Aussie Dollar Plummets
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Economy plummets with bankers screaming (avoiding a nearby primary school)
The pilots of the economy grappled with the controls (and tried to avoid a nearby day-care centre) as the economy entered a deadly plunge. Banking passengers screamed in terror as their investments suddenly lost altitude.
"It was terrible, the floor suddenly fell from under us. People were screaming and crying everywhere. I thought this was the end. I saw flashed of 1930 before my eyes. And I'm not sure we're safe yet." a passenger was reported to have said just after the initial fall.
A well known pilots web site released a dramatic trace of the economy's altitude information. A spokesman from the investigation refused to comment when asked to confirm or deny the accuracy of this information.
A Government spokesman said that the problem was caused by a near-miss with another crippled economy and re-iterated that there were no problems with the engines of the Australian economy.
The spokesman went on to say that the economy was still flying, although it is uncertain as to whether it can regain any of the lost altitude. He is confident that the pilots can bring it in for a soft landing.
The regulator, who had been out to lunch for several years, has stated that many of the economy's systems will need to be examined to determine the exact cause of the incident and to prevent a future occurrence.
A factual report should be released within 30 days, presuming the economy lands somewhere.
"It was terrible, the floor suddenly fell from under us. People were screaming and crying everywhere. I thought this was the end. I saw flashed of 1930 before my eyes. And I'm not sure we're safe yet." a passenger was reported to have said just after the initial fall.
A well known pilots web site released a dramatic trace of the economy's altitude information. A spokesman from the investigation refused to comment when asked to confirm or deny the accuracy of this information.
A Government spokesman said that the problem was caused by a near-miss with another crippled economy and re-iterated that there were no problems with the engines of the Australian economy.
The spokesman went on to say that the economy was still flying, although it is uncertain as to whether it can regain any of the lost altitude. He is confident that the pilots can bring it in for a soft landing.
The regulator, who had been out to lunch for several years, has stated that many of the economy's systems will need to be examined to determine the exact cause of the incident and to prevent a future occurrence.
A factual report should be released within 30 days, presuming the economy lands somewhere.
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The AUD needs to be driven down further. Living abroad I have noticed Oz exports are starting to get caned by competition from the USA or USD pegged currencies.
There are a million Australians working abroad. Government should look at how to encourage them to repatriate their wealth to help the economy. They will probably just want to tax them....
Good Australian real estate should hold out OK. Propped up by a supply shortage and foreign bargain hunters.
Australia should do OK. Helped by a lowered currency.
There are a million Australians working abroad. Government should look at how to encourage them to repatriate their wealth to help the economy. They will probably just want to tax them....
Good Australian real estate should hold out OK. Propped up by a supply shortage and foreign bargain hunters.
Australia should do OK. Helped by a lowered currency.
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Australia should do OK
The leading recipient of our Iron Ore is China (closely followed by Japan) to the tune of around $9B worth. Chinese leading steel makers today collectively announced an immediate cut in production of at least 20% on Business Asia. Some of our Coal is used for Coking as well as power for the mills.
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Hi Gnadenburg,
I concurr with your comments, however, I agree that the best tack is to just ride it out pick up the odd bargain and not get too greedy.
Perhaps is Eden valley anywhere near the abode of peace?
I concurr with your comments, however, I agree that the best tack is to just ride it out pick up the odd bargain and not get too greedy.
Perhaps is Eden valley anywhere near the abode of peace?
So there's a hiccup in the commodities boom? Thank Christ for that! Have you seen the air in China?
Won't a lower AUD help the mining industry have a softer landing? A lower AUD will help other Oz industries- agricultural export etc.
First thing I would do is put off some expensive defence contracts. The arms race in Asia is on hold Mr Rudd.
Won't a lower AUD help the mining industry have a softer landing? A lower AUD will help other Oz industries- agricultural export etc.
First thing I would do is put off some expensive defence contracts. The arms race in Asia is on hold Mr Rudd.
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I wonder how many Aussie dollars were on board the Qantas A330 that "plummeted" off the coast of WA?
Could have been the cause of the problem!
BC
Could have been the cause of the problem!
BC
Last edited by BrokenConrod; 9th Oct 2008 at 05:05.
Grandpa Aerotart
Ah plankbender an optimist after me own heart
China indeed has an enormous trade surplus which I suspect the Chinese will use strategically rather than just hiding their heads in their hands and screaming "We all doom..la".
But I don't think it will be enough.
Those young people that are currently learning to fly who are REALLY keen will keep on and when things eventually pick up will be well placed to take advantage...many will give up and do something else...has always been thus. I learned to fly in the early 80s during that recession, went to PNG because there were NO jobs in Oz...had a ball. Africa and PNG are still there. Expectations will need to be re-adjusted - LH seat of shiny jet within 3 years of first solo will be replaced with L/H of Cessna Caravan for several thousand hours but that won't bother the dedicated inordinately.
Whomever is in power in the US in January will be more passenger than leader. What needs to be done is so politically unpalatable that I don't think either has it in them - I suspect Obama will make it worse and McCain will be a mere spectator - either will be a one term wonder, as will Rudd. Maybe in 4 years time the next POTUS might do the right thing. As Churchill said "The Americans can always be relied upon to do the right thing - after they have exhausted every other possibility".
This is not the end of the world merely the bursting of the latest economic bubble in a long line of bubbles - until next time.
China indeed has an enormous trade surplus which I suspect the Chinese will use strategically rather than just hiding their heads in their hands and screaming "We all doom..la".
But I don't think it will be enough.
Those young people that are currently learning to fly who are REALLY keen will keep on and when things eventually pick up will be well placed to take advantage...many will give up and do something else...has always been thus. I learned to fly in the early 80s during that recession, went to PNG because there were NO jobs in Oz...had a ball. Africa and PNG are still there. Expectations will need to be re-adjusted - LH seat of shiny jet within 3 years of first solo will be replaced with L/H of Cessna Caravan for several thousand hours but that won't bother the dedicated inordinately.
Whomever is in power in the US in January will be more passenger than leader. What needs to be done is so politically unpalatable that I don't think either has it in them - I suspect Obama will make it worse and McCain will be a mere spectator - either will be a one term wonder, as will Rudd. Maybe in 4 years time the next POTUS might do the right thing. As Churchill said "The Americans can always be relied upon to do the right thing - after they have exhausted every other possibility".
This is not the end of the world merely the bursting of the latest economic bubble in a long line of bubbles - until next time.
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You're obviously not renting.
For most of the renters I know (Mrs Leafblower is a property mgr) the rent is equal to the mortgage repayments... and in some cases, a litle more.
Ask any independent financial advisor, and they'll tell you that the stock market outperformed real estate consistently over the last two to three decades.
This may sound weird, but if you actually run the numbers, it works: Instead of buying, rent and spend the difference (there is one in most places, although property folk may want you to believe otherwise) investing the stock market (buy now, it's a good time
), and you'll come out in front after twenty years. Doubt it? Work through an example using average earnings, house prices, real estate and stock market gains, and you'll see what I mean. Assume similar risk profiles when selecting mutual funds..
ABC news has just reported that one iron ore exporter's clients are asking for their shipments (to China and India) to be delayed.
PB
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Who are you trying to convince?
I have seen properties advertised in the last 3 months where it would be possible to purchase two properties in Sydney, rent one and live in the other and it would probably only cost you about $50 per week!
These are not properties out in the 'mortgage belt' either, they are in sought after areas...
I wouldn't be going with any 'independant advisor' who advises an 'all the eggs in one basket' approach! Shares have their place in a balanced portfolio, as does property. I know a number of people who do not own the house in which they live, they do however have property as part of their investment strategy.
I have seen properties advertised in the last 3 months where it would be possible to purchase two properties in Sydney, rent one and live in the other and it would probably only cost you about $50 per week!
These are not properties out in the 'mortgage belt' either, they are in sought after areas...I wouldn't be going with any 'independant advisor' who advises an 'all the eggs in one basket' approach! Shares have their place in a balanced portfolio, as does property. I know a number of people who do not own the house in which they live, they do however have property as part of their investment strategy.
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Check Domain Jaba, many properties that you can positively gear, in particular in the city! Rent's are ridiculous, I reckon it's all the 'get rich quick with shares' types who now have sold off their property to invest in the stock market, pushing the rental prices up!
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PB.
You have to compare apples with apples. Leverage is required.
Banks etc allow you to leverage into property at a much higher gearing ratio than shares. Unfortunately.
You have to compare apples with apples. Leverage is required.
Banks etc allow you to leverage into property at a much higher gearing ratio than shares. Unfortunately.
Why would anyone pay rent for a house that is more than what the mortgage would cost? (Except in a slump when no-one can get a home loan)
I am looking at buying my first place (but am being patient and waiting for the bubble to finally burst) and have found that in most cases the mortgage is close to double the price of renting an equivalent property.
I am looking at buying my first place (but am being patient and waiting for the bubble to finally burst) and have found that in most cases the mortgage is close to double the price of renting an equivalent property.
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ferris, margin lending can do the same for your in shares, but is also associated with increased risk of course.
I looked at it a year ago but steered well clear of it once I dug into the potential pitfalls.. like a huge bet, really. If you don't know what you're doing, you might as well put it on the horses..
Same really with betting seven years' salary on continually rising property prices.. unless you have a really really good case for negative gearing (assumes you'll be paying taxes in Oz for years to come, which is not a given in aviation), you might want to stay flexible and independent..
Says it all, really.. mate, rent a place, stay flexible for the next position on the other side of the country or the other side of the world, and invest the half you've saved wisely. For a young person, generally recommended is a third in bond/cash/term deposits, with the rest in mutual funds of whatever risk you find acceptable, with different institutions around the world, in at least two different currencies.
I looked at it a year ago but steered well clear of it once I dug into the potential pitfalls.. like a huge bet, really. If you don't know what you're doing, you might as well put it on the horses..
Same really with betting seven years' salary on continually rising property prices.. unless you have a really really good case for negative gearing (assumes you'll be paying taxes in Oz for years to come, which is not a given in aviation), you might want to stay flexible and independent..
..in most cases the mortgage is close to double the price of renting an equivalent property.
This may sound weird, but if you actually run the numbers, it works: Instead of buying, rent and spend the difference (there is one in most places, although property folk may want you to believe otherwise) investing the stock market (buy now, it's a good time ), and you'll come out in front after twenty years. Doubt it? Work through an example using average earnings, house prices, real estate and stock market gains, and you'll see what I mean. Assume similar risk profiles when selecting mutual funds..
Property markets can crash leaving you with negative equity, or interest rates can go sky high, but by hanging in there long term you will come out ahead. How much is a Qintex share worth today ? Compare that to a house bought at the wrong time in the 1990s.
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PB, you are missing my point. Once saw the bloke from "money" standing outside his first house in SY, talking about how he had paid 100k for it, and now it was worth $350k (this was a while ago!!). He then went on to say that if he had put the 100k in an index tracking fund, he would now have 750k. Thats fine, except to put 100k in an index tracking fund, you need 100k (pretty much). To put 100k into a house, you need 10k (pretty much). Do you see my point about leverage? Go ask a bank how much they lend you for shares if you have 10k.
ps. there is no point in talking about the greater returns of the sharemarket if you cant handle the risk inherant in the sharemarket.
A fairly recent inception are leveraged funds, which might be the answer. A lot different to a margin loan.
ps. there is no point in talking about the greater returns of the sharemarket if you cant handle the risk inherant in the sharemarket.
A fairly recent inception are leveraged funds, which might be the answer. A lot different to a margin loan.
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A lot of people sweating on a margin call at the moment, I'm not sweating on the bank making a call on my housing loans, not yet anyway...
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To put 100k into a house, you need 10k (pretty much).
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I'm not sweating on the bank making a call on my housing loans
Here are some interesting graphs:-
