This
Ugly Chart Illustrates How Australia's Economy Is Such A Mess
5
November, 2012
Australia
flourished as its enormous mining industry supplied the world's
booming emerging markets.
But
the rapid deceleration in those key export markets lately have been
devastating to the Australian economy.
It's
"a credit bubble built on a commodity market built on an even
bigger Chinese credit bubble," wrote SocGen's Dylan Grice.
In
a recent note to clients, Morgan Stanley's Gerard Minack charted the
evolution of 2013 earnings expectations for the major global stock
market indices (see below).
"Australian
consensus earnings forecasts keep falling," writes Minack. "The
pattern of earnings revisions in Australia reflects the global
pattern. The Materials sector has seen the largest downgrades of any
top-level GICS sector. Metals & mining, a component of Materials,
has seen even larger downgrades.
"Australia
has a mining-heavy/technology-light index. This in part explains why
market-wide EPS forecasts for the ASX200 have been cut more than
almost every other market in the world, including Europe (Exhibit
5)."
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