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In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. I think the report definit

In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. I think the report definitely could have been better written, because a lot of the inflation is more due to passing on external cost increases, or domestic businesses raising their prices to account for inflation, and all keeping the same margins, hence resulting in larger profits in nominal terms. So I think it would have been more accurate if they’d put it that way. The important thing is that it’s not demand driven - the RBA talks every update how scared they are and how important it is for them to avoid a “wage-price spiral”, which is nonsense. Median wages here have barely kept up with inflation for 10 years, and now they have gone strongly backwards. Absolutely no sign of any kind of spiral…

gruez 4y ago
> In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. As someone who isn't from Australia, can you provide some actual figures, preferably with historical comparison? Without specifics "record profits" doesn't mean much. The most banal interpretation is that profits in nominal dollars went up, which is totally expected given that the economy grows and there's inflation, making it almost guaranteed that each year has "record profits" even if all else was equal.
- naasking 4y ago
  I won't speak to Australia, but Rep. Porter did a decent job of that here: https://youtu.be/udITRL9-t08 https://youtu.be/udITRL9-t08
  - gruez 4y ago
    I'm not sure whether youtube is broken for me, but the linked video caps out at 480p resolution and on top of that it's letterboxed. As a result it's impossible to see what the chart is actually saying, or where the data is sourced from. Reading the transcript, the date range for the figures is "pandemic period" and "recent period", which means the comparison is probably bunk as a result of cherry picking.
    - naasking 4y ago
      Right, so instead of taking 5 seconds to search youtube for a better copy of this clip which is everywhere, you'll just assume your prejudice is correct? I don't know where you got your date ranges: https://www.youtube.com/watch?v=0ixmqzjvb7k https://www.youtube.com/watch?v=0ixmqzjvb7k
      - gruez 4y ago
        >Right, so instead of taking 5 seconds to search youtube for a better copy of this clip which is everywhere, you'll just assume your prejudice is correct? No, if the source you provided doesn't convey enough information, I'll assume that your claim is unsupported and respond accordingly. I'm not going to wade through the dumpster fire that is youtube search to try to do my opponent's work. >I don't know where you got your date ranges: From my previous comment: >Reading the transcript, the date range for the figures is "pandemic period" and "recent period" They correspond to literally the first few lines of the transcript 0:00 according to this chart what is the 0:02 biggest driver of inflation during the 0:05 pandemic the blue is the dark blue is 0:08 the recent period >https://www.youtube.com/watch?v=0ixmqzjvb7k https://www.youtube.com/watch?v=0ixmqzjvb7k I traced down the original source to be: https://files.epi.org/charts/img/248291-29919.png https://files.epi.org/charts/img/248291-29919.png I don't see how this addresses my claim that the data was cherry picked. If anything it strengthens it. 1. the date ranges chosen for the dark blue period starts at 2020 Q2 and ends at 2021 Q4. This is an unusual date range to pick. Most analysis use round numbers and/or whole years. The start date conveniently corresponds to the trough of the pandemic recession period. 2. the date ranges chosen for the light blue period covers a 20 year period. This date period probably isn't cherry picked, but comparing long run data with short run data is inevitably going to show discrepancies, since long run data is less volatile than short run data. Given that the BEA publishes such data on a quarter to quarter basis, they could have easily made a line chart showing the data across two decades. The fact that they chose to use a bar graph that only shows numbers for two suspiciously chosen time periods, and their overall reputation[1] makes it hard to take the chart at face value. [1] https://en.wikipedia.org/wiki/Economic_Policy_Institute https://en.wikipedia.org/wiki/Economic_Policy_Institute
- Khaine 4y ago
  You can see Woolworth's (one of our supermarket chains) 5 half-years worth of results here https://www.woolworthsgroup.com.au/au/en/investors/our-performance/five-year-summary.html https://www.woolworthsgroup.com.au/au/en/investors/our-perfo... H23 H22 H21 H20 H19 911 798 1175 1024 1003 As you can see the 'record profit' is just coming off a low base.
  - deleted 4y ago
    [deleted]
Khaine 4y ago
so lets look at this closely: Banks - banks make more money when rates are higher, as they can get a bigger spread between what they offer savers and borrows. CBA, Australia's largest bank has a net interest margin of 2.1%. This means that the difference between the cost of interest paid to savers, and that borrows pay is 2.1%. This 2.1% covers all of the expenses and profit the bank makes. Banks make obscene amounts of money due to the volume and value of the loans. Amazingly, banks want to maintain their NIM, to ensure they can fund all of the compliance costs, risk management, and technology costs. If you looked at the Investor Presentation you would have seen that in the last quarter the NIM for CBA dropped which is why the share has been sold off. Due to strong competition in the banking sector Qantas announced record profit because demand for flights is really, really high, but flight volumes have not returned to pre-covid levels. This is why flights are still very expensive. Again, inflation is on the demand side, to counter the increase in demand, Qantas has raised prices to ensure the flight demand meets what it can supply. You will note, Qantas is also actively trying to build out more flight capacity to cater to the excess demand. Supermarkets, I already spoke to, down thread. This is a reversion driven by reduced costs from COVID. 'Mr Kierath said it was important to note the companies' profits fell in the last six months of 2021, so these results were rebounding off an unusually low base.' Ergo, they look good because they were depressed in the prior reporting season. Ergo, it's just corporations bashing, because people are mad inflation is going up. If you look at Woolworth's profits over time, it would look to be going back to normal levels[1] after a dip due to COVID. [1] https://www.statista.com/statistics/1116200/australia-net-pr https://www.statista.com/statistics/1116200/australia-net-pr...
- naasking 4y ago
  > Qantas has raised prices to ensure the flight demand meets what it can supply. This is weasly language for "price gouging". There's literally no problem with Qantas just selling the seats they had at reasonable prices and then saying, "sorry, no more seats available". Instead, you're trying to portray it as totally natural and just that they take advantage of any circumstances to squeeze as much out of their customers as possible. Market-think has perverted your worldview. The people tolerate markets because they generally serve the common good via innovation, competition and self organization. When the market deviates from that objective, like by price gouging to enrich a few at the expense of the public, it is right to criticize and correct it, not try to justify that the market is right and the common good is wrong.

gruez 4y ago

> In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. As someone who isn't from Australia, can you provide some actual figures, preferably with historical comparison? Without specifics "record profits" doesn't mean much. The most banal interpretation is that profits in nominal dollars went up, which is totally expected given that the economy grows and there's inflation, making it almost guaranteed that each year has "record profits" even if all else was equal.

naasking 4y ago
I won't speak to Australia, but Rep. Porter did a decent job of that here: https://youtu.be/udITRL9-t08 https://youtu.be/udITRL9-t08
- gruez 4y ago
  I'm not sure whether youtube is broken for me, but the linked video caps out at 480p resolution and on top of that it's letterboxed. As a result it's impossible to see what the chart is actually saying, or where the data is sourced from. Reading the transcript, the date range for the figures is "pandemic period" and "recent period", which means the comparison is probably bunk as a result of cherry picking.
  - naasking 4y ago
    Right, so instead of taking 5 seconds to search youtube for a better copy of this clip which is everywhere, you'll just assume your prejudice is correct? I don't know where you got your date ranges: https://www.youtube.com/watch?v=0ixmqzjvb7k https://www.youtube.com/watch?v=0ixmqzjvb7k
    - gruez 4y ago
      >Right, so instead of taking 5 seconds to search youtube for a better copy of this clip which is everywhere, you'll just assume your prejudice is correct? No, if the source you provided doesn't convey enough information, I'll assume that your claim is unsupported and respond accordingly. I'm not going to wade through the dumpster fire that is youtube search to try to do my opponent's work. >I don't know where you got your date ranges: From my previous comment: >Reading the transcript, the date range for the figures is "pandemic period" and "recent period" They correspond to literally the first few lines of the transcript 0:00 according to this chart what is the 0:02 biggest driver of inflation during the 0:05 pandemic the blue is the dark blue is 0:08 the recent period >https://www.youtube.com/watch?v=0ixmqzjvb7k https://www.youtube.com/watch?v=0ixmqzjvb7k I traced down the original source to be: https://files.epi.org/charts/img/248291-29919.png https://files.epi.org/charts/img/248291-29919.png I don't see how this addresses my claim that the data was cherry picked. If anything it strengthens it. 1. the date ranges chosen for the dark blue period starts at 2020 Q2 and ends at 2021 Q4. This is an unusual date range to pick. Most analysis use round numbers and/or whole years. The start date conveniently corresponds to the trough of the pandemic recession period. 2. the date ranges chosen for the light blue period covers a 20 year period. This date period probably isn't cherry picked, but comparing long run data with short run data is inevitably going to show discrepancies, since long run data is less volatile than short run data. Given that the BEA publishes such data on a quarter to quarter basis, they could have easily made a line chart showing the data across two decades. The fact that they chose to use a bar graph that only shows numbers for two suspiciously chosen time periods, and their overall reputation[1] makes it hard to take the chart at face value. [1] https://en.wikipedia.org/wiki/Economic_Policy_Institute https://en.wikipedia.org/wiki/Economic_Policy_Institute
Khaine 4y ago
You can see Woolworth's (one of our supermarket chains) 5 half-years worth of results here https://www.woolworthsgroup.com.au/au/en/investors/our-performance/five-year-summary.html https://www.woolworthsgroup.com.au/au/en/investors/our-perfo... H23 H22 H21 H20 H19 911 798 1175 1024 1003 As you can see the 'record profit' is just coming off a low base.
- deleted 4y ago
  [deleted]

Khaine 4y ago

so lets look at this closely: Banks - banks make more money when rates are higher, as they can get a bigger spread between what they offer savers and borrows. CBA, Australia's largest bank has a net interest margin of 2.1%. This means that the difference between the cost of interest paid to savers, and that borrows pay is 2.1%. This 2.1% covers all of the expenses and profit the bank makes. Banks make obscene amounts of money due to the volume and value of the loans. Amazingly, banks want to maintain their NIM, to ensure they can fund all of the compliance costs, risk management, and technology costs. If you looked at the Investor Presentation you would have seen that in the last quarter the NIM for CBA dropped which is why the share has been sold off. Due to strong competition in the banking sector Qantas announced record profit because demand for flights is really, really high, but flight volumes have not returned to pre-covid levels. This is why flights are still very expensive. Again, inflation is on the demand side, to counter the increase in demand, Qantas has raised prices to ensure the flight demand meets what it can supply. You will note, Qantas is also actively trying to build out more flight capacity to cater to the excess demand. Supermarkets, I already spoke to, down thread. This is a reversion driven by reduced costs from COVID. 'Mr Kierath said it was important to note the companies' profits fell in the last six months of 2021, so these results were rebounding off an unusually low base.' Ergo, they look good because they were depressed in the prior reporting season. Ergo, it's just corporations bashing, because people are mad inflation is going up. If you look at Woolworth's profits over time, it would look to be going back to normal levels[1] after a dip due to COVID. [1] https://www.statista.com/statistics/1116200/australia-net-pr https://www.statista.com/statistics/1116200/australia-net-pr...

naasking 4y ago
> Qantas has raised prices to ensure the flight demand meets what it can supply. This is weasly language for "price gouging". There's literally no problem with Qantas just selling the seats they had at reasonable prices and then saying, "sorry, no more seats available". Instead, you're trying to portray it as totally natural and just that they take advantage of any circumstances to squeeze as much out of their customers as possible. Market-think has perverted your worldview. The people tolerate markets because they generally serve the common good via innovation, competition and self organization. When the market deviates from that objective, like by price gouging to enrich a few at the expense of the public, it is right to criticize and correct it, not try to justify that the market is right and the common good is wrong.