Ression

[Sturdy]

I keep hearing this R word around.....

so i have a very thin idea of what one is but i am unknown as to what caues a ression an how long it will last???

plus who is most at risk of being affected by it?

 

[jessb]

'Recession' perhaps? Google it.

 

[Pauly]

Tell me about it, Ive just gone into business for myself and signed off on an equipment loan over the next 5 years...... ohh nnooooo.

Im sure we will be alright, I will be managing costs fairly closely from here on to minimise risk though.

 

[Sturdy]

google is my friend... thank you jess.

how ever... this has caused another question...

did the rudd government cause this.

or just the lack of spending in relation to the unstable cost of living.

 

[Wench]

construction has slowed riiiiiiiiighhttt down..
2 reasons: ppl cant get finance and ppl are too scared to enter into buying a expensive new or even used machine when they dont know whats gonna happen next year.

im not really sure about nething else though in regards to the rudd side of things cept that its annoying me at work.
customers will ring up and want something, then cant get finance or ya get a lot of tyre kickers who are all ho hum about buying.

im hoping things will lift up next year though

 

[big_head]

neither the howard or rudd governments fault. the US is going through a recession, so the rest of the world will feel the effects. the US is going through a recession due partly to bad lending practices. i dont think its as bad as the news is making it, and i am sure we will all survive. in my opinion, there are much much more important things in the world that we should be worrying about!!

 

[bredli_lover]

America has a large part in it, banks lent out to much money, people couldnt pay them back, had there houses taken. Housing prices fell. America has a heap of debt. Our dollar follows the american dollar (vaugely), their dollar fell. Our dollar fell. Our stockmarket hasn't been performing so well for the last few years.. People paniced, media focused on it to much, more people paniced, shares were sold, the ASX plummeted even more. In Recession, the people most likely to be affected the workers.
At least our government had but aside some money in case of this, and they have been quick to act...

And didnt america bail there colapsed banks out with taxpayers money? (corect me if im wrong!)

 

[pepper]

No the Rudd government hasn't caused it. America has been in recession for a few years now and when that happens we usually follow. America had a huge crash on the stock market not so long ago that has effected our stock market and it has gone down there fore people aren't spending as much. A recession is all part of the economic cycle. It has a high and a low.

It's not good for businesses as people will be watching their dollars and the ones to suffer first are resturants and luxury items.
On a possitive side is a great time to buy a house or shares in the stock market.

 

[jessb]

Blaming a government that has been in power for less than a year for the biggest economic crisis since the Great Depression is a pretty big call! No, this is just a predictable "correction" in the market after the boom days that the Howard govt was so proud of, which led to soaring interest rates and expansion-happy, irresponsible lending.

Of course there are major international factors involved as well, predominantly the fact that the US government basically deregulated all sorts of lending - home loans and short term lending on the stock market being the most responsible. Then, when the market slowed down, borrowers were unable to make repayments, lenders were repossessing worthless properties (because no-one could afford to buy them) and the lenders (banks and investment companies) began to collapse.

Then other lenders refused to make loans which meant that no businesses had the means to expand, had to lay off workers, who then can't meet their loan repayments etc etc.

It's vicious cycle which can only be halted by govt intervention in the form of guaranteeing bank deposits, lowering interest rates etc. Things will probably get worse before they get better but it's unlikely that we will see a major economic crisis like the Great Depression as our welfare system and govt intervention is far more structured than in the 30s.

 

[deebo]

A lot of this all stems from the problems that the US had recently. A lot of the major banks were in some serious trouble and were carrying a lot of bad debt. The government released a lot of bonds to try and raise funds to bail some of the banks out. Even though their economy was pretty dodgy when the government put all those bonds out onto the market which had to be bought in USD that put a lot of demand on the USD which in a sense drove its value up. It has been this major crunch on the banks which has made them tighten up on their borrowing a lot. This has caused a lot of people to stop spending money, as they cant borrow money easily now. Chinas economy has also slowed up a bit as well which means that australias main exports are in less demand which means the AUD has dropped a lot - the interest rate cuts have also made the AUD drop. The stock markets dropping so much have also put a lot of strain on people and their willingness to spend money. The stockmarket falling has put a lot of pressure on peoples super funds as some of them dropped massively over the past few months. A lot of the problems we have seen recently are due to speculation - people think that chinas economy is going to slow massively and the "knee jerk" reaction is that all the major australian export commodities are going to drop massively in value - and then they do, all because of what people is thinking is going to happen.

As my line of business is importing stuff from Japan when the AUD only gets you 60 yen as opposed to 104 a while ago I know I wont be spending much money at the moment!

Anyway that is my basic understanding of what has happened recently, i am sure someone with more knowledge and experience in economics could explain it a lot better im sure.....

 

[falconboy]

to what caues a ression an how long it will last???

Now ret me teach you a ression. :lol:

 

[channi]

Now ret me teach you a ression. :lol:

I wish i could express my joy at this post with just a smiley but two letters are too few apparently

 

[tooninoz]

Now for the conspiracy theory;


The Rudd Govt isnt to blame, but both the Bush and Howard governments are culpable. Both encouraged larger business and banks to over extend, largely based on a resources/construction boom that they knew would slow very quickly.
It did.

Both governments thought they could ride the boom, sneak into the next term, and when the poo hit the fan (as we all saw as early as June last year), blame 'market forces''...

What did they do? Encourage personal spending to almost obscene levels. LCD TVs for everyone! Shiny black SUVs for everyone! McMansions for us all! Buy! Buy! Buy!
Hey, it made so many people feel worthwhile, and was a feelgood 'rub on the tummy' that diverted attention from illegal incursions in other countries, torture, illegal prisons and the pursuit of people that just dont look like us.. or pray to the same god?!

Sadly, so many sheep fell for it, too blinded by the obsessive desire to accumulate. Controlled by fear, just puppets and mere minions.

But, the banks and business have been bailed out once again, leaving the nouveu riche panicking. The worst part of it is that the poor and those that cant afford another belting will yet again have to pick up the pieces. All to accomodate the excesses of the rich/wannabes.

Born. Consume. Die :|

 

[gman78]

We are in for a bad next few years.
Good news for us though cause python prices will fall due to less demand and no funds

 

[The Devil]

jessb....( that the Howard govt was so proud of, which led to soaring interest rates and expansion-happy, irresponsible lending.)

soaring interest rates, well I'm not so sure about that. I brought a house in 1990 and the bank home loan rate was 16.5% and on the way DOWN from around 18 or 19%.
Makes todays interest rates seem bloody cheap.

Irresponsible lending.....well I haven't yet seen any Aussie go down.
Someone mentioned all the plasma t.v.'s, cars ect. Well I would reckon that was a sign of good times. If interest rates were not at about a 40 year LOW and inflation was also low people would not have been able to afford those sort of things.

Why blame the gov and the banks in Australia for lending the money, surely personal responsibility comes into it somewhere.

Yes, the stock market has tanked, panic sold down to a low level but will recover in time. Inflation unfortunately will increase as it's a simple matter of that what happens when heaps of money is pumped into the system.
Doesn't matter if it's welfare funds or massive gov spending.

Saw it happen in the mid 70's, when inflation was around 15% and again in the 80's when inflation was better than 12%.
Lets just hope the unemployment doesn't get out of control.

What's happening to the world's financial system stems from USA, their crazy, irresponsible and criminal lending and as they say when the USA sneezes we get the flu. I curse America everytime I see the figures, the amount of money lost and being pumped into their system is unbelievable.

Mr Rudd won government at an unfortunate time, oil prices going sky high and the meltdown in USA.
While there is nothing he can do about oil prices unless he can control the economy his will be a 1 term government.

 

[coz666]

Now ret me teach you a ression. :lol:

now rats furry


it goes recession war depression........................... so build a bunker now.

 

[The Devil]

now rats furry


it goes recession war depression........................... so build a bunker now.

You're right, nothing like a war or major disaster to get over a recession.

Look what happened in USA with hurricane andrew, I think it was in the early 90's when they had serious stag-flation.

 

[Untouchable_Jodz]

Add another conspiracy theory

Anyone notice that how when it was election time the differences in approaches to being elected?

Rudd went hammer and nail, approached every bit of detail.. Howard said nothing but "We're not doing what Rudd did wrong" made no new promises in their ad's and so forth

(now, anyone that pays attention to politics would of looked at what they were both offering etc, but im talking the what 65% of Australians that take no interest - these ads were aimed at them)

IMO Howard LOST the election, i don't know if Rudd exactly won it (I hope that makes sense, and you can see past the grammar errors in that!)

Why would someone loose an election? Well if an economic crash was about to take place who would want to be at the centre of responsibility for that? yes the U.S market has affected us greatly obviously it affects everyone, but the 4 prior years of government could of made sure that we had a steady economic rate rather then boom through (as other people have said) fancy cars, handing out loans people cant pay back and fancy shiny big plasmas.


IMO given what Rudd has been dealt with he is doing very well in keep our heads above water especially in his first term of government..

As for what a recession means to the masses. Depends on your job if you work in an area that makes its money by consumerism (such as construction, retail) then you're looking at a lot of jobs dying up and finding it hard to get another job. if you're in a govt job you should be safe, same as teachers and other necessity jobs.

How long with it last? That's the 20 million dollar question

 

[The Devil]

Interesting theory and you're right, governments loose elections rather than the opposition winning them.

Before the election Mr Costello did say that we were facing a financial tsunami but I thought it was mainly election talk (sob sob).
My thoughts are that the slow down will be relatively short lived and Australia will come out of it OK.

 

[Forensick]

jessb....( that the Howard govt was so proud of, which led to soaring interest rates and expansion-happy, irresponsible lending.)

soaring interest rates, well I'm not so sure about that. I brought a house in 1990 and the bank home loan rate was 16.5% and on the way DOWN from around 18 or 19%.
Makes todays interest rates seem bloody cheap.

/quote]

looking at buying a house atm...
tell you what, i;ll trade you the interst rates now for the interest rates you had.
over the course of the loan you will have paid a 3rd of what i would have....
median income hasn't gone up enough to cancel that out

so seriously, bring on a recession, bring on 20% interest rates!