How deep is the financial hardship well?

It is probably no comfort to anyone to reflect on the year when investors could get 14.95% on a bank term deposit. It was January 1991, the recession Paul Keating said we had to have. People with personal loans and credit card debt watched horrified as repayment rates went to 20% and beyond. The average variable mortgage rate rose to 17.5% at the same time. The gap between the haves and have-nots in that era…

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Taking An Interest In Recessionary Economics

The end of financial year meeting of the Basil and Sybil Cheeseparer Superannuation Fund was going well until the Trustees (a) found that their investment strategy was out of sync with reality and (b) failed to find a fixed interest investment that would return more than 2.50% over five years. “We should stick it under the mattress,” said Sybil. “Your side or mine?” quipped Basil. As you should know, even if economics is not your…

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The Eighties and the Sail of the Century

If one symbol conjures up an image of Australia as world-beaters, it is our one-off snatching of the Americas Cup yacht race trophy in the Eighties. Those of you old enough to remember will see in the cloud archive of your distant memory (and maybe want to press delete), former PM Bob Hawke wearing a garish black and white sports coat and declaring: “Any employer who sacks a worker for not coming in today is…

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Don’t touch my dividends, Dude

There have been few occasions when dividends made it on to the front pages or lead item TV news. The first time was when Treasurer Paul Keating introduced the dividend imputation scheme in 1987, largely as a way of eliminating the double-taxing of company dividends. From that day, Australian investors were given franking credits on the dividends they received on their shares. This had the welcome effect of boosting the investment return for the investor…

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