The road to recovery is long, winding and bloody confusing!

The road to recovery is long, winding and bloody confusing!

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The global financial crisis (GFC) has been a fascinating turn of events where businesses and households tweaked, sleeked and critiqued their respective currency flows in a battle for survival. So now we hear that as the good times roll, expect the cost of living to rise exponentially. With interest, I was reading another blog on Business2 which intrigued me.

“While you are talking to Glenn Stevens ask him how come the inflation rate is around 3% when everything we use or consume is rising at a much faster rate than that, and also – how come home mortgage rates in the rest of the world are SO much lower than here. And how come the banks are crying about the cost of funds – and making multi BILLION profits. And why won’t we let some other banks into this country to compete with the Big 4. Also – how come the homeowners of this country have to carry the burden of government stuff ups via monetary policy every time?”  Poignant questions to those residents living on Recovery Road, Australia!

Sydney real estate markets this year have been in a somewhat chill mode, although recent sales results are sending strong indications that the tide is turning and sentiment is starting to heat up. This week’s Mosman real estate sales are the strongest recorded this year as the results show here. Source: Domain Property Data

Nielsen

BUY PRINT

I was consumed by this week’s announcements to the residents on Recovery Road, Australia – starting with The GFC saved Australia. “As an aside, the realities of what really happened at our Big Four banks over the past three years makes CEOs’ extreme pay packets all the more obscene. Remember that the CBA’s $16 million man this year, Ralph Norris, took the top job in 2005 – his latest bonus bonanza supposedly recognises his responsibility for the bank coming out of the GFC in such rude good health. Haven’t seen much impact of his presumed matching responsibility for the bank’s financial and reputational exposure to Storm Financial, ABC Learning, Babcock & Brown et all reaching their crescendo on his watch. Similar remuneration report follies are on the way from ANZ, NAB and Westpac.”

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Plain old economic growth is good for society as inflation expectations of 3.1 per cent in September quarter – survey as the RBA beats the inflation war drums. The mining boom will push interest rates up, Reserve Bank’s Glenn Stevens says as the odds shorten for October rate rise. Let the speculation begin when former RBA economist tips 5.75 per cent cash rate which in real terms equates to a 125 basis point increase over the next fifteen months. This would place Australia’s first ever female prime minister at Fort Fumble under increasing pressure, given 2011 could very well be another election year? Which bank? CBA joins calls for an October rate rise despite the release of data this week that household savings fall signals money woes as home loan customers told to brace for $90 – a – month increase in repayments. On top of this the Reserve Bank of Australia revealed this week that the big banks increase penalty charges take 9 per cent to $536 million after more customers fell behind in payments.

Electricity charges have gone through the roof as power bills force big firms to flee from NSW as Fort Crumble continues to mismanage NSW’s power supply where price rises put power to 138,000 people in jeopardy. Opposition energy spokesman Duncan Gay said he would not be surprised if big businesses fled NSW after being forced to bankroll an overdue energy infrastructure upgrade. “NSW Labor has ripped $14 billion out of the state’s energy retailers in dividends and taxes and failed to re-invest in our ageing infrastructure.”

Fort Crumble is encouraging Sydneysiders urged to shift inland as they drown mentally in addressing infrastructure collapses in NSW. The problem with Fort Crumble is that with just six months in power, it doesn’t have a single plan – as public loses all faith with planning process. For example:

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Taking the low road to disaster where Fort Crumble has delayed 60 major road projects by at least five years (some longer) because  it can no longer fund urgent road works. No wonder Fort Crumble, hopelessly and embarrassingly broke, is trying to push residents into the bush. There is no greater example of how the present state governments mismanage debt than 080246-100917-graphic-debt as state’s debt binge to top $240 billion as private sector faces squeeze. Analysis by The Australian of state (fake) budget round has found that borrowing is forecast to soar 52 per cent from $159.6 billion this year to $243.2 billion in 2014 to help fund upgrades to rundown transport, electricity and water infrastructure. The analysis found NSW and Queensland had the highest level of borrowings and both face re-election within the next six months. Constituents are wondering whether we have state governments or fake governments?

Yes, the road to recovery is long, winding and bloody confusing where even the strings on our elected puppets have worn thin and in NSW, the show can no longer go on. No wonder there is increasing demand for property within five kilometres of the Sydney CBD.

Alas, Fort Fumble embarks on a $45 billion NBN network which will become Australia’s greatest ever white elephant. We need a Very Fast Train to link cities because road works in NSW have virtually ceased.  For the record, wireless (not cable) works very well even on very fast trains.

In answer to the earlier question, “how come homeowners of this country have to carry the burden of government stuff ups via monetary policy every time?”  What Australia needs, is a train of thought – not a broken cable car!

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

3 Responses to “The road to recovery is long, winding and bloody confusing!”

  • Ed says:

    “The analysis found NSW and Queensland had the highest level of borrowings and both face re-election within the next six months.”

    Next Qld election is 2012 although many Qlders probably wish there was one earlier!

  • Robbie Mac says:

    Chatting with Fatty O’Barrell the other night, and he gave every indication his team will run a positive campaign, in itself a novelty. That alone should bring some reward.

    The state debt level is an interesting dilemma, as the only way to finance the replacement of our ageing infrastructure is to borrow to do so, even taking into account private/public partnerships. Whilst high borrowings will make the new government an easy target for the scaremongers, it is something they should be able to defend, especially if there are obvious signs that something is actually being done.

    Thinking positively, if this DOES happen, infrastructure gets built and confidence returns, then that naturally should flow through to property prices, which will in turn top up the state coffers with revenue. So, all is not lost, but a “regime change” is desperately required. I suspect this event will not end in a draw!!!

  • Ann says:

    Looks like lots of new faces in State Parliament in 2011

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