Our stock market added 114 points yesterday after a triple-digit lead in from Wall Street. And again, the New York Stock Exchange is in positive territory, so let’s look at the big story our major newspapers aren’t leading with.
Imagine the headlines if the ‘main man’ for determining whether we end up in recession or a boom — the Reserve Bank of Australia — substantially downgraded our economic outlook. What would follow would be front-page declarations like “Economy down the gurgler!” or “Recession looms and unemployment will rise.”
Sure, the whole concept of the RBA and my old mate, Governor Glenn Stevens, doesn’t do a lot to get the blood racing like a “10 Sexiest Aussie Politicians Ever!” headline, which you could imagine showing up one day! Newspapers and their websites have to cater to their audiences so click-bait headlines are important for their survival.
It’s sad because in an era when a newspaper was the main source of news and was then ripped off by radio and TV for the big stories of the day (as they still do to a degree), anyone who bought a paper encountered serious, educating, mind-expanding front-page stories.
This isn’t happening so much nowadays.
Yes, I know, today I’ve gone with the unusual headline “What in the F is wrong with good news?” and it shows I’m a product of the new age. However, I am a commentator not a reporter, though I do a hell of a lot of reporting of the facts on the economy, stock markets and investing, which a lot of my rivals choose to ignore.
Here are yesterday’s facts from the RBA’s last interest rate meeting:
• Our economy is growing faster.
• Growth is expected to be between 2–3% over the year to June 2016, before rising to 2¾–3¾% over the year to June 2017.
• Employment growth is stronger than expected!
• A rate cut is still possible if inflation remains low and wage rises don’t pick up.
This is a very positive story and I know Australians at this point in the economic cycle actually enjoy seeing good news for our economic prospects. I’ve done two speeches in the past two weeks, where I simply showed the run of good economic news that I’ve shown regular readers here and people were staggered that there was so much good news around.
Congratulations from members of the audience followed and selfies too, of course, but it shows our media outlets are primarily breeding negativity. This economy of ours is at a crossroads or, more accurately, a turning point. If external news can be positive, then I think 2016 will surprise on the upside (economically and market-wise) but it needs help from the media as well.
Some right-wing commentators, who still regret the demise of Tony Abbott, keep asking why are people so positive about Malcolm Turnbull when “he has done nothing?”
Well, policy-wise, they’re right but he has talked the right talk about innovation, encouraging entrepreneurs, infrastructure spending and, more importantly, he has helped raise business and consumer confidence.
Last week’s unemployment and employment numbers helped the snowball of confidence building and headlining that the RBA thinks the next financial year — July next year to June 2017 — could grow at 3.75% is huge news.
Any growth over 3% means the unemployment rate falls. It implies that wages rise, inflation becomes more usual and we have a more normal, healthy economy. We would have finally beaten the persistent malaise from the GFC and that would be huge too!
You all know I carry the can for "positivity" but I wouldn’t if I believed the economists who have been pedaling stories about the economy that even hinted at recession, which some poor Aussies have read and believed.
In September, the SMH led with “Australian recession a one in three chance: Goldman Sachs”. In October, a Deutsche Bank report linked recession to a housing collapse and the SMH ran hard with it. Why can’t it run with “RBA gives economy the thumbs up?” Or something even better? That’s a good question, isn’t it?
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