Online threat brings high street prices down

Posted to Adelaide Now (29/10/2011) on 29/10/2011 at 5:15 AM
Commenting on “Online threat brings high street prices down”
http://www.adelaidenow.com.au/business/online-threat-brings-high-street-prices-down/story-e6frede3-1226180035831

Just less than 5 decades ago, footwear and clothing industry could not compete with cheap imports; the industry is now almost vanished. The early oil crisis caused the tumble of demand of large cars produced in Australia. Japanese gained strong foothold in Australian car market with less fuel hungry and much cheaper small cars. The Korean followed. The Holden-Ford's domination started to decline.

These and many other manufacturing industries employed a lot of workers, and those were the days no one had any trouble getting a job or two. The continual growth of online shopping will kill off the retail shops; the consequence is a total destruction of Australian shopping centres and cities. The ghosts of unemployment will rise from Hell, creating massive job losses and building ghost towns. If business people don't make money, less people will be employed. Cynically speaking, the one that loses the job could be the one buying all their goodies from online overseas stores.

They're spending money, Jim, but not as we know it

Posted to The Age (28/10/2011) on 28/10/2011 at 12:36 PM
Commenting on “They're spending money, Jim, but not as we know it”
http://www.theage.com.au/business/theyre-spending-money-jim-but-not-as-we-know-it-20111028-1mmy5.html

@Michael Pascoe, when was the last time you applied for a job advertised in seek.com, mycareer.com, newspapers, local papers, etc? I used to think that with years of working experience and several certificates/degrees from colleges and universities would have no problems for me to find a job, not necessary a full time one. I was very wrong. I start to doubt some of the jobs advertised are just promotions for some companies or employment agencies. If I did not save and spend my money wisely during my working life, I'll be dead like a dodo.

Incomes are growing nicely for those who are in employment. What you have written are valid, but I can ensure you, without employment, spending just stops - no credit card, Foxtel, coffee, international travel, home repayment, rent payment, etc.

If official unemployment rate is at 5.2%, 40% of the employed are casual/part time, what is the real unemployment rate even if 50% of the 40% want to have full employment? ABS data can be rubbery and must not be taken at face value.

How many durable items like fridges, cars, houses, TV's, etc does one family need? How many pieces of clothing can one wear even the prices have come down or available in recycled clothing outlets? An Amway founder once said, "The best thing about selling detergent is that it can only be used once, and you have to keep buying." Can you see why people keep drinking and eating repeatedly?

Stocks hit by trading glitch

Posted to The Age (27/10/2011) on 27/10/2011 at 12:10 PM
Commenting on “Stocks hit by trading glitch”
http://www.theage.com.au/business/markets/stocks-hit-by-trading-glitch-20111027-1mkuj.html

The only way EU problems can be resolved is to allow those countries in financial crisis to default, or the whole world’s economy will be dragged down to the state no return! Let these troubled countries start out with a blank sheet – correction, let the filthy rich starts from scratch again. Greece is in a diabolical situation. Whether a country is governed by democratic system, dictatorship regime or communist ideology makes no difference to the people if equality and full stomach prevail. There are enough examples in the past as well as lately where people power has proved to be mightier than big guns and trained soldiers. I hope peaceful countries like Australia are vigilant about the ways public monies and taxes are spent, and that the wealth gaps between the haves and have-nots do not get bigger than the Earth’s fault lines.

Low inflation raises case for RBA rate cut

Posted on The Australian (27/10/2011) on 27/10/2011 at 3:23 AM (Cannot post as non-subscriber)
Commenting on “Low inflation raises case for RBA rate cut”
http://www.theaustralian.com.au/business/economics/low-inflation-raises-case-for-rba-rate-cut/story-e6frg926-1226177799948

The table headings are incorrect - Quarterly change should be Annual change, and vice versa. Please refer to http://www.abs.gov.au/ausstats/abs@.nsf/mf/6401.0

The problem with inflation calculation tied with CPI is that they are not totally correlated. Basing on inflation rate to adjust interest rate by RBA is unrealistic and to some extent nonsensical.

Most services are labour related and provided locally. In almost all cases, services increase in absolute dollars each quarter, and are based on our own currency. The utility prices have been on the increase to the point where many cannot afford such basic needs in everyday living.

Product supply / provision are influenced by currency exchanges, parity, and supply / demand of the products. For the example, the rise of fall of petrol prices are not caused by local supply and demand but parity prices and import prices beyond our control.

I have written often on the issue that increase in utility prices is NOT inflation. Users of utility do not push up the price due to additional demand, and it is through no fault of theirs that they copped double whammy - one from price rise, and two increases in interest rate to curb "inflation".

Data quells double-dip recession fears

Posted to Herald Sun (9/10/2011) on 9/10/2011 at 4:38 AM (Not published by Newspaper)
Commenting on “Data quells double-dip recession fears”
http://www.heraldsun.com.au/business/data-quells-double-dip-recession-fears/story-fn7j19iv-1226162061336

It's a load of mumbo-jumbo when ABS provides two sets of data, one actual and the other seasonally adjusted. The latter is used by RBA and for other reporting purposes. This contradicts the argument about climate change - if such man-made phenomenon does take place, the seasonal pattern cannot be relied on, and the mathematical model will be inaccurate.

There is another flaw using seasonally adjusted data; the real disastrous impact of financial crises resulting from external environment may be diluted which thus leads to incorrect formulation of corrective policies.

Australian consumers starting to spend again

Posted to Adelaide Now (5/10/2011) on 5/10/2011 at 9:51 PM
Commenting on “Australian consumers starting to spend again”
http://www.adelaidenow.com.au/business/australian-consumers-starting-to-spend-again/story-e6frede3-1226159410714

With closer examination, ABS figures show that many household items including carpets, furniture, goods for renovation etc increased the most while departmental stores suffered. This can be explained easily - many houses had to refinish and repair after severe storms and floods during the same period.

The departmental store spending decline is due to online purchases, much of the money went overseas. For argument sake, even if only 25% of the $22b spent on online were overseas purchases and if the government had collected GST, it would have a windfall instead of a shortfall of $550m.

While many items are subject to currency fluctuations, it is not the case for cafe/restaurant prices. Commonsense tells us that no matter what happens to foreign exchange, cafe/dine-out meal prices can only go up but never down. If the patronage remains unchanged, the total spending will still increase, theoretically by the same percentage as the price.

I have written often about the state of Australian economy, and tempest is yet to come. I believe the China's forward orders for our iron ore and coal will be less, coupled with lower price offered, the next quarter export income will NOT be rosy.

Shares lose $20b as sell-off continues

Posted to The Age (3/10/2011) on 3/10/2011 at 1:14 PM
Commenting on "Shares lose $20b as sell-off continues"
http://www.theage.com.au/business/markets/shares-lose-20b-as-selloff-continues-20111003-1l4ai.html

We have not seen the last of the fall yet. ASX ordinary index will fall to 3500 within the next few days. While we need to live more optimistically, or else life is not worth living, we also need to be realistic and live within our means. Everything, in the universe, is always in a state of equilibrium. When something goes negative, another goes positive. The share market fall results in larger amount of money in the bank deposit; share market players lose but bank account holders win. In fact, this is the fundamental principle of accounting rule.

Borrowers cannot keep on borrowing, because the lenders cannot even get their interests from the borrowers let alone the principal. Germans cannot just handout money to the Greeks who work shorter hours, and many live on social welfare enjoying the Mediterranean sun. Young Greeks of today suffer because the romantic, casual and relaxed life style enjoyed by forebears of yesteryears did not create solid foundation for employment.

European financial crisis is analogous to a fast descending hot air balloon. It has reached a stage that almost everything, except the balloonists, in the balloon basket has to be thrown overboard to keep the balloon afloat. If the rest of European countries go down with Greece, no one is wiser, and even if with the best intention, Greece will not survive, because the rest also become exhausted in energy and fund.

As what the former Singapore Prime Minister Mr Lee Kwan Yew once said, “give a beggar a gold coin, he will ask for a second one.”

Get tough on China: unions

Posted to The Age (3/10/2011) on 3/10/2011 at 11:42 AM
Commenting on “Get tough on China: unions”
http://www.theage.com.au/national/get-tough-on-china-unions-20111002-1l3zp.html

@Alexander, why no one stops China stealing copyright for so long? In fact, the stupid "smart" countries hand over their decades of designs and blueprints to China via "technology transfer", utilising Chinese factories to produce their goods - idiotic but true. Why? China offers the world cheap labour! Is it China’s fault? No, comfortable life-style comes with a price!

Australia was classified as a developed country, while China was still "under-developed". Australia was so much richer, and China miserably poor. Australia was technologically advanced, and China relied on recycled, rusty metal scraps during early Mao's time. Now China is producing the latest generation computers, telecommunication electronics, electric cars, satellites, rockets, fastest train, etc. It can complete projects in short period well beyond other country’s dream.

Deregulate labour market without sacrificing OHS, revamp unemployment welfare system, and in the meantime curb obscene salaries and remunerations of top executives will likely to propel us in competing more vigorously in the world market, and cope with any future GFC.

Who wrecked this country? Ask the unions, and the big-mouth, loud-mouth leaders who know nothing about innovation or how to adapt to changes. Australia still lives in the past, and like dinosaurs, it will perish. I bet all these people will blame the negligible carbon emission as the cause of Australian economic extinction.