I don't know what I was expecting. This is not it. I blame the robot. It's the penguin's fault.
The economy of 2025 challenges people's convictions.
Permacrisis. It's hectic. Contradiction and cause and effect, chaos and change.
The market is at record highs, but so many people aren't invited that it doesn't feel like a party.
Please wait a moment. The Global Trade Uncertainty Index is higher than during COVID-19 and the Global Financial Crisis (GFC). And gold is at an all-time high as well, up 67% in one year.
That's what people buy when they're worried the world is falling apart.
Meanwhile, our corporate regulator is investigating our (essentially) monopolistic stock market provider, the ASX, after “repeated and significant failures”, a phrase that could have been used at any time over the past decade.
(When ASIC sued the stock market operator last year for misleadingly saying that a project to replace its system was “progressing well,” I suspect it was probably warned that things weren't “progressing well.”)
President Donald Trump, who had promised in words, ads, and deeds to impose hefty tariffs on our friends, neighbors, and enemies, added to our global anxiety by announcing he would impose tariffs on our friends, neighbors, and enemies, a truly shocking move for the world's traders.
Donald Trump's first year back in the White House has been full of economic surprises. (Reuters: Elizabeth Franz)
Markets slumped, chaos spread, and penguins on a remote desert island trembled as tariffs were imposed on non-existent exports to the United States.
The only certainty after that is uncertainty.
It's party time, right?
The Nasdaq index of tech giants is up 17% from its already elevated levels that began in January.
The so-called “Magnificent Seven” companies exposed to artificial intelligence are injecting cash and optimism through the market. (Let's ignore the fact that one of the most talked about books this year was IfEveryone Builds,Everyone Dies: The Case Against SuperIntelligent AI).
The ASX 200 group, which comprises the top 200 listed companies, is up 4.5%, but it would have been up even more had there been no change since October.
George Talenow of the global investment fund UBS told me that this is an “up-crash” in which assets such as stock markets and real estate skyrocket.
“That's almost a departure from the basics.”
Talenow calls it “FOMO” (fear of missing out).
And he's not the only one wondering about what seems like an empty boom at a dangerous time.
Analysts and experts talk about the “atmosphere of 2008” – the era just before the global financial crisis destroyed the global economy. (It took 12 years for the ASX 200 to reach pre-GFC levels again).
The government's sovereign wealth store, the Future Fund, manages $250 billion. Chief executive Rafael Arndt told the Australian Financial Review this year felt like a “perpetual inflection point, a permanent crisis if you like”.
”The weaponization of trade, sustained inflation, the shock of climate change, and the rising cost of capital are all testing the very assumptions that underpin investment theory.”
We continue to shatter economic norms.
This overwhelming inflation requires a rise in unemployment.
Increased trade costs, or tariffs, will weigh on gross domestic product (GDP) growth (though it is still possible).
This means that when the market is falling, gold will skyrocket.
And here's the biggest thing. We are talking about “business” economics, indexes and returns. They affect people's lives. However, that's not all.
There are far greater forces at work.
You don't need to know these incredibly obvious things people are talking about
Every time there is an election, civil servants create a manual for the next minister.
A Red Book will be published if Labor wins, and a Blue Book if the Coalition wins.
Labor didn't just win in May's election. The Union was expelled. In the two most populous cities, Sydney and Melbourne, the Liberals hold just three seats in total that do not include agricultural land. three.
These so-called incoming government briefs are honest reflections on the issues facing ministers in their portfolios, and are written for one audience: that person.
So I still feel a certain way about the Treasury Department, which accidentally emailed me a document that only Jim Chalmers was supposed to read.
Brandt didn't say what he told Jim, but we did say,
- taxes need to be raised
- need to reduce spending
- Is your key election promise to build 1.2 million homes? That won't happen (unless you change it drastically right away)
Dr Chalmers said he was “relaxed” about the publication of the recommendations, which covered all the actions and data of most government economists and journalists.
Jim Chalmers. (ABC News: David Chashi)
(If you didn't really discuss the points, the lawyers weren't very relaxed about it).
But that wasn't even the most shocking synopsis.
This missile was embedded in Social Services Minister Tanya Plibersek's manual. The boomer boom is occurring as the poor and middle-income earners subsidize the incomes of the older wealthy.
literally:
”Low- and middle-income earners subsidize the retirement income of older people who have large assets in addition to their homes.”
Let's think about it. Poor people subsidize the incomes of non-working seniors who are much better off than owning a home.
People who don't need help receive support from people who do.
Not only is it unfair, it's polluting the well.
“The majority of Australians believe that the current distribution of income is unfair,” the briefing, obtained through the Freedom of Information (FOI) process, said.
“This appears to be affecting views of democracy, as fewer people believe that hard work leads to a better life.”
We have tilted the playing field.
Job mobility is at a multi-decade low as people are held back by a tax system that makes buying and selling homes very expensive, and people are tied up with huge mortgages that discourage them from taking risks.
Meanwhile, people with mortgages continue to struggle with high repayments.
The RBA cut interest rates three times in 2025. (ABC News: John Gunn)
The Reserve Bank's key interest rate remained unchanged during 2024. It dipped slightly earlier this year at the height of public anger, but then fell twice more before flattening out again.
The RBA has now warned that interest rates, which are holding back the economy, are probably no longer outpacing inflation.
No real shock. Much of the pressure on the cost of living is driven by long-term issues such as the messy but necessary energy transition and rising insurance premiums due to climate change.
Additionally, in an economy where productivity is increasingly dependent on services provided by humans, rather than machines that can squeeze out widgets faster, we are also seeing price increases that are difficult to quell.
As productivity stagnates, workers are exposed to accusations of laziness, even though agreeing to measure this concept in rapidly expanding sectors such as healthcare, the NDIS and education is itself clear and controversial.
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Increasingly, your circumstances are judged by your housing situation and how you earn your income (wages? schmucks. assets? genius), separated from the effort you put in.
Young people are burdened with debt (personal and government), face the dizzying costs of dealing with the climate crisis, and then there's the housing crisis…this crisis is literally eating away at the waking thinking of millions of people.
AI bubble. Customs confusion. The market moves. They are all substantial and will shape our lives in 2025.
The biggest questions for a growing number of Australians this year, next year and beyond are less real and more real. “How do we make this happen?”
We hope that 2014 will be a wonderful year for all of you, and we look forward to your continued patronage of OK PARKING.
Thank you to all our viewers across Australia and overseas. Special thanks to all the people who spoke with me and my colleagues at ABC, as we were able to talk about business, economics, and how they affect your life.
May the year ahead be filled with peace and joy.
