they had no idea of what was on the horizon.
Gotta hand it to ya Neil, you’ve been fiendishly well programmed.
“Workers vote for the Tories at their own peril.”
Amen to that, for want of a non-biblical refrain.
It’s very much a (non)choice of the lesser of two evils though.
“Their refusal to allow their currency to float has distorted world markets for years, enabling them to flood the world markets with artificially low priced goods to the detriment of intrinsically efficient western industries that have been forced to compete with one hand behind their back”carlyle
Seems like a very legitimate point to me, not something I’d previously considered.
I appears obvious that any plateau of overall equilibrium MUST result in a downwards pressure on the current (generally opulent) standard of living (comparative to the rest of the world) that we now enjoy…& blindly take for granted for the most part.
“Gotta hand it to ya Neil, you’ve been fiendishly well programmed.
41. Toiletboss | December 14, 2008 at 5:36 pm”
Actually their my own opinions. In fact i reackon that Swans first budget proves that you are all frauds.
All I heard about from you lot e.g. Min, Adrian, TB et al was the Liberals reckless spending producing inflationary pressures. Never made sense to me since they were running large surplus budgets and inflation was at 2.9% when they lost the election.
Well what reckless spending did Swan/Tanner cut?? I heard several times that the budget should have been $10B bigger than it was.
Why didn’t Tanner get up on budget night and SCREAM about all the reckless spending and proclaim and list all the waste of money.
labor cut 100 jobs at ANSTO, made some cuts to the ABS raised some taxes (Alcopops) and got a surplus no bigger than Costello handed labor.
And now it is all gone in less than 12 months.
Either the reckless spending didn’t exist or labor was too gutless to do anything about it.
Either way you people are FRAUDS
From The Wall Street Journal 11/12/08:
“Either way you people are FRAUDS”Neil
Hehe, what’s this “you people” stuff?
Seems like a bit of a heads I win, tails you lose…kinda comment to me.
The problem with your logic, as I see it, is that you are making your (highly unobjective) measurements of “progress” over such a minute timescale.
As has already been pointed out, the rot had set in long before teflon Kevin ever got near the reins. To ignore this, in favour of your screeching Ackermanisms, is supremely intellectually dishonest of you IMHO.
BTW, I agree with you about a lot of the bullshit fed to us by Rudd et al; it’s fairly obvious that they’re just masturbating the public sentiment gland for their own political expedience much of the time. Almost identical to the last lot of archliars & scoundrels. That’s why they’re all called “politicians”.
I’d still prefer them any day of the week over the stale bunch of conservative pillocks that we got rid of last year (have you noticed that they haven’t quite yet got over their post electoral dismemberment death rattle ? how long is shiny Malcolm gonna last?).
T-boss, the sooner that Turnbull is exposed the better, he is a divisive so and so and I would prefer just about anyone to take his place of leader of the opposition!
I know a lot of people here don’t think much of Nelson but due to Turnbull and co’s actions the destabilisation has created a snowball effect.
scaper @ 47
Hear, hear on Turnbull.
I could damn him with faint praise by saying he is trying to be ‘nice’. Or, I could say what people say in the circles I move in: He doesn’t have enough c*** in him.
Either way, you get my meaning.
I can definitely understand why genuine conservatives, who want proper (& necessary) differentiation, don’t like him.
I think he has plenty of c*** in him though, it’s just c*** of the self agrandising variety.
Judging by recent polls the “snowball effect” is becoming quite pronounced.
Turnbull = Frazer. No thanks.
I have to admit that I support the Nelson camp due to certain exchanges supportive of GSC.
When I look back on this year I achieved more than I expected!
Many more years of work before anything tangible occurs.
Tony@38 Keen’s concern about debt is valid, it’s his dire predictions that are a concern – they’re a bit sensationalist. However, his interpretation of Minsky’s instability hypothesis is quite good. So I’d have to say I agree with him in principle but not so much the full extent of his predictions – that’s a personal call.
Tony
John Kenneth Galbraith gave one of the best descriptions of the market system and a warning which has now materialised at Harvard University on December 9, 1998, when he said:
… this is a system which has a built-in instability, which in good times attracts participants who bid up values in a mood of optimism. That mood produces the increase in price for real estate, but particularly for securities, that justifies the expectation. The process then repeats itself. It’s a simple fact of life, the speculative bubble, but it’s something that, on the whole, economists ignore, the fact that the optimism that attracts people to real estate or securities markets shoves up the price, justifies the expectation, and then the process continues until you run out of optimism, you run out of the means to sustain it, something else intervenes, and you get the inevitable breaking of the bubble.
One of the great facts of our time is that there is still, in the investment structure, in the stock market, a commitment to what we should call, “the speculative bubble.” The possibility that bubble will break is something that everybody should have in mind.
There’s one thing that should warn everybody. If you forget everything else tonight, remember this, that when you hear someone say, “We have entered a new era of permanent prosperity,” then you should immediately take cover, because that shows that financial idiocy has really taken hold and that history, all history, is being rejected.
This all comes to mind because we have been enjoying, we’ve been seeing, a period of strong stock market speculation, we have seen the rush into the more dubious, the more questionable, and sometimes the more insane, of the subsidiary investment opportunities in the stock market, including hedge funds, for example, run by two Nobel Prize winners. You can see it every day, some reference to “a new era of permanent prosperity.” This is the commonplace of what is called the speculative, the financial mind. The “great financial mind” rarely survives the market.
In 1929, two or three did. Joe Kennedy, the father and the founder of the Kennedy family, was deeply in the market in the 1920’s, and got out. That is the basis of the Kennedy fortune to this day. The other great figure of that time was Bernard Baruch, who also went on to manifest interest in political and government matters. Baruch got out in 1929, in that summer, with a nice heap of millions, in a day when a million dollars really counted for something.
This is the warning of the present time. We had a slight indication of that in August and September. It’s a warning that everybody should have in the back of her or his head. The effect of the speculative collapse is something which economists have not yet, even to this day, fully appreciated, because it is not the collapse that causes the trouble, but the further effect on investment, and also the further effect on consumer spending.
A very large part of our present consumer spending is based on debt creation, credit cards, or the impression given by stock market gains or real estate gains. If and when the end comes, the economic effect will be the drying up, the slump, in consumer expenditure and, of course, the economic effects of that.
I don’t make any firm predictions, because I’ve discovered over the years that my wrong predictions are wonderfully remembered and my right predictions are always forgotten. But as you leave these pleasant precincts here in Cambridge next year, do take with you one slight note of gloom growing out of the discussion tonight.
Tony,
I know George Soros has his critics but I think he’s got one of the keenest financial minds of anyone alive. He’s proven it time and time again. He’s also very bullish on China’s long term prospects for economic development along with India. He too, take the view that markets are far from efficient and stable.
In January this year he claimed that this was ‘the worst market crisis in 70 years’ and his explanation is quite convincing, he writes:
“The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.
However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.
Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.
Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility.
Everything that could go wrong did. What started with subprime mortgages spread to all collateralised debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi-trillion-dollar credit default swap market. Investment banks’ commitments to leveraged buyouts became liabilities. Market-neutral hedge funds turned out not to be market-neutral and had to be unwound. The asset-backed commercial paper market came to a standstill and the special investment vehicles set up by banks to get mortgages off their balance sheets could no longer get outside financing. The final blow came when interbank lending, which is at the heart of the financial system, was disrupted because banks had to husband their resources and could not trust their counterparties. The central banks had to inject an unprecedented amount of money and extend credit on an unprecedented range of securities to a broader range of institutions than ever before. That made the crisis more severe than any since the second world war.
Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the US Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realise that the Fed may no longer be in a position to do so. With oil, food and other commodities firm, and the renminbi appreciating somewhat faster, the Fed also has to worry about inflation. If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.
Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.”
John,
One thing I think we can say for certain about markets: they overshoot both ways.
They are overbought – producing the so-called ‘bubble’, then they are oversold – producing opportunity for those who can recognise it, who have the balls to buy, and of course who have the wherewithal when such opportunities present themselves.
Tony@56 exactly! Unfortunately it’s the ordinary investors just trying to invest for the future that too often get crushed.
I have this hunch that Sherlock might turn up here.
He was always good value on economic threads in my opinion.
scaper
did you find him?
Tony
Then there are all those Ponzi schemes that have been flourishing under the noses of regulators and it doesn’t get much bigger than this:
$75bn at risk from trading fraud
http://www.theaustralian.news.com.au/story/0,25197,24797739-601,00.html
NEW York broker Bernard Madoff’s alleged giant pyramid scheme duped some of the world’s smartest investors, reports suggested, adding to questions about why the scam wasn’t uncovered earlier.
Evidence emerged that Madoff’s alleged multibillion-dollar fraud stretched from Tokyo to Europe to top US investors, all of them apparently unaware they were being conned until the broker’s arrest on Thursday.
Prosecutors allege Madoff, a decades-long veteran of Wall Street and pillar of the US financial community, confessed to losing at least $US50 billion ($74.4 billion) in the so-called Ponzi scheme or pyramid fraud.
US newspapers detailed how Madoff, 70, traded on his impeccable reputation and access to exclusive country clubs to cultivate A-list investment clients, including big banks, hedge funds and individuals.
Yep…and posted a reply, just hope it gets through like the others at the site in question.
So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.” 55. John McPhilbin
Sounds familiar, JMc
Makes perfect sense to me – and I find it astonishing that some people still don’t see that (real) regulatory control of capitalist greed is the answer – “feeding” off retirees and ordinary folk, simply demonstrates a primitive understanding of society – not a need to live in harmony…Robber Baron mentality in its extreme form…my children’s children deserve better…they/we are not simply peasant/serf fodder for the powerful, greedy and selfish…
TB@63 the reason for cheap credit and the insatiable appetite for consumerism has been financed by countries like China who invested large chunks of their export dollars back into the US as well and providing cheap products and manufacturing which has had a deflationary effect gloabally . What, and we thought this could last forever. What happens when China etc decide to pull their money out to invest in their own growth requirements and other, more solid, investment opportunities elsewhere? The value of US dollar will likely start going into free-fall. The destruction of US wealth will be quite substantial.
Exactly TB.
And the bailouts in a large part are to keep the Robber Barons in their lofty castles. For example the US auto bailout in part failed because the Republicans wanted the auto workers to take large pay cuts yet senior management and the boards kept their pay scales and bonuses (because they have to do the hard yards in the restructure).
I also have a lot of trouble with these bailouts (especially the mostly lax conditional US ones) in that instead of doing what Tony stated, which is cull out the bad with the sound going on, they allow the bad to continue on at the expense of the good who get nothing and are unfairly competitively disadvantaged by their bereft rivals having a huge publicly funded leg up.
If these bad financial institutions had been allowed to naturally die and those who were sound and did the right thing rewarded by the public purse I would have less misgivings, but instead the bad have been given the hand and true to form stories are on the increase of how they are selfishly and corruptly utilising the billions given to them for nothing.
This illustrates perfectly the built in flaw of the current system and if allowed to go on the next crash (after several more smaller bail outs) will make this one look like a Monopoly game with most of the money missing.
Only a complete overhaul of the entire current system from the top down will do, and that means greater regulation with those screaming for total deregulation sidelined.
TB, back in August China fired a warning shot.
China goes the big squeeze
http://business.smh.com.au/business/china-goes-the-big-squeeze-20080829-45q8.html
A high-ranking Chinese economist has put his nation’s cards on the table in the global financial poker game by effectively telling the US to fix Freddie and Fannie … or else.
“A failure of US mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system”, Yu Yongding, a former adviser to China’s central bank, says.
“If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,” Yu said in e-mailed answers to Bloomberg. “If it is not the end of the world, it is the end of the current international financial system.”
It is well within the bounds of imagination. People have been thinking the unthinkable for some time.
Yu Yongding, whose statement seems to have been lost to most of the world as the Olympics came to a merciful end, is described as “a former adviser to China’s Central Bank”. He is possibly the most highly accredited economist in China. A list of his positions would fill a little red book.
Men like Yu Yongding don’t just get up one morning and say this sort of thing. US Treasury Secretary Paulson was put on notice.
“Mac and Mae” are not looking robust. Max Fraad Wolff, an editor of the website GlobalMacroScope, made a contribution to Asia Times on Thursday that helps explain: “Fannie Mae’s June 2008 statement declares a gross mortgage portfolio of $US750 billion ($A869 billion) and guarantees of mortgage backed securities and loans of $US2.6 trillion. Freddie Mac’s June statement details a retained portfolio balance of $US792 billion and a total mortgage portfolio balance of $US2.2 trillion. These two giants have retained interest in over $US1.5 trillion and guaranteed over $US4.5 trillion in mortgages, mortgage backed securities and loans. There are $US11 trillion in outstanding mortgage liabilities in the US.”
“The extent of the firms’ guarantee commitments is global in scope. Sixty-six global central banks buy loans bundled and or backed with Freddie Mac and Fannie Mae involvement. As of June 30, 2007, foreign entities and individuals held over $US1.4 trillion in securities of US agencies such as Freddie and Fannie … They have been caught with weak financials, swollen balance sheets and escalating default, just like the homeowners they assist. The size of their retained mortgage portfolios is truly gigantic.”
The Chinese have basically said “we have spent 10 years of savings on your junk and it is getting close to high noon” – and the US has come quickly to attention.
For the Chinese have not declared war, but issued a statement of intent. It might have been ignored by much of the planet, but the US Fed, to whom the statement was directed, took note.
The Chinese are not entirely happy with the fact they have been faithfully buying Freddie and Fannie and Ginnie and all the Macs and Maes that might come home by May Day itself. Their fear is that the US might be speaking with a forked tongue. They are starting to remember the history of Western behaviour and it has come upon them that they might be played for suckers, big time. Dr Strangelove is now sitting in Beijing saying “I smell a big dirty, er … commie er … rat.” And the good doctor is holding the financial equivalent of the entire ICBM arsenal of Russia over the US and, as the email points out, the world’s head.
Don’t know why you folks waste your time responding to Neil of Sydney. He clearly has no interest at all in anything remotely resembling a genuine debate.
“Don’t know why you folks waste your time responding to Neil of Sydney. He clearly has no interest at all in anything remotely resembling a genuine debate.
66. JimJim | December 14, 2008 at 10:59 pm”
Actually no-one has responded to what i am interested in. Everybody was saying that Howard was spending like a drunken sailor and this was producing inflationary pressures. Well Labor had a chance to do something about it at the LAST budget.
Either this reckless spending didn’t exist or labor was too gutless to cut it. Everybody was saying that the surplus could have been $30B instead of $20B.
Peter Martin the economics commentator was saying the same thing
Now it is all gone. Twenty billion dollars blown away. $10B in Christmas presents and Labor will lose the rest somehow. I will be surprised if we have a surplus in the next budget.
I will continue to believe that you people are lying until proven otherwise.
Now exactly who is the Australian Government looking out for again?
http://www.theaustralian.news.com.au/story/0,25197,24799800-601,00.html
The business lobby is pushing for more “cheap labor” by using the same old tired arguments of those in the states. It really is pathetic and obvious most here are oblivious to the hardships such policies can inflict on an already overstretched tax base. You guys have no idea how lucky you are not to share a border with the 3rd world!
Ouch Sparta! Nice pick-up. It reminds me of a cheerleader PM who was riding the wave of consumer driven economic growth (thanks to boatloads of private debt) who then wanted to introduce laws (Work Choices) that would allow employers to cuts wages and sack en masse for operational reasons.
How was he going to make workers and unions buckle to his vision? Invite foreign workers to operate as ‘cheap labour’ and all under the guise of filling the skills gap.
You will probably be interested in this then Sparta: Animation – Immigration to the US, 1820-2007 v2.
http://vimeo.com/2424744
You guys have no idea how lucky you are not to share a border with the 3rd world!~Sparta
Ahhhhhhhh!
More ignorance from you Sparta
With the exception of Tasmania every Australian state shares a border with the 3rd World
The place is called South Australia !
68. Sparta Phoenix, AZ USA
Sparta, you obviously have no idea of the make-up of Australia.
The only good thing about NSW is to seperate Queensland from the Mexicans (in your language Victorians) – the big problem we have is that IT ISN”T WORKING!
…as an aside for you edifiaction we love their number plate text – “Victoria The Place To Be” – then why the f#ck do you spend all your time in Queensland!
…I confess it gets worse – some Queensland numer plates still have Qld the Smart State on them (most have Qld the Sunshine State) – mine’s The Smart State but that makes sense of course!
Note to self – do a bloody edit before posting!
some Queensland numer plates still have Qld the Smart State on them
73. TB Queensland | December 15, 2008 at 4:51 pm
Note to self – do a bloody edit before posting!
Yeh…………..How do Queenslanders spell “number”
74. I Am The Walrus
You are on the piss again IATW – aren’t you!
75. TB Queensland | December 15, 2008 at 6:30 pm
Nah !!!!!!!!!!!!!!!!!
Perfectly sober at my work desk actually……………!
Wow, I would love to respond to either TB or Walrus but one wonders what the hell their on about. Ignorance? Um, I do live next door to a 3rd world without the benefit of sarcasm. No offense dude, but you have absolutely no idea what your talking about!
No offense dude, but you have absolutely no idea what your talking about!
77. Sparta Phoenix, AZ USA | December 16, 2008 at 1:23 am
TB and Walrus reel backwards barely conscious and scuttle away to lick their wounds having been bashed mercilessly by ……………..a pillow !
Walrus,
Honestly, there must be some video game you could be playing or mommy you could be pissing off?
Sparta,
The three Eastern States of Australia have a “friendly” rivalry (similar to the Aussies and Kiwi “brotherly’ slagging)…bit like North South in the States but not as serious – we never shot at each other!
Queensland is often called the Deep North (ie Deep South…get it?)
…people from anywhere south of Queensland’s borders (usually Victoria) are referred to as “Mexicans” – bit like NSW being referred to as Cockroaches and Qld Cane Toads during our State of Origin Football Comp…as for Tasmanians (or Taswegians) most of them have two heads ’cause of the inbreeding and generally begin thneir sentences “…we in Tasmania…etc…” (this can be verified by reading some of reb’s, posts – bloody double Dutch, er Taswegian.
South Australians are referred to as Crow Eaters (interesting bit of history there but would take to long)…
Western Australians we simply call Sand Gropers cause that’s what they do over there – grope around in the desert looking for massive deposits of anything we can sell to China…!
There ya go…easy…hey!
PS I must go and see “Australia” to see if I got it right!