October 10, 2019 Edition.
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The question of the year is now about just how bad President Trump’s mental state is and is it reaching the position that we might see some serious problems from his distraction and anger! Otherwise the threat of impeachment seems to be totally overwhelming any other issues. What can one say about the Syrian Stupidity??
I have no idea where Brexit is up to – but it will have to be sorted in the next few weeks one way or another!
Incidentally what is happening in Hong Kong is both understandable and very sad. The face of Asia is being changed radically I suspect.
In Australia the big news is regarding how we are being sucked into the US impeachment whirl and how we can be more in control of our destiny with the issues around the US / China playing out. This will take decades to work out I suspect and it might be rough along the way. It is all a mess!
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Major Issues.
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Australia's China policy dilemma
The Australian government faces more friction both within the US alliance and with Beijing, but must ensure its China policy is not the sole preserve of intelligence agencies.
Sep 27, 2019 — 12.00am
Washington’s trade war with Beijing has led to a tendency to label the economic, strategic, technological and ideological contest between the United States and the People’s Republic of China as the coming of a new cold war. A long-term shift in US strategic thinking about China is clearly under way, but its magnitude remains unclear.
While both Australia and the US view China’s assertive behaviour in the South China Sea and authoritarianism under President Xi Jinping as acute challenges, Canberra and Washington do not agree on the policies required to address it.
Australia is squeezed from both sides: as the US increases pressure on Canberra to take a tougher line on China, Australia’s bilateral relationship with China remains frozen. Beijing continues to express its wrath at Canberra’s decision to ban Huawei and the manner in which the new foreign interference legislation was introduced.
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Now’s the time to spread the wealth
French economist Thomas Piketty's new book says the world's best chance to redistribute wealth is now.
Sep 29, 2019 — 3.22pm
Thomas Piketty’s new book, Capital and Ideology, appears in English translation next March. But I got a sneak preview by walking into my local Parisian bookshop and handing over €25 ($40) for the French edition. My conclusion: the 1200-page tome might become even more politically influential than the French economist’s 2013 overview of inequality, Capital in the Twenty-First Century.
Helped a little by that book, inequality has soared up the left’s agenda, especially in the particularly unequal US and UK. Now Elizabeth Warren has a shot at becoming the most redistributionist US president since Franklin D. Roosevelt, while an electable post-Corbyn Labour leader could achieve similar in Britain.
Piketty explains why this could be the moment for a turn to equality, and which policies could make that happen.
His premise is that inequality is a political choice. It’s something societies opt for, not an inevitable result of technology and globalisation. Whereas Marx saw history as class struggle, Piketty sees it as a battle of ideologies.
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Another front in the super wars
Superannuation always involves super sensitive politics – which is why the government is insisting on a "facts-based" review of retirement incomes. But facts will still start a new front in the long-running superannuation wars.
Sep 30, 2019 — 12.00am
The stipulation in the terms of reference for the new review of retirement incomes couldn’t be clearer.
It is the requirement to establish a “fact base” of the current system. About time. The constant political arguments over super are usually more a reflection of the philosophy of those pushing their case, with particular facts and figures chosen to suit.
That doesn’t make superannuation unusual in politics and policy, of course. But despite its immense and direct significance to the economy and to the welfare of individuals, the current system is so complicated very few people understand it.
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Economists challenged by world on fire
In the uncertain new world of Twitter tantrums, trade wars and political chaos, modelling the future is an endeavour fraught with more hazard than ever.
Sep 30, 2019 — 12.00am
No matter how finely calibrated the models of Australia's leading economists, there's just no way they can calculate the cumulative impact of risks like the latest Trump twitter tantrum, another Brexit stumble, or an attack on Saudi Arabia's oil infrastructure.
The world is a risky place, and the outlook for Australia's sluggish economy remains captive to events well beyond our shores – and our control.
The halcyon days of the Great Moderation and well established norms of international politics and trade are over, replaced by a chaotic evolution of new regime marked by unconventional monetary policy, resurgent superpower rivalries, and an attempt to rewrite the rules of the rules-based global order.
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Scott Morrison’s climate change speech criticised as ‘colossal bulls**t’
There’s been a brutal reaction to Scott Morrison’s speech on climate change with some calling it ‘colossal bulls**t’. But has the PM got it right?
Scott Morrison has brushed off suggestions Australia is not doing enough on climate change in a speech that has been labelled by the Climate Council as “colossal bulls**t”.
During a speech to the United Nations in New York on Wednesday (local time), the Prime Minister said critics “willingly overlook — or, perhaps ignore our achievements”.
“The facts simply don’t fit the narrative that they wish to project about our contribution,” Mr Morrison told the general assembly.
He said Australia was taking real action on climate change and getting results.
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Risk of monopolies driving up prices: ACCC
· Australian Associated Press
Australia's consumer watchdog warns monopolies are taking over key infrastructure points and the nation risks seeing prices rise and competition drop.
The call comes after the National Competition Council allowed the Port of Newcastle to hike its shipping fees, primarily affecting coal exports.
Australian Competition and Consumer Commission boss Rod Sims said the decision meant a key access point for exports was now at the mercy of a company trying to maximise its profits.
"With the Port of Newcastle, we already have a monopoly and it seems they are now completely unregulated. That simply does not make economic sense," Mr Sims told the Australasian Transport Research Forum on Monday.
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The great super fee scam
The review of the retirement income system to be led by Michael Callaghan should put the use of percentage-based investment fees at their top of their agenda: it is a scam hiding in plain sight.
That’s because percentage fees compound along with returns, and nobody understands it. As a result, fees are actually much higher than everyone thinks, and the system is a deliberate fraud.
There are a couple of ways that this can be revealed.
The total retirement savings pool is now $2,800 billion dollars, and the average fee is about 1.2 per cent, although dispersion among super funds is very wide.
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Rate cuts not helping record low housing credit
Sep 30, 2019 — 11.57am
Credit growth for housing has recorded its lowest annual growth since records were first kept in 1977, raising concerns that interest rate cuts are not as effective.
Housing credit growth dipped to 3.1 per cent according to the Reserve Bank of Australia's latest numbers, while the monthly increase for August was just 0.2 per cent, down from 0.3 per cent in July.
Investor credit growth went backwards in August, down -0.1 per cent, with annual growth at just 0.1 per cent - the lowest it has been since records were kept.
Owner-occupier credit growth dipped in August to 0.3 per cent, down from 0.5 per cent in July, and the annual rate of 4.7 per cent is the lowest it has been since 2014.
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Are investors ready for the ‘Doomsday Dollar’ scenario?
What would it mean if the entire paradigm for long-term investing was to change? The FT's Rana Foroohar looks at the shift in the greenback's profile.
Updated Sep 30, 2019 — 10.39am, first published at 10.36am
For decades, global savers, and American retirement savers in particular, have been taught that you should put most of your money in an S&P index fund — one that tracked the fortunes of the largest US companies — and then forget about it until you were close to retirement.
Since the mid-1980s onwards, that has been more or less good advice. American multinationals were, after all, the best way to buy into globalisation, and globalisation was very good for the stock prices of many big companies.
But recently, I’ve begun to wonder — what would it mean if the entire paradigm for long-term investing was to change?
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Labor overstating China rift: Morrison
Oct 1, 2019 — 12.00am
The federal government has challenged Labor to spell out how it would fix the so-called "terrible" relationship with China as the split intensifies between the major parties over how to handle Australia's largest trading partner.
On the eve of China marking its 70th anniversary of communist rule, Prime Minister Scott Morrison accused Labor of immaturity and naivety over the relationship, which the government insists is in good shape despite ongoing mixed messages from Beijing.
A senior government figure, speaking on condition of anonymity, said the tensions which have infiltrated the relationship in recent years were a product of actions, not language.
These included the decision to ban Huawei from bidding for the 5G network and the introduction by the Turnbull government of foreign interference legislation.
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Seven strategies to secure a good return for investors
What are you going to do now? In this market, hoarding cash — or trying to save — is an uphill battle. Even the best financial advisers will no longer recommend holding cash as an investment: with the official cash rate below 1 per cent, “cash in the bank” as an investment choice is dead.
Investors — especially retirees who often have up to a third of their entire investment portfolios in cash — will now search the market for something, anything, that pays a better return than bank deposit rates.
What’s more, there will be no lack of entrepreneurs ready to take this rising flood of money from income-seekers desperate for yield. It’s a time to review but also to watch like a hawk for danger because once you move out of government-guaranteed cash deposits, you are going further out the risk curve, as an economist might put it.
Here’s a look at seven alternatives where investments can still get a decent income. You have to find the choice with which you are most comfortable.
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RBA thinks the once unthinkable
The RBA is now perhaps only one or two interest rate cuts away from a highly unusual and unbalanced macroeconomic policy situation of buying government bonds through "quantitative easing".
Oct 1, 2019 — 6.00pm
The historic cash rate cut to just 0.75 per cent takes the Reserve Bank of Australia one notable step closer to unconventional stimulus measures.
The RBA is now perhaps only one or two interest rate cuts away from potentially launching a radical program to buy financial assets such as government bonds through "quantitative easing" (QE).
Unless the Morrison government relents from its budget discipline and decides to inject more economic support through extra infrastructure investment or income tax cuts, QE is now a distinct possibility by next year.
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RBA and the savings dilemma
RBA governor Philip Lowe admits the world's central banks are fighting against a global appetite to save, which is far stronger than the appetite to invest.
Oct 2, 2019 — 12.00am
The Reserve Bank of Australia’s cut in the cash rate to a historic low of 0.75 per cent will kick along the frantic search for yield that has triggered a boom in infrastructure, real estate and fixed income funds.
Investment in fixed interest funds, both listed and unlisted, is super hot with a surge in demand for assets ranging from hybrid bank securities to highly speculative American junk bonds.
The RBA’s deliberate effort to encourage businesses and households to spend more money and hoard less cash in bank accounts and on balance sheets brings with it a savings dilemma.
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China relations are now at a dangerously low ebb
Tony Walker
Columnist and award-winning foreign correspondent
October 2, 2019 — 12.00am
At last, a healthy divergence of views between the Coalition and Labor about how Australia might manage its relations with its cornerstone trading partner and rising power in its own region.
It is a debate that is long overdue. We now have contrasting narratives between the Coalition government and the Labor opposition.
That contrast was given sharp expression at the weekend by deputy Labor leader Richard Marles in an interview on the ABC’s Insiders program. Marles accused the government of mismanaging a "complex" relationship. After visiting Beijing last week for conversations with a range of Chinese opinion-leaders, he described relations as "terrible".
Prime Minister Scott Morrison, Marles said, had engaged in megaphone diplomacy on his visit to the United States, insisting China be regarded as a "developed" country for trade and other purposes. This includes its climate change obligations.
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What the credit markets are telling us
Oct 2, 2019 — 5.08pm
Ever since the global credit crisis of 2008, the expert view is that credit markets see everything first.
In late 2007, while credit markets were in full panic mode, equity markets shook off initial fears about frozen funding markets to hit new highs.
But reality caught up with stocks in 2008 as sharemarket investors realised that listed companies weren't worth much without the debt markets that can finance them.
It means that asset managers hired by pension funds are wearing the world's credit risk rather than banks.
— Jonathan Shapiro
Ignoring the warning signs in credit markets was costly. But what are they telling us today?
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Why there is always a high price for the RBA's cheap money
Low rates no longer boost growth for all. They just entrench the gains of those already better off.
Oct 3, 2019 — 12.00am
Cutting the cash rate to 0.75 per cent this week was aimed at keeping Australian monetary policy at an ultra-easy setting – that is, maintaining a real interest rate well below the real rate of growth of the economy.
To say that Australian monetary policy has moved into uncharted waters with this latest rate cut misses the point. Yes, the nominal cash rate is now at a level unknown to any living Australian. But Australian monetary policy has been in unprecedented territory for the past five years.
A quick look at the period of inflation-targeting from 1993 to 2008 highlights the close relationship between the real cash rate and the real rate of economic growth.
Everything has changed since the financial crisis of 2008 and in the past five years the real growth rate has averaged 2.5 per cent while the real cash rate has been, on average, just below zero.
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Investors sweat on the final domino to fall
All eyes are on the US labour market this week, mainly because the American consumer is one of the only things keeping the global economy afloat.
Oct 3, 2019 — 3.21pm
It's no surprise that a weak jobs growth number from the US proved so explosive for financial markets on Wednesday night and into Thursday in Asia.
Amid all the bad news around the global economy over the past 12 months – collapsing trade volumes, an earnings and manufacturing recession, rising geopolitical risks – the American consumer has sailed through untroubled.
Confidence has stayed high and retail spending remained robust. It has been the saving grace for the global economy. Bulls have pointed to this data as evidence the global economy was not, in fact, headed over the cliff.
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Growth fears savage Australian shares
Oct 3, 2019 — 10.26am
The Australian sharemarket plunged as investors reacted to more disappointing signs that the US economy is weakening by bailing out of stocks and buying up bonds.
The reaction from investors was "exactly what you would expect from a market on assisted living," said Tracey McNaughton, head of asset allocation at Wilsons Advisory.
"Risk premiums have been artificially suppressed by central bank liquidity and fundamental drivers have taken a backseat," she said. "That's OK until it's not."
The S&P/ASX 200 index dropped 149 points, or 2.3 per cent, to 6490.50, falling back to where it traded in late August, after investors were spooked by another terrible session on Wall Street.
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Squeeze on banks a risk to the economy
Oct 4, 2019 — 12.00am
Leading superannuation investors and analysts have cautioned politicians against bank bashing, warning that a squeeze on the big four banks' profits and dividends from ultra-low interest rates could undermine hopes for a pickup in economic growth.
Chief investment officer for Unisuper, John Pearce, said Australia's big banks were no longer as profitable as their US counterparts.
"This notion that our banks are earning super-normal profits is a complete fallacy," said Mr Pearce, whose industry super fund controls more than $80 billion in assets under management,
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ACCC to push ahead with new banking inquiry despite internal concerns
By Sarah Danckert
October 4, 2019 — 12.02am
The competition regulator is pressing ahead with preparations for a controversial new inquiry into the banking sector despite internal concerns about the probe and a lack of formal approval from Treasurer Josh Frydenberg.
Agenda items for a meeting of the Australian Competition and Consumer Commission's Financial Services Board on Friday, obtained by The Sydney Morning Herald and The Age, outline the regulator's plans for the inquiry, which has upset the banking sector.
Documents obtained by the Herald and The Age show the regulator was concerned about proceeding too far on the inquiry without political support. "There may be a perception that we are commencing the inquiry before the Treasurer has formed a view on whether it should proceed," the documents read.
Board minutes for the September meeting and agenda items for Friday's meeting reveal the ACCC's vision for the inquiry would include meetings with new financial digital upstarts such as Afterpay and neobank Xinja.
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As Trump enters new meltdown territory, Australia stumbles right along
Tony Wright
Associate editor and special writer
October 4, 2019 — 10.00am
US President Donald Trump erupted in rage at persistent questions from reporters on the impeachment inquiry looming over his administration.
The humiliation of it.
Who could have imagined, in the days before the twittering Trump, that any Australian government could feel itself required to help a US president build a paranoid conspiracy theory in order to help said president survive an impeachment inquiry?
Who could have imagined an Australian government would be so accommodating it would allow the impression that it was willing to toss under a bus the standing of one of its former most-senior diplomats, Alexander Downer, a fellow who served as Australia’s foreign minister for 11 years and once led the Liberal Party of Australia?
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How to grow and preserve wealth in a low rate environment
RBA cuts and unconventional monetary policy are forcing investors up the yield curve. We outline the levels of risk involved, depending on your stage of life.
Oct 5, 2019 — 12.00am
The Reserve Bank of Australia has been hinting at it for some time, but the events of the past week have made it clearer than ever – low rates are here to stay.
The central bank cut the official cash rate on Tuesday to a historic low of 0.75 per cent, and consensus among economists is that there are more cuts on the way, perhaps even this year. There is also talk that we are just one RBA board meeting away from attempting controversial policies such as quantitative easing (QE) to stimulate the economy.
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How scientists finally got Americans to worry about the climate
Faye Flam
Oct 4, 2019 — 6.12pm
The evidence was strong 10 years ago, even 20, that the world had a problem with global warming. We knew then that it was going to exacerbate extreme weather and heat waves and raise the sea level. But nearly half of Americans didn't take it seriously. Now they do, according to polls, and what changed wasn't the amount of evidence but a shift in political forces and some changes in the way scientists learnt to make their case.
A report last week on cumulative damage to the world's oceans and ice caps, for example, got big attention in the media, though the message wasn't all that different from earlier reports from the Intergovernmental Panel on Climate Change. A few more specifics are known: the report projects that by 2050, at many coastal locations, the historic once-in-a-century flood will become an annual event, says Princeton University climate researcher Michael Oppenheimer, who is an author of the report.
What's noticeably changed is the way Americans are reacting to the news: taking these forecasts seriously, and recognising that this isn't only about polar bears, but about them.
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Governments are learning a simple and cheap nudge can yield big dividends
Ross Gittins
Economics Editor
October 5, 2019 — 12.00am
The world is a complicated place – partly because humans are complicated animals. One of the many things this means is that when governments try to influence our behaviour, their chances of stuffing up are surprisingly high.
Consider this. Say I’m an investment adviser telling you (or your parents or grandparents) where to invest your retirement savings. I warn you that, should you take my advice, I’ll be paid a commission by the managers of the investments I put you into.
How do you react?
Well, you should react by becoming a lot more cautious about following my advice. It’s clear I have a conflict of interest. Is my advice aimed at doing the best I can for you, or at maximising the commissions I earn?
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Morrison runs risks by invoking unnamed, shadowy adversaries
By Deborah Snow
October 5, 2019 — 12.05am
Scott Morrison, by his own admission, has never been much of a foreign affairs buff.
As he reminded the high-powered guests at the annual Lowy lecture, which he delivered in Sydney on Thursday night, his instincts as a politician have been “domestic in nature… I am not one who naturally seeks out summits and international platforms”.
That changes when you become Prime Minister. Protecting and promoting Australia’s interests abroad is one of the most critical and challenging tasks you face - a task generally approached with great care and forethought.
So it was all the more surprising to hear Morrison so blithely demonising in his Lowy address what he dubbed “negative globalism” driven by “an unaccountable internationalist bureaucracy”.
Exactly which corner of the matrix of interlocking multinational arrangements we’ve long been part did he have in mind? Was he talking about the United Nations? Its subsidiary bodies? The World Trade Organisation? The International Monetary Fund? Was he talking about global pressures to accelerate action on climate change, a challenge that can only be addressed by countries acting in concert?
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The age of risk-free income is over with permanently low rates
We are indebted to Goldman Sachs’ Australian chief economist, Andrew Boak, for giving us a glimpse of the truth, even though it wasn’t quite what we were hoping for.
Boak has done his own run of the new Reserve Bank model of the Australian economy, called MARTIN, and published the results. He found that in order to achieve the RBA’s unemployment and inflation targets, the cash rate would need to be minus 1 per cent, not the current 0.75 per cent, nor the 0.5 per cent the market is pricing for year-end.
This is getting serious. It confirms that we must get our heads around not being able to earn a risk-free living from any amount of capital … forever, at least for those alive today.
Making a living from a lump of money now requires taking risk, and will do so for a very long time. This is no aberration; it’s normal.
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Royal Commissions And The Like.
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'Liar loans': Banks failing to curb mortgages based on lies, says UBS
By Nick Toscano
September 30, 2019 — 12.00am
More Australian home-buyers are submitting false information in order to obtain mortgages despite banks and brokers promising tougher lending checks in the wake of the banking royal commission, a new survey by investment bank UBS has found.
The introduction of stronger responsible lending practices – including asking more questions of borrowers and seeking more documentation to support their claims – appear to have failed to reduce the threat to the banking system and economy posed by so-called "liar loans", according to the survey, which pointed to a record-high number of borrowers admitting their applications were "not completely factual".
Analysts from UBS conducted detailed surveys of 903 people who had taken out a mortgage in the past financial year, finding more than a third of them – 37 per cent – had not provided accurate information to their financial institution, up from 32 per cent the year before. It has been estimated previously that as much as $500 billion of home loans may be underpinned by fake customer information.
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Why the super system is failing most Australians
The $2.9 trillion superannuation system is short-changing retirees because it doesn't offer a retirement income product with attractive and predictable returns.
Sep 30, 2019 — 4.30pm
The Baby Boomers were an extraordinarily blessed generation, but as its youngest members approach retirement age, it's becoming increasingly evident that even this fortunate demographic cohort has its winners and losers.
The winners, it turns out, are those who didn't waste years taking advantage of free university tuition but instead joined the workforce in time to sign up for defined benefit superannuation schemes, which were then routinely offered by the public sector and by many larger corporate employers.
Those Boomers prudent enough to take this tack can now look forward to joining the lucky 10 per cent of the population who can enjoy a generous inflation-linked pension in retirement, with their payments linked to their final salary level.
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The $10 billion cost of banks behaving badly
Elizabeth Knight
Business columnist
October 2, 2019 — 7.13pm
The cost of misconduct for the major banks and AMP just keeps ticking up. It’s not over yet but at this stage of peak remediation provisioning, the number appears to be approaching the magic $10 billion mark on a pre-tax basis.
And that represents about $3 billion in lost tax revenue for the government.
The total of the tariff must also include the costs of litigation, the royal commission and regulatory fines.
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ASIC targets junk superannuation insurance
12:00AM October 3, 2019
The corporate watchdog is prepared to prosecute some of the nation’s largest superannuation funds, which have signed up members to worthless life insurance products on a default opt-out basis.
The looming “tough and uncompromising” action from the Australian Securities & Investments Commission comes after it found funds failed to comply with a new code of conduct aimed at limiting insurance fees that are worth $10bn a year and are eroding retirement savings.
According to notes taken from confidential meetings between ASIC and major superannuation lobby groups, the corporate watchdog has outlined its concerns about the value for money consumers get from default opt-out insurance.
The notes, obtained by The Australian, show ASIC is poised to target super funds that are dragging their heels when processing insurance claims.
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CBA’s CommInsure life arm charged
Commonwealth Bank’s life insurance arm CommInsure has been charged with 87 criminal counts of “hawking”, or illegally selling insurance products in unsolicited phone calls.
The charges against the CBA subsidiary, announced by ASIC, are the first criminal charges to flow from a banking royal commission case study.
ASIC alleges that between October and December 2014, CommInsure, through an agent, unlawfully sold life insurance policies over the phone.
ASIC alleges that the calls to CBA customers were unsolicited, and that CommInsure did not comply with all of the hawking exceptions in the Corporations Act.
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Jim Chalmers: We should make banks more competitive
Labor could ratchet up the government’s major bank levy by tens of billions in a bid to level the playing field between the big four banking oligopoly and smaller lenders, amid fallout from the bank’s refusal to pass on last week’s Reserve Bank rate cut.
Scott Morrison should also legislate an immediate increase to Newstart as part of “responsible and affordable” fiscal stimulus to reignite weakening economic growth, according to Labor’s opposition treasury spokesman, Jim Chalmers.
Dr Chalmers said Labor should consider whether to increase the 0.06 per cent tax on the five largest banks in Australia as part of a raft of packages to increase competition in the banking sector, which is dominated by Commonwealth Bank, Westpac, National Australia Bank and ANZ that together control 80 per cent of the market.
“We need to have a broad conversations about how we can make the banking sector more competitive,” Dr Chalmers told Speers on Sky.
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National Budget Issues.
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Canberra finally cottons on to the small business credit crunch
Sep 30, 2019 — 12.00am
Bankers, who have spent the past 18 months shielding themselves from a barrage of unrelenting and scathing criticism, could scarcely believe their ears last week as senior politicians abruptly changed tack last week, and tried to cajole them into lending for the sake of the economy.
But the sudden shift in the political winds will have left James Shipton, who runs the country's top corporate regulator, feeling decidedly uncomfortable, particularly after ASIC's controversial decision to appeal Justice Nye Perram's judgment in the "Wagyu and shiraz case".
Speaking in New York on Wednesday, Prime Minister Scott Morrison warned that an ill-judged and heavy-handed response to the Hayne royal commission could choke off the supply of credit to the economy.
"While it's important to address those conduct issues with the banks, we must be very, very careful that we don't lead our banks into a place where they've been overly sheepish, and that can really cut off the opportunities that we would otherwise have."
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RBA gets GDP growth wrong, but says it will pick up
Sep 30, 2019 — 12.00am
"Over recent times, our economy has been going through a soft patch," Reserve Bank governor Philip Lowe said last week.
He was referring to the latest national accounts figures, which showed GDP expanded by a paltry 1.4 per cent over the year to June - the weakest annual pace in around a decade.
"We did not expect this slowdown, so it has come as a bit of a surprise," Lowe confessed.
Indeed, the RBA's outlook in the February Statement on Monetary Policy still had GDP growth for the June financial year at 2.5 per cent. Fast forward to the central bank's latest estimates from the August SoMP, and the RBA expects the economy will expand by 2.4 per cent in calendar 2019 and by 2.8 in 2020.
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What is quantitative easing?
It's unconventional, it's not for the faint-hearted and it may soon be on our central bank's to-do list. What is quantitative easing, or QE, and does it work?
By Shane Wright
September 30, 2019
Just before Christmas, the Reserve Bank board held its final meeting of 2018. The view, shared around the bank’s board members and senior staff, was that the next move in official interest rates would likely be up.
Six months later – and just days after the May election – board governor Phil Lowe used a speech in Brisbane to effectively promise that the bank was about to start cutting interest rates.
The economy had slowed, inflation was well short of where the RBA wanted it and, as Dr Lowe noted, the country needed to cut unemployment.
While other nations with really low interest rates had jobless rates of between 3 and 4 per cent, Australia was at 5 per cent (and now sits at 5.3 per cent).
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Time for an ABC 'TV tax'?
Eryk Bagshaw
Economics correspondent
September 30, 2019 — 12.01am
In all the debate last year about allegations of political interference at the ABC, little attention was given to the structure that allows those claims to flourish.
The ABC is funded by through the federal budget. Its editors and executives are exposed to the fiscal whims of the government. It is protected editorially by a charter of independence but financial challenges can make their way onto the newsroom floor.
Cue former ABC chairman Justin Milne last year: "[The] government ... is our shareholder, they’re our banker, they’re our regulator, they’re our occasional inquisitioner," he said.
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Why low inflation does and doesn't matter
RBA boss Philip Lowe has said that the average Aussie doesn't care about inflation slightly below target and nor does the bank - so why is he about to cut rates again?
Sep 30, 2019 — 3.26pm
With another cut expected on Tuesday, it's clear we have lost the monetary exceptionalism so championed by Reserve Bank governor Philip Lowe in his first couple of years in the top job.
Even after two consecutive moves in June and July, Lowe continues to talk down the usefulness of monetary policy. In a speech in late August at the annual central bank conference in Jackson Hole, Wyoming, he warned that looser policy risked achieving little but higher asset prices.
At that same event the governor scoffed: "Many people in our communities are incredulous that we would be too worried over whether inflation was 1.6 per cent, 2 per cent or 2.2 per cent.
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Australia's export share to China hits record high 38pc
Oct 1, 2019 — 12.01am
Any political tensions between Australia and China have not been borne out in trade – Australia's share in the value of exports to China reached a record 38 per cent or $117 billion – more than any other country – according to new analysis.
The rapid increase in Australia's share has been driven by higher iron ore prices. However, research by the Australian National University shows that this has not just been owing to a supply shock from Brazil's Vale dam disaster but also to China increasingly looking overseas to fulfil its thirst for commodities.
"We have had a trough in the political relationship with China in the last few years, yet the trade has continued to trade robustly," said ANU's head of the East Asian Bureau of Economic Research, Peter Drysdale.
"So any intentions to interfere in trade restrictions has had very little effect on trade itself," he said.
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Doubt grows on tax refund stimulus as Australians shun accountants
By Shane Wright and Eryk Bagshaw
September 30, 2019 — 11.55pm
The size of the Morrison government's first round of tax cuts has fallen well short of expectations, as workers shun accountants and fail to make deductions, casting doubt on their impact on Australia's sluggish economy.
Ahead of Tuesday's Reserve Bank board meeting at which official interest rates are expected to be cut to a fresh record low of 0.75 per cent, The Sydney Morning Herald and The Age can reveal that despite the new low and middle-income tax offset that promised to pump up to $1080 into the pockets of cash-strapped households, there has only been a modest lift in refunds.
We crunch the numbers on the more than 13 million Australians who file a tax return.
The average refund sent to more than 6.6 million Australians is now $2638, Australian Tax Office data shows, just $250 more than the average refund recorded through the first four months of the 2018-19 financial year.
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Truly weird times set to push interest rates below 1 per cent
Shane Wright
Senior economics correspondent
September 30, 2019 — 4.00pm
For 30 consecutive meetings the Reserve Bank board did not vary the official cash rate. Between September 2016 and May this year, while more than half of the nine members of the board changed, the result of the meeting was the same. A cash rate of 1.5 per cent.
But not all decisions to hold the cash rate steady are made for the same reasons. Following a monthly meeting the RBA governor releases a statement explaining the bank's thinking.
Three years ago, Glenn Stevens, overseeing his last meeting as governor, reported that banks were in a position to loan money for "worthwhile purposes", house prices had risen "moderately" over the past year and lending standards had been strengthened. He noted that the local economy was continuing to grow, the jobs market was likely to expand and inflation remained subdued.
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Bubble fears are back: Property prices threatening to get out of control
Elizabeth Knight
Business columnist
October 1, 2019 — 11.34am
The government, regulators, the Reserve Bank were all hoping for an orderly upturn in house pricing. But the price gains recorded in September suggest the bounce is proving to be anything but orderly - prices are threatening to spin out of control.
Fear of missing out appears to be gripping the property market and expectations of continued RBA rate cuts is spurring buyers.
The price momentum was dialled up a notch in September as valuations in Sydney and Melbourne both bounced 1.7 per cent and jumped by 3.5 and 3.4 per cent respectively over the quarter.
Even the national result is up a strong 0.9 per cent in September.
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Our economic miracle delivers Aussie dream, says Chinese ambassador
Chinese ambassador Cheng Jingye says Australia should remember it depends on China for its economic success, as he urged greater “mutual respect” between the countries and a reduction in “prejudices and suspicions”.
On the eve of the 70th anniversary of China’s communist revolution, Mr Cheng lauded his country’s “miracle” rise from a “poor backward country” to the world’s second largest economy.
But he said it could take another 30 years before China could be considered developed — a timeline that could deliver the country up to three more decades of concessional treatment under international trade and climate change agreements.
While China pours billions into modernising its military and gaining a technological edge in new weapons developments, Mr Cheng reiterated his country’s commitment to “peaceful development”.
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This is no way to start up the economic motor
The Financial Review’s take on the principles at stake in major domestic and global stories.
Oct 3, 2019 — 12.00am
If Tuesday’s cut in the cash rate to a record low 0.75 per cent does not do the trick, then the Reserve Bank of Australia is just a step or two away from the strange world of unconventional policies such as quantitative easing.
Just a decade ago, QE and sub-zero interest rates were the emergency, even experimental policies which stopped a slide into global depression in 2008, and then later tried to jolt the stagnant Japanese and European economies back into life. Central banks create electronic money to buy up safe-haven bonds, which forces down market interest rates and pushes investors and their bankers back into taking riskier real-world growth investments. With the global recovery slowing again, the likes of the European Central Bank has been proposing further rounds of QE, this time not as a last-ditch defence but as a pre-emptive strike at the first signs of trouble. But now here in Australia, which escaped the global financial crisis, Goldman Sachs reckons that the Reserve Bank of Australia could by next year turn to a $200 billion QE program if conventional rate cuts fail to get more Australians into work and use this “spare capacity” in the economy to reinvigorate growth.
QE answers the call on policymakers to “do something”. But it is also a trap, hard to reverse, but which becomes less and less effective the longer it's used. It takes away the normal disciplines that the bond markets would apply to governments with conventionally borrowed money. It tips more easy money into the community, but Australia is already stretched on housing affordability and household debt – the wealth effect would mainly flow to the already wealthy. It would bring down the Australian dollar, another shot in the currency wars. But the dollar has hardly been at elevated levels, and we already have an export boom underway.
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Compulsory super is the only route to dignity in retirement
Swapping super for pay would charge low-paid workers more tax for a poorer retirement.
Greg Combet
Oct 3, 2019 — 12.00am
When Australia’s compulsory superannuation system was first established more than 25 years ago, it was done so with a simple objective in mind: to provide working Australians with some savings at retirement.
Before that, most people had no nest egg at all, other than their home. Superannuation was largely the domain of higher income earners and the public service. Millions of Australians had nothing in super, and could only look forward to the aged pension.
As the cornerstone of Australia’s retirement income system, compulsory superannuation is one of our greatest success stories. It has created a significant pool of capital that is now benefiting our economy and financial system, it is a key mitigant against wealth inequality, and it is enabling people to have a better living in retirement.
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RBA backs borrowers over investors
Oct 4, 2019 — 7.36pm
The Reserve Bank of Australia says the big four banks are highly profitable, suggesting they could afford to pass on interest rate cuts that would put the interests of borrowers and the economy ahead of investors.
The central bank on Friday rejected concerns by leading superannuation investors that the squeeze on the big four banks’ profits and dividends from ultra-low interest rates could undermine hopes of a pick-up in economic growth. On Tuesday, the RBA cut the cash rate for the third time this year, bringing it to a record low 0.75 per cent.
‘‘Australian banks remain very profitable, with return on equity well above their cost of equity and high by international standards,’’ the RBA said in its Financial Stability Review, published on Friday.
Week of tension
In an apparent endorsement of the Coalition’s criticism that the big four banks were prioritising profits over customers, the RBA said the banks remained among the most profitable in the world. It said recent margin falls were a result of misconduct costs, intensifying competition and a switch by customers to lower-margin loans.
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China puts a rocket up Australia's defence dollar challenge
Australia was once an underspender on defence. But acute strategic challenges may push us over the key 2 percent benchmark.
Oct 4, 2019 — 1.21pm
Watching China's military parade this week, it was easy to be enthralled by the sight of all those weapons of war – nuclear missiles! drones! gyrocopters! – before being hit with a sense of dread at the thought of them being used.
And a briefing last week by the man in charge of buying Australia's military kit offers some stark statistics about the spending challenge confronting the Morrison government amid a regional arms race.
A slide show in Defence Department deputy secretary Tony Fraser's presentation to defence industry insiders put China's annual military budget at $US177 billion ($262 billion), compared with America's $US686 billion.
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A big difference between profiteering and profits
The cost of a stable banking system is healthy margins for banks.
Oct 5, 2019 — 12.00am
The Reserve Bank of Australia’s six-monthly Financial Stability Review does not paint a pretty picture of the world economy. Markets are at dizzying levels, with cheap money so easy to come by that investors are oblivious to the risks of some investments, and demand virtually no extra yield over safer assets for holding them.
What if markets were to look down – and panic at how little support there really is in a world beset with slowing real economies, and unpredictable politicians happy to use trade, capital flows and technology as weapons in their geopolitical struggles? The review says that “asset prices are vulnerable to a destabilising correction if risk premiums were to rise suddenly. This could be triggered by a negative growth shock, geopolitical event, major credit event, or normalisation in term premiums.” If over-leveraged investors can't find buyers for the assets they need to dump, then the immense borrowings that have propped up the global economy since the last debt meltdown of 2008 will start to weigh heavily on the world again.
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Cash splash just a trickle: From $14.5b in tax refunds, Australia's shops got squat
By Eryk Bagshaw
October 5, 2019 — 12.00am
It could have been worse. That is about the only way to put a positive spin on retail figures that show for a $14.5 billion investment, Australia's shops gained less than a half-a-per cent increase in sales.
No doubt Treasurer Josh Frydenberg will see it as a sign the economy is turning a corner, but it is a hard argument to make when interest rates - already at emergency lows - are heading south towards zero.
By the end of August, the Australian Tax Office had delivered almost $15 billion worth of tax refunds to workers. Far from the expectations of a $1080 tax cut for many, the reality is increased compliance and fewer deductions saw an average jump of only $270 delivered into bank accounts.
Enough for a couple of pairs of shoes.
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‘Wow, we’re like them now’: All eyes on the economy as Australia joins the low-rates club
By Jessica Irvine
October 5, 2019 — 12.00am
For more than a decade after the global financial crisis, Australians watched in puzzlement as the world’s economic policymakers unleashed a strange armoury of unconventional policies designed to conquer low economic growth.
But, sheltered by a China-fuelled commodity boom and blessed with a high starting point for interest rates, such exotic terms as "negative interest rates", "quantitative easing" and "helicopter money" remained curiosities confined to foreign lands.
That all changed this week.
With Australia’s official cash rate now tipped to fall to a simple rounding error from zero this summer, the world’s low-growth dilemma has finally washed up on Australian shores.
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Health Issues.
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Small cap healthcare stocks surge to billion-dollar plays
Sep 30, 2019 — 12.00am
A series of successful phase two clinical trials and increasing commercial adoption in the US market for Aussie biotech companies have driven the creation of three new billion-dollar healthcare stocks in just a few months.
In the past six months more than $3.25 billion dollars has been added to the valuations of a handful of small and mid cap healthcare stocks like Avita Medical, Opthea, PolyNovo and Paradigm Biopharmaceuticals.
The unique momentum in the sector is in stark contrast to a year ago when some significant phase two clinical trial failures resulted in investors turning away from the risky sector.
The more risk that's taken off the table in terms of investment, the more reward you get.
— Tanushree Jain, Bell Potter
Speaking to The Australian Financial Review, Bell Potter healthcare and biotech analyst Tanushree Jain said investors were recognising the growth potential of this next wave of biotech success stories, with some like Opthea also considered potential acquisition targets for big pharmaceutical giants on the back of stellar clinical trial results.
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Protesters demand answers over 'preventable' hospital deaths
By Lydia Lynch and Stuart Layt
October 1, 2019 — 8.05pm
More than 200 protesters in a remote Queensland Aboriginal community have taken to the streets over a series of hospital deaths they say could have been prevented.
Queensland Health has confirmed it has launched an investigation into the death of an 18-year-old girl at Doomadgee Hospital in remote north-west Queensland.
The teenager died on Monday, September 23, after being admitted to the hospital with breathing problems.
North West Hospital and Health Service chief executive Lisa Davies Jones said in a statement it would fully investigate the death.
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Codeine overdoses dive following over-the-counter ban
By Kate Aubusson
October 3, 2019 — 12.01am
Australia's ban on over-the-counter codeine has dramatically reduced the number of overdoses and cut sales of the painkiller in half.
The first peer-reviewed research to investigate the effect of the switch to prescription-only codeine in February 2018 has vindicated proponents of the controversial decision.
Prescription-only codeine in Australia has halved codeine sales, finds new research led by the University of Sydney.
The monthly rate of codeine overdose calls has more than halved since patients have needed a doctor's prescription to buy any product that contains the opioid, according to the analysis by NSW Poisons Information Centre data, which fields 50 per cent of all poisoning calls in Australia.
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Sickie insurance: push for the boss to cover worker healthcare
Employers would be given tax exemptions to pay the private health insurance of workers under a $1.2bn, five-year plan developed by health funds to stem the exodus of young people from the private system and limit premium rises.
The funds have also urged the government to restore the private health insurance rebate to 30 per cent of premiums for those aged under 40, amid concerns that low-income earners are facing steeper premium increases than the wealthy.
The proposals are contained in a confidential policy blueprint sent to the government by Private Healthcare Australia. It was developed after extensive surveys with members aimed at identifying why young people were abandoning health insurance. “The overwhelming perception that people have under the age of 40 is that while they do value their private health insurance … the real issue is it is becoming very expensive given the other costs of living that they have,” said Private Healthcare Australia chief executive Rachel David.
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Private health struggles as young drop out
Beth McMullen feels caught in a bind. She’s paying $140 every month for private health insurance, but it’s a product she doesn’t want and doesn’t see the value in having.
“I’m confident that I’m wasting money,” McMullen says. “I know that my premiums have doubled since I’ve been paying for private health over the past eight years. And my benefits, especially on extras cover, have not gone up at all.”
McMullen plans to cancel her private insurance soon, and on an income of about $50,000 a year there’s little financial incentive to stay — she’s paying more for her insurance than she’d be slugged in a Medicare levy surcharge if she cancelled.
It’s a calculation that thousands of other young Australians are making — that health insurance is just not worth it — and it’s contributing to an exodus of young people from the private system, regardless of the loading they’ll pay if they rejoin.
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International Issues.
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Pelosi says public opinion shifting in support of impeachment inquiry
Brad Brooks
Sep 29, 2019 — 5.04pm
Austin, Texas | US House Speaker Nancy Pelosi said on Saturday (Sunday AEST) that public opinion was now on the side of an impeachment inquiry against President Donald Trump following the release of new information about his conversations with Ukrainian President Volodymyr Zelensky.
Ms Pelosi last week announced her support for an investigation after the surfacing of a whistleblower complaint that said Mr Trump appeared to solicit a political favour from Ukraine's President aimed at helping him be re-elected next year.
For months Ms Pelosi took a cautious approach in weighing the calls of other Democratic House members to launch impeachment proceedings against Mr Trump, which grew louder after former special counsel Robert Mueller testified on July 24 about his probe of Mr Trump and Russian interference in the 2016 election.
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Barr under fire as Trump blurs lines between lawyer, Attorney-General
Michael Balsamo
Sep 29, 2019 — 6.00pm
Washington | As Washington plunges into impeachment, Attorney-General William Barr finds himself engulfed in the political firestorm, facing questions about his role in President Donald Trump's outreach to Ukraine and the administration's attempts to keep a whistleblower complaint from Congress.
Mr Trump repeatedly told Ukraine's President in a telephone call that Mr Barr and Mr Trump's personal lawyer Rudy Giuliani could help investigate Mr Trump's Democratic rival Joe Biden, according to a rough transcript of the conversation. Justice Department officials insist Mr Barr was unaware of Mr Trump's comments at the time of the July 25 call.
When Mr Barr did learn of that call a few weeks later, he was "surprised and angry" to discover he had been lumped in with Mr Giuliani, a person familiar with Mr Barr's thinking told Associated Press.
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Flashy 70th birthday party masks growing problems for China
Modern China has a lot to celebrate as it turns 70, reports Michael Smith in Shanghai, but the anniversary of the Communist Party's grip on power comes at a challenging time for leader Xi Jinping.
Sep 30, 2019 — 12.00am
China is literally bringing out the big guns to celebrate its 70th birthday.
Tanks, ballistic missiles and stealth drones will be among the 580 pieces of military hardware paraded through the centre of Beijing tomorrow along with 15,000 military personnel and 160 aircraft.
Expect fireworks, technicolour aerial contrails, singing, dancing and an 80-minute extravaganza of Chinese propaganda heralding the achievements of the Chinese Communist Party since it came into power following a bloody civil war 70 years ago.
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No plans to block Chinese listings 'at this time', says US
Jenny Leonard, Shawn Donnan and Saleha Mohsin
Sep 29, 2019 — 5.38pm
Chinese companies will not be blocked from listing on US exchanges for now, the US Treasury has said amid reports of a raft of measures being considered by the Trump administration to curb investment in China.
However, the statement did little to assuage fears of a crackdown on investment in Chinese companies, that sent stocks tumbling on Friday.
"The administration is not contemplating blocking Chinese companies from listing shares on US stock exchanges at this time," Treasury spokeswoman Monica Crowley said in an emailed statement on Saturday.
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Joe Biden tells news networks to stop interviewing Rudy Giuliani
By Brian Steinberg
September 30, 2019 — 8.57am
Washington: Joe Biden's presidential campaign has urged major US TV-news outlets to cease booking President Trump's personal lawyer Rudy Giuliani as a guest, citing his penchant for spreading "false, debunked conspiracy theories" on behalf of the White House.
The letter, signed by top Biden aides Anita Dunn and Kate Bedingfield, was sent to top executives at several major news outlets, as well as a handful of prominent anchors, according to a person familiar with the matter.
US President Donald Trump's personal lawyer Rudy Giuliani said on CBS's "Face the Nation" that US Secretary of State Mike Pompeo was 'aware' of his meetings with aides to Ukrainian President Volodymyr Zelenskiy.
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Tarnished Trudeau’s election hopes hinge on ‘glum acceptance’
The Economist
The Liberal Party supporters who lined up behind Justin Trudeau during a campaign stop in Brampton, near Toronto, were an ethnically diverse lot, yet they looked universally glum. Thanks only partly to the release of several photographs showing a younger Trudeau wearing blackface make-up, the man who was once his party’s greatest asset has become its biggest problem.
Trudeau, who came to power in 2015, is a prominent exception to the domino run of right-wing populist world leaders. At international events he promotes immigration, globalisation and feminism. At home, his government has raised taxes on the wealthy, launched a means-tested child benefit, imposed a carbon tax in provinces that do not have their own ones and legalised marijuana.
Gradually, though, Trudeau has acquired a shifty reputation. In 2017, he broke his promise to reform Canada’s first-past-the-post electoral system, which benefits his party. In February this year, he broke the parliamentary ethics code by pressing his attorney-general to intervene in the criminal prosecution for bribery of a large Quebec engineering firm. Then the blackface pictures appeared.
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China rising: this time it's different
By being willing to learn so much from the modern West, China is undergoing a totally different experience of rising again after a great fall.
Sep 29, 2019 — 11.25am
On Tuesday China will celebrate the 70 years of unification that followed Mao Zedong’s victory over the Nationalist regime in 1949. Many thought that had brought about the rise that Chinese peoples had been waiting for since the beginning of the 20th century. But it was not to be.
After the Great Leap Forward and Great Proletarian Cultural Revolution had nearly destroyed all that Mao had established, there were doubts that China would ever rise. Then came Deng Xiaoping’s reforms after 1978 and the opening of China to the free market economy.
By 20 years later, China astonished the world with the way it was rising again. By one account, this was the fourth time it had risen after a great fall.
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GOP split over impeachment fight as Democrats plough on
Laurie Kellman
Sep 30, 2019 — 3.27pm
Washington | The president's lawyer insists the real story is a debunked conspiracy theory. A senior White House adviser blames the "deep state". And a Republican congressman is pointing at Joe Biden's son.
As the Democrats drive an impeachment inquiry toward a potential vote by the end of the year, President Donald Trump's allies are struggling over how he should manage the starkest threat to his presidency. The jockeying broke into the open on Sunday (Monday AEST) on the talk-show circuit, with a parade of Republicans erupting into a surge of second-guessing.
At the top of the list was Rudy Giuliani's false charge that it was Ukraine that meddled in the 2016 elections. The former New York mayor has been encouraging Ukraine to investigate both Biden and Hillary Clinton
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Trump Pressed Australian Leader to Help Barr Investigate Mueller Inquiry’s Origins
The discussion was another instance of the president using American diplomacy for potential personal gain.
· Sept. 30, 2019Updated 5:38 p.m. ET
WASHINGTON — President Trump pushed the Australian prime minister during a recent telephone call to help Attorney General William P. Barr gather information for a Justice Department inquiry that Mr. Trump hopes will discredit the Mueller investigation, according to two American officials with knowledge of the call.
The White House restricted access to the call’s transcript to a small group of the president’s aides, one of the officials said, an unusual decision that is similar to the handling of a July call with the Ukrainian president that is at the heart of House Democrats’ impeachment inquiry into Mr. Trump. Like that call, the discussion with Prime Minister Scott Morrison of Australia shows the extent to which Mr. Trump sees the attorney general as a critical partner in his goal to show that the Mueller investigation had corrupt and partisan origins, and the extent that Mr. Trump sees the Justice Department inquiry as a potential way to gain leverage over America’s closest allies.
And like the call with the Ukrainian president, Volodymyr Zelensky, the discussion with Mr. Morrison shows the president using high-level diplomacy to advance his personal political interests.
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Trump pressed Morrison in call over Australia's Mueller probe links
Oct 1, 2019 — 7.06am
Washington | Australia has been pulled into the rapidly-escalating impeachment battle against Donald Trump after reports emerged the president pushed Scott Morrison in a telephone call to help US Attorney General William Barr with a probe into the origins of the Mueller Russia inquiry.
The explosive conversation - confirmed by Mr Morrison's office on Tuesday - comes less than a week after the White House released a transcript of a call in which the President urged his Ukrainian counterpart to investigate a potential 2020 US presidential rival.
The call between Mr Morrison and Mr Trump - which The Australian Financial Review understands took place in early September - was first reported by The New York Times late on Monday (Tuesday AEST).
"Like that call", the discussion with Mr Morrison "shows the extent to which Mr Trump sees the attorney general as a critical partner in his goal to show that the Mueller investigation had corrupt and partisan origins," the Times wrote.
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Beijing's birthday message carries a mixed blessing
Sep 30, 2019 — 6.00pm
It’s a not-so-happy anniversary for many of China’s neighbours.
The contrast between the chaos on the streets of Hong Kong and the celebrations in the streets of Beijing for October 1 reveal the fallacy at the heart of the “one country, two systems” notion that accompanied the 1997 handover. But underneath the exchange of diplomatic niceties about China’s 70th birthday under communist rule from other countries in the region, the reasons for their concern will also be on show in the massive military display scheduled for Tiananmen Square on Tuesday.
That includes China’s impressive arsenal of missiles – from the unveiling of a new longer-range intercontinental ballistic missile to the short and mid-range, conventional weaponry that China has been developing with enthusiastic determination over several years.
The tough message from the extensive and sophisticated hardware is re-enforced by software.
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Donald Trump asked Scott Morrison to help discredit Mueller probe
By Matthew Knott
Updated October 1, 2019 — 10.07amfirst published at 6.39am
New York: US President Donald Trump urged Prime Minister Scott Morrison in a phone call to assist an investigation designed to discredit the Mueller probe into Russian election interference.
Details of the phone call were restricted to only a select number of senior officials, mirroring the handling of Trump's controversial phone call with Ukrainian President Volodymyr Zelensky, The New York Times reported on Monday local time (Tuesday AEST).
A spokesman from the Prime Minister's office confirmed that call and said that Morrison had agreed to help the investigation.
"The Australian Government has always been ready to assist and cooperate with efforts that help shed further light on the matters under investigation," the spokesman said in a statement.
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Kiwis’ pursuit of banking stability
The countdown has commenced to the announcement of the Reserve Bank of New Zealand’s controversial capital reforms, with the imminent release of three independent expert reports on whether the central bank’s governor Adrian Orr has identified all relevant considerations.
As the owner of the NZ’s largest bank, and facing a $NZ6bn tab from Orr to meet a proposed doubling in high-quality, tier one capital from 8.5 per cent to 16 per cent, ANZ chief executive Shayne Elliott is mightily interested in all developments across the ditch.
He won’t have to wait too long for the expert reports, which remain under wraps but could be released in the coming days.
While they are likely to stretch the attention span of the average non-banker, judging by the terms of reference, you can’t fault the exhaustive nature of the review process, which kicked off in 2017 and is likely to conclude with an announcement by the RBNZ on its final position before the end of the year or in early 2020.
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Trump and Johnson have weaponised the will of the people
The political arguments made by both the Johnson and Trump administrations use the language of democracy, but the underlying logic has more in common with populist authoritarianism, writes the FT's Gideon Rachman.
Oct 1, 2019 — 10.06am
“By any means necessary” is the slogan used in 10 Downing Street to describe UK prime minister Boris Johnson’s approach to Brexit. The same phrase encapsulates Donald Trump’s approach to re-election in 2020.
The consequences of this attitude to government became clear last week, as rule-of-law crises broke out on both sides of the Atlantic. In the UK, the Supreme Court ruled 11-0 that the Johnson administration had acted unlawfully in suspending parliament.
On the same day, an impeachment inquiry began against the US president, prompted by a whistleblower’s claim that Mr Trump pressured the government of Ukraine to dig up dirt on his political opponents.
These concurrent crises are more than a coincidence. They are signs that the laws and conventions that underpin liberal democracy are under attack in both the UK and the US, two countries that have long regarded themselves as democratic role models for the world.
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Why Morrison got sucked into Washington's bitter impeachment mess
Updated Oct 1, 2019 — 1.42pm, first published at 1.00pm
Washington | The correct response – in a normal world – would have been to tell Donald Trump to take a long leap off a short pier.
But that’s no strategy for getting along with this strange, unpredictable president.
Most smart foreign leaders end up adopting a balancing strategy of trying to keep the man happy without compromising themselves too much in the process. Japan’s Shinzo Abe is probably the world’s best practitioner of this specialised diplomatic ninja skill.
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Canberra's candour with Trump only deepens his impeachment woes
By Matthew Knott
October 1, 2019 — 2.01pm
New York: It's an exceptionally rare day in America when a news story about Australia dominates the headlines.
Even when Donald Trump hosted Scott Morrison for an opulent state dinner at the White House earlier this month, it caused barely a murmur in Washington.
Not so with the revelation that Trump asked Morrison to help his efforts to discredit the Mueller inquiry into Russian election interference.
This story landed with the force of a thunderclap. The New York Times, which broke the news, splashed it on the top of its website. Twitter went into a frenzy.
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Chinese military muscle reigns on Xi Jinping's parade
Oct 2, 2019 — 12.00am
A long-range nuclear warhead that can evade US missile defences, a bomber capable of sinking aircraft carriers with next-to-no warning and a world-first stealth drone have been revealed at China's military parade to celebrate 70 years of Communist Party rule.
The showcase of military might passing through Beijing's Tiananmen Square and in the skies above had given a clear demonstration of advances in Chinese technology, defence analysts said.
And the belief is the new weapons have already been deployed into the field, given China's past practice to only display weapons ready for service.
"It is symbolic of the fact that American military primacy in Asia is almost over," Lowy Institute International Security Program director Sam Roggeveen said of the parade.
"The US is still clearly the biggest and most advanced military we have in the world but China is catching up and, unlike the US, it doesn't have global military commitments."
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PM faces 'please explain' over Trump request to torpedo Mueller
Oct 1, 2019 — 5.43pm
Scott Morrison is under pressure to explain what, if any, assistance Australia has provided to help Donald Trump try to torpedo the Mueller probe into Russian interference in the 2016 US election campaign.
Following explosive revelations in The New York Times that Mr Trump pushed the Prime Minister to help US Attorney-General William Barr probe the origins of the Mueller Russia inquiry, Mr Morrison confirmed the request but gave little detail.
"The Australian government has always been ready to assist and co-operate with efforts that help shed further light on the matters under investigation," a government spokesman said.
"The PM confirmed this readiness once again in conversation with the President."
Mr Trump is questioning how information about Russian interference that was relayed in 2016 to Australia's then High Commissioner to the United Kingdom, Alexander Downer, and then passed on to US authorities during the 2016 US election campaign, fuelled the Russia probe.
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https://www.afr.com/policy/economy/wto-slashes-2019-forecast-for-global-trade-growth-20191002-p52wro
WTO slashes 2019 forecast for global trade growth
Rachel Siegel
Oct 2, 2019 — 4.58am
Washington | The World Trade Organisation has downgraded its forecast for global trade growth for this year and next as the repercussions of the US-China trade war and a broader economic slowdown continue to play out.
On Tuesday (Wednesday AEST), the WTO said world merchandise trade volume is now expected to rise 1.2 per cent in 2019 - markedly slower than the 2.6 per cent forecast in April. For 2020, the forecast calls for 2.7 per cent growth instead of 3 per cent.
The darkening outlook for trade is discouraging but not unexpected.
— WTO director-general Roberto Azevedo
The revised projections come less than two weeks after President Donald Trump called China a "threat to the world" and said there was little urgency for an interim trade agreement. On September 20, he told reporters he was under no pressure to reach a deal with China before the 2020 election, despite his early insistence that China was eager to return to the negotiation table. Last month, Trump said the US had reached a trade deal with Japan, though terms of the deal were scarce.
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Dalio outlines potential Trump path to limit capital to China
Margaret Collins
Oct 2, 2019 — 7.36am
Washington | Ray Dalio, the billionaire founder of the world's biggest hedge fund, said preliminary discussions on limiting US investments in China make him wonder if the Trump administration is "inching toward bigger moves".
In a new essay posted on LinkedIn on Tuesday (Wednesday AEST), the Bridgewater Associates co-chairman points to the US freezing Japanese assets and embargoing oil to Japan in the late 1930s to early 1940s as a potential example of how special emergency powers could be used by the President.
"Regarding the capital and currency wars, the ability of the US president to unilaterally cut off capital flows to China and also freeze payments on the debts owed to China, and also use sanctions to inhibit non-American financial transactions with China must be considered as possibilities," Dalio wrote.
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Ray Dalio worried by Trump's capital punishment
The Bridgewater Associates boss says all investors "need to worry" about capital flow retributions becoming a new weapon in the trade war.
Oct 2, 2019 — 3.43pm
Ray Dalio's gilt-edged reputation as a global investor means that when he says worry, it's best to pay attention.
The boss of hedge fund behemoth Bridgewater Associates is worried about the Trump administration's willingness to consider choking off the supply of US capital to China, a provocative move that would significantly up the ante in the growth-sapping trade war.
Embracing capital flows as a weapon in its showdown with Beijing would be a highly risky move at a time when global markets are fretting about a slowdown, with the latest US Institute of Supply Management purchasing managers index slumping to a 10-year low in September and sparking a Wall Street sell-off on Tuesday.
In his latest essay, Mr Dalio warned the US president's ability to cut off capital flows to China and freeze payments on debts owed to China, and the use of sanctions to stymie non-American transactions with China, should be considered as "possibilities".
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The end of 'the world's most important number' is drawing nearer
Stephen Bartholomeusz
Senior business columnist
October 2, 2019 — 12.00am
It has been described as the world’s most important number, underpinning roughly $US400 trillion (about $590 trillion) of financial contracts. In just over two years it is supposed to disappear but the recent turmoil in a short-term secured funding market in the US has pointed to some of the perils as banks and others try to transition from the familiar old to the untested new.
The number is LIBOR, or the London Interbank Offered Rate, a benchmark rate that underpins roughly $US400 trillion of loans and derivatives globally and which has been used as the world’s key reference rate for financial transactions since the 1960s.
LIBOR is calculated via a daily survey of a relatively small number of large banks that asks them what they believe it would cost them to borrow, over a range of relatively short time-frames, from other banks. The highest and lowest "bids" are removed and the rest averaged out.
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The real takeaway from Donald Trump’s call with Scott Morrison
Two weeks. Two phone calls. Two completely different controversies. Looking at them together exposes Donald Trump’s obsession which could cost him his job.
ANALYSIS
Two weeks. Two phone calls. Two completely different controversies.
We must be careful not to conflate Donald Trump’s call with Prime Minister Scott Morrison, revealed by The New York Times today, and the one with Ukrainian President Volodymyr Zelensky, which dominated the news last week.
Yes, the two conversations were superficially similar.
During both, Mr Trump pressured foreign leaders to co-operate with a US Justice Department investigation into the origins of the FBI’s Russia probe.
But there was a significant differentiating factor between the two — Mr Trump’s request for Ukraine to launch its own investigation into his most likely opponent in next year’s presidential election, Joe Biden.
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China’s weapons display the eroding military gap
China’s 70th anniversary parade on Tuesday was a showcase of the domestically made, state of the art weaponry of the world’s second largest economy that has benefited from two decades of increased defence spending.
While there was much speculation about the appearance of China’s long-range Dongfeng 41 intercontinental ballistic missile, the real interest came on what was the first outing of China’s Dongfeng 17 short to medium-range launcher for the DF-ZF hypersonic glider. (Dongfeng is Chinese for east wind.)
The Dongfeng 17’s hypersonic glide vehicle technology also allows it to manoeuvre at high speed and travel at low altitudes just before delivering its weapons, making it harder to detect and intercept.
Australian Strategic Policy Institute analyst Malcolm Davis told The Australian that the DF-17 was particularly significant, with the potential to turn US carrier battle groups into sitting ducks.
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Australia drafted in Donald Trump’s quest for revenge
Scott Morrison is entitled to fob off Donald Trump’s pleas for help. But here’s why we won’t be much help in his quest for revenge.
Prime Minister Scott Morrison would be entitled to fob off Donald Trump and refuse to join his self-absorbed quest for revenge.
Because that’s what the US President wants — a brutal campaign against his domestic enemies.
Mr Trump is seeking the heads of those who put him through what he called the “witch hunt” of the Mueller inquiry into claims he colluded with Russians during the 2016 election campaign.
The inquiry didn’t establish any collision but was a source of great discomfort for the President.
Mr Morrison has agreed to assist but reportedly is in no mind to hand over secret Australian intelligence communications, and it seems he is likely to fob off — in the nicest possible way — the pleas of the President.
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Trump hurls abuse at 'lowlife' Democrats over 'BULLSHIT' impeachment
Oct 3, 2019 — 4.16am
Washington | Donald Trump has gone on the offensive against an intensifying impeachment process, which he slammed in a tweet as "BULLSHIT".
In a fiery Oval Office press conference, Mr Trump abused top Democrats leading the impeachment fight. He called Adam Schiff, the House intelligence committee chairman, a "low life" and reiterated that Schiff should resign.
"Frankly they should look at him for treason," Mr Trump said.
As US stocks slumped to their lowest since late August on faltering investor sentiment amid renewed trade war fears and weak data, Democrats warned the White House that "we're not fooling around here".
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Chances of Republicans deserting Trump are underrated
The president’s transactional world view always implied the possibility of his own abandonment. Once he stops being useful to people, by his own logic, they have no reason to stay loyal, says the FT's Janan Ganesh.
Janan Ganesh
Oct 3, 2019 — 9.43am
Upon dismissing his chief of staff in 1973, Richard Nixon said that he loved him “like my brother”. The line seems too easy until you remember that the US president had seen two of his own die young.
Nixon’s bond with H R Haldeman and other colleagues fortified him well into the Watergate crisis that brought him down.
Excluding his in-laws and blood relations, is there anyone in Washington of whom Donald Trump would make the same comment? Is there anyone who would say it of him? The point is not about the president’s likeability or otherwise. It is about his level of support as his own impeachment ordeal nears.
Since the Ukraine scandal emerged, it has been natural to assume total Republican commitment to Mr Trump. Such is the tribalism of a riven nation.
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US set to widen trade war with Europe
Tim Hepher, Philip Blenkinsop and David Shepardson
Oct 3, 2019 — 7.24am
Washington | The United States won approval to impose import tariffs on $US7.5 billion ($11.2 billion) worth of European goods over illegal EU subsidies handed to Airbus, threatening to trigger a tit-for-tat transatlantic trade war as the global economy falters.
The decision by the World Trade Organisation pushes a 15-year corporate dispute over illegal support for plane giants to the centre of caustic world trade relations and comes on top of a tariff war between Washington and Beijing.
In response, the United States intends to impose new 10 per cent tariffs on aircraft and 25 per cent on agricultural and industrial good other European goods starting October 18, an official from the US Trade Representative's office said.
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'Positive advances': Boris Johnson sets out new Brexit compromise plan
By Latika Bourke
October 3, 2019 — 8.09am
Manchester: In his first speech as Prime Minister at the Conservative Party conference, Boris Johnson struck a conciliatory tone, outlining a compromise with Brussels in a last-ditch bid to "get Brexit done".
Addressing 6000 members gathered in the northern English city of Manchester, Johnson proposed an all-island regulatory zone for the island of Ireland covering all goods and agrifood.
This would prevent a physical border of customs checks on the island, something viewed as critical to preserving peace between the Republic and the north while at the same time freeing Britain from adhering to EU regulations after Brexit.
Under the plan, the Northern Ireland assembly and executive would be required to give their consent to this arrangement and every four years afterwards, before the end of a transition period after Brexit in December 2020.
Northern Ireland would stay part of the UK's customs territory but to avoid customs checks, a declaration system would be introduced with a simplified process for small traders, along with a trusted-traders scheme.
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US-EU trade war widens with tariffs on planes, cheese, wine and whisky
Tim Hepher, Philip Blenkinsop and David Lawder
Updated Oct 3, 2019 — 3.27pm, first published at 3.25pm
London/Brussels/Washington | The United States on Thursday (AEST) said it would slap 10 per cent tariffs on European-made Airbus planes and 25 per cent duties on French wine, Scotch and Irish whiskies, and cheese from across the continent as punishment for illegal EU aircraft subsidies.
The announcement came after the World Trade Organisation gave Washington a green light to impose tariffs on $US7.5 billion ($11.2 billion) worth of EU goods annually in the long-running case, a move that threatens to ignite a tit-for-tat transatlantic trade war.
The measures would follow tariffs levied by the United States and China on hundreds of billions of dollars of each other's goods in their more than year-old trade war.
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Trump is on a warpath against everything that threatens him
Charles M. Blow
Updated Oct 3, 2019 — 1.13pm, first published at 1.07pm
Washington | On Wednesday (Thursday AEST), I watched Donald Trump in the Oval Office, while seated next to the Finnish president, take questions from reporters in what can only be described as the unhinged rantings of a desperate man melting down, spiraling out of control and lashing out.
Over the last few years, and particularly since the Robert Mueller investigation concluded, I have grown accustomed to Trump delivering his insults, launching his attacks and spewing his lies with a swaggering smugness.
US President Donald Trump erupted in rage at persistent questions from reporters on the impeachment inquiry looming over his administration.
This was not that. What was on display Wednesday was anger animated by panicked fear.
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Sweden is the canary in the coalmine - and it just keeled over
A pattern is emerging where open economies that rely on trade and have big current account surpluses are getting into difficulties.
Ambrose Evans-Pritchard
Oct 3, 2019 — 3.30pm
Sweden has suffered its worst slump in manufacturing output since the depths of the Lehman crisis in late 2008, flashing an early warning signal for the rest of Europe's industrial bloc.
The country's PMI reading of factory activity plummeted far below the boom and bust line to 46.3 in September, catching the Riksbank off guard in a startling move that points to mounting stress in Europe's manufacturing supply chains. "The plunge was nothing short of disastrous," said David Oxley from Capital Economics.
Sweden's open-trading economy is highly leveraged to the international cycle and is watched by analysts as an indicator for global industry. Its PMI data tends to anticipate eurozone trends by roughly two months.
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Now Trump wants a tit-for-tat stoush with Europe, no wonder markets are fearful
Stephen Bartholomeusz
Senior business columnist
October 3, 2019 — 4.03pm
Last year the US sharemarket imploded in the final quarter, primarily because the Federal Reserve was foreshadowing a series of interest rate hikes, but also because of the then-developing trade conflict with China.
It’s happening again but this time the sell-off – the US sharemarket has fallen more than 3 per cent already this week – is predominantly due to the fallout from the trade issues.
A year ago it was concern about what the effects of the tariff war with China might be if it weren’t resolved (there had been more threats than serious action at that point) that was the secondary factor in the market meltdown. This week those effects have been materialising and unsettling investors.
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Unchecked globalism a threat to Australia's sovereignty: Morrison
Oct 3, 2019 — 8.30pm
Scott Morrison has announced an audit of Australia's role in international organisations during a speech in which he railed against the threat of globalism impinging on Australia's sovereignty.
The Prime Minister did not advocate withdrawing from multilateral organisations but said Australia must seek greater input into the rules set by the bodies, in a major foreign policy address to the Lowy Institute on Thursday night in Sydney.
This was needed to protect the national interest against "a negative globalism that coercively seeks to impose a mandate from an often ill-defined borderless global community and, worse still, an unaccountable internationalist bureaucracy".
"Australia does and must always seek to have a responsible and participative international agency in addressing global issues. This is positive and practical globalism,'' he said.
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Trump says China's Xi should investigate the Bidens
Jennifer Jacobs
Oct 4, 2019 — 3.06am
Washington | President Donald Trump said China's Xi Jinping should consider investigating Joe Biden and his son after again calling on Ukraine's president to re-open an investigation into one of his top political rivals.
"China should start an investigation into the Bidens," Trump told reporters Thursday (Friday AEST) as he left the White House. "Because what happened in China was just about as bad as what happened with Ukraine."
Trump's China remarks came after he reiterated his call for Ukrainian President Volodymyr Zelenskiy to start an investigation of the Bidens. Trump's allegation that Joe Biden, as vice president, tried to shield his son Hunter from a Ukrainian investigation of a company that employed him, has been discredited.
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US services gauge misses most pessimistic forecast
Reade Pickert
Oct 4, 2019 — 3.17am
America's service industries joined manufacturing in taking a big step back last month, fuelling concerns that the global slowdown and trade war are weighing more on the broader economy.
The Institute for Supply Management's non-manufacturing index dropped 3.8 points to 52.6 in September, the lowest since August 2016 and well below the most pessimistic forecast in a Bloomberg survey, according to data Thursday (Friday AEST).
Growth in orders and business activity slowed abruptly, while the employment gauge registered its weakest print in more than five years.
The weakening in US services mirrored developments in Europe, where Germany registered a sharp slowdown in services activity. IHS Markit reported its gauge dropped to a three-year low of 51.4 in September from 54.8 a month earlier.
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Brace yourself: the Trump slump hits US economy and the world
By Paul Krugman
October 4, 2019 — 9.55am
When he isn't raving about how the deep state is conspiring against him, Donald Trump loves to boast about the economy, claiming to have achieved unprecedented things. As it happens, none of his claims are true. While both GDP and employment have registered solid growth, the Trump economy simply seems to have continued a long expansion that began under former president Barack Obama. In fact, someone who looked only at the past 10 years of data would never guess that an election had taken place.
US President Donald Trump is calling on China to probe former Vice President Joe Biden.
But now it's starting to look as if Trump really will achieve something unique: He may well be the first president of modern times to preside over a slump that can be directly attributed to his own policies, rather than bad luck.
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Trump's angry, bizarre, self-defeating impeachment strategy
By Paul Waldman
October 4, 2019 — 4.15am
There was a remarkable development in President Donald Trump's impeachment saga on Thursday morning: while the President stands to be impeached for using the power of his office to pressure a foreign government to investigate one of his political opponents, he is responding to the crisis by - wait for it - using the power of his office to pressure a foreign government to investigate one of his political opponents.
"China should start an investigation into the Bidens, because what happened in China is just about as bad as what happened with Ukraine," Trump told reporters. His allegations about Joe Biden's son and China are, you'll be surprised to hear, as utterly bogus as pretty much everything else he learns from trolling right-wing conspiracy theory sites.
China is obviously not the same as Ukraine; they aren't dependent on the US for weapons and protection, so they're likely to just laugh this request off. Nevertheless, Trump's bizarre plea shows just how blinkered his view of this whole scandal is.
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Trump's biggest threat looms - and it's not impeachment
Oct 5, 2019 — 12.00am
Washington | Donald’s Trump’s crime, as his growing army of political enemies see it, is hiding in plain sight for all to see.
Indeed, Trump’s reeling, angry and histrionic performance this week as the noose tightens around his presidency shows him making no efforts to deny the basic problem: that he wants foreign leaders to dig up dirt on his domestic rival Joe Biden.
And, in the case of Australia, to help him pursue a conspiracy-laden campaign to denigrate the FBI’s decision to open a covert probe into Russian meddling in 2016.
Speaking on the White House south lawn in front of the thudding blades of Marine One on Thursday (Friday AEST), the President not only defended his decision to push Ukraine's President Volodymyr Zelensky for help but started imploring China to look into Biden and his son, Hunter.
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2nd Official Is Weighing Whether to Blow the Whistle on Trump’s Ukraine Dealings
The official, a member of the intelligence community, was interviewed by the inspector general to corroborate the original whistle-blower’s account.
Oct. 4, 2019, 8:37 p.m. ET
WASHINGTON — A second intelligence official who was alarmed by President Trump’s dealings with Ukraine is weighing whether to file his own formal whistle-blower complaint and testify to Congress, according to two people briefed on the matter.
The official has more direct information about the events than the first whistle-blower, whose complaint that Mr. Trump was using his power to get Ukraine to investigate his political rivals touched off an impeachment inquiry. The second official is among those interviewed by the intelligence community inspector general to corroborate the allegations of the original whistle-blower, one of the people said.
The inspector general, Michael Atkinson, briefed lawmakers privately on Friday about how he substantiated the whistle-blower’s account. It was not clear whether he told lawmakers that the second official is considering filing a complaint.
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Hong Kong face mask ban provokes widespread anger
The move by Hong Kong leader Carrie Lam to ban face masks has backfired spectacularly with one of the worst nights of violence in the city on Friday night.
Rampaging protesters roamed the streets burning shops and bank machines, blocking roads and forcing the closure of the city’s subway system with outlets of mainland Chinese banks among the worst hit.
Some police groups are raising the idea of imposing a curfew in the city as it becomes increasing clear they are losing control of the streets and the face mask ban has only provoked another round of anger by protesters.
People gathered in the streets of the Central area on Friday afternoon immediately after Lam announced the ban on the wearing of face masks which officially came into force at midnight on Friday.
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Texts reveal White House pressure on Ukraine
· The Wall Street Journal
The Trump administration sought to use a potential meeting between the US President and his Ukrainian counterpart as leverage to press Kiev to investigate Joe Biden, newly released text messages showed.
Texts released by House of Representatives committees on Friday reveal administration officials sought to use a White House meeting between Donald Trump and Volodymyr Zelensky as leverage to press Kiev to pursue an investigation into the former vice-president, his son Hunter and any Ukraine interference in the 2016 presidential election.
The messages show US officials co-ordinated with Zelensky aides and Rudy Giuliani, Mr Trump’s private lawyer, on a draft statement in which Kiev would announce the investigation at the same time as announcing a visit by the Ukrainian President to the White House.
They also reveal concerns by the US charge d’affaires in Ukraine, Bill Taylor, that Mr Trump was seeking to use a hold on $US400m in aid to Ukraine — which the President imposed a week before his July call with Mr Zelensky — for political purposes.
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Violence sweeps Hong Kong after face mask ban
Michael Smith China Correspondent
Oct 5, 2019 — 8.47pm
Hong Kong, Asia's financial hub, was in virtual lockdown on Saturday after the city's rail network, major supermarkets and major shopping malls were closed as protests against a government ban on face masks continued through the weekend.
There were growing fears the Hong Kong government, which invoked emergency laws to ban face masks at midnight Friday, would take harsher measures to contain the unrest following one of the worst nights of violence during four months of protests.
Chief executive Carrie Lam’s decision Friday to ban the masks, which tens of thousands of protesters have been using to hide their identity and protect themselves from tear gas, backfired spectacularly.
Violence broke out throughout the city on Friday night when protesters lit fires at the entrance to metro stations and clashed with police. A 14-year-old was shot in the leg and was in a serious condition in hospital, according to local media. Police said an officer had fired a shot believing his life was under threat but did not confirm whether anyone was hit.
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I look forward to comments on all this!
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David.
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