Tuesday, March 4. 2008Hard To Get Past The Bad News Each MorningJohn Linton I am, at worst, a phlegmatic sort of person in the face of depressing predictions still retaining some vestiges of over confidence/arrogance that irrespective of what happens I will be able to find a way through whatever mess engulfs everyone else around me but I have to say when the "D" word is used by a relatively conservative and competent commentator as in this statement about the real state of the US economy: "We are seeing the deepest housing deflation since the Great Depression and a massive unwind of the largest credit binge ever, and fiscal and monetary policies are more limited in their ability to respond than earlier this decade. Not good news for the economy or the equity market," I nearly spilled my coffee. The article can be found here: http://news.smh.com.au/shares-us-dollar-tumble-on-economy-woes/20080304-1wo6.html Now I am not so stupid as to believe that I have any kind of economic grasp on either world's or Australia's economic movements or directions (I have little enough grasp on our household's economics most of the time) but I can get a general impression by reading quite widely and testing what I read against my quite significant previous experiences. Among the many positive implications of the March 1st bill run was one quite significant negative - that was the level of credit card defaults which set a new record and were almost 30% higher than in the February bill run which itself was a new 'record'. One of the very first indications of 'economic problems' is people running out of credit with credit card defaults on what, for many people are quite important monthly expenditures, being the earliest warning sign. I will be looking at the defaults on payments via direct debit which won't be known until today to see if that trend is continued - direct debit payments have a much lower level of default than credit card payments by a factor of 5. As I said - I'm not an 'alarmist' (in any sense of that word) neither am I a person who accepts what he reads with anything but a very wary eye for exaggeration or polemics. It's getting hard to escape the feeling that things, economically, for a significant number of people in Australia aren't going to be as good in 2008 as they were in 2007. Worse, we have a totally inexperienced government whose contribution to addressing that situation (if in fact there is anything an Australian government can do) is, on current indications, going to make things worse with absolutely no positive moves or contributions and, based on the ridiculous statements by Crazy Kev and Dopey Swan to date will be content to sit back and take their fat salaries and continue to say "it's all the previous government's fault - what can we do or be responsible for?". (someone should tell them "You're the government - stupid - you're expected to deal with whatever eventuates - not try and explain why you can't). Leaving that aside - the 'micro signal' (the record credit card defaults) have to be 'listened to' even if the senior Merrill Lynch economist can be ignored as an alarmist quoted by a newspaper who wanted to be the first to have a meaningful use of the "D" word now that the "R" word is so passe. Exetel have been reducing our financial exposures from the morning after Australia became saddled with a Labor government and my view was things would become very difficult very quickly. Irrespective of what now happens I believe small companies like Exetel are going to find it extremely difficult over the coming 12 - 18 months and I'm unsure how to deal with many of the decisions that need to be made. Obviously the easiest, and now clearly absolutely correct, decision was to abandon any massive infrastructure investment which we did, formally, at the beginning of last month. I would hate to have that burden right now. It makes the decision to invest nearly $A3 million in buying office space a difficult call - it's a sensible medium term financial decision that will reduce data centre costs within two years but it's a major financial 'unknown' in terms of "never buy real estate at the top of the market" - my completely uninformed view is that CBD property prices are, right now, as high as they are going to go for a long while to come. There has to be a better way to start the day. Trackbacks
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John,
Your one-eyed anti-Labor bias is the only blemish on what are usually interesting and insightful entries. Is this some remnant from the old country, class warfare and all that? I personally do tend more Labor that Liberal although I am not rusted on - I did vote for the Kennett government and would happily vote against Brumby if the Coalition manage to get some competent policies forward. If one looks at the record over the past two decades the Hawke/Keating set of reforms certainly were significant, important, and on the whole, sucessful. This needs to be balanced against the crash-or-crash-through Whitlam years, but one needs to look no further than the outgoing Coalition government to see that they aren't necessarily economic wonderkids either. Howard/Costello had a pretty easy run. With belevolent wordwide economic conditions and an resources boom, the Australian economy hardly needed major reforms to keep tickling along. Furthermore, the looming inflation problem can be squarely placed at their door. I hardly see how this problem would be better dealt with by returning the government who created this problem. Anyway I think my point is that no political party has a monopoly on talent and that your dogmatic anti-Labor position seems at odds with the thought that has clearly gone into your other opinions. Comment (1)
A long time ago - the CEO of a company I was employed by made the comment:
"John, you are an amazingly successful senior sales manager but you would be much better if you would just moderate some of your more controversial attitudes". I never have and never will modify what I see as being the case - if I ever had I would be a totaly different person - and I certainly wouldn't have been an "amazingly successful sales manager" - of any seniority. The incredible, doctrinaire stupidity of the Australian Labor Party has, for 100 years dragged Australia down and held it back every single time the Australian population has misguidedly handed it 'power'. No good has ever come from a Federal Labor Government and, based on the last three months, nothing will change with the current Cheshire Cat and his cronies who display an almost breath taking stupidity in every action taken and opinion expressed to date. Rudd is an uninformed dickhead and the dross currently posing as federal ministers would be laughable if they weren't so dangerously idiotic. But, of course, these are just one very insignificant person's views person's which are of no value and of no power. In terms of their correctness, or otherwise, they can be judged in the context of the other views I express. Comments (5)
I must say I strongly echo Ian's comment. I reckon it's an informative and unique blog but the overt anti-Labor bias can sometimes be a turn-off.
Now I understand that everyone's entitle to their views and political preference and I'm by no means trying to influence that. I personally think that political preference is different to say, barracking your footy team. You support your team when the captain gets a 5-week suspension, or when the team wins the wooden spoon. In this instance, blind following is seen as loyalty. But in the case of political parties, blind following isn't a good thing, I would argue. And from comments like "the Australian Labor Party has, for 100 years dragged Australia down and held it back", "No good has ever come from a Federal Labor Government" Although I do not agree but I can understand and respect the statement that "Rudd is an uninformed dickhead". But other statements seem to me that you will never ever vote for Labor, under any circumstances. Policies within a political party changes, and rapidly I might add, after an election loss. Refusal to apologise, WorkChoices, Kyoto, Nuclear Power... defined the Coalition, and all these policies were dumped post election, does it make the Coalition fundamentally different? And more Labor-like? I wonder if all the Labor politicians becomes Coalition and Coalition politicians becomes Labor overnight, would you still support the Coalition? Given you hatred of Labor. I'm neither Labor or Liberal and I'm certainly not trying to convert you into buying a Labor party membership. I'm just a bit sick of the constant Labor bashing on this blog. The last three months haven't been THAT bad. I'm more proud to be an Australian after the apology and Kyoto signing. And let's face it, Rudd and the Labor government is that power to drag down the whole world's economy nor drive up the commodity prices nor put the US into a imminent recession. Comments (2)
I'm just a bit sick of the constant Labor bashing on this blog.
You have an immediate remedy. The last three months haven't been THAT bad. True - they've been absolutely dreadful. I'm more proud to be an Australian after the apology It sickened me - and it was grotesque and completely pointless - simply representative of the grandstanding meaninglessness that characterises Rudd's dickheadness. and Kyoto signing Oh please....Australia had already exceeded the then targets and Rudd immediately repudiated the next set of targets. Rudd is a complete wanker and God..that inanely grinning face when he makes his idiotic pronouncements belongs in Lewis Carroll. Both you and Ian should protect your sensitive natures from my unwelcome views in the simple way available to you. Comments (5)
John,
Have you considered that it was a LABOR government that opened up the telecommuncation market in the early 90 and provided the business opportunity for companies like Exetel to operate. It was the stupidty the Howard/Coalition government that made what Telstra is today by privatised it without wholesale and retail separation. A Telstra that constantly tries to kill off all competitors like Exetel. Comments (2)
I never thought that privatising Telstra was a good idea when it was first suggested (and that was not done by a Labor government).
Everything that has happened since that time has shown, conclusively, that changing the status of Telecom was wrong and it remains wrong. However, irrespective of what views you may personally hold please accept that the views I hold are simply that - my own, personal, views formed over 6 decades of personal experiences. The title of this blog is: "John Linton's Personal Musings" If you find them distasteful - no-one is forcing you to read them. Comments (5)
Interesting outlook.
In this country, most of us have embraced the policy of a "fair go" as part of our culture and what makes us who we are, and that applies equally to new governments. (maybe the average whinging pom doesn't grasp this concept) The previous Liberal government was given a fair go, and they used it to feather their own nests and screw this country (and particularly the average man in the street), sideways, although big business didn't do too badly. I think the new Labor government should be given a "fair go" as well. They should be condemned or praised on what they do or don't achieve, not on what some previous group of polititions may or may not have done in the past. Don't forget that virtually the entire information age in Australia has so far been administered by the previous Liberal goverment, and what a bloody mess they made of it. The new boys should at least be given the opportunity to see what they can do. John, I believe your apparent good judgement and intuition in business is being clouded by some deep-seated and long-standing hatred in this area. It doesn't become you. Comment (1)
(maybe the average whinging pom doesn't grasp this concept)
You have, undoubtedly, hit the nail on the head. Thank you so much for your insightful view. Comments (5)
The intention of my post was just to soften your anti-labor view and that was it, but it seems I have failed and upset you instead. My apology.
I didnt find your view distasteful at all, just amusing. Peace man. Comments (2)
I for one would hate to see Nelson as PM. But then, there is a reason he's at the top now and it's not because he is a good candidate to lead a win come the next election.
It would seem all of the people who have posted before me, in this discussion which has nothing to do with the topic, are part of the bunch that ejected a perfectly good government last year. Do you all honestly think you can sway the views of a 60 year old man who has never voted for a Labor government in his life? I can't wait until the budget comes out. John's views & opinions should be hilarious. And after all those years of competent treasury management... Look out. And just remember you voted for it. Comment (1)
who has never voted for a Labor government in his life?
I actually was one of those stupid people who voted for that egocentric maniac - Gough Whitlam. I was then one of the huge group of people who voted him, his insanely doctrinaire friends, and the rest of their inept and equally stupid 'baggage' out of office less than three years later with Australia in ruins and carrying a legacy that would devastate the country for another two decades. Based on the devastation done by those lunatics to the country in three short years it has never occurred to me that anyone with any common sense would ever inflict Labor on this country ever again. But then, as with all democracies, 50% of the people who vote are 'below average' in both intelligence and knowledge. Comments (5)
John,
Continue to bash labour! I am with you buddY! I am leaving the country so as not to be lead by that RUDDing fool! Comment (1)
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