Is Australia entering Japan's nightmare, too & too?

[Astroboy]

Australia Facing `Once-in-100-Year' Housing Slump

Australia may be headed for a housing recession similar to those roiling the U.S. and U.K....
Bloomberg - Are you a robot?

When Japan wake up from nightmare, others are entering nightmare.

But there is likely a certain rule for the credit crunch this time. i.e... Anglo-America countries (USA, UK, Aust, NZ) are subprime mess leaders in the world.

 

[FrustratedDave]

Why is it that you ridicule any other country other than you own? Does that mean b/c Japan was in the same situation before that Japan leaders were exactly the same as the "Anglo-America" leaders now? Was Japans leaders a bunch of "subprime mess leaders" as you put it? And how do you imply something racist in almost every post? You need to take a good look in the mirror, or are you too self absorbed to listen anything anyone else has to say?

 

[Astroboy]

Why is it that you ridicule any other country other than you own?

Because Japan thing is not fun as I am Japanese.

Does that mean b/c Japan was in the same situation before that Japan leaders were exactly the same as the "Anglo-America" leaders now? Was Japans leaders a bunch of "subprime mess leaders" as you put it? And how do you imply something racist in almost every post? You need to take a good look in the mirror, or are you too self absorbed to listen anything anyone else has to say?

Calm down again, and take some Stella Artois Lager Beer.

It is my objective analysis about the global credit crunch. I wonder why the world takes the same path as us, and what is reason behind. I don't know ... that's why ... asking. If my suggestion is wrong, let us know your idea.

 

[FrustratedDave]

Because Japan thing is not fun as I am Japanese.

Don't you see something fundamentally wrong with this statement?

 

[Astroboy]

Don't you see something fundamentally wrong with this statement?

You mean .... Japan Forum is the people being interested in Japan ONLY? Maybe right, but from Japanese perspective, Japan Forum is the interesting Forum to compare Japan with others. Otherwise, Japan Forum will be either Japan-bashers or Japan-lovers. Various discussion ...based on Japan... must be interesting, I think.

 

[Pachipro]

I believe Australia, as well as many developed countries of the world will, in fact, enter into the same fate that befell Japan in the late 90's only much worse.Some, like the lockstep UK, are experiencing the same pains as the US. I follow this situation and here is what I have learned concerning Australia:


Business conditions in Australia have slumped to their lowest levels since the aftermath of the September 2001 terrorist attacks in the United States, a survey shows. The National Australia Bank (NAB) survey found business conditions for the June quarter fell by seven index points to six points. It is the lowest index reading since the December quarter of 2001, when the business conditions index was minus-two points. An NAB economist, John Sharma, said global financial market volatility and higher interest rates were affecting business conditions in Australia.

The NAB's decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which, in the words of John Stewart (NAB's Chief Executive), are experiencing a ﾂ"meltdownﾂ".

We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression and we are nearly there. Just yesterday the US government released, ahem, "revised figures" that said the US did indeed have negative GDP growth in the 4th fourth quarter of 2007. My belief is that the first quarter 2008 figures will also be revised to show negative growth indicating that the US is indeed in a full blown recession which I have said long ago.

The NAB CEO said, ﾂ"I think we are not at the bottom yet. Things are going to get worse. There are more than 18 million properties for sale in the US just now. That is more than the whole housing stock in Australia.ﾂ"

The NAB bought about $1.2 billion of America's subprime loans because of their falsly AAA ratings and had "big" customers lined up wanting to invest in them. Unfortunately, 90% of these investments are now worthless and many of these "big" institutional investors are now very angry.


Australia holds about $830 million in US subprime mortgage debt and most of it is now lost. Please see this story for the fulll details


Also, wasn't there a story the other day indicating that Australia's job losses last month were the worst in recent memory?


Yes, Australia will also enter Japan's nightmare thanks to the false ratings of Moodys and the selling of worthless US debt and mortgages to Japan, Australia, the UK and countless other countries. They will all suffer because of this.

Why is it that you ridicule any other country other than you own? Does that mean b/c Japan was in the same situation before that Japan leaders were exactly the same as the "Anglo-America" leaders now? Was Japans leaders a bunch of "subprime mess leaders" as you put it? And how do you imply something racist in almost every post? You need to take a good look in the mirror, or are you too self absorbed to listen anything anyone else has to say?

I believe he is only pointing out the truth Dave. Japan was the "test market" so to speak for what we are experiencing today and their fall in the 90's was due to land and housing speculation which have NEVER recovered to this day, nor has the Nikkei stock market which was at a high of 44,000 then. That is why I left Japan. A typical 3LDK mansion was selling for more than 5,000,000 back then in the boonies of Yokohama and quadrupled in a matter of three years! Then it all came tumbling down, much as we have seen in the US and UK for a year now. The worst is yet to come.


Yes, they were a "bunch of subprime leaders" as you say and it was the main reason for the fall. Japan was only doing what they were instructed to do by the US and bankers that actually control all economies and anyone who believes that the Japanese government makes decisions on their own is sadly disillusioned.


Is it any coincidence that the former head of Japan's Central Bank was a former Goldman Sach's executive as were the heads of the Bank of England and European Cental Bank, as well as "Hanky Panky" Paulson of the US Treasury Department?


When are people going to understand that the governments and economies of all major industrial nations are run by the Goldman Sachs and the banker elites of the world, like Chase, JP Morgan, etc. and that they have put us in the mess we are in now today in Australia, Japan, the UK? The so called "invisible hand" that runs the markets or economic fundamentals as we were taught in Economics 101 is just a lie.

Everything happens as planned, but the plan is worse than even they imagined and the world and middle class will suffer because of it because it will be their taxes who will "save" the bankers and criminals of Wall and Fleet Street.

Do you not see anything strange in the fact that it was Goldman Sachs that "bailed out" Bear Sterns for $10/share when just a year earlier it was trading near $100/share?


I see no racism in Astroboys posts as he is only pointing out the obvious in the best English he can. It is the western countries of the US and UK forcing this mess on Japan and the other countries of the world. Please check it out if you don't believe me.

 

[FrustratedDave]

I see no racism in Astroboys posts as he is only pointing out the obvious in the best English he can. It is the western countries of the US and UK forcing this mess on Japan and the other countries of the world. Please check it out if you don't believe me.

Sorry , I don't share your veiws on this. If he was "just" pointing out his veiws I would be fine, b/c as you say there is truth in some of these posts. But, most of his posts hides a different agenda in my opinion.

Do we really need three sperate threads on how the "Anglo-America" countries economy is screwed? And why use the words "Anglo-America" ? England, America, Australia and Newzeland are sperate countries, so why single them out?

 

[KirinMan]

Sorry , I don't share your veiws on this. If he was "just" pointing out his veiws I would be fine, b/c as you say there is truth in some of these posts. But, most of his posts hides a different agenda in my opinion.
Do we really need three sperate threads on how the "Anglo-America" countries economy is screwed? And why use the words "Anglo-America" ? England, America, Australia and Newzeland are sperate countries, so why single them out?

I agree with you Dave. I am almost tempted to start a thread with a title something like....."Is Astroboya JRef's nightmare?" or "Is Astroboya entering your nightmare's too?"

 

[Astroboy]

i Agree With You Dave. I Am Almost Tempted To Start A Thread With A Title Something Like....."is Astroboya Jref's Nightmare?" Or "is Astroboya Entering Your Nightmare's Too?"

always ... Agree To Disagree.

 

[noyhauser]

I agree with you Dave. I am almost tempted to start a thread with a title something like....."Is Astroboya JRef's nightmare?" or "Is Astroboya entering your nightmare's too?"

You can add the byline "Now with twice as much pachipronomics" to give a real sense of these threads.

 

[Shouganai]

I believe Australia, as well as many developed countries of the world will, in fact, enter into the same fate that befell Japan in the late 90's only much worse.Some, like the lockstep UK, are experiencing the same pains as the US. I follow this situation and here is what I have learned concerning Australia

Well there are always differences, so lets take a look.
1. Australia is in a pre-eminent position to supply minerals to the Asian region, and you can also expect alot of business investment in mining & energy in Australia, which will strengthen the local economy. We already see that, as well as takeover of mining projects by the Chinese, just as Japan did in the 1970s and 1980s. But it will be on a bigger scale because the mineral tightness is greater, at least for the next 10 years.
2. Australia has this lovely hedge, which makes Australia's pretty relaxed people. Every time mineral prices collapse, so does the Australian currency.
3. The important mineral prices are not falling much, eg. iron ore, coal, bauxite are holding quite well, nickel, copper & gold have almost bottomed.
4. The Australian farm sector will kick in when this drought finishes, and this will happen at a time of high prices.
5. The Australian govt has one of the lowest debts in the OECD, so expect the Federal government to spend if unemployment rises, eg. Train lines in Sydney. The NSW just cancelled a project because its finances went backwards. When unemployment gets to 6% (now low 4%), expect that to change. You said business confidence is bad; well get this, job growth was 3x higher than forecast. Analysts without a mining background like me under-estimated the contribution of minerals.
I would be reluctant to pay much attention to business surveys. They reflect only short term conditions. Of course when asset prices are falling people are scared, and recent interest rate rises have curtailed retail spending, hence the bad retail figures. Simply this is a period for Australian's to save, to pay off homes, but people are still sitting on a lot of asset value, so they will resume spending within a year, but it will be in a higher interest rate environment. I actually expect inflation to relax once credit creation kicks in. I don't see this as the bottom because there are still deflationary powers at work, and the credit expansion has yet to go global. I think you can expect an Asian property boom over the next 10-15 years; then you will finally see the slump everyone is projecting.

The NAB's decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done.

Nonsense, you are talking about NAB's exposure to the USA, which would be small. 90% of nothing is nothing.

We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression and we are nearly there.

Yes, the USA has problems, but you can bet that people will be buying up those properties within a year. The US will take a while to pick up, but the world didn't go into a recession in 2000 when the USA faced a comparable asset crisis. Most Americans are sitting on a lot of equity in their homes. Higher interest rates in the USA, probably, but there will not be depression for another 15 years. We are in the midst of a super-cycle. This is just a pause for absorption of credit. So I suggest breathing before you hyperventilate.

The NAB bought about $1.2 billion of America's subprime loans because of their falsly AAA ratings and had "big" customers lined up wanting to invest in them. Unfortunately, 90% of these investments are now worthless and many of these "big" institutional investors are now very angry.

NAB is capitalised at $40 billion plus, so you are talking about a 2% exposure. Its share price has already fallen far more. I actually think the market has bottomed and will now consolidate. Its at technical support. Mineral stocks will fall a little more.

Also, wasn't there a story the other day indicating that Australia's job losses last month were the worst in recent memory?

Nonsense, unemployment is 4.2%, the only state which declined was NSW (Sydney), and job growth was 3x greater than expectations.

Japan was the "test market" so to speak for what we are experiencing today and their fall in the 90's was due to land and housing speculation which have NEVER recovered to this day, nor has the Nikkei stock market which was at a high of 44,000 then. That is why I left Japan.

Japan was very different. They did not allow the liquidation of debt. Today there is still household foreclosures overhanging the market, banks are reluctant to lend, the govt is reluctant to sell. Basically that is why the economy is stagnating. Retirees are under-funded. Australian savings are far better, outlook far better. Australia will liquidate foreclosures. Better still, within 18 months, that market will have dried up because of land supply tightness in NSW. Expect a lot of migration too as Sydney becomes unaffordable. It costs $160-200K for a house block when it should be $50K on the fringes. Thats because of zoning restrictions. But state governments might change that policy, or the Fed govt will need to start spending on train lines. States will need federal money, and all the better than there is a Labor-State & Fed govts (except WA which doesnt need the money).

When are people going to understand that the governments and economies of all major industrial nations are run by the Goldman Sachs and the banker elites of the world, like Chase, JP Morgan, etc. and that they have put us in the mess we are in now today in Australia, Japan, the UK? The so called "invisible hand" that runs the markets or economic fundamentals as we were taught in Economics 101 is just a lie.

Hehe, its interesting how many people who cite Ecos 101, but you don't learn anything in that. Your claims are a little sensational here, but not too much so. There is a corporate-govt partnership, and we are dealing with fascist governments intent on controlling our minds by controlling our wallets. The greatest prisoners are those with something to loose. I suggest selling out and going to live on a farm somewhere, growing vegetables, and thinking deep philosophical thoughts.

Everything happens as planned, but the plan is worse than even they imagined and the world and middle class will suffer because of it because it will be their taxes who will "save" the bankers and criminals of Wall and Fleet Street.

Actually no, things usually happen in the opposite to plans. People are very poor at long term projects because they are not good critical thinkers, and often don't fully comprehend the context. Missing data. What these investment bankers dont realise is that when they control all the money, there will be more domestic demand, so we'll then become a communist state.

Do you not see anything strange in the fact that it was Goldman Sachs that "bailed out" Bear Sterns for $10/share when just a year earlier it was trading near $100/share?

Nope, I tend to think the market always moves from over to under-pricing assets. Goldman Sachs got a bargain, and they increased their market share. The global market will have turned in 6 months, and the US will resume growing in 2 years.
And yeh, I don't see any racism implied.
If you are interested in foreclosed property, google 'foreclosed Japan'

 

[Mycernius]

As the last couple of threads were going off-topic they have been moved here
Off topic from is Australia entering Japans Nightmare
Thanks.

 

[Shouganai]

Australia not dire

When Japan wake up from nightmare, others are entering nightmare.
But there is likely a certain rule for the credit crunch this time. i.e... Anglo-America countries (USA, UK, Aust, NZ) are subprime mess leaders in the world.

No Australia is not entering the same nightmare as Japan. Japanese household & business debt went to crazy levels - Australian debt is far less severe, though its bad. Where they differ greatly is in their capacity to repay. Aust govt has low debt (as Japan did before), but also the promise of huge export earnings coming out of the next recession. Watch as some of that public money goes into export port capacity. Also the farm sector will do quite nicely over the next few years with the low $A. There will be a big difference between the fortunes of the city and country.