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blscarlett
Site Admin
Joined: 08 Aug 2007
Posts: 238
Location: Melbourne
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 Posted: Sun Apr 08, 2012 11:20 am Post subject: SuperInvestor Bulletin April 2012 |
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SuperInvestor Bulletin April 2012
International Turmoil
The Greek credit deal has been done but the debate continues on whether the authorities can implement the reforms at the pace envisioned by the IMF, the European Commission and the European Central Bank; and whether they will be able to lower the debt to 116.5 per cent of GDP by 2020. We believe that the answer is NO to both questions as political imperatives will take over prior to the next elections. Further it would be hard to sell state assets in this market and difficult to grow the economy and GDP without an injection of some fresh funds.
This is clearly a paradox of massive proportions for Greece, Europe and the international community. The key issue for Greece is whether the economy can be restructured to be private sector driven by 2020? Will the private sector be able to raise funds to buy some of the public assets and reinvigorate the economy, and just as importantly generate funds for the Treasury to reduce debt and provide critical government services? In national and international terms, eight years is not a lot of time; but it is significant for individuals who are facing around a decade of uncertainty.
The debt issue for Spain has surfaced again; this will be another Greece that will create additional uncertainty. Bond markets and equity markets remain volatile and there is no certainty of economic recovery.
Local Markets
As commented in earlier reports, the equity markets are continuing to remain volatile. Residential property is struggling and whilst there is talk of importing US labour, the employment situation in Australia is uncertain. Unfortunately, there is no long-term strategy for addressing skills shortages for the future and youth unemployment remains high. There is a critical need to deal with skills shortages and youth unemployment through policy incentives to employers and adequate pay rates for trainees and apprentices.
While some people enjoy shorter working hours and contract work, the people starting out in life need certainty of employment and adequate remuneration to start a career, family and ultimately own a home. In a sophisticated economy such as Australia there is no excuse for lack of government policies that minimise people’s chances of reaching their potential. Education and vocational training at all levels is the key and needs to be embraced to ensure that Australia does not go backwards; and more positively, leverages from its fortunate position of rich resources and invests in the future.
The car industry has come up for some discussion recently.
Terry McCrann’s article in the Herald Sun states:
| Quote: | “The cost-benefit part is clear-cut and simply undeniable. That $275 million of government money bought $1 billion of investment by Holden over the next 10 years. And it preserves the sunk investment and everything that flows from that.
Think of it in these terms. You have a house which you spent $500,000 building. If you put up $100,000, someone will spend $400,000 improving it. The alternative is to demolish it.
The deal was even more a cost-benefit no-brainer for the SA and Victorian governments separately. SA only had to put up $50 million to keep Holden alive in its state; Victoria a mere $10 million. They still get the benefit of the $1 billion-plus.
Anyone who argues against the unambiguous excess of benefit over cost for the two states identifies themselves as a theoretical purist beyond all reason.
I'm fully aware that this has mightily offended economic rationalists and 'free-marketeers.' But that's 'their problem' - essentially it announces they've got nothin' to say of relevance in the complex circumstances of the contemporary (and future) world.” |
Australia needs to develop manufacturing industry and embrace the lower energy costs suggestions by the likes of Andrew Liveris of Dow Chemical and co-chairman of Mr. Obama's manufacturing advisory committee. Australia will find it difficult economically if we rely on digging up and selling our resources without value add, and shift our reliance onto service industries that are more prone to economic shocks, for example, tourism, financial services and hospitality.
ASIC
As reported in the SuperInvestor Forum previously, the corporate watchdog has signalled it will take a far closer look at the rapid growth of so-called dark pool share trading. Dark pool trading - which is not carried out through the Australian Securities Exchange - increasingly has the potential to distort the market.
The whole premise of publicly listed shares is to be traded publicly and not under the table. ASIC needs to take urgent measures to ensure that prices and volumes are immediately reported and those doing secret deals are dealt with through large fines and loss of trading licences. The equity markets cannot afford to lose credibility because of a greedy few who think that they are just a bit smarter than everybody else. As the SuperInvestor Forum comment urges: Get on with it ASIC.
Super Reforms
Future of Financial Advice Reforms legislation was passed by Parliament in March 2012. This package of reforms will provide consumers with a simple, cheap default superannuation fund and will exempt financial planners from the controversial opt-in provisions if they sign up to an approved code of conduct.
In 1996 super funds were a massive $3 billion industry. Today leading industry super funds manage more than 10 times that and collectively control funds of more than $240 billion. Industry funds have become heavyweights controlling significant public infrastructure assets as well as more traditional investments such as shares and CBD buildings. They also have political clout. Last year, the Prime Minister, Julia Gillard, infuriated the conspiracy theorists when she addressed an Industry Super Network (ISN) lunch and lauded their support in reforming the industry. ISN, she said, had stood with the government on its reform agenda and was often at the vanguard of policy debate.
The role of unions in industry funds is a target for critics who see them as union controlled or caught up in a union grab for power. While unions might have representatives on trustee boards, funds are required to have equal union/employer representation. And all votes require a two-thirds majority to be passed. In terms of public policy, the industry funds sector is a product of the wage accord negotiated under the Hawke/Keating government. On compulsory super, the public policy view is that 80 per cent of members do not actively choose where their money is invested, or engage with their funds. For them, protections must be put in place.
The financial services industry, on the other hand, is used to dealing with products over which customers do take active decisions - credit cards, mortgages, savings accounts and so on. So to them the central issue is individual choice and responsibility. The Financial Planning Association and the Financial Services Council (which represents the big retail funds) had long accepted that commissions have to go and that financial advisers should act in their clients best interest. All three groups are represented on the current round table convened by the Superannuation Minister, Bill Shorten, to discuss further reforms to the system.
The current policy debate impacts on all SuperInvestor members. We would be pleased to receive any comments that our members have on this issue and if there is clear interest; then to make a submission to the Government on further policy development.
Regards,
The Super Investor Team
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Vasily
Joined: 08 Aug 2007
Posts: 354
Location: South Melbourne
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| Posted: Mon Apr 09, 2012 1:13 pm Post subject: Re: SuperInvestor Bulletin April 2012 |
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| blscarlett wrote: |
The debt issue for Spain has surfaced again; this will be another Greece that will create additional uncertainty. Bond markets and equity markets remain volatile and there is no certainty of economic recovery. |
On the international side, there is also Italy and Portugal. On the local side, there is the debate on the budget surplus and whether this government strategy will assist in reducing the interest rate and lowering the $A. It is definately a market for tough investors. |
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Apex_Partners
Joined: 29 Jan 2009
Posts: 32
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| Posted: Sun Apr 15, 2012 9:50 am Post subject: An uneventful month for the Australian share market |
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An uneventful month for the Australian share market
It was an uneventful month for the Australian share market.
Aussie shares were relatively flat in March, gaining 0.7% to close at 4,420.0 points.
Global markets were mixed with the Dow Jones Index gaining 2.0%, the FTSE falling 3.3%, the Nikkei 225 gaining 3.7% and the Hang Seng falling 5.2% for the month.
The Australian share market is struggling for direction as stronger economic data from the United States is offset by persistent debt concerns in Europe.
The key question is whether the emerging economies (in particular, China) can continue to stimulate world economic growth.
For more information please contact me.
Ryan Love
Director - APEX Partners
SuperInvestor profile - http://www.superinvestor.com.au/profiles/Apex_Partners/index.php
The above is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives. |
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cindyanderson
Joined: 02 May 2012
Posts: 1
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| Posted: Wed May 02, 2012 4:37 pm Post subject: Hi there, |
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| In the past few years, more large retail banks have started going into alternative financial companies, or offering companies traditionally the domain of payday loan lenders and check cashers. The onslaught continues as more of the banking elite court the poor and unbanked. A certain segment of the population does not have a bank account of any kind. No checking, no savings, or even credit cards of any kind. To cash paychecks, they go to a check cashing business. If they need to pay with a check instead of with cash, they get a money order and if they need credit they go to a payday loan lender. Estimates range as to the size of the unbanked population, according to Forbes, but it's believed that 18 to 24 percent of the United States doesn't have a bank account. The alternative services they use amount to roughly $45 billion in business. This is said to be the very reason why large retail banks that exclude the unbanked are trying to attract them in. Resource for this article : Big banks offering alternative services to poor and unbanked. |
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Vasily
Joined: 08 Aug 2007
Posts: 354
Location: South Melbourne
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| Posted: Thu May 03, 2012 11:01 am Post subject: Re: No checking, no savings, or even credit cards |
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| cindyanderson wrote: | | Estimates range as to the size of the unbanked population, according to Forbes, but it's believed that 18 to 24 percent of the United States doesn't have a bank account. |
Cindy, you have referred to an interesting article. Whilst considered as most developed, US society has some significantly under developed elements. Be interesting to assess the position in Australia. In theory at least Australia should have lower numbers of unbanked population. Most payments such as social benefit payments, pensions and salaries and wages are paid direct into bank accounts. |
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bchami
Joined: 04 Sep 2008
Posts: 458
Location: Melbourne
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| Posted: Sun Jun 03, 2012 2:45 pm Post subject: |
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| Toyota sacked 350 workers at its Altona plant in Victoria that month, It is indeed another blow for the car industry in Australia, which increasingly relies on government subsidies to remain viable. |
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Vasily
Joined: 08 Aug 2007
Posts: 354
Location: South Melbourne
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| Posted: Tue Jun 05, 2012 12:23 pm Post subject: Government subsidies |
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| bchami wrote: | | the car industry in Australia, which increasingly relies on government subsidies to remain viable. |
All the more reason to develop new more efficient technologies to remain competitive. |
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