Ahhh, thank you camkawa for bringing this thread back to reality
This time it is different! Well at least compared to any small slowdowns in the the last decade... more people are in over their eyeballs in debt than ever before, more massive corporations are losing billions than ever before, and this time there is very very little room for the public to move in case of even minor disruption, and boy there is still a lot of it still to filter through from o/s!
Europe hasn't even entered recession yet, but it's getting damn close.. and how long has it taken for the full effects of the US to kick in after it started, what 12-18 months ago? and soon we'll get the Europe kicker, which will probably be worse for Australia (in terms of where our exports go) than the US one.
Most it seems couldn't even cope with 9.6% interest rates.. never mind 12-17% like the old days. The goals of where stress occurs have been shifted.
We've got more other outstanding debt than ever before - credit cards, personal loans, new cars, holiday houses, geared investments, 24 month mobile phone contracts, internet contracts, foxtel contracts, "interest free" finance, the list goes on and on. None of which were so prevalent even 10 years ago. And that is what has stuffed people so much with interest rates and fuel rises - they have so little room to move as these small costs are fixed, but add up to a large amount for many families at the end of each week.
Unemployment may have been 10% in the past, and people got by, but property values were not 7 times avg. income, but rather 3-4 times. Many have geared themselves into property expecting 7% interest rates forever, 4.5% unemployment forever, and no bad times, with very little buffer. After all, why not when houses have been rising 10-20% a year. It's going to continue forever, endless demand, endless population, rental shortages, everybody needs somewhere to live, endless credit handed out like candy.
Veda came out the other day and said bankruptcies are higher than the early 1990's. Surely than indicates something of the magnitude of this thing. Even take a short stroll across to NZ and it's quite a deflated story compared to Australia. Ahh, little old Australia, the island in the middle of nowhere, gently oblivious to the rest of the world until it smacks us in the face!
This is probably the calm which may lull some into a sense of false security, before the worst is felt. Interest rates are going to fall next year, maybe 1%, it's all over the news, will make things easier. House prices haven't really hit anybody too hard, seem fairly stable right now. Unemployment is still low, banks are reporting big profits. Where is the problem? I hear gloom, but I see no doom.. but when it comes down to it, all those charts of real house prices, household price v income, household debt v GDP, are still saying something that will sort itself out - just as the sharemarket charts 18 months ago said something was up in terms of deviation from the norm, except very few chose to believe it would ever correct.