Economist of BT
Financial Group.
MARKETS
in August, bringing its year-to gain to
10.5%. For once, the domestic market
out-performed the US share market, which
registered a fall of 3.1% in the month,
leaving its year-to gain at 14.5%.
quantitative easing by the US Federal
Reserve. I discussed this recently, and
suggested that there was no need for
markets to fall when the tapering began.
Given that markets are forward-looking, any
likely effect has probably already happened.
long-term interest rates. It certainly did
this, with the 10-year bond rate reduced to a
paltry 1.63% in early-May but back at 2.78%
in recent days. The market is effectively
doing the Fed's work for it; in its view,
QE has already ended.
Expect some volatility in markets (what's new)
but there is no need for any depressant effect.
election campaign going on? Now that the
expected result has come in, it is likely that
business confidence will be lifted, which
should be positive both for the economy
and for financial markets.
the election. What is interesting about this
is there is no clear evidence that one side is
a more competent manager of the economy
than the other. In recent times, the Coalition
while the Labor government got to deal with
the GFC. Who is to say that if the roles had
been reversed the results would have looked
very different?
performs has little to do with the government.
The rest of the world matters a lot, monetary
policy is independent and the private sector
goes about its business every day. In Hamlet's
words, there's a divinity that shapes our ends,
rough-hew them how we will. The Federal
Government does the rough-hewing.
should be given credit for the bipartisan
approach to economic reform that dragged
the Australian economy into the 20th
century in the 1980s and 1990s. The days of
bipartisanship are, unfortunately, long gone.
misused time and time again. Here there is
bipartisanship; both sides are equally guilty.
Australia (or rather the Labor government)
has amassed this huge pile of government
debt that will, somehow or other, impoverish
us or our children (or perhaps their children).
The plain and simple truth is that, measured
relative to the size of our economy, Federal
debt is less than a quarter of the average for
the developed world.
that it has left us with a major debt problem.
The phobia about debt is not without