With only 24 hours left the go, analysts are describing retail conditions as the worst since the early 1990’s.
According to the Australian Retailers’ Association, more than 65 percent of retailers had worst sales figures this year than in the same week, last year.
While some blame the high Australian dollar and the internet for off-shoring more sales, the stark reality is that due to huge levels of household debt, more household income is required to be funnelled into housing at the expense of discretionary spending. In addition to this, the deleveraging process is starting to take hold with many households trying to save money and pay down debt, rather than the traditional spend more than you earn-a-thon.
Retail Traders Association of WA executive director Wayne Spencer says “The larger discretionary spend is certainly being affected”
Gerry Harvey was quoted “There is a recession in retail right now. Boxing Day sales have had to come early because retailers need to sell something to pay their staff.”
“It’s a crisis, the worst in 20 years,”
The Victorian Employers Chamber of Commerce and Industry has called for further stimulus such as personal tax cuts. In early 2009, the Rudd Government gave over 8 million Australians a $900 handout to help prop up the unsustainable economy.
All eyes are now on the largest retail day of the year – Boxing Day. It will be make or break for many retailers.
» Retailers wish for Christmas miracle – The Sydney Morning Herald, 22nd December 2010.
» Traders crying out for help – The Herald Sun, 23rd December 2010.
God help us if Labor gives out more stimulus.
My wish for all Australians for the New Year;
“…the deleveraging process is starting to take hold with many households trying to save money and pay down debt, rather than the traditional spend more than you earn-a-thon.”
I hope this time round of deleveraging does last more than 6 weeks. Last round many people began deleveraging, then the Government and Media spewed rhetoric of how good and solid the Economy and Banking system was (not!) here, everyone went on a buy a property and other items spending spree.
May future stimulus programs not be stimulus programs, but commonsense (can’t find a better word that applies to Politicians, Economists,..) measures that will bring sense, and a fair go for the prudent.
Merry Christmas WhoCrashedTheEconomy, and shall be awaiting more postings here into the New Year, and all Next Year. Unless the Economy has a bubble-less BOOM! I am sure there will be a record number of postings here.
Best wishes for you and your family.
Thanks and regards,
– BotRot
But, but the GFC is over they tell us!
To those who don’t buy the government rhetoric, the GFC hasn’t yet unleashed all of its fury. Like a terminal cancer patient just given their first dose of chemotherapy, this is a temporary lull which will catch out the unwary. The USA will continue to go backwards, the EU will have more member states get into financial strife and China isn’t as rosy as we all believe. Any one of these getting into more strife would push us back into a recession and all three would cause a global depression. I hope I am wrong but the signs are not positive.
I think the govt can try to prop it up all they want with stimulus money but to many Australians are past the point of no return because of the amount of debt. Any free govt money/stimulus they get has to go towards debt. God help us when China slows down and the mining boom comes to a grinding halt. That will give Australia the real picture of its economy. All Krudd did was prolong the boom and make the coming correction(recession) be worse than what it is going to be. All you got to do is look at NZ as the correction has begun there. I would not bank on the US falling as I am from there and things are picking up. I am reading more and more companies are starting to do whats called re-shoring jobs. They are actually finding that if they look at Tost Cost of Ownership models as opposed to just labor costs that they arent saving hardly any money by having the jobs over seas. http://velocityschedulingsystem.wordpress.com/2010/08/10/manufacturing-heads-back-to-usa-reshoring-usatoday-com/
When US pulls out of it the rest of the world will. Everybody keeps saying that China is going to pull us out. I completely disagree. They have to create their own internal consumption and stop counting on 60% of their GDP being in construction. 60% of that construction isnt producing money as all you have to do is look at the empty cities and bridges/roads leading to the middle of nowhere. The other factor you have to take in account is fuel is on the rise again and if it hits over 100USD barrel then shipping costs go throught he roof. No incentive to keep producing goods overseas because your shipping costs have just doubled or tripled. What I believe the Aussie govt needs to do is work on developing other industries and not depend so much on mining as it is not going to boom forever. Only time will tell in all this.
LBS
Alot of these blogs like
http://delusionaleconomics.blogspot.com/
http://www.unconventionaleconomist.com/
and whocrashedtheeconomy are stating the govt needs to put more efforts towards other industries and stuff. The thing is they are right. The govt has all this extra money that they should be protecting the factories here and producing or stimulating other industries to keep the ball rolling. But they are to focused on mining and keeping the housing market going with all this securitization and guarantees. Its going to catch up sooner or later.
Oh dear…..
Here in VIC a Liberal politician has come out and warned about the level economic dependency here in this state on building new homes…
http://www.theage.com.au/victoria/economy-too-reliant-on-housing-says-wells-20101226-197xv.html
Up till now everything has been fine according to the pollies, now cracks appearing as reality starts to kick in?
And as usual the masses are again on the bank bashing band wagon….
http://www.news.com.au/money/banking/million-eyeing-loans-switch-as-bank-anger-reaches-new-high/story-e6frfmcr-1225976818776
As usual these news sites selectively publish comments that help boost the anger and hysteria, comments like mine criticizing the borrower rather than the lender are never published…..