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That is what The Emperor (Kevin Rudd) thought and now they are fighting words where Fort Fumble (Federal Government) will be forced to perform yet another monumental back – flip on policy. Back to that over-worked drawing board where a 2010 federal budget is on the political rack.  The gloves are off as government and miners trade blows over tax as Wayne’s world comes unstuck which should not come as a great surprise when one looks at a government built around crumbling policy failures.

Ross Gittins in the Sydney Morning Herald wrote this  interesting story “Shonky advisers have led Rudd badly astray” It’s not just The Emperor’s reputation on the line, the Australian economy is on the nose too. The Minister for Mining, Ken Henry, who these days is wearing many hats, has a different interpretation.

Rudd’s dollar delusion – Since the end of April, the Australian dollar has been hit much harder than the euro, so for our decline to be entirely linked to the global crisis, Australia would need to be on its knees with a huge debt problem. But, of course, as Kevin Rudd correctly points out, the Australian government is in a strong borrowing position.  Leaving aside what was apparent in the marketplace, logic dictates that the mining tax had to be part of the slump.  A cavalier effort last Friday when dollar rout ‘stemmed by Reserve Bank’.

Let’s look back at The Emperor’s blackboard of back – flips: save the whales, fuelwatch, grocerywatch, kids laptops, takeover of hospitals by mid 2009, hospital reform, schools stimulus infrastructure programme, 2020 Summit (where he met Kate Blanchet), insulation program, refugees,  insulation industry, foreign investment review board removal, mining tax, childcare centre building program, carbon emissions programme and of course his “greatest moral challenge of our time” the list goes on. Is this the worst CV in Australia’s political history? In search of a photographic capture that best describes Fort Fumble’s business and economic outlook?

BUY PRINT

On Q&A this week, former Australian Prime Minister Malcolm Fraser (stole the show for mine) when he took this question from the audience and what a wordsmith he  is (and resigned from the Liberal party).

Paul Sherrington: “Controversial Melbourne columnists like Andrew Bolt and others have declared the Rudd Government to be the worst and most wasteful government in living memory, perhaps unfairly. Given a choice between the Whitlam Government, as you intimately know it, Mr Fraser, and the Rudd Government so far, which do you think is better?”

Malcolm Fraser: “Oh, you’ve got to say – I’d use different terms; “least worst”. The Rudd Government so far, but you didn’t take a very good – I don’t want to criticise journalists, because you know, some journalists have very extreme views and generally only report one side of a question, as we’ve heard, perhaps. The administrative failures of the current government, whether it’s in delivering houses to indigenous people, or whether it’s in putting insulation in roofs or building classrooms for schools with government schools costing several times what it costs private schools, or what other things they have sought to administer? They’re going to muck up the hospitals next. The administrative failures are gross and half of them aren’t pursued by the opposition and the administrative  failures are as great, if not greater, than the administrative failures in Gough Whitlam’s government. But Gough’s failures were of a different kind, of a different quality, and I don’t want to go into those now. It wasn’t straight out of administering what should have been a plain, straightforward programme, which for some reason this government seems totally incapable of doing.”

Now to those other deposits – not mineral but banking.  This week, we saw the “Big Four” banks  realise, given the current economic movements, (downwards) that they now ant your hard earned monies trapped away in their vaults – the banking oxygen of the future. Global Financial Crisis II looms if debt woes grow so it is reasonable to assume that our banks urgently require a topping up of liquid funds. Lending ratios have fallen from 100 per cent to 60 per cent in a matter of months for residential properties. The current offers are 6.00 + which is much higher than the current cash rate of 4.50 per cent. I would not lock and load in yet as it will get higher given the global demand for money. Throw in the fact that the Reserve Bank of Australia announced this week that credit card purchases rose 12.2 per cent over the year to March 2010. The value of purchases made in March was $19.9 billion, up by $2.1 billion from the previous year.

A busy few weeks for the Reserve Bank of Australia – who just released its Competition in the Deposit Market. See a pattern forming? For depositors, retribution, given term deposits are now challenging investment in the shock market, hedge funds can’t short you now and no more wild ride for Australian equities.
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We are definitely witnessing a shift where businesses and households are actively paying down debt as a direct result of the uncertain times ahead. Unsustainable home loans are of great concern where we now have a rise in middle – class bankrupts where even the Pope, ECB chief slam spendthrift governments. In Australia, we are already witnessing first hand interest rises kicking the stuffing out of auction clearance rates.

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This explains why deposit rates are suddenly attracting all the attention at the moment and in all probability will remain a major player for the foreseeable future. Work within the markets and not without them as this is not a viable time to pinch – hit profit taking models. Ever seen a correction before? Not sure if Hedge funds are actually not Dredge funds and it should also be noted that  Fort Crumble (NSW government) has successfully dredged NSW where in terms of infrastructure, it is now paralysed by parliamentary past performances. Prepare for 20 years of transport despair given it will be decades before any new roads are built.

Fort Crumble approves 4,500 new North shore houses where residents will now spend their annual leave on the Pacific Highway. Cashed – up foreigners snap up homes who spent $14.900 billion on houses and land last year. Once again The Emperor identified that he is an economic  illiterate and foreign investors selected Victoria and Queensland ahead of NSW. NSW once upon a time, like the fairytale, was the number one choice.

Sydney one of the world’s top 10 cities Australia’s other state capitals are out of the world’s top 20, but still in the top 40, with Perth ranked 21, Canberra 26, Adelaide 32 and Brisbane at 36.

• Vienna, Austria
• Zurich, Switzerland
• Geneva, Switzerland
• (tie) Auckland, New Zealand
• (tie) Vancouver, Canada
• Dusseldorf, Germany
• (tie) Frankfurt, Germany
• (tie) Munich, Germany
• Bern, Switzerland
• Sydney, Australia

As Malcolm Fraser once said “life was not meant to be easy” which he scripted from within his very own government. I wonder what it should be under the present Labor regime? A suggestion: hey “big spender” bankruptcy is our very own act of life!

The number of security clearances of asylum seekers by ASIO has risen tenfold in recent years. (Security clearances by asylum seekers up) in 2008/09 ASIO processed 207 irregular security assessments and in the period of July 2009 to March 2010 – 2028 assessments, which is attributed to KRudd border security – and guess who pays for that?

Our website sponsors announced this week - First Home Buyers offered a helping hand from Mortgageport which many subscribers to Virtual Realty News will find interesting. Also, the Balmoral Burn is on this Sunday and this event has become an iconic Sydney event.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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28.05.10Robert Simeon9 Comments »

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An extraordinary week in Australian politics that resembled the “Battle of Sydney Harbour” or maybe “Battleships in the Big Bathtub” – where part of all contestants’ boundaries (by coincidence) were the high water marks of Sydney Harbour. The “Mad Monk” won line honours and yet, as with any race (fluid spill motions) there are always protests and on the very same day, the Reserve Bank of Australia (RBA) broke tradition and raised the cash rate (+0.25%) for the third consecutive month – a day of threes!

The cash rate, now at 3.75 per cent, keeps heading north and whilst on north, rumours that “The Emperor” Kevin Rudd is auditioning for Getaway, remain totally unsubstantiated. We can however, be sure that somewhere, he is up – up – and away and if he does call a double dissolution, will have to return to our shores sooner rather than later.

Gerard Henderson wrote an interesting article that appeared in the Sydney Morning Herald – Lodge is a long way off, but the new man will shore up base. “Since its formation in 1944, the Liberal Party has won office from Labor on three occasions, Robert Menzies defeated Ben Chifley in 1949, Malcolm Fraser prevailed over Gough Whitlam in December 1975 and John Howard vanquished Paul Keating in March 1996.” What I did find amazing was this “It is most unlikely that Abbott can lead the Coalition to victory in next year’s election. No government has been defeated in its first election since 1931, when Labor prime minister, James Scullin, faced not only the impact of the Great Depression but also splits within his own party.”

Was the Mad Monk bunkered down at his Mosman headquarters – whilst observing troop movements at the harbour bunkers of Turnbull and Hockey? Loose lips sink ships. We asked Tim Mooney to fly over Tony Abbott’s Mosman bunker.

www.timmooneyphotography.com

Westpac has jumped the starting gun where as quick as a flash it raised its standard variable home loan by 45 basis points to 6.76 per cent which comes into effect today. On November 5, 2009 John Rolfe from The Daily Telegraph wrote Cut Government taxes on savings, says Westpac boss Gail Kelly. It would appear to some, that raising rates has nothing to do with household savings. National Australia Bank (NAB) increased its home loan rates by +0.25 per cent and then attacked Westpac with this announcement “We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.”

“Westpac CEO Gail Kelly argued yesterday (November 4, 2009) that if we all had more money salted away the country could have ducked the global financial crisis.” So in the aftermath now that the crisis has passed one can only then assume that Westpac is quickly making up for lost opportunities. Business Spectator – THE DISTILLERY: Waving Westpac through John Durie of The Australian concludes that the bank “is acting entirely rationally by extending the duration of its loans, chasing deposits aggressively as evidenced by its present campaign offering 6.8 per cent for 12 – month money and raising the cost of loans to protect profits. Its deposits now offer 130 basis points more than its closest competitors and 145 basis points more than the ANZ. This is a bank demonstrating its market strength emphatically, unworried by the potential for either market or political downside.” Or “roughly in simpatico is Matthew Stevens of The Australian who reasons that “Westpac’s decision to confront its customers with the nasty realities of our national funding dilemma serves to, once again, demonstrate the shaping dislocation of the Australian banking system triggered by the GFC. The latest credit growth numbers, for example, confirm the widening schism of the Four Pillars into a two – and – two – configuration. The data shows that the Commonwealth and Westpac now dominate the system growth like never before, speaking for 80 per cent of loan growth over October.” Wayne Swan approved the acquisition St George Bank by Westpac.

Market share of the big four banks, including BankWest and St George as at September 30 / Source: The Australian

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Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker

• “The RBA lifted the cash rate by 25bps in December. While the RBA’s view of the world has changed little since November, the news over the past month has reinforced their view that the recovery in train is on stable ground. We expect the cash rate to reach 4.50 % by the end of 2010.”

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Reserve Bank Deputy Governor Ric Battellino is indeed very upbeat about the Australian economy in that we can expect and look forward to years of economic growth on the back of booming resources, escalating population growth with rising household incomes. The RBA is predicting a strong escalation of house prices because Australia had entered “a new upswing” that would extend its record 18 years of continuous economic expansion.

RP Data revealed this week that house prices have doubled to an average $600,000 over the past ten years – the average Sydney house price was $300,000 back in 1999. The average price for an apartment in 1999 was $270,000 today it is $457,274.

The latest BIS Shrapnel Residential Property Prospects report identified that residential rent are expected to rise by an average 5.8 per cent a year over the next three years. This compares with a 5.7 per cent increase in 2009 and an average annual rate of 4.4 per cent between 2002 and 2008. Throw in an electricity bill expected to rise by 60 per cent over the next three years (according to an IPART report).

Fort Crumble was at it again and we now have our fourth premier in four years – recruitment companies would be well justified in opening up a sacked premier’s division. Now we have our first female premier – Kristina Keneally (no strings attached)! Can’t wait to see who makes up her front bench? Not that she will have any say in it! The Daily Telegraph is running a petition for an early election (To Sign)

Last edition of Virtual Realty News for 2009 next week – the chaos of this week would be very hard to beat. Thankfully it is controlled – however we all know that elected politicians make great puppeteers.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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4.12.09Robert Simeon1 Comment »