For what it’s worth, in the midst of the interregnum Standard and Poor’s announced that – whatever the ultimate outcome of the election – that their AAA credit rating on Australia’s sovereign debt was to be maintained, with a stable outlook.
Unemployment continues to trend down.
Interest rates remain unchanged.
Oh, and that source of all wisdom, the stock market? Pretty much tracking the American market, as it usually does in the short term:
The ASX 200 compared to the S&P 500 for the last month
Nothing to see here, move along.
I guess with a Green being elected to the HoR we should look forward to 99% unemployment and a junk bond status with resultant interest rates around 100%. I’ll check back toward the end of this parliament to see how it’s going.
Yes, fear and loathing in the OO. I’m surprised they haven’t challenged the unemployment stats. Interest rates steady-bugger wake up that Greens MP and tell him to wear druids’ clothes and sacrifice a goat or something.
Obviously Standard and Poors haven’t been reading the OO enough-give them a free subscription.
Australia’s fortunes are literally hitched to China’s. We’re their dirt pit.
The point you’re making is pretty obvious, but doesn’t really amount to much. Especially the one about Standard and Poor’s. They set a pretty poor standard of rating those zillions of CDOs and CDSs and so on that are still floating around the world, and wouldn’t get close to a AAA themselves if some bona fide ratings outfit could be found to rate them. I sense you’re actually taking their rating seriously here.
But, yes, I suppose these things provide an antidote of some kind to the Chicken Little hysteria coming from the three bandidos Abbott, Hockey and Robb and the sycophants in Murdoch-world.
Fair enough, Macondo, but they got the same big tick from Moodys.
And as you say, it does make a mockery of all the lies the Liberals have been spreading about the debt in the last 12 months.
Sadly the parochial punters have sort of bought that, or at least still believe the Liberals would have managed it better. I doubt the fact that the Liberals couldn’t cost their programs will make the slightest difference.
At least we know that the Independents didn’t believe them. Apparently Abbott outbid Gillard in goodies for the last two amigos but they didn’t buy. Maybe they wondered, like Wilkie, if the offers were affordable.
Macondo, you may have noticed the “for what it’s worth” at the start of the sentence discussing S&P’s announcement.
Or authentic, like the person offering the bribe.
Robert:
‘Macondo, you may have noticed the “for what it’s worth” at the start of the sentence discussing S&P’s announcement’
Yes, I did, Robert. I didn’t think it was worth much! The phrase usually indicates the utterer is looking very tentatively but without irony for some affirmation. Tony Windsor used that phrase too, as he announced his intentions, but he was undervaluing his imminent revelation. No offence; I’m sure you’re as cynical as me about the rating agencies when all’s said and done. I wonder just how deeply any ‘good’ news – that is, ‘good’ according to the neolib world-view or as seen through OO eyes – will be buried under a pile of bile on the front page until Labor is removed.
Fair enough.
Just to expand on why I thought pointing this out was relevant and my own view on the ratings agencies:
a) the Coalition made “pay back the debt” a centerpiece of their campaign. Clearly, the organizations whose job it is to assess whether Australia is likely to do so think that this is virtually certain to occur, whoever wins government. Which shouldn’t be historically surprising, given that’s what we’ve always done.
b) The ratings agencies are flawed human institutions. Nevertheless, they are still taken seriously in that the cost of Australia’s sovereign debt is affected by their judgments. So, I don’t think it makes sense to ignore them completely even if their prognostications are elevated way beyond their real importance.
Keep digging Australia
.
To examine the Australian economy you ignore it just about altogether and examine the European and US economies which is the ocean that we and Asia swim.
Yes, China is a major customer, but there can’t be a China sustainable on its presents settings without some uptick in Europe and the US coming pretty soon.
I wouldn’t be over confident in our banks either since 30% of their funding is from overseas. A sudden contraction/increase in costs on that front would bring us our long awaited property bubble burst. Then we would join the global misery party.
There is copious amounts of analysis out there they pretty much state the US is a basket case currently living in a fantasy existence. Europe not much better, papering over a raft of critical problems.
Record amounts have been withdrawn from equities for 18 consecutive weeks as everybody exits the risk, funnily enough the market keeps going up. Amazing what billions of free money via the Fed can achieve. Then there is Goldman, HSBC, JPM etc manipulating down Silver and Gold to keep them from exploding and burying the USD.
One should also have a good look at Govt stats that are almost always adjusted downwards a week or so later. It helps improve the current level of increase and so on.
The US only hope is to play the confidence game – fake stats and a pumped up market courtesy Fed money and HFT algos that see large portions of the market rise in unison, the good with the bad with the awful, it doesn’t matter.
I think Australia’s pain is coming, it is just a matter of time for someone to eventually call ‘no clothes’ on the US and Europe.
The Chinese are selling out of US treasury bonds and buying up commodities or commodity producers, such as Aussie mines. The US debt crisis is coming and the Chinese are wisely adjusting their wealth portfolio.
The ever optimistic IMF can only raise a negative outlook.
‘IMF says growth will slow in coming months
It also raises the possibility of more problems in the sovereign debt market, similar to the crisis of confidence that left Greece requiring a 100bn euro loan earlier this year.’
This could turn out to be very nasty indeed. Lets hope not.
An alternative of the Australian economy:
- Queensland is in recession. Queensland tourism is in a depression.
- Melbourne real estate is in a bubble.
- The wider economy is hollowing out as we inevitably become a quarry for Asia.
- The strong Aussie dollar is wreaking havoc in the manufacturing, tourism and education sectors.
And globally:
- Global imbalances have returned with trade surplus counties such as China and Germany booming, and trade deficit countries such as the US, UK, and the PIIGS suffering.
- China’s investment boom has accelerated post-GFC with the investment share of GDP now north of 45%. The consumption share of GDP continues to fall, worsening already unprecedented imbalances in the Chinese economy.
- The US economy is slowing markedly in the second half of 2010, with unemployment stuck above 9%, households deleveraging and refusing to spend, and the housing market showing no signs of recovering.
So yeah, nothing to see, move along, move along…
love the handle, The Lorax. My daughter started reading that over the weekend. Very eco-apocalyptic for a children’s book.
Queensland doesn’t have a problem as it’s handing most of the rise in the terms of trade over to rich entrepreneurs. The ensuing trickle down effect will obviously enrich everyone and hopefully one day make Clive Palmer’s hair look normal. (/s)
The Lorax – yep, you can take that view. And there’s always reasons to be gloomy, and sometimes they turn out to be right. As Robert Samuelson put it, Wall Street predicted nine of the last five recessions.
But none of them have anything much to do with the marginal differences in macroeconomic policy that will result from the election result.
Rob @ 17: True, but Wall St famously failed to predict the GFC, the Tech Wreck and the Great Depression. All were preceeded by periods of irrational exuberance on the stockmarket. But I agree, macroeconomic policy in this country will have little impact one way or the other. A bit less complacency might be nice though.
Austin @ 16: Too true. If anyone embodies 21st Century Australia its Clive Palmer: Fat, rich, and profiting from the destruction of the planet.
Terry @ 15: