Steve Keen's Debtwatch

Discussion (12) ¬

1. 
   Bullion Baron

   June 5, 2012, 4:01 pm | #

   Fin­gers crossed the MSM is as vig­i­lant about pub­li­cis­ing this as they were about your (par­tially) lost bet!
2. 
   alex78

   June 5, 2012, 4:07 pm | #

   Steve, I also hope you haven’t lost track of where Rory Robert­son is hid­ing. No longer at Mac­quarie when I last checked.
3. 
   TruthIsThereIsNoTruth

   June 5, 2012, 6:35 pm | #

   That’s what you get for putting your ego (and suit) on the line over a mar­ket pre­dic­tion. No dif­fer­ent to win­ning roul­lette and going home think­ing you’re a roul­lette expert.

   Not to despair, there are econ­o­mists out there who under­stand this. They will still pro­duce likely out­comes but it becomes more about an evolv­ing under­stand­ing of the cur­rent state of the sys­tem rather the­o­ret­i­cal inspi­ra­tion. If you keep fore­cast­ing rain, you will inevitably be cor­rect sooner or later.
4. 
   john sayle

   June 5, 2012, 7:18 pm | #

   Steve don’t give this fool any time. He is irrel­e­vant. He knows he is get­ting it wrong often but will never admit it.
5. 
   TruthIsThereIsNoTruth

   June 6, 2012, 12:42 pm | #

   Big upside sur­prise on aussie gdp.

   Given that debt is decel­er­at­ing, it fits nicely into the notion that house­holds are con­sciously decid­ing to use addi­tional income to del­e­varage. This is very pos­i­tive behav­iour as it reduces debt, increases sav­ings at a time where this can be off­set by exter­nal fac­tors in the econ­omy. It also high­lights that there is always more to real­ity than the­ory may suggest…
6. 
   Endless

   June 6, 2012, 3:16 pm | #

   So where does this leave the sig­nif­i­cance on delever­ag­ing on GDP? GDP sur­prises to the upside and yet debt is decel­er­at­ing. I know one set of fig­ures does not a sum­mer make, but despite high lev­els of pri­vate debt the econ­omy trun­dles along at a rea­son­able pace.
7. 
   TruthIsThereIsNoTruth

   June 6, 2012, 4:22 pm | #

   The growth is com­ing from a capex boom, which is clearly not as sen­si­tive to debt dri­ven demand. What seems to be hap­pen­ing cur­rently is growth via invest­ment in pro­duc­tive assets.
8. 
   brett123

   June 6, 2012, 6:49 pm | #

   And in fur­ther good news unem­ploy­ment drops a mas­sive 1.1 per cent accord­ing to the Roy Mor­gan research which is often quoted here as a reli­able indi­ca­tor on unem­ploy­ment. “Unem­ploy­ment was 8.2% (down 1.1% since April 2012)”
9. 
   RickW

   June 6, 2012, 7:04 pm | #

   re: TruthIs­ThereIs­NoTruth
   June 6, 2012 at 12:42 pm | #
   Big upside sur­prise on aussie gdp.
   Given that debt is decel­er­at­ing, it fits nicely into the notion that house­holds are con­sciously decid­ing to use addi­tional income to del­e­varage. This is very pos­i­tive behav­iour as it reduces debt, increases sav­ings at a time where this can be off­set by exter­nal fac­tors in the econ­omy. It also high­lights that there is always more to real­ity than the­ory may sug­gest…
   End Quote

   Not cer­tain whose debt you are refer­ring to here. Aus­tralia went back­wards AUD14.9bn in March 2012. Plenty of debt or invest­ment there thanks to the good graces of the coun­tries that save. I expect a good pro­por­tion of that is sell­ing farms and mines as well as infra­struc­ture that sup­port them.

   The staff at the asy­lum (RBA) con­tinue to encour­age less sav­ing by reduc­ing inter­est rates. Aus­tralia is about 4 years behind Spain with cur­rent account but on the same trajectory.

   Aus­tralian bank lia­bil­i­ties, not denom­i­nated in AUD, has been steady at 27% of GDP since Feb­ru­ary so no gain there for 3 months.
10. 
    Steve Keen

    June 7, 2012, 1:39 am | #

    Yes that does seem to be the case. The mys­tery is why it was so long in com­ing, given the alleged size of Capex expenditure.
11. 
    Adrian Janschek

    June 7, 2012, 12:40 pm | #

    Joye and his mate Adam Carr have been so über bull­ish for so long that it is embar­rass­ing. Their col­lec­tive advice has been long prop­erty and equi­ties, short bonds. They don’t appear to have the first clue about what is going on. They are worse than use­less (even though being wrong con­sis­tently does have mea­sur­able macabre value), they are malign.
12. 
    June 7, 2012, 4:57 pm | #

    “This is very pos­i­tive behav­iour as it reduces debt, increases sav­ings at a time ”

    Increased sav­ings?

    Debt is a finan­cial asset. Always matched by a finan­cial asset held by another party

    So if debt decreases then sav­ings in total must also decrease. That is peo­ple or com­pa­nies in total will hold a lower amount of finan­cial assets

    So either sav­ing stay the same (if reduced debt is con­sid­ered as a sav­ings increase rather than debt decrease). Or sav­ings decrease. There is no way surely in total that sav­ings can increase?