The year that was

Andrew Pegler – 29 December 09

What a difference a year makes. We started firmly astride the seven horses of the apocalypse galloping right into the belly of the beast where we sat frozen by what looked like the headlights of doom but turned out to be shards of sunlight blazing though the woods from which we are now emerging. In other words, the sky didn’t fall in; it just passed quite close.

Things kicked off ceremoniously with Obama inaugurated into the biggest mess since the Great Depression. With little more than a blink he threw US$787 billion at it, Gordon Brown US$330 billion and Kev and Wayne about $70 billion. For now things seem to be under control. It’s the longer-term implications for inflation and inter-generational debt that will be the elephants in the room.

Star Wars: the stock market strikes back! The share market defied expectation, logic and intuition in 2009 to roar back from its 2008 lows and recover 50% of its losses. Bank shares have fully recovered, resources stocks have boomed and super has pretty much made up its falls. The most amazing thing is this happened in one year. Nice.

China’s economy began to roar again in 2009 following a sharp decline. Its returning appetite for raw materials has been a big part of the spectacular rise of the Aussie dollar, which some bearish types are tipping for parity. The jury is still out on that one.

With uncertainty the only certainty a lot of money fled into the safety and stability of gold, which rocketed past US$1000 an ounce. Its rise was also fuelled by the US dollar losing its lustre. The counter argument is summed up wonderfully by legendary US investor Warren Buffet. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

The Australian economy continues to be a shining light in an otherwise bleak global landscape. Thanks to the low debt left by Peter Costello and the swift stimulation of the Rudd Government we’ve ended the year with unemployment actually going down, banks still standing and (touch wood) no real property collapse … yet.

On the crime front, epic shonk Bernie Madoff got 150 years for his $65 billion Ponzi scheme and Texan billionaire and cricket promoter Sir Allen Stanford got arrested for an alleged $8 billion fraud.

And finally, when the global swarming in Copenhagen wound up we were left with agreements to disagree about agreements or something. In other words we’re as resolved to tackle the problems and shape an ETS as we were in January.

In Sopranos parlance “fugeddaboutit”, it’s over, move on and have a spanking NY’s knees-up. I’ll cop you on the other side.