January 18, 2018 Edition.
Trump continues to astound – revealing is true racist side this week – wanting migrants from Norway rather than Africa – but they won’t come given the current wealth of Norway (GDP $71,000 per person p.a. vs USA at about $50,000)!
Bret Stephens of the New York Times got is right:
“I believe that Trump is ignorant, incurious, vain, gauche, bigoted, intemperate, bullying, suggestible, reckless and morally unfit for his office.
But he's not deficient in cunning, and that cunning deserves healthy respect from his political opponents.”
Europe is still in a post – festive haze – in the UK the NHS is under severe stress but Germany seems to be closer to getting a Government and Australia is all still at the beach believing life is good!
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Here are a few other things I have noticed.
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Major Issues.
Record debt threatens economy
- The Australian
- 12:00AM January 8, 2018
David Uren
Debts across the country have hit a record high of double household incomes and are still climbing, making it difficult for the Reserve Bank to raise rates and increasing the risk to the economy from any downturn in housing prices.
Reserve Bank analysis of the latest national accounts shows debt is 99.7 per cent higher than the total earnings of all households, having risen from 67 per cent greater three years ago. Households are still adding to their debts as new home buyers enter the market for the first time, established homeowners upgrade their houses and investors add to their property portfolios. Housing debts rose $110 billion, or 6.9 per cent, in the year to November
Although the Sydney market has cooled and rates have risen for investors, owner-occupiers are still being offered record low rates, with Westpac last week advertising special discount rates as low as 3.6 per cent. The Reserve Bank’s analysis shows that despite record debts, spending on mortgages still accounts for only an average of 7.2 per cent of all household incomes across the population, which is the same as in 2004 when mortgage rates were above 7 per cent.
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Students and employers question the value of university degrees
- The Australian
- 12:00AM January 8, 2018
Adam Creighton
The university sector is held up as a great ‘‘export industry’’ but one wonders how much quality education we’re really selling when more than half of employers think the bulk of graduates’ degrees aren’t vocationally useful.
The government’s latest survey of employer satisfaction, out today, appears to give a big tick to the nation’s universities: 84 per cent of businesses said they were satisfied with the attributes and skills of the graduates they hired.
The fine print is more sobering: most businesses thought qualifications in ‘‘management and commerce’’ and ‘‘society and culture’’ weren’t important. And graduates themselves in those areas were even more scathing, with barely 40 per cent suggesting they were important to their job.
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Audit office slams Australia’s dud investments in “clean coal”
By Giles Parkinson on 15 December 2017
Clean coal may be a marketing term that you can still read in the Murdoch press and hear on the ABC, but the technology remains nothing more than a fantasy – and a point of distraction and a lacquered prop for the fossil fuel industry and its proponents.
The Australian National Audit Office (ANAO) has published a damning assessment of Australia’s carbon capture and storage program, noting that more than $450 million has been invested by the government over the past decade, and nothing achieved.
Not a single tonne of CO2 has been saved, no technology is ready for deployment, and the ANAO report slams the government for having no strategic direction, no oversight over the projects, and little accounting for the spending.
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- Jan 8 2018 at 1:40 PM
Is the next financial crisis looming: Ross Barry
by Ross Barry
The strong performance of many share markets around the world has led many to speculate that another major correction may not be too far away. History has shown us, over the past 300 years or so, that major corrections have occurred every nine to 10 years, on average, albeit some have come closer on the heels of the one before, while others have been more than 20 years apart.
History has also shown us that financial manias and crashes are almost always an outworking of three things – an accumulation of large volumes of idle capital (savings), financial innovation and leverage. Most have also occurred following a strong, speculative surge in markets and a few years into a new phase of higher interest rates.
Looking at these things in turn, we know that the level of global savings must always equal the level of global investment (unless savers conspire to find a way to remove their money from the system altogether). But savings may be actively invested in new physical or intellectual capital, or more idly held in financial assets such as government bonds or bank deposits.
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Superannuation raids to pay for health bills
- The Australian
- 12:00AM January 9, 2018
Sean Parnell
Sarah-Jane Tasker
The number of Australians dipping into superannuation early to pay for medical bills, particularly for weight-loss surgery, is rapidly increasing amid rising concerns about soaring out-of-pocket healthcare expenses.
Recent data reveals about 15,000 people last year drew down a total of more than $200 million to fund medical bills. Over the past six years, there has been a fivefold increase in the number of applications for early release of superannuation on medical grounds, from about 4000 in 2010-11 to about 22,000 in 2016-17.
Weight-loss surgery was the top reason people took money from their retirement savings last year for medical reasons. About 8500 sleeve gastrectomies were funded last financial year, with an average cost of $1909.
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- Jan 9 2018 at 12:17 PM
Citi chief economist Willem Buiter warms of overdue correction
by Ambrose Evans-Pritchard
The air is becoming treacherously thin for global asset markets at the peak of the cycle and investors should cut their exposure before central banks shut off emergency stimulus, Citigroup's star economist has warned.
Willem Buiter, the bank's chief economist and a leading theorist on monetary policy, said: "There are clearly signs of late-cycle froth in financial markets, in everything from equities to corporate credit and real estate, especially in the US. There is the risk of an overdue correction."
He added: "We are reluctant to call an end to the bull market in risk assets just yet but a considerable degree of caution is now warranted. Downside risks are rising as the business cycle matures."
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Age pension and superannuation changes hit home
- The Australian
- 12:00AM January 10, 2018
Glenda Korporaal
It has been a year since stricter asset tests for the age pension came into force — overshadowed by a flurry of changes to superannuation that hit mid-year.
But the longer-term financial impact on those affected is now becoming more apparent.
The Self-Managed Superannuation Fund Association threw a spotlight on the issue yesterday.
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- Updated Jan 10 2018 at 4:46 AM
Bill Gross says US bonds enter bear market
by Brian Chappatta and Anooja Debnath
The 10-year US Treasury yield climbed to the highest level in more than nine months, leading Bill Gross at Janus Henderson Group to declare a bond bear market just ahead of a deluge of sovereign debt sales.
The benchmark US yield rose as much as six basis points to 2.54 per cent, a level last seen in March, and the Treasury curve steepened the most in three weeks, as a looming glut of bond supply from the US, the UK, Japan and Germany coincided with a surprise cut in purchases of long-dated Japanese government bonds by the Bank of Japan.
Even though central bank watchers said the BOJ's actions aren't interpreted as an imminent shift from ultra-accommodative policy by Japan's monetary authority, it's yet another sign of central banks stepping back from global bond markets - just as the US is about to sell the most debt in eight years. Add to that rising market expectations around inflation, and traders are starting to wager that Treasuries are about to break out of their tightest range in a half-century.
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- Updated Jan 10 2018 at 11:02 AM
World politics looks sad in 2018, but the global economy is surprisingly good
by Martin Wolf
The world economy hums as politics sours
The world at the beginning of 2018 presents a contrast between its depressing politics and its improving economics. Might this divergence continue indefinitely? Or is one likely to overwhelm the other? And, if so, will bad politics spoil the economy, or a good economy heal bad politics?
As I argued last week, we can identify several threats to a co-operative global political order. The election of Donald Trump, a bellicose nationalist with limited commitment to the norms of liberal democracy, threatens to shatter the coherence of the west. Authoritarianism is resurgent and confidence in democratic institutions in decline almost everywhere. Meanwhile, managing an interdependent world demands co-operation among powerful countries, particularly the US and China. Worst of all, the risks of outright conflict between these two superpowers are real.
Yet the world economy is humming, at least by the standards of the past decade. According to consensus forecasts, optimism about prospects for this year's growth has improved substantially for the US, eurozone, Japan and Russia. The consensus also forecasts global growth, at 3.2 per cent next year (at market prices), slightly above the rapid rate of 2017.
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Fizzling out: World Bank says global economy is set for a decade of gloom
Tim Wallace
Published: January 10 2018 - 10:05AM
The World Bank has joined a growing chorus predicting an end to the global economy's strong run. Stock prices are high relative to earnings and volatility is at historic lows, warnings that economists traditionally take as signs of overheating.
"There is a sense in which financial markets appear to be complacent. That makes room for disruption when there are surprises - a repricing of risk," said Franziska Ohnsorge, a World Bank economist.
Her warning echoes those of institutions including Legal and General Asset Management, which fears the US economy and markets will surge ahead this year before rate hikes burst the bubble and cause a recession.
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- Opinion
- Jan 11 2018 at 11:08 AM
Bond ice age thaw will send shockwaves through global markets
by Ambrose Evans- Pritchard
Each super-cycle for bonds over the past two centuries has lasted the span of a career. The tide is immensely powerful. When it turns, the world economic system faces what amounts to a regime change.
The current "ice age" - to borrow from Albert Edwards at Societe Generale - began in 1981 when the US Federal Reserve delivered a crushing monetary shock and defeated the Great Inflation. Benchmark US yields have been falling in a staggered fashion ever since.
It is the only experience that most investors, traders and PhD economists at central banks have ever known. But if the chartists are right - and you ignore them at your peril - the downtrend line has finally broken. US Treasury yields across the maturity spectrum are smashing through historic lines of resistance, with instant knock-on effects through the $US49 trillion ($62 trillion) market for global bonds.
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Tue, 14 Nov 2017 |
Why the RBA is wrong, wrong, wrong
The latest Statement on Monetary Policy has confirmed the failure of the Reserve Bank of Australia to implement monetary policy settings that are consistent with its inflation target and objective of full employment.
It used to be the case that the RBA could never have a medium term forecast for inflation other than 2.5 per cent – the middle of its target range. The thinking was that if the RBA had a forecast an inflation rate of say, 1.5 or 3.5 per cent, that was based on current policy settings, it would adjust interest rates to ensure inflation would not reach those levels, and instead would return to the middle of the target.
The middle of the target range is an important goal for policy because it means the risks to the forecast are symmetrical. A forecast of, say 2 per cent, means that a 0.5 percentage point error could see inflation fall to a troublesome 1.5 per cent as much as it could rise to a perfectly acceptable 2.5 per cent, while a forecast of 2.5 per cent that turns out to be wrong by 0.5 per cent would still mean the RBA meets its target.
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Malcolm Turnbull's scare campaign that didn't scare anyone
Michael Pascoe
Published: January 11 2018 - 12:15AM
So Treasury didn’t think Labor’s negative gearing/capital gains tax proposals would crack the earth asunder and spew forth toads and serpents. Nobody much else did either.
Oh, as part of their election campaign, the Prime Minister and Treasurer both said Labor’s policy would result in all manner of disasters befalling the nation, but put your hand up if you believe that they believed what they were saying or were just fibbing away as politicians will to get elected.
The choice here is between the credibility of the Prime Minister and Treasurer or their competence in assessing economic policy.
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OECD finds company tax cuts benefit people at all income levels
- The Australian
- 12:00AM January 11, 2018
David Uren
Company tax cuts bring benefits to people at all income levels, an OECD study has found, and do not unfairly favour the rich.
The finding came as Scott Morrison told The Australian he intends reintroducing legislation to cut taxes for companies with turnover above $50 million in the first few weeks after parliament resumes on February 5.
“It is an early agenda item for the new year,” the Treasurer said.
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Miners dig in to overturn nuclear power ban
Renee Viellaris, Federal Political Editor, The Courier-Mail
January 11, 2018 1:00am
MINING giants will lobby the Turnbull Government to dump a ban on nuclear power to help keep the lights on and bankroll the country.
The Minerals Council of Australia, which represents some of the country’s most influential miners, will today reinvigorate the debate for nuclear power, plus pressure the Government to invest in new generation coal-fired power stations.
It’s pre-Budget submission also urges Treasurer Scott Morrison to “directly address the policy roadblocks to investment and employment”, including contentious changes to industrial relations that would allow some high earners to opt-out of enterprise bargaining, and generate taxation reform.
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Climate change: Josh Frydenberg concedes Australia's carbon emissions rose in 2017
Nicole Hasham
Published: January 11 2018 - 11:22PM
Environment and Energy Minister Josh Frydenberg concedes Australia's greenhouse gas pollution continued to soar last year, confirming that more than a decade of climate policy bickering has failed to curb harmful emissions.
Official data shows Australia's annual emissions have risen for the fourth year running. They were up by 0.7 per cent in the year to June 2017, to 550 million tonnes of carbon dioxide.
The alarming figures come ahead of a critical few months for the Turnbull government as it seeks to convince the states and territories to sign off on its signature climate policy, the national energy guarantee – a measure that Labor says will fail to sufficiently rein in emissions.
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Why interest rates are likely to rise in 2018
Jessica Irvine
Published: January 13 2018 - 12:11AM
It's one of the most time-worn and sacred traditions of Australia's central bank that January be declared a no-meeting month.
Every other month of the year, on the first Tuesday, the Reserve Bank governor and his board (it's always been "his") assemble in the bank's Martin Place headquarters in Sydney to discuss policy settings.
But not January.
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Axing negative gearing would boost economy and home ownership, RBA conference paper finds
Peter Martin
Published: January 12 2018 - 6:01PM
Axing negative gearing would lift home ownership to as much as 72.2 per cent of households, cut home prices by just 1.2 per cent and lift rents "only marginally", a study shown to the Reserve Bank of Australia has found.
Preliminary results from the economic modelling exercise, believed to be the first of its kind in Australia, were presented to a RBA workshop last month and released on Friday.
Melbourne University researchers Yunho Cho, Shuyun May Li and Lawrence Uren conclude that eliminating negative gearing entirely would lead to an overall welfare gain of 1.5 per cent of GDP, making three quarters of the population better off.
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Why Australia might be forced to consider nuclear weapons
Tony Walker
Published: January 12 2018 - 11:45PM
Dr Strangelove or: How I Learned to Stop Worrying and Love the Bomb is a 1964 black comedy produced and co-written by Stanley Kubrick and starring Peter Sellers and George C. Scott.
It suggests a mad American general could launch a nuclear attack against the Soviet Union – without the president's authorisation – to defend the purity of "our bodily fluids" from communist subversion.
Fifty years on from Strangelove's release it's not an irrelevant question to ask whether America has in place fail-safe mechanisms to prevent just such a nuclear accident; nor is it out of order to note the beginning of a debate – in the shadows – about Australia going nuclear.
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Ice found buried just below surface of Mars may sustain human bases
Will Dunham
Published: January 12 2018 - 12:29PM
Washington: Scientists using images from a NASA spacecraft orbiting Mars have detected eight sites where huge ice deposits near the planet's surface are exposed on steep slopes, a potential source of water that could help sustain future human outposts.
While scientists already knew that about a third of the surface of Mars contains shallow ground ice and that its poles harbour major ice deposits, the research published in the journal Science on Thursday described thick underground ice sheets exposed along slopes up to 100 metres high at the planet's middle latitudes.
"It was surprising to find ice exposed at the surface at these places," said research geologist Colin Dundas of the US Geological Survey's Astrogeology Science Centre in Flagstaff, Arizona, who led the study.
Credit card foreign transaction fees ‘a form of gouging’
- The Australian
- 12:00AM January 13, 2018
Adam Creighton
Banks and other financial institutions are gouging consumers to the tune of $850 million a year from foreign transaction fees, according to analysis of data obtained by The Weekend Australian.
The “foreign currency” or “overseas” transaction fee (typically 3 per cent) that banks tack on to their customers’ Visa or Mastercard purchases made in foreign currency (via the internet or travelling abroad) have earned the big four banks alone $1.24 billion over the past two years.
Payment system experts say the fees are charged by financial institutions “simply because they can be”, raising questions about the level of competition in the banking sector.
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National Budget Issues.
Dozens of countries now tax sugary drinks but sweet-toothed Australia isn't interested
Esther Han
Published: January 8 2018 - 8:13AM
This year five countries, including Ireland, the United Kingdom and South Africa, will join 26 nations who have raised the price of sugary drinks in the hope of a healthier population.
Meanwhile, Australia - one of the fattest countries in the world - is defiantly refusing to consider a so-called "sugar tax".
"Zero chance," Prime Minister Malcolm Turnbull has said.
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Tax cut for rich needed to stop brain drain, says Tax Institute
Matthew Killoran, The Courier-Mail
January 8, 2018 1:00am
A RADICAL tax plan put to the government would see more items slugged with GST to give Australia’s wealthiest a tax cut.
Respected think tank the Tax Institute says the measure is needed to prevent a brain drain of Australia’s top talent to overseas countries which have lower income tax rates for their top earners.
Australia’s highest paid people are taxed at 45c for every dollar earned over $180,000, but this could be slashed to more comparable international rates, to 33 to 39 per cent.
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Treasury advice says Labor's negative gearing policy would have 'small' impact on house prices
Fergus Hunter
Published: January 8 2018 - 1:33PM
Previously confidential Treasury advice to the Turnbull government found Labor's negative gearing and capital gains tax policies would probably have a "small" impact on property prices.
The opposition has seized on the documents - released to ABC under freedom of information laws - to accuse the government of lying when it claimed Labor's proposals would put a "sledgehammer" through the housing market and bring the economy to a "shuddering halt".
"The ALP policies could introduce some downward pressure on property prices in the short term, particularly if the commencement of the policy coincides with a weaker housing market," the Treasury advice said.
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Why Treasury thought Turnbull was wrong on negative gearing
Peter Martin
Published: January 8 2018 - 8:53PM
Malcolm Turnbull knew or ought to have known that the claims he made about Labor's housing policy during the election were likely to be wrong.
The Treasury pointed it out in the lead-up to the campaign.
Ramping up his rhetoric in order to win the election, Turnbull said Labor's plan would "devalue every home, every property, in Australia".
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Miners pay their 'fair share' of tax if you count royalties: report
Nassim Khadem
Published: January 9 2018 - 12:15AM
The Australian mining industry paid $185 billion in federal company tax and state and territory royalties between 2005-06 and 2015-16, according to a report produced by Deloitte Access Economics for the mining lobby.
The report, prepared for the Minerals Council of Australia, is based on a survey of 25 Australian mining companies covering more than 70 per cent of the local mining industry.
The report uses taxable income (rather than actual tax paid), plus royalty expenses, in a bid to show that miners pay their fair share of taxes.
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Health Budget Issues.
Put our children’s health first
MEDIA RELEASE MONDAY, 8 JANUARY, 2018
It is time for Australia’s political leaders to put the health of our children and future generations ahead of all other interests. Refusing to consider a tax on sugary drinks is not sound public health policy, the Consumers Health Forum says.
Given more than 20 countries have now introduced levies on sugary beverages, Australia is falling shamefully behind in taking the step supported by the World Health Organisation to curb our intake for unhealthy drinks.
“The Consumers Health Forum has joined with other health groups in recent years to urge the Government to introduce a health levy and to stop the promotion of unhealthy food and drinks at sport events and in children’s television viewing times,” the CEO of the Consumers Health Forum, Leanne Wells, said.
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- Jan 9 2018 at 1:12 PM
Let's operate on greedy medical specialists
by Terry Barnes
In 2014, imposing a mandatory $7 co-payment for going to the GP was fanatically opposed by the medical profession, especially the Australian Medical Association.
Yet they do nothing about massive co-payments for specialist services beyond Medicare and private health insurance (PHI) rebates. While most specialists do the right thing, a greedy substantial minority charges what they think they're worth, hundreds and sometimes thousands of dollars beyond the rebates available. Surgical operations, anaesthesia and obstetrics are fee-gouging ground zero.
Most people seeing specialists aren't made of money. They are often elderly or young families, and fee gouging hits them hard: but when urgent specialist treatment is needed, few patients shop around. In announcing PHI reforms last October, Health Minister Greg Hunt proposed an expert committee to "investigate out-of-pocket costs and options to ensure that consumers are better informed of fees before agreeing to treatment".
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Clinics spruik ‘super solution’ to weight loss
- The Australian
- 12:00AM January 10, 2018
Sean Parnell
Obesity clinics are encouraging patients to pay for weight-loss surgery with their superannuation, as one agent warns that specialists will go broke, waiting lists will blow out and the government will lose tax revenue if the rules are tightened.
Fertility clinics are also helping patients fund IVF with their superannuation by certifying that the procedures will alleviate mental illness, as required under the superannuation rules.
After a surge in health-related claims, Financial Services Minister Kelly O’Dwyer has called for public and industry feedback on the circumstances in which people gain access to their superannuation ahead of retirement.
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'Not the way they wanted to die': Final wishes of thousands of Australians going unmet
Nicole Hasham
Published: January 9 2018 - 11:45PM
The desire of thousands of gravely ill Australians to die without pain and surrounded by family is going unmet because palliative care services fall badly short, the national peak body has warned.
Just one palliative medicine specialist is available for every 704 deaths each year, according to Palliative Care Australia. It has called on the Turnbull government to make palliative care a national health priority, appoint a 'national palliative care commissioner' and ensure health workers can better help grief-stricken families.
The pleas come six months after a draft Productivity Commission report predicted that without a significant policy overhaul, "tens of thousands of Australians will die in a way and in a place that does not reflect their values or their choices".
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Advertising banned, drinks taxed, vending machines removed: doctors' plan for war on sugar
Fergus Hunter
Published: January 6 2018 - 11:45PM
Advertising junk food to children would be banned, sugar-sweetened drinks taxed, and unhealthy vending machines removed from all medical facilities under an all-out assault on poor nutrition being pushed by the Australian Medical Association.
In a new position statement, the powerful doctors' group says a suite of measures needs to be adopted by governments and businesses in 2018 to reduce the large-scale damage being wrought by over consumption of sugar.
"Improving the nutrition and eating habits of Australians must become a priority for all levels of government," AMA president Michael Gannon said.
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Health insurers want to pay GPs directly
- The Australian
- 12:00AM January 12, 2018
Sean Parnell
Australia’s largest health fund wants the federal government to allow insurers to pay GPs for seeing their members, in what would represent a major departure from long-time separation of private and primary care.
In a pre-budget submission, Bupa, which has more members than the formerly government-owned Medibank Private, has recommended insurers be allowed to pay GPs directly “for visits on behalf of customers”.
“Health insurers would then recover (Medicare) payments from the government and co-contributions from the customer,” the submission argues.
“This would enable health insurers to support their customers with early intervention in relation to risk of chronic disease or other health conditions by providing them with access to information on their customers that they currently do not have.”
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Cost of having a baby skyrockets since 90s: study
The out-of-pocket cost to have a baby has skyrocketed, according to a new study. Photo: AAP
Some Australian parents are paying 1,000 per cent more out of their own pockets to have a baby than they would have done 25 years ago.
New research from James Cook University analysed data from the Medicare Benefits Schedule from 1992-3 to 2016-17, revealing how out-of-pocket costs have changed for care both in and out of hospital.
Researcher Emily Callander said obstetric care had the highest out-of-pocket costs of any service covered by Medicare.
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Shortage hits push for blood self-sufficiency
- The Australian
- 12:00AM January 13, 2018
Sean Parnell
Most supplies of a blood product that is vital to the nation’s health system — and to patient survival — may soon be imported, undermining Australia’s long-held policy of self-sufficiency.
The National Blood Authority has confirmed 44 per cent of all immunoglobulin (Ig) used in 2016-17 had to be bought from overseas suppliers. With demand for Ig rising at 11 per cent a year, but local blood plasma collections needed to manufacture Ig rising only by 5 per cent, imports are likely to make up the majority of products used within months.
Ig is used in different forms to treat a range of conditions where immune replacement or immune modulation therapy is required, and also in cases of severe blood loss. Sourcing and supplying such plasma products now takes up half of the NBA’s $1 billion-plus government-funded budget, with costs increasing from $205.2 million to $504.6m over the past 14 years.
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Medibank’s Craig Drummond seeks action on out-of-pocket costs
- The Australian
- 12:00AM January 13, 2018
Sarah-Jane Tasker
Medibank chief Craig Drummond says the issue of rising out-of-pocket medical costs must be addressed, calling on the Turnbull government to act quickly.
He said consumers were rightly asking for higher levels of accountability and disclosure. “Any party, whether private health insurers or healthcare providers, would be unwise to push back strongly against this push (for transparency) from consumers,” he said.
Health Minister Greg Hunt has appointed chief medical officer Brendan Murphy to chair a committee to investigate out-of-pocket expenses and ensure consumers are better informed of fees before agreeing to treatment. The announcement was followed by news that Australians were increasingly accessing superannuation early to pay for medical bills.
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Federal Government urged to bankroll bariatric surgery for public patients
EXCLUSIVE, Federal Political Editor, The Courier-Mail
January 13, 2018 9:37am
POOR, obese Australians would be given free lap-band surgery under a fighting-fat fund proposed by the nation’s influential doctors.
The Royal Australasian College of Physicians is urging the Turnbull Government to bankroll bariatric surgery for public patients without private health insurance, as the health system continues to buckle under the nation’s $60 billion obesity crisis.
College president Catherine Yelland called for targeted Commonwealth funding for public hospitals to perform the procedure.
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International Issues.
Donald Trump is probably to blame for the weak US dollar
Leonid Bershidsky
Published: January 8 2018 - 6:59AM
President Donald Trump keeps bragging about the stock index gains since his election. He did so again on Friday, claiming he'd helped create "six trillion dollars in value." Be that as it may, it's also likely that Trump is at least partially responsible for the dollar's weak performance in 2017, which, from an international perspective, wiped out much of that "value."
Last year, the US dollar lost 10 per cent against the euro and 5.5 per cent against the renminbi. It was the second worst performer among major currencies after the New Zealand dollar, and its drop was the steepest in more than a decade despite three interest rate hikes and the passage of Trump's tax reform, which could logically be expected to drive the dollar's value upward. This happened for a complex set of reasons which may include the dollar's popularity as a funding tool for foreign companies and governments, but Trumps's effect on his country's global standing must be a key driver of the dollar's decline.
In a 2017 paper, Barry Eichengreen of the University of California, Berkeley, and Arnaud Mehl and Livia Chitu of the European Central Bank developed a "Mercury and Mars" hypothesis about the value of reserve currencies. They wrote that there are two sides to a currency's appeal. The Mercury side is economic: It's all about safety, liquidity, network effects and economic connections. The Mars side is geopolitical: It reflects the issuing country's strategic, diplomatic and military power.
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Stephen Bannon apologies for calling Donald Trump jnr 'treasonous'
Jeremy W. Peters, Michael Tackett and Noah Weiland
Published: January 8 2018 - 6:28AM
Washington: Isolated from his political allies and cut off from his financial patrons, Stephen K. Bannon, President Donald Trump's former chief strategist, issued a striking mea culpa on Sunday for comments he had made that were critical of the president's eldest son.
Bannon, who is quoted in a new book calling Donald Trump jnr's meeting with Russians in 2016 "treasonous," tried to reverse his statements completely, saying that the younger Trump was "both a patriot and a good man."
He said his reference to "treason" had not been aimed at the president's son, but at another campaign official who attended the 2016 Trump Tower meeting, Paul Manafort.
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Meet the one and only White House aide to quit over concerns about Donald Trump
Jennifer Rubin
Published: January 8 2018 - 3:52AM
Washington: I cannot tell you why so many White House staffers cited in Michael Wolff's book, Fire and Fury: Inside the Trump White House, did not quit on principle or come forward with their concerns about the President's fitness for office.
What can I say? People are careerists; they become addicted to the power and prestige that comes with working in the White House.
Nevertheless, in all that we have learned over the past week and all the anecdotes about those facilitating possible obstruction of justice and enabling a non-functional President, one person managed to do the right thing.
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- Updated Jan 8 2018 at 8:30 AM
Donald Trump's nonstop tweeting threatens US credibility when diplomacy at play
by Steven Erlanger
Since the first of the year, President Donald Trump has attacked a variety of countries in Twitter posts, urging protesters to overthrow the Iranian government, threatening to blow up North Korea and calling for cuts in aid to the Palestinians. In bluster and tone, he has begun 2018 where he left off.
Two things stand out about the foreign policy messages Trump has posted on Twitter since taking office: how far they veer from the traditional ways US presidents express themselves, let alone handle diplomacy. And how rarely Trump has followed through on his words. Indeed, nearly a year after he entered the White House, the rest of the world is trying to figure out whether Trump is more mouth than fist, more paper tiger than the real thing.
Countries are unsure whether to take his words as policy pronouncements, or whether they can be safely ignored. If Trump's threats are seen as hollow, what does that do to American credibility? In a series of Twitter posts on Saturday, Trump reacted to questions about his mental fitness by calling himself a "very stable genius."
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Michael Wolff's shameless - even morally dubious - strategy behind the riveting but sloppy Fire and Fury
Matthew Knott
Published: January 8 2018 - 11:46AM
Journalists use all manner of psychological tricks to get their stories. Some cajole and threaten. Others flatter their sources and seek to convince them they are on their side. Following Donald Trump's election victory, Michael Wolff took the latter approach to the extreme by publicly attacking what Trump calls the "fake news" media. Rather than a threat to the nation, Wolff argued in a podcast interview that Trump was "no different from anyone else". The United States, he added, was "not in a crisis situation", simply "a new and different political moment". He would later attack CNN host Brian Stelter for delivering a weekly "pious sermon about Trump's perfidiousness" and New York Times reporter Maggie Habberman for reporting on Trump as an "aberrant" president.
As a way of insinuating himself with the Trump White House it was shameless, even morally dubious, strategy. And it worked a treat. Wolff, in his words, took up a "semipermanent seat on a couch in the the West Wing", a level of access most reporters could only imagine. The result is a book, Fire and Fury, that is riveting, catty, sloppy and, as Trump approaches his first year in office, essential reading. Life in the age of Trump - with its rolling scandals and outrageous tweets - can be a disorientating experience. With its all-seeing narrative style and steady accumulation of devastating anecdotes, Wolff's book cuts through the noise. Its stark conclusion: the US is run by a man utterly unfit to be president, and this view is shared by those closest to him.
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The Trump Recession is coming
David Von Drehle
Published: January 9 2018 - 12:15AM
It may have been Donald Trump's most conventional move as President.
During his holiday break at Mar-a-Lago in Florida, he convened meetings to start planning his re-election campaign.
Given the garish accounts in the new book by sometimes-reliable writer Michael Wolff - of Trump's horror at winning in 2016, of his wife's angry tears at the prospect of being first lady, of his lonely hours in bed with a cheeseburger, ranting at the TV - you might wonder why Trump would want a second term.
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- Jan 10 2018 at 12:15 AM
The top 10 global conflicts to watch in 2018
by Robert Malley
It's not all about Donald Trump.
That's a statement more easily written than believed, given the US President's erratic comportment on the world stage – his tweets and taunts, his cavalier disregard of international accords, his readiness to undercut his own diplomats, his odd choice of foes, and his even odder choice of friends.
And yet, a more inward-looking United States and a greater international diffusion of power, increasingly militarised foreign policy, and shrinking space for multilateralism and diplomacy are features of the international order that predate the current occupant of the White House and look set to outlast him.
The first trend – US retrenchment – has been in the making for years, hastened by the 2003 Iraq War that, intended to showcase American power, did more to demonstrate its limitations. Overreach abroad, fatigue at home, and a natural rebalancing after the relatively brief period of largely uncontested US supremacy in the 1990s mean the decline was likely inevitable.
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Steve Bannon steps down from Breitbart News after comments critical of Donald Trump
Paul Farhi
Published: January 10 2018 - 10:18AM
Washington: Stephen Bannon stepped down as executive chairman of Breitbart News Network, bringing an end to his relationship with the far-right website that he helped become widely influential and which in turn abetted his rise as a political adviser and would-be kingmaker.
Bannon's departure was a humbling denouement for a figure who had reached the uppermost levels of power only a year ago. It leaves him with no evident platform to promote his views and no financial basis for his preferred candidates.
Bannon left Breitbart in August of 2016 to join Donald Trump's presidential campaign and later served as President Donald Trump's chief White House strategist. He was fired by Trump almost exactly a year after formally signing up with him.
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How infamous Trump dossier was created
LEAKED secret testimony has revealed that someone was killed over the infamous Donald Trump “golden shower” dossier.
THE former British government spy behind the infamous Donald Trump “golden shower” dossier shared his findings with the Federal Bureau of Investigation because he feared the President had been “compromised by a hostile foreign power”, leaked secret testimony has revealed.
And while the President tried to dismiss the dossier as “fake news” and a “political witch hunt”, the lawyer for the firm behind the explosive documents says “somebody’s already been killed as a result of the publication of this dossier”.
Democratic senator Dianne Feinstein defied her Republican adversaries on Tuesday when she published the full transcript of Glenn Simpson’s secret testimony before the Senate Judiciary Committee investigating whether the President colluded with Russia to win the election.
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- Updated Jan 11 2018 at 9:48 AM
Chinese fury over Turnbull government's foreign aid attack
Relations between Australia and China continue to deteriorate, with Beijing lodging an official diplomatic protest over the Turnbull government's accusation it is funding "white elephant" foreign aid projects in the Pacific.
In the Chinese Foreign Ministry's regular press briefing on Wednesday, spokesman Lu Kang took umbrage at International Development Minister Concetta Fierravanti-Wells' claim impoverished Pacific nations were being left with useless buildings and roads to nowhere funded by China.
Mr Lu said Senator Fierravanti-Wells should "engage in self-reflection instead of pointing fingers".
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World needs to 'prepare for the worst' with North Korea, retired general warns
Latika Bourke
Published: January 12 2018 - 4:33AM
London: The world needs to "prepare ourselves for the worst," a recently-retired South Korean general has warned, despite hopes that tensions between North and South Korea could thaw following recent talks.
Lieutenant General I. B. Chun told the Westminster-based think tank Policy Exchange that while his heart hopes the talks will lead to peace, every indication is that "we have a long way to go."
In landmark 11-hour peace talks this week, North and South Korea agreed that the North will send a team to compete in next month's winter Olympics in PyeongChang
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Trumping the shrinks: The risks for psychiatry in diagnosing a public figure
Robert M. Kaplan
Published: January 12 2018 - 12:00AM
The incumbent of the White House is causing considerable controversy – and then some – by his behaviour, leading many to question his mental state. For a psychiatrist visiting the US, any meeting is invariably followed by the question: What's wrong with him? Such questions are best deflected by saying that, as I specialise in medical history, it's too early to say; come back in 200 years.
Other psychiatrists are less restrained. Several have made public statements of their diagnoses and one has been interviewed by a Democrat committee, hardly a forum for impartiality. It is noted that several psychiatrists are the same individuals who took a leading role in promoting the egregious recovered memory therapy several decades ago, but this may be an incidental observation.
These psychiatrists are well aware of the Goldwater rule but say the situation is too serious for this to apply, suggesting they have not read the rule. The Goldwater rule was set up after the 1964 election when some psychiatrists declared that the presidential runner, Barry Goldwater, was mentally unfit. It states that it is unethical to express a public opinion about a political figure who has not been examined – and then unacceptable to breach confidentiality in any event.
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- Updated Jan 12 2018 at 11:00 PM
Misunderestimating Donald Trump is our biggest mistake
Trump book author speaks out
by Bret Stephens
Guess what? Donald Trump is a raving idiot. Every sentient person knows this, and if Michael Wolff is to be believed, so does most everyone in the White House. So why are we talking about Wolff's book Fire and Fury as if it's the news sensation of the decade?
The answer lies in that timeless definition of the word "gossip": Hearing something you like about someone you don't. Fire and Fury is catnip for everyone who detests this president. Trump gorges on burgers in a bed he doesn't share with his wife! He barely reads and constantly repeats himself! He has mastered the fine print in the Bill of Rights – all the way from the First to the Third Amendment!
But gossip isn't journalism. And Wolff's book is Exhibit A in how not to damage Trump's presidency, much less his chances of re-election.
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Donald Trump denies 'language' used amid fury over 'shithole countries' remark
Anne Gearan
Published: January 13 2018 - 7:55AM
Washington: US President Donald Trump acknowledged on Friday that he used "tough" language during a meeting on efforts toward a bipartisan immigration deal, but appeared to deny using the term "shithole" to refer to some countries.
"The language used by me at the DACA meeting was tough, but this was not the language used. What was really tough was the outlandish proposal made - a big setback for DACA!" Trump wrote on Twitter.
However, moments after the tweet, Democract senator Dick Durbin, who was in the bipartisan meeting, confirmed that the president had used the word when the conversation turned to immigration from African nations.
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'Pompous popinjay': Boris Johnson furious after Trump cancels visit
Latika Bourke
Published: January 13 2018 - 3:55AM
London: Britain's Foreign Secretary Boris Johnson has blamed Jeremy Corbyn and Sadiq Khan for US President Donald Trump's decision to abandon a visit to London, as he vowed not to let the Labour leader and London mayor put the "crucial relationship at risk."
Trump-critics and Brexit opponents seized on the President's announcement via a tweet, to say the breakdown showed there was no guarantee the US and UK would strike a quick trade deal after Brexit, as supporters of the 'leave' campaign have insisted.
Mr Trump announced on Twitter that his London trip, originally planned for 2017, was cancelled, citing the move of the the US embassy from its prestigious Mayfair location to the regenerated Battersea area south of the river Thames, which he wrongly attributed to the Obama administration, as his reason.
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I look forward to comments on all this!
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David.
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