http://www.news.com.au/business/money/story/0,28323,24846506-5013953,00.html
Why don't you start building your understanding of the Australian stock market with this article. You can see it is an attempt to summarize the best/safest options for investment this year. Take some notes identifying why each stock was recommended, do some research to find out what certain terms mean or ask me Wednesday. Finally, check out the chart for each stock and see how they've performed through the year. (you can use the charting tool supplied by The Australian - the link is in your email from Friday)
Friday, October 9, 2009
Saturday, September 26, 2009
The worst is over? Stimulus working?
http://tools.goldcoast.com.au/stories/32711621.php - the negative data continues to reveal that the GFC is far from over. Personal debt levels are still far too high, people cannot afford the debt they have accumulated to accrue the assets they aquired in recent years! So much wealth was 'created' in the last decade, but much of it created on speculative demand fueled by cheap debt - whilst the initial crisis have occured there will be continued effects for some time as many households and businesses have managed to avoid failure so far, but surviving the slowing demand conditions, potential unemployment and higher interest rates will cause more pain for lenders and borrowers in coming months and years.
This sentiment needs to be understood alongside summaries such as this http://tools.goldcoast.com.au/stories/32928221.php where the Tresury Secretary emphasises the need to continued government intervention in driving economic growth as domestic demand would otherwise have us in recession right now.
Do these two articles get you thinking about the appropriate role of government in markets and managing aggregate demand?
This sentiment needs to be understood alongside summaries such as this http://tools.goldcoast.com.au/stories/32928221.php where the Tresury Secretary emphasises the need to continued government intervention in driving economic growth as domestic demand would otherwise have us in recession right now.
Do these two articles get you thinking about the appropriate role of government in markets and managing aggregate demand?
Saturday, September 19, 2009
Value: Why does gold continue to appreciate?
Matt Whittaker from the Australian reported through the week some insight into this important investment commodity:
Understanding: Why is gold so strong at the moment?
Interpretation: Why does Frank Lesh say that 'gold is the new international currency'?
Wider reading: Is there some history to the idea of gold as an international currency or standard?
Wednesday, July 22, 2009
Signs of recovery in some of this weeks' statistics?
Why does Adam Carr suggest that the message is inconsistent? Is there a good reason for this?
http://business.smh.com.au/business/rba-optimism-grows-20090721-drfi.html
Do you think this article reads as one of pessimism, caution, or optimism?
http://business.smh.com.au/business/rba-optimism-grows-20090721-drfi.html
Do you think this article reads as one of pessimism, caution, or optimism?
Tuesday, July 14, 2009
Time for a pay rise? Why? Why not?
http://www.theaustralian.news.com.au/story/0,,25784272-2702,00.html According to the article Why shouldn't the minimum wage rise as much as is requested? Who are the stakeholders concerned?
http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/men_out_of_work/ This article focusses on a particular demographic hit by unemployment, read the posts below the article and note what some are suggesting about unemployment figures being inaccurate - describe for me why these people aren't yet measured as being unemployed.
http://www.smh.com.au/news/world/british-airways-saves-20m-with-voluntary-pay-cuts/2009/06/26/1245961406184.html Something quite unusual happening to employees at BA. What does the article suggest: Is this reasonable? Is it going to help the company? Could it jeopardize future wages and conditions?
http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/men_out_of_work/ This article focusses on a particular demographic hit by unemployment, read the posts below the article and note what some are suggesting about unemployment figures being inaccurate - describe for me why these people aren't yet measured as being unemployed.
http://www.smh.com.au/news/world/british-airways-saves-20m-with-voluntary-pay-cuts/2009/06/26/1245961406184.html Something quite unusual happening to employees at BA. What does the article suggest: Is this reasonable? Is it going to help the company? Could it jeopardize future wages and conditions?
Wednesday, July 8, 2009
Why such a difference between what the Unions think is reasonable and what the Commission is offering?
Low-paid income will drop: Gillard
Sid Maher July 08, 2009
Article from: The Australian
JULIA Gillard has condemned the Australian Fair Pay Commission's decision to freeze minimum wages, saying it failed to "strike the right balance" and would send low-paid workers' incomes backwards.
Employer groups and the opposition hailed the move as the necessary decision to protect jobs.
Despite the government not specifying a wage rise figure in its submission to the Fair Pay Commission's latest wage deliberations, the Acting Prime Minister said the freeze decision was "disappointing".
"We didn't nominate a figure; we suggested that the Fair Pay Commission should consider a pay rise for these workers, and we were obviously concerned that people should, at least, maintain their real wages," Ms Gillard said yesterday.
"This decision inevitably means that there will be a real wage reduction for low-income Australians."
In its final decision, the Fair Pay Commission decided to leave the federal minimum weekly wage at $543.78, or $14.31 an hour, despite unions asking for a $21-a-week increase.
Ms Gillard said changes to
the tax system and the federal government's stimulus package had provided real increases in
disposable incomes for most households.
The decision incensed unions and won immediate backing from employer groups, who said it would save jobs.
Australian Industry Group chief executive Heather Ridout said the decision was understandable given the current economic circumstances.
"The decision delivers a broader signal about wage restraint and the need for the current round of wage negotiations to take account of the continuing economic pressures on businesses and employment," Ms Ridout said.
"In making its decision, the Fair Pay Commission has taken into account that under the new Fair Work workplace relations system, wages will be reviewed in early 2010 by Fair Work Australia, with any minimum wage increase awarded operative from
1 July, 2010."
She said disposable incomes had been boosted by recent tax cuts, the indexation of family payments and the impact of the cash payments in December and March as part of the federal government's stimulus package.
The combination of tax cuts, family tax benefit increases and stimulus payments had added disposable income of more than $20 a week, or 4 per cent, to a single worker on the minimum wage.
Australian Chamber of Commerce & Industry workplace policy director David Gregory said the freeze on the minimum wage was a sensible decision, given the economic environment.
"Certainly we think that it's the best outcome in that context for Australian businesses," Mr Gregory said. "It's also the best outcome for Australian employees in terms of preserving Australian jobs."
ACTU secretary Jeff Lawrence said the Fair Pay Commission was a leftover from the Howard government-era Work Choices regime and the decision was "another kick in the guts for working Australians".
He said the Fair Pay Commission had shown no respect for the contribution low-paid workers were making to the economy during the downturn and had relied on discredited research.
"The decision means ordinary working Australians and their families are bearing the brunt of an economic downturn they did not cause," Mr Lawrence said.
Opposition workplace relations spokesman Michael Keenan backed the decision, saying the most important consideration in the current economic environment was to protect jobs.
"While everyone would like to see low-paid employees get a pay rise, at the moment we need to balance those considerations with the most important thing, which is preserving jobs," he said.
What/Who is the ACCI, FPC and ACTU?
What are some of the criticisms of the lack of increase in minimum wage?
List and explain some of the problems with raising the minimum wage in the current climate.
Sid Maher July 08, 2009
Article from: The Australian
JULIA Gillard has condemned the Australian Fair Pay Commission's decision to freeze minimum wages, saying it failed to "strike the right balance" and would send low-paid workers' incomes backwards.
Employer groups and the opposition hailed the move as the necessary decision to protect jobs.
Despite the government not specifying a wage rise figure in its submission to the Fair Pay Commission's latest wage deliberations, the Acting Prime Minister said the freeze decision was "disappointing".
"We didn't nominate a figure; we suggested that the Fair Pay Commission should consider a pay rise for these workers, and we were obviously concerned that people should, at least, maintain their real wages," Ms Gillard said yesterday.
"This decision inevitably means that there will be a real wage reduction for low-income Australians."
In its final decision, the Fair Pay Commission decided to leave the federal minimum weekly wage at $543.78, or $14.31 an hour, despite unions asking for a $21-a-week increase.
Ms Gillard said changes to
the tax system and the federal government's stimulus package had provided real increases in
disposable incomes for most households.
The decision incensed unions and won immediate backing from employer groups, who said it would save jobs.
Australian Industry Group chief executive Heather Ridout said the decision was understandable given the current economic circumstances.
"The decision delivers a broader signal about wage restraint and the need for the current round of wage negotiations to take account of the continuing economic pressures on businesses and employment," Ms Ridout said.
"In making its decision, the Fair Pay Commission has taken into account that under the new Fair Work workplace relations system, wages will be reviewed in early 2010 by Fair Work Australia, with any minimum wage increase awarded operative from
1 July, 2010."
She said disposable incomes had been boosted by recent tax cuts, the indexation of family payments and the impact of the cash payments in December and March as part of the federal government's stimulus package.
The combination of tax cuts, family tax benefit increases and stimulus payments had added disposable income of more than $20 a week, or 4 per cent, to a single worker on the minimum wage.
Australian Chamber of Commerce & Industry workplace policy director David Gregory said the freeze on the minimum wage was a sensible decision, given the economic environment.
"Certainly we think that it's the best outcome in that context for Australian businesses," Mr Gregory said. "It's also the best outcome for Australian employees in terms of preserving Australian jobs."
ACTU secretary Jeff Lawrence said the Fair Pay Commission was a leftover from the Howard government-era Work Choices regime and the decision was "another kick in the guts for working Australians".
He said the Fair Pay Commission had shown no respect for the contribution low-paid workers were making to the economy during the downturn and had relied on discredited research.
"The decision means ordinary working Australians and their families are bearing the brunt of an economic downturn they did not cause," Mr Lawrence said.
Opposition workplace relations spokesman Michael Keenan backed the decision, saying the most important consideration in the current economic environment was to protect jobs.
"While everyone would like to see low-paid employees get a pay rise, at the moment we need to balance those considerations with the most important thing, which is preserving jobs," he said.
What/Who is the ACCI, FPC and ACTU?
What are some of the criticisms of the lack of increase in minimum wage?
List and explain some of the problems with raising the minimum wage in the current climate.
Friday, June 12, 2009
Signs of recovery affecting Monetary Policy expectations...
Recovery signs put rate rises on agenda
Clancy YeatesJune 13, 2009 Sydney Morning Herald
MONEY markets have slashed the odds of further cuts to official interest rates after a string of indicators showing the economy and global conditions are holding up better than expected.
There is now only a one in four chance of a further 0.25 percentage point cut in rates later this year, as implied by market prices, whereas in March they were factoring in a cut of up to 0.50 percentage points from the current level of 3 per cent.
Moreover, futures markets are also tentatively pricing in rises in interest rates from early next year, though the outcome is difficult to predict at the moment.
Analysts say the change in sentiment is a response to persistent "green shoots" in global markets and the surprisingly resilient state of the domestic economy.
In the latest sign of global improvement, China again beat economists' expectations by notching up growth of 15.2 per cent in its retail sector last month, and further strength in industrial production.
The chief interest strategist at Deutsche Bank, David Plank, said the main reason for the changes in interest rate expectations was the improvement in international conditions.
"It's not that the global economy's in good shape, but it's not as bad as it looks," he said.
In another promising sign for world growth, crude oil traded near a seven-month high of $US72 a barrel after the International Energy Agency raised its outlook for oil consumption for the first time since August.
On the domestic front, Mr Plank said a more buoyant mood in markets was also lowering the odds that the Reserve Bank would provide further stimulus with cuts to lending rates.
This lift in investor confidence has also boosted the ASX 200 index to 4062.2 points, its highest close since November.
"We've seen more than a 30 per cent rally in equity markets, and credit spreads have come in sharply," Mr Plank said.
Yet despite the newfound optimism in credit markets, the Commonwealth Bank yesterday raised its main standard variable mortgage rate by 10 basis points, citing higher credit costs.
The chief economist at Nomura, Stephen Roberts, said the lower expectations of interest rate cuts also reflected a rise in key commodities used in industrial production, such as copper, which reached an eight-month high yesterday. And once again China is seen as the driving force behind the rise.
Yesterday's figures also said China's industrial production expanded at an 8.9 per cent annual rate, with car production almost double to 35 per cent last month, compared with 17.3 per cent previously.
"It's the latest piece of evidence that China, of all the economies in the world, is going to have a U-shaped recovery," Mr Roberts said.
Markets overseas are also pricing in an interest rate rise before the end of the year in the US, where official rates are in effect zero. Markets in New Zealand and Canada are predicting higher interest rates from early next year.
Despite the market optimism, the Reserve Bank said last week that "scope remains for some further easing of monetary policy".
See if you can locate some of these 'string of indicators' which are leading market confidence which has this journalist commenting... find them, share them in your comment and interpret them if you can.
Clancy YeatesJune 13, 2009 Sydney Morning Herald
MONEY markets have slashed the odds of further cuts to official interest rates after a string of indicators showing the economy and global conditions are holding up better than expected.
There is now only a one in four chance of a further 0.25 percentage point cut in rates later this year, as implied by market prices, whereas in March they were factoring in a cut of up to 0.50 percentage points from the current level of 3 per cent.
Moreover, futures markets are also tentatively pricing in rises in interest rates from early next year, though the outcome is difficult to predict at the moment.
Analysts say the change in sentiment is a response to persistent "green shoots" in global markets and the surprisingly resilient state of the domestic economy.
In the latest sign of global improvement, China again beat economists' expectations by notching up growth of 15.2 per cent in its retail sector last month, and further strength in industrial production.
The chief interest strategist at Deutsche Bank, David Plank, said the main reason for the changes in interest rate expectations was the improvement in international conditions.
"It's not that the global economy's in good shape, but it's not as bad as it looks," he said.
In another promising sign for world growth, crude oil traded near a seven-month high of $US72 a barrel after the International Energy Agency raised its outlook for oil consumption for the first time since August.
On the domestic front, Mr Plank said a more buoyant mood in markets was also lowering the odds that the Reserve Bank would provide further stimulus with cuts to lending rates.
This lift in investor confidence has also boosted the ASX 200 index to 4062.2 points, its highest close since November.
"We've seen more than a 30 per cent rally in equity markets, and credit spreads have come in sharply," Mr Plank said.
Yet despite the newfound optimism in credit markets, the Commonwealth Bank yesterday raised its main standard variable mortgage rate by 10 basis points, citing higher credit costs.
The chief economist at Nomura, Stephen Roberts, said the lower expectations of interest rate cuts also reflected a rise in key commodities used in industrial production, such as copper, which reached an eight-month high yesterday. And once again China is seen as the driving force behind the rise.
Yesterday's figures also said China's industrial production expanded at an 8.9 per cent annual rate, with car production almost double to 35 per cent last month, compared with 17.3 per cent previously.
"It's the latest piece of evidence that China, of all the economies in the world, is going to have a U-shaped recovery," Mr Roberts said.
Markets overseas are also pricing in an interest rate rise before the end of the year in the US, where official rates are in effect zero. Markets in New Zealand and Canada are predicting higher interest rates from early next year.
Despite the market optimism, the Reserve Bank said last week that "scope remains for some further easing of monetary policy".
See if you can locate some of these 'string of indicators' which are leading market confidence which has this journalist commenting... find them, share them in your comment and interpret them if you can.
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