Recession - Where Is It?

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Originally Posted by Bob38S

Sorry Waldo

Mac had their dates organised from day 1 as dd/mm/yyyy or the Yankee mm/dd/yyyy.

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I haven't as yet read Waldo's response to this, but from memory PCs (DOS and Windows) and Macs (UNIX based) use different "base" years

software based on DOS had a recognised potential problem in 2000 — an example quoted to me was that because of the way DOS recorded dates, the software used by the Blood Bank to track blood and blood product would interpret 1 Jan 2000 as being YEARS after 31 Dec 1999 and consequently suggest that all stored bllod be destroyed as too old


software based on UNIX (including Macs) also had a "Y2K limitation", the difference to DOS was that the Mac's Y2K "year" was 2042 or thereabouts



ian

http://www.ipa.org.au/news/1789/the-bail-out-disease

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It's actually a bit misleading to describe our economic woes as a crisis.
If anything deserves that title, it was the asset bubble that was burst in the crash last year.
All the downsizing and unemployment that we face over the next year is not the crisis, it is the correction.
So when the Government tries to stimulate the economy with big spending and tries to resuscitate dying companies, it isn't resisting the crisis, it's resisting the correction. And preventing the economy from healing itself isn't doing Australians any favours.
Things fail. Napoleon failed to conquer Russia. Baz Luhrmann's Australia failed to be the next Titanic. And companies fail. In fact, building a successful business is an extremely hard thing to do.
The sooner we get to the last stage of grief - acceptance - the quicker our economy is going to recover.

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Food for thought

There was an interesting chap on the 7:30 report tonight who made an interesting point about income.
He said that over 20% of all income in the US is now going to 1% of the total number of earners there. (In 1980 that was under 8%)
He followed that by saying that the last time that ratio occurred was 1928.

I was quite stunned by those numbers. Greed has truly ranged out of control in recent years. How could that possibly be a sustainable ratio in a free market?
Does anyone think that the contribution to society made by such a few individuals is worth sucking that much wealth out of an economy?
The reports in recent years in Australia of grossly overpaid executives & fat cats make me think that Aussie has sufferred from a similar problem as these US numbers...

& I still can't imagine what I would have to do for a living, in order to feel like I would be justified claiming even 1 million$

Funny how people, even on this forum, are sccreeching @ each other over this... Will that help

Sorry Eli, you may have taken it personally, but bad decisions by the succesive US Governments have lead the world to this position, it is their fault. Not just Yank bashing here, its a fact, remember though you are no more responsible for it than Australians are for Rudd and Lil' Johnny.

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Seems to me you should blame yourself a bit more. You wanted a fat bloody profit just like everyone else,

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Do you really know what a share is?

Seems a lot of people have the wrong end of the stick about stocks and stock markets, everyone knows "buy low , sell high", but in reality what people do is "buy high, panic sell at low", not the markets fault.

"Serves you right" and "you knew the risks" are no comfort for people when the fund or bank collapses, so why direct it at people who dare invest in the market?
Remember what a share actually is and differentiate it to speculating.

The saying " safe as houses" will be challenged soon, WA and Qld are already seeing falls as a overheated market slows, serves you right for buying your home?

How about the people who bought into the gold boom in the 80's, are people who buy gold now any smarter?

So, lets review, banks are beng bailed out to stop them collapsing, many cash and mortgage funds have collapsed, property prices are falling, gold is fully valued, inflation is reducing buying power, company profits are falling (lower share prices), serves us right for taking risks?

Sheesh.

Eli,

I back up all that Cruzi has said but would just expand a point on shares. Emotive language, such as greed and fat profits are not really what is at the base of a share. When someone buys a share they are taking a stake in a company. Hopefully that company is honest enough in it's accounting and other info to enable the share buyer to make a reasoned decision regarding how much risk he or she is willing to bear. Properly balanced and controlled, the share market is not akin to pokies.
Without it no company could prosper because it could not raise capital to generate more business.
The current crisis is, in part, genrated by a total lack of control in certain countries and through that lack of control unscrupulous CEO's have scewed information to the point of dishonesty.
As everyone knows, the sub prime scam started in America. That vulnerable people were preyed upon is an example of the result of lack of control. That other countries have been drawn in is in part because some of those countries equally lacked proper control. However trade is an interdependant web and so innocent countries and innocent shareholders suffered. Many shareholders have lost money, not because they were seeking fat profits but because the information on which they based their decision has changed.

Jerry

Jerry and Cruzi,
Congratulations on your sober and reasoned replies.:U:U
Makes me feel a lot better about my first post, and not quite as angry as in my second.:;
Well done!!:2tsup::2tsup:
Jim

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The Reserve Bank has slashed its growth and inflation forecasts, but predicts Australia will avoid a recession, while warning the jobless rate will rise significantly as the nation suffers fallout from the global financial crisis.

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http://business.smh.com.au/business/...0206-7zee.html

The link is stuffed, Dudd's must've got to it too.

Works for me. It's on the home page of www.smh.com.au. Headline: "More jobs to go, warns RBA".

RC,
On the stimulation package, your argument is a bit wobbly. You start off by implying it is all retail and will only stimulate China's economy. In this you focus purely on $12 bill. The package is of course $48 bill and is aimed in others areas.

On the schools program, you ask why no spending on teachers? First there has been difficulty in recruiting for teaching, as there has been for nursing. Money alone will not ease that problem and it is an ongoing one. This is a SHORT TERM package designed to deal with the present crisis.

Then we come to the issue of housing "sustainability". Nice word that and quite in vogue. The idea of building low cost public housing does not preclude "sustainabilty" if it is built into the fabric of the house. You, however seem to think houses should not be built in major population areas. Surely you provide houses where population needs exist. People have to live near where work is available. They also want to live close to friends and relatives, their life network. You give no thought to that with your "sustainability"
After the Second World War, England tried a new and bold experiment in social engineering. they built satellite towns such as Crawley. Even though they encouraged industry to move there to provide jobs the people moved only under pressure.

On the trade issue you shift ground and bring in new arguments, In comes the sweatshop, pollution, work safety and Uncle Tom Cobley and all. They are vexed issues. Do we stamp out child labour when that labour may well be the only income in a family? We cannot force our standards on another culture. The path to Hell is paved with good intentions. What we can hope to acheive is that trade will open up that culture to new prospects and raise the general standard of living. Study labour conditions in England during the nineteenth century and you may understand what I mean.

You are entitled to your belief that families are better off now. One cannot argue against belief because there are no facts to engage with

And your beef against the IMF. As I have said previously I am no fan of the IMF. Rudd is invoking the name because most people have some idea it is THE GREAT ECONOMIC BODY. As a politician he has to condense argument to sound bites or lose his listeners. He could equally have said that most major world economic experts support the idea of a stimulous package.

As I have said previously, Economics is not an exact science. In any crisis there are conflicting views. Some economists are sincere in opposition whilst others seek to make a name for themselves. It's the nature of humanity.

Jerry

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Originally Posted by silentC

Works for me. It's on the home page of www.smh.com.au. Headline: "More jobs to go, warns RBA".

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Link worked the second time, SMH must've had a warning go about about me. :U

Just been reading an economic report and a couple of things were there that might be interesting

RC
As I argued about China, that exposure to capitalism and Western ideas will raise standards of living so I find China has a massive 20 million unemployed and the government is keenly aware it has a social problem. It has put in place a stimulation package that, surprise, surprise, has a large infrastructure component in it. Also Chinese banks have markedly freed up lending.
We have to be prepared to abandon this "Chinese Crap" thinking. Before WW2 Japan bore a similar label. During WW2 they showed what they could design. Remember the Zero? And who now would call Toyota "crap" ? China has produced a fighter jet that is far superior to anything the Yanks have, but we, guided not by the military but by Brendan Nelson, went American.

Another thing to help in the doom and gloom is that the Chinese have depleted their stockpiles of resources, this means they could be back buying from us again soon.

Unfortunately I have to end on a down note.

Eli,

Remember I said shareholdeers are often punished not because of greed and a race for fat profits but by lack of transparency by companies?

Some economists believe banks are sitting on $1 trillion dollars of undisclosed debt, because they don't believe the market is ready for such revelations yet. This is not me and not some conspiracy theory nutter spruiking this but a well respected market watcher.


Jerry

"China has produced a fighter jet that is far superior to anything the Yanks have"

Just wondering which fighter you refer to here Jerry?

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Originally Posted by ian

I haven't as yet read Waldo's response to this, but from memory PCs (DOS and Windows) and Macs (UNIX based) use different "base" years

software based on DOS had a recognised potential problem in 2000 — an example quoted to me was that because of the way DOS recorded dates, the software used by the Blood Bank to track blood and blood product would interpret 1 Jan 2000 as being YEARS after 31 Dec 1999 and consequently suggest that all stored bllod be destroyed as too old


software based on UNIX (including Macs) also had a "Y2K limitation", the difference to DOS was that the Mac's Y2K "year" was 2042 or thereabouts



ian

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Can't really help you out Ian as I'm no expert but I was told initially when all of the Y2K hooha started [I was looking after 40 Macs in a school] that it was all about the year only having 2 digits and when 2000 came along it would have had "00" as the year and that this would have been interpreted as 1900 - why I couldn't say. With regards the Mac I was told, by the experts, that it was no problem as the year part of the date had always been indicated as 4 digits, as to the year 2042, I have never heard of this before.

I do believe, however, that many IT "experts" [not all by any means] did play up on people's fears and exploited the situation for their own purposes - unfortunately, any situation [current downturn, recession, depression - whatever they want to call it] like this does tend to bring out the chicken littles, optimists and experts - according to the media reports - all claiming to be correct.

I'm also no expert in the economic area either but I'm getting a little tired of being told how bad it is - the blame game, we are not as badly off as others in the world - by now even Blind Freddy would have to realise there is a problem. This kind of talk etc is destroying public confidence as well as some peoples lives.

How about some positive media, politicians, business/trades people etc. We still have the skills, resources, a magnificent country, people etc - how about the so called "moovers and shakers", media, politicians, business/trades people start looking and and talking up our economy.

Regards,
Bob

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Originally Posted by Jeff@G

"China has produced a fighter jet that is far superior to anything the Yanks have"

Just wondering which fighter you refer to here Jerry?

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They haven't. The best they have come up with so far is a rip-off of the Russian SU - 27 Flanker which they have labelled the J-11 and the Ruskies are far from happy about.

It apparently has some innovative electronics but it seems it's plagued with problems regarding the short life of components.

Nothing destroys an argument better than crap "facts":rolleyes:

Ian

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Originally Posted by Ian Smith

They haven't.

Nothing destroys an argument better than crap "facts":rolleyes:

Ian

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Ah well everyone is entitled to one mistake. I have never put myself foward as a military expert so perhaps I can be forgiven this one. However I would argue that none of my other statements are "crap facts"

Jerry

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Originally Posted by jerryc

Just been reading an economic report and a couple of things were there that might be interesting

RC
As I argued about China, that exposure to capitalism and Western ideas will raise standards of living so I find China has a massive 20 million unemployed and the government is keenly aware it has a social problem. It has put in place a stimulation package that, surprise, surprise, has a large infrastructure component in it. Also Chinese banks have markedly freed up lending.
We have to be prepared to abandon this "Chinese Crap" thinking. Before WW2 Japan bore a similar label. During WW2 they showed what they could design. Remember the Zero? And who now would call Toyota "crap" ? China has produced a fighter jet that is far superior to anything the Yanks have, but we, guided not by the military but by Brendan Nelson, went American.

Another thing to help in the doom and gloom is that the Chinese have depleted their stockpiles of resources, this means they could be back buying from us again soon.

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I am aware China can produce good stuff, however it is priced competitively to what we would produce so they do not produce it...

I am not against Infrastructure spending...I welcome it, but it has to be intelligent spending....At the moment it is like Kevin Rudd has a fire hose running full blast full of money and is just spraying it everywhere..

The schools infrastructure spending is good but it is a blanket spend, Every school gets the same amount regardless of how big they are or how much has been spent previously at each school....I queensland this will be administered by Q-build a government organisation...I am sure they will take their cut of the cash first..

The railway crossing upgrade...I really have no idea why that is there for, it certainly won't produce any wealth for the country... Again in Qld this will be built by Queensland Rail, a governemnt owned business...I do not believe QR employees are at any risk of losing their jobs...It was often remarks a QR job was a job for life as it is near impossible to be sacked..

I mentioned the houses being built in unsustainable areas...I still believe houses should not be built where there is not enough current resources to service them....We talk about how the Murray River is dying yet the Victorian government is going to build a pipeline from the Murray river to supply melbourne with water.... How is the country supposed to be developed if all we do is build the three major cities bigger and bigger..

Education is where a long term benefit could be felt BUT we must also change societies attitudes to teachers...Kids these days seem to be taught at home not to respect teachers and teachers have no disciplinary punishments of any worth available to them.. Only by making our children smarter can we grow the country in the long term..

The national broadband network is something that promises to bring great benefits to neraly every Australian, but it is in great danger of being scuttled by idiotic processes...It was not even mentioned in this infrastructure spend...

But one thing we must keep in mind is that if the government borrows the full amount they are asking for $200 billion, that will mean every man, woman and child has to pay back $9500 to an overseas business...We can only pay this back by exporting goods of similar value.. Where in this great money splurge is the money to keep the exporting industries going??? They are the most valuable industries we have...

Since military was bought up, why is it we are not going to be making parts for the upcoming F-35B...Initially we were going to but I have since heard it has been knocked on the head...There is another missed opportunity for Australia and it's shrinking manufacturing sector..

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Originally Posted by Bob38S

Can't really help you out Ian as I'm no expert but I was told initially when all of the Y2K hooha started [I was looking after 40 Macs in a school] that it was all about the year only having 2 digits and when 2000 came along it would have had "00" as the year and that this would have been interpreted as 1900 - why I couldn't say. With regards the Mac I was told, by the experts, that it was no problem as the year part of the date had always been indicated as 4 digits, as to the year 2042, I have never heard of this before.

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Bob

from memory, DOS allocated the equivalent of 2 digits to the year portion of a date with a clock unit (the rest of the "clock unit" was used for day, month and time) software written by most (lazy?) developers accessed these two digits and added a 19 to get a four digit year. Hence the Y2K curfuffle
As I understand it, developers who were pedants in respect to time, checked for the elasped time since DOS's creation and added a 19 or 20 as appropriate before displaying a 4 digit date

Macs (and UNIX) clock units contain 32 bits and count time as the number of seconds that have elasped since 1 Jan 1970.
In early 2038 any remaining 32 bit UNIX/Mac "clocks" will roll back to the equivalent of zero hour, i.e. return to 1 Jan 1970 –
presenting a possible re-run of Y2K


ian

I don't understand why you guys keep saying Yanks when what you mean is Banks. The Y and B keys are nowhere near each other on the keyboard. You're still slagging a nation (and calling it 'fact'). :no:

I'm out, before I start saying really bad things. Enjoy your $hit-$linging, sorry about all the hard earned money lost, I'll go ahead and apologize on behalf of all the yanks who must have stolen it.

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Originally Posted by Eli

I don't understand why you guys keep saying Yanks when what you mean is Banks. The Y and B keys are nowhere near each other on the keyboard. You're still slagging a nation (and calling it 'fact'). :no:

I'm out, before I start saying really bad things. Enjoy your -, sorry about all the hard earned money lost, I'll go ahead and apologize on behalf of all the yanks who must have stolen it.

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I'm with Eli on this. Blaming the US of A for this economic downturn strikes me as scapegoating on a large scale. Booms and recessions are a component of capitalism. We're all involved in the system, the system functions to a large extent by borrowing, and confidence that we're able to pay money back. History shows us that every now and then that confidence contracts, as it has now. Blaming the mortgage scam in the US for this downturn is a little far fetched.

Without wishing to lay blame, I'd be glancing in the direction of India and China, and their recent and spectacular plunge into the system. Now there is absolutely nothing ethically or morally wrong with the sudden increase in their economic activities, but it must change the function and balance of the system. Maybe this recession is an indication of these changes?

Sorry, fellas, I think 'twas I who first suggested that the Good 'Ol US of A was the instigator of all our woes.:B:B
If my memory serves me correctly it was the failure if "Somebody" Mac, and "Fanny May" to meet their committments that started the ball rolling.Both these institutions are, I believe, American (or "Yank") institutions.
Panic breeds panic, and while not suggesting that some adjustment in lending policies and debt management was not inevitable at some time, it STILL seems to me that America sneezed, then we all caught a cold!:((:((

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Originally Posted by Cruzi

Technically a ressesion is one Quarter of negative growth, a depression is more than one quarter.

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Actually, Cruzi, a recession is just a sustained contraction in aggregate output which is usually measured by gross domestic product (GDP).

The conventional rule of thumb is that a recession is two consecutive quarters of negative growth (contracting GDP).

However that's just a convention and not an official definition, and not all countries or edonomists use it. It has problems - like what if you got three quarters of big contractions but they're interrupted by two quarters of little expansions?

In the US, people generally defer to the National Bureau of Economic Research which is a private sector non profit think-tank. They look at a bunch of indicators including GDP and employment and a couple of others then the final decision is made - not joking - by a committee.

There's no official benchmark for measuring or defining a depression either, it's just a deeper and more prolonged recession, a recession that won't go away. If a recession is the flu, a depression is glandular fever.

Having said all that, the definitions that I like best are these:

A recession is when you lose your job. A depression is when I lose mine.

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Originally Posted by Eli

I don't understand why you guys keep saying Yanks when what you mean is Banks. The Y and B keys are nowhere near each other on the keyboard. You're still slagging a nation (and calling it 'fact'). :no:
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Don't get too hot under the collar Eli. People tend to talk in shorthand. No one is attacking the American people. What we are saying is that a system failed because of lack of government control. American financial structure , being the powerhouse of present economic thinking, the monetarist theory, was an obvious spark waiting to create the fire. England under Thatcher followed that theory which is why it too is in deep trouble. The Geat Depresson of the 1930's started in America and reverberated around the World and, as now, the American people were not responsible and suffered badly. Again it was the system that was out of control.

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Originally Posted by Rossluck

I'm with Eli on this. Blaming the US of A for this economic downturn strikes me as scapegoating on a large scale. Booms and recessions are a component of capitalism. We're all involved in the system, the system functions to a large extent by borrowing, and confidence that we're able to pay money back. History shows us that every now and then that confidence contracts, as it has now. Blaming the mortgage scam in the US for this downturn is a little far fetched.

Without wishing to lay blame, I'd be glancing in the direction of India and China, and their recent and spectacular plunge into the system. Now there is absolutely nothing ethically or morally wrong with the sudden increase in their economic activities, but it must change the function and balance of the system. Maybe this recession is an indication of these changes?

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I have argued from the start that finance is a house of card built on confidence, but it is also built on trust. The morttgage scam is universally recognised as the spark that ignited the fire, because it exposed the point I made earlier that the one dollar was not turned into an equal dollar debt but was sold on until it generated thirty dollars in debt. Banks and financial institutions had become too greedy. A collapse has a starting point and the sub prime was it.

"Without laying the blame" Then what are you doing? To bring them into the equation without facts or argument as to their part in this is difficult for me to grasp. You might just as well blame Australia. We have had a spectacular mining boom. That has caused a noticable capital inflow over about ten years. You might equally have argued that the rise of the oil producing countries was responsible because they too "changed the balance".

What all three of these areas of economic activity did was to invest in America's debt. To finance it's deficit. To imply blame here for the present crisis is really pushing things a bit far. Where we might worry is that these countries call in that debt and who would blame them? If you lend money to a business and it goes wobbley, wouldn't you think of getting some of it back?

Jerry

Add a little humour to the discussion.:U:U
Look in on "Woodies' Jokes" and read Breslauer's "Financial Vocabulary"
It just might alter your perspective!!:2tsup::2tsup:

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Originally Posted by jerryc

A collapse has a starting point and the sub prime was it.

"Without laying the blame" Then what are you doing? To bring them into the equation without facts or argument as to their part in this is difficult for me to grasp. You might just as well blame Australia. We have had a spectacular mining boom. That has caused a noticable capital inflow over about ten years. You might equally have argued that the rise of the oil producing countries was responsible because they too "changed the balance".


Jerry

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It's not just members of this forum who (to quote Prime Minister Curtin in another context) "look to America". Our pollies are doing it as well. What I'm trying to suggest is that the blame game itself is a little spurious given that these ups and downs are historically destined to occur. With a stronger and upward bound world/capitalist economy, very few of us would have heard the words "sub prime". It's a symptom rather than the cause of the disease. What Eli and other Yanks are suffering from is a world that is inclined to say "we're suffering now because a bunch of greedy people in the US lent people money that those people couldn't afford". I don't think my kids would buy that yarn. :p

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Originally Posted by Rossluck

world that is inclined to say "we're suffering now because a bunch of greedy people in the US lent people money that those people couldn't afford". I don't think my kids would buy that yarn. :p

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It's exactly what happened, cause and effect.

So will anything change???

I cannot see it happening with the government desperately trying to keep the status quo going..

Anyway, I hereby declare that I know nothing of economics, and that's the way I want to keep it. :D

But from a historical perspective, this recession was bound to happen sooner or later. We're all part of a sine wave I'm afraid .... :(