No money – no honey!
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It’s that simple – Failure in Washington “Sometimes it seems that an American talent for self – congratulation is surpassed only by a talent for self – delusion.” The United States debt is now over $14 trillion and nearly two – thirds is public debt which is owed to the people, businesses and foreign governments. The US debt is the largest in the world and now has so many discussing The U.S. National Debt and how it got so big? Even before the economic crisis, the U.S. debt grew 50 per cent between 2000 – 2007, ballooning from $6 trillion to $9 trillion. The $700 billion bailout helped the debt grow to 10.5 trillion by December 2008.
Even scarier, the debt level is the debt as a per cent of the total country’s production, or Gross Domestic Product (GDP), which was $14.7 trillion in 2010. Makes one wonder what the real figure is today? The debt is 95 per cent of GDP, up from 51 per cent in 1988. Interest on the debt was $414 billion in Fiscal Year 2010 and that was with the AAA credit rating – which was downgraded last week to AA and 10 million jobs short of full employment. The U.S. has enjoyed a AAA credit rating since 1941.
Last Sunday, I was reading the Bangkok Post – Ratings Downgrade prompts attack China blasts US over debt problems “China gave the United States a dressing down over its debt problems yesterday, questioning whether the US dollar should remain the world’s reserve currency and urging the superpower to live within its means.” So we now enter Global Financial Crisis Mark ll and where will the money come from this time? Second GFC has become their debt to society with many asking – The last plan failed. So what’s the plan?
The US downgrade resulted in a market bloodbath for the Australian equity markets resulting in the worst three day slump since November 2008. Global debt crisis could last 20 years, warns Future Fund chairman David Murray “We’re a highly indebted nation overall. If you add up all government debt in Australia plus private sector debt, the aggregate is high.” He then went on to say “so in Australia at the moment we need a significant reduction in government debt, we need things that will drive private sector investment and success which generally means in the business sector lower taxes.” BHP Billiton chairman Jac Nasser strongly criticised two of the government’s key policy platforms, warning against spending $36 billion on the National Broadband Network and the aggressive timetable for a carbon tax – BHP’s Jac Nasser gives government productivity warning.
The Australian – Order Bill Leak’s Print
The U.S. financial debacle prompted Fort Fumble to issue a statement: Labor won’t budge on surplus for 2012/13 despite economists tip rocky road for surplus target. In a week full of riveting reading I enjoyed reading an article by Warwick McKibbin Ditch the delusion that stimulus saved us from the GFC a point I have been arguing in Virtual Realty News for years. Although in another back flip Wayne Swan appears to soften budget surplus pledge, calling it an “objective” which stems back to May this year when Wayne Swan can’t say which year Labor achieved its last surplus. It remains odds on, that by the next federal election in Australia, the budget will still be in deficit – the last Labor budget surplus was during the Hawke – Keating governments in 1989 – 1990.
Interesting to note this week the decision by the Commonwealth Bank and Westpac to slash interest rates is the strongest indication yet that investors are strategically abandoning equities in favour of fixed–interest securities – rate moves point to grim future. For the moment, the financial market calamities have clouded real estate confidence although we believe this will be short-lived . Everybody needs to live with a roof over their head. Will Stevens hit the panic button? It is looking that way although (at this point in time) I just can’t see a double rate cut for September, investors bet my tip is that the Reserve Bank of Australia (RBA) will keeps its powder dry.
Unlike many global banks, our banking system remains strong and I agree that CBA’s strength should be rightly seen as a plus, not a minus. Our government could not afford banking bailout, considering that it cost the U.S government $700 billion to bail its banks out in GFC Mark l. Bear in mind we now have worst retail results in 50 years which dates back to the 1961 – 62 recession. The recent equity market capitulations have seen many Mosman vendors delay their market debuts so it appears we will have to wait until late September before we see the full orchestra playing.
MOSMAN – 2088
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• Number of houses on the market July 13 – 80
• Number of houses on the market this week – 88
• Number of apartments on the market July 13 – 92
• Number of apartments on the market this week – 95
CREMORNE – 2090
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• Number of houses on the market July 13 – 16
• Number of houses on the market this week – 15
• Number of apartments on the market July 13 – 31
• Number of apartments on the market this week – 25
NEUTRAL BAY – 2089
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• Number of houses on the market July 13 – 7
• Number of houses on the market this week – 6
• Number of apartments on the market July 13 – 65
• Number of apartments on the market this week – 65
For this week’s sales in 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
Again, no surprises with the polling: PM stalls in Newspoll doldrums as voters stay cool so it was enlightening to read that constant news cycle and rise of bloggers means quality of information at risk: PM obviously I would be surprised if that was a reference to Virtual Realty News. I’m sure if the carbon tax and National Broadband Network were canned, her polling would increase dramatically– that’s the policy with polling.
Great to be back – it will be a most eventful run into Christmas and beyond.
Cheers ^__^
