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Australia8532 Posts
On August 31 2013 22:52 GhastlyUprising wrote:Show nested quote +On August 31 2013 21:32 bkrow wrote:On August 30 2013 03:34 GreenGringo wrote:Skipping to the main thrust and cutting all the irrelevant filler, we have: On August 30 2013 02:37 JonnyBNoHo wrote:
Do we live in the 1700's still? Agricultural land used to be really valuable. Not so much now. Agriculture contributes 12% of Australia's GDP and isn't to be scoffed at. However, you raise an important point. My response would be that, apart from agriculture, large land area confers the following advantages: (1) Much easier planning and macromanagement. Nobody wants to constantly have to demolish buildings from the 18th century. Nobody -- with the exception of the owners -- wants expensive land where everywhere is built. (2) Much cheaper cost of living in loosely regulated housing markets. Rent and mortgage is a hole in the consumer's pocket, and a black hole for the national economy. (3) Mineral wealth and resources. (About 50% of Australia's exports are mineral and fuel.) (4) Impetus. How do you pay for getting millions of people together in a city? It's not cheap and often happens on the back of a gold rush or a port or coal mining. Then when you have a city, the inhabitants can move to other occupations before the gold rush (or longshoreman industry or whatever) comes to an end, and you'll still retain the "bond energy" that was originally bought from land in an opportune spot. (5) Living conditions and psychology. Very difficult to analyze quantitatively (though there is empirical evidence), but people are happier if they're less cramped and they enjoy more space and liberty. A happy population is a successful population. As for Russia, the answer there is that nobody wants to live in Siberia because it's mostly barren and the winters are deadly. But the land still is useful and that's why experts see Russia as a potential superpower. Agriculture makes up 2.2% of the Australian economy. That is, two point two percent Let's be reasonable. Let's not take advantage of a poster's banned status to reiterate a point he already addressed. Agriculture + its closely allied sectors which wouldn't exist without Australia's agriculture together make up approximately 12% of Australia's GDP. Source. Edit: Fixed link.
Your link didn't work but i'd love to read what comprises the 12%. I have a chart on my work computer that shows the industry make-up of Australia's economy, which I can access tomorrow. I'd love to compare the numbers 
edit: just googled and found the website - National Farmers' Federation probably doesn't instill greatest confidence in terms of bias and integrity of data. Anyway - it claims that the 'processes that food and fibre go through once they leave the farm' plus the value of the inputs that go into the farm equates to 12% of the Australian economy. That statement seems quite misleading - who knows what is included in that calculation. Pure agricultural output accounts for 2.2% of the economy - if you aren't referring to agriculture, then don't call it agriculture.
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On September 01 2013 00:33 JonnyBNoHo wrote:Show nested quote +On August 31 2013 19:17 Rassy wrote:On August 31 2013 00:34 Crushinator wrote:On August 30 2013 22:25 Rassy wrote:
Think its no mystery, a huge amount of shares have to be sold in a short period of time, wich is only possible if they are priced competitivly.
Its not so much that the ipo is to low, its more so that the prices 2 years after the ipo are often to high.
During an ipo institutional investors buy the shares for the biggest part, They are not going to sell them in 1 year or even 10 years usually.So after the ipo there are relativly few shares freely available while the demand for them is more or less continuous existing, wich makes it easy for the price to go way above the "true value"
Another nice example of an ipo is royal ahold. In 2001 the company went bankrupt basicly,due to fraud in its american devission. The company had to emit shares at ~ 2 euro each. We are now 10 years later and the shares are at 12. The company realy didnt become 6 times more valuable over the past 12 years. That is basicly impossible for the defensive sector ahold is in. Still the shares have gone to 12 easily only because the people who initially bought the ipo are refusing to sell and hoarding their stocks.
Now that 10 years are over thoose intitial investors are slowly wanting to sell and the way they are going to sell without crashing the price is interesting. They made ahold starting a share buyback program (as soon as a company announces a share buyback program you now that it is time to sell...) so that they can sell back their 2 euro stocks to the company for 12 euro each without crashing the price, the company goes along with this because the people wanting to sell their shares have a huge influence over the company, due to the amount of shares they have.
Ahold is a safe short for the long term if the overall market stops rising and starts consolidating.
This is the same game as was played with KPN.... In 2000 kpn emitted shares for ~ 2 euro each. In 2009 the company started a share buyback program buying back the shares for ~ 10 ea. And now in 2013 the company is emitting shares again, selling them for 1,20 each...(yes, the same shares the company bought 4 years ago for 10 ea, though you now need 3 times as manny shares for the same percentage of ownership, making the price comparison a little less bad with 3.60 vs 10 but with 2.40 extra cash deposited per share wich the 10 euro shares didnt have)
Its hilarious (outright criminal) what is happening lol.
Buying back shares is one of the bigger scams in the financial markets. It is said that companys do it to give monney back to the share holders but why not simply raise the dividend then?? When buying back shares the monney is only going to ex-shareholders...thoose people who sold back their shares.
So what you have to do is join them, whenever a company anounces a share buyback you should sell. It might not be the absolute top but you can be sure it is verry close.
Apple is starting a share buyback as well, so apple wont rise much more (wont go above previous top i think) and will go in a long term decline as soon as the share buyback program is finished (within 2 years i asume), this prediction i dare to make and put monney on. There is definitely mystery around IPOs and a comprehensive economic explanation for why they are so underpriced is a topic of ongoing research. YOur comment about the prices after 2 years make no sense at all. The two year price is utterly irrelevant to day 1 returns, and the long term performance of stocks after an IPO is fairly poor on average. Which is another part of the IPO mystery. Buying back shares is not any kind of scam, it is just a way to return excess cash to shareholders and has no criminal or shady element to it at all. Dividends are indeed another way to do it, but the result is exactly the same, there is literally no difference when you do the maths. Nobody is damaged in a share repurchase. I dont understand why you insist that a company is not worth what people are willing to pay for it. I would also like to point out that both your cases are not IPOs but rather seasoned equity offers. Which makes a rather big difference. There really isn't very much in your post that makes any sense at all, to be honest. Well its not that difficult. A company is not worth what 1000 people are willing to pay for 1% of the shares. A company is worth what x people are willing to pay for 100% of the shares. Stock prices often inflate way above the true value (that what people are willing to pay for all the shares) because only a small percentage of the shares is on the market. As soon as all shares would be offerd for an inflated price the price would crash, it can only hold its inflated price because the amount of shares offerd is verry low. (this specially in europe and with small caps) Buying back shares is a big scam, i can not stress this enough. Why buy back shares when you can also give dividend? Because when buying back shares, the monney only goes to a select group of shareholders, the group that sold their shares back, and dividend goes to all of the shareholders... this is the ONLY reason. So..when a company is buying back shares, make sure you are in the group of people that gets the monney, the group of people that is selling their shares. How can you explain a company selling shares for 2 euro, then buying them back for 10 euro 6 years later, and then 4 years after that selling them for 1.20 lol? The only other explanation possible is that the company has extremely bad management, not able to forsee the future well. Buying shares for 10 and 4 years later selling them for 1,20 lol >< You have to see what is going on here (the company beeing played with by the banks to suck it dry and let small shareholders left behind) This company had a debt of like 25b euro in 2009-2010, yet instead of paying down debts with cash they start a share buyback program worth like 6b euros buying shares for 10 euro each (and higher, if look at the chart, then you can see the share buyback program is exactly at the top lol, i did examine manny share buyback programs and far more often then not they all where initiated at an absolute high for the shares) Then 4 years later the debt of the company is deemed to high,and the banks say to the company "hey your debt is to high, you cant meet the conditions annymore and you have to sell shares for 1 euro ea" The scam is the banks buying the shares in 2003 for 2 euro each, then in 2010 forcing the company to buy them back for 10 euro each, and then forcing the company in 2013 to sell them again for 1.10 ea. The price of 2010 was the inflated price btw, manny small investors bought for that price thinking "the price of the stockmarket is always the right price, so i cant go wrong" But this mistake is unforgivable for the higher management of the company who aproove of the buyback program,and who do have a verry clear insight in the true value of the company. Now apple: 100b+ in cash to hand out to the shareholders, i believe they are going to pay out dividends of like 25b and use 75b to finanance a share buyback program... They are even going to lend monney to finance a part of the share buyback program while they never had debts before. Whats going on here? Imo its big investors wanting to go out of apple because they can all see that in the next 10 years apple will get completely crushed by the competition from korea and china.(because apple lost their innovative advantage and now that marktet will become dominated by cheap producers because noone can compete with an innovative product) After having had a great ride for 10 years with the stock going from 20$ to a high of 700$ (and 470$ now) they want to get out. They rightly fear that if they would start selling their holdings onto the market the price would crash so they go the the company and say "hey we have so manny shares so you have to do what we want, and we see you have tons of cash" "we want you to give the cash back to the shareholders" And apple goes "ok, i can start pay out dividends, how does that suit you guys?" and the big investors go "meh we dont realy like that because then the monney will go to every idiot who bought apple shares lately, and we think they dont deserve anny of that monney" "lets do this different, we want to get out and sell our shares, so you start a buyback program and buy our shares" and apple goes "hmm its not realy ethical but i guess i will need you guys in the future, so lets do this" And no, i wish i was a conspicary idiot who only imagine this, but unfortunatly this is realy how the game is beeing played. Annyway:I realise this is all slightly off topic btw, so will stick to the subject in next posts. Rassy, you could make that claim both ways. 100% of the shares not being sold today, so the price is 'inflated'. But you could say the opposite: 100% are not being bought so the price is 'discounted'. Just because you can flood the market one way or another and, on paper at least, change the price doesn't mean that the market price is biased to stocks being traded for more than they are really worth. Share buybacks are functionally little different than dividends. The point is to give cash back to shareholders, not trade the stock (buy low sell high is largely irrelevant). Whether you do a buyback or a dividend really just comes down to a corporation and its shareholder's preferences. If a big investor wanted his shares bought back that's no different than a big investor wanting to sell some of their shares. They don't somehow get more money by having them bought back than if they just sold them.
Hmm you are right it goes both ways lol, stocks are also underpriced now and then.
I still dont see how buying back shares is not a scam. I see not a single reason to buy back shares instead of paying an extra dividend, besides the reasons i mentioned.
Can you give me 1 argument or reason why a company who wants to give monney back to its shareholders would do a share buyback instead of didend? (no fiscal technical reason pls lol) I realy can see no reason other then to give the monney to a part of the shareholders instead of to all of them.
And what about buying back shares when you have still heavy debts ? why not pay down the debts instead wich will safe you a ton of interest? No, companys even go the other way, they go lend extra monney to buy back shares.
It makes no sense at all and its only done so a few selected big investors/funds can sell their shares at top prices where there are not enough normal buyers to buy thoose shares for said price.
Share buyback is a sign on the wall (at least here in europe) and you can make alot of free monney by selling your longs as soon as a buyback starts, and go short as soon as the buyback program has finished.
If the usa plays the game in the same way (wich i think it does) then apple will stay stable for ~ 2 more years tops during the buyback program (between say 400 and 600) after wich a long term (5 year+) decline will start bringing apple below 200 again.
Then in 5 years from now, with apple at sub 200 you can see all the hedgefunds have sold their shares for 500 to apple.
They have gotten their monney back from the company but all small time investors who buy a stock and hold it till their pension hoping for nice dividends wont have seen anny from this 100b apple paid to buy back stocks.
They will have an increased holding in the company, but that is barely a compensation because 100b cash just left the company and the company is only going down hill further.
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On September 02 2013 00:03 Rassy wrote:Show nested quote +On September 01 2013 00:33 JonnyBNoHo wrote:On August 31 2013 19:17 Rassy wrote:On August 31 2013 00:34 Crushinator wrote:On August 30 2013 22:25 Rassy wrote:
Think its no mystery, a huge amount of shares have to be sold in a short period of time, wich is only possible if they are priced competitivly.
Its not so much that the ipo is to low, its more so that the prices 2 years after the ipo are often to high.
During an ipo institutional investors buy the shares for the biggest part, They are not going to sell them in 1 year or even 10 years usually.So after the ipo there are relativly few shares freely available while the demand for them is more or less continuous existing, wich makes it easy for the price to go way above the "true value"
Another nice example of an ipo is royal ahold. In 2001 the company went bankrupt basicly,due to fraud in its american devission. The company had to emit shares at ~ 2 euro each. We are now 10 years later and the shares are at 12. The company realy didnt become 6 times more valuable over the past 12 years. That is basicly impossible for the defensive sector ahold is in. Still the shares have gone to 12 easily only because the people who initially bought the ipo are refusing to sell and hoarding their stocks.
Now that 10 years are over thoose intitial investors are slowly wanting to sell and the way they are going to sell without crashing the price is interesting. They made ahold starting a share buyback program (as soon as a company announces a share buyback program you now that it is time to sell...) so that they can sell back their 2 euro stocks to the company for 12 euro each without crashing the price, the company goes along with this because the people wanting to sell their shares have a huge influence over the company, due to the amount of shares they have.
Ahold is a safe short for the long term if the overall market stops rising and starts consolidating.
This is the same game as was played with KPN.... In 2000 kpn emitted shares for ~ 2 euro each. In 2009 the company started a share buyback program buying back the shares for ~ 10 ea. And now in 2013 the company is emitting shares again, selling them for 1,20 each...(yes, the same shares the company bought 4 years ago for 10 ea, though you now need 3 times as manny shares for the same percentage of ownership, making the price comparison a little less bad with 3.60 vs 10 but with 2.40 extra cash deposited per share wich the 10 euro shares didnt have)
Its hilarious (outright criminal) what is happening lol.
Buying back shares is one of the bigger scams in the financial markets. It is said that companys do it to give monney back to the share holders but why not simply raise the dividend then?? When buying back shares the monney is only going to ex-shareholders...thoose people who sold back their shares.
So what you have to do is join them, whenever a company anounces a share buyback you should sell. It might not be the absolute top but you can be sure it is verry close.
Apple is starting a share buyback as well, so apple wont rise much more (wont go above previous top i think) and will go in a long term decline as soon as the share buyback program is finished (within 2 years i asume), this prediction i dare to make and put monney on. There is definitely mystery around IPOs and a comprehensive economic explanation for why they are so underpriced is a topic of ongoing research. YOur comment about the prices after 2 years make no sense at all. The two year price is utterly irrelevant to day 1 returns, and the long term performance of stocks after an IPO is fairly poor on average. Which is another part of the IPO mystery. Buying back shares is not any kind of scam, it is just a way to return excess cash to shareholders and has no criminal or shady element to it at all. Dividends are indeed another way to do it, but the result is exactly the same, there is literally no difference when you do the maths. Nobody is damaged in a share repurchase. I dont understand why you insist that a company is not worth what people are willing to pay for it. I would also like to point out that both your cases are not IPOs but rather seasoned equity offers. Which makes a rather big difference. There really isn't very much in your post that makes any sense at all, to be honest. Well its not that difficult. A company is not worth what 1000 people are willing to pay for 1% of the shares. A company is worth what x people are willing to pay for 100% of the shares. Stock prices often inflate way above the true value (that what people are willing to pay for all the shares) because only a small percentage of the shares is on the market. As soon as all shares would be offerd for an inflated price the price would crash, it can only hold its inflated price because the amount of shares offerd is verry low. (this specially in europe and with small caps) Buying back shares is a big scam, i can not stress this enough. Why buy back shares when you can also give dividend? Because when buying back shares, the monney only goes to a select group of shareholders, the group that sold their shares back, and dividend goes to all of the shareholders... this is the ONLY reason. So..when a company is buying back shares, make sure you are in the group of people that gets the monney, the group of people that is selling their shares. How can you explain a company selling shares for 2 euro, then buying them back for 10 euro 6 years later, and then 4 years after that selling them for 1.20 lol? The only other explanation possible is that the company has extremely bad management, not able to forsee the future well. Buying shares for 10 and 4 years later selling them for 1,20 lol >< You have to see what is going on here (the company beeing played with by the banks to suck it dry and let small shareholders left behind) This company had a debt of like 25b euro in 2009-2010, yet instead of paying down debts with cash they start a share buyback program worth like 6b euros buying shares for 10 euro each (and higher, if look at the chart, then you can see the share buyback program is exactly at the top lol, i did examine manny share buyback programs and far more often then not they all where initiated at an absolute high for the shares) Then 4 years later the debt of the company is deemed to high,and the banks say to the company "hey your debt is to high, you cant meet the conditions annymore and you have to sell shares for 1 euro ea" The scam is the banks buying the shares in 2003 for 2 euro each, then in 2010 forcing the company to buy them back for 10 euro each, and then forcing the company in 2013 to sell them again for 1.10 ea. The price of 2010 was the inflated price btw, manny small investors bought for that price thinking "the price of the stockmarket is always the right price, so i cant go wrong" But this mistake is unforgivable for the higher management of the company who aproove of the buyback program,and who do have a verry clear insight in the true value of the company. Now apple: 100b+ in cash to hand out to the shareholders, i believe they are going to pay out dividends of like 25b and use 75b to finanance a share buyback program... They are even going to lend monney to finance a part of the share buyback program while they never had debts before. Whats going on here? Imo its big investors wanting to go out of apple because they can all see that in the next 10 years apple will get completely crushed by the competition from korea and china.(because apple lost their innovative advantage and now that marktet will become dominated by cheap producers because noone can compete with an innovative product) After having had a great ride for 10 years with the stock going from 20$ to a high of 700$ (and 470$ now) they want to get out. They rightly fear that if they would start selling their holdings onto the market the price would crash so they go the the company and say "hey we have so manny shares so you have to do what we want, and we see you have tons of cash" "we want you to give the cash back to the shareholders" And apple goes "ok, i can start pay out dividends, how does that suit you guys?" and the big investors go "meh we dont realy like that because then the monney will go to every idiot who bought apple shares lately, and we think they dont deserve anny of that monney" "lets do this different, we want to get out and sell our shares, so you start a buyback program and buy our shares" and apple goes "hmm its not realy ethical but i guess i will need you guys in the future, so lets do this" And no, i wish i was a conspicary idiot who only imagine this, but unfortunatly this is realy how the game is beeing played. Annyway:I realise this is all slightly off topic btw, so will stick to the subject in next posts. Rassy, you could make that claim both ways. 100% of the shares not being sold today, so the price is 'inflated'. But you could say the opposite: 100% are not being bought so the price is 'discounted'. Just because you can flood the market one way or another and, on paper at least, change the price doesn't mean that the market price is biased to stocks being traded for more than they are really worth. Share buybacks are functionally little different than dividends. The point is to give cash back to shareholders, not trade the stock (buy low sell high is largely irrelevant). Whether you do a buyback or a dividend really just comes down to a corporation and its shareholder's preferences. If a big investor wanted his shares bought back that's no different than a big investor wanting to sell some of their shares. They don't somehow get more money by having them bought back than if they just sold them. Hmm you are right it goes both ways lol, stocks are also underpriced now and then. I still dont see how buying back shares is not a scam. I see not a single reason to buy back shares instead of paying an extra dividend, besides the reasons i mentioned. Can you give me 1 argument or reason why a company who wants to give monney back to its shareholders would do a share buyback instead of didend? (no fiscal technical reason pls lol) I realy can see no reason other then to give the monney to a part of the shareholders instead of to all of them. And what about buying back shares when you have still heavy debts ? why not pay down the debts instead wich will safe you a ton of interest? No, companys even go the other way, they go lend extra monney to buy back shares. It makes no sense at all and its only done so a few selected big investors/funds can sell their shares at top prices where there are not enough normal buyers to buy thoose shares for said price. Share buyback is a sign on the wall (at least here in europe) and you can make alot of free monney by selling your longs as soon as a buyback starts, and go short as soon as the buyback program has finished. If the usa plays the game in the same way (wich i think it does) then apple will stay stable for ~ 2 more years tops during the buyback program (between say 400 and 600) after wich a long term (5 year+) decline will start bringing apple below 200 again. Then in 5 years from now, with apple at sub 200 you can see all the hedgefunds have sold their shares for 500 to apple. They have gotten their monney back from the company but all small time investors who buy a stock and hold it till their pension hoping for nice dividends wont have seen anny from this 100b apple paid to buy back stocks. They will have an increased holding in the company, but that is barely a compensation because 100b cash just left the company and the company is only going down hill further.
Dividends are assumed to be relatively safe, so if a company is generating extra cash that is temporary, it may prefer to issue a buyback instead of a dividend. Cutting a dividend is viewed as bad news, ending a temporary stock buyback is normal.
Overall, shareholders don't care too much about dividends vs buybacks. Some have different preferences, sure, but there really isn't much of a reason to prefer dividends over buybacks since they basically do the same thing - return money to shareholders. When a company buys back stock it goes to the market and buys shares. If an investor wants to sell, he / she can sell. There's no lottery where the ones who sell somehow "win" more than those who don't just because they sold to the company.
As for paying down debt, put simply equity is not free. Debt is generally cheaper than equity so why would a company want to pay down cheap debt first? As long as the debt isn't a problem you are usually better off giving the excess cash back to shareholders rather than paying off debt.
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Yeh equity is actually a lot more expensive since it carries a lot more risk. There's no collateral on equity and when the company goes belly up you lose everything. The providers for equity obviously want a risk premium to carry thay risk.
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On September 01 2013 21:34 bkrow wrote:Show nested quote +On August 31 2013 22:52 GhastlyUprising wrote:On August 31 2013 21:32 bkrow wrote:On August 30 2013 03:34 GreenGringo wrote:Skipping to the main thrust and cutting all the irrelevant filler, we have: On August 30 2013 02:37 JonnyBNoHo wrote:
Do we live in the 1700's still? Agricultural land used to be really valuable. Not so much now. Agriculture contributes 12% of Australia's GDP and isn't to be scoffed at. However, you raise an important point. My response would be that, apart from agriculture, large land area confers the following advantages: (1) Much easier planning and macromanagement. Nobody wants to constantly have to demolish buildings from the 18th century. Nobody -- with the exception of the owners -- wants expensive land where everywhere is built. (2) Much cheaper cost of living in loosely regulated housing markets. Rent and mortgage is a hole in the consumer's pocket, and a black hole for the national economy. (3) Mineral wealth and resources. (About 50% of Australia's exports are mineral and fuel.) (4) Impetus. How do you pay for getting millions of people together in a city? It's not cheap and often happens on the back of a gold rush or a port or coal mining. Then when you have a city, the inhabitants can move to other occupations before the gold rush (or longshoreman industry or whatever) comes to an end, and you'll still retain the "bond energy" that was originally bought from land in an opportune spot. (5) Living conditions and psychology. Very difficult to analyze quantitatively (though there is empirical evidence), but people are happier if they're less cramped and they enjoy more space and liberty. A happy population is a successful population. As for Russia, the answer there is that nobody wants to live in Siberia because it's mostly barren and the winters are deadly. But the land still is useful and that's why experts see Russia as a potential superpower. Agriculture makes up 2.2% of the Australian economy. That is, two point two percent Let's be reasonable. Let's not take advantage of a poster's banned status to reiterate a point he already addressed. Agriculture + its closely allied sectors which wouldn't exist without Australia's agriculture together make up approximately 12% of Australia's GDP. Source. Edit: Fixed link. Your link didn't work but i'd love to read what comprises the 12%. I have a chart on my work computer that shows the industry make-up of Australia's economy, which I can access tomorrow. I'd love to compare the numbers edit: just googled and found the website - National Farmers' Federation probably doesn't instill greatest confidence in terms of bias and integrity of data. Anyway - it claims that the 'processes that food and fibre go through once they leave the farm' plus the value of the inputs that go into the farm equates to 12% of the Australian economy. That statement seems quite misleading - who knows what is included in that calculation. Pure agricultural output accounts for 2.2% of the economy - if you aren't referring to agriculture, then don't call it agriculture. Real link is here.
You're right that Australia's foremost advocacy organization on behalf of farmers mightn't instill the greatest confidence in terms of bias and integrity of data to an Ayn Rand objectivist. We're lucky that if you check their source, the data was obtained by Econtech as well as the the Department of Agriculture, Fisheries and Forestry.
Ignoring the processing of agricultural products seems to be utterly ridiculous and out of place in a discussion concerning the benefits of Australia's land. There's no chance in hell you would apply such an unfair and pedantic standard to banking and your other favourite sectors.
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On August 28 2013 12:57 aksfjh wrote:Show nested quote +On August 28 2013 11:28 bkrow wrote:On August 28 2013 11:11 fabiano wrote:
Interesting info.
If I'm not mistaken the brazilian central bank has reduced the prediction of economic growth of the country to 2.5% when initially had expected 4.5% (and is set as 3.0% in your graph).
Funny to see Brazil with 38% of taxation rate, right below European countries, and yet our country general infrastructure/health/education are so shitty compared to them. The destruction power of corruption and bad administration is quite impressive.
Also, how did Japan acquire such a huge government debt? Was it due to the tsunami? http://en.wikipedia.org/wiki/AbenomicsBasically, issuing a ton of government bonds to shock the economy into shape Not completely. A lot of the debt was already accumulated in the Lost Decade, where they kept trying to stimulate the economy, but would then stop before it gained traction. There's also the problem they've had with deflation, which has pushed the debt up quite a bit.
Yes, the debt was far bigger than any other G20 economies much before Abe indeed. And they can sustain it, shortly, because japanese people save tons of money and buy gov debts through public loans (bonds)
This makes a big difference with any other economy, especially the US one, because, for most, us citizens have been living way over their capacities through credits&loans while japanese citizens have been living much under, with lower consumption due to very important savings.
Who made these graphs btw?
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On September 02 2013 02:38 GhastlyUprising wrote:Show nested quote +On September 01 2013 21:34 bkrow wrote:On August 31 2013 22:52 GhastlyUprising wrote:On August 31 2013 21:32 bkrow wrote:On August 30 2013 03:34 GreenGringo wrote:Skipping to the main thrust and cutting all the irrelevant filler, we have: On August 30 2013 02:37 JonnyBNoHo wrote:
Do we live in the 1700's still? Agricultural land used to be really valuable. Not so much now. Agriculture contributes 12% of Australia's GDP and isn't to be scoffed at. However, you raise an important point. My response would be that, apart from agriculture, large land area confers the following advantages: (1) Much easier planning and macromanagement. Nobody wants to constantly have to demolish buildings from the 18th century. Nobody -- with the exception of the owners -- wants expensive land where everywhere is built. (2) Much cheaper cost of living in loosely regulated housing markets. Rent and mortgage is a hole in the consumer's pocket, and a black hole for the national economy. (3) Mineral wealth and resources. (About 50% of Australia's exports are mineral and fuel.) (4) Impetus. How do you pay for getting millions of people together in a city? It's not cheap and often happens on the back of a gold rush or a port or coal mining. Then when you have a city, the inhabitants can move to other occupations before the gold rush (or longshoreman industry or whatever) comes to an end, and you'll still retain the "bond energy" that was originally bought from land in an opportune spot. (5) Living conditions and psychology. Very difficult to analyze quantitatively (though there is empirical evidence), but people are happier if they're less cramped and they enjoy more space and liberty. A happy population is a successful population. As for Russia, the answer there is that nobody wants to live in Siberia because it's mostly barren and the winters are deadly. But the land still is useful and that's why experts see Russia as a potential superpower. Agriculture makes up 2.2% of the Australian economy. That is, two point two percent Let's be reasonable. Let's not take advantage of a poster's banned status to reiterate a point he already addressed. Agriculture + its closely allied sectors which wouldn't exist without Australia's agriculture together make up approximately 12% of Australia's GDP. Source. Edit: Fixed link. Your link didn't work but i'd love to read what comprises the 12%. I have a chart on my work computer that shows the industry make-up of Australia's economy, which I can access tomorrow. I'd love to compare the numbers edit: just googled and found the website - National Farmers' Federation probably doesn't instill greatest confidence in terms of bias and integrity of data. Anyway - it claims that the 'processes that food and fibre go through once they leave the farm' plus the value of the inputs that go into the farm equates to 12% of the Australian economy. That statement seems quite misleading - who knows what is included in that calculation. Pure agricultural output accounts for 2.2% of the economy - if you aren't referring to agriculture, then don't call it agriculture. Real link is here. You're right that Australia's foremost advocacy organization on behalf of farmers mightn't instill the greatest confidence in terms of bias and integrity of data to an Ayn Rand objectivist. We're lucky that if you check their source, the data was obtained by Econtech as well as the the Department of Agriculture, Fisheries and Forestry. Ignoring the processing of agricultural products seems to be utterly ridiculous and out of place in a discussion concerning the benefits of Australia's land. There's no chance in hell you would apply such an unfair and pedantic standard to banking and your other favourite sectors.
As I said elsewhere on the topic, raw material processing, agricultural or otherwise, doesn't always have to be done close to the point of extraction. Australia can and does export raw agricultural products to be processed in other countries. Australia also exports raw iron and coal to be processed and used in other countries. To give an example, Japan mines little iron ore, yet produces a lot of steel.
To further burden the issue, agriculture processing requires quite a bit more than land. So if Australia didn't invest so much in agriculture and processing it could have invested in some other form of manufacturing.
To burden the issue some more, productive farming in Australia (or anywhere, really) requires a lot of modern equipment, financing and distribution. And little of that is tied to land.
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Interesting data. Mostly stuff that I expected or knew, but I found Russia to be extremely surprising. It's interesting how Russia, which had a financial collapse that makes the Great Depression look like Disneyland, is able to keep their debt low and budget relatively balanced. Usually the exact opposite would be expected.
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On September 02 2013 03:46 JonnyBNoHo wrote:
As I said elsewhere on the topic, raw material processing, agricultural or otherwise, doesn't always have to be done close to the point of extraction. Australia can and does export raw agricultural products to be processed in other countries. Australia also exports raw iron and coal to be processed and used in other countries. To give an example, Japan mines little iron ore, yet produces a lot of steel. It is RIDICULOUS to use the pre-processed figures as a representation of the wealth Australia reaps from its agriculture. In the modern world we don't eat most crops without processing them. Yes, the processing could be done in other countries, but in practice it isn't because the Australians aren't inclined to sell for cheap.
At the very best you are nitpicking, as the 12% figure was never offered as a key argument, just an observation. "You mean agriculture + closely allied sectors". That's all you should have said and it's the only point you have to offer here.
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On September 02 2013 07:12 GhastlyUprising wrote:Show nested quote +On September 02 2013 03:46 JonnyBNoHo wrote:
As I said elsewhere on the topic, raw material processing, agricultural or otherwise, doesn't always have to be done close to the point of extraction. Australia can and does export raw agricultural products to be processed in other countries. Australia also exports raw iron and coal to be processed and used in other countries. To give an example, Japan mines little iron ore, yet produces a lot of steel. It is RIDICULOUS to use the pre-processed figures as a representation of the wealth Australia reaps from its agriculture. In the modern world we don't eat most crops without processing them. Yes, the processing could be done in other countries, but in practice it isn't because the Australians aren't inclined to sell for cheap. At the very best you are nitpicking, as the 12% figure was never offered as a key argument, just an observation. "You mean agriculture + closely allied sectors". That's all you should have said and it's the only point you have to offer here.
I think you are missing the point. Even if you want to roll with the 12% figure, you still need to unpackage it. Agriculture is only worth that much if you include the value of the land itself and all the other factors involved.
Keep in mind that we were originally discussing land's contribution to an economy. Agriculture in Australia was brought up as a point in the discussion. That point is misleading, as I've discussed, since Australia's agricultural sector relies on much more than just land for its contribution to GDP.
In Ethiopia agriculture, sans processing and distribution, represents 46% of GDP. Should we talk about how wealthy Ethiopia is because of their agricultural land?
In the US agriculture plus processing represents ~2.3% of GDP by value added. Should we talk about how poor the US because of their agricultural land?
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Australia8532 Posts
On September 02 2013 07:12 GhastlyUprising wrote:Show nested quote +On September 02 2013 03:46 JonnyBNoHo wrote:
As I said elsewhere on the topic, raw material processing, agricultural or otherwise, doesn't always have to be done close to the point of extraction. Australia can and does export raw agricultural products to be processed in other countries. Australia also exports raw iron and coal to be processed and used in other countries. To give an example, Japan mines little iron ore, yet produces a lot of steel. It is RIDICULOUS to use the pre-processed figures as a representation of the wealth Australia reaps from its agriculture. In the modern world we don't eat most crops without processing them. Yes, the processing could be done in other countries, but in practice it isn't because the Australians aren't inclined to sell for cheap. At the very best you are nitpicking, as the 12% figure was never offered as a key argument, just an observation. "You mean agriculture + closely allied sectors". That's all you should have said and it's the only point you have to offer here.
I think you're getting overly worked up mate, I'm not saying the figure is wrong - all i'm saying is that statement "and closely allied sectors" is incredibly vague and to my mind, misleading.
Does the website offer any explanation of what those closely allied sectors are because I could argue Woolies/Coles (major supermarkets) could be termed closely allied as they sell the processed products? I just want more information on what the 12% is made up of, that's all. Nobody is damning your dear farmers to hell, I just want more data.
The 2.2% figure comes from ABS, what constitutes the 12% figure?
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Just curious, where is this information from?
I think it is fairly safe to assume it is reasonably accurate since people aren't tearing it apart, but i'm curious
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On September 02 2013 08:18 bkrow wrote:Show nested quote +On September 02 2013 07:12 GhastlyUprising wrote:On September 02 2013 03:46 JonnyBNoHo wrote:
As I said elsewhere on the topic, raw material processing, agricultural or otherwise, doesn't always have to be done close to the point of extraction. Australia can and does export raw agricultural products to be processed in other countries. Australia also exports raw iron and coal to be processed and used in other countries. To give an example, Japan mines little iron ore, yet produces a lot of steel. It is RIDICULOUS to use the pre-processed figures as a representation of the wealth Australia reaps from its agriculture. In the modern world we don't eat most crops without processing them. Yes, the processing could be done in other countries, but in practice it isn't because the Australians aren't inclined to sell for cheap. At the very best you are nitpicking, as the 12% figure was never offered as a key argument, just an observation. "You mean agriculture + closely allied sectors". That's all you should have said and it's the only point you have to offer here. I think you're getting overly worked up mate, I'm not saying the figure is wrong - all i'm saying is that statement "and closely allied sectors" is incredibly vague and to my mind, misleading. Does the website offer any explanation of what those closely allied sectors are because I could argue Woolies/Coles (major supermarkets) could be termed closely allied as they sell the processed products? I just want more information on what the 12% is made up of, that's all. Nobody is damning your dear farmers to hell, I just want more data. The 2.2% figure comes from ABS, what constitutes the 12% figure?
Wiki also mentions the 12%
Agriculture[edit source]
Main articles: Agriculture in Australia and Australian wine
Agriculture contributes 3% of Australia's GDP at the farm gate and when value-added processing beyond the farm is included this figure rises to 12%.[95] 60% of farm products are exported. Irrigation is an important and widespread practice for a country where many parts receive low rainfall.
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Australia8532 Posts
On September 02 2013 13:33 Rassy wrote:Show nested quote +On September 02 2013 08:18 bkrow wrote:On September 02 2013 07:12 GhastlyUprising wrote:On September 02 2013 03:46 JonnyBNoHo wrote:
As I said elsewhere on the topic, raw material processing, agricultural or otherwise, doesn't always have to be done close to the point of extraction. Australia can and does export raw agricultural products to be processed in other countries. Australia also exports raw iron and coal to be processed and used in other countries. To give an example, Japan mines little iron ore, yet produces a lot of steel. It is RIDICULOUS to use the pre-processed figures as a representation of the wealth Australia reaps from its agriculture. In the modern world we don't eat most crops without processing them. Yes, the processing could be done in other countries, but in practice it isn't because the Australians aren't inclined to sell for cheap. At the very best you are nitpicking, as the 12% figure was never offered as a key argument, just an observation. "You mean agriculture + closely allied sectors". That's all you should have said and it's the only point you have to offer here. I think you're getting overly worked up mate, I'm not saying the figure is wrong - all i'm saying is that statement "and closely allied sectors" is incredibly vague and to my mind, misleading. Does the website offer any explanation of what those closely allied sectors are because I could argue Woolies/Coles (major supermarkets) could be termed closely allied as they sell the processed products? I just want more information on what the 12% is made up of, that's all. Nobody is damning your dear farmers to hell, I just want more data. The 2.2% figure comes from ABS, what constitutes the 12% figure? Wiki also mentions the 12% Agriculture[edit source] Main articles: Agriculture in Australia and Australian wine Agriculture contributes 3% of Australia's GDP at the farm gate and when value-added processing beyond the farm is included this figure rises to 12%.[95] 60% of farm products are exported. Irrigation is an important and widespread practice for a country where many parts receive low rainfall.
Wiki mentions the 12% and references the original source from the farmer's federation - kind of just going around in circles. The rest of your post doesn't really explain what the 12% is.
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On September 02 2013 03:53 JudicatorHammurabi wrote:
Interesting data. Mostly stuff that I expected or knew, but I found Russia to be extremely surprising. It's interesting how Russia, which had a financial collapse that makes the Great Depression look like Disneyland, is able to keep their debt low and budget relatively balanced. Usually the exact opposite would be expected.
When the Russian economy collapsed, oil was 20 dollars a barrel. Its amazing what a combination of bankruptcy and oil going up 5-6x price per barrel does for the economy.
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EPT
