Australia..The Last Days Of Easy Living :

I cannot accept that to be realistic means to tolerate misery, violence and hate. I do not believe that the hungry man should be treated as subversive for expressing his suffering. I shall never accept that the law can be used to justify tragedy, to keep things as they are, to make us abandon our ideas of a different world. Law is the path of liberty, and must as such open the way to progress for everyone.  -- Oscar Arias Sanchez

Australia's "Tulip Mania" About to Crash; 44% Jump in Property Listings Proves the Proposed Housing Shortage is Gargantuan Myth; Playable Actions 

victoria-property for sale

Australia's household debt to disposable income ratio

"The chart above doesn't have the most recent data. It appears to show a gentle decline in the household debt-to-disposable income ratio. Since then, though, due to higher debts and income growth that's not quite kept up, the ratio has turned up again. It's around 156% today, largely thanks to the mini-boom in mortgage lending spawned by the diabolical first home owner's grants." 

"The RBA’s figures show that as at March 2009 ”around 20 per cent of banks’ total liabilities were denominated in foreign currencies.”

This percentage has remained relatively stable over time, but the raw numbers involved ballooned through the credit boom, to the point where the banks’ net foreign currency exposure is more than $300 billion.

few people fully understand how dependent our banks are on foreign debt and the mechanism by which they mitigate their exposure (through a series of swap contracts designed to insulate against currency and interest rate movements). And that brings us to the key issue.

Should future convulsions in the global financial markets send any of the institutions on the other side of these contracts to the wall, our banks would become more exposed to the harsh winds of the international financial markets."

The Australian people have had it good for at least 40 years, minor recession's and corresponding booms, very few Australians realise that the actual standard of living has over that period decreased requiring the work of two people to maintain status quo with the rest. Real wages have not gone up, they have gone down.

Its now 2011 and Australia faces two internal challenges the first is our long running and now collapsing Real Estate Boom. Property prices had been going up constantly for decades and our Banks have been more than accommodating in financing this speculation holding up to 60% of their assetts in Mortgage related products.

As of this year the 'Boom' has slowed and now turned homes are not selling, Auctions are failing, this is not the news you hear on the local Media. Our R/E is estimated to be 60% overvalued and when the Inflation coming down the line hits we are in deep S#$@. The Oil price is an external factor that is now adding to stress that the average overextended home owner is already under.

Most people who bought "Investment " property bought into a loosing bet from day one. The Banks financed up to 110% before the GFC and now are offering 97% to customers they are familiar with. Problem for the new crop / the last lot of buyers who got in at the Top Of The Market. For these people there is no "Greater Fool" out there to buy the properties at a price that will cover the losses from depreciation and expenses.

We will not avoid a collapse in our R/E market, our personal debt (not the Government Debt) is higher than the Average America's debt burden on Credit cards and Mortgages.

When the Home loans and Retail / Commercial property market collapses so will the Australian Economy, our Banks will be screaming for bailouts and these will not be forthcoming unless the Government decides to print Money. Even without external events Australia has a Black day coming in the "commodity that always goes up".


Lucky we have our Chinese friends buying our Minerals etc, will this Boom continue forever...5 years? 20 years? I think not, China has been pushing its economy at Maximum growth and billions of cubic meters of  empty Cities are one result, another is the Billion Chinese that have not got a spot in the sunshine, the $2 a Day workers that provide us with so much "Stuff" we have bought. When the Western Nations are struggling to fill their Petrol Tanks and pay Mortgages then who will pay for China's growth.


After a US default on its currency  / Debt problem the Chinese will be short a cool Trillion Dollars in lost assetts tied up in the US Treasury Bills, Notes not even PIMCO will buy, the US Treasury is the primary buyer of US Debt. Sooner than later the World will realise the US Dollar is over. An announcement of more Quantitative Easing will tell even the stupidest Investor that any American paper is worthless. Not to forget the probable fate of the Euro.


For the Elites of the world to finalise plans that have been on the board for a Century the worlds disparate currencys have to go and be replaced with a new World Order Dollar.

The events in Saudi Arabia on the so called "Day of Rage" will tell us a lot as the future will come to crystal focus, Oil to $200, and the the real trouble begins.

Wake Up Australia, its now begun, our time of joining the rest of the world in trying to buy the next meal.

Revolution is only ever 7 Meals away, people so insulated, arrogant and obscenely rich have plans for all of us.....then again its all just Conspiracy isn't it.

 

World Elite Get On With The Job...Fuel to $200 a Barrel

 

Ignore WTI , West Texas Crude price, the true definition of what the world (including most of the USA) consumes is the price of Brent Crude currently @ $116 per Barrel.

The kaos in North Africa and the Middle East has been set off by design, the Elites of this world want to push the price to $200 a Barrel. The effect on the Western Economies will be devestating, Inflation you are already seeiong the start.

The USDX (The price of the US$ on World Market is down to  76.678

This is a very low spot and we see it in the 75.999 area, Gold at $1500, Oil at $145 / Barrel and increasing Global instability, either in Economics or Politics, their is little difference. That is your time of historical flux.

Our 5 Stooges above have a lot to answer for and if they think they have their own God to let em off the hook, perhaps they should all get down to Texas and get some Baptist Rebirth-in!

Oil Price & Commodities Real Time Charts

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A Black Swan in more ways than One. The Gulf Mega Disaster

A Black Swan in more ways than One.

BP, the Multinational Global Giant has already lost its AAA rating. Fitch dropped BP’s credit rating an unprecedented 6 notches on June 15th from AA to BBB which followed June 3rd's AA+ to AA cut.

If Lehman Brothers was considered to be the trigger that activated the GFC then consider the implications of a Company the size of many small Countries in its Gross Earnings; and overall effect that a Bankruptcy or Multi Billion Dollar Litigation that will probably result from the disaster in the Gulf of Mexico. It would serve Investors well to do some research on the Economic implications of the disaster as well as the outlook from here on as to the damages already inflicted and the potential for these damages to multiply by factors of 10.

The Deep Sea Drilling represented the cutting edge of technology, during the construction phase problems never before encountered were overcome and the achievement of tapping what might be one of the Worlds largest Oil Deposits, would have made BP the wealthiest Oil Company on the Planet. Unfortunately this outcome did not occur. Workers from the Rig have been quoted as saying the project had problems from the beginning to the moment of disaster. Shortcuts were taken and a lot of vital information has been kept from the public.

What BP achieved was to drill down about 5 Miles into the Earths Crust, under thousands of feet of Ocean. When the Drill finally penetrated the cavity containing the Oil the pressures they encountered were on the order of 60,000 PSI added to that the pressure of the water above another 22,000 PSI for a Total of 70 to 80 Thousand PSI. (A Car Tire has 30 PSI, a Gas Bottle about 100 PSI Max. Hence the difficulties in capping the Well. Imagine trying to push Drilling Mud or Cement down against these pressures pushing back.

Hence all efforts to Cap it have failed, the best they can do is put a “Funnel” over the top and pump as much as you can into a surface ship. Judging by the numbers of Tankers they have not been overly successful even in this. Images of Crack and Fissures breaking open in places away from the Drill Head have been seen. When BP broke into that cavity it landed on a new Planet, a place of impossible pressures, Temperatures and Chemistry.

Soundings have detected a 20 Mile wide ‘Dome’ tens of feet high forming around the Drill Head. This is a giant compressed (80,000 PSI) bubble of Gas and other muck. A very real fear of this bubble reaching a point of bursting and releasing a cloud of Toxic Gas across the lower SE United States. Rainfall containing Toxins from the Oil and from the Dispersant “Correctcit” (Spelled wrong …Corrects it.) A great label for a very toxic substance, apart from Benzene, Hydrogen Sulfide and a dozen others. A Hurricane in the Gulf this year that will cross the Gulf , pick up the Ocean and dump it across the Coastal Cities would be the equivalent of a Chemical Warfare attack on the USA. The chance of a Hurricane of Force 3 to 5 hitting somewhere this season is 100% or as close as you can get. That’s probably one of the few certainties we can be sure of.

This entire event from start till present has been a ‘Whitewash’ / Suppression / Downplay / Spin of Media and Govt. Apart from telling the World the truth (That there is a probability of not being able to Cap the well, even using Nukes is a consideration to ‘Pinch Off’ the well.) We have an Event in motion that threatens the Planet. Its that serious.

Investors should start thinking in terms of BP’s Derivative Exposure and the Counter Parties who will be left hold the Bankrupt Bag, It will cost Hundreds of Billions of Dollars to clean this up, the area (Thousands of miles of coast, fishing, Tourism, the living space of Millions of people. ) People will soon come to their own correct assumption that this is an Oil Chernobyl, in fact Chernobyl would be an easier fix.

Comments from Moody’s:

“In the event of BP’s restructuring or bankruptcy, CSO transactions referencing BP or its affected subsidiaries may experience what is called a “credit event.” If the credit event occurs, the CSO transactions will have to meet their payment obligations to the protection buyers, which will result in the loss of subordination to the rated CSO tranches. In cases where the subordination is no longer available, CSO investors will incur the loss.
….
We reviewed our entire universe of outstanding CSOs and determined that exposure to BP and its rated subsidiaries appears in 117 (excluding CSOs backed by CSOs) transactions, which represents approximately 18% of global Moody’s-rated CSOs. Exposure ranged from 0.26% to 2% of the respective reference portfolios. The transaction with the largest exposure to BP and its subsidiaries is Arosa Funding Limited – Series 2005-5

The other four companies and their subsidiaries that were involved in the Gulf of Mexico incident, which are Halliburton, Anadarko Petroleum, Transocean Inc., and Cameron International. Halliburton appears in 43 CSOs, Anadarko Petroleum appears in 28 CSOs, Transocean Inc. appears in 79 CSOs, and Cameron International appears in 6 CSOs.”

“A study by Monody’s outlines that a BP bankruptcy would impair 117 Collateralized Synthetic Obligations (CSOs), which would lead to pervasive losses by a broad range of holders. The 117 effected is a startling 18% of the total CSOs outstanding, which is an indication of the scope and impact of BP financing globally. For those that remember the 2008 financial debacle, you will recall its epicenter was the collapse of Collateralized Debt Obligations (CDO) associated with mortgages and Credit Default Swaps (CDS) of financial companies impacted. CSOs are even more leveraged and toxic.”

Fitch dropped BP’s credit rating 6 notches on June 15th from AA to BBB which followed June 3rd's AA+ to AA cut.

“On June 25th BP’s Credit Default Swaps shot up 44 to 580 on the 5 years CDS. This meant it costs $580,000 per year to ensure $10 million in BP bonds over a 5 year contract period. Anything approaching 300 is considered serious risk.”

Political implications parallel the Financial and Environmental, anti British feeling will force Politicos to “Come down Hard” the usual guff, however they Buck doesn’t just stop at the White House it crosses the Ocean to the UK. America cannot afford a Trillion Dollar disaster. That’s what this will cost, count in Trillions not Billions. The cost in lives, displaced people and destruction to the Eco System is on a scale Humanity has never encountered in its recorded history. This ‘News Item’ should be a front page everyday, it seems silence is the only thing enveloping this ‘Spill’.

By the end of October the Gravity of this ‘Spill’ will be obvious to all. Prior to that Investors with any exposure to BP, its Co-Defendants and any Company with exposure to a crippled BP need to get out now before the obvious becomes obvious.