Quote Of The Year

Quote Of The Year - Paul Shetler - "Its not Your Health Record it's a Government Record Of Your Health Information"

Thursday, October 18, 2018

The Macro View – Health, Financial And Political News Relevant To E-Health And The Health Sector In General.

October 18, 2018 Edition.
The big news is the rather large share market crash in the US with Trump saying his economic plans were great – and that the US Fed Reserve was the problem.
Alan Kohler explained it best:
There were three triggers for this week’s sell-off:
  1. US interest rates
  2. China/US cold war
  3. Rising oil prices
I reckon No 2 is the biggie and still underestimated grossly. There is a real war brewing I fear.
Read about it here:
Of course Australia was also caught up in the Global sell down. Other big news is the awfulness that has been revealed from the House of Saud. Worse and worse as time goes on....
Australia is figuring out what to do with school children who are at religious schools and discover a degree of ‘gayness’.  Nothing should happen to them and it seems ScoMo now agrees. Phew! Sadly for ScoMO this week has been a political mess and the Wentworth bye-election is looking close and dirty tricks filled. Not good!

Major Issues.

Nation’s economic success little more than ‘good luck’

  • 11:00PM October 7, 2018
Australia’s economic growth is driven more by “good luck” than good management and is vulnerable to an increasingly polarised political leadership that has failed to deliver genuine reform, according to the nation’s top business leaders and economic analysts.
Business Council of Australia chief executive Jennifer Westacott told The Australian a more ambitious commitment to economic reform was required from both sides of politics, and cited the failure of company tax and energy reform as evidence politics had become too ideological.
“Our GDP growth is being driven by population growth, by consumption and by government spending,” she said. “It is not being driven by the one thing we can control, which is productivity, but is being driven by luck. You can’t bank luck. Our GDP growth is masking a series of weaknesses.
  • Updated Oct 7 2018 at 7:00 PM

Explained: How to understand Australia's new energy mess

On August 14, a clear majority of the federal Coalition party room endorsed the National Energy Guarantee being promoted by then Energy Minister Josh Frydenberg.
Designed by the nation's top energy regulators, the NEG was designed to encourage the market to provide a mix of power that would reduce Australia's carbon emissions but would be reliable enough to avoid blackouts - and reduce household power bills. With the strong backing from business, the NEG appeared to be a policy that could attract bipartisan support and provide a stable framework for investment to end a decade of damaging "climate wars".
But the Coalition partyroom endorsement did not extend to a minority of Liberal and National MP's, including former prime minister Tony Abbott, who fiercely opposed the NEG, because it privileged renewable energy over coal. Their opposition fed into the conservative push against Malcolm Turnbull's leadership that climaxed 10 days later with a Liberal party vote to install Scott Morrison as prime minister. Along the way, the NEG was dumped, to the general dismay of the power industry and business users.
  • Updated Oct 7 2018 at 11:00 PM

Rising bond yields will hurt global equity markets

Veteran investor Geoff Wilson says further rises in US bond yields could spell the end of the longest bull market in history.
On Friday, the 10-year Treasury bond yield hit a fresh seven-year high of 3.23 per cent on the back of US employment data. While the job numbers came in well below expectations, earnings were higher and the unemployment rate fell to its lowest level since 1969.
Mr Wilson, chairman of Wilson Asset Management, said the 10-year yield could rise as high as 5 per cent, and that could bring an end to the long bull market.
  • Updated Oct 8 2018 at 5:43 AM

Chinese investment in Australia slumps 40 per cent

Chinese investment into Australia slumped 40 per cent last year, twice the drop worldwide, according to new figures, which highlight the impact of Beijing's crackdown on trophy acquisitions and Canberra's tougher stance on sensitive infrastructure and property.
A new public database to be released on Monday by the Australian National University, supported by Treasury and with input from the Reserve Bank of Australia, shows Chinese commercial investment peaked in 2016 at $14.9 billion, before falling to $8.9 billion last year.
"This is an unusual drop in Chinese investment into Australia," said the project's leader Peter Drysdale, who heads the Asian Bureau of Economic Research at ANU. He noted the decrease was significantly larger than the 19.3 per cent fall in China's worldwide foreign direct investment.
  • Updated Oct 7 2018 at 11:00 PM

The 'in touch' politician masters misperception of fact

Here are some questions for you to reflect on. In the past 20 years, has the percentage of the world's population living in absolute poverty doubled, stayed the same or halved? That question was put to Australians by the opinion pollster, IPSOS. Just 6 per cent of Australians answered the question correctly. 
Six per cent! The answer is that poverty has halved in the past 20 years; that's something to celebrate. Yet about 40 per cent of Australians thought poverty had doubled.
Let's try another question. How many one-year-old children, worldwide, have been vaccinated against disease? Is it 20 per cent, 50 per cent or 80 per cent? Fourteen per cent of Australians gave the right answer. Since there was a choice of three answers and given that we are unlikely to know the answer to the question, you'd expect about 33 per cent of people to get the right answer. No, just 14 per cent did. The right answer is 80 per cent. That's good news and helps to explain why global life expectancy has risen to above 70 years of age.

Australia won't mediate as doctors leave Nauru

8:58am Oct 8, 2018
The federal government won't intervene to help Medecins Sans Frontieres continue providing mental health treatment for asylum seekers on Nauru.
Medecins Sans Frontieres (Doctors Without Borders) was given 24 hours to leave Nauru on Friday, after being told by the Nauruan government its free psychological and psychiatric services were no longer required.

Tech's challenge for democracy isn't just an engineering matter

By Chris Zappone
6 October 2018 — 11:52pm
With the world watching, Australia prevented China from building its 5G network on national security grounds. In doing so, Australia placed a line around the nation’s strategic telecoms infrastructure.
Australia has another opportunity – this time to correct what has become a flaw in the culture of the Western technology world that now poses a threat to liberal democracy everywhere.
The Assistance and Access Bill 2018 would allow the government to require tech companies “to assist” in gaining access to information of suspected criminals and hackers and agents of influence. While explicitly avoiding calls to create backdoors in devices, the bill would require a level of co-operation from technology companies that the industry and activists have long resisted.
  • Oct 8 2018 at 12:00 PM

Defence think-tank sounds alarm over $50b submarine project

A top military think-tank has warned of a raft of potential threats to the navy's ability to conduct submarine missions and protect Australia's sea lanes as it switches from the ageing Collins class fleet to unproven French designed boats.
In a study published on Monday, the Australian Strategic Policy Institute says the change in submarine fleet will be the most complex capability transition ever undertaken by the Defence Force.
According to the study's author, former senior Defence Department bureaucrat Marcus Hellyer, the navy should extend the life of all six Collins class vessels, with the last one to be retired in 2048 to avoid a capability gap, and recruit three times as many submariners than it has now to crew the 12 new, bigger French boats.
  • Oct 8 2018 at 1:54 PM

Coal power finished by 2050 if temperature increase kept to 1.5 degrees: IPCC

Coal power would have to be eliminated or reduced to negligible levels and agriculture and land use changed dramatically for the world to limit temperature increases to 1.5 degrees Celsius above pre-industrial levels, a landmark report says.
The special report by the International Panel on Climate Change lays out a stark challenge to the coal industry if the world is to limit global temperature increases to 1.5 degrees - the aspirational level that nations agreed to pursue in addition to their individual national targets in the Paris climate agreement.
Australian pure coal exporters such as Whitehaven Coal, Yancoal and New Hope Corporation base their outlooks on International Energy Agency "New Policies" scenarios which allow for modest increases in global coal exports out to 2040, with larger increases in their primary Asian markets.
  • Updated Oct 8 2018 at 10:23 AM

Dark clouds gather over the US housing market

by Rana Foroohar
The US economy is white hot. Consumer confidence is higher than it has been since the 1990s. Unemployment just hit its lowest level since 1969. Using amazingly bold language for a central banker, US Federal Reserve chairman Jay Powell says he is "very happy" about the " remarkably positive" outlook which he predicts may continue "for quite some time". So why, amid all this good news, is the US housing market slowing?
It is a hugely important question, because housing is still where the majority of Americans keep most of their wealth, and it has been a traditional bellwether for economic trends. Nationwide, sales and building permits are down. Several once soaring markets, including New York City, the San Francisco area, and Denver, have been softening. Construction activity has been slowing, too, which is a concern given the disproportionate role that home building plays in US economic growth.
The problem is, ironically, the growth of the housing market itself, which has been bifurcated and has outpaced the ability of most consumers to pay for shelter.

The political will to prevent climate change is lacking, even as the cost climbs

By David Crowe
8 October 2018 — 7:50pm
Australians are being presented with another startling contrast between colossal risk and paltry action over climate change.
The latest scientific advice is that human activity has already caused an increase of 1 degree in world temperatures, with global warming estimated to reach 1.5 degrees by 2052 on current trends.
The cost is astronomical. The damage over the years to 2100 would reach $US54 trillion in today’s dollars if warming was kept to 1.5 degrees. The cost would climb to $US69 trillion if warming reached 2 degrees.

The next financial crisis is staring us in the face

By Barry Ritholtz
9 October 2018 — 10:45am
The financial crisis ripped through Wall Street 10 years ago, pushing the global economy to the edge of the abyss. One might think those searing experiences would have created a learning opportunity -- for managing risk better, understanding structural imbalances in the financial markets, even learning a bit about how our own cognitive processes malfunction.
That was one of the key takeaways of an extraordinary conference I attended last week called Risk: Retrospective Lessons & Prospective Strategies co-sponsored by the Santa Fe Institute and Morgan Stanley in New York. It left me excited, brimming with ideas and curious about how we could do better as investors.
I took notes - and I never take notes. Every discussion topic had profound implications for the capital markets.

Investors still haven't learnt their lesson since Trump's election

By Barry Ritholtz
9 October 2018 — 5:52am
People, must we go over this yet again?
I have gently chided you over the years not to allow politics to infect your investment portfolios. Obviously, this was to no avail based on a Bloomberg News article earlier this month with the headline "Republican Voters Bet on Stocks After Trump's Win. Democrats Didn't."
I suppose I shouldn't be surprised, since it's clear that so much - no, too much - human behaviour is based more on feeling than thinking. Still, colour me disappointed.
  • Updated Oct 9 2018 at 8:18 AM

2018 Nobel prize in economics awarded for work on climate change and innovation

Stockholm | Just a day after a United Nations panel called for urgent action on climate change, the Nobel Prize in economics was awarded Monday to one American researcher for his work on the economics of a warming planet and to another whose study of innovation raises hopes that people can do something about it.
The Royal Swedish Academy of Sciences awarded the $US1 million ($1.4 million) prize on Monday to William Nordhaus of Yale University and to Paul Romer of New York University.
Nordhaus, 77, who has been called "the father of climate-change economics", developed models that suggest how governments can combat global warming.

Want a more capable nation? Start younger

By Ross Gittins
9 October 2018 — 11:00pm
The older I get, the more unimpressed I become with both sides – all sides – of politics. And the more disdainful I become of people who let loyalty to a particular party determine their support or opposition to particular policies. Don’t think for yourself, just follow your herd of choice.
On the other hand, since I do care about policy, I shouldn’t be slow to give a tick to whatever side is first to come up with a good one. So, two cheers for Bill Shorten for promising to extend universal access to preschool to three-year-olds.
The Coalition government and its predecessors, together with the state governments, have done a good job of ensuring almost all four-year-olds are now attending preschool for the equivalent of two days a week during the school year (though, for reasons I can’t fathom, the feds have insisted on guaranteeing funding for only a year at a time).
Trouble is, getting four-year-olds to preschool takes us only halfway to catching up with most other advanced economies, even New Zealand. So, with any luck, Scott Morrison won’t be too proud to match Labor’s promise to extend it to three-year-olds.

Religious freedom review enshrines right of schools to turn away gay children and teachers

By Jewel Topsfield
9 October 2018 — 11:45pm

Talking points

  • A religious review commissioned in the wake of last year's same-sex marriage victory has been kept under wraps for months.
  • Sections of the report sighted by Fairfax Media show a number of proposed amendments to anti-discrimination legislation.
  • The report's authors have stopped short of endorsing a number of measures proposed by conservative MPs and religious leaders.
Religious schools would be guaranteed the right to turn away gay students and teachers under changes to federal anti-discrimination laws recommended by the government’s long-awaited review into religious freedom.

How religion will divide the Liberals and inflame the Parliament

By David Crowe
10 October 2018 — 9:00am
The new fight over religious freedom comes at the worst possible time for Prime Minister Scott Morrison and his wounded government.
The Liberals and Nationals are desperate to smooth over their differences after the trauma of the August leadership spill but there is no way to pretend they are unified on this issue.
Prime Minister Scott Morrison says that the law already permits schools from refusing to accept a child based on their involvement in the LGBTQI community and that the government is not looking to change that law.
  • Updated Oct 10 2018 at 12:22 PM

How to avoid the next financial crisis: keep capital requirements up

The financial crisis of 2008-09 and the resulting recession were a historical watershed. The pre-crisis world was one of globalisation, belief in markets and confident democracies. Today's is a mirror image.
The economic impacts are certainly not the end of the story. But they are the beginning. The latest World Economic Outlook of the IMF provides a valuable empirical analysis of the effects. It brings out two big points: the impacts have been long lasting and have spread far beyond the countries that suffered banking crises.
The obvious way to measure the economic impact of crises is by comparing post-crisis performance with what would have happened if pre-crisis trends had continued. Yet pre-crisis trends were, to some extent, unsustainable. So, the IMF's analysis adjusts pre-crisis trend growth for credit booms.
  • Oct 11 2018 at 5:50 AM

Equity tantrum grips Wall St, slams tech stocks including Atlassian

Washington | US equity markets have been pummelled the most since February, led by tech stocks including Australia's Atlassian, on fresh fears rising interest rates and a worsening trade war with China will derail global economic growth that the IMF this week warned is already fragile.
At the close in New York, the Dow Jones was more than 831 points lower - a 3.2 per cent drop. The S&P 500 shed 3.1 per cent. The Nasdaq fell 4.1 per cent. It was the biggest drop since the sell-off in February.
Within hours of the close, President Donald Trump lashed out at the Federal Reserve for raising official interest rates, suggesting he blames the central bank for today's selloff.
  • Updated Oct 11 2018 at 7:39 AM

Why US-China trade tensions are fuelling the bond sell-off

It's probably no coincidence that long-term US interest rates have spiked to their highest level in seven years at the same time that investors have come to the belated realisation that the Trump administration's tariffs on Chinese-made goods are likely to remain in place for years, which will undoubtedly add to rising price pressures.
At the outset, most analysts regarded US President Donald Trump's tariff threat as a negotiating ploy to force China to open up its markets and commit to buying US-made goods in order to whittle back the $US375 billion ($527 billion) trade surplus it runs with the US.
But it's now clear the Trump administration's gripe with China runs much deeper than the yawning US trade deficit.

Make no mistake, gay children are the target of new report

By Nicholas Stewart
10 October 2018 — 3:29pm
When I was 14 years old, I wasn’t aware of my homosexuality. Yet some of the kids on my (public) school bus thought they knew. One boy in particular constantly taunted me about how I styled my hair. He would yell loudly from the back of the bus “Hey Nick, are you f---ing gay?”.
Daily incidents like that pushed me deep into a closet and for the rest of my teenage years I suppressed my sexuality to a point of depression. Like many gay kids, I didn’t get to experience school dances, parties, sports events and carnivals like my straight peers. I felt different, alienated and confused. I withdrew from teenage life and I’ve been trying to catch up ever since.
My school had some gay teachers and, I guess, their sexuality was not that apparent to most. But one teacher had effeminate characteristics and often copped a homophobic spray from various kids in the classroom. Yet when a boy in the year ahead of me attempted suicide on the school grounds (his girlfriend had ended their relationship), that particular teacher was the only one who mentioned the incident in class and used his sensitivity to reach out to us and calm us down.

'I haven't left anger yet': NEG architect slams policy 'anarchy'

By Cole Latimer & Peter Hannam
10 October 2018 — 1:23pm
The architect of the failed National Energy Guarantee has claimed Australia has sunk into policy "anarchy" as part of a fierce critique of the government's shift to focus on power prices instead of other issues such as reducing carbon emissions.
Energy Security Board chair Kerry Schott said she remained bitter over the dumping of the signature energy plan when Malcolm Turnbull was deposed as prime minister in late August.
 “I’m still going through the stages of grief, and I haven’t left anger yet,” Dr Schott told The Australian Financial Review's energy summit in Sydney on Wednesday. “I characterise the general state of affairs right now as anarchy."

Blatant currency exchange rip-offs under official scrutiny

By John Collett
10 October 2018 — 12:00am
Australians have long been dudded by poor rates and charged high fees on money they change into foreign currencies but there are signs the party might be over for the exchange companies.
Capital Economics estimates that in 2016 Australians likely paid at least a $1 billion more in high fees and poor rates on their currency exchanges than they would likely pay in a competitive marketplace. That research confirmed that the most costly way to buy foreign currency is through the big banks.
And it is not just overseas travellers who are being stung. New figures from comparison site Mozo show that the big four banks are charging 4.7 per cent more to customers, on average, on overseas money transfers than the best-value online services.
  • Oct 12 2018 at 9:42 AM

Bonds amplify equities crash

Supposedly smart investors argue there is a long-term negative correlation between fixed-rate bonds and equities that means you should allocate to the former to protect against losses in the latter.
As the experiences in February, September and October demonstrate, this presumption is totally wrong.
Equities have been smoked while the Composite Bond Index, which tracks "fixed-rate"—as opposed to "floating-rate"—bonds, has been concurrently hammered.
Rather than mitigating equity losses, fixed-rate bonds amplified them, as we've warned was a risk for years.

Read the full 20 recommendations from the religious freedom review

12 October 2018 — 10:13am
Fairfax Media's exclusive report on Wednesday detailing sections of the religious freedom review commissioned by the Coalition government has triggered a political furore.
The report by former attorney-general Philip Ruddock, which was ordered by Malcolm Turnbull in the wake of last year's same-sex marriage victory, was delivered to the government in May but has been kept under wraps ever since. 
Prime Minister Scott Morrison has vowed to make the report public towards the end of the year, when he also plans to release the government's response. 

Mental health on Nauru 'absolutely devastating' as Trump rejects refugees under extreme vetting

By Michael Koziol
12 October 2018 — 12:00am
Global humanitarian giant Medecins Sans Frontieres says the mental health of refugees on Nauru has deteriorated to an "absolutely devastating" state, as dozens of men, women and children are knocked back for resettlement in the United States under Donald Trump's "extreme vetting".
Doctors who spent the past 11 months on the island reported a "shocking" 78 cases of attempted suicide, suicidal thought or self-harm by refugees - including an attempted suicide by a 9-year-old.
Medecins Sans Frontieres psychiatrist Beth O'Connor said the US rejected about 70 people for resettlement in May, and more had followed in the months since, causing deep distress.

'Politics making it hard for politicians to do right thing: energy chief

By Cole Latimer
11 October 2018 — 7:30pm
Energy industry chiefs have hit out at changing government rules, saying they have helped create domestic gas shortages and the potential need to import gas, but argue further intervention in the sector will not help.
Speaking at the AFR National Energy Summit on ThursdayEnergyAustralia’s chief executive Catherine Tanna said changing guidelines from the government had created instability across the whole sector.
“Calls for stability are becoming background noise, too easily brushed aside in a populist energy debate,” Ms Tanna said.

Why global sharemarkets are melting down

By Ben Wright
12 October 2018 — 11:31am
For many it will feel that the latest market sell-off has come out of the clear blue sky. Aren't we being told that the global economy - and the US in particular - is doing pretty well right now? Why then are equities taking fright - with Wall Street plunging over the past two days and Asian and European markets following suit?
The slightly Wonderland answer is that equity investors are worried precisely because the global economy is in such fine fettle.
Let's follow the breadcrumbs backwards. We are now three decades into an equities bull market. Investors have been telling themselves that it has to end at some point. There has been a great deal of debate about whether equities are overvalued. On some measures they are; on others they aren't. Ultimately, which side you come down on is principally a matter of faith. And faith is a fragile thing.

Labor to back PM’s tax cuts, Chris Bowen says

  • October 12, 2018
Labor will back a federal government move to bring forward tax cuts for companies with annual turnovers less than $50 million.
Those companies will have their tax rate cut to 26 per cent in 2020/21, then 25 per cent the following year, under legislation that will be introduced to parliament next week.
“Labor has always been the friend of small business,” Labor leader Bill Shorten and shadow treasurer Chris Bowen said in a statement on Friday. The federal opposition says it will pay for it by delaying the introduction of its proposed Australian Investment Guarantee by 12 months.

Reserve Bank issues new trade war warning

  • By James Glynn
  • Dow Jones
  • October 12, 2018
Sharply escalating trade tensions between the US and China represent a growing external risk to Australia’s economic outlook, the Reserve Bank of Australia has warned.
In a twice-annual report card on financial sector stability, the RBA said Australia, a major exporter of mineral and energy products to the global economy, would be in the firing line of any slowdown brought on by the worsening trade spat.
“Australia would be sensitive to a sharp contraction in global growth or dislocations in global financial markets because of the importance of trade and capital inflows,” the RBA said.
 “Downside risks to (global) growth have become more prominent since the previous review,” the central bank added.
  • Oct 12 2018 at 1:14 PM

RBA warns that US-China trade friction adds to global market vulnerability

by Karen Maley
Growing trade frictions between the United States and China, combined with sky-high asset prices have created potentially incendiary combination for global financial markets, the Reserve Bank of Australia warns in its latest Financial Stability Review.
Australia's central bank also warns that the growing popularity computer-driven trading could amplify any financial market disruption, while bond yields could climb sharply on any sell-off because of the reduced liquidity in financial markets.
The RBA's warnings have proved timely given the brutal sell-off in global markets over the past week, which has pushed yields on benchmark US 10-year bonds close to seven-year highs.
  • Updated Oct 12 2018 at 11:40 AM

What the market cycle is signalling to investors

The term du jour in financial markets is "late cycle". This concept dominates talk among investment professionals and their clients all around the world, and this week in London was no different.
It's an idea that "profoundly runs through everything", JP Morgan Asset Management head of multi-asset strategy John Bilton says.
But what is it? And does it really matter that much anyway? And if it does matter, what should be done?

Scott Morrison will change the law to ban religious schools from expelling gay students

By David Crowe
12 October 2018 — 11:45pm
Prime Minister Scott Morrison will seek to end a political firestorm over gay rights and religious freedom by moving an urgent change to discrimination laws so that religious schools cannot expel students on the basis of their sexuality.
Parliament could vote on the new safeguard within days after Mr Morrison vowed to make it clear that gay students must not be thrown out of religious schools under special exemptions in the Sex Discrimination Act.
In an escalating dispute over personal rights, Opposition Leader Bill Shorten wrote to Mr Morrison on Friday night with an offer to remove the exemptions entirely on the grounds they are “out of step” with the views of most Australians.

Breaking news: government does what it's meant to do

By Peter Hartcher
13 October 2018 — 12:00am
This may come as a shock. The federal government is on the cusp of coming up with an actual solution to a real problem.
You could be forgiven for walking away in disgust at the conduct of federal politics. There was the Liberal Party's urgent need to change prime minister for reasons so mysterious the new Prime Minister still hasn't been able to explain.
There was the dire failure to fix urgent policies like climate change and energy. Today's generation of families and businesses have given up. Tomorrow's generation will demand to know what the politicians were doing to cut carbon output as the global climate approached the point of no return.

Is the sharemarket party over?

By Elizabeth Knight
12 October 2018 — 4:57pm
Each time stock markets experience a steep sell-off - or take a nasty hit over a couple of days - it increasingly tests the nerves of investors, who wonder whether or when it will move into a full-blown correction and bear market.
In other words, is the market party just taking a breather before the music begins again or has the beer run out and is the hangover about to kick in?
There is a broad but not universal consensus that markets have been testing their upper limits this year, but there is absolutely no agreement on whether the world stock markets are about to fall out of bed or whether this week’s rout is just the pullback we needed to have.

Sorry, small business has no special sauce for jobs

By Ross Gittins
13 October 2018 — 12:05am
Scott Morrison is surely on a winner with his decision to step up pursuit of jobs and growth by bringing forward the time when small and medium businesses have their company tax rate cut to 25 per cent.
Certainly, it’s likely to be a popular decision, not just with the owners of the more than 3 million businesses who’ll be paying a bit less tax, but also with a lot of ordinary voters.
After all, as everyone knows, small business is the backbone of the economy and its engine room. It’s where most of the economy’s jobs are.

'It hits a nerve': the politicisation of the population debate

By Jessica Irvine
13 October 2018 — 12:00am
Bob Birrell is no stranger to controversy.
The 80-year-old, Princeton-qualified academic, has spent most of his career warning of the pitfalls of what he sees as too-rapid population growth in Australia.
But even to Birrell’s mind, this week’s extraordinary political intervention by NSW Premier Gladys Berejiklian, calling for a reduction in the rate of migration into Australia’s most populous state, stands out as a turning point in how state governments plan for a growing nation.
“There has been planning, but not of the sort which says : ‘We have got major problems here, it’s really difficult to retrofit a city, it might be time to have a break.’ That’s now changed. That’s what’s so significant about this past week.”

If anything, this correction is Trump’s fault

  • 11:00PM October 12, 2018
The fact that the US sharemarket had a convulsion this week and sent an angst wave around the world is not surprising — corrections are a natural part of equity markets, and happen all the time.
This one has simply involved the US playing catch-up with the rest of the world, which has been grappling with a bear market this year — in virtually everything, as I’ll explain. What brought the bear market roaring into the US like Hurricane Michael was the trade war and rising bond yields.
Markets had been going along in the belief that we were dealing with a trade war that would lead to a deal, but as I pointed out here earlier this week (“US declares cold war on China”), Vice-President Mike Pence’s speech last week put paid to that idea. That was trigger No 2. No 1 was the 10-year bond yield going back above 3 per cent three weeks ago, and hitting 3.26 per cent on Tuesday.

Financial Services Royal Commission Issues.

  • Updated Oct 7 2018 at 11:00 PM

Bank compensation schemes need scrutiny too

Deliberately delaying compensation payouts, strategising ways to reduce remediation bills, using members' money to pay for refunds and ignoring requests from the regulator to pay up are just some of the ways financial institutions have been caught doubling down on poor behaviour.
It has prompted calls in some quarters for an independent oversight of remediation programs as well as the introduction of a compensation scheme of last resort for those who fall through the cracks when a licensee closes or the professional indemnity insurance cover is inadequate.
Remediation is included in the royal commission's terms of reference and to date hasn't had much airplay. It will likely be raised in the final round of hearings of chief executives next month. External dispute resolution (EDR) bodies also need to be scrutinised.
  • Updated Oct 7 2018 at 8:15 PM

Banking royal commission interim report: The trashing of ASIC's reputation

Kenneth Hayne takes aim at big targets, particularly big banks. But his interim report also hits out hard against the regulators responsible for market behaviour –  good and bad.
The Australian Securities and Investments Commission comes in for particularly astringent criticism as the key organisation supposedly in charge of finding examples of misconduct or illegality in financial services, punishing it as required and preventing it recurring.
In the royal commission's blunt view, ASIC instead has become an institution too reluctant to litigate, too slow to insist on remedial action, too prone to negotiate rather than denounce and punish and too soft in the penalties it imposes.

Note to banks: the long run is now, and the bills are arriving

By Ross Gittins
8 October 2018 — 12:00am
It’s easy to take Keynes’ dictum that “in the long run we’re all dead” out of context. When you do, you can come badly unstuck - as the banks and insurance companies are discovering.
In case you’ve ever wondered, economists see the short term as being for a year or two, the medium term as about the next 10 years, and the long term as everything further away than that.
See the point? If the long run is only 10, 15, 20 years from now, you won’t be dead. Nor will most of the people around you at work. The economy will still be alive and kicking in 20 years’ time and, in all probability, so will your company.

Big four bank chiefs to face parliamentary grilling

By Clancy Yeates
8 October 2018 — 12:00am
Bank chief executives this week face a highly-anticipated public grilling that is likely to scrutinise the causes of banking's cultural problems, and what is being done to ensure accountability for the scandals being uncovered by the royal commission.
CEOs from the Commonwealth Bank, Westpac and ANZ Bank will appear before the government's ongoing parliamentary banking inquiry, the first detailed public questioning of the bankers since the royal commission's interim report was published 10 days ago.
The hearings, to be followed by a grilling of NAB next week, are likely to explore some of the key question raised by Commissioner Kenneth Hayne, including the potential for reform of banker pay, financial advice, and mortgage lending.
  • Updated Oct 8 2018 at 11:00 PM

Canberra's breathtaking hypocrisy on the banking royal commission

Commissioner Kenneth Hayne has done a brilliant job of revealing the sordid underbelly of the country's financial system, but it would be naive to think that bankers won't revert to many of their previous bad habits once his blowtorch is safely packed away.
To their huge annoyance, bankers have been on the back foot since the public hearings began in March.
Their hopes of bamboozling the financially illiterate lawyers were destroyed, with counsel assisting Rowena Orr, QC, ruthlessly pouncing on every attempt at obfuscation.

Banks spooked as behavioural ghosts won't be put to rest easily

By Elizabeth Knight
9 October 2018 — 12:00am
On the eve of bank chief executives fronting a gruelling parliamentary inquiry and only weeks before full-year results are posted, confession season has taken on a whole new dimension.
ANZ has become the third of the big banks to make a run at clearing the decks and admitting to investors the massive cost of compensating customers. ANZ also provided the first hint of the cost paid to its army of lawyers involved in the royal commission - $55 million before tax.
The National Australia Bank is the only one of the big four to have not yet disclosed the financial carnage associated with overcharging fees and the cost of trawling through its client accounts to find out who the victims were.

Wealth or greed for their own sake does not define the liberal

  • 11:00PM October 8, 2018
In the halcyon days before the global financial crisis, when labour and capital were doing well, the terms Left and Right more or less meant something.
To be “on the Right” of politics meant supporting the conventional wisdom of that time: lowering taxes on the wealthy, cutting welfare to encourage workforce participation, celebrating the financial services sector and privatising government assets.
To be on the Left signalled, mainly, an affection for identity politics. So convincing had the ideas of the Right been that social democratic parties in the US, Britain and Australia pretty much adopted its program. The economic debate had shrunk to one of degree, not kind.
  • Oct 9 2018 at 11:00 PM

Banks to stop charging dead, support grandfathering ban

The Australian Banking Association will outline ambitious plans to ban grandfathered commissions, promise to stop charging dead customers and end the fees-for-no-service rort with a suite of changes to the banking code of practice to be announced on Wednesday.
ABA chief executive Anna Bligh said charging ongoing advice fees to dead people and fees for no services was inadequate and the changes would address two key issues to emerge from the Hayne royal commission.
"It has always been unacceptable for any organisations to charge fees without providing a service," Ms Bligh said.

Spotlight must shine on bank boss pay

By Jessica Irvine
10 October 2018 — 11:00pm
Who would want to be a bank CEO these days?
Amid a public mood to see heads on stakes for the potential crimes committed by their institutions, the bosses of Australia’s big four banks will front a parliamentary committee in Canberra this week and next, beginning on Thursday with the Commonwealth Bank’s Matt Comyn and Westpac’s Brian Hartzer.
But it’s a mere warm-up act for the real show, which kicks off next month when the bank bosses will undergo a more rigorous and potentially career-destroying interrogation from the royal commission’s razor-sharp-minded senior counsel assisting.

National Budget Issues.

IMF downgrades outlook for Australian economy on trade fears

9 October 2018 — 7:31pm
The International Monetary Fund is downgrading its outlook for the world economy, citing rising interest rates and growing tensions over trade.
The IMF said the global economy would grow 3.7 per cent this year, the same as in 2017 but down from the 3.9 per cent it was forecasting for 2018 in July.
Australia would hit 3.2 per cent growth this year before slipping to 2.8 per cent next year, the IMF said. In April, the IMF was forecasting 2.9 per cent for Australia next year. The May federal budget forecast 3 per cent GDP in 2018-19 and the same the following financial year.
  • Updated Oct 11 2018 at 8:00 PM

Business readies to leave Coalition right behind

In February last year, NAB chairman and former Treasury secretary Ken Henry blew into Canberra to lament the damnable state of politics.
Politics, he said, had degenerated into trench warfare in which populism was the ammunition. The reform narrative had been replaced by the language of fear and anger.
"Our politicians have dug themselves into deep trenches from which they fire insults designed merely to cause political embarrassment. Populism supplies the munitions," he said.

Health Issues.

Coalition launches mental health inquiry as Labor accuses it of playing 'catch-up'

Productivity Commission to examine economic impact of mental illness and its funding
The federal government has commissioned an inquiry into mental illness and its impact on the economy, saying it wants to know whether Australia’s mental health funding is delivering the best possible outcomes.
The government has asked the Productivity Commission to investigate the issue in an 18-month inquiry to begin later this month.
  • Updated Oct 7 2018 at 11:58 AM

Productivity Commission to review mental health in the Australian economy

The Productivity Commission will consider the impact of mental health on the Australian economy, with a new inquiry set to review $9 billion in spending nationally.
Treasurer Josh Frydenberg and Health Minister Greg Hunt announced the inquiry on Sunday, calling for the effectiveness of spending by federal, state and territory governments to be considered.
In 2018, one in five Australians with a mental health issue don't seek help because of perceived stigma.

A third of unplanned pregnancies aborted in Australia

  • 11:00PM October 7, 2018
Almost a third of unplanned pregnancies in Australia end in abortion while stillbirth is more common among migrant women with “non white” backgrounds, according to survey data released today by the Medical Journal of Australia.
The data, collected by researchers from La Trobe University and the University of Western Australia, attempts to establish the prevalence of abortions and stillbirths.
Researchers from the Judith Lumley Centre at La Trobe University, led by Angela Taft, found that one in four Australian women became pregnant in the past 10 years without planning to do so, and that 30.4 per cent of those pregnancies ended in abortion. The team undertook a national random computer-assisted mobile and landline telephone survey between December 2014 and May 2015 and interviewed 2013 women aged between 18 and 45.

Health insurance reforms may miss April 1 start date

  • 11:00PM October 7, 2018
The main pillar of the Morrison government’s health insurance reforms could miss the planned start date as insurers push for a 24-month transition period amid debate over the clinical definitions used to underpin the policy.
Health Minister Greg Hunt is determined to introduce a range of health insurance reforms on April 1, ahead of an expected mid-May federal election, and Labor has signalled health insurance policy will play a key role in its campaigning.
The key reform in a suite of new initiatives that are aimed at addressing affordability and transparency is the introduction of gold, silver, bronze and basic categories, but industry insiders have warned that the new categories could miss the deadline.

Mental health expert calls for reforms as well as more funding

  • 11:00PM October 7, 2018
A review of the $9 billion mental health funding system should cover mounting concerns about the role of the National Disability Insurance Scheme in scrambling an already broken system and not be used as an excuse for more money without reform, a top expert says.
Josh Frydenberg and Health Minister Greg Hunt yesterday announced the Productivity Commission would investigate the issue which will, for the first time at an economic level, explore the cost of poor mental health on incomes, living standards, physical wellbeing and social connectedness.
Former National Mental Health commissioner Ian Hickie, who is also co-director of health and policy at the University of Sydney’s Brain and Mind Centre, told The Australian any government that thinks it can fix the problem with more money alone would be “making a big mistake”.
  • Oct 8 2018 at 11:37 AM

Headaches for InvoCare, Sonic and Primary as flu cases tumble

The flu vaccine is having a significant impact on the fortunes of a handful of ASX companies.
Australia's largest funerals group, InvoCare, became the latest to feel the pinch on Monday when it warned the number of funeral cases it handled in the nine months ended September was now 2000 lower than at the same time last year, because of a very mild winter and an effective flu vaccine campaign. This resulted in a $17 million hit to revenues so far this calendar year.
InvoCare shares slipped a further 3.6 per cent on Monday in early trading to $11.52. It is down 21 per cent since mid-August.

'Father of Medicare' John Deeble dead at 87

By Sally Pryor
9 October 2018 — 12:07pm
John Deeble, the “father of Medicare”, has died aged 87.
The Canberra-based professor co-authored with Dr Dick Scotton the original proposals for universal health insurance in Australia in 1968.
This work led to the establishment of Medicare in its original guise of Medibank during the term of the Whitlam government.

Private health premiums could rise by 12 per cent next year, leaked modelling shows

By Nigel Gladstone & Esther Han
10 October 2018 — 12:00am
Private health insurance premiums have been predicted to rise by up to 12 per cent for some people next year if a scenario, favoured by the government is adopted, confidential federal health department modelling leaked to Fairfax Media shows.
Doctors are warning that the reforms, meant to be "premium neutral", should be looked at with "extreme caution", are not "consumer focused" and lack input from medical professionals.
The changes, due to start in April 2019, will see cataract, bariatric, spinal and some orthopaedic surgery insured only at the highest priced level, despite being covered in some lower-cost policies now.

States in revolt on hospital funding clawback

  • 11:00PM October 9, 2018
The debate over public hospital funding has escalated, with several states now targeting the independent financing body over decisions that have retrospectively stripped $609 million from the system.
The commonwealth takes ­advice from the Independent Hospital Pricing Authority and the ­administrator of the National Health Funding Pool to reconcile the states’ hospital activity with the appropriate level of funding. The complex process was determined when the former federal Labor government introduced ­activity-based funding and a ­national efficient price.
Ahead of the federal election, several states have again found themselves unexpectedly short-changed and want funding to become a major political issue. They say the reconciliation process is flawed when their hospitals ­deliver services to patients but the commonwealth ultimately ­declines to contribute.

Private health insurance simpler and cheaper for everyday Australians

New rules have been announced that will make private health insurance easier to understand and help Australians choose the cover that best suits them and their families from 1 April, 2019.
11 October 2018
New rules announced today will make private health insurance easier to understand and help Australians choose the cover that best suits them and their families from 1 April, 2019.
The rules establish easy to understand clinical categories and a Gold, Silver, Bronze and Basic classification system.
This is a no surprises approach that will, for the first time, provide clearer information to consumers and allow them to compare different health insurance policies and choose the cover that best suits their needs.

Health insurance reform to make 'winners and losers'

By Nigel Gladstone & Esther Han
11 October 2018 — 12:00am
Health insurance premiums will be shaken up and down by reforms due to start in April 2019, with the costs of top coverage rising while lower levels get cheaper, confidential modelling by Deloitte for the Health Department shows.
The new tiered system will make various hospital treatments compulsory if they are to be included in one of four categories to be called - Gold, Silver, Bronze and Basic.
The Deloitte report found removing the currently allowed restrictions in some health insurance policies will increase costs to insurers by about 3.5 per cent but "this is more than offset by the impact of the proposed categorisation design" that "leads to a net 5.3 per cent reduction in costs to the industry".

Life expectancy at risk from early obesity

  • 11:00PM October 10, 2018
Australians who are obese as young adults risk dying up to 10 years earlier than their slimmer counterparts, researchers say.
Modelling from The George Institute for Global Health and the University of Sydney, published in the International Journal of Obesity, raises the most ­concern for heavily overweight people in their 20s and 30s.
“We know that excess weight has an impact on your health, but to have excess weight as a young adult is really significant on life expectancy,” said lead author Thomas Lung.
 “We are talking about losing up to 10 years of your life.”

Deadline for health funds to introduce new categories

  • 11:00PM October 10, 2018
Health funds will be given 12 months to introduce new insurance categories, while some treatments will be made available in cheaper policies, under late changes to the Coalition’s flagship reform program.
Having already added a basic category to the promised gold, silver and bronze model, Health Minister Greg Hunt yesterday confirmed the implementation date of April 1 would be subject to a year-long transition period.
The move follows a delay in finalising the underlying clinical definitions and lobbying from specialist groups, with some treatments shifted between categories.

Insurance players urged to lift game

  • 11:00PM October 10, 2018
Efforts to improve the Australian health system have been undermined by stakeholders engaging in “pitchfork activity” to protect their interests at the expense of others, according to Medibank chief executive Craig Drummond.
Speaking at the Healing the System panel session, hosted by The Australian in partnership with Medibank, Mr Drummond called for greater collaboration between stakeholders to improve patient outcomes and make the system more sustainable in the long-term.
“My observation is we have a fantastic health system, a combined private and public system, which is giving really great outcomes to customers,” Mr Drummond told the audience in Melbourne last week.

Caesarean sections have doubled since 2000, sparking calls for change

By Esther Han
12 October 2018 — 9:30am
The proportion of babies born through caesarean section globally each year has almost doubled to 21 per cent since 2000, sparking renewed calls for governments to help reverse the "alarming" trend.
In Australia, 33 per cent of about 300,000 babies were delivered through the life-saving surgery in 2014, high above the World Health Organisation's (WHO) recommended rate of 10 to 15 per cent.
New studies published in the latest Lancet show the procedure is being overused in wealthier regions and countries, while it remains out-of-reach in poorer areas.

Diabetes: a serious matter of life and limb

  • 11:00PM October 11, 2018
Diabetes is likely to be under-reported, its impact underestimated, yet it is one of the most serious chronic conditions. An estimated 1.2 million Australian adults, or 6 per cent, had diabetes in 2014-15. It is thought that for every four adults with diagnosed diabetes there is another adult living undiagnosed. Without diagnosis the condition cannot be managed. In 2015-16, there were one million hospitalisations associated with diabetes, more common among those living in socio-economic disadvantage or outside a city. There were 16,400 deaths associated with diabetes in 2015, and Australia has one of the highest diabetes-related limb amputation rates. If you or someone you know may be an undiagnosed diabetic, have it dealt with as soon as possible: it could cost you a limb — or even your life.
Midway through the Australian National Diabetes Strategy 2016-20, authorities generally know the starting point for improvement but progress still may be slow. This week the Australian Institute of Health and Welfare has given the baseline data for the 55 indicators on which the goals of the plan will be judged. The first goal is to prevent people developing type 2 diabetes; however, there are still no complete national estimates of incidence, and the trends with risk factors such as obesity and inactivity haven’t been good. Another goal is to reduce the occurrence of diabetes-related complications and to improve quality of life; however, the AIHW has had to rely on dated estimates of management practices. There is more recent data on the scale of the problem, particularly in indigenous communities. The final goal is to focus on strengthening prevention and care through research, evidence and data; however, the AIHW has been unable to identify potential indicators.

States give PM two-week deadline to hand over $609m health funds

  • 11:00PM October 12, 2018
State and territory health ministers are demanding the federal government hand over $609 million in contested public hospital funding within two weeks or they will refer the dispute to the Council of Australian Governments for a pre-election showdown.
At a COAG Health Council meeting in Adelaide yesterday, Liberal ministers in several states joined a campaign led by their Labor counterparts in Queensland and Victoria to block the 2016-17 funding reconciliation.
Federal Health Minister Greg Hunt has already accepted the ­advice of the Independent Hos­pital Pricing Authority and funding administrator to claw back $609.3m in funding the states were expecting for services ­already delivered.

International Issues.

  • Oct 7 2018 at 4:04 PM

Sparks or harmony with Brett Kavanaugh on the US Supreme Court?

Kavanaugh confirmed to Supreme Court
by Lawrence Hurley and Andrew Chung
Washington |When Clarence Thomas took a seat on the US Supreme Court in 1991, he had only barely survived a series of bitter Senate hearings on allegations of sexual harassment that divided the country.
But he said he was quickly welcomed by his eight fellow justices.
"After going through all those difficulties, the members of the court were just wonderful people to a person," Thomas said in an appearance at the Library of Congress earlier this year. "So the court itself is quite different from the ordeal. It's almost the opposite of the ordeal it took to get there."

‘Blatant slander’: China loses its temper amid building tension

CHINA has blown up at Australia, accusing a prominent senator of attacking it with “unwarranted invective” and “blatant slander”.
news.com.au October 8, 201811:17am
CHINA has lost its temper with an Australian senator, accusing her of attacking it with “unwarranted invective” and “blatant slander”.
On Friday, Liberal senator Concetta Fierravanti-Wells issued a grim warning in The Australian newspaper, saying China was using “debt-trap diplomacy” to build its influence among the Pacific Island nations neighbouring Australia.
She claimed China was tempting poor countries with loans they couldn’t afford to repay — a strategy far less sinister than military expansion, but no less effective.

China accuses Concetta Fierravanti-Wells of ‘blatant slander’

  • 7:12AM October 8, 2018
China has warned Australia that any attempt to get in the way of Beijing’s growing relationships with Pacific Island countries will fail as the country’s diplomats in Australia criticised former minister Concetta Fierravanti-Wells for her recent strident remarks.
The embassy has also insisted that China’s leaning to Pacific nations had “no strings attached” amid US claims that Beijing was tipping nations into debt in order to gain their support on international issues.
Senator Fierravanti-Wells, who resigned from Malcolm Turnbull’s ministry and backed Peter Dutton ahead of the leadership spill, has previously accused China of building “useless buildings” and “roads to nowhere” in the South Pacific.

US declares cold war on China

  • 6:22AM October 8, 2018
In a speech in Washington last Thursday, US Vice President Mike Pence made it absolutely clear for the first time that the United States is not simply engaged in a trade war with China – it is much bigger and broader than that.
It was a remarkably aggressive speech.
And moreover, it wasn’t the off-the-cuff spruiking of President Trump at a rally or on Twitter – it was a long, measured, well-researched, and very detailed attack on China, accusing it, among many other things, of “meddling in America’s democracy” and largely based, according to Pence, on “intelligence assessments”.
  • Oct 9 2018 at 11:00 AM

Italy is on brink of a banking crisis as its debt costs spiral

by Ambrose Evans-Pritchard
London | Italy is on the brink of a dangerous banking crisis as the red-blooded showdown between Brussels and Rome pushes the country's borrowing costs to a five-year high.
Yields on Italy's 10-year debt spiked to 3.62 per cent after the League strongman and deputy prime minister, Matteo Salvini, vowed to sweep away the existing European -order. He called Jean-Claude Juncker and his Commission aides "enemies of Europe barricaded inside their Brussels bunker".
The furious outburst followed the leak of a stern letter from the Commission rejecting the deficit spending plans of the insurgent League-Five Star government, and more or less ordering Rome to go back to the drawing board.
  • Updated Oct 9 2018 at 8:49 AM

Federal Reserve projections signal intent to slow economy: Tim Duy

by Tim Duy
Recent speeches by Federal Reserve policy makers make clear that they have reduced their reliance on estimates of the long run neutral level of interest rates as a guide for monetary policy.
Going forward, market participants will need to more closely scrutinise the central bank's Summary of Economic Projections for clues as to where rates may be headed. Those forecasts currently point to a fairly hawkish path for monetary path. Not only do they indicate policy will eventually turn restrictive, but they also suggest policy will remain restrictive even as economic growth slows. In other words, the Fed doesn't anticipate turning tail on their policy path even if the economy dips next year.
In his press conference two weeks ago, Fed chairman Jerome Powell intentionally highlighted the importance of the forecasts as playing an "important role in our work", likely in order to turn the focus away from questions about where he believes the neutral rate of interest lies. The Fed's so-called dot plot of interest-rate projections are forecasts, not promises, and although market participants focus on the median values of those forecasts, they reveal considerable uncertainty about the path of policy.
  • Updated Oct 10 2018 at 8:09 AM

Nikki Haley resigns as US ambassador to the United Nations

Washington | Donald Trump's United Nations ambassador Nikki Haley - the administration's highest-ranking woman - has resigned in a surprise move that may foreshadow the rising GOP star's eventual run for the White House.
The announcement on Tuesday (Wednesday AEST) appears to have caught many administration and Cabinet officials off-guard and stoked conjecture about the motives behind her decision.
Ms Haley stood in the Oval Office with Mr Trump who praised her for doing a "fantastic job" and solving a "lot of problems".

Why Nikki Haley was smart to jump off Trump's sinking ship

By Paul Waldman
Updated10 October 2018 — 11:00amfirst published at 4:38am
Washington: When a senior official in the Trump administration resigns, it's usually the culmination of an awkward and bitter series of events.
First, stories emerge of the official's conflicts with US President Donald Trump, usually accompanied by head-snapping quotes in which the official describes him as an ignorant, impulsive, dangerous halfwit. Then perhaps there are some insulting tweets from the Oval Office, followed by an attempt by the official at some last-minute apologetic bootlicking to demonstrate loyalty. Then the official departs, and Trump boosters enthuse that the great man is finally assembling an appropriately worshipful team.
One of the most prominent members of the Trump administration, U.N. Ambassador Nikki Haley has resigned.

China appears to blink in trade confrontation with the US

By Stephen Bartholomeusz
10 October 2018 — 12:00am
There’s a whiff of fear in the air in China as escalating trade frictions with the US begin to impact on an economy that had its own pre-existing issues.
Returning after a week-long national holiday, China’s stock markets and its currency were rattled on Monday by the People’s Bank of China’s (PBoC) weekend decision to inject liquidity into the banking system for the fourth time this year, a signal of the central bank’s concerns about the vulnerability of the economy.
The Shanghai Composite index fell nearly 4 per cent and the Hong Kong market was down nearly 2 per cent. The renminbi was about 0.4 per cent weaker against the US dollar.

'Trumponomics' has taken a heavy toll on the world

By Ferdinando Giugliano
10 October 2018 — 8:10am
Donald Trump's shadow looms large over the world economy.
The US president is presiding over an economic boom in his country that has pushed its unemployment rate to its lowest level in nearly 50 years. It's not certain that the good times will last, and they may come at the expense of debt sustainability. What's indisputable, though, is the toll that "Trumponomics" is already taking on other countries.
In its latest World Economic Outlook, the International Monetary Fund has cut its global growth forecast for this year and next by 0.2 percentage points to 3.7 per cent. While its prediction for advanced economies was left broadly unchanged, the fund trimmed its 2019 forecast for the US Most important, there was a chunky revision for emerging markets and developing economies. These are now expected to grow by 4.7 percent in 2018 and 2019, respectively 0.2 and 0.4 percentage points lower than forecast in July.
In principle, there's nothing wrong with a slight deceleration in global growth. The world economy has enjoyed a decent run over the past few years. As central banks start to ease back on cheap money, it's natural for consumers and companies to become a little more cautious.

China, US 'independent relationships' for Australia, says Morrison

By Kirsty Needham
10 October 2018 — 5:20am
Beijing: Prime Minister Scott Morrison has told a prominent Chinese business magazine that Australia will seek to work closely with the US and China amid the worsening trade war because Australia has "independent relationships with both countries".
"I always believe it's best to have those conversations directly and quietly in an encouraging and positive way because the prosperity and security of our region depends on it," he said in an interview with Caixin published overnight.
"Australia is in a unique position to engage with both China and the US," he said, noting Australia came from a "position of friendship with both countries."

China draws a new red line around Hong Kong

By David Tweed
10 October 2018 — 10:49am
Hong Kong: Hong Kong's rare rejection of a UK journalist's visa was about far more than the fringe political ideology he was accused of promoting. The move has been viewed as the latest escalation in a methodical campaign to tame dissent in the former British colony.
The push, which took shape after the Occupy Central movement locked down swaths of the city four years ago, has seen the Beijing-backed government expand the zone of national security threats to include pro-independence activists and journalists who give them a platform. The ultimate goal, say China's supporters and critics, is passage of long-dormant legislation giving Hong Kong expansive powers to limit speech, protest and the activities of foreign groups.
Calls to enact the legislation -- known as Article 23, for the section of local law requiring its passage -- have reached their loudest level since 2003, when half a million protesters persuaded the government to abandon its last attempt. The day after the Foreign Correspondents' Club hosted a pro-independence activist's speech in August, China's top minister overseeing the city, Zhang Xiaoming, blamed "Hong Kong's inadequacies in protecting national security."

'The Fed has gone crazy': Trump points finger for Wall Street tumble

By Justin Sink & Shannon Pettypiece
11 October 2018 — 9:22am
President Donald Trump again criticised the Federal Reserve for raising interest rates, calling it a "mistake" hours after the worst US stock market sell-off since February.
"The Fed has gone crazy," he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. "So you can say that well that's a lot of safety actually, and it is a lot of safety, and it gives you a lot of margins, but I think the Fed has gone crazy."
White House Press Secretary Sarah Sanders said in a statement following the close of markets that the US economy is "incredibly strong" despite the selloff, which analysts attributed in part to trade tensions with China.
  • Oct 12 2018 at 10:04 AM

Donald Trump is right to blame the Fed for market rout

by Ambrose Evans-Pritchard
London | Global liquidity is vanishing faster than water on the beaches of Mont-St-Michel as the tide goes out.
The two great central banks of the Western world - the US Federal Reserve and the European Central Bank - are both dialling down stimulus rapidly even though the world economy is slowing.
The $US2 trillion ($A2.8 trillion) flow of stimulus each year from "peak QE" has plummeted to zero. By early next year the net effect will be negative. "We are moving into an -entirely different world," said Brian Coulton, chief economist at Fitch.
  • Updated Oct 12 2018 at 4:53 AM

Five factors pointing to what lies ahead: Mohamed El-Erian

by Mohamed A. El-Erian
The 3 per cent to 4 per cent plunge in the major American indexes on Wednesday is unsettling for investors who have grown accustomed to low US market volatility in recent years. What's more disturbing is that most of the traditional hedges against such a large equity selloff, both within and across market segments, did not work well.
Yet neither of these developments should come as a great surprise given the following five factors that also point to what's ahead:
  1. After years of seemingly unquestioned central bank support - including the so-called "Fed Put" - stock and bond markets are transitioning away from a world where liquidity injections underpin asset prices and moving toward a greater role for fundamentals. Almost by definition, this is a volatile process: Think of a plane changing engines while flying at a high altitude. Turbulence is to be expected.
  • Updated Oct 12 2018 at 8:34 AM

Why global markets are collapsing right now (and who you should blame for it)

by Jim Edwards
Global markets are falling so fast it's difficult to keep up with the numbers.
  • The Dow Jones industrial average in the US fell 3.2 per cent on Wednesday.
  • In China, the Shanghai Composite was down 5.2 per cent overnight.
  • Virtually all European indexes lost more than 1.5 per cent Thursday.
  • Britain's blue-chip FTSE 100 lost 1.6 per cent in midday trading Thursday.
This is not random.
A major correction in the asset markets has been building for a while. There have been 10 years of economic growth since the great financial crisis of 2008 and a bull market in stocks of pretty much the same length. That's a long time in terms of economic cycles, and we were overdue for a "reversion to the mean", as statisticians say.

Chinese move was an 'up yours' to the rest of the world

By Nick McKenzie
11 October 2018 — 5:09pm
The revelation that the disappearance of Interpol president Meng Hongwei was engineered by Beijing's secret police shows what President Xi Jinping really thinks of those within the international community who care for the rule of law.
After all, Meng headed one of the very global agencies created to uphold this rule. His brief vanishing confirms that the desires of Xi and his communist party will always trump concern about what anyone thinks of Beijing's conduct.
This was not one of those domestic matters, such as the mass incarceration of the Uighurs, that rightly energises human rights organisations but which the wise men of diplomacy such as Bob Carr and Henry Kissinger (Carr would love this comparison) confine to the art of whispered diplomacy.
  • Updated Oct 12 2018 at 5:06 PM

Richard Branson, Steve Case among executives snubbing Saudis over disappearance

by Jeanne Whalen
Washington | Western business leaders, including Virgin Group founder Richard Branson and tech investor Steve Case, distanced themselves from Saudi Arabia over the disappearance and alleged murder of Saudi dissident and Washington Post columnist Jamal Khashoggi.
Several company leaders also backed away from the "Davos in the Desert" event intended to showcase Prince Mohammed bin Salman's modernisation plan for the desert kingdom.
Mr Branson said he was suspending his work as a director of two Saudi tourism projects, and suspending discussions with the kingdom's sovereign wealth fund about a proposed investment in the space companies Virgin Galactic and Virgin Orbit.

Saudi crown prince's carefully managed rise hides dark side

By Matthew Lee
13 October 2018 — 12:00am
DUBAI, United Arab Emirates– In a kingdom once ruled by an ever-aging rotation of elderly monarchs, Saudi Crown Prince Mohammed bin Salman stands out as the youthful face of a youthful nation. But behind the carefully calibrated public-relations campaign pushing images of the smiling prince meeting with the world's top leaders and business executives lurks a darker side.
Last year, at age 31, Mohammed became the kingdom's crown prince, next in line to the throne now held by his octogenarian father, King Salman. While pushing for women to drive, he has overseen the arrest of women's rights activists. While calling for foreign investment, he has imprisoned businessmen, royals and others in a crackdown on corruption that soon resembled a shakedown of the kingdom's most powerful people.
As Saudi defence minister from the age of 29, he pursued a war in Yemen against Shiite rebels that began a month after he took the helm and wears on today.
  • Updated Oct 12 2018 at 5:08 PM

China battens down the hatches for prolonged trade war

The queue of twenty-somethings lining up outside a new pop-up shop in Shanghai's former French Concession this week snakes around the block.
A group of elderly men sitting on stools slurping noodles look bemused at the well-dressed millennials jostle to take selfies in front of a logo that looks suspiciously like a giant bottle of Chanel perfume.
They have been lining up for hours to buy bottles of chocolate- and strawberry-flavoured milk cleverly marketed in expensive looking glass bottles. At 60 yuan ($12) a pop, the beverage costs more than the noodle-eating men from a different generation would spend on food in a day. A yellow Ferrari roars past.
Scenes like this are a reminder of how far China's economy has come in the past two decades. An affluent middle class still has cash to burn and the skylines of Shanghai, Beijing and dozens of other mega-cities are still lined with cranes.

Trump promises 'severe punishment' if Saudis killed journalist

14 October 2018 — 4:48am
United States President Donald Trump has added to the pressure on Saudi Arabia over the fate of journalist Jamal Khashoggi, vowing "severe punishment" should the kingdom's leaders be linked to his disappearance.
But at a White House event with US pastor Andrew Brunson, who arrived in Washington after being freed in Turkey, Trump said the US would be "foolish" to cancel arms deals with the kingdom in response to the controversy.
President Donald Trump said he will soon speak with Saudi Arabia's King Salman about the disappearance of journalist and US resident Jamal Khashoggi.

Frydenberg weighs in on US-China trade war

Treasurer Josh Frydenberg has called on American and Chinese finance leaders to let “cooler heads” to avoid escalating a global trade crisis.
Eliza Berlage
Australian Associated Press October 13, 20181:44pm
Treasurer Josh Frydenberg has intervened in the US-China trade battle saying that as a "trade-exposed country" it is in Australia's interest to "see cooler heads prevail".
His remarks were made during a discussion of G20 finance ministers and central bank governors in Indonesia.
"China is our number one trading partner and the US is our number one investor. We have a real stake in the global trading system," Mr Frydenberg said.
I look forward to comments on all this!

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