I am a clown
Image courtesy of Com.1000. Click on photo to enlarge and make me look better.
Kidding – that is what clowns do right?
Just ask Joe Hockey – “Treasurer Joe Hockey has described as “clowns” commentators who warned Australia’s economy was heading for recession.”
Link to SMH article below (1).
Well I have some news for Joe. It ain’t getting better – in fact it is going to get a whole lot worse.
Commodities – the one true savior of Australia through the Financial Crisis of 2008 are dropping like a lead weight – demand is declining.
China has fudged their figures for too long and their chicken (Peking) has come home to roost. Mass inventories – over production due to the State forcing factories to stay open – produce – maintain employment.
I checked Australian Bureau of Statistics key points – for only June 2015 mind you but there is no ‘hockey stick’ adjustment coming as the bad news in June has got decidedly worse in August.
ACTUAL EXPENDITURE (VOLUME TERMS)
The trend volume estimate for total new capital expenditure fell 3.9% in the June quarter 2015 while the seasonally adjusted estimate fell 4.0%.
The trend volume estimate for buildings and structures fell 5.3% in the June quarter 2015 while the seasonally adjusted estimate fell 5.6%.
The trend volume estimate for equipment, plant and machinery fell 0.8% in the June quarter 2015 while the seasonally adjusted estimate fell 1.2%.
EXPECTED EXPENDITURE (CURRENT PRICE TERMS)
This issue includes the seventh estimate (Estimate 7) for 2014-15 and the third estimate (Estimate 3) for 2015-16.
Estimate 7 for 2014-15 is $150,579m. This is 4.7% lower than Estimate 7 for 2013-14. Estimate 7 is 0.5% higher than Estimate 6 for 2014-15.
Estimate 3 for 2015-16 is $114,814m. This is 23.4% lower than Estimate 3 for 2014-15. Estimate 3 is 9.9% higher than Estimate 2 for 2015-16.
See pages 7-10 for further commentary on expectations data. Link to ABS here. (2)
Yes expected expenditure is decreasing – it is business Joe – lower commodity prices defers capital expenditure – and this is the June figures.
Look at the June 2015 graph – slippery dip to hell.
Now – another commonwealth commodity exporter is Canada – real estate booming due to Asian (Chinese) demand for real estate – but lower commodities dragging on their GDP.
Ottawa (AFP) – Reeling from low oil prices, Canada fell into a recession in the first half of the year, government data confirmed Tuesday, putting Conservative Prime Minister Stephen Harper on the defensive in the run-up to October elections.
According to Statistics Canada, the economy contracted 0.5 percent in the second quarter after retreating 0.8 percent in the previous three months.
It is Canada’s second recession in seven years and it is the only Group of Seven nation in economic retreat. The figures are the weakest since the 2008 global financial crisis. (3)
Yes Joe – this is the global economy.
And me – well I am just a clown.