tag:blogger.com,1999:blog-22031270.post5860152840515025723..comments2023-11-03T19:05:08.512+11:00Comments on Harry Clarke: Financial crisis, Australia & unknown unknownsUnknownnoreply@blogger.comBlogger9125tag:blogger.com,1999:blog-22031270.post-82431314411198802762008-10-23T11:06:00.000+11:002008-10-23T11:06:00.000+11:00given how deregulated labour markets are now unemp...given how deregulated labour markets are now unemployment getting to 10% would see a ginormous drop in domestic demand.<BR/><BR/>I really do not think you have thought through your scenario very well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22031270.post-61837631885620143492008-10-21T01:26:00.000+11:002008-10-21T01:26:00.000+11:00HarryCredit spreads are coming in. If they continu...Harry<BR/><BR/>Credit spreads are coming in. If they continue to come in and you combine it with the monetary expansion from the CBs the rally in stocks could be of epic proportions.<BR/><BR/>I think they have nailed the credit problems and now through monetary expansion they are going to try and nail the recession. Stocks are going higher, Harry,. Much much higher is my bet.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22031270.post-69574268509887390372008-10-20T18:17:00.000+11:002008-10-20T18:17:00.000+11:00My apologies for not making my comments explicit p...My apologies for not making my comments explicit previously.<BR/><BR/>The relationship between property prices and shares in margin call share buying is that some banks like Macquarie, NAB and HSBC, for example, widely lent for buying shares on a margin call basis.<BR/><BR/>They used the shares in the punter's portfolio as security, PLUS, note this, security in real estate or cash management account. <BR/><BR/>As marging calls came in, in a rapidly falling market, much of the cash had been sucked up by the diminishing value.<BR/><BR/>Should they fall steeply again, then the bank will be holding a lot of domestic property as security which it will then attempt to liquidate as quickly as possible. <BR/><BR/>This is the exposure I was talking about before. Nobody wants to say how much funny money debt there is. And this is why Turnbull is giving Swannie and Kevin a hard time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22031270.post-88529834836130371002008-10-19T22:56:00.000+11:002008-10-19T22:56:00.000+11:00haryDon't get so pessimistic. There are furthe...hary<BR/><BR/>Don't get so pessimistic. There are further hurdles, but we're past the worst of it.<BR/>Trust me.<BR/><BR/>The S&P is now trading at book value. It will come back quickly unless we have a major policy mistake which could happen with Obama's policies but left on its own the economy will begin pointing up 2nd quarter next year.<BR/><BR/>As for us... we'll have a harder time but we'll get out fine.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22031270.post-79783683993892260392008-10-19T22:47:00.000+11:002008-10-19T22:47:00.000+11:00My main fear Harry is that economists in Australia...My main fear Harry is that economists in Australia will revert to the ideologically driven narratives of the 70's and the 80's. That will probably make things worse. <BR/><BR/>We have a rather good understanding of what's going on and it has nothing to do with the nonsensical recipe's associated with the various murky cults that used dominate what was called macroeconomics a generation ago.<BR/><BR/>I hope that kabbalistic and alchemical economics doesn't emerge from this crisis and that sound prudent and scientific economics dominates the policy debate this time round.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22031270.post-92229733349499583842008-10-19T22:29:00.000+11:002008-10-19T22:29:00.000+11:00Jack, I think the sleeper for the Aussie banks are...Jack, I think the sleeper for the Aussie banks are just high levels of private debt. <BR/>Rabee, I agree with you. The confused signals are recognised as confused - e.g. high value of US dollar - so no-one knows what is happening.hchttps://www.blogger.com/profile/13799594181016858701noreply@blogger.comtag:blogger.com,1999:blog-22031270.post-55073921052771949562008-10-19T20:03:00.000+11:002008-10-19T20:03:00.000+11:00I'm with Keenie on this one. The sleeper is the ma...I'm with Keenie on this one. The sleeper is the margi call caper. The banks are not telling about this bit of exposure. Just as you are deleveraging, so are the other punters. Hence the falling stocks. <BR/>I tried to go cash with my acct at unisuper but they only effect this once a month, on the first of the month. In the spread between cash rates (up 4%) and securitised investments of "growth" portfolio (down 10%) I have taken a 14% bath.<BR/><BR/>I just hope that not all supe funds "effect" their clients wishes on 1 Nov. Otherwise there will be a bath for everyone. A bloodbath.<BR/><BR/>We'll be taking in ironing i think Harry this time next year.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22031270.post-58045856796372012112008-10-19T20:01:00.000+11:002008-10-19T20:01:00.000+11:00What do we know about markets with a semi-function...What do we know about markets with a semi-functioning capital market? <BR/><BR/>What do stock prices reveal in such circumstances? <BR/><BR/>What do exchange rates tell us? <BR/><BR/>Not much really. We know a lot about prices and their transmission of information regarding scarcities with well functioning capital markets. We also can probably work out what prices are telling us when financial markets have entirely collapsed. As for the intermediate case; well who knows? <BR/><BR/>The main aim of governments should be to fix the financial market so that prices start revealing relevant information. Or perhaps let it fix itself.<BR/><BR/>It's probably not a good time to advocate policy aimed at mitigating whatever catastrophe prices are predicting. The gauge is broken.<BR/><BR/><BR/>ps. regarding your stock portfolio. Not to worry the Tel-Aviv exchange is rallying as right now http://www.tase.co.il/tase/.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22031270.post-65601989296087082332008-10-19T11:14:00.000+11:002008-10-19T11:14:00.000+11:00How much do you think can really be inferred about...How much do you think can really be inferred about this recession based on previous history?<BR/><BR/>If you're saying 10% unemployment, then, given aging trends, that's obviously very serious, since it means there will be more and more old people not working at one end of the spectrum, and lots of unemployed young people at the other. <BR/><BR/>Any predictions for what percentage of the workforce is employed and under-employed? Perhaps this is more meaningful than the unemployment rate.Anonymousnoreply@blogger.com