Governments & stock markets panicing , heading for a Depression in 2009 ?

Ian Robinson · #1 08-10-2008, 11:01 PM

What do you think of the actions being taken by the central banks and governments , and the response of the stock markets ?

I think the global economic outlook is grim and a global depression is highly likely , this is probably the start of the Great Depression of 2009.

casstony · #2 08-10-2008, 11:13 PM

Instead of cutting the rot out to save the patient, their trying to drown us in more debt. In trying to avoid recessions the U.S. is about to succeed in creating a depression. That's just my wild guess anyway. If were lucky we'll just get a severe world recession.

tornado33 · #3 08-10-2008, 11:20 PM

After seeing the 7:30 report tonight they said AT BEST Australia will cop a recession worse then the 1991 one, lasting 1.5 times longer than it. At worst, we will get a full blown depression with 20% unemployed, for a decade!

Thank goodness I have all the astro gear I need. Doing astro imaging in my backyard costs nothing, bar the 1 or 2 cents worth of electricity the rig uses. So a full depression shouldnt stop me enjoying my hobby.

I think the astronomy market will really suffer, as it will be seen as "non essential" and among the first thing that people cut out. Science reasearch will also suffer badly. If worst case prediction comes to pass, companies like SBIG, FLI and the like have little chance of surviving. I cant see many 10 grand astro cameras being sold in a full blown worldwide recession/depression. A host of other astronomy equipment makers will fold as they lose sales to both domestic and professional customers.

Institutions like the AAO may go too. I cannot see it surviving in a country with 10 years of 20% unemployment, along with the fact other countries that might otherwise support it like the UK will also be in dire straights.

To see the horribly sobering prediction go here and download

Quote:

Steven Keen talks to 7.30 Report [mp4] [wmv] (08/10/2008)

erick (Eric) · #4 09-10-2008, 10:24 AM

I've been told that Universities and other tertiary institutions can do OK in a recession. People take the opportunity to upskill or train in different areas.

Robert_T · #5 09-10-2008, 01:10 PM

my biggest gripe is the $ crashing and stopping me buying stuff... I've told the wife that we're saving interest on the mortgage now so I shoud be able to spend more to compensate... you're not going to believe it but she said "no" - go figure

rogerg (Roger) · #6 09-10-2008, 01:13 PM

I don't have a good enough understanding of the situation to really understand what the risk is to the country or even myself. But the situation seems pretty scary anyhow, enough to make me spend cautiously, put that bit more against the home loan and hope the bank doesn't go belly up rendering my efforts fruitless

Certainly expect that astronomy will suffer throughout the world in general, it's a luxury which especially in the US surely will take a significant hit?

There are upsides to everything and I'm sure one would be increased sense of community as people share resources more rather than buying their own.

Roger.

Starkler (Geoff) · #7 09-10-2008, 02:13 PM

People will stop buying luxuries out of discretionary income in favour of saving in case they loose their job. Ironically, this will cause other people to loose their jobs.
Business confidence is down, employment is down, and gen Y are going to learn some lessons that each generation before has.

Quote:

put that bit more against the home loan

Always a good idea and a lower interest rate climate allows each extra $ paid to go further.

shredder · #8 09-10-2008, 03:13 PM

I personally feel we will hit a recession, but will recover slowly. I think, and have done for some time, that in Australia even though we are in a “Boom” time, it is only the mining area that is booming and keeping the economy as a whole out of recession anyway. For those of us not in a boom industry we are probably already in a recession, and have been for some time. It just isn’t politically responsible to say so.

I would like to hope that the issues affecting the US/Europe will be slowed sufficiently by the actions currently being taken by the world banks that it won’t affect us too greatly. Our recession (or non-recession) might go on a little longer than otherwise expected, and maybe be a little more obvious in the media/financial reporting, but that is about all we will see. Naturally if their actions don’t work, we are all toast, and out of jobs...

I think some of this is also media beat-up. The US for example has isolated their defence spending from budget cuts. Clearly to avoid depression they can cut this to save themselves if need be. And I am sure that isn’t the only action they have open to them. While it sounds funny there is no reason why 0% is as low as interest rates can go (and we are well off that anyway). I remember back in about 98 working for a major bank, Japan regularly had their rates below 0% to avoid recession and stimulate the economy. Think of that, you are getting paid to take out a loan.... can you see it “here have $100, and for every year you keep that $100 you will get an extra $1”...

And finally if we are all out of jobs, at least we can still look up, and with some luck there will be less cars, less lights, less air travel and so far less pollution...

qld · #9 09-10-2008, 04:52 PM

Quote:

Originally Posted by shredder

I personally feel we will hit a recession, but will recover slowly. I think, and have done for some time, that in Australia even though we are in a “Boom” time, it is only the mining area that is booming and keeping the economy as a whole out of recession anyway. For those of us not in a boom industry we are probably already in a recession, and have been for some time. It just isn’t politically responsible to say so.

I would like to hope that the issues affecting the US/Europe will be slowed sufficiently by the actions currently being taken by the world banks that it won’t affect us too greatly. Our recession (or non-recession) might go on a little longer than otherwise expected, and maybe be a little more obvious in the media/financial reporting, but that is about all we will see. Naturally if their actions don’t work, we are all toast, and out of jobs...

I think some of this is also media beat-up. The US for example has isolated their defence spending from budget cuts. Clearly to avoid depression they can cut this to save themselves if need be. And I am sure that isn’t the only action they have open to them. While it sounds funny there is no reason why 0% is as low as interest rates can go (and we are well off that anyway). I remember back in about 98 working for a major bank, Japan regularly had their rates below 0% to avoid recession and stimulate the economy. Think of that, you are getting paid to take out a loan.... can you see it “here have $100, and for every year you keep that $100 you will get an extra $1”...

And finally if we are all out of jobs, at least we can still look up, and with some luck there will be less cars, less lights, less air travel and so far less pollution...

well i hope you all save your money to pay for the carbon tax you so eagerly support and is being designed for you by your politicians. When you loose your jobs(most aussie jobs have been lost to China ,never to return in your lifetime) you can stop worrying,After all a mortgage is irrelevant ,lifestyle is irrelevant,carbon reduction is the only priority its the future.........give me a break.

Glenhuon (Bill) · #10 09-10-2008, 07:04 PM

Its the way the capitalist cookie crumbles, always has and always will. The more you look at doom and gloom the worse it will get. Self fulfilling prophecies an' all that.
Reckon there'll be a slowdown all over the "western" world, not sure about Asia, but it will right itself and we'll go back to living in cloud cuckoo land for another while, until the next time.

Bill

Miaplacidus (Brian) · #11 09-10-2008, 07:08 PM

"We're all goin' to be rooned."

Hanrahan aside, what is the definition of depression?

In the 19th century people used the word "panic", but after a while that was thought too alarmist, so they substituted "crisis". Then that was thought pretty alarming too, so to try to get people used to the idea of a temporary decline in the economic landscape they decided on the word "depression". That worked well up until 1932, when depression garnered the adjective "great" and resembled a sinkhole. "Recession" was meant to suggest a mere backwards step, and conventionally means two consecutive quarters of economic contraction (however measured). As far as I am aware, depression remains undefined and unmeasurable, which is just as well really, since when all is said and done it still remains the name for a state of mind. If some of us lose our jobs, then quite a few people are going to be in a pretty goddam depression. You can bank on it.

GrahamL · #12 10-10-2008, 06:49 AM

looking at the gdp of most countries over the last couple of years we
have been in a reccesion/depression the whole time if you take
the terminology as is.

Forcasts for 2009 show more of the same .. but the slow down in the asia pacific is much more subtle than europe and the US.. so maybe there is some truth in the politicians yarping that our ecconomy is strong and robust enough to sneak through this with only a severe case of indigestion for a year or two.

AstralTraveller (David) · #13 10-10-2008, 09:59 AM

Quote:

Originally Posted by Glenhuon

Its the way the capitalist cookie crumbles, always has and always will.

True. It isn't a stable system - it always has boom-bust cycles, with all the associated hardship for the working classes. We've seen 1840, 1890, 1930 just to mention the major depressions. The massive destruction of capital during the '39-'45 war postponed the next cycle but I'd suggest we are now overdue. Perhaps this will be a major depression, perhaps not; I don't know. But if this isn't the biggie then we can look forward to it in 5-10 years.

The problem is that capitalism requires constant growth and that just isn't possible - if for no other reason than we are on a finite planet. Capitalist crises are unique in history in that they are not caused by a shortage or underproduction. There is enough food (though not distributed evenly) and production is rattling along, yet the economy goes belly up. So long as we persist with this anarchic system we condemn the world to the barbarity of wars and depressions.

I saw a quote yesterday that sums up the present situation nicely: 'a game that privatizes profit but socializes risk'.

casstony · #14 10-10-2008, 10:01 AM

Without even considering the credit crisis, a recession is locked in for the USA due to excessive debt, falling real estate values and failing banks. Add to that a government that thinks the problem can be cured by more debt and you get the credit crisis. The USA is a hairs breath away from a repeat of the 1930's - they're stumbling around like a drunk in a minefield - good reason to be on tenterhooks as we watch. Where they lead we follow.

It's easy to think panic breeds panic and all will be fine once everyone regains their senses, but there are good reasons to be very worried this time.

On a more important note it's a beautiful sunny day out there. Sun is warm, grass is green. That's better

§AB · #15 10-10-2008, 10:03 AM

A major upgrade of Melbourne airport has been delayed because of this crap

Jen · #16 10-10-2008, 05:16 PM

Unavoidable - we in a very deep pile of poo.

i ticked this one cause it made me laugh

(Jen tries to find her shovel)

acropolite (Phil) · #17 10-10-2008, 07:31 PM

I selected pretty bad but not inevitable. The players in this game are the same (the 1930's and now) and the lesson is there to be learned (again). The banking system, worldwide, has behaved very badly. If this scenario is not to be repeated we need some sensible worldwide regulation. A good start would be preventing the banks from jacking up interest rates and not passing on full RBA cuts in an attempt to maintain profits which they don't deserve; these guys either directly or indirectly have causes vast amounts of our superanuation to vanish.

norm · #18 10-10-2008, 08:12 PM

The whole thing is the pits and we literally have no say in it at all. The greedy CEO's of the likes of Telstra, Macquarie Bank, Qantas et al will still walk out with golden parachutes one way or the other.

I find it more astonishing that this has probably brewed for some years and only the last 9 months did the chickens come home to roost. Financial planners, funds managers, all the so called experts didn't even see it coming, at least not the crisis it is now.
I wished I'd move all my super to a cash fund now

. I do feel sorry for those due to retire in the next couple of years.

Quote:

If this scenario is not to be repeated we need some sensible worldwide regulation.... these guys either directly or indirectly have causes vast amounts of our superanuation to vanish.

Couldn't agree with you more mate!!!

One more thing, given we have compulsory superannuation, shouldn't the government at least guarantee your principal ?

Its sickening to know that our hard earned $$$ are dwindling away......

Ian Robinson · #19 10-10-2008, 09:40 PM

Quote:

Originally Posted by norm

The whole thing is the pits and we literally have no say in it at all. The greedy CEO's of the likes of Telstra, Macquarie Bank, Qantas et al will still walk out with golden parachutes one way or the other.

I find it more astonishing that this has probably brewed for some years and only the last 9 months did the chickens come home to roost. Financial planners, funds managers, all the so called experts didn't even see it coming, at least not the crisis it is now.
I wished I'd move all my super to a cash fund now

. I do feel sorry for those due to retire in the next couple of years.

Couldn't agree with you more mate!!!

One more thing, given we have compulsory superannuation, shouldn't the government at least guarantee your principal ?

Its sickening to know that our hard earned $$$ are dwindling away......

I think they saw it coming and will have privately positioned themselves , but chose not to tell their clients .... after all their clients' money is not their money and so if the clients loose money based on their advise - given in so called "good faith" then it's no skin off their noses.

I decided financial advisors were a waste of time when they ALL told me I should put ALL my money from my separation and super into their products when Newcastle Steelworks closed .... BAD IDEA !!! . I instead took my own advise and rolled over the super I have wait to access into a low risk rollover, and used a big chunk of my cash to pay out my house mortgage , pay out the car loan and the personal loan and to clear the credit cards , and I still had money left for emergencies and living in case I couldn't get another job soon. Best move I ever made.

The warning signs were all there about 12 months ago , maybe longer for those of us who follow the markets and know something of the last few crashes.
Of cause Bush and Howard saying thing were fine didn't help.

casstony · #20 10-10-2008, 09:46 PM

Quote:

Originally Posted by norm

Financial planners, funds managers, all the so called experts didn't even see it coming, at least not the crisis it is now.

Many of these people are primarily interested in the fees they can earn off your investment; with such conflict of interest how can you know who to trust? Educate yourself to the extent that you can pick which advice to follow.

I learned the hard way not to trust financial advisers after accepting bad advice just before the 1987 crash. After ending my career due to poor health last year I've had to worry about protecting savings again. Just for kicks I accepted an appointment with a Bank financial advisor late last year - his advice was to put everything into managed equities funds. I argued against that advice and got the same tired old lines about the sharemarket always going up over the long run. (it took 25 years for markets to exceed their peak prior to the Great Depression).

Here's one place you can get an understanding of current events:
http://globaleconomicanalysis.blogspot.com/