Intrade echoes Obama optimism

Intrade’s latest Prediction Markets show some optimism for the U.S. economy but little hope for Detroit’s big 2 car dinosaurs:

Their markets not only indicate low probability of a depression, they also suggest there could a turn around by the end of 2009.

The news is not so good for Chrysler with “50.1% chance of a partnership agreement being successfully concluded by April 30th” with Fiat and 79.9% probability of bankruptcy.

Intrade markets hold out slightly more hope for General Motors with bankruptcy at 68.0%.

Barack Obama’s latest comments echo these results:

United States President Barack Obama says he is starting to see glimmers of hope for the US economy.

Mr Obama says the US economy is still under severe stress, with many Americans losing their jobs and their homes.

But he says there are glimmers of hope as his massive economic stimulus plan takes effect.
Obama sees ‘glimmers of hope’ for economy (ABC 11 April 2009)

Watching the INTRADE World Crisis Index

INTRADE are following the global financial crisis. Although this is not meant to be a free ad, ‘Intrade, is The Prediction Market where you can buy and sell “shares” in financial, political, weather and other important subjects’.

Their latest email from John Delany on 28 January claims:

The Intrade World Crisis Index will tell us whether the Davos World Economic Forum Matters!

A higher post meeting index means our markets predict a more disastrous 2009 than before. A lower post-meeting index means our markets predict global leaders have reduced the probability that 2009 will be the disaster we previously thought.

We hope the global leaders convince our traders that 2009 will not be as bad as previously thought. We hope to see the index react to the keynote addresses.

You can also bet on the Academy Awards. Slumdog Millionaire is currently at 77.5 for Best Picture. You’ll have to visit their website for an explanation of the betting system.

Kevin Rennie

Qantas Airways?

Is it a pure coincidence that immediately after the departure of Geoff “I am worth it” Dixon, we find out that Qantas and British Airways are in talks.

The BA/Qantas tie up is likely to be just one of many considered over the next few months and would most likely see both airlines retain their separate identities, be separately listed on their respective stock exchanges  – but be run by a single management organisation.

The airlines would also then be able to significantly cut operation costs by merging activities such as ticket sales, administration and other back-office areas.

And I am sure that these cost savings will be passed onto us, the consumer and not into the pockets of the executives.

Economy XX

As we reach our twentieth thread on the economy, it seems that the good money (?) is on the RBA reducing the interest rates by 1%. Now what was it that Howard kept saying about interest rates?

In a local paper here I read an interesting comment on the fact that the GFC seems not to be affecting the average person as much as the rich. It is because they (the rich) have lost so much on-paper money which is affecting them, whereas the most of us do not have that much in investments – all of our money is debt.

Is that why Malcolm is so upset with the governments bank guarantee? Because it is not helping his asset base?

So, blogocrats, what are your thoughts on what is happening?


Amused to Debt

Now I am not a financial expert at all, and so the values here may be inaccurate, but they are the best that I can find and I think highlight what a huge problem debt is to Australia.

The total household debt in Australia is currently about $650 billion or over $32,000 per person. In 1992, the ratio of household debt to income was 56%, in 2002 it was 125%. It is now over 150%. Continue reading

The ABC’s of money, Singapoor and the banks.

ABC Learning has been in the news lately – with the federal government having to input over $22 million into the company to keep the daycare centres open, after the company went into receivership. 

From the reports, it seems that a lot of the money that went into keeping the company afloat and indeed what underpinned the expansion was federal money in the first place. This ABC News report says that the company was receiving “$1 million a day in child care rebates”. So – Eddy Groves was reliant on our taxpayers money to grow his company.

Continue reading

Economy XVIII

It has been a while since I put up a thread on the economy, and after the G20 summit on the weekend I thought that we should have a catchup.

Over the past week the following developments have occurred:

  • Pakistan has obtained $7.6 billion loan from the IMF (which is short of the $15 billion they wanted)
  • Seven Goldman Sachs executives have decided not to accept their normal bonuses. For example, the chief executive Lloyd Blankfein will revert to his $600,000 base salary. Last year he took home $68.5 million – so I think he will be OK
  • And it does not look like the US car manufactures will be getting their bailout money any time soon.

Continue reading