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And yet Australia and many other had and have high housing prices as well and they didn't have recession. So this oversimplified theory is really just your con

by nickik 8y ago

And yet Australia and many other had and have high housing prices as well and they didn't have recession. So this oversimplified theory is really just your confirmation bias.

mcguire 8y ago
The theory is a bit oversimplified, but not incorrect given that the previous poster isn't alone in seeing the problem in the US, and the experiences of other countries. Why Australia wasn't involved is a different question. (http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1301.0Chapter27092009%E2%80%9310 http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1301.0Chapter...) "...and they didn't have recession." Yet. How much of Australia's economic growth is made up of financial shenanigans and the housing industry?
- nickik 8y ago
  Arguing that Australia's 30 year history of no recession is build on 'financial shenanigans and housing' are the arguments of people who defend a theory that is not workable. Even were that so, why can Australia managed this 'shenanigans' but others can not. I agree with the Article, the Australian central bank did its job and they didn't have a crisis, the Fed was a disaster and the US suffered the consequences. The Fed however was 10x better then the ECB and that's why Europe is still not recovered.
  - bigger_cheese 8y ago
    I don't think it is correct to say Australia didn't have a crisis. I graduated in 2008 there were no jobs at all until about 2012 companies on the East Coast just stopped hiring. I know I lived through it. About 2/3's of my graduating class (Engineering) left the East coast to move West for work in the mining sector. Fly in Fly out was about all there was going it was tough times and hard lifestyle. Basically resources sector was only part of economy still functioning retail, manufacturing etc had huge contractions and we are still feeling the impact most of those lost jobs won't come back. Holden, Ford, Mitsubishi etc all those plants shut and left the country. The resource boom which was driven by Chinese demand for Iron ore + Coal propped up large parts of the economy. Lookup all the articles from treasury etc at the time "Two speed economy" was real. To say Australia was not affected by 2008 is a gross misstatement.
    - nickik 8y ago
      Recession is a technical term, maybe I should have said that rather then crisis. There was no recession. The problem with the 'its all resources' is that countries that do have natural resources got hit by the depression as well. Also, if the NGDP of Australia had dropped, there is absolutely no way Australia could have avoid a recession.
  - mcguire 8y ago
    My point there was that Australia did not have an economy based on finance and real estate maneuvering, like the US and much of Europe in 2006. If, on the other hand, Australia's rising housing prices are supported by increasingly sketchy loan practices, the Australian central bank will have another opportunity to practice its skills.
    - nickik 8y ago
      This is wrong. Australia didnt have a recession because of its monetary policy. The economy in the US was not based on real estate manuvering and the US had a recession because of bad monetary policy.

by nickik 8y ago

And yet Australia and many other had and have high housing prices as well and they didn't have recession. So this oversimplified theory is really just your confirmation bias.

mcguire 8y ago

The theory is a bit oversimplified, but not incorrect given that the previous poster isn't alone in seeing the problem in the US, and the experiences of other countries. Why Australia wasn't involved is a different question. (http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1301.0Chapter27092009%E2%80%9310 http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1301.0Chapter...) "...and they didn't have recession." Yet. How much of Australia's economic growth is made up of financial shenanigans and the housing industry?

nickik 8y ago
Arguing that Australia's 30 year history of no recession is build on 'financial shenanigans and housing' are the arguments of people who defend a theory that is not workable. Even were that so, why can Australia managed this 'shenanigans' but others can not. I agree with the Article, the Australian central bank did its job and they didn't have a crisis, the Fed was a disaster and the US suffered the consequences. The Fed however was 10x better then the ECB and that's why Europe is still not recovered.
- bigger_cheese 8y ago
  I don't think it is correct to say Australia didn't have a crisis. I graduated in 2008 there were no jobs at all until about 2012 companies on the East Coast just stopped hiring. I know I lived through it. About 2/3's of my graduating class (Engineering) left the East coast to move West for work in the mining sector. Fly in Fly out was about all there was going it was tough times and hard lifestyle. Basically resources sector was only part of economy still functioning retail, manufacturing etc had huge contractions and we are still feeling the impact most of those lost jobs won't come back. Holden, Ford, Mitsubishi etc all those plants shut and left the country. The resource boom which was driven by Chinese demand for Iron ore + Coal propped up large parts of the economy. Lookup all the articles from treasury etc at the time "Two speed economy" was real. To say Australia was not affected by 2008 is a gross misstatement.
  - nickik 8y ago
    Recession is a technical term, maybe I should have said that rather then crisis. There was no recession. The problem with the 'its all resources' is that countries that do have natural resources got hit by the depression as well. Also, if the NGDP of Australia had dropped, there is absolutely no way Australia could have avoid a recession.
- mcguire 8y ago
  My point there was that Australia did not have an economy based on finance and real estate maneuvering, like the US and much of Europe in 2006. If, on the other hand, Australia's rising housing prices are supported by increasingly sketchy loan practices, the Australian central bank will have another opportunity to practice its skills.
  - nickik 8y ago
    This is wrong. Australia didnt have a recession because of its monetary policy. The economy in the US was not based on real estate manuvering and the US had a recession because of bad monetary policy.