Turmoil-enomics III

Update: the sign has fallen over – just like our market 😦

Yes – another day and another thread for the Mad Market Mayhem that no one seems to be able to predict what can happen. So bring your comments from thread II onto here.

After a dreadful day yesterday on the Australian markets, Wall St overnight was up, and so the prediction (?) is that the Australian markets will also be up. But who knows?

Anyway, I heard a stockbroker on the radio yesterday moaning how his losses on the market are worse than a divorce. He has lost his house, his car and half his money – and he is still married to the b*tch! LOL

78 Responses

  1. Neil

    I respect your opinion but how about you repsect our Prime Minister. I do not see you calling Howard anything than Howard so respect our PM and call him Rudd not Dudd or Krudd, you are showing your immaturity and chiuldish rantings. Did you not learn at school to debate not denigrate.

    The majority of Australians ( after preference voting) selected Mr Rudd as our PM. You may not agree but we live in a democracy and how about you respect the office of PM. This is not the Piers Akerman abuse site.

  2. Lets see another day.

    Eeeny, meeny, miney, mo which way will the market go if it squeals let it go eeny meeny miney mo.

    Well good a way as any to pick a stock these days 🙂

  3. Shane – it seems better than any other method that is being used at the moment.

  4. “You may not agree but we live in a democracy and how about you respect the office of PM.”

    I’m of the belief that respect is earnt, not bestowed simply because of the position one holds.

    If Neil reckons Rudd is a “dud” he should be at liberty to say so..

    Also, it’s much more fun! As a poster of comments I like to call the pollies names, but when I post topics for discussion I refer to them by their proper titles.

    It allows me to walk both sides of the fence (so to speak), or maybe I’m just a very confused individual…

  5. Interest rates tipped to drop to zero percent:

    “AUSTRALIAN interest rates are tipped to fall to the lowest level since the aftermath of the September 11, 2001, terror attacks as the central bank worries about a recession.”

    “One Sydney academic is even forecasting an unprecedented zero per cent interest rate by 2010 on the premise that debt-laden consumers will close their wallets and threaten to push the economy into a deep economic contraction.”

    BUT I thought interest rates would always be lower under a Liberal government? Surely this cannot be true…


  6. Adrian,

    Future fund details as of 30 June here:


    By my calcs, Telstra shares have dropped in value by around 8% since then so the 64Bn is lighter by around 1/2 bn just there. Fortunately, there is a large chunk of the fund in cash and fixed interest. I’d hate to see the share portfolio though. Costello’s Higher education fund is probably looking sick as well – if I was the unis, I wouldn’t be expecting much from the interest on this fund for next year

  7. Stuntreb

    I agree, Neil can keep call Rudd: dud (or derivations of same), if I can keep calling Turnbull: Humbull.

  8. Oh come on D55, Malcolm certainly isn’t humble.

  9. It’s “feigned” humility Joni.

    Talcum once lived in a flat you know…

  10. “Yes, a global environment which made the Howard Government look like they were masters of the universe in the eyes of no-nothing die-hards such as yourself Neil.”

    I’m trying to work out what I meant by ‘no-nothing’ LOL

  11. The market opens and up up up it goes…. what has really changed overnight to permit the market to climb? It really does seem like the markets are just lemmings. If one goes up, they all go up, if one goes down, they all go down. And not in a good way.

    I wonder if there is a inverse relationship between the markets and shareholders blood pressure?

  12. John Mc… and it’s not like “D” and “N” are next to each other on the keyboard?!?!

  13. But joni – he said he was, and everyone knows that you have to believe everything the Liberals say – just ask Neil.

    Alternatively, it could be the old Aussie calling a red head ‘Bluey” in me 😉

  14. John, I thought that you just left the k and w off the ends of ‘no’

  15. Calling Mr Rudd KRudd or Dudd is another sign of the unoriginality of conservative rusted-ons.

    Their last big “idea” – WorkChoices – wasn’t even original; it harks back to pre-Industrial Revolution employment conditions.

  16. Dave, I’m sure I did. Like, yesterday I wrote ‘looing’ instead of ‘willing’ work that one out LOL

  17. John, I can’t make any sense of that one I’m afraid. I’m generally crap at proof reading my posts but I must say, Google Chrome (plug plug plug) is excellent with it’s built in spell checker.

  18. I actually got hot under the collar with Neil because of the way he went at TB. Ordinarily I would have just ignored his rant.

    It comes down to ‘it’s alright to disagree and debate sensibly’ but relying on ‘blind ignorance and bias as a blunt object for assault’ is simply rude and insulting.

  19. Google Chrome? I’ll check it out.

    As for today’s market update? It’s insanity all around LOL

  20. I thought I’d change the image for this post to see if it helps to keep Wall St going up tonight… after all, it’s about as scientific as anything anyone else is trying.

  21. joni – LOL It’s worth a shot. If things get really tough, maybe we could even resort to Howard’s solution to the drought – pray – although given how well that’s worked and the fact that the majority of the US has probably been trying that for the last couple of months, there’s no evidence that it would be any more successful here.

  22. John – “‘blind ignorance and bias as a blunt object for assault is simply rude and insulting.”

    You’re right John. I never use my blind ignorance as a reason to be rude and insulting. It just happens regardless.

  23. Tom of Melbourne:


    Same here…It just happens naturally..

  24. Breaking News!

    President Rudd is to deliver another “Bwoadcast to da Nation” on prime time TV this Sunday..

    Following on from his stellar performance last Sunday, ‘the ruddster’ is due to grace our screens again, only this time with his tips for surviving our impending impoverishment.

    According to leaked documents, some of the guru’s finiancial saving tips include:

    – Don’t throw out the crusty old bits of stale bread. Julia Gillard demonsrates how to make a hearty ‘bread n butter’ pudding using leftover breadcrusts and a packet of wallpaper paste.

    – Can’t afford to pay for heating? How you can dismantle the kitchen table piece by piece for firewood.

    – Can’t afford tea? Drink your own wee. It’s free and nutrious, and your guests will just love that fresh fruity flavour

    – Winter blues getting you down? How to make a raincoat out of an old bin liner. Stylish and fashionable without breaking the bank.

    – No money to clothe the kids? Wayne Swan demonstrates how you can make a fashionable ‘European Tuscan” style kaftan out of an old hessian sack and a teracotta pot. Your kids will thank you forever.

    And finally Kevin delivers a handful of heart-warming anecdotes to keep the family spirits lifted:

    “the reality is, we’ve never had it better off”

    “well guess what…”

    “Look on the bright side, we could be living in New Zealand!”

  25. Good article in the SMH today by Peter Hartcher about how the Government dealt with the emerging problem and developed it’s response. Well worth a read:


  26. (scaper – just an aside – did you get the template I emailed?)

  27. But Reb – butter is so fattening, surely she couldn’t be advocating obesity!

    I love Rudd’s ‘ well guess what?’ phrase – it’s like he asking us to guess what question he going to ask himself to answer next.

  28. joni, that picture’s screwing with my head. Can’t we just be happy with a day that the stock markets remain static?

  29. 18. John McPhilbin | October 17, 2008 at 10:36 am
    I actually got hot under the collar with Neil because of the way he went at TB.

    Thanks for the “defence” JMc but I didn’t have problem…that’s Neil’s “style” – over the top – but like most of us here I would defend his right to say what he thinks…I just chose to ignore it at the time…

    joni, luv the picture swotch – says it all – ASX 57.9 as I type – must be working! 😀

  30. switch, bloody, switch – more haste less speed (‘scuse the pun wouldn’t touch the stuff 😀 )

  31. …and SPI futures up 180 that IS good!

  32. Back guys had customers since 8am ( QLD ) time that is.

    treb, I agree respect is to be earned. To call people names form day 1 shows your immaturity and how on earth did the person not earn your respect from day 1, I think simply because he is not of the correct political persuasion could be the reason. if that is the case you have decided not to respect the person for your own selfish reasons and from no fault of the individual.


    Made me laugh out loud, however I happen to love bread and butter pudding and make it quite often. Must try it with wallpaper paste though. I imagine it will have an alltogether different texture than being made with milk.

  33. oh dear, market has fallen below 4000 points…

  34. Amazing, this link says exactly what I have been saying. Why don’t poeple listen to me. Paul Simon was the guy who ressurected wollies from the dead so he should know. Also shows the greed of CEOs and the ignorance of super funds.


  35. Can someone give me a typing lesson please or a big slap for not checking my spelling 🙂

  36. I cannot believe you people. After all the abuse you gave Prime Minister Howard on Dunlop’s blog you start to worry about personal abuse of the PM. Hypocrites!!

    O.K. I will be more polite. Prime Minister Dudd. See I can do it.

    On another topic you can find the Future Fund at this link.


    I hope Costello locked the money away so the ALP cannot get their paws on to it. They will blow the lot if they do. Like they did last time. If people have forgotten when in power they got big double. The ALP produced the highest Federal govt debt in Australian history and under the leftie Cain/Kirner govt the ALP produced the highest state debt in Australian history with the great state of Victoria almost going bankrupt.

    Lest we forget

  37. Neil

    I take offence just like you did the other day. I have never once abused our previous PM or a fellow blogger either here, or blogocracy or even Piers Akermans site for that matter. So please do not label us all either.

    This is the last time I will respond to your comments unless you use our leaders and previous leaders with some respect.

    The Future Fund is run by my previous boss of the CBA David Murray. Won’t tell you what I think of where the fund will be in 10 years time.

  38. I cannot believe you people either.

    Neil is right.

    “After all the abuse you gave Prime Minister Howard on Dunlop’s blog you start to worry about personal abuse of the PM. Hypocrites!!”

    Yeah! Hypocrites! The lot of you!

    You lot should be ashamed of yourselves.

  39. Mr Turnbull

    Read my comments above yours

  40. Is it insulting to call people mindless, politically correct union apologists?

    I always get confused, this always seems like a fact AND an insult. A factual insult. Are they allowed? I’m quite partial to them!!

    EDITOR REB: Consider them allowed….

  41. Gee everyone – look over there – the markets are down…

  42. Not just down Joni, totally rooted…


    Why you should care about the crisis

    By Caitlin O’Toole and Lanai Vasek | October 16, 2008 12:38pm

    * Overnight share rout signals worst is not over
    * Analysts say global recession a ‘virtual certainty’
    * Find out how you’re affected here

    NEWS.com.au outlines how the financial crisis affects your job, interest rates, super and the cash in your bank account.

    With the share market plunging 6 per cent today after US and European markets slumped, government rescue efforts have not stopped the world financial crisis entering a new phase, with a recession ‘virtually certain’.

    The unpredicted global bailout efforts – with the US, UK and European governments making co-ordinated rate cuts, guaranteeing bank deposits and taking over partial ownership of major banks, caused markets to rally briefly this week. But not for long.

    The Federal Government’s $10.4 billion package of payments to families, pensioners and homebuyers and the RBA’s surprise one percentage point rate cut have failed to boost market confidence.

    The signs for the Australian economy, so reliant on foreign growth, are not good.

    Unemployment is tipped to reach 5 per cent, commodity prices are falling, and our dollar has plunged to US65c.

    Australian businesses expect growth to slow in the next six months, and consumers say we are headed for uncertain times – and are snapping shut their wallets.

    Billions lost (again)- when will it end?

    Investors are watching their superannuation plummet or rush to cash out their shares, they are wondering when the volatility will end.

    “We are definitely going into a recession; there is no doubt about it,” says Aequs Securities’ Ric Klusman, who called the government bank deposit guarantee welcome but “really concerning”.

    “We are really very worried now for the local market,” said Mr Klusman, who predicts falling commodity prices will hit miners hard.

    Markets could fall even further, and it’s too early to call a bottom, says CommSec economist Savanth Sebastian.

    “It is likely over the next month get closer to bottom but it is hard to say when exactly that will be.”

    After the market crashed in 1987, it took four months for the markets to reach their lowest point, he said.

    What will happen to my super?

    The Australian share market has lost billions since last year’s highs.

    That means falling superannuation balances, big losses on shareholders’ investments and a crisis of confidence throughout the economy as nervous consumers stop spending.

    “What is happening in the global economy and what people see daily on their television screens and the impact on stock markets affects people’s superannuation earnings, it really does,” Kevin Rudd said earlier this week.

    SuperRatings’ managing director Jeff Bresnahan told news.com.au last month that because around 55-60 per cent of Australians’ super was generally sitting in the share market, there was going to be volatility from year to year.

    “Having said that, what we’ve seen is a significant increase in earnings between 2003 and 2007, and we’re simply handing back a part of that increase through this market cycle,” he said.

    He said there were “very few people” who would need to jump straight to cash right now – most affected are those in or around retirement.

    Why isn’t petrol getting cheaper?

    Oil prices fell below $80 last week. That’s compared to a record high of $US147 in July, when experts said oil below $US100 was now a thing of the past.

    But it’s uncertain how much of that will flow through to prices at the pump – because our Aussie dollar is falling dramatically at the same time – from US95c in June to US65c today.

    “Unfortunately a weaker Aussie not good news for motorists,” says CommSec’s Mr Sebastian.

    Global oil prices are at their lowest all year, as demand slows, but we won’t see a drop in petrol prices at all, he predicts.

    “If the Aussie continues to tumble then the national average will remain up in the $1.50 mark,” he said.

    Are interest rates going to fall further?

    Boosting the first home owners grant to up to $21,000 may have prompted a flurry of interest from homebuyers.

    Despite the massive $10.4 billion injection of spending into the economy from the government economic plan, Mr Sebastian tips more rate cuts.

    He predicts interest rate cuts of 50 basis points in November, and could get another 50 basis point cut by end of year.

    Is my job safe?

    Consumers are spending less, eating at home instead of restaurants and choosing home brands at the supermarket, despite the one percentage point interest rate cut.

    “With a slowing global economy we are seeing many more Mums and Dads saving for a rainy day meaning consumer spending will slow,” says Mr Sebastian.

    “More so if employees are feeling less confident in their jobs then they are much less likely to go out and not spend as much as they previously did.”

    “And despite the stimulus package we are likely to see a drop in the retail sector by Christmas.”

    “Traditionally Christmas is the time of year where retailers make up for rest of year, and this is still unchanged – however retailers may not see a strong Christmas period in light of economic times.”

    So what should I do? Sell?

    Despite the panic, financial advisors say sit tight and even look for bargains.

    “In effect, these are the times when wealth is destroyed. People sell out of fear and emotion when they shouldn’t. And they sell at this time because they’re forced to, they did the wrong thing – borrowed too much, took too much risk.”

    Sell now, and you’ll miss out on gains when the market turns up, he says. And remind yourself that market falls are normal, and average about a 20 per cent drop every five years.

    “If anything now’s the time of buy more. Now’s the time for those who are cashed up to be opportunitistic predators. One thing I can tell you with absolutely certainty, it’s a lot better to buy to invest at these prices.”

    Fifteen years of boom times mean Australian consumers have been spending beyond their means, borrowing on rising house prices.

    “For many years in Australia we have not had healthy spending, quite simply spending more than earning. Like a party and the more you just keep drinking and drinking the bigger the headache is when the party stops.”

  44. joni,

    Is that really MT that posted?

    There used to be a poster over The Australian under the name of Mythbuster and we suspected him of being MT.

  45. Nah – I think it might be someone here pulling our leg.

    And can someone post a summary of John Mc’s comment…


  46. I think it was Malcolm Turnbull, or perhaps the tooth fairy…

  47. Joni


    * Analysts say global recession a ‘virtual certainty’

  48. Let me get this right…the A$ loses around 30% of value and oil loses around 50% of value and we end up paying the same for fuel???

  49. Scaper

    From what I hear OPEC will be going into crisis talks as well.

  50. 43. John McPhilbin | October 17, 2008 at 2:59 pm


    Rule One: Posts shall be no longer than 200 words!

    In your case Jmc, because you are “in training” no more than 20 words! 🙂

    We’ll increase your quota as the weeks progress!

    Jmc that last post was excellent (49) – fourteen words, well done! 😀

  51. I read that too John…if OPEC cuts production to push up the price it will certainly add to the pain.

    If they don’t and the price stabilises to around $65 I bet we won’t see a reduction in prices that were raised because of the fuel spike.

  52. 36. Neil of Sydney | October 17, 2008 at 1:52 pm

    That link shows a return of 1.54% up until June 30 this year. That is well before the world financial collapse, and only 1.54% return for an investment of over $64 billion? John Mac and other more financially astute might be able to tell me if that’s good or not, but for mine that seems like a lousy return for such a huge sum of invested money?

    But as I said previously I heard on the radio that the Future Fund has recently lost billions so the next report should be enlightening. So Neil you don’t have to worry about Labor getting their mitts on it and using it wisely, Howard and Costello have ensured it will be frittered away on large fees and economic losses before it sees the light of day.

  53. Adrian

    Need I say anymore?

    A case of hear no evil, see no evil
    August 22, 2006

    HERE’S something to really amuse Telstra shareholders. Back in June 1999, The Weekend Australian ran a piece under the headline “Why Telstra’s a Real Humdinger”.
    “The growth premium you are being asked to pay for Telstra now does not take into account any of the goodies in the pipeline that are likely to start appearing over the next couple of years.” That was a huge sales pitch and was always going to be an impossible task.

    As a majority shareholder and regulator, the federal Government has an interest in selling its shares at a premium price and an obligation to ensure the telco functions and will continue to function properly. Given the Government has so much of our money invested in the telco, it should have been monitoring our investment much more closely. Mr Trujillo and his team have attempted to reveal the true operational state of the telco, something that has been conveniently ignored. The PM admits he was aware the share price was being propped up by redirecting profits to shareholders as dividends instead of reinvesting in operational requirements. Mr Costello heard rumours but ignored them because, he claims, it was not his area of responsibility. What I think we have here is a case of hear no evil, see no evil, and that is what’s hurting investors.

    – John McPhilbin, Miller, NSW

  54. Scaper

    Rudd has got the right idea for sure, at least he’s showing leadership – very hard to implement, however, definitely the right direction.

  55. ROFLMAO, the arch-trolls Malcolm Turnbull & Neil are really teaching all the dumb lefties a stern lesson.

    Please keep calling Rudd names, I don’t want to give up on slandering Anus Howard either.

  56. ROFLMAO, the arch-trolls Malcolm Turnbull & Neil are really teaching all the dumb lefties a stern lesson.
    Human Dividend | October 17, 2008 at 8:53 pm

    I am not a troll. I give my honest opinion.

  57. Not fishing at all Neil? honestly?
    The way you couch your language suggests otherwise. But I am happy to be proven wrong.

  58. Not fishing at all Neil? honestly?
    The way you couch your language suggests otherwise. But I am happy to be proven wrong.
    Human Dividend | October 17, 2008 at 9:42 pm

    O.K. Some fishing. But i do not like the ALP. I really do believe they are good at two things. 1. producing unemployment and 2. increasing debt.

    And they are useless at anything else.

    Our current unemployment rate at 4% is unusually low. I think in France and Germany it is around 8-9%.

    But my conscience is clear. If our unemployment increases back to 10% when the ALP was in power all you lefties ( TB , Adrian, John Mc et al ) will be all personally responsible.

    Hay but I guess you don’t care . You won the last election and that is all that matters. And I lost.

    See you all in unemployment

  59. “O.K. Some fishing. But i do not like the ALP. I really do believe they are good at two things”Neil

    OK, I certainly give kudos for the first 2 Sentences but the rest of the post is utter, absolutist TOSS. Not even a little bit objective Neil, which is fine- but runs the inevitability of being interpreted as little more than a conservative powerpoint presentation.
    Absolutes just don’t work in a state of flux.

    “useless at anything else”….? You can’t seriously state that & expect to be taken seriously.
    Funny though, I enjoy watching your obscure rationalisations being refuted.

  60. Funny though, I enjoy watching your obscure rationalisations being refuted.
    Human Dividend | October 17, 2008 at 10:05 pm

    If I have provided another human being some enjoyment I have done something useful with my life.

    I Have seen a newspaper article that Anthony Albanedisease wants to get at the Future Fund and use it for infrastructure projects.

    What is it with the ALP. They were handed a $20B surplus. Half is now gone because our most wonderful and glorious Prime Minister (see I can be polite) wants to spend it pissing against the wall.

    After blowing the surplus they want to blow the Future Fund.

    What is it with you people!!!!!

  61. Hehe, Anthony Albanedisease.

    I say screw the Liar’s Party & the horse they rode in on but I still am not real enthused by the current fixation with “spending our way out of trouble” ironically with our taxes. yay.

  62. Neil, economist Hyman Minsk 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.

    Over a a protracted period of good times, capitalist economies tend to move from a structure dominated by hedge finance units to a structure in which there is a large weight to units engaged in speculative and Ponzi financing”

    The Howard Government ensured we would be ill-equipped to deal with the fallout in this global crisis. The Rudd Government have really only just taken over. So, you can take it as a fact that the damage inflicted on our economy is as a direct result of the Howard Government’s failure to insulate us in even the simplest terms.

    It comes back to what Mark Davis, author of ‘Land of Plenty’ recently wrote:

    “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 this. 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.”

  63. John… ya kidding me… you from Miller? I used to live on Miller Rd!!

  64. It’s a small world ‘bought in here dirt cheap’ back in 96, off Miller Rd near the primary school

  65. I was down the other end!

  66. The Howard Government ensured we would be ill-equipped to deal with the fallout in this global crisis. The Rudd Government have really only just taken over.
    John McPhilbin | October 17, 2008 at 11:06 pm

    I personally think your insane. The Libs took unemployment from 8% to 4%. Got rid of all the federal govt debt. Not only that provided an extra $60B in the Future Fund.

    Nothing the Libs did would ever satisfy you because you are an ALP tribal loyalist.

    Let us say that your comments are correct. Do you really think the ALP would have done a better job???

    If you recall we had budget deficits of -12, -17, -17, -13 and a big -10 up to 1996. If labor wasn’t thrown out in 1996 we would have had budget deficits for years past 1996. Yes they would have gotten smaller and labor would have started running some surplus but nothing like the Libs did. Labor was a tired govt in 1996 completely incapable of running a budget surplus.

    The Libs slashed and burned in 1996 and within a year and a half got the budget back into surplus. Only they were capable of this.

    The Libs left us in good condition for the current world problems

  67. Correct, I’m insane and you’re just stupid.

  68. Actually, I don’t like politics or politicians – I’m just calling it as I see it. In fact, it’s dumb-arse politicians that cause the bulk of problems in the world today.

    Don’t you worry, when I think Rudd’s screwed up I’ll say so. Also, the NSW State Labor Government is probably the biggest bunch of screw ups that have ever walked the earth.

  69. http://blogs.smh.com.au/federalelection/archives/2007/10/campaign_cheer_or_campaign_cha.html?page=fullpage#comments

    Sydney Morning Herald blog, 29 October 2007

    I’m chaffing at the fact that people believe that “historically” Howard is the better economic manager.

    History actually says that Howard is a very poor manager – in 1983 he handed over rising inflation, rising interest rates and a dysfunctional industrial realtions system, despite having control of the Senate.

    In 1996, he inherited from Keating, falling inflation, falling interest rates and a workable industrial relations system.

    Now what is he handing over? Rising inflation, rising interest rates and a dysfunctional industrial relations system and once again he’s had control of the Senate.

    Couldn’t manage his way out of a paper bag I suggest! History will judge him and I don’t think it will be very kind.

  70. Caney

    And those are the facts

  71. John McPhilbin:

    “Labor Government is probably the biggest bunch of screw ups that have ever walked the earth”

    Obviously, you haven’t been to Hillsong…..

  72. Wow, the Future Fund losing billions…I have been worried about this for near a year!!!

    That money should have been invested in Australia instead of going OS and if my fears are realised then WC will pale into insignificance in my opinion.

    I read on the web site in the beginning of the year that 55% was exposed to high risk but now read that they will not reveal their investment strategy…funny that.

  73. Shock! horror! Neil, I forgot to mention that this was a silly move by Rudd.

    Surely Rudd knew he would be blowing hot air into the housing bubble.

    House prices up as greedy cash in

    By Justin Vallejo

    October 18, 2008 12:00am

    GREEDY home sellers are taking properties off the market and re-listing them at higher prices in an attempt to cash-in off first home buyers.

    Real estate industry insiders have told The Daily Telegraph of an almost immediate move to increase prices, in one case up to $30,000.

    There have also been moves to change the sale from private treaty to auction after the first home owners grant doubled.

  74. John,

    It was always on the cards and I bet the developers are smiling too.

    The culture of greed is well and alive.

  75. Exactly scaper – just another example why ‘market fundamentalism’ has failed and will continue to fail. Human nature dictates that there will always be predators working the system which has been too easy and lucrative to ignore.

  76. As nasty as this is I couldn’t help but laugh. Game’s up!

    Thanks stupid: hedge exit
    Andrew Lahde, the hedge-fund manager who quit after posting an 870% gain last year, said farewell to clients in a letter that thanks stupid traders for making him rich and ends with a plea to legalize marijuana.

    Lahde, head of Santa Monica, California-based Lahde Capital Management, told investors last month he was returning their cash because the risk of using credit derivatives – his means of betting on the falling value of bonds and loans, including subprime mortgages – was too risky given the weakness of the banks he was trading with.

    ”I was in this game for money,” Lahde, 37, wrote in a two-page letter in which he said he had come to hate the hedge-fund business. ”The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.

    ”All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God Bless America.”

  77. I know I’ve said it time and again but it’s worth repeating “Everything needs to be done to avert a housing meltdown similar to what’s happening in the U.K. ”

    Today’s Editorial confirms my concerns and raises the issue of predatory lending and it’s role in the development of our housing bubble. It should also be pointed out that our big banks have also been engaged in these ‘dubious lending practices’

    [url=http://http://www.news.com.au/dailytelegraph/story/0,22049,24516294-5001030,00.html]Today’s Editorial: Sunday Telegraph[/url]

    Recent data from the RBA showed the proportion of low-doc loans on lenders’ books was increasing, even as the credit crunch kicked in last year.

    There is plenty of evidence to suggest we are just as vulnerable to a house-price crash as the US. In Australia, the average property costs seven times the average income, rising to nine times the average income in Sydney and Perth.

    Compare that to America, where prices are just three times the average income. What looks more like a bubble? In addition, Australian borrowers are struggling under more debt at higher interest rates than their US counterparts.

    Sean Parnell, FOI editor of the AUSTRALIAN recently revealed:

    AUSTRALIA’S big banks ignored the sub-prime crisis in the US and actively took greater risks in the home mortgage market to see off a challenge from rival lenders.

    The banks not only relaxed their lending standards in recent years – ultimately luring many customers into financial distress – but held off tightening their terms of credit to build a better market position.

    Reserve Bank documents, obtained by The Australian using Freedom of Information laws, show the change in lending standards was driven by competition and the housing boom.

    In the last six months of last year, banks informed the Reserve Bank that the proportion of new mortgages described as non-standard – such as low-document loans and those with high loan-to-valuation ratios – was increasing.

    That was despite the sub-prime crisis, rising interest rates and evidence that more of their existing mortgage customers were unable to make repayments.

    In April this year, as the Reserve Bank ended its run of interest rate rises, an RBA analysis found the relaxation of lending standards had allowed some Australians to take on extraordinary debts. Households with annual incomes of $60,000 or more could borrow up to five times their annual income – up from 4 1/2 times in 2004 – requiring repayments of about 50 per cent of gross income, up from 45 per cent in 2004 and well above the common cut-off point that lenders applied of 30 per cent.”

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