Peachy if we are to sex up our ability to manufacture,then wages must fall significantly.I don't think that this present Govt has a clue.

Costello had a grasp of the big picture while Swan gropes for words to express his economic ignorance.Rudd is cutting back now since he knows a recession will mean Govt debt in terms of unemployment benefits and loss of tax revenue as in the Keating recession.I still think that Rudd is trying to bring it on early in the hope that things will improve come the next election.Their only hope is private enterprise since Govt is basically useless.A leaner Public Service will take the pressure off the private system that is the life blood for everyone.

The states however will have to follow suit,since they are the greatest offenders in the stakes of waste and inefficiency.Rudd must read the riot act to them particularily.Govt bureaucracy must be reduced at all levels.We have strangled private enterprise with rules regulation and legality.

I don't think that Rudd is up to the challenge,and a public that has not seen a recession for 18yrs,will not tolerate or be understanding of another Labor debacle.

Want a news flash?

Here is what every business pundit from Wall street to St Georges Tce are saying.

American Fed Reserve bailing out Bear Stearns and others can only be supported by high inflation or extreme interest rates.

You just gotta love it when those chickens come home to roost.

Oh Dear! Couldnt happen at a better time, what gluttinous fowl we have become.

Our snouts have been so busy feeding from the trough we are unaware we will be the next meal....

I think Costello and Co will gradually end up wearing the blame for much of what is yet to come as the full impact of their legacy is realised.

Selling off most of our gold reserves plus as many public assets they could made the bottom line look good for a while, but now we are in the position where the Singapore government owns more of our public assets that the Australian government does. The only way we can raise money now is through increased taxation if unemployment rises or further cuts to expenditure.

The previous flow of dividends coming in from government enterprises is being replaced by outgoing taxpayer subsidies (in the case of Telstra's service obligations for example) or increased consumer costs to maintain privatised company profit levels. (Privatisation = private wealth + public squalor?)

Add the billion or so lost on dubious currency swaps, the failure to budget for Public Service Pensions for many years plus the lost opportunities to invest in large-scale infrastructure, and it really wasn't a very responsible track record for the long-term.

Their biggest failure however, was to convince everybody that they were suddenly somehow wealthier and that encouraged the current orgy of debt and spooked many into buying into an already overpriced housing market.

I heard that it take six-and-a-half tons of coal to be dug up and exported to import one plasma TV. How much of our primary industry output has already been pre-spent?

It's going to be a bumpy ride and we may be more vulnerable than we realise.

A worthwhile thread about the international credit crisis and its effects.
Yet arjay has used it to promote a failed government and question another, both little to do with the subject.
It is true, for 11 years we spent ourselves into trouble, personal, national, and government handouts had free passage.
Our balance of trade has left us deeply in debt as a nation.
We all know of body language, it tells us of the hidden thoughts of the person we talk to.
Arjay I see the pain in your posts, the hope Labor will fail , the fear and miss use of the truth.
Any day federal Parliament sits I see it too from your side of the floor, the small rump of past days , the fear and lies are not policy's.
And they are not working.

Jeez, I just saw an interview on the ABC Web-Site that was headed, 'Economic crisis worse since WWII, Greenspan says’.

He caused it ! (helped a little by the greed of the banks and people who were prepared to borrow such preposterous amounts of money to speculate on the real estate market. We used to just call it buying our home.

Now, Greenspan advises a large hedge fund. Conflict of interest? If he is talking the market down, and he advises a hedge fund, is it time to go long?

Yes it is as bad as Greenspan says, maybe worse it will take a very long time to improve.
We may see ten years of low returns in our super funds ,this year a minus? surely?
How can it be if we borrow the money we take never truly exists? but the profit those lending it to us does?
A trip away from the normal, a day spent reading international finance news might have stopped some in real trouble, using borrowed money to invest in falling shares.