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eurogeddon armageddon

Deloitte Access Economics is, in its own words, one of Australia’s most recognised economics advisory practices. It offers policy, regulatory and strategic advice, forecasting and modelling services, and five “highly regarded” publications offering investment, business and economic analysis.

Deloitte Access Economics was in the news this evening, including prominent coverage on Australian Broadcasting Corporation news and news commentary programs, because of a report it released today.

The ABC is where serious news is presented by serious journalism. It could have been expected therefore, that the ABC’s financial journalists would have taken their copy of the Deloitte report today, seen that it was an analysis piece on the European debt crisis, and noted that Deloitte’s prediction was that Europe is likely to muddle through without bringing upon us all the doom and destruction being touted by some others.

As such, in a solid news day, the ABC financial journalists may have put the Deloitte report aside as not quite catchy enough in an objective news prioritisation sense. Not a lot of man bites dog there.

But they didn’t put it aside. As stated earlier, they ran it on their main evening news bulletin, and it got a prominent mention on The Drum analysis program which runs up to the news.

Why is that?

The reason is that someone clever at Deloitte Access Economics, perhaps an editor, came up with the following headline for the report: Eurogeddon.

I just did a Google News search for that word and got 158 results, international media organisations and global economics bloggers amongst them.

The guts of this report is that Deloitte Access Economics is predicting that the European debt crisis will be resolved without the truly dire consequences for global debt, growth and employment that some are saying are possible.

We’re not saying the ABC journalists or, probably, most of the educated commentators responsible for those 158 other reports have tried to hide this. All the reports we have seen mentioned this overall Deloitte conclusion.

However, all those reports also ran with the doomsday details which Deloitte added as a worst-case scenario.

We’re not saying the journalists and bloggers got this wrong. We’re saying that most of them would not have reported the story at all except for one thing: that clever, if misleading, heading of Eurogeddon.


Neither a borrower ...

September 7th 2010 23:21
credit card debt

The US Federal Reserve surprised a few people in mid-January with a new set of rules on credit cards which were firmly skewed in favour of the consumer. The Fed's 1,155 pages of rules were welcomed by consumer groups which have long been pointing at the modern phenomenon of mountainous personal debt.

An economic realist once said: "When you get a credit card, technically you’re borrowing money from a bank. In reality, though, you’re borrowing money from yourself." We thought it would be interesting to collect a few more perceived wisdoms and salient facts on the subject.

More than 175 million new credit cards were approved in China in the first 11 months of 2009, up 33 per cent year-on-year.

US credit card defaults (defined as credit card debt more than 60 days behind on payments) rose steadily throughout 2009, finally reaching record levels in September. At that point, defaults were more than double the average levels of the previous decade.

In Britain, about one million families used credit cards to make mortgage or rent payments in 2009.

Australian mortgage, credit card and personal loan debts stood at A$1.2 trillion in December 2009, up 71 percent from five years ago and, for the first time, exceeding the country's GDP. "It’s a terrible, terrible sign," said University of New South Wales economics professor Steve Keen.

"While 2008 brought us the worldwide credit crisis, 2009 ... turned into a credit card crisis, as cardholders around the globe careened from credit binge to credit bust." (US commentator Eva Norlyk Smith,

"He looks the whole world in the face for he owes not any man. (Henry Wadsworth Longfellow)

"The only man who sticks closer to you in adversity than a friend is a creditor." (Anonymous)

"Who goeth a borrowing, goeth a sorrowing." (Thomas Tusser)

"Before borrowing money from a friend, decide which you need most." (American proverb)

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