Recession - Where Is It?

[Lignin]

Jerry,
I did not bring politics into the argument!! I stated two facts:
1; The spending package offered by this government does not benifit me in any way (Nor,I suspect, you)
2, The last time I can remember seeing so many expensive cars for sale on the side of the road was during the "Recession We Had To Have".They were Keatings words, not mine.
It just happens that each time, the Labor party has been in power.Had Howard and his mob won the last election, he'd be carrying the can now, and there is no guarantee that he'd be in less of a mess than Krudd and Swine.
My Daddy told me never to discuss Politics, Religion or Sex, so no wonder I'm repressed.

[RETIRED]

Keep it on topic. This is not a slanging match about whether or not which political party did what to whom and when.

[jerryc]

Lignin,

Apologies for mis reading you.

As to that statement "the recession we had to have" it was like so many of Keatings statements. Keating was a rare example of a politician who not only sincerely believed in what he did but spoke TO the public and not DOWN to them. He was keenly aware that, as is common in finance, there are periods of "correction": It was a wry comment that the media, ever hungry to pander to the lowest common denominator was ready to seize on..

Remember this was the period when Keating was "Arrogant" but Kennett was a "Strong Man".

Cynical? Me?

Jerry

[silentC]

Technically a ressesion is one Quarter of negative growth, a depression is more than one quarter.

I think you'll find that technically a recession is TWO consecutive quarters of negative growth. This makes it straight forward to tell whether we're in a recession or not - just look at the GDP for the last three quarters.

There is no technical definition of an economic depression. It is just a deeper recession and is more a reflection of the affects on the population than an economic measure. Let's hope we don't go there.

[Chumley]

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.

Don't underestimate the Y2K issue. Yes there were nutcases who spoke about planes falling out of the sky. But if all those companies hadn't spent all that money getting all those people to rewrite all that programming code you would have seen some nasty situations (think about how eftpos works, or atms, or traffic regulation systems, etc, etc). The fact that there were so few problems just shows the preventative measures were successful.

Now, think about the Y10K problem - much more difficult to solve!

Cheers,
Adam

[silentC]

think about how eftpos works

It just so happens that I was an EFTPOS programmer for one of the big four at the time. Many of the dates used in the system were stored as dd/mm/yy. It was common practice to do something like this:

If yy > 40 then
yyyy = 19yy
else
yyyy = 20yy

The reasoning being that we will all be long gone before that time bomb explodes. Hopefully all those systems will have been replaced long before 2040.

[Waldo]

Don't underestimate the Y2K issue. Yes there were nutcases who spoke about planes falling out of the sky. But if all those companies hadn't spent all that money getting all those people to rewrite all that programming code you would have seen some nasty situations (think about how eftpos works, or atms, or traffic regulation systems, etc, etc). The fact that there were so few problems just shows the preventative measures were successful.

Now, think about the Y10K problem - much more difficult to solve!

Cheers,
Adam

So why didn't Macs fall over? No one came into the agency I worked at and rewrote things. Maybe it was someone against PCs? Me thinks it was a load of carp.

[SPIRIT]

Greed is the cause
here in Australia we have life style we can not support so we have to play in the open market with the world population moving more and more into middle class the effect has to pop its head up more and more .


Or was it all created to take the focus of G/W
maybe if we stop spending so much we might just find a balance between life style and the environment

[silentC]

So why didn't Macs fall over? No one came into the agency I worked at and rewrote things. Maybe it was someone against PCs? Me thinks it was a load of carp.

We had to upgrade the BIOS on many of our older PCs because they did not handle the year 2000. Some of them could not be upgraded and had to be decommissioned. Lots of our software, including in-house and third party developed had to be upgraded to handle a four digit year. Believe me a lot of work had to be done to make sure ATMs didn't shutdown or start spitting out cash all over the footpath on 1st Jan 2000. The fact that nobody noticed means the job was done well, not that there was never a problem.

Ex Y2K officer for On-line Services Group, 1999.

[Bob38S]

So why didn't Macs fall over? No one came into the agency I worked at and rewrote things. Maybe it was someone against PCs? Me thinks it was a load of carp.

Sorry Waldo

Mac had their dates organised from day 1 as dd/mm/yyyy or the Yankee mm/dd/yyyy.


Just to add to the other comments,

I'm also a self funded retiree who was taught by his fairly strict European parents that if you don't have the money then you don't buy it. This of course excluded only 2 items which were a house and a car. These had to be funded by loans which needed 20% deposits in those days - both loans were paid off in short times by making extra interest payments as they became due. So, after doing all of the right things, saving, making frugal expenditures, paying all of the due taxes etc we are now penalised for doing so. If we had blown the lot etc then my previous paid taxes would at least be coming back to me in part.

Not happy Jan, John, Kevin, Peter, Wayne. Malcolm as well as Tom, Dick and Harry.

[Waldo]

Mac had their dates organised from day 1 as dd/mm/yyyy or the Yankee mm/dd/yyyy.

Fair enough, still think it was a load, to a point. Like terrorism, it only makes the security blokes a packet because Chicken Little cried, "The sky is falling"

Your point of only borrowing what you need and saving to buy the rest is very pertinent. Just bought a newish car myself - I paid in cash, that way I know it's mine and I don't owe anyone. Except for bills and a house, I owe no one any money.

The world needs to look towards Japan, okay they're in recession, but, they don't use credit cards and prefer the old bank book. It's about how you live in a capitalist society and best manage your money.

[jerryc]

Just to take us away from computers and back to the core of this discussion. The problem that has generated this recession/ depression, call it what you will, is that banks in most countries were totally deregulated. Thus we reached the absurd situtation that a single dollar when lent did not represent a dollar debt. Debt was sold on and eventurally that one dollar generated thirty dollars debt. Banks are now being forced to reign in that over debt and so credit disappears. Companies work on forward estimates of profit and borrow against it. People were doing the same. It was not uncommon for individuals to buy a property, calculate forward profit and buy another property on credit on the presumption that it would be financed out ot the as yet to be realised profit on the first property. Still with me? It's what happens in a time of unrealistic greed. Alice is in Wonderland .
Debt, properly managed, does have a place in finance. How else would houses and cars be sold? Japan has been in recession now for ten years because there is another factor to consider. If you put your money under the mattress you have effectively removed that money from circulation and from use. Less money circulating equals less things being bought and sold and result stagnation. It's why governments are trying desperatly to force money into circulation at the moment by injecting it into the economy.

Jerry

[Waldo]

But, to give credit to Costello and the banks in Australia we have what is called APRA, wherein which the financial institutions are regulated as to what they can do, and they were directed to keep away from sub-prime lending practices when it was recognised early on by Costello what the ramifications of this could lead to.

This has lead to Australia having 4 of 11 banks in the world with a AA rating. Whatsherface was very proud to announce this the other day, but neglected to give credit where due for the setting up of APRA.

But forcing money by artifical means into the economy isn't keeping us or anyone else going into or coming out of recession, a case very plainly argued on Lateline Business last night by Robert Schiller, and for which reason I'm against Dudd's $48M stimulus.

http://www.abc.net.au/lateline/

[Sturdee]

Debt, properly managed, does have a place in finance. How else would houses and cars be sold?
Jerry

Personally I think the debate about whether we are in a recession or depression is intellectual wanking and not really relevant to us. What is relevant is the reality that we are in deep trouble, and if nothing is done to help and stimulate the economy then it will become worse.

Every day we hear about more financial difficulties caused by this lack of confidence and business laying of people. If you lost your job and have no hope of getting another than it is totally irrelevant if its a recession or depression. You already know we've got trouble.

The pity is that the media and politicians won't loose their jobs, for if they were at risk they might get of their high horses and try to fix it.

Part of the problem is the reluctance as a country to have debt. This is also ridiculous and has penalised our current generation who have had to pay for capital works that will also benefit generations of people to come. Capital works, being infrastructure will benefit many generation so should in part be paid by them.


Peter.

[silentC]

The problem that has generated this recession/ depression, call it what you will

It's neither because we are not into negative growth yet. The economy is still growing (1.6% last quarter I believe). It is an economic downturn. If we return negative growth this quarter and the next, then we will be in recession.

But as Peter says, it's just intellectual wanking by economists and politicians because it makes no difference to normal people whether it's technically a recession or not if you have lost your job.