I'll throw my hat in the ring and also offer some kudos to...

I'll throw my hat in the ring and also offer some kudos to Whiskey67 for that rant, much of which is true.

Politicians would do well to start telling some of these home truths to the middle classes, rather than obfuscating by playing petty political games in clamping down on executive pay. Hoardes of people in this country are about to get a huge shock when things start to really unravel next year, and rather than the government shifting blame to the banks, executives, mortgage brokers and so on, they'd be much better served by telling the hoardes that they've ultimately got only themselves to blame and that the downturn is a consequence of their profligacy. Not only that, but the reason this forthcoming downturn will be so severe is because of the enormous leverage at the household level - my guess is the average Australian can't fathom that, and this fact needs to be told to them by those in power.

I also despise this notion that Australia is somehow going to avoid the world recession. It's absolutely fanciful and makes no intuitive sense. 4 of our 5 major trading partners - South Korea, New Zealand, USA and Japan - are in recessions of varying degrees of severity and are getting worse. China is slowing rapidly - they've been growing at 10-12% for the last 5 years and it's their growth that has largely funded our economy, but next year their growth rate will be about half that, with risks to the downside.

The way the world works is that Europe and USA do most of the consuming. Consumers place their inventory orders with the world's manufacturers (i.e. China and other developing countries), and then the world's manufacturers, having received their orders from Europe and USA, place their orders with the world's raw commodity producers, i.e. Australia, so they can manufacture the stuff to send to Europe and the US. So basically, as we're seeing in this downturn, USA and Europe were the first to go down, then it takes about 3-6 months for that to be felt in China, then it takes about another 3-6 months for that to be felt in Australia.

So really, we're just on a big time lag of about 9-12 months behind Europe and the US. Australia is now where Europe and the USA were in about March this year, and we'll be where the Americans and Europeans are now by about the middle of next year. Bottom line is that next year is going to be very ugly in Australia.