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Surprise rise in CAPEX
Topic Started: 28 Aug 2014, 01:53 PM (3,069 Views)
Lef-tee
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Some good news today, CAPEX actually picked up.

This is a good sign. To me it suggests that low interest rates are continuing to have some positive effect on growth and business intentions.

However, it would be unwise to clutch at every little uptick as evidence of a smooth changeover. Non-mining CAPEX is going to have to go full-throttle and continue that way to offset the barely-beginning wind down in mining investment.

But for now it's a good sign.
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Dr Watson
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What implications does this have for the MacroBusiness prediction of a "capex cliff"? Is the said cliff still looming?
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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stinkbug
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Pragmatically, we need to keep an eye on it and see if this is a trend, or whether it's just an anomaly.

I wouldn't be surprised if it was the beginning of a trend (interest rates and all), but we should watch and see.
Edited by stinkbug, 28 Aug 2014, 02:10 PM.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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peter fraser
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Dr Watson
28 Aug 2014, 01:59 PM
What implications does this have for the MacroBusiness prediction of a "capex cliff"? Is the said cliff still looming?
I think there will still be a fall in capex, but no matter if there isn't, those who look for things to complain about will never be disappointed.
Any expressed market opinion is my own and is not to be taken as financial advice
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Jimbo
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Lef-tee
28 Aug 2014, 01:53 PM
Some good news today, CAPEX actually picked up.

This is a good sign. To me it suggests that low interest rates are continuing to have some positive effect on growth and business intentions.

However, it would be unwise to clutch at every little uptick as evidence of a smooth changeover. Non-mining CAPEX is going to have to go full-throttle and continue that way to offset the barely-beginning wind down in mining investment.

But for now it's a good sign.
In WA we have squandered the CAPEX boom on useless monuments. Elizabeth Quay being the prime example.

We could have built better road and rail links and improved our productive capacity but we decided instead to build some more empty offices next to the river.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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b_b
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Jimbo
28 Aug 2014, 04:10 PM
In WA we have squandered the CAPEX boom on useless monuments. Elizabeth Quay being the prime example.

We could have built better road and rail links and improved our productive capacity but we decided instead to build some more empty offices next to the river.
WA's capacity to build better roads and rail links has been enhanced by the end of the capex boom. The worst time to build public infrastructure is when the private sector is booming - since the real cost of resources are bid-up.

So now is the right time since real resources (labour and materials) are now becoming more available now that the mining sector is shrinking.

The only thing missing is political will.
(S – I) + (T - G) + (M - X) = 0
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Perthite
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b_b
28 Aug 2014, 04:23 PM
WA's capacity to build better roads and rail links has been enhanced by the end of the capex boom. The worst time to build public infrastructure is when the private sector is booming - since the real cost of resources are bid-up.

So now is the right time since real resources (labour and materials) are now becoming more available now that the mining sector is shrinking.

The only thing missing is political will.
It was all badly mistimed and that is why the costs just blew out enormously on every project.

I agree... Problem is the gravy train of royalties is stuttering.

They put my work up for sale today the wankers.
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Jimbo
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b_b
28 Aug 2014, 04:23 PM
WA's capacity to build better roads and rail links has been enhanced by the end of the capex boom. The worst time to build public infrastructure is when the private sector is booming - since the real cost of resources are bid-up.

So now is the right time since real resources (labour and materials) are now becoming more available now that the mining sector is shrinking.

The only thing missing is political will.
Apart from the fact that we built monuments using labour prices that were bid up by the CAPEX boom and we have no money left to build roads and railways.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Veritas
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b_b
28 Aug 2014, 04:23 PM
WA's capacity to build better roads and rail links has been enhanced by the end of the capex boom. The worst time to build public infrastructure is when the private sector is booming - since the real cost of resources are bid-up.

So now is the right time since real resources (labour and materials) are now becoming more available now that the mining sector is shrinking.

The only thing missing is political will.
And a time machine to go back 15 years and set up a Sovereign Wealth Fund.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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b_b
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Veritas
28 Aug 2014, 05:00 PM
And a time machine to go back 15 years and set up a Sovereign Wealth Fund.
Why do you need a SWF to build a road? How were roads built in the past?
Jimbo
28 Aug 2014, 04:57 PM
.....and we have no money left to build roads and railways.
I must admit, it is real concern that Australia no longer has any more Australian dollars...does the RBA know?
Edited by b_b, 28 Aug 2014, 05:06 PM.
(S – I) + (T - G) + (M - X) = 0
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