The Yellow Brick Road

[thunderdownunder]

Australia has a Falling unemployment rate down to 5.7% - Tick
Australian dollar goes through 90c to the USD and heading for parity and beyond - Tick
Australian house prices rise - Tick
Australian Loans up - Tick
Tick Tick Tick Tick
Sounds like a Bomb

We obviously did not get the Financial FUBAR - the plus of being small, financially lazy, an island and primary producer ;)
good place to live as well

http://www.news.com.au/business/stor...47-462,00.html

http://www.news.com.au/business/stor...-31037,00.html

http://www.news.com.au/business/mone...013951,00.html

http://www.news.com.au/business/mone...013951,00.html

Goldman Saks can now come and rape and pillage the last standing village :eek:

[meechpod]

Re: The Yellow Brick Road

AUS is an exceedingly bullish proposition for the next twenty fooking years. Don't tell that to the permabears or they'll be reaching for their Peptobismol antacid tablets, with miserable and bearishly frustrated expressions on their permabear mugs. :rolleyes:

RIP Outback Oracle. A stout man.

Australian Unemployment Falls, Driving Rate-Rise Bets (Update2)


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By Jacob Greber


Oct. 8 (Bloomberg) -- Australia’s jobless rate fell for the first time in five months as employment unexpectedly surged, driving the currency to a 14-month high as traders bet the central bank will raise interest rates again next month.
The number of people employed jumped 40,600 from August, the biggest gain in almost two years, cutting the jobless rate to 5.7 percent from 5.8 percent, the statistics bureau said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg was for a decline of 10,000.
Today’s report supports Governor Glenn Stevens’ decision to unexpectedly raise interest rates this week, the first Group of 20 central bank chief to do so. The currency is set for its biggest weekly gain in more than four months, and 21 of 23 economists surveyed by Bloomberg News forecast borrowing costs will be raised another quarter point to 3.5 percent next month.
“It really is quite surprising to see such strength so quickly,” said Brian Redican, a senior economist at Macquarie Group Ltd. in Sydney, one of only two analysts surveyed by Bloomberg to forecast a gain in employment. Today’s report “is supportive of a fairly quick tightening of monetary policy.”
The number of full-time jobs gained 35,400 in September and part-time employment increased 5,200, today’s report showed. Hours worked rose 0.9 percent to 1.52 billion, the highest level in seven months.
Currency Rises
Since the collapse of Lehman Brothers Holdings Inc. in September 2008, Australia’s unemployment rate has risen to 5.7 percent from 4.3 percent. By contrast, the U.S. jobless rate jumped to 9.8 percent from 6.2 percent in the same period.
The Australian dollar rose to 90.21 U.S. cents at 2:37 p.m. in Sydney from 89.30 cents just before the report was released, taking its gain this week to 4.2 percent. The two-year government bond yield surged 21 basis points to 4.55 percent. A basis point is 0.01 percentage point.
The nation’s benchmark S&P/ASX 200 stock index climbed 1.5 percent, taking this year’s gain to 28 percent.
Woolworths Ltd., Australia’s biggest retailer, said on Aug. 25 it will hire “thousands” of extra workers as it expands into hardware stores. Retailer JB Hi-Fi Ltd. and Germany-based supermarket chain Aldi are also hiring as they expand. Specsavers Optical Group Ltd. today opened a new head office and manufacturing facility in Melbourne and said it will create 1,000 jobs in its Australian retail network.
Chevron Gas Jobs
The government is also stoking demand for workers as it spends A$22 billion ($19.8 billion) on roads, ports, schools and hospitals. An index published Oct. 7 by the Australian Industry Group showed the nation’s building industry expanded in September for the first time in 18 months.
The nation’s single biggest investment project, the A$43 billion Gorgon natural-gas venture in Western Australia, will create as many as 10,000 jobs when construction starts early next year, Chevron Corp. said on Sept. 14. Chevron and its partners say they will sell A$300 billion of gas to China, India and Japan in the project’s first 20 years.
Australia’s economy has outperformed most other developed nations, expanding 1 percent in the first half of the year, and is forecast by the International Monetary Fund to grow 2 percent in 2010. By contrast, the U.S. economy will expand 1.5 percent next year, Japan by 1.7 percent and the euro region by just 0.3 percent, the fund said last week.
Growth in Australia has been stoked by A$20 billion in government cash handouts to consumers and the central bank’s decision to slash borrowing costs between September 2008 and April to the lowest level in half a century.
Interest Rates
Australia and Israel are the only central banks to raise interest rates since the height of the global financial crisis. Israel is not a member of the G-20. Governor Stevens said this week the justification for a benchmark rate an “emergency” level of 3 percent “has now passed.”
“The risk of serious economic contraction” in Australia has passed, Stevens said in a statement on Oct. 6.
“Unemployment has not risen as far as had been expected. The board’s view is that it is now prudent to begin gradually lessening the stimulus provided by monetary policy.”
Recent reports showed retail sales, approvals to build private homes, bank mortgage lending and property prices all jumped in August. Advertisements for job vacancies rose in September for a second straight month, gaining 4.4 percent, an Australia & New Zealand Banking Group Ltd. survey showed this week.
Consumer confidence jumped last month to the highest level in more than two years and business sentiment climbed in August to the highest level in almost six years.
Investors have a 92 percent expectation Stevens will raise the overnight cash rate target on Nov. 3 by another quarter point, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 1:17 p.m. Prior to today’s report, they tipped a 68 percent chance of an increase.
The participation rate, which measures the labor force as a percentage of the population aged over 15, rose to 65.2 percent in September from 65.1 percent, today’s report showed.
To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net
Last Updated: October 7, 2009 23:42 EDT

[Down Under]

Re: The Yellow Brick Road

Australia has a Falling unemployment rate down to 5.7% - Tick
Australian dollar goes through 90c to the USD and heading for parity and beyond - Tick
Australian house prices rise - Tick
Australian Loans up - Tick
Tick Tick Tick Tick
Sounds like a Bomb

We obviously did not get the Financial FUBAR - the plus of being small, financially lazy, an island and primary producer ;)
good place to live as well

I think Australia will be okay until China falls over; if China falls over, then Australia will follow.

[meechpod]

Re: The Yellow Brick Road

Resource depletion. Overpopulation. Energy crisis and Peak Oil, with the looming critical situation in commercially minable URANIUM. Massive East Asian Industrialisation. 20 imminent years. China "falls over"? For how long? :rolleyes:

Your comment evidences a certain "lack of vision".

I think Australia will be okay until China falls over; if China falls over, then Australia will follow.

[nedtheguy]

Re: The Yellow Brick Road

redacted

[thousandmilemargin]

Re: The Yellow Brick Road

This massive rush of positive news sets alarm bells off in my head.................. it seems like the big financial players are pushing a last surge to sucker everyone in, before pulling the rug out.





I do agree with this article about how things could possibly be working:

1. Borrow money for free in the US, courtesy of Ben Bernanke.
2. Buy AUD to be ‘invested’ in Australia (i.e. short the US dollar).
3. If you are more risk adverse, put the AUD into government guaranteed term deposits, courtesy of the Australian tax-payers.
4. If you enjoy risk taking, punt on the Australian stock exchange and/or capital raisings.
5. Watch you wealth grows as the AUD appreciate and Australian stock prices trend up. With the RBA expected to raise interest rates, watch in glee as your potential returns increases.
6. At the first sign of trouble, (1) liquidate your Australian stocks and pull out all your government guaranteed term deposits immediately, (2) sell the AUD to buy back the USD, (3) repay the free money borrowed from Ben Bernanke, (4) pocket your easy profits and (5) retire in Bahamas, thanks to the American and Australian tax-payers.

We've gotten off remarkably lightly here in OZ so far. I suppose that's thanks to a combination of the Chinese stimulus/bubble, the big Australian stimulus spend, and the housing bubble still running strong here.

Since things never got really bad (yet) our markets were quick to bounce back after the March lows, and once momentum developed I think international investors have jumped on the "recovery"/rising $AUD bandwagon.

What that means to me is that there is potential for a truly spectacular fall in the $AUD when the gloss wears off the China story, and Wall Street takes another leg down, and the carry trade starts unwinding, and the housing bubble finally pops here , and the Reserve bank reverses direction after popping the housing bubble and lowers rates to 2% (all at the same time).

I'm reminded of that scene in Pirates of the Carribean where the crew capsizes the Black Pearl by running back and forth from one side of the ship to the other, until they create enough of a rocking motion to flip it completely.

[nedtheguy]

Re: The Yellow Brick Road

redacted

[Chomsky]

Re: The Yellow Brick Road

Where's The Outback Oracle these days, anyway?