As I write the share market is the highest it has been since November 2008.  Does this mean that the economy is in great shape?  I think not, but what it does mean is that there is more confidence in the belief that the economy will recover.

Many people are buying shares through their super funds before the May Federal Budget and others are taking the opportunity to buy very sound companies at very good prices. Will the Budget affect the markets? Well they always do in some way, and this time the Treasurer has been fairly candid about “hitting the wealthy”.

Just why they think that is a good idea is beyond me. I saw the damage that did during the Whitlam era when the wealthy were penalised simply for being successful. When this type of small minded behaviour happens it does far more damage to those who can least afford it than to anyone else.

What happens is this; the wealthy stop spending. So what happens then? They have small private dinners at home, they decide not to buy the designer clothes, and they decide to only have a facial every couple of months instead of every month. They postpone the house renovation and drop the regular fresh flowers every week and just have them for special occasions.  The cleaners come once a fortnight instead of every week and the landscape gardener is replaced by Jim’s Mowing once a month.

In short, the people who need the work that the wealthy provide lose out.  It also follows that stores reduce their inventories so that spur of the moment sale is lost when someone has to wait for their size to come in, or the new couch is cancelled once someone has a chance to rethink if they really need the new couch. They hang on to the current car rather than buy a new one and they go to cheaper restaurants and not as often as they did before.
That’s where the job losses will build from, not just from the effect of the global crisis. We must have the Federal Government take action to provide confidence in the economy by stimulating investment in infrastructure, such as the much mooted Broadband national network. We need to upgrade our ports, the railways and hospitals. Education needs to be improved so that our children do not leave school with the vocabulary of texting rather than the ability to express themselves and their ideas in sound terms .They need the mathematical skills and analytical skills to make their way in a world that may be very high tech, but still needs creative thinkers to keep our nation abreast with the rest of the world.

There have been lots of suggestions that the Budget will affect superannuation. Well that would not be a surprise;  I have given up keeping track of the changes in relation to super. If I remember correctly it was about 2000 changes between 1984 and the mid 1990’s and we lived through all that so I guess we will cope with the next lot.

The next few months will still be difficult for everyone who depends on others buying their goods and services. Those who are employed should be thankful and take the opportunity to build themselves a sound base of financial security by saving as much as they can and only paying cash for goods and services purchased and not using credit for non essential or indeed essential expenses.

It’ s surprising how much you can do without if you only spend cash and do not use your credit card. The people who are going to learn bitter ,but life changing lessons are those young people who  have had good jobs and spent everything that they earned and then topped that up with credit card debt. These are the very people who are most at risk of losing jobs and who will find it harder to become reemployed.

Older workers are going to remain employed for longer and employers find them stable and reliable. The show pony employee will be at risk if there are to be job cuts. All workers should aim to save at least six months living expenses as a backstop to provide for them if they lose their job. A new job will be harder to find and it is very possible that the salary will be lower than the previous job.

This recession will last longer than the previous ones over the past twenty years. The reason is that fundamentals in the financial systems worldwide have to be worked through and we also face increasing claims from underdeveloped countries to participate in the overall wealth of the world. Modern communication means that no nation is unaware of the lifestyle of the developed countries; they see that for the most part all the potential has to a certain extent been squandered by indulgent living by the people, who like the grasshopper in the fable, sang and played all day and did nothing to set resources aside to provide for the days when things were not so easy.

This is the time of the ants who work and put food aside for the bad times. They are the people who have money in the bank to take advantage of lower cost assets. They can buy the house that is worth 10% less than a couple of years ago , they can buy the shares that now are at low prices but paying very good dividends,  in short they have provided for poor times and then they can take advantage of good opportunities  that are now available.

If we can teach young people one lesson out of this recession it should be to always have some money behind you in the bank as a backstop. Spend less than you earn and like the Scout motto “Be Prepared” for anything that life will throw at you. Money does not solve all problems but it sure does make dealing with problems easier. Having money behind you gives you choices about where you live and what job you might take, but mostly it gives you peace of mind and  the opportunity to live with dignity and not be dependant on handouts from the government or relatives.
We have had some welcome autumn rain and more will be much appreciated. The cold days certainly turn our minds to nice hearty soups, and warm slippers. This may be a bear rally that we have seen, but the trend is to the market rising, albeit slower than most of us would like. There is light at the end of the tunnel and from all we can research it is not a train coming towards us.

Keep warm, and fingers crossed for more rain,

Jen, Rose and Lina the Canine Receptionist

You will find your reports this month a little more cheerful than the last few months. Now the Aussie share market seems to be trying to stabilise at between 3200 and 3600 and this is a positive sign, as it is doing so in spite of the continuing poor news from overseas.

Retails sales are down and we do seem to be saving rather than spending money which may not be so good in the short term for the economy, but it is to the benefit of all in the longer term. We still have major issues that are not occupying the minds of our governments at either state or federal level, with drought or the now very concerning lack of water for capital cities.

In our view, instead of handing out money to taxpayers to stimulate the economy, the Government would be better to issue Commonwealth Infrastructure Bonds that we all could invest in to build better water supply and much improve transport infrastructure. This would provide jobs and a real long term benefit to the nation. But I guess we face as usual politicians who are focused on getting their pet projects passed and winning the next election which will be along sooner than we all realise.

The financial data that is coming forward suggests that although we certainly are in a severe downturn and things may get a good bit tougher over the next few months, there are signs of improvement. The tragic bushfires and floods will give some stimulus to the jobs area so it does seem to be true that “every cloud has a silver lining”  although  it has been jolly hard on those who have had their lives wrecked.

We have been going through our cupboards to see what is in good condition that we do not need to pass on to our favourite charity the Salvation Army. In doing this I remember just why our family has always supported the Sallies. My grandmother’s brother served in both the World Wars, and Uncle Jack would often tell us of the great work they did at the front and at departure points for troops.. He used to tell us of a Sally officer appearing out of the dust and smoke to offer “a cuppa and a smoke mate, and can I post your mail for you?”

It was the caring and practical assistance that my uncle found so helpful; he was an ambulance driver for the Army and saw all the good that was done. Later I was involved during the 1960s in bushfires and again was so impressed by the practicality of the Sallies. I guess we all have our pet charities and that is a great thing, times like these give us all a reminder that although we think that times are bad for us there are many who would count themselves very fortunate to be as well off as we are.

Budgeting is becoming a popular subject of discussion and we are always happy to help with fine turning budgets so there is still some fun money available. It is quite obvious that many people have discovered their local library. There are lots of items like CD’s and DVD’s as well as books and magazines that can be borrowed. Our library has internet access that people can use as well. So different from when you had to whisper and look very respectable to borrow 5 books at a time. I can take out 25 items at once. So it is worth a look especially if you have special interests like knitting and other crafts, you can save a lot by not buying books but borrowing.

It is apparent now that many folk are losing their jobs, and  this is a very difficult thing to face especially if you have worked for the same firm for a long time. It is important to remember to go to Centrelink as soon as possible to check what benefits are available. Redundancy payments have special tax treatment and not getting  good advice as soon as you lose a job can cost you very dearly. Moss Financial has been dealing with redundancy since 1985 so are well experienced in making sure that the funds are used to the clients best advantage so that they can receive Centrelink as soon as possible and that they understand just what their tax liability is . We are also happy to network amongst our contacts to try to assist with finding new employment for those who have lost jobs.  The rules have changed regarding redundancy payments so what many people think are the options are not necessarily so.

We have noticed that some people interested in the Transition to Retirement Pensions. These are pensions where you take a pension from your super fund while still at work. This can be a good option for those who would like to take the opportunity to either work a shorter week or who would like to save into their super fund more than they are currently but still take home the pay they need to live on. There are some rules involved and some details need to be just so in setting these arrangements up. One is the wording of the document to the employer asking them to make the arrangement to salary sacrifice super payments. Failure to have the correct wording may cause the tax benefit to be disallowed.

We are always happy to help people get these details sorted as part of our ongoing service. We hope that you have had some rain at your place. We had a lovely downpour that has cheered us up enough to plant some winter veggies.

Well Easter is almost here and you will be pleased to know that Lina the canine receptionist has been looking after the Easter Bunny. She takes this responsibility very seriously as you can see. Minding the door is a big job as well, note the wagging tail.

Daylight saving has ended and we are pleased as Lina is not that keen on walking in the dark in the mornings. She wants to know what you humans do with all this daylight you save. She likes to go to bed early and the birds keep her awake, they are as bad as the possums pinching the quinces and banging around on the metal roof while they do so.
Home made soup time is near so we trust you all keep well.

Jen, Rose and Lina the Canine Receptionist

Interest rates down to pre decimal currency levels……….. hottest and driest weather for seventy years in the southern states and the opposite in the northern states…………. Europe almost at a standstill with heavy snow and storms…………….  unemployment rising………….confidence sinking………………. is this the end of the world????!!!!

Probably not.  Is it climate change?   Maybe!   But what we are all in is the same boat.   Someone asked me not long ago what I thought would be one positive outcome from all the problems the world faces at present and my answer is that I thought that the environment was going to get a breather.

As we all change our lifestyles to adjust to our new financial circumstances almost everyone is rethinking just how they use the resources they have. This includes physical and well as financial resources. We are all saving water, turning off lights, making shopping lists to make sure we bring home just what we need rather than what we think might be nice to have.

Many people are not renewing gym memberships but are instead buying a good pair of walking shoes and either taking the dog for a walk or joining a walking group to keep fit. In doing so they are meeting new friends and making new contacts. From the change in activity that is happening will come some of the greatest benefits from new relationships that will create new types of employment in areas that never were considered in the past.

If you consider all the van based services that you see around your suburb every day from dog washing to lawn mowing, window washing to home cleaning these are all businesses that have been developed out of adversity.

The past thirty years has seen a huge growth in micro businesses that are either part of a franchise group or are simply someone local that has had an idea and is giving it a good go. Home delivery of milk and vegetables was the normal thing when I started work in the late1950s. We had a fridge on the back porch and the green grocer would deliver as well as the butcher and the grocer and put the perishables in the fridge for you. This was after they had rung you before you went to work to get your order for the day.

Nowadays we all trundle off to the supermarket to be enticed into buying many items we really do not need. Buying from the Internet will become much more sensible for those tempted by “specials” and promotional ladies offering tasty titbits in the super market.

The government is certainly throwing money at the economy to try to alleviate the worst aspects of a recession. It appears that most everyone will get some assistance of some type. We hope that these efforts will stimulate employment and encourage those who do become unemployed to think about creating a job for themselves if there is not one in the industry they have left.

Paying down debt particularly credit card debt is a very sound idea even if the government would like you to get out and spend. But if you are going to spend, then it’s better to save up first then spend. The effect on the economy is the same,  just a little delayed.

We think that house prices may go down a little but we do not think that there will be a wholesale crash as some pundits have speculated. Our reason for this thinking is that there still is a housing shortage particularly in Victoria. The first home buyer grants plus the low interest rates will keep house prices supported at least for some time. The longer term will of course depend on how bad the employment market becomes.

The government proposals to fund stimulus from going into a deficit budget is quite sound and will provide eventually some good opportunities to buy Commonwealth Government Bonds. The only question is how will the government issue the bonds.
If they do as has been done in the past which is to offer bonds in $10,000 lots at a good rate of interest for 3, 5, and 10 year periods then these bonds will provide a very secure investment for retirees to have sound income streams.

So let’s hope that in all this stimulating that is going on we have offerings that will assist working families and those in the community who have retired and do their bit by spending what they have saved. The other hope is that the recession will not be as bad as it could be, that we all remember that “a penny saved is a penny earned” or maybe I should apply the same to dollars and in the next few years we will have good environmental outcomes, a much more connected and locally focused community and the economy will recover to the prosperity we have previously enjoyed and we all are more careful abut our spending habits in future.

Try to stay cool, Lina the canine receptionist offers this advice to keep cool; either stay in the office and watch the air cooler does not go off or do what she does, dig a big tunnel and sit in that and of course hop into her paddling pool then cool off by shaking the water all over anyone who is standing nearby. That way she shares the cooling down.

Jen is very mean about her tunnel efforts as once she gets down deep enough for the tunnel to cave in Jen smashes the tunnel and poor Lina has to start again. Still she is a very diligent little doggie and never gives up. What an inspiration to us all.

The market is struggling to make progress and it is, very slowly. Let us hope that little by little further progress is made

Regards,

Jen, Rose and Lina the canine receptionist

We begin the new year with some very mixed messages, both on the economic front and on the climate front. Clearly no one wants to face another year like 2008 but it would be very foolish to think that after the holiday season all will be well.

Melbourne has just had the coldest December in 7 years but the upside was that we did have some good rain that went some way to restore faith in our veggie gardens.
But we still face the possibility of further water restrictions if more solid rain does not fall in the next few weeks.

The weather is something we have little control over but other aspects of our lives also seems to be out of our control. Clearly in the USA there has been significant lack of good legislation to control the activities of the banking system but no amount of law will control crooks.

The Ponzi scheme that was operated by Bernard Madoff that has made fools of many investment fund managers is proof once again that the more complex an investment scheme is, or the better the results that so called expert fund managers claim, the more you should be cautious. They were foolish enough or inexperienced enough to believe that he could pay higher than normal returns for many years.

More sensible fund managers pointed out to the regulators that the system that he claimed to be using did not have validity as there were simply not enough of the deals available in the whole world let alone the USA market and they were ignored.
So we all now suffer.

Ponzi schemes for those not familiar are scams that keep collecting new money from “investors” that is paid to the existing “investors” so the first people in usually are paid but eventually there is no new money and the money that was collected was never invested but had fees taken out before it was paid to the first people in. It is named after a chap called Ponzi who did this to poor fools in the early part of the last century.

It is straight out fraud and to think that the USA regulators had been warned about Madoff and did nothing to bring to justice is just breath taking.

So what am I really on about is this: when times are tough there are always crooks out there who will come up with schemes to make money that are disguised as investments but are all about stealing from those who are trying to make good their losses.  When good times return then these blighters are often not so obvious, as the good market conditions allow them to operate for much longer before their wickedness is discovered.

Now, do I have any predictions about interest rates or the share market? On the understanding that you all realise my Mum did not give birth to me clutching a crystal ball in my little hand here are my thoughts.

I think that interest rates may come down a little more but not much. The economy is slowing quite quickly and certainly there seems to be a slow down on spending by families and a real effort to reduce personal debt. Now what needs to happen is for folk to start saving for purchases rather than borrowing to replace kitchens, go on holidays, buy a new car or replace the hot water service or fridge that died when you expected it to last much longer.

Those who want to buy their first new home will need to have bigger deposits and have saved the money to cover expenses like legal fees. The banks are going back to asking for answers to questions like how long do you want the mortgage for and how do you expect to pay it back and can you afford to borrow as much as you are being offered?

Now, will the share market go up?  Well I think slowly it will return to more realistic prices as many quality Australian companies have been over sold. Those who have had to sell up to meet margin calls have largely caused this. In the later part of the fall, investors who had not been foolish and over borrowed but who had modest loans against shares, were caught up in the panic that resulted from the ceaseless fear of the market, fuelled by the next lot of bad news from overseas.

Bad news from the USA now is just the confirmation of what we already know and plans are being undertaken to hold up the USA economy by the incoming President.
So it is generally expected that we will see modest gains over time in our local market as the world sorts out the problems in each country.

So we think the job outlook is going to be tough for school leavers, therefore if they can stay at school or do a course that is probably worthwhile if possible.  There will be work for women who are past childbearing if the proposed rules for maternity leave come to fruition. Jobs in the financial sector will be very tight, retail and building not so, but still not buoyant.

There will be several of the Franchise companies looking to sell new stores or vans or what ever their particular base is. Bakers Delight is looking to add 150 new stores this year. That is a lot of bread given many shopping strips already have 2 or 3 hot bread shops now.

Petrol will become more expensive as the OPEC group look to limit supply. So the price of every days needs may not drop as expected.

There has to be an upside to all this and I think it will be the environmental issues. Shortage of money to spend on luxurious and indulgent items will reduce the burden on the environment. Many people will find that real wealth is being able to sit in your own backyard that will not be bombed and have a cup of tea brewed in your own teapot. Picking a few herbs and maybe some home grown tomatoes is wonderful when you think of how tough it is for many in Europe and the Northern USA.

We are still the lucky country and if we can return to water usage as we did in the 50’s we should be fine. You can still be perfectly clean and healthy bathing with a bucketful of water rather than even a 4-minute shower. After all that is what we all did in the country as all the water we had was what fell each year into our rainwater tank and we knew there was no more till it rained again.

It is possible to wear clothes more than once without washing them, and the world will not end if you wear aprons to keep your clothes clean while you are washing the dishes or cooking.

Thank you for all your wonderful good wishes for the New Year and Lina thanks the lovely person who left the little parcel for her on the front step. She just loves liver treats.  Now the office is open again we trust that she will desist from sand mining in the back yard to fill her time. If she does not stop soon we can see that a tin hat will become essential, we think that even more walks will help but she is a girl on a mission.

The markets are trying to rise and with some good reports soon from various sectors there should be more that is positive than negative this year.

So enjoy a peaceful summer and keep well and remember what my grand dad used to say “it will all be the same in 100 years no matter how you fret and worry”.

Not so sure that he was always right but if he was referring to the behaviour of humanity he probably was.

Jen, Rose and Lina the canine receptionist

One aspect of reflecting on what has happened during the past year is that one tends to think of other times and other years. I guess my family was like most families in the immediate post war years when we all were grateful simply to have peace and the end of rationing.

Thousands of migrants flocked to Australia, as one kid told me at school because it was” the place most far from Europe and the bombs”. These New Australians as they were called then added some colour to our communities and brought new customs and some very interesting ideas about food.

But what most brought was the love of family and the capacity like us to enjoy simple celebrations. There were no “decorator Xmas trees”, just a bit off a pine tree or cypress that Pop had trimmed back so it was not a bush fire hazard. We made the decorations from coloured paper and that wonder product Clag.

We painted gumnuts and leaves to hang on our tree and one fantastic year Gran made toffee crab apples to put on the tree. Trouble was the ants loved them as much as we did. I remember Christmas in a house that my parents were still building. We had roof, external walls, a floor,  no internal lining and curtains made of surplus parachutes to provide privacy in the bathroom. No indoor toilet though because there was no sewage connection.

That first year in the house we had a roast chicken for Christmas lunch, and Gran had made a big pudding with coins interred inside for diners to find a ‘lucky threepence’. Gran carefully served out this monster pudding so everyone got a coin. But tragedy struck when my younger sister swallowed her” threepenny” and was distraught. Now the adults knew that in time the coin would appear, but when you are just turned three years old you do not have the same confidence.

Well in time the coin did appear but there was no going to the outhouse by my sister till it did appear. We got presents, special clothes made by Mum and my Gran, a billy cart made by my uncle, a wooden box for my private stuff made by my other uncle and wonder of all a rubber ball that had a face painted on it and when you squeezed it a bright red tongue popped out of the mouth.  Another wonderful piece of technology as well was the camphor boat; we had hours of fun with the boat putt putting up and down the bath.

After lunch the kids went outside to play with the billy cart and the adults, at least the males, went for a nap while the women washed up. No hot water service, just lots of kettles of boiling water. We thought that we were very well off and had no thought that we should have any more. It was fun to watch the adults square dancing on Boxing Day and if they were short a person for the set to be asked to join in and learn the dance as well.

We were very well off as we had a gramophone that would take 3 ½  inch long play vinyl discs that would play for a total of  seven minutes each. Jim Vickers Willis was the local hero square dance caller, he was from Melbourne and Mum got all his records as they were called. Lots of great fun with family parties; obesity was not a problem in those days as having fun meant heavy exercise.

Barbeques were a regular party just as they are these days. Recently while at the butcher, buying bones and ox heart for Lina the canine receptionist, I spotted a half sheep hanging in the back of the shop.  The butcher was amazed when I asked him for a fore quarter of lamb. I wanted to roast it; this was my absolute favourite roast as a child because it had lots of bones.

Well I reckon it was 40 plus years since I had a forequarter roast and it was a real treat. I did it just as Gran did all that time ago and it was surprising just how modern she was. Forequarters have lots of chops as part of the cut, so a good butcher cuts through the bones for you to make it easy to carve. In the spaces between the chops you tuck sprigs of rosemary and cloves of garlic, sprinkle lots of salt and pepper and a splash of olive oil.  Put it on a rack in the roasting tin over a couple of cups of water.

Then roast slowly at medium oven for at least one and a half hours or two if it is a really big piece. So the result was for $17 we had one very fine roast dinner that would have served 6 people if they had turned up, but they didn’t so we enjoyed another three meals of cold lamb salad and sandwiches. A bargain.

So if you are contemplating a barbeque for Australia Day or just thinking of having a few friends around anyway try a forequarter or two in your kettle barbeque. One other way Gran had with this cut was to baste if with a mixture of fresh squeezed orange juice with the zest and mix that with orange marmalade and lots of chopped mint. You must not use bottled orange juice it tastes absolutely awful used this way. If she was feeling in a really good party mood and she often was, dry sherry was added to the basting mixture.

Gran used to roast heaps of veggies whenever she had the oven going; her view was if you light the oven, fill every shelf with something. That way you get full value for the money you spend on the fuel. So there were often scones or pies in the oven along with the roast meat and trays of veggies. We loved cold roast veggies in salads with homegrown tomatoes and chopped white onions.  We had never heard of Balsamic vinegar or Extra Virgin olive oil. Our family was considered very odd that we ate garlic and used olive oil for anything other than warming in a spoon to pour in your ear for earache.

But then Gran would threaten to paint kerosene on the back of your throat with a crow’s feather if you complained of a sore throat. Needless to say we endeavoured to keep very healthy and did wear our camphor block purses around our necks for the winter. That was believed to preserve us from getting cold or flu or more frightening diphtheria.

All of the best Christmases I remember were simple family get togethers, and then as more affluent times came somehow things became more materialistic. Present buying was a chore; the more elegant and fancy Christmas menu grew to be a burden on whoever was the host that year and more family squabbles erupted at Christmas. Maybe they did when I was small and I did not realise that, but things did seem much more fun then.

So this is what happens when you start to ponder on the past. I hope you have fond and pleasant memories of Christmases past and perhaps in these tough times maybe we should all walk a more simple path and be thankful for good friends and family, good health and a peaceful country to call our home.

All the fancy electronic gadgets will never replace a hug and kiss, and they do not need batteries either. Family games and dancing, a picnic at the favourite swimming hole, listening to my elders talk about the past and tell the family funny stories, looking at family photos, being patient with Uncle George who always gave a big sloppy kiss with his smelly tobacco stained moustache.

We were so thrilled when a local war veteran who had lost his leg and managed on very primitive crutches gave us two shillings for Christmas lollies. We were taught that he was a very special person who must always be treated with respect.  I can tell you in 1949 two shillings was a very respectable sum of money for a little kid and a great deal of time was spent on deciding what to spend this bounty on.

Maybe a White Knight or a ChooChoo bar, some jelly babies or maybe the quickly devoured delight of ice cream. Most homes did not have a refrigerator in those days. Films from the USA taught Australian homemakers what a boon a fridge would be and along with a washing machine these were the appliances that many working class families just dreamed about.

Today we have so much and yet we have so little in many ways when we see the desolation of young people drinking to get drunk, trying to find joy and happiness at the bottom of a bottle. Perhaps tough times will bring a new realisation of what really is of value and what is simply passing dross.

As always I wish you all the joy you wish yourselves and that we all arrive in the new year to a better outlook for prosperity. But if the new year does seem to promise more pain, then we know we are strong enough to cope and that it is simply a time that will pass.

So until 2009,

All our very best to you and yours,

Jen , Rose and Lina the canine receptionist

Most folk will be very happy to see the end of 2008 and have a firm wish that things will be better in the coming year. The past is something we cannot change and the future something over which we have no control but only up to a point. There would be few who have not reconsidered their current spending patterns and be wondering if things will ever return to the boom days of past years.

Well history tells us that all markets have cycles and that this down turn will sometime return to the more profitable times previously enjoyed. But this down turn is somewhat different from such events in the past as the speed of communications means that events on one side of the world are instantly transmitted to news desks and the whole world is informed within minutes.

This can be a good or bad thing as there is a tendency to over react to events and this has caused panic selling fuelled by irrational fear by those who have borrowed funds to invest in the market. This includes fund managers, many of whom are young baby boomers or even younger that have not previously been tested in such markets.

So is there light at the end of the tunnel? Well we think there is, interest rates have come down and will fall further, the oil price has dropped and although we do not think that will fall much further it has reduced operating costs for many businesses.
The cost of living is falling although if you are in debt that is what consumes your thinking and it is easy to not see that as a benefit. The lower Australian dollar does make it better for our exporters although we do understand that those who are used to travelling  overseas for holidays may not be so happy and of course the cost of imported goods is higher.

Sadly there will be significant job losses as companies restructure to face the current conditions and many who lose their jobs will not be reemployed at the same salaries as previously. You will find we have included a paper regarding redundancy for you to pass on to those who face this trying event. We understand that for many this is a very difficult time and therefore we have made an offer to try to do our bit to help them understand their changed circumstance and the importance of getting experienced financial advice to deal with their payout and super. Mindful that many will be made redundant before Christmas we have decided to stay open and only close the public holidays so we can help folk make positive steps towards reemployment and financial security.

Now is also a time when Craig is working with us to review portfolios to make sure that incomes can be supported so that although you may not for a couple of years have the same income as before, you are positioned as best we can to make you as sure of a stable income as possible.

On a personal note may we say thank to all of our loyal clients who have been so very kind and supportive during this trying year. Moss Financial Services has been going for almost 30 years and we can say that this has been the toughest year we have experienced. The one thing that we have been able to be thankful for is that our clients have cared about us as much as we care about them. Times are slowly getting better in the financial sector but there still is some pain to come for those employed in the sector and there will be still some fallout to the greater workforce in the coming year.

What we wish for is that Generation X and Y and their parents have come to an understanding that debt does not always bring prosperity, that spending less than you earn is wiser than putting it on the plastic and finding out the sense of achievement that comes from “saving up” for the holiday or new car or plasma TV.

Having a few dollars in the bank as a backup for emergency and unplanned for expenses is the most peaceful way to live. Everyone in the workforce should have an income replacement insurance policy to cover their salary if they are ill or have an accident. These policies are tax deductible and provide security for the family during difficult times. Life insurance rates have fallen and it is a wise idea to review your life insurance plans as the new rates may well provide you with better cover for the same or less money.

Rick Williams has been appointed to Moss Financial Services to review our clients’ life cover. Rick is very experienced in working out a quality policy that meets your needs. So if you have not reviewed your cover lately you probably should. Doing so will probably suggest that you review your estate planning as well. An up to date Will and Powers of Attorney are important things to have in place.

Our veggie garden is thriving and we are so pleased that we put the rainwater tanks in. They both collect the runoff from our evaporative air coolers as well so we save as much as possible. The recent rain has helped put more heart into gardening for us, we had almost lost hope of seeing some of our roses and other plants flower again. A lovely show of Flag Iris this year was a real treat.

The canine receptionist is settling in very well and when you visit her bark is now a “Hullo” not “I am scared of you” bark. So we are very happy she is feeling at home. Unfortunately she has decided to see if the caveat on our property can be tested regarding mining. We have told her that on our title we are not allowed to mine for pottery clay, but she is undeterred. Her excavations under the office steps are quite impressive, so we will have to put some cement pavers down to stop her undermining the building.

Failing success we will have to change her name to Rio Tinto. We are trying some new toys as well and more frequent visits from her friend Billie, although Billie is good at cheering Lina on. Ah what a life a doggie enjoys.

We will be sending a second just before Christmas note

Keep well and know we are thinking of you all each day

Jen , Rose and Lina the canine receptionist

The world is a very different place this morning as I contemplate the USA. They have finally become engaged on a large scale with the way they are governed. With what seems to be the biggest turnout of voters ever Barack Obama has been elected President of the USA.

He has control of all houses of government and one can only hope for three things; that no one tries to assassinate him, that he considers very carefully just how he will guide the USA out of the financial disaster they are in and how to extricate the USA out of unwinnable wars and bring the troops home.

Not only do the American people have high hopes for his success, the whole world needs him to succeed so that once again we have a break out of peace and the financial world settles to clean up the mess that it is in at present.

That said we can now see the way forward. In Australia we will have more company collapses but the belief is that we know who they will be and why. We will see a growth unfortunately in unemployment to probably around 6%, on the upside interest rates should probably fall another 2% in the next 12 months.

The share market has started to trend higher and although there will be continued volatility with some days and weeks being much better than others over the next 6 to 12 months, the trend as the old saying is your friend so it is a very good time to restructure the holdings of your portfolio to reflect the changing times.

Paying down debt is still a sound strategy and we would not recommend that anyone take on debt to buy shares at this point in the market cycle. We probably will not get the tax reductions that were proposed in the last budget as the Government has in our view foolishly offered to guarantee banks that did not need to be guaranteed as a kind of international “me too “gesture. Australian banks have always had very sound provisioning requirements as a matter of law; the Government does not need to lend them our money.

We hope that the Government does stimulate the economy by bringing forward infrastructure projects to provide employment and improve our efficiency as a nation with better rail and port facilities.

We have included 2 reports for you this month, one is the usual as at the last day of the month and the other is the date of the USA elections so you can see how just how much movement there was on this once in a lifetime occasion.

It was also close to the anniversary of when the market was at the top last year. So it is good to show you that markets do turn eventually

After a very dry October there seems to be a bit more rain about so far this November, so here is keeping fingers crossed for more. Thank you for those of you taking a keen interest in Lina the canine receptionist, she is becoming more experienced in meeting

new people on a regular basis and although she still does a spectacular deep growl, she now does understand that she is not to consider being rude to someone twice.

Her swimming skills have improved and trips to Gardiners Creek on the weekend are favourite outings. We do hope that she is not going to be a tomato thief like Tam was as we have planted a few in the hope of enjoying nice home grown toms with our salads this summer. Tam ate them all last year and we only got two out of the whole crop, she certainly was an efficient picker of toms.

Christmas is only six weeks away and we think that many folk will elect to have a more modest Christmas this year.  Home made presents are often the most appreciated, if you are not a “crafty” person you might be able to offer “help vouchers”.

I am no dressmaker and was totally delighted one year when my sister gave me a voucher for a “new jacket and slacks“, and as she is a prize winning dressmaker that was a real treat.  Perhaps you can offer a “clean out your linen press” voucher or similar.

Home made jams and sauces are always special, and they are not hard to make and many can be microwaved.

One aspect of this global downturn is this. It will be a break for the environment, we will drive less, waste less, be more careful with how we spend money and the best thing is we will all get to know our friends and neighbours better.

So here is hoping for lots of rain, for your veggies to thrive and that being on a budget will be more of a fun challenge than an arduous burden.

Think of the glass half full rather than half empty.

Jen, Rose and Lina the canine receptionist.

When I first was interested in the share market and property markets and even just the veggie markets one thing that was pointed out to me by the chaps who trained me as a financial adviser was this: Markets go up and they go down and if anyone could predict with total accuracy by how much and when then the opportunities would disappear.

Well I guess that we are all going through the going down stage at present and it certainly feels pretty uncomfortable. My thoughts were when this market started to retreat that it might well hit lower points than we had seen for many years, but few thought that the damage would be so extensive.

So what to do? Quality companies are still paying good incomes and those are the ones that you are invested in. Unless of course you have some speculative investments that you bought because you either had a “good tip” or you simply felt that they would be a “good thing”. Those types of companies are in the doldrums simply because they do not meet the criteria as investable quality.

Will the USA plan by the Government to take over dodgy loans help the markets stop falling and start to return to better times? Well it is a start but the USA had better start to get real with controlling their financial markets soon or they are likely to see the average US citizen get really angry about the mess their legislative slackness has got them into.

Unfortunately these slack controls have affected the whole world with the possible exception of China which will slow down somewhat but is still going to grow at around 6 to 7% a year. That does give us some comfort, as there is lots of opportunity for us to export a wide range of goods and services to China, one growth area being food, so if the Australian government does not get too silly about piping water out of the food bowl and into backyard spa pools we should be OK.

Will the share market ever go up? Absolutely, it will return to higher levels so this is the time to stay calm and wait till better times return. This shake out is worldwide and we are better positioned to ride it out than most countries. We have a stable government, and if they do not keep sucking up to the banks and tell them to pass on the rates cuts expected the pressures will ease for lots of folk.

There will be job losses and it is tough going for many but most of us can trim our expenditure and go easy on our wallets for a while. There is a real change of power going on in the world and the USA will never have the same faith and trust shown to them that they once enjoyed. The new power brokers will be Europe and China, China more so simply because the Chinese save their money. Most homes bought in China are paid for in cash the rest have only 30 to 50% mortgages.

It is common for households in China to save between 50 and 70% of household income. So they still have the capacity to buy goods that we can export to them, they are looking to have better quality food and are prepared to pay well for that food.  Thrift is a habit that we would do well to emulate and I suspect that the younger generation is going to learn lessons from this period that they will never have to learn twice. It is young people who have excessive debt and who are going bankrupt in great numbers. They seem not to see any shame in this, and that is a great culture shift from earlier times.

Banks are not going to be so free and easy with lending money to buy Plasma TV’s and extending credit card limits. Failure to pay bank debts on time will attract swift action by the banks and living on credit will be a declining activity. Saving up for the things you really want will be the best way to acquire them.

Coming to more pleasant matters, may we say thank you so very much to you all. It has been wonderful to have the support of clients who have rung us and written to us to let us know that they are pleased to have us keep in contact with them. We have been and always will be a conservative advisory firm. Although we have all lost money in this once in a lifetime downturn from what we can ascertain most of our clients have not suffered the degree of loss that we are seeing from some of the new clients that are joining us. Up to now we have seen some portfolios that have suffered losses of 60% and up to 78%. We sincerely hope that none of you face this.

All bad times pass, we would like to think that this one will pass soon, but until the USA elections it is unlikely that there will be any real forward move. But we are all in the same boat and can only wait till confidence returns to the investment community again.

In the meantime for every seller there is a buyer so many people are making hay from those who are panicking and selling up. Warren Buffett, the most successful investment manger in the world is buying, so he believes that there is very good value to be had in the markets right now.

Let us all hope that others soon join him to restore confidence in the markets.

Spring has got off to a good start and our newest employee Lina is settling very well.
She was spayed last week and cannot understand what she did that was so naughty that we took her paddle pool away. She had to keep her stiches dry so she will be very pleased this week when we restore the pool.

Keep well and enjoy the warmer weather

Jen, Rose and of course Lina

Without question we are facing very difficult times as the credit crisis in the USA infects the rest of the world. All investors have lost money and may be feeling that the whole situation is most unfair because for the most part Australians do run good businesses and try to be responsible in their spending even though there has been a trend to using probably more consumer credit than is perhaps prudent.

The USA Government has stepped in to try to take control of the market by underwriting the sub prime mortgage debt as well as several large financial institutions. What the long term outcome of this is really anybody’s guess, but it does demonstrate that the more complex and tricky the type of investment is the more chance that it will fail in a poor market. Much of what has happened is because the people who issued the mortgages then sold them on to merchant banks that parcelled them up into “managed funds” holding all sorts of other investments as well.

The reality is this we do not know what further problems the USA has but in Australia things are not going to be as bad as the difficulties many Americans will face.

Our climate is not so extreme so there is little chance that you will freeze to death without heating. As the USA and Europe move into winter the citizens of those countries are going to face great difficulties just surviving if they have no jobs and cannot afford to pay for warmth and good food.

We will have job losses here but we are moving into summer and so will be safer as far as our actual living conditions are concerned. We have a quality welfare program in Australia even though it needs to be more generous than it is at present. We do have access to medical services if we cannot pay and for the most part most suburbs have support systems for those in trouble.

Is this going to be a great Christmas for a big spend up? Not if you are sensible and realise that a big hug and kiss will be just as welcome and you know that it will fit and you will not have to dust it. Looking at ways to reuse and recycle goods rather than buy new unless absolutely necessary will ease the cost of living. If you can postpone some spending or for go it altogether then that will be to your benefit.

Many people are growing vegetables in their backyards, perhaps talking to your neighbours and sharing veggies will be a way to build a new level of neighbourhood support and at the same time be more mindful of others. Please keep an eye on your elderly neighbours, they might not be the liveliest people to know but they may well be suffering financial difficulties and a friendly hand can go a great way towards living in a better and more secure neighbourhood.

Equally they just might have some very good budgeting ideas.

Do not give up on spending time with friends, just invite them round for a coffee or meet them in the park to walk and talk and maybe have a family picnic with each family bringing some food to add to the common table.

We know this all sounds a bit mother hen and not a very sophisticated answer to the economic woes of the world. But no one anywhere can tell you when this will be over, or how much worse it will get or if we have reached the bottom now. They simply cannot and it would be foolish to pretend otherwise.

What we can do is understand that we are all in this time together and that some are going to be better off than others. We should be thankful for what we have and appreciate what real wealth is. Having good friends and a loving family are riches that many do not have.

The government cannot fix this, nor is blaming the USA President or the poor regulative stucture going to help. We must simply live through this time with as much dignity and thought for others as possible.

One benefit that will remain from this period of hard times is this, having learnt the lessons of thrift they are never forgotten by the generation that experiences difficult times. One learns to value the things that are intangible and well as the tangible.

Australians are a very resilient people and will devise ways to improve life when there is less to work with. Out of these times will come great innovation and creativity possibly creating whole new industries and business opportunities. So the clouds will have a silver lining even if it is hard to see that just at present.

If you know people who have lost employment try to help them regain a job by thinking of all the contacts you might have who can assist. Try to keep to a budget to make sure that you have a back up for an emergency. A positive attitude is a great help when things seem to be against you, and remember that tough times never last and that better times return and we can spend this time planning how to take better advantage of them when they arrive.

A word of caution, in times like this the number of scams and generally deceptive offerings increase greatly. It could be someone offering to buy your shares off the market or an email that offers a scheme to reward you with work to be done at home or some other criminal activity. Please warn your friends and family if it sounds too good or easy to make a profit it is almost for sure a scam. You should check the ASIC website for the current scams on www.fido.gov.au.

As you know we lost our lovely canine receptionist Tamba. Well the good news is that we offered the position to Lina, Tamba’s niece and she has accepted the job. Her bio is that she loves retrieving balls, is a black haired girl of 4 years who has just retired as a breeding girl. She likes chicken mince better than fresh beef mince. Her favourite game is doing belly wackers into her paddle pool when Bill throws her ball and she gets a bit hot. She just loves ear tickles and although a little shy still is settling into her new career very well and looks forward to meeting you all soon.

Looking forward to better days.

Jen, Rose and Lina the canine receptionist.