Reserve Bank governor Glenn Stevens says election winner faces 'years' of budget repair

The outgoing central bank governor, Glenn Stevens, has declared whomever wins the federal election on 2 July will inherit substantial heavy lifting on budget repair, as the campaign descended into a day of partisan finger-pointing about budget “black holes”.

In comments anticipated to be his final public intervention before leaving the Reserve Bank of Australia, Stevens said the bank concurred with updated forecasts produced by Treasury last week about the state of the nation’s books but he said the official outlook amounted to everything is OK as long as nothing goes wrong.

“The budgetary situation will be OK if nothing else goes wrong,” Stevens told his audience in Sydney. “You can’t really assume in life that nothing will go wrong over an an extended period.

“I suspect there are quite some years of hard repair work ahead for whomever is the government over the period ahead.”

Stevens also noted conditions would be more favourable if economic growth was stronger. “Growth is proceeding, it would be good if it was a bit stronger, but it’s not too bad.”

Stevens also defended the RBA’s system of inflation targeting, rejecting calls from some economists for a rethink of the system.

He said inflation targeting was “not a rigid thing that demands kneejerk reactions”, it was a system with sufficient flexibility to deliver what was required.

Stevens noted many approaches had been tried but the current system had worked and “you wouldn’t want to be without it”.

He also addressed the housing market, warning the bank was keeping a close watch on the leverage in the system.

The outgoing governor was also asked about China’s economic transformation. He noted Beijing was “trying to manage a profound epochal transition” and there was no textbook for how to do that, because no country had ever attempted the transformation that China was attempting on the scale it was attempting.

http://www.theguardian.com/australia-news/2016/may/24/reserve-bank-governor-glen...
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So, WE don't need to re-think OUR system, BUT the TEXTBOOK WON'T WORK for CHINA, so THEY MAY NEED TO RE-THINK???
WHAT A LOAD OF OLD COBBLERS!

The fact is WE (Globally) are now in NEW TERRITORY & have been for quite some time, BUT Politicians (ALL of them), Central Bankers (All of Them) & TPTB have largely BURIED THEIR HEADS IN THE SAND & HOPED that "SOMETHING" would come along, to solve these NEW PROBLEMS, for them, SO THAT THEY COULD CONTINUE WITH THE STATUS QUO, WHICH BENEFITS THEM!
That hasn't & won't happen and it is now a matter of Timing, for when the Proverbial hits the fan!!!

THEY will then plead IGNORANCE, which as usual, IS NOT THE WHOLE STORY!
THEY KNEW, BUT DID NOTHING, BECAUSE IT MEANT THEY GOT THEIR BENEFITS, FOR JUST A LITTLE LONGER!!!

AND, we allowed them to do it!
It's well past time, when WE need to SHOW THEM THE WAY, BY KICKING OUT EVERY INCUMBENT, UNTIL THEY FINALLY GET THE MESSAGE!

Wall Street has been rocked by an $8 billion hedge fund's implosion

Visium Asset Management, a multibillion-dollar hedge fund, has imploded in the biggest scandal to hit the industry in years.

The fund told investors of its plan to close in a letter Friday. It's the most high-profile shutdown since authorities forced Steve Cohen's controversial SAC Capital to close in 2013.

A slew of factors — from a brewing insider-trading scandal to a contentious investment by Visium's founder that rankled investors and staffers alike — led to Visium's demise.

Just days before Visium announced the shut down, one of its top portfolio managers — Sanjay Valvani — was charged with wire and securities fraud.

Two other former Visium portfolio managers, Christopher Plaford and Stefan Lumiere, were accused of purposefully miscalculating the price of securities so that they could charge investors inflated fees and mislead them about the fund's liquidity.

http://finance.yahoo.com/news/wall-street-rocked-8-billion-150229008.html
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The story reminds me "a little" of the ethics of the Banking industry, who  are still charging 20% + on some Credit Cards, But the Politicians still rarely, if ever, mention it!

Stock Market Bottoms End Of 2017

We said in Stock Market Bottoms End of 2017 that we see major birth cycles, plus 50 years, corresponding to major market moves.

We called for a market low at the end of 2017.

When 50-year-olds are growing in the population, earning and spending are strong. When they decline that strong component of the economy is in decline. We are currently in a period of decline.

Conclusion
We'd expect stock market downside and/or a market low at the end of 2017 if demographics end up taking hold. We are in a down-cycle of the all-important 50 year old demographic. They are peak strong earners and spenders. They also haven't exited the job market yet.

When they are in decline, like they are today, that is an economic drag. Those periods of drags and growth have had material impacts on the stock market itself. This leads us to our bearish conclusion.

http://seekingalpha.com/article/3984737-stock-market-bottoms-end-2017-update?ifp...
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Well, there is sometimes a single factor, which makes everything happen.
But, it is "more usual" that there is a combination of events/factors!
The current combination of factors being -
1) Demographics - where the Global Population is Aging & where Growth is slowing, just prior to going into actual Decline.
In addition to the 50 year olds, there is also the largest Demographic group in history (the Baby Boomers), which must also be considered because of the reduction in their spending, compared to their "Peak Spending Years". Their influence is very significant & it will continue for quite some time!
2) Energy - Where Growth in Demand is Slowing, Growth in Supply is also slowing & Pricing is Down, in tune to both Demand & Supply.
What we now find, is that Demand is Down, Production is Down & Price is Down and that is very likely to continue for some time.
"Coincidently", the current situation is probably "somewhat beneficial", because if Demand Growth had continued to rise, on a trajectory anything like the period of 1960-2000, then the Supply Growth or Lack of it, would have exposed the GLOBAL Economy in a far great way & the Economic CRASH would have been far more pronounced!
3) Climate Change - which is changing & affecting Agriculture & Water Supply, in different ways,in different places.
There are many ramifications of this Climate Change, which is certainly happening, irrespective of whether it is "man made" or part of the 'normal cycle". But, certainly, it will mean a lower Global Population will be "more likely", given the likely Climate impacts on Agriculture, Water & therefore the planets capacity to support the Human Population?
4) Debt - which is off & racing higher Globally, following the Japanese trend, which started around 1990 & it is the "Canary in this Coal mine".
Debt in Europe & the USA is also already a problem & a Growing Problem, which means that many of the "usual Fixes" simply won't Fix things, in the usual way we think they should!
So, irrespective of the current "Brexit issues", the period ahead will be very difficult, very difficult indeed and it will stretch out over quite some time!

Strewth cobber, this is ancient Greenie guff from the dusty Greenie archives.

World Energy and Population
Trends to 2100

October,

2007

The Greenie UN puppets have been following UN Agenda 21 but are now swinging over to UN Agenda 2030.

Lack Of NGDP Growth Is The Real Reason For Italy's Banking Crisis

I think we have moved closer to this "euro spasm" and it is now particularly showing up in the form of worries over the state of the Italian banking sector, which adds to the concerns that the markets already have about the state of Italian public finances.

So while the global financial markets seem to have been recovering from the initial shock from the outcome of the United Kingdom's EU referendum and even though the EU system clearly still is in shock from the 'Brexit' decision, it is clear that the global financial markets seem to have stabilised after a short-lived spasm.

However, for the EU it is far too early to conclude that we are out of the woods. In fact, Brexit might not be the biggest worry for the EU. Instead the next big worry might be Italy.

Italy - 15 years without growth
Italy is without a doubt one of Europe's absolute worst performing economies over the past decade and recently fears over the state of the Italian banking sector has yet again resurfaced and in the direct aftermath of the Brexit crisis Italian Prime Minister Matteo Renzi has suggested a major bailout package for the Italian banking sector.

However, such plans would likely be in conflict with EU's new rules that basically means such bailouts should be financed primarily by depositors and creditors rather than by taxpayers so for now it looks like Renzi cannot get an okay from the EU for a new banking rescue package. That, however, doesn't change the fact that the Italian banking sector is in serious trouble and Italian bank shares have more than halved in value this year.

The Italian banking sector's trouble has little to do with the Brexit vote. Rather the main reason the Italian banking sector is under water is the same reason why Italian public finances are a mess - lack of economic growth.

Hence, there essentially hasn't been any recovery in the Italian economy since 2008. In fact, real GDP is today nearly 10% lower than it was at the start of 2008 and even worse - real GDP today is at the same level as 15 years ago! 15 years of no growth - that is the reality of the Italy economy.

And have a look at the nominal GDP growth in Italy:
https://staticseekingalpha.a.ssl.fastly.net/uploads/2016/7/10/saupload_skc3a6rmb...

In the decade prior to 2008, Italian NGDP grew more or less at a straight line. However, since 2008 actual nominal GDP level has fallen massively short the pre-crisis trend.

There are numerous reasons for Italy's lack of (both real and nominal) growth. One thing is the fact that Italy is in a currency union - the euro area - in which it should never had become a member. Italy's deep crisis warrants massive monetary easing - in other words Italy needs a much weaker 'lira', but Italy no longer has the lira and as a consequence monetary conditions remains too tight for Italy.

Furthermore, Italy is marred by serious structural problems - for example rigid labour market regulation and negative demographics. As a consequence, the growth outlook remains quite bleak.

And even though growth has picked up slightly over the past year, it is hardly impressive and latest round of market turmoil has likely further dented Italian growth and Italy could easily fall into recession again in the coming quarters if the banking trouble escalates.

With no growth it is hard to see both private and public debt levels coming down in any substantial way, and as a consequence, we are very likely to soon again see renewed worries about both the Italian banking sector and Italian public finances. As consequence the EU's next headache might very well be Italy.

http://seekingalpha.com/article/3987360-lack-ngdp-growth-real-reason-italys-bank...
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The fact is, "NO MATTER WHAT IS SHOWN IN THE MEDIA, NOR WHAT POLITICIANS DON'T SAY", there are many of the "Larger Global Economies, who have Economic Negatives, including Demographics, But also Energy, Climate & Debt issues!
But, the above hasn't been addressed by Politicians, nor TPTB, as they almost exclusively "live for today & what is in their best interests today".
However, for US (THE WHOLE POPULATION) & OUR BEST, LONG TERM INTERESTS, they (the Pollies & TPTB) have no interest.
But, WE will be the "most affected", when countries such as Japan, Italy, China & many others, finally go over the edge, due to the continuation of the following major Economic issues -
1) Demographics - Slowing Growth, which must continue, due to Energy & Climate issues.
2) Energy - Supply & Demand issues
3) Climate Change - Causing Agricultural Water problems
4) Debt - Ever rising