Warren Cammack

• Prediction of 3.5% growth next year in Australia, 1.5% in the US and we’re both very vulnerable to recession
• Prediction that Germany will split from the Euro
• View on poor productivity is that it will improve as business learns to do more with less. We need to get aggressive in terms of obtaining resources from overseas.

• Poor European countries will continue to go through write down, this will cause major problems for European banks.
• Any recession in Australia would be minor
• Believe house prices will vary in loss/gain across country primarily due to the supply of jobs in those areas. There’s still a prediction of housing shortages which will maintain overall growth. House prices will stay strong in the medium term due to booming economy.
• Last time we had an infrastructure boom like this the AUD was trading at 150% against usd. ANZ predict 115 but cannot rule out 130.
• In response to a question on whether US property was a good investment Warren recalled a story of an Australian man who was killed when trying to evict tenants from a Detroit property he had bought. (the recollection was slightly incorrect according to the Herald Sun Story)
• Consumer spending is likely better than the figures that are reported as the aging population of Australia buy more services instead of goods. Also due to currency we are buying more from overseas.
• Consumer behaviour is however changing to be slightly more conservative as our spend/save ratio changes from 97% to 80%.

• Can Asian countries sustain growth despite slowdown in north Atlantic countries
• Strong prospects for Australia
• The trade balance is up $25bn (2%), this may reach 3% and increase inflation risks and hence why the RBA may raise rates to counteract that. In the medium term rates should go up.

 Shane Oliver

• Concept of the Australian two speed economy is exaggerated as there is only a 2% difference in employment between mining and other industries. Compare this to employment in the Netherlands of between 5% and 20% depending on the industry.
• Believe that unemployment will go up by 5% and there will be rate cuts towards end of the year to stimulate the economy.
• Singapore is on the brink of recession
• The average Sydney house costs $630k, the average house in LA is $350k. Relative incomes are however the same. Inflation is not caused primarily by private supply/demand. Lots around services, council rates etc which are due to government policy.