Volatility has returned to global equity markets. Finally some big falls mixed with partial recoveries, typical of markets in transition. So far at least this is nothing to worry about and, as RBA Chief Dr Phillip Lowe said, there is no need to change the outlook for general economic progress, which is predicting a year or two of economic sunshine. But global interest rates are rising and rising rates usually end equity booms. In modern days, no country like Australia can for long stand apart from powerful global trends.
Here is the problem. Should there be further market correction to a point where economic sunshine would be affected adversely, or other news bad for economic sunshine, governments do not have the ammunition to prop up economies. Interest rates are still very low and fiscal deficits are very large, producing more or less steady increases in piles of official debt. In countries like Australia, household debt is still rising from horrendous and utterly unsustainable levels. Housing prices are so far stabilising or falling gently, but it is early days.
My advice to the punters is to start tightening belts and pay off household debt as quickly as you can. National Treasurers do not give this advice. Rather it is 'all is well, keep spending'. This is complete bull s**t but false economic advice like this is one of the flaws in modern capitalism.
Economic sunshine as predicted by Dr Lowe may last for a year or two, or the dark clouds may roll in sooner than that. Use your time to repay debt and produce a more sustainable lifestyle punters.
Fiona Prior sees Australia’s Margot Robbie in the thought provoking and hilarious tragedy I, Tonya. More here.
The sporting life.
Caaaarlton! has won its first two games in the AFLW competition. A serious knee injury to a star player and captain will slow the team down, despite in the game against GWS signs of new skills, like passing the ball across the ground to players who have somehow got free from opponents. Melbourne look the most sklilful team but the overnight game between Freo and Collingwood at the new stadium in Perth delivered a record crowd of almost 42 K fans and showed a very skilled Freo team that may provide competition.
The big excitement is the Winter Olympics. The surprise if this event is the gracious greeting on the team from North Korea, combining its forces with the capitalist running dogs from South Korea and walking under a single flag, albeit one carried by two people looking as if they were struggling for possession. Rocket Man's sister has been greeted graciously by the South Korean President, while the North American Veep looked doggedly at the field of play.
Much excitement as snow boarders hurled themselves down impossible looking slopes performing great flights with various exciting contortions as they left the various 'jumps'. Henry is waiting most eagerly for the Lurge.
Our cricketers beat the pestiferous Poms in the tests, got flogged in the ODI competition and are again winning in the T20. Obviously one or other team is not delivering maximum AMPS from time to time.
Image of the week - Clear Air Disrupted.