Talk Around Town

Does anyone really have a handle on what is happening with the economy at the moment?

With what we have seen overseas, riots in the UK, USA having their credit derated and Spain, Italy, Greece and Ireland in debt…along with more ups and downs on the local stock market than at a Yo Yo contest

By the way, when I went to school AA+ was considered a bloody good grade.

The interesting thing is each ‘expert’ who throws their twobob in the ring seems to have a different view on the world – will interest rates rise, stay where they are or drop? It appears that each bank has a different idea, each newspaper you read and even the TV/radio commentators don’t seem to agree. It reminds me of that old bumper sticker seen on old V8’s, “Get in, Sit down, Shut up and Hang on”.

Well, if they can all have an opinion…so can I!

The Standard & Poor’s decision on the USA’s credit rating could be a blessing in disguise. It may force the powers at the top to take stock and make the hard decisions required to rectify their economic situation. It may also make the general population more willing to accept those changes and understand that there needs to be ‘shared’ pain for all within the USA for the betterment of future generations.

Locally, a lot of people seem to forget that one of the best barometers of the economy is YOU; our clients who run small to large businesses, employ staff and for many, deliver the goods that keep the country moving. We are talking to clients up and down the Eastern seaboard who work in all facets of the economy, from food, manufacturing, sales, housing/construction and mining.

There is no doubt that confidence is down across business at the moment, the air of uncertainty on what impact new taxes may have, what effect a movement in rates will have; should I look to expand or is now a time to consolidate?

On interest rates, I believe that if the RBA were going to lower rates it would have done so by now, therefore they will hold rates at present but I would not be surprised to see a small increase of .25% b.p. this side of Xmas. I don’t see a cut in rates coming anytime soon unless we see some major overseas ‘incident’, such as the other two ratings agencies also downgrading the USA to AA+.

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