Perthite

14 Sep 2011, 11:02 AM

Everywhere else it's falling.

http://www.news.com.au/business/tough-times-add-up-to-12pc-insolvency-rise/story-e6frfm1i-1226136538400

AUSTRALIA has joined the ranks of some ailing European nations to record a sharp rise in business failures in the June quarter, according to the latest survey by Dun & Bradstreet.

Despite insolvencies falling to their lowest levels globally, Australia recorded a 12.1 per cent rise in business failures in the June quarter -- up from 4.1 per cent in the previous quarter, The Australian reports.

Australia has now joined some struggling European economies including Hungary, Ireland, Italy, Portugal and Spain, with a sharp rise in insolvency risk.

Shadow

14 Sep 2011, 11:24 AM

Interest rates down?

Quote:

 

Insolvencies hit second-highest level in history in August

By Madeleine Heffernan
Tuesday, 11 October 2011

Another month, another set of ugly collapse figures – the number of corporate insolvencies reached their second-highest level in August since records started in the late 1980s, according to the Australian Securities and Investments Commission.

The new figures show that 1,049 companies entered external administration in August 2011, up 14% from 921 in July, and 20% higher from 870 in August 2010.

The numbers, released last week, also show there were 1,531 insolvency appointments in August – an increase from 1,248 in July, and 1,289 in August 2010.

Cliff Sanderson, of company liquidator Dissolve, says the August monthly figures mean there have been six monthly highs so far in 2011 – and the Australian Taxation Office is largely behind the increase.

"At the basis of a lot of them is the ATO," Sanderson says.

"While the petitions they lodge in court are up a bit but not a lot, the ATO's actions cause a lot of directors to move. And as they would – they're often the last to get paid."

Sanderson says while ASIC doesn't break the numbers down into sectors, Dissolve is seeing lots of activity from small retailers and tradies such as builders and plumbers who have about five to 10 employees.

He says while calls to Dissolve in September were lower than in August, the insolvency records won't stop unless the ATO decides to soften its stance against struggling companies.

"I predict moderate further increase throughout the rest of year, but this is largely dependent on the ATO," Sanderson says.

"The ATO put away their pen a few years ago and if they get the same instruction, the numbers will turn around, but it's a fake turnaround."

"If the ATO continues to plough through its backlog, the numbers will increase."

State-by-state, Sanderson says Tasmania and Western Australia are "looking bad," collapses in New South Wales have reached a plateau, Victoria is up a bit, and calls from Queensland are on the up.

"Based on indicators over the last couple of months, the effects of the floods are starting to come through," Sanderson says.

Read more: http://www.propertyobserver.com.au/residential/insolvencies-hit-second-highest-level-in-history-in-august/2011101151879

Quote:

 

Insolvencies to stay at record highs despite rate cuts

Clancy Yeates
May 17, 2012 - 10:37AM

Historically high levels of corporate insolvency are tipped to continue in the economy’s struggling industries, despite this month’s hefty cut in interest rates.

As the number of corporate failures continues to rise, the chief executive of the credit reporting agency Dun & Bradstreet, Gareth Jones, said the number of companies going into administration in weak industries was likely to remain high.

There was a 16.7 per cent annual rise in the number of companies tipped into administration in the March quarter, figures showed last week.

Mr Jones said lower interest rates would do little to help businesses in financial strife, especially those in struggling sectors such as retail and manufacturing.

‘‘There are clearly certain sectors of the economy that are feeling the pressure more than others and this may continue to result in relatively higher insolvency numbers among these firms,’’ Mr Jones said.

‘‘Industries such as manufacturing, non-mining related construction and retail are most affected by conservative consumer spending and the high exchange rate — one of the contributing factors to shifts we are seeing in the overall structure of the economy.’’

Businesses applauded the Reserve Bank’s 0.5 percentage point cut in official interest rates this month, and Mr Jones said this may help companies with outstanding debts.

However, he added: ‘‘For businesses experiencing severe financial distress, a reduced interest payment may not be sufficient to put their cash flow cycle back where it should be.’’

Read more: http://www.smh.com.au/business/insolvencies-to-stay-at-record-highs-despite-rate-cuts-20120517-1ys6u.html#ixzz1v5TYJM00

TED BULLPIT

17 May 2012, 12:04 PM

This is what many bulls eem to disreguard completely.
The fact that people without jobs cannot pay their mortgage or buy a house.
It really is quite simple.

peter fraser

17 May 2012, 12:16 PM

Corporate failures Ted. We are still well below the recession levels of the nineties when we had 11% unemployment, don't get excited.

If we are going to get screwed it will have to come from China, and if that happens you won't like it any better than I will.

audas

17 May 2012, 01:11 PM

peter fraser

17 May 2012, 12:16 PM

Corporate failures Ted. We are still well below the recession levels of the nineties when we had 11% unemployment, don't get excited.

If we are going to get screwed it will have to come from China, and if that happens you won't like it any better than I will.

What do you mean - will have to come out of China - its already come from China.
And its what we have been saying all along - China will pull back and take Australia down with it - already happening - BHP has set the tone.

You were warned - you failed to heed the warning.

peter fraser

17 May 2012, 01:19 PM

OK then - what day is that happening?

Do you think that a pull back will be the end of the world, because that would suit me fine, I could buy property for nothing, but I just haven't seen it happen yet despite being told almost daily for almost four years.

You tell me about the fundamentals, but really the fundamentals are only part of the story with housing, it is affected by other factors such as political interference and stimulus from the RBA.

So I reiterate my position - you need a big crash in China to make a large difference here. I'm not suggesting that it can't happen, it could, but it hasn't happened yet despite many many dire warnings from you and many others.

TED BULLPIT

17 May 2012, 01:57 PM

peter fraser

17 May 2012, 01:19 PM

OK then - what day is that happening?

Do you think that a pull back will be the end of the world, because that would suit me fine, I could buy property for nothing, but I just haven't seen it happen yet despite being told almost daily for almost four years.

You tell me about the fundamentals, but really the fundamentals are only part of the story with housing, it is affected by other factors such as political interference and stimulus from the RBA.

So I reiterate my position - you need a big crash in China to make a large difference here. I'm not suggesting that it can't happen, it could, but it hasn't happened yet despite many many dire warnings from you and many others.

What day is it happening , you ask Mr Fraser. That is such a narrow minded and smartarse response not to mention childish, because you know it is happening now. This is a perfect example of what you asked earliear as to why I have called people an idiot with no explanation. I explained it clearly to you within the last hour or so and yet here you are again. Your not making it easy for me to refrain Mr Fraser with such mindless comments and questions . Your credability here is not looking so good these days to put it mildly

peter fraser

17 May 2012, 02:26 PM

Ted - when you see several down days where the DJIA loses 500 points then I will know that it has hit the fan again.

DJIA

A big slowdown in China will also hurt the USA, there is a lot of US investment in China, and a lot of US firms have had most of their growth in the emerging markets. Watch the S&P 500 and the NASDAQ as well, probably more so than the DJIA, but that's the index the media quote.

Be careful about those Kouk tweets if you have been watching them, I find that he is a bit excitable.

Perthite

14 Sep 2011, 11:02 AM

Australia recorded a 12.1 per cent rise in business failures in the June quarter