Australia-Another Interest Rate Hike?

Watch out for another Australian interest hike this week. So reports Reuters.

On November 2, the Australian government once more upgraded its economic and fiscal outlook citing a more resilient domestic economy proved when compared to 6 months ago.

Australia boasts of being the only rich nation to have avoided recession during the global financial crisis. Last month, it became the first among the Group of 20 industrialised economies to raise interest rates as a global recovery emerged.

But the government on Monday sought to play down expectations for a rapid recovery, sketching a slightly weaker recovery than the central bank has forecast, and warning voters that the budget will remain in the red for at least seven more years.

“Despite the improved outlook, the global recession has still had a marked effect on the Australian economy and challenges remain,” Treasurer Wayne Swan said in his regular November review of budget estimates and forecasts.

“The economy is expected to continue to operate below capacity for some time and unemployment is still expected to rise.”

The government upgraded all its major economic and fiscal forecasts, as expected, with the outlook for growth, joblessness and the long-term fiscal deficit brighter than it appeared back in May, when the government framed its 2009/10 budget.

The government revised its economic growth forecast to 1.5 per cent for the year to end-June 2010, up from a 0.5 per cent contraction predicted in May, though its growth forecast of 2.75 per cent for the following year falls short of the central bank’s forecast for 3.25 per cent growth in 2010/11.

The government also forecast fewer jobless than expected in May, trimming its jobless forecast to peak at 6.75 per cent in 2009/10. Previously, the peak was seen at 8.5 per cent in 2010/11.

But the government’s inflation forecast also climbed to 2.25 per cent for 2009/10, from a May prediction of 1.75 per cent. Inflationary concerns prompted the Reserve Bank of Australia last month to raise its official cash rate from a record low of 3 per cent, taking it 25 basis points higher.

The bank is expected to raise the rate by another 25 basis points on Tuesday.

The stronger growth and jobs figures will be welcome news for Prime Minister Kevin Rudd as he heads into an election year in 2010, with his government under political attack for spending too much on economic stimulus.

Rudd remains well ahead in opinion polls, and may call a snap election early in 2010 if a hostile parliamentary upper house continues to block his reform agenda. –

China: Buoyant Optimism in Industrial Production

This was taken from a Reuters report.

In an 18-month window, China's vast manufacturing sector expanded at the fastest rate in October 2009 according to a survey. Economists expect the momentum to be sustained in the coming months.

The purchasing managers’ index (PMI) issued by the China Federation of Logistics and Purchasing rose to 55.2 last month, the highest level since April 2008, from 54.3 in September.

It was the eighth month in a row that the official PMI has stood above the boom-bust line of 50. The index, which is designed to provide a timely snapshot of business conditions in industry, slumped as low as 38.8 last November as the global financial crisis raged.

Zhang Liqun, a researcher with the Development Research Centre, a think-tank under the State Council, China’s cabinet, said the report showed the economy was now firmly on the recovery track.

In a comment for the logistics federation, Zhang said gains in the sub-indexes for imports and new export orders reflected growing demand both at home and abroad.

“All these show that economic growth will accelerate in the future, and the growth rate in the fourth quarter is likely to be 9.5 per cent,” he said.

Annual gross domestic product growth accelerated to 8.9 per cent in the third quarter from 7.9 per cent in the second.

The report was not universally strong. Growth in employment slowed, inventories of finished goods fell and input price inflation eased.

But Jing Ulrich, chairman of China equities and commodities at JP Morgan, agreed that the survey — especially the forward-looking components — suggested sustained expansion in industry.

“While public investment may moderate in the months ahead, private real estate investment, consumer spending and export demand should drive growth in the coming months,” she said in a note to clients.

Ulrich singled out a revival in property construction as developers replenish housing inventories. New starts rose 56 per cent in September from a year earlier.

Construction — infrastructure as well as property — accounts for a large chunk of China’s demand for materials, including 52 per cent of steel consumption, which grew 44 per cent in September from a year earlier, she noted.

Like other countries, China has started to debate the timetable for a gradual withdrawal of the monetary and fiscal stimulus it injected to support the economy through the crisis.

The government is almost half-way through a 4 trillion yuan (RM2 trillion) pump-priming programme, while the country’s mainly state-owned banks have increased their loan books by a third over the past year. In the first nine months of the year they lent a whopping 8.67 trillion yuan.

Ulrich, voicing the consensus view, said a broad-based macroeconomic tightening was unlikely over the rest of 2009.

“Until greater inflationary pressure and a sustained recovery in exports become apparent, pro-growth economic policies are expected to remain in place.

“Messages from the authorities suggest that they are not planning to withdraw stimulus measures in the near term, although the government is clearly fine-tuning policies for sectors that are prone to overcapacity,” she said.

That fine-tuning is also taking the form of orders to banks to ease up on the pace of lending. Yu Song and Helen Qiao at Goldman Sachs said this tightening was positive because it would slow credit growth to a rate that was sufficient to fuel the recovery while reducing overheating pressures down the road.

“We expect October activity growth data to continue to show firm readings when they are released on November 11,” the economists told clients.

So, the future looks bright for the Chinese economy during the final months of 2009.

Nurul Izzah-Up Close

This is a short interview with Nurul Izzah,MP of Lembah Pantai. It is an interesting read.

Q1: If you have to say it in six words, what would you say to Lembah Pantai folks?

A: Let us exercise our collective power.

Q2: What is your biggest fantasy as an MP?

A: Debating as well as George Galloway.

Q3: What was the first thought you had when you found out you’re the MP for Lembah Pantai?

A: A triumph of democracy and hope.

Q4: What have you learned since becoming an MP?

A: The people are the real bosses.

Q5: Do women make better MPs?

A: Yes, in certain aspects, we are!

Q6: Why?

A: We tend to have more empathy.

Q7: What is your greatest achievement so far
(as an MP or in whatever role you play in life)?

A: Challenging authoritarianism with my committed team.

Q8: If you were the Education Minister, what would be compulsory
subjects in secondary school?

A: True Malaysian history and many languages.

Q9: What are your favourite causes?

A: Education, Empowerment, Environment and (local) Elections.

Q10: What is development for?

A: Increasing individual capacities, otherwise it’s pointless.

But That's Not My Job!

This will happen if you take your job too seriously!


In this case,the guy drawing the lines just drew his lines irrespective of what roadkill lies on the road. What a fun picture!

What a Creative Tee -Shirt!

Some people are born naturally creative;others like to explore and discover their innate giftings.

For instance, look at this tee-shirt. Don't you think it is great?

Make sure you are at work or else.....

Yes, do not leave your work station for too long a time;other wise you may find this happening to it!

What a Twist of a Joke!

A contestant Sally, on 'Who Wants to be a Millionaire? ' had reached the final plateau..

If she answered the next question correctly, she would win $1,000,000.If she answered incorrectly, she would pocket only the $25,000 milestone money.

And as she suspected the Million Dollar Question was no pushover.

It was, 'Which of the following species of birds does not build its own nest but instead lays its eggs in the nests of other birds? Is it:

A) the condor?

B) the buzzard?

C) the cuckoo?

D) the vulture?

The woman was on the spot. She did not know the answer.She had used up her 50/50 Lifeline and her Ask the Audience Lifeline. All that remained was her Phone-a-Friend Lifeline.

She hoped she would not have to use it because..... ... Her friend was,well, a blonde.

But she had no alternative. She called her friend and gave her the question and the four choices. The blonde responded unhesitatingly:

'That's easy. The answer is C: the cuckoo..'

The contestant had to make a decision and make it fast.

She considered employing a reverse strategy and giving any answer except the one that her friend had given her.

And considering her friend was a blonde that would seem to be the logical thing to do. But her friend had responded with such confidence,

Such certitude, that the contestant could not help but be convinced.

Crossing her fingers, the contestant said, 'C: The cuckoo.'

'Is that your final answer?'

'Yes, that is my final answer.'

'That answer is Absolutely correct!

'You are now a millionaire! '

Three days later, the contestant hosted a party for her family and friends, including the blonde who had helped her win the million dollars.

'Jeni, I just do not know how to thank you, ' said the contestant. 'How did you happen to know the right answer?'

'Oh, come on,' said the blonde 'Everybody knows that cuckoos don't build nests. They live in clocks.'

Sally fainted.