Australia is doomed.
Yes the simple fact of the matter is that Commodities have a way to go to reach bottom rung and the housing bubble is about to burst.
Australian politicians know nothing about the macro economic debts and posturing over semantics.
Add to that the TPP agreement that is being considered and you have a shit storm approaching.
Some views, other than mine… Have placed bold comments which I consider pertinent.
Oh, the stupidity of politicians, Marxism to support socialism and big Government debt
Goodbye Banks… “Beware the financial sectors risky business”
Note that this does not cover Tier 2 capital investments, which is a different story and WILL blow up. Banks invest in AAA Bonds, rather than place monies in the RBA they can invest in AAA Bonds, like Greece, Austria, EU, Argentina…. Yes before their downgrades. Risky and no mention of devaluation impact on these values.
Hey I like Steen Jakobson, “ONE of the first economists to predict February’s rate cut says the Reserve Bank should now put the razor away to avoid bursting what has already become a housing bubble.”
Note not 50% that Australia will have a recession, he is hedging his bets.
Then Commodities.. Oh hum copied from Australian Financial Review
From the AFR comes some sense at last: “The managing director of Denham Capital, Bert Koth, also defied optimists who have called the bottom for commodity prices. “We believe we are still two years away from the bottom and then we are going to stay there for at least four to five years,” Mr Koth”
Note this is not rocket science when you look at China.
On a side note I did sent Mish an email sometime ago to warn him about FMG, it was the debt stupid, not in those words.. Now we have this in the Australian Financial Review.
The AFR: “Fortescue’s stock is worthless at current spot iron ore prices, analysts at CBA calculate. Zippo, zilch… There is $US7.5 billion ($11.5 billion) in net debt squatting on Fortescue’s balance sheet. In Aussie dollar terms, that’s approaching twice the company’s market capitalisation – just a number…”
PIMCO shorts Yen and AUD.
“Our highest conviction views are in the currency markets, and we remain short the yen and the Australian dollar against a long U.S. dollar position”…
On TPP, Wikileaks… This agreement favors no one in Asia, Australia and Europe except the Corporates (yes Money talks, bullshit walks) Hopefully Robb will not sign, cannot see that happening though. Jeez Obama has a lot to answer for…. And Democrates next choice Hilary? Excuse me while I erase my database….
“Under the agreement, corporations may challenge foreign government’s laws and regulations if they interfere with “distinct, reasonable investment-backed expectations”, and they can do so before tribunals under the World Bank or the United Nations. This process is known as Investor-State Dispute Settlement (ISDS), and while it has existed in the past, the large scope of the TPP has prompted some serious concerns.”