Tsunami watch list
Thursday, November 1, 2007/
If Costello’s tsunami rolls in, surfing it safely is not an option. But keeping your head above its water – maybe. Here are some tips…
Small business owners should use November to recruit temporary staff that can help them rake in the cash while the sun shines, despite the uncertainty.
Take on more staff than you need and reward those that grow your customer base by offering the prospect of real jobs in the coming year.
Then, if the good times roll on after the election, you will have a hot team converting electoral giveaway cash to long-term assets for you. If, however, the Costello “tsunami” reality strikes, you will have locked in the best staff team to build your brand reputation in the times ahead.
It’s time, for sure, to review the section of business and marketing plans that relate to risk assessment and make a new watch list.
First watch the US Federal Reserve. Is it on a crash alert trajectory or is it on an export driveway?
If the Fed is really worried about the US as a global engine that is giving financial engineers the shudders it will only make another minor adjustment to the rates.
The Fed will attempt to take the US dollar down a peg and our major banks will be forced to take mortgage rates up to 10% if they believe that the really wealthy are still spending up big on property.
Watch the Fed shift to gold, moving away from $US-denominated assets and hedge against the new Chinese leadership slowing their imports.
Remember that in the United States the number of sub prime loans that were behind in payments soared to 29%, compared to 18% a year ago, so the worst is yet to come.
Next watch the Melbourne Cup. On the same track we will see all of these features at work. The “affluents” will make this a betting spree to suppress their anxiety about who will win the great race – Costello or the RBA.
If the overall numbers of punters is high but the average bet is low, anticipate a small business Christmas that is long on food, family and household pressies rather than a surge in big ticket items and extended credit card debts.
Then watch the prospects of David Jones and Wesfarmers against the new kids on the block who are betting that the luxury and top-end market is going to open avenues for value and basics.
The international retailers are circling like white pointers on the West Aussie coast, expecting that the really affluent are going to cut and run from the equities market and begin anti-recession proofing their family incomes.
If the tsunami that Costello has predicted occurs, find ways to get your customers and friends to buy gift vouchers that can be cashed in at the splendid discounts of the New Year sales. There will be more cheap imports and even cheaper overseas holiday deals for all those with access to their super savings.
Speculators are playing the market like shifting bets from black to red at the only legit casino in Sydney. The “Star City mentality” is that while China and India are on a massive growth surge and do not agree to environmental controls required by the Government’s international alliance strategy, it is safe to expect a return of the Howard Government.
Finally, watch the betting market rather than the upsy-downsy world of the worm and the opinion polls.
Depending on which state you are living in, watch the daily movements on the electoral betting market for Bass, Blair, Eden-Monaro, Kalgoorlie, Deakin, Robertson, Solomon, and Wakefield.
If the locals in these markets go against the national polls, you better bet on a December sitting of the Howard/Costello team to pull on the breaks and put the nation on a massive credit crunch ahead of a major RBA intervention to soak up the surge.
Surfing the tsunami is not an option, and avoiding the warnings that the boss is not heeding could make the previous sub-prime triggers bring on the recession we don’t have to have. As we turn into the home straight and the old/new leadership backroomers plot their campaigns, watch for some of these straws in the wind.
To read more Colin Benjamin blogs, click here.
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