Blip or crisis? What 2016's horror start really means

Wed, 13 Jan 2016  |  

This article first appeared on the Yahoo7 Finance website at this link: 


Blip or crisis? What 2016's horror start really means

For anyone invested in the stock market, it has been a horror start to the year. Australian stocks have fallen by around eight per cent.
This is a sharp fall, especially given the slightly negative year for stocks in 2015. The moves on the ASX are similar to those in other industrialised markets.

The main issues driving this negativity are the perennial concerns about the Chinese economy. Market mayhem has seen huge stock market falls in Shanghai and erratic currency movements for the Chinese Yuan that have reverberated around the world. It is interesting to see that the bulk of the hard economic data in the major economies has been good or very good. In the US, the pace of job growth remains very strong and with that, the unemployment rate is low. In the Eurozone, business sentiment indicators and the labour market are improving.

Here in Australia, the early signs for 2016 suggest a continuation of reasonable economic expansion. Australian retail sales are growing at a healthy five per cent annual pace, business expectations for the economy remain firm, even if they not strong.

While the housing market is clearly off the boil, at this stage all we are seeing for house prices is a stalling in the rate of increase, not generalised price falls, while the 2014 and 2015 surge in apartment building has come to an end with a glut of supply in several major cities driving new building approvals a little lower.

It is interesting to note that Australian stocks have traded poorly for many years. Compared with the peak level in early 2008, the ASX today is down over 27 per cent. For those investing just prior to the global crisis hitting, stocks have been a poor investment, offset a little in should be noted, by reasonable dividend flows.

The big question dominating markets now is whether this is merely a temporary blip – as we have seen on many occasions – or if it is the start of something more serious?

As has been the case most of the time in the last 25 years, there are reasons to be optimistic. Policy makers learnt many valuable lessons during the recent global crisis. If conditions deteriorate further, they will ease monetary policy and deliver fiscal stimulus. These measures work.

This is why the futures market in Australia is now pricing in more than one 25 basis point interest rate cut during 2016. It is why the profile for expected interest rate hikes in the US have been sharply pared back in recent weeks. Some are even suggesting that the US Federal Reserve will not hike again as it keeps very stimulatory monetary policy in place as it underpins and extends the current US expansion.

It is not clear when the current market ructions will end, but it will likely be tied to the authorities in China walking away from the misguided management of the market in the first instance, but then delivering policy stimulus in the not too distant future. In Australia, policy makers are likely to sit tight and view global market moves with interest and some concern. They will be ready to act if the worst happens.

For now, with the economy still rolling along, the best bet is probably to think the RBA will be on hold for many months to come and that the Budget in May will be framed around election economics which just might happen to stimulate the economy.

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Wed, 29 Jul 2020



Covid19 has opened a door for Australians to positively accept significant changes that will lead to a shared good. This rare opportunity enables us to achieve sustainable economic and social goals that create a new ‘normal’ as our way of life.

These Ten Steps are presented as non-partisan recommendations to the Australian Parliament in the firm belief that, if they embrace them, the Australian economy and society will be greatly enhanced after the Covid19 pandemic has passed.

*A job for you if you want one.
A significant increase in part time and casual employment can be created that will enable you to enjoy a more creative and peaceful lifestyle and to live longer and better. The traditional age at which you would have been expected to retire will become obsolete as a result. An access age for pension and superannuation will become your choice. This will enable you to remain in paid work for as long as you want to, on a basis that you choose, while boosting the productivity and growth of Australia.

*You will get wage increases that will be greater than your cost of living.
A demand for enhanced innovative skills at all levels of employment will be created as the economy grows in strength, thereby enhancing your stature in the workforce and enabling executive salaries and bonuses to drop to levels that are accepted as justifiable by employees, shareholders and customers.

The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

Tue, 07 Jan 2020

This article first appeared on the Yahoo Finance web site at this link:   


The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

For many people, the cost of the fires is immeasurable. 

Or irrelevant. 

They have lost loved ones, precious possessions, businesses and dreams and for these people, what lies ahead is bleak.

Life has changed forever.

As the fires continue to ravage through huge tracts of land, destroying yet more houses, more property, incinerating livestock herds, hundreds of millions of wildlife, birds and burning millions of hectares of forests, it is important to think about the plans for what lies ahead.

The rebuilding task will be huge.

Several thousands of houses, commercial buildings and infrastructure will require billions of dollars and thousands of workers to rebuild. Then there are the furniture and fittings for these buildings – carpets, fridges, washing machines, clothes, lounges, dining tables, TVs and the like will be purchased to restock.

Then there are the thousands of cars and other machinery and equipment that will need to be replaced.