Recession - Where Is It?

[Metal Head]

Hi,

I just returned from the barbers which I feel is a place one can get a feel on certain things going on in the economy and alike. Given the people who were talking there and that of friends and family no one seems to be affected directly by this so called recession. The barber said he hasn't be affected by any "downturn" neither had any of the tradespeople in his shop. None of the 30 business in the immediate area have reported having problems either - so is this just government propaganda again, or the work of the media?

No I'm no hermit, I live in the real world and read the papers (watch TV) like nearly everyone else. No I don't live in a affluent neighbourhood aka Toorak Camberwell etc either so where are all these people struggling? I see people living on the streets, druggies getting their rocks just as they have for decades. Maybe it is the same people (who took us as fools) that told us in the late 90's that the World was doomed with the forthcoming YK2.

Are we being conned or taken for a ride?

MH

[jerryc]

Metal Head,

I have studied Economics and Economic History and put simply the financial world is a wonderful house of cards built on credit and confidence.
to over simplify explanation of a complex issue, What has happened is that confidence has collapsed and so credit is tighter. Money remains but people keep it to themselves, as do banks and countries. The effects of a recession/ depression vary with areas and countries. If you lived in a community that relied on mining for example as do many in West Oz or had a job in the financial world of Wall Street then this recession would be very real, many have been put out of work or are on short hours. Seems that at present the area you inhabit is shielded. I have a friend who is an architect in Melbourne and he tells me he has had no inquiries about new work for over a month. He is living on present contracts and is worried.

What this and other governments are doing is to try to keep money on the move. The Great Depression of the 1930's haunts history and governments don't want such a collapse again. The Great Depression had a hand in bringing Hitler to power.

Let's hope things stay rosy for you and your area.

Jerry

[Lignin]

Would like to agree with the habitues of your barber, but, as a self funded retiree,completely dependant on my investments, I have lost over THIRTY PERCENT of their value in about eight months.
I console myself with the knowledge that, given enough time,things will get better, and will probably get back to where they were before the ???? fell out of everything.
My pension is generated from dividends earned from my investments, and, unless you have had your head buried deeply in the sand, you must be aware that company profits and therefore dividends, have copped a belting.I'm bloody worried!!!
Krudd's "generousity" means exactly Sweet Fanny Adams to me.
I have been prudent,saved,paid off everything. and even insulated my house.I no longer earn an income, so even the tax relief is worthless to me, and to thousands like me.
I paid taxes for over 40 years,educated myself and did pretty well, but, at 66 years, I am not eligible for a Government pension because I have too many assets.!!
I do not understand why or how this situation has developed, but it seems to me that the blame lies fairly and squarely at the feet of the Yanks.
It's fairly true that the Yanks have sneezed, and the rest of us poor bastards have caught a cold!!

[givupcont]

Hi,

I just returned from the barbers which I feel is a place one can get a feel on certain things going on in the economy and alike. Given the people who were talking there and that of friends and family no one seems to be affected directly by this so called recession. The barber said he hasn't be affected by any "downturn" neither had any of the tradespeople in his shop. None of the 30 business in the immediate area have reported having problems either - so is this just government propaganda again, or the work of the media?

No I'm no hermit, I live in the real world and read the papers (watch TV) like nearly everyone else. No I don't live in a affluent neighbourhood aka Toorak Camberwell etc either so where are all these people struggling? I see people living on the streets, druggies getting their rocks just as they have for decades. Maybe it is the same people (who took us as fools) that told us in the late 90's that the World was doomed with the forthcoming YK2.

Are we being conned or taken for a ride?

MH

I'm with you, I've been in recession my whole life and cannot see the difference eccept for bosses trying to pay employers less

[Perkz]

Would like to agree with the habitues of your barber, but, as a self funded retiree,completely dependant on my investments, I have lost over THIRTY PERCENT of their value in about eight months.
I console myself with the knowledge that, given enough time,things will get better, and will probably get back to where they were before the ???? fell out of everything.
My pension is generated from dividends earned from my investments, and, unless you have had your head buried deeply in the sand, you must be aware that company profits and therefore dividends, have copped a belting.I'm bloody worried!!!
Krudd's "generousity" means exactly Sweet Fanny Adams to me.
I have been prudent,saved,paid off everything. and even insulated my house.I no longer earn an income, so even the tax relief is worthless to me, and to thousands like me.
I paid taxes for over 40 years,educated myself and did pretty well, but, at 66 years, I am not eligible for a Government pension because I have too many assets.!!
I do not understand why or how this situation has developed, but it seems to me that the blame lies fairly and squarely at the feet of the Yanks.
It's fairly true that the Yanks have sneezed, and the rest of us poor bastards have caught a cold!!

I think all of us who are approaching or in retirement share your sentiment ( and loss!)
It makes me more than a little angry that we have all done what the Govt asked a decade or so ago and moved to self fund our retirement and most of us have done that in a responsible and beneficial manner only to have a large part of it removed in a way that is beyond our control.

I get even angrier with all the experts coming out of the wood work who have "seen it coming". If they saw it ( whatever IT is) coming then why didnt the highly paid professionals in Govts see it and PREVENT it happening??

The only thing that I have seen is the failure of the secondary mortgage market in the US that can be considered a tangible thing that has happened. Why that should cause all the doom and gloom is beyond me.

I believe that the doom and gloom merchants including our very "professional" media have been very irresponsible. I believe that KRudd and W Swann have been naieve and have not got a clue how to manage this situation and have done nothing but add to the perceptions. Simply handing out money that is going to be stuffed down the throats of pokies is not how to generate sustained economic stability and growth.

Thank god Mr Howard and Mr Costello managed to repay the old labour debts and put a great deal of money in the "bank" ...The shame of it is that Mr Rudds inexperienced financial incompetence has now overdrawn the bank account in a little over 12 months !!

The way to overcome this self fulfilling prophecy is to stop all the doom and gloom talk and get people talking positively again. It is quite amzing ( and historiclly proven) that we all believe what we are told by the media and politicians..god help us..

A lot more of us need to get angry and tell them we dont believe and ask for proof and details..there has been a lot of talk but not a lot of fact

[Cruzi]

Technically a ressesion is one Quarter of negative growth, a depression is more than one quarter.
It is happening CES are getting notices every day about companies putting off workers, everyday there is more and more companies going under.
Less people employed = less people spending = less people employed.

Here is a situation that partisan politics do not work, everyone in every party should be looking for a way of immunising Australia from the golbal crisis, not point scoring or laboured rhetoric.

The Great Depression had a hand in bringing Hitler to power.

No, the War Repatriations that Germany had been paying since 1918 had a lot more to do with it.
He promised a way out from under the crippling debts and the people bought it.

[Ben from Vic.]

My sister and hubby own a mobile phone shop and have a few corporate contracts, one of which is with a forklift company that supplies forklifts to a mining company. The mining slow down has resulted in the forklift company now having 1500 forlifts no longer required by the mine. Obviously with flow on affects in mobile phones etc.

I'm doing my best to keep tool shops afloat.

Ben.

[weisyboy]

i think we have been talked into a recesion.

if the media didnt mention it then people would keep spendign as normal and business would not see a reduction in sales and life would go on as usual.

if more things were made in australia tehn there woul dbe a lot more industry and it would give jobs to a lot more people.

even now if teh government put a restriction on what could be imported quantity mainly thewn there would be a lot of jobs first in buildign up the diferent industries then working in them.

i would not mind paying a little more for quality australian goods than teh cheep chineese crap we get at present.

[jerryc]

Cruzi,

I was oversimplifying an explanation on recession. The remark on Hitler was shallow because I wasn't intending to do more than show how governments fear unrest. I said it had a hand in the rise, not that it was the prime cause.I am well aware of the problems of Germany during the Weimar Republic, what generated those problems and it's ramifications that allowed the rise of Nazi Germany. However a short answer in a forum usually precludes deep analytical answers.


As to the rest of your argument, I would not fault it.

Jerry

[Cruzi]

Sorry JerryC, my fault, I forget that we do need to condense from time to time.

Having said that it's Carl's turn now

even now if teh government put a restriction on what could be imported quantity mainly thewn there would be a lot of jobs first in buildign up the diferent industries then working in them.

This is a double edged sword, if we restrict imports, the countries we restrict then restrict our exports.
The biggest importers into our country also happen to be our biggest customers, (China, India, Japan, USA), any jobs gained from restricting imports would quickly be offset by jobs lost from exporting industries.

Being talked into recession is not the problem, people spend when they feel secure in their jobs, with so many companies going under (SWMBO informs me they got notices for over 5,000 job losses so far this week), people are unsure about their future, less borrowing, less spending, less jobs, less confidence.

Ben hinted at what happens when a company goes under, the retailers in town get less money, the suppliers get less money, the service industries get less money, people borrow less, everyone has to downsize staff and the cycle continues.

.

[Lignin]

I live in The Hunter, an area heavily dependent on mining.
Today I had reason to travel fairly extensively throughout the area principally populated by those who work in the mines, and, until recently, pretty affluent.
I was startled to see so many late model twin cabs and big 4WDs on the side of the roads with "For Sale" signs on them.The last time I can remember this happenning was during Mr Keating's "Recession We Had to Have"!
We're hurting up here, and it's going to get worse before it gets better.
To those of you who think it is a conspiracy by the bosses to diddle the "workers", wake up to yourselves.It's bloody-well happening, and you'll probably feel it soon enough.

[Waldo]

Are we being conned or taken for a ride?

MH

Whathe? You're not serious.

First industry to notice is advertising when clients cut back on budgets, it started back in March of last year, a while before media started reporting it. It's real.

[Steve Fryar]

It is pretty real in the SE of South Aust.too.I'm lucky I work in the oil and gas industry.It is relatively stable but having said that I know of some service companies that are laying off staff.Nine months ago everybody was looking for staff but couldn't get any because of the mining boom.Different now.

[Pheonix]

The top 200 companies in the world have lost 74% of their value, thats not a recession?

[jerryc]

I wondered when party politics would rear it's head.
Lignin and Perkz, I too am a self funded retiree and like you I am hurting. Therefore I paid attention to Turnbull and his opposition statement.

Know what? Not a word about self funded retirees.
Mr Howard and Mr Costello were able to repay the debts because they were fortunate to be in power during a boom period. Copious company tax and advantageous foreign trading makes it easy to be successful when things are going your way.

If you examine the present world financial situation it will be obvious that "handing out money" is not confined to the Austalian Labor Party. Nor is the concept of going into debt. The USA, home of '"free enterprise" has been in debt for many years. Ben Bernanke is busy printing money to the extent that some economists wonder how it will be balanced and what it will do to the value of the dollar in future.
As to handouts feeding the pokies, that is a rather insulting comment to level at the majority of recipients of help.. Just think what the American financial bosses did with the handouts given to them. They sacked staff, whilst still paying the top echelon huge salaries and bonuses. That of course is different. The financial sector has been one big poker machine for several years.

As we discovered, what appeared to be a scam in the American housing market blew up into a world wide disaster. Credit and debt drive finance and is more complex than is possible to explain here. Basically what happened was credit was too easy and many companies borrowed too much. Banks get nervous and call in debt and the house of cards crumbles.

So to fall back on the old easy political arguments and blame a particular party might make you feel better but it is not the full answer.

Jerry