Earlier this year inflation was a big worry, now with inflation fading rapidly around the world there is more and more talk of deflation. This note looks at the key issues surrounding deflation, viz: what is it? why it could be a problem? what is driving it? what does it mean for investors? and how…
The reality of a global recession became further entrenched in November. Financial market volatility persisted and some of the world’s major economies reported successive quarters of negative growth. Consequently, the IMF revised its world growth estimates down. The US economy contracted in the September quarter with real gross domestic product (GDP) declining 0.1%. US housing…
IT IS back to basics for BHP Billiton. The miner’s year-long hostile tilt at Rio Tinto came to an official close yesterday when the UK Takeover Panel and European Commission allowed it to drop the $US66 billion ($102 billion) bid rather than wait for the competition regulator to block it in mid-January. At BHP’s annual…
This note looks at the outlook for shares from a very long term perspective. The key points are as follows: – While the short term outlook for shares is uncertain they are great value for long term investors. – The 50% plus slump in shares from last year’s highs has taken them well below their…
Have you noticed that, though Kevin Rudd & Associates are too delicate to utter that dirty word “deficit”, they’re all too ready to use another D-word, Depression – as in “worst crisis since the Great Depression”? So he’s going to take us through a slump big enough to be compared to the 1930s and do…
This note looks at the global economic slump that is now unfolding. The key points are as follows: – Global recession is now a given. Australia is also headed for at least a mild recession. – The key issue is the depth and duration of the slump. At the moment leading indicators for global and…
This note looks at the outlook for house prices given the deterioration in the economic outlook over the last six months. The key points are as follows: – How house prices behave over the year ahead will likely be a key determinant of how well Australia weathers the global financial crisis and recession now embracing…
Opposition frontbencher Andrew Robb says the Treasury’s latest economic figures have got “the smell of manipulation” about them because they differ from the Reserve Bank’s. The Reserve Bank yesterday released figures which show it expects growth to slow to 1.5 per cent, compared to Treasury’s prediction of 2 per cent. Mr Robb says it is…
The Reserve Bank of Australia’s (RBA) latest dramatic official interest rate cut has signalled to many that the Australian economy is in worse shape than first thought. The cut of 0.75 of a percentage point follows a full percentage point cut last month. The action has many people worried, although Treasurer Wayne Swan is citing…
Treasurer Wayne Swan says a massive drop in expected revenue has caused the Government to slash its forecast Budget surplus from over $21 billion to around $5b. Unemployment figures have also been revised up, with the jobless rate expected to hit 5 per cent by the middle of next year, while growth is expected to…