Must admit I am a little surprised at the sudden upturn in the economy.

Was it not only three plus months ago that we were undergoing the largest economic downturn since the great depression.

Demand was sliding, unemployment was going to rise, low interest rates due to low inflation expectations, housing prices falling, stockmarket on a freefall, debt out of control and then suddenly everything appears to be pretty rosy.

Has anything actually changed? My humble opinion is no. Why?

- Demand still rising slightly mainly due to access to debt, helped by a little stimulus - thanks Kevin and well done for avoiding that recession.

- My understanding of the definition of unemployment is that it only kicks in for those working less than 12 hours per week. Not only have many workers’ hours been cut in the last 6-12 months but I reckon many of those middle management workers who were lucky enough to cop a redundancy still aren’t standing in the dole queue.

- Interest rates are on the rise. The RBA in their wisdom state that inflation is above acceptable levels and hence textbook monetory policy says to raise interest rates to calm things down. Hello folks have a look beyond the numbers and perhaps see why your ‘basket of goods’ is getting a little more expensive. We have the most ridiculous duopoly in the 2 major supermarkets Coles and Woolies which was quantified by a report over the last few days which stated grocery prices had increased 41% since 2002 (Imagine how many consultants it took to find that out). Petrol prices up, gaming up yet strangely enough no real pressure on wages which is actually one of the main reasons to raise interest rates when inflation rises. Honestly.

- Housing prices are starting to rise in a few areas. Helped a little bit by the dash for the first home owners grant. Construction sector also going pretty well thanks to more of Kev’s stimuli. Both props ending very shortly so should be interesting to see how the market goes.  In fairness there is a bit of a shortage of housing as our population grows. One thing for housing prices to go up due to an increasing population and another to determine where everyone is actually going to work in 20 years. Any ideas Kev, Julia or shoud I read the 2020 summit paper more closely.

- Great to see the stockmarket rise back to the levels it was nearly 12 months ago. Obviously massive multiples on company earnings is justified. Things surely have to get better, in fact fifteen to twenty times better. We have a lot riding on the value of superannuation to help ease the burden of the ageing population so go the All Ords. And well done JBWere for sponsoring the Masters and having a couple of your senior execs have a round with Tiger. I am sure those people who paid you your large commissions when having to sell at a huge loss over the past 12 months would at least be happy to see their hard earned money well spent.

- Debt has been reigned in a little thanks to a few government bailouts mainly o/s. Apart from that debt is still alive and well and is a sleeping giant. The sooner something serious is done (by all concerned) the better.

So things are looking good. A little cynical yes. My advice;

- Do something good for those around you and even those you dont know

- INNOVATE at work, at home and wherever else you choose to spend your time

- Buy BHP shares.

Why, because it Just Makes Sense.

This is a good initiative and it will be interesting to see who does and who doesn’t sign up to have the Carbon Footprint of their product shown on their label.

Whilst I understand the need for import/export to maintain a healthy economy here in Australia, wouldn’t it be nice to see some pressure back on the major retailers to purchase local where possible. It would also be nice to see them not screw local suppliers (ie farmers) but that is a whole different story.

It is also really important if they are to introduce labelling that the measurement process is consistent and transparent.

Carbon Footprint Labelling Headed to Australia - G Online

The Sydney Theatre Company, through a combination of public and private funding, is to embark on a extensive program of energy and water saving through initiatives including the installation of 2000 solar panels.

This is a great initiative, but when will the Government really get serious about solar and provide some incentive for businesses large and small to introduce similar measures.

1. Drink Driving - Between 0.05 and 0.1 and cop a 12 month ban. Over 0.1 and you lose your licence forever no questions asked. See how many people do it then.

2. Blow Up the Pokies - The TAB and Keno seem reasonably harmless but the pokies are a disgrace and an indictment on society. To the State Government - you have become far to dependant on them and it is time to show some real leadership and responsibility and get rid of them or at the very least restrict their use.

3. State Governments - Unfortunately seems for many involved like a great excuse for people having a job that would not normally or should not have a job. Health, education, roads - they just never seem to be able to get it close to being adequate so maybe give someone else a go.

4. Violence - We had a 40 person brawl within a 100m of where we live on Sat night. By the way where we live should be classed as one of the greatest places in the world but it aint. One bloke got stabbed.

Simple solution. Please close pubs at 12am and nightclubs max 2am. Nothing good ever happens after 2am I can assure you.

I really dont want to be a prude, but i think it just makes sense.

If anyone else would like to contribute to ‘What Really Annoys Me’ please let me know.

There is little doubt that with the lack of spending on infrastructure upgrades across Australia over recent times there is a real chance of widespread blackouts in the near future.

The Australian Academy of Technological Sciences and Engineering (ATSE) has released a statement explaining this.

So stock up on some candles and hope that the ‘powers’ that be make the correct decisions.

Blackouts Inevitable Without Tech Boost

One really has to wonder what the world would look like if this bloke had assumed the top job a couple of years ago.

He is certainly up against it from an economic point of view but there is a sincerity and belief in what he has to say that must make his supporters proud and Country hopeful.

Whilst they may be replaced as the ‘powerhouse’ of the global economy over the next decade or so it is certainly refreshing to know that the US is in pretty good hands.

Just hope he has the support of those around him on a domestic and international level.

Seems like a nice bloke and his stated intentions certainly make a lot of sense.

President Obama Speaks After Tour of Electric Car Plant

President Barack Obama 2009 Inauguration and Address

No doubt we are going through tough times relative to what most of us are used to.

Whatever the reason(s) the harsh reality is that many people are going to lose their job, or at least have it significantly downgraded.

But were many of these jobs justified in the first place?

Take 3 sectors - Mining, Retail and Financial Services.

Mining (together with agriculture) has been the backbone of the Australian economy for a long time. The past few years have seen unprecedented demand in resources which has created many jobs. There comes a time when they can’t keep building in China however. On top of this we have the environmental concern. I really hope some of those who have invested strongly in shares/joint ventures of Australian mining stocks are having a good look at renewables. Point is that whilst some people have made a dollar, what we have seen within mining over the past couple of years is not, and was never, sustainable.

There seems to be a retailer going into administration every week. Jobs lost as a result. Why do retailers feel the need to open x amount of stores per year? Why not just stick to a good formula, make a good profit and share a bit with your employees? Why employ people at a rate of knots and then wait until a situation like we are in to realise that you are possibly a bit over resourced. No offence to those involved but maybe that merchandise planner’s assistant didn’t need an assistant?

Retail sales growth over the past few years has been distorted by excessive credit coupled with an inflated value of personal assets. Not by wages growth. It will be a fair while I reckon before we gain real momentum in a retail sense.

Many an organisation and individual involved in the financial services sector have profiteered greatly over the past few years. Whilst I am sure there are many of you involved in the sector that had the greatest intentions the reality is this wealth was in most cases built on the insatiable appetite of other individuals and businesses for ‘growth’ and want (not need).

Unfortunately this ‘growth’ was funded in the most part by debt. For a while whilst the good times rolled this appeared to be a case of everyones a winner. Unfortunately that aint the truth.

Now here in Australia and around the world we are faced with massive decline in asset values and unfortunately this becomes a bit of a snowball effect (asset prices devalue, credit harder to come by, demand softens, people lose jobs, demand falls even further, more people lose jobs, asset values fall further and so on).

One thing is for sure and that is that we will come out of this better for the experience. This will only happen when the vast majority of people realise that the ‘wealth’ and ‘growth’ and levels of employment in certain sectors as a result of ridiculous amount of debt were never going to be sustainable.

I just hope, apart from anything else, that what we are going through makes people aware of this and what should be important to them.

Fortunately, you just get the sense that this is starting to happen and in the long run we will all be better for it.

Many organisations around the Globe have (or intend to) shed many a job in the face of the current ‘economic crisis’. Whilst for many I think it is a result of harsh economic times for others it unfortunately appears to be a catalyst for action they have been thinking of taking for some time.

One internal resource which seems to have escaped the workings of senior management and many fine highly paid consultants is ‘email’.

There is no doubting the positive impact email has had in terms of speeding up communication in a personal and working environment. What this had inadvertantly done, however, is almost destroyed the notion of face to face communication.

Corporates have madly spruiked the benefits of open plan offices for a few years now. In theory a good concept. Problem is far too many people in this situation hide behind the comfort of email as a way of communicating simple things to their co-workers.

So here is a suggestion to businesses out there.

Make email available for two half an hour periods per day, lets say 8.30-9am and 2.30-3pm. Obviously this does not pertain to customer orders, more general business/personal email use.

Try it for one week.

If there is any downturn in productivity then I apologise and please send everyone back to their computers.

Please give it a go. Really think it just makes sense.

Nothing against our big banks (apart from the fees perhaps) but they seem to have a bit of a stranglehold on where we put our money in Australia.

Just when you think one comes along that offers great service they seem to be swallowed up by or ‘merge’ with another player. I understand the concept that the major banks have to grow profits to look after shareholders funds and consequently many people’s superannuation but it would be nice if someone gave them a little bit of a run for their money.

Kiwi Bank seems to have achieved this in New Zealand. Will probably never be a major player in banking but doing enough to keep everyone else honest. 

Kiwibank’s Call To Arms

The more you look into the Government’s proposed Carbon Pollution Reduction Scheme (CPRS) and the approach they have taken to date the more the mechanics of the scheme and potential pitfalls become apparent.

So far the Government have released a green paper and white paper outlining how the CPRS may operate. They have also release a medium term target of a 5 to 15% reduction on 2000 levels by 2020 somewhat setting a ‘cap’ on potential emissions reduction. The Government also launched a mass media advertising campaign telling the general public that they are proposing to launch the CPRS in 2010.

Now we have the Government launching an inquiry (we did - seems to have been canned for now) into the merits of an emissions trading scheme. I understand that we have unprecedented economic conditions but as The Australian article - ‘We Need to Start Emissions Debate’ suggests shouldn’t we have looked at this before?

As has been shown in the European Union’s Emission Trading Scheme there is potential for significant price volatility for carbon ‘permits’. The problem here is that if the price drops below a certain level then there is really no incentive for Companies to reduce emissions. That is the cost of the permits are potentially less than what it would cost to implement emissions reduction initiatives. This, combined with the enormous resources required to administer such a scheme really makes me a little nervous as to how effective it may be.

We also need to focus on what we are really trying to achieve here. My understanding is that the objective is to reduce carbon emissions and thus avoid ‘dangerous climate change’. Given Australia’s two main sources of emissions are stationary energy (mainly coal generated electricity) and agriculture in the absence of many of us converting to a vegan lifestyle the best solution is reduce electricity/energy consumption and increase our use of renewable energy.

If this is the objective then how about we not try and over complicate things and put a simple ‘price’ on carbon. More and more a Carbon Tax looks like the most effective way to achieve this.

Left and Right Agree on Carbon Tax provides a good insight into potential pitfalls of the CPRS and how a carbon tax can actually encourage ALL big pollluters to reduce their emissions.

Economist Warns of Dire Consequences of Emissions Scheme