QLD Floods and the impact on Local and Intl Economies

Generali

michaels wrote: »

Half a house would do fine for my extension and the whole thing could be done in a couple of days (excluding shipping time) - do you think the planners would go for it? Would it be warm in the winter?!

I'm sure you could have it flown in quickly although that would most likely eat into the money saving aspect of a 'free' house.

It's warmth depends upon where you live. If you're in Northern Queensland then yes, it would be lovely and toasty in winter. If you live in Northern Europe then you might want to consider a different design. Queenslanders, in my experience at least, wrap up warm when the daytime temperature drops below 25C. Brrrr.

I'm sure the planners would go for it. After all they let Tescos put up those godawful sheds.

vivatifosi

I have some news from where my Uncle is. His road is open and is being used as the main route around the town due to flooding. This is good news as it puts him at the centre of things and being able to access what's available in terms of food and fuel. Mum tried to call him but couldn't get through as he was out. Full credit to Telstra though, there's massive flooding and they still manage to run the phone service.

vivatifosi

There's an interesting article on economic impact of floods here:

http://www.news.com.au/business/flood-disaster-to-cut-gdp-by-25bn/story-e6frfm1i-1225982762632

Bear in mind this is a few days old though, more flooding has happened since then and Brisbane hit, so worse than in article. Interesting insight nevertheless.

THE Queensland floods will hit the economy heavily, with Australia's gross domestic product set to fall by $2.5 billion. Inflation is also likely to rise and major projects will be delayed, threatening investment and jobs.
But another rise in interest rates is likely to be delayed, The Australian reports.
JPMorgan Australia chief economist Stephen Walters predicted yesterday that while the flood damage would push fruit and vegetable prices up sharply, thus affecting the consumer price index, "the RBA is likely to look through those numbers and we believe will hold off raising the official interest rate in February".
He said JPMorgan had previously forecast a rate rise from 4.75 per cent to 5 per cent on February 1, but "we now see it as less likely" because of the damage to the Queensland economy.
Mr Walters noted that one of the biggest problems for Queensland's coal exporters was that, because rail tracks and ports had been working at almost full capacity before the floods, it would not be easy to make up lost tonnages once the floods receded and the mines, many of them waterlogged, were pumped out.
Analyst Andrew Boak of Goldman Sachs said Queensland usually exported about $7.5bn worth of coal every quarter, so a month of zero coal exports would strip $2.5bn, or 0.2 per cent, from the country's annual gross domestic product.
Some Queensland mines, most rail tracks and all coal ports are still operating. But according to Mr Boak, exports are likely to be lower in both January and February, potentially stripping an estimated 0.1 per cent from annual GDP, or 40 basis points for the March 2011 quarter alone.
The floods are also likely to push global coking coal prices up by more than a third from about $US225 in early December to more than $US300 a tonne, according to JPMorgan.
"Clearly they won't stay there," he said, but he added that because Queensland met about 50 per cent of global demand for the coal used in steelmaking, "news of the floods has been raising red flags globally", Mr Walters said.

Read more: http://www.news.com.au/business/flood-disaster-to-cut-gdp-by-25bn/story-e6frfm1i-1225982762632#ixzz1AjPhLViC

Generali

michaels wrote: »

More serriously is the impact big enough to affect world coal, ore and steel prices and if so how will this play out - similar to the impact of rising oil? How about for China - possibly a big enough impact to push them in to worrying levels of inflation and thus monetary tightening - can they risk the resulting unemployment politically?

This will push up spot prices of coal, iron, steel and food. (The spot price being the price you pay if you want to buy some right now).

For the Chinese, the spot price of the first three matter very little. AIUI, pretty much everything they buy in the way of 'hard commodities' (stuff you mine) they agree the price of in long-term contracts. The miners get to make a mine in the knowledge that they have a buyer. The buyer gets a guaranteed price, usually a little below the prevailing market price.

The problem could come if there has been damage to infrastructure so Aussie mines can't deliver what they have promised. If the Indians and Chinese can't get the coal they've agreed to buy they'll either have to buy it expensively on the spot market or face power cuts. There are stories of bridges out on the main roads that run out to the mining areas. They'll take months or years to rebuild.

Mining in QLD has pretty much ceased I think as a result of all this. There will be stocks around at the mines, in transit and with the end user so it's not like the world will run out of coal in the next couple of weeks.

The world lucked out with the timing as the QLD wheat harvest is in, for the most part I think. I think wheat harvest time up there is December as rain in late December and January is common (they have a wet and dry season rather than 4 seasons like the UK). I suppose some storage facilities will be under water but I don't know how much is stored here for export later and how much is shipped as quickly as possible. Land is cheap here so it would make sense to store it here but the Aussie mindset would be to get it out of the ground and off the farm as quickly as possible I reckon.

I don't know how big the impact on the price will be so it's impossible to say what the impact will be on Chinese growth and inflation.

Generali

vivatifosi wrote: »

I have some news from where my Uncle is. His road is open and is being used as the main route around the town due to flooding. This is good news as it puts him at the centre of things and being able to access what's available in terms of food and fuel. Mum tried to call him but couldn't get through as he was out. Full credit to Telstra though, there's massive flooding and they still manage to run the phone service.

Excellent news. It sounds like most of the problems are further south now which is good for him.

Not so great for people in Ipswich that are sitting on their roofs waiting for someone to come by to pick them up. All that water that they are trying to avoid is headed straight down the valley to Brisbane. It should arrive Thursday daytime.

One cultural point. If this happened in Europe, the papers would be full of stories about global warming/climate change. I have not seen a single word written about that in the Aussie papers.

Really2

Generali wrote: »

The problem could come if there has been damage to infrastructure so Aussie mines can't deliver what they have promised. If the Indians and Chinese can't get the coal they've agreed to buy they'll either have to buy it expensively on the spot market or face power cuts. There are stories of bridges out on the main roads that run out to the mining areas. They'll take months or years to rebuild.

I presume the problem at the for the mines could be penalty clauses, But should imagine they have covered their "Act of God" well as this is a known problem I presume.

Edit,

Just a thought, who is the predominant Insurance underwriters in Auss (don't say Lloyds )

Generali

Really2 wrote: »

I presume the problem at the for the mines could be penalty clauses, But should imagine they have covered their "Act of God" well as this is a known problem I presume.

Edit,

Just a thought, who is the predominant Insurance underwriters in Auss (don't say Lloyds )

Force majure.

And yes, the underwriters will be Lloyds who will have their best reinsurance people on flights into Townsville as I write to top up the policies which will have all breached their upper limits.

vivatifosi

Some sick bar stewards have got to the Facebook page and defaced it:

http://www.frasercoastchronicle.com.au/story/2011/01/12/internet-trolls-deface-flood-tribute-site/

vivatifosi

Generali wrote: »

Excellent news. It sounds like most of the problems are further south now which is good for him.

Not so great for people in Ipswich that are sitting on their roofs waiting for someone to come by to pick them up. All that water that they are trying to avoid is headed straight down the valley to Brisbane. It should arrive Thursday daytime.

One cultural point. If this happened in Europe, the papers would be full of stories about global warming/climate change. I have not seen a single word written about that in the Aussie papers.

Thanks Gen, it is good news and I really appreciate your keeping an eye out to what's happening in his neck of the woods.

On the cultural point, I don't think people in Europe realise how hardy Aussies are. It's easy to watch Neighbours or have ideas about famous Australians or images in our heads of Sydney Harbour etc and not know what a hard place it can be.

As a five year old, I did first term reception in both Aussie and UK schools. In the English school it was this is how to write a-b-c. In the Aussie school it was these are the deadly insects/spiders here and this is how to avoid them killing you.

Generali

vivatifosi wrote: »

On the cultural point, I don't think people in Europe realise how hardy Aussies are. It's easy to watch Neighbours or have ideas about famous Australians or images in our heads of Sydney Harbour etc and not know what a hard place it can be.

As a five year old, I did first term reception in both Aussie and UK schools. In the English school it was this is how to write a-b-c. In the Aussie school it was these are the deadly insects/spiders here and this is how to avoid them killing you.

I think people here are used to having nature as something that you can't fight, that you just have to go with.

We're near one of the National Parks so get plenty of extra wildlife around here. You very quickly get used to always wearing boots and gloves when you do the garden and having a quick look before you sit down to check the grass isn't going to bite back (link SFW). This stuff hurts like hell if you stand on it in bare feet.

The funny thing is that the deadliest animal in Australia by number of deaths caused is apis mellifera, the European Honey Bee.