Friday, 21 November 2008
With petrol prices falling rapidly, the interest payment to the bank dropping considerably and no friends and neighbours losing their job it does not really need a politician or a Reserve Bank governor to tell people not to panic. At this stage of the economic cycle the main reason people might be getting a little apprehensive is only because these people in authority tell them there is no need to. Even the annual statement from the super fund for the year ended 30 June was not too bad for those not actually on the verge of retirement. The loss of a few percent is not that troubling after all those great years of the recent past.
The Morgan Poll's Weekly Consumer Confidence Rating (the graph here gives the annual average since 1973) is still well above its record lows. True there was a drop of 4.6 points to 91.2 in the week ended 16 November but it got down to 72.8 in June 1989 . The mob are far from being at panic stations yet despite what they have been hearing and reading about the stock market crash.
It's the next progress super report showing the losses increasing, combined with unemployment going up at a frightening rate, and it is people you know without work, while the value of the family home is going down that will have an impact/ All the honeyed words from Prime Ministers, Treasurers and Governors will not stop despondency when that day comes.
Posted by Richard Farmer at 12:03