WEEKEND ECONOMIST: Capex marks the spot
The Reserve Bank's growth forecasts are now substantially below trend meaning this month's capex data will likely be the final key to understanding further monetary moves.
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Comments PolicyBill, perhaps monetary policy has reached it's use by date. It clearly is not working. (WEEKEND ECONOMIST: Capex marks the spot, February 8)
In fact at this stage, if we don't get increased company efficiency, the only beneficiary will be in the fiscal area. That is reduced (debt) servicing costs.
The banks have shown business, that efficiency equates to profit, the sharemarket will do the rest.
Just a thought.
RBA and the share market are still surprisingly sanguine. They must go to bed praying for China to ramp up which IMHO is not what will happen (WEEKEND ECONOMIST: Capex marks the spot, February 8). In fact China is making a transition to a consumer economy as its export markets deteriorate and no country in history has done this without serious economic disruption. Australia's optimism is therefore possibly unfounded and extreme intervention by the RBA with panic level low rates pushes the short-term minded investor into chasing yield in the share market just as fundamentals weaken, which business leaders see in their results and from discussions with their clients. So I for one contrarily expect 'volatility', but I have been wrong on occasions in the past and I see no change in that.