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The big news is that we have at least has some rain that has acted to help a little with the fires, but sadly as of Thursday we are having bas fires again and look to have had a major air accident with a tanker. We have also plumbed the Australian political depths with the good Senator McKenzie refusing to resign despite being found to have acted corruptly as far as I can tell.
In the US we have a Trade Deal signed but not really implemented and we have the impeachment trial. Should be enough to keep the Donald flat out. I wonder if there will be blowback on the Iranians now we know they caused 11 casualties with their rocket attack…To top it off he has behaved awfully at Davos and is the 'chief global climate change denier'. Really pretty sad!
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Major Issues.
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Be selective, but stick with shares
Jan 13, 2020 — 12.00am
Asset allocation experts are advising institutions and financial planners to stay invested in the sharemarket, even as market indices reach all-time highs, global growth shows signs of slowing and geopolitical tensions are on the rise.
The mix of assets chosen by investors has historically accounted for 90 per cent of portfolio returns and after a strong 2019 for stocks and bonds, the experts hired to make these decisions are drafting their strategies for the new year.
The message among those surveyed by The Australian Financial Review is that high asset valuations mean investors need to be selective about which sharemarkets they invest in, but low interest rates make it costly to rely on defensive assets for returns.
“The challenge investors are faced with today is that while the valuations of most risk assets appear expensive in the context of historical levels, compared to defensive assets such as bonds and cash, risk assets look relatively attractive and even cheap,” JANA Investment Advisers chief investment officer Steven Carew said.
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Here's some new year predictions to ponder
Could we have predicted Harry and Meghan divorcing the Royal family? Well, not specifically but like many of the event in 2020, the trends were already there.
Alexander Downer Columnist
Jan 13, 2020 — 12.00am
The New Year is a time when pundits love to make predictions about the year ahead. I find this an interesting intellectual exercise even though it is impossible to predict specific events. It is, nevertheless possible to predict trends. So let’s have a look at what might happen over the next 12 months.
This new decade has certainly got off to a lively start. The global media has covered extensively the devastating bushfires here in Australia. We’ve had the surprise assassination of the Iranian general Soleimani, the Iranian retaliatory missile attacks on American bases in Iraq and the tragic accidental shooting down of the Ukrainian airliner. And then there is the saga of Harry and Meghan.
Could we have predicted these events? Well, not specifically but the trends were already there.
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GetUp admits to election campaign mistakes
By David Crowe
January 13, 2020 — 12.00am
Activist group GetUp has admitted to strategic and tactical mistakes in its election campaign to unseat conservative ministers and promote progressive candidates despite a big increase in its volunteer ranks.
The group cited an advertising campaign against former prime minister Tony Abbott as one of the blunders but pointed to wider problems including its reliance on opinion polls to target the wrong conservative seats.
In an election review expected to be released within days, GetUp claims a shared victory in the bid to drive Mr Abbott out of Parliament by backing his replacement Zali Steggall, citing it as a highlight of its campaign.
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Weaker returns, more mergers: Tougher year tipped for super sector in 2020
Stephen Miles
Investment editor
January 13, 2020 — 12.15am
Superannuation experts are warning fund members they should not expect the stellar returns of 2019 to continue this year, with increased regulation and more mergers poised to reshape the retirement savings landscape.
Many super funds are yet to report their end-of-year results but industry researcher SuperRatings expects an average fund return of between 13.5 per cent and 14 per cent for the 2019 calendar year.
With equity markets at record highs, the valuations of many stocks listed on the Australian Securities Exchange are considered stretched compared to historic levels. As a result super funds are likely to continue their push into alternative assets such as private equity and infrastructure, which offer the potential for stronger upside and sustained performance.
Bruce Apted, the local head of portfolio management at State Street Global Advisors says the prospects of recurrent bouts of market volatility could result in funds maintaining a relatively defensive posture in their Australian equity allocations.
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Central bank easing triggers record corporate bond issuance
Joe Rennison
Jan 13, 2020 — 2.14pm
New York | Companies across the globe took advantage of lower borrowing costs to sell a record amount of bonds in 2019, prompting renewed concerns among policymakers about soaring levels of debt.
Just over $US2.5 trillion ($3.6 trillion) of corporate bonds were sold over the year, inching past the previous record set in 2017, according to data from Dealogic.
Issuance was boosted by supportive moves from major central banks, which reversed course and lowered interest rates, helping to cut the costs of borrowing for all sorts of companies.
The Federal Reserve cut rates by a total 0.75 percentage points over 2019, erasing much of the 1-point rise the US central bank administered over the previous year. The European Central Bank also reduced rates and renewed its commitment to buying bonds in a bid to help revive the economy.
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Commodities may not stay cheap forever
In an ideal world, the next commodities bubble, whenever it comes, could help us make what might be the final shift — away from fossil fuels and towards renewables.
Jan 13, 2020 — 10.07am
There are plenty of expensive assets in the world today. The past decade of loose monetary policy and central bank money dumps have created the infamous “bubble in everything”.
This is one reason we now have the bizarrely yo-yoing investment environment that we do, in which everything from risky stocks to safe gold is rising at the same time.
But one thing has remained reliably cheap – commodities. While the US equity market, which keeps ratcheting up to new highs, is almost as expensive as in the past 150 years, commodities are about as cheap relative to stocks as they’ve been in the past century.
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Is capitalism over? Not even close
Michael Strain
Jan 13, 2020 — 4.15pm
Even the most ardent defenders of capitalism must acknowledge the indignities it occasionally imposes.
The toilet seat designed to be uncomfortable with the goal of getting employees back to work quickly seems to capture some of the essence of the criticism that capitalism has jumped the shark.
The image of a tiny, environmentally friendly paper straw inside a large plastic cup is similarly absurd, as are the straps you can fashion around your thighs with clips that attach to your shirt to help keep it tucked in.
Use of the term "late capitalism" has exploded during the past decade. Greg Newington
I found these examples by searching Twitter for "late capitalism," an ominous phrase associated with Marxist theorists (though not Karl Marx himself) that has been borrowed widely to express exasperation with the economic system that governs the developed world today.
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The reason you aren't getting a pay rise
Nostalgia for the 1980s is not going to get us out of the structural trap of low productivity and low wages that we face now.
Jan 13, 2020 — 4.45pm
Economists need to reimagine wages policy. Policies developed from textbooks for the 1980s are not appropriate for the 2020s. Economics is not a physical science but a social science.
There would have been no Keynesian economics if the Great Depression were not occurring at the time. Macroeconomic policy in the 1980s and early 1990s dealt with runaway inflation emanating largely from the two oil price shocks of the 1970s.
A debilitating wage-price spiral caused stagflation – a combination of high inflation and high unemployment.
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Action urged on 'Wild West' of risky debt
Jan 15, 2020 — 4.14pm
Financial experts have rallied behind former Treasurer Peter Costello's warnings about the proliferation of aggressively marketed, risky and complex investments, calling on regulators to take action.
However, fixed income analysts said some debt products were serving an important need in actually reducing overall investment risk by spreading exposures beyond the big banks, property and the domestic economy.
UNSW Professor of commercial law and regulation Pamela Hanrahan called on regulators to use their existing powers to "address misleading sales practices, including those directed at wholesale investors".
"You will never completely eradicate sharp practice but part of a regulator’s job is to draw attention to it and disrupt it.”
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Regulatory risk threatens financial stability
The Financial Review’s take on the principles at stake in major domestic and global stories.
Jan 16, 2020 — 12.00am
First it was Wayne Byres warning that the Australian Prudential Regulation Authority's deep dive into the compliance practices of Australia’s banks and other financial institutions had only just started. Next it was James Shipton’s turn to warn that the Australian Securities and Investments Commission's crackdown on corporate governance and culture would extend beyond financial services to include other big listed companies. Both regulators are pushing non-financial risk squarely into the regulatory frame. Ironically, this overreach is occurring at the same time as the post-Hayne regulatory hit to bank lending and the Reserve Bank’s record low interest rates threaten to expose Australia to greater financial risk.
The post-Hayne regulation to protect against bad bank loans has helped to drive market share away from the prudentially sound 'Big Four' to riskier and unregulated fintech start-ups such as Latitude Financial. Bloomberg
This is the implication of Peter Costello’s warnings about the nation’s elevated financial risk profile in his exclusive interview with The Australian Financial Review. But what the former treasurer has really identified is the growing regulatory risks and potential unintended consequences that could destabilise Australia’s financial system.
Mr Costello says that the fallout from the Hayne royal commission spurred the growth of a “huge shadow finance system”. The push to enforce new responsible lending standards on mainstream financial institutions has had a chilling effect on bank lending, and restricted the flow of credit out of the nation’s prudentially sound, mostly well-managed and mostly well-supervised banks that weathered the global financial crisis without needing taxpayer-funded bailouts.
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'Shameless': Audit damns Coalition sports cash
Jan 15, 2020 — 6.03pm
Senior minister Bridget McKenzie approved hundreds of applications from grassroots sporting groups for taxpayer-funded grants because they were in marginal seats, a damning auditor-general's report has found.
Labor is demanding Senator McKenzie's scalp after the Australian National Audit Office found her office overruled recommendations by the former Australian Sports Commission board – now known as Sport Australia – to dole out money under the $100 million program, designed to pay for changing rooms, lighting and other community infrastructure.
Auditors found $41 million was splurged on projects in 47 marginal or targeted seats.
The audit was triggered after Labor complained that Liberal candidate Georgina Downer handed over a giant novelty cheque worth $127,373 to a bowling club while campaigning for the seat of Mayo last year.
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The crisis of 2020 – where we should look
The overextended state of central-bank balance sheets leaves us vulnerable to a major shock.
Jan 16, 2020 — 2.00pm
Predicting the next crisis – financial or economic – is a fool’s game. Yes, every crisis has its hero who correctly warned of what was about to come. And, by definition, the hero was ignored (hence the crisis). But the record of modern forecasting contains a note of caution: those who correctly predict a crisis rarely get it right again.
The best that economists can do is to assess vulnerability. Looking at imbalances in the real economy or financial markets gives a sense of the potential consequences of a major shock. It doesn't take much to spark corrections in vulnerable economies and markets. But a garden-variety correction is far different from a crisis. The severity of the shock and the degree of vulnerability matter: big shocks to highly vulnerable systems are a recipe for crisis.
In this vein, the source of vulnerability that I worry about the most is the overextended state of central-bank balance sheets. My concern stems from three reasons.
First, central banks’ balance sheets are undeniably stretched. Assets of major central banks – the US Federal Reserve, the European Central Bank, and the Bank of Japan – collectively stood at $14.5 trillion in November 2019, which is down only slightly from the peak of around $15 trillion in early 2018 and more than 3.5 times the pre-crisis level of $4 trillion. A similar conclusion comes from scaling assets by the size of their respective economies: Japan leads the way at 102 per cent of nominal GDP, followed by the ECB at 39 per cent and the Fed at a mere 17 per cent.
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Asset bubbles – the world risk being ignored
It says a lot about complacency among business leaders that the World Economic Forum global risks survey ranks assets bubbles on the outer perimeter of big dangers in the next 10 years.
Jan 16, 2020 — 12.05pm
Against a background of global markets surging to new highs, the World Economic Forum has barely registered the problem of assets bubbles in its annual global risks perception survey ahead of its 50th annual meeting in Davos, Switzerland, next week.
It says a lot about the world's complacency about escalating asset prices fuelled by record-low interest rates that the survey ranks asset bubbles on the outer perimeter of its matrix of global risks over the next 10 years.
The survey brings together the thoughts of about 800 stakeholders in business, government and academia as well as the thoughts of 200 members of a group called Global Shapers, which WEF says is “a generation of emerging global social entrepreneurs and leaders”.
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Bridget's field of dreams
The Financial Review’s take on the principles at stake in major domestic and global stories.
Jan 17, 2020 — 12.00am
Ros Kelly’s legendary whiteboard may have been replaced by a spreadsheet. But the then federal sports minister and deputy Nationals leader Bridget McKenzie has been caught red-handed doling out new sports facilities to Coalition marginal seats before the May election. The arms-length Sports Australia had already decided which 426 proposals could be funded. But the Australian National Audit Office found that the minister’s office then borrowed the spreadsheets and added a political filter of marginal or Coalition target seats, changing the distribution entirely.
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The jury is still out on Trump's trade deal
The Financial Review’s take on the principles at stake in major domestic and global stories.
Jan 17, 2020 — 12.00am
President Donald Trump will now claim a mighty election year win on one of the most lurid complaints of his 2016 campaign, that his predecessors had for years let the US be “raped” by China on trade. China has now agreed to buy $US200 billion worth of farm goods, pharmaceuticals and financial services, and promised to treat thieving of US technology secrets at least seriously. US manufacturing leader, Australian-born Andrew Liveris, told The Australian Financial Review that if this opens the way to a balanced trade relationship after 30 years of ever-rising Chinese surpluses, then the trade war will have been worth it.
There’s no doubt about the cost. The tariff burden and chilling of investment prompted the International Monetary Fund to downgrade its global economic forecasts to the slowest pace since the financial crisis, cutting off the recovery that began in 2018. Importantly, that’s knocked off track America’s return to monetary normal. Three out of four earlier interest rate rises had to be reversed by the Federal Reserve in 2019, forced to give in to Mr Trump’s demands to buffer the domestic economy while he made war on China. Global sharemarkets have loved it. The S&P/ASX 200 index broke through 7000 points yesterday for the first time on euphoria at the new truce. But the genuine worry is that cheap funding - rather than real prosperity - is prolonging the world’s phoney boom of inflated asset prices.
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'Dangerous path' as low rates push ASX to 7000
Jan 17, 2020 — 12.00am
Leading investors warn that the sharemarket's ascent to the 7000 points level helped by the lowest interest rates in history should be met with caution and may not be supported by earnings in an economy growing below-trend.
A formalised phase one trade deal between the US and China pushed the Australian market to a record 7041.8 on Thursday and biotech champion CSL to an all-time high of $300.89.
On Wall Street, the Dow Jones Industrial Average surpassed 29,000 points for the first time in anticipation of the long-awaited accord.
The sharemarket's rally has been fortified by three Reserve Bank rate cuts in 2019, and the expectation of more to come. Futures traders are pricing in the certainty of at least one cut – reducing the cash rate to 0.5 per cent – by the June meeting, and a 55 per cent chance of a cut in February.
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Trade deal will not stop US and China drifting apart
It's part mercantilism, partly credible, and designed to kick the hard stuff down the road until after the election. But the US-China 'phase one' trade deal is probably as good as it will get under Trump.
Jan 16, 2020 — 2.11pm
Sitting in the East Room of the White House yesterday among a gaggle of US politicians, corporates and the occasional think-tanker to witness the signing of a "phase one" US-China trade deal was something of an otherworldly experience.
There was Chinese Vice-Premier Liu He – Confucian scholar-official, Harvard graduate, politburo member, China’s highest authority on public finance policy, unofficial leader of the economic reform faction, and most recently his country’s principal trade negotiator – standing patiently beside the current President of the United States for a 45-minute stream of consciousness about everything from the impeachment “hoax”, his great buddy Rupert Murdoch and his “fantastic family” to why he is a better president than George Washington, and why JPMorgan should thank him every morning before breakfast for their share price.
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How to deal with retirement anxiety
With lower returns for longer, the question on everyone's lips is how to construct a nest egg that will last as long as you do.
Jan 18, 2020 — 12.00am
Research house SuperRatings this week flagged the emergence of a two-speed retirement savings system: accumulators are enjoying great investment returns while retirees in pension phase grapple with much lower returns.
Results for calendar year 2019 show super savers in the median balanced investment option (which is where most workers have their money) got a return of 13.8 per cent, driven by strong gains in domestic and international equities.
People who have already retired, or are close to retirement, probably won't have fared as well because their portfolios are unlikely to be as heavily weighted toward equities.
Bonds and cash are the "safe haven" assets for this group and returns on those are, frankly, in the toilet. What's worse, they are expected to remain subdued in what has come to be known as the "lower for longer" environment.
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A perfect storm of political hopelessness
While Morrison government ministers handed out grants to small projects around the country last year, there appeared to be no time to heed the warnings that this year’s fire season was going to be really, really bad
Jan 17, 2020 — 4.38pm
Some rain, at last, started to fall on eastern Australia this week.
It didn’t fall everywhere. And it didn’t put out all the fires. But at least it de-escalated the sense that more catastrophe might be lurking only hours away for so many communities.
There was time to look around and survey the damage. There was time to look around to see that, while the bushfires had destroyed 10 million hectares and killed an estimated 1 billion animals, the drought had continued to get worse.
Driving through rural Australia, it is sometimes difficult to distinguish country hit by fires from country where even native vegetation has turned up its heels through lack of water.
Those dams on properties that still had water have dried up. More and more and more towns are becoming reliant on water being trucked in.
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https://www.afr.com/wealth/personal-finance/frydenberg-s-listed-investment-conflicts-20200117-p53sc8
Conflicted advice loophole could sink Frydenberg
The war over conflicted selling fees could determine the fate of the advice industry and the Treasurer's political career as Labor zeroes in on what they claim is his neglect of ASIC’s advice.
Jan 17, 2020 — 1.21pm
In the shadow of the banking royal commission an emotive war has erupted over whether financial advisers should be allowed to accept large kickbacks, or selling fees, from fund managers to push complex listed investment products to retail clients.
As a result of never-ending mis-selling crises created by these conflicts, advisers were banned from accepting selling fees to spruik fund managers’ wares by both sides of parliament in 2012 via the Future of Financial Advice (FOFA) laws.
Yet in 2014 the Coalition bizarrely created an exemption from these laws – against the express advice of the Australian Securities & Investments Commission (ASIC) – for any fund manager that listed their product on the ASX via a listed investment company (LIC) or listed investment trust (LIT).
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Populist revolt against their failed policies making economists rethink
Ross Gittins
Economics Editor
January 18, 2020 — 12.00am
It’s often said that the failure of conventional economics revealed by the global financial crisis has prompted no serious effort to find a new economic theory that actually works. Look closer, however, and you see economists stirring themselves to lift their game.
That’s the view of a noted American economist and critic of his profession, Professor Dani Rodrik, of Harvard, in an article published this week by Project Syndicate.
Rodrik says the populist backlash sweeping the advanced economies in recent years – think Trump, Brexit and Pauline Hanson – has produced some soul searching in the discipline. It is, after all, a backlash against the austerity policies, free-trade deals, financial deregulation and labour market deregulation that economists urged on the politicians (and only in retrospect realised how naive they’d been and how misused by pollies with other agendas).
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The Fed started this rally — and if history is any guide, it will decide when it’s over
When the ASX200 punched through 7000 this week most people thought it was because of the trade deal between China and the US. It wasn’t — it was all about the Fed, and that carries with it a big question: is it 2017 again, or 2000?
In the first nine months and one week of 1999 the Nasdaq rose 30 per cent — pretty solid, but not what you’d call a bubble.
It was on October 7 that the dotcom bubble really got under way. From that day to the end of the year, the Nasdaq rose another 44 per cent in 11 weeks and by the time it peaked on March 9, 2000, it had added 76 per cent, doubling between October 7 and the peak.
October 7 was the day the Federal Reserve announced in its minutes that extra liquidity would be provided to offset what it called “the century date”, also known as Y2K.
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Why Australia needs to consider nuclear power to meet energy needs
Here is a reliable power source that’s almost totally emissions-free and produces no air pollution. And while the main rational argument against nuclear power has been the cost, that now appears to be falling.
Rather than wasting millions of dollars on a royal commission that will recommend common sense, Scott Morrison could have channelled the deluge of exhortations to “do something” about climate change into a concrete plan.
“These bushfires are a wake-up call. The only way to seriously slash our carbon dioxide emissions without destroying the economy is to replace our coal-fired power stations with state of the art nuclear energy, which emits zero emissions,” the Prime Minister could have said.
“Wind and solar power will continue to be an important part of the energy mix, but without a reliable, totally emissions-free source of energy we cannot realistically curb our emissions dramatically. One kilogram of uranium has as much energy at 2000 tonnes of coal. Japan and Germany have recently illustrated the folly of shifting away from nuclear power,” he might have added.
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Bushfire Crisis And Climate Policy
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Scott Morrison makes a 'historic change', but it's not the change his critics wanted
12 January, 2020
The Prime Minister wants the nation to know he gets it. Amid this horror bushfire season, there's a need for change.
"We have to prepare for the new normal," Scott Morrison said in his most in-depth interview on the crisis. He spoke of the need for a "historic change".
The only problem is the "new normal" he's talking about isn't in relation to climate change.
The "historic change" being referred to by the Prime Minister relates to when and how Defence resources are deployed in natural disasters.
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Australia's bushfires show why democracy requires shared truths
Chris Zappone
Digital Foreign Editor
January 12, 2020 — 2.07pm
Australia’s unprecedented bushfires mark many things, an inflection point when the nation’s politics and science collide, a galvanising moment of national emergency, and a tragedy that serves as a symbol of a bigger crisis that the world can understand.
They represent another event too: the moment when Australia came to terms with the reality of digital disinformation.
Underneath the real events of the fires, information taken out of context, and disinformation, flatly untrue, aided by bots and trolls has increased across the internet.
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Scott Morrison talks of going 'even further' on emissions in response to fires
By David Crowe
Updated January 12, 2020 — 11.56amfirst published at 10.26am
Prime Minister Scott Morrison has said he wants to take further action to tackle climate change and flagged a royal commission into the horror bushfire season but indicated the crisis would not lead to any increase in his government's target to reduce carbon emissions by 2030.
Arguing that Australians now expected the federal government and defence forces to respond more directly to national emergencies, Mr Morrison used a lengthy interview on Sunday morning to say a royal commission that considered climate change and examined federal-state relations was "necessary" to formulate a long-term response to the threat of more catastrophic fires.
Asked about his leadership during the bushfire season that has so far claimed 28 lives and destroyed more than 2050 homes, The Prime Minister also conceded there were some things he could have done better when visiting fire-razed communities while saying he visited affected communities “in good faith”.
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Bushfires: Scott Morrison signals climate shift, deeper cuts
Scott Morrison has signalled a shift in the federal government’s approach to climate change, vowing to make deeper cuts to carbon emissions and help Australians adapt to a “hotter, drier” environment, as he prepares to call a sweeping royal commission into the bushfires crisis.
The Prime Minister also claimed the government may not need to use Kyoto carry-over credits to “meet and beat” its 2030 emissions reduction target, as he came under increasing pressure at home and overseas to adopt more ambitious commitments.
While Mr Morrison confirmed he would not revisit the government’s policy of a 26-28 per cent cut in emissions by 2030, he said policies would “evolve” to reduce emissions “even further”.
“We’re going to do it without a carbon tax, without putting up electricity prices, without shutting down traditional industries upon which regional Australians depend for their very livelihood. That’s what I took to the Australian people,” he told the ABC.
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Bushfires will lead to the rebirth of the National Energy Guarantee
There’s quite a lot of “I always thought that” going on at the moment, it being the best way to change your mind about climate change without admitting you’re changing your mind.
The assertion that “I always thought” global warming is real and that it causes extreme weather events, and to suggest that we ever thought otherwise is an unspeakable affront, has become necessary because public opinion has shifted decisively as a result of the bushfires - as it was always going to as said extreme weather events inevitably mounted up.
The Coalition and its supporters in the media are now in the uncomfortable but self-appointed position of being blamed for bushfires. The Prime Minister points out that such an idea is absurd, and says that in any case the government is doing its bit to reduce emissions and to meet Paris targets, but no-one is listening.
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Newspoll: Scott Morrison given political uppercut on bushfires, but no knockout blow
The Prime Minister has been given a bruising political uppercut over his handling of the bushfire crisis.
He may think it unreasonable after being smacked around for the past four weeks, but he won’t be that surprised.
What may have been regarded initially as Twitter-generated outrage over his Hawaiian holiday has cut through to the mainstream.
Scott Morrison has himself acknowledged that at least some of it was self-inflicted.
The question is to the potential longer-term political damage.
The latest Newspoll suggests it is Morrison who has been punished personally rather than the government as a whole. While his personal numbers may have fallen through the floor, this will be the one encouraging take-out for the Prime Minister.
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Welcome, Prime Minister, to your trial by fire
By Ross Bradstock
January 13, 2020 — 12.00am
Scott Morrison has announced he will be proposing a national inquiry, possibly a royal commission, into the current bushfire crisis. This can be welcomed with cautious optimism. A national catastrophe requires a national response, as amply illustrated by the nature of the fires themselves, which have transcended state borders and the capacity of our state-based fire-management systems to respond to them.
Equally welcome is the unequivocal admission by the Prime Minister that the current crisis and the likelihood of a more flammable future are the result of climate change.
It is heartening to see him acknowledge the formidable challenges to our capacity to co-exist with and adapt to a world more prone to fire. Perhaps the Prime Minister has glimpsed the leadership responsibilities and opportunities that will be required to equip us for these challenges.
An inquiry, however, provides no guarantee of lasting solutions, let alone the formidable problem of adaptation to a rapidly changing fire environment that is being transformed by drought, heat waves and the ensuing immutable changes to our bush landscapes.
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Technology is the key to climate policy
Jan 13, 2020 — 3.48pm
The Morrison government will rely on investments in low-emissions technologies to beat its 2030 emissions reduction target, holding out the likelihood that Kyoto carry over credits won't be needed to meet its international commitments.
Leaving open adjustments to climate change measures, though not the 26 to 28 per cent emissions reduction target, the government will largely depend on previously announced $3.5 billion in energy subsidies for business to be rolled out over the next few years.
The $3.5 billion Climate Solutions Package announced last year includes funding for expanding the Snowy Mountains Hydro 2.0 project, battery storage, biofuels, electric vehicles and unlocking Tasmania’s hydro and wind power by building a second interconnector across the Bass Strait to Victoria.
Amid community angst about a link between global warming and a hotter and drier summer that contributed to the bushfire crisis, Treasurer and former energy minister Josh Frydenberg said on Monday "technologies will help drive a smaller carbon footprint.
"All our focus is on adapting, mitigating, technology adoption without compromising the strength of our economy."
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Household insurance premiums set to soar
Jan 13, 2020 — 5.30pm
Building and contents insurance premiums in parts of the nation at the highest risk of natural disasters are nearly three times higher than elsewhere, trigging speculation that bushfire zones could increasingly face higher costs for cover.
Insurance premiums in northern Queensland, which has suffered billions of dollars in losses from cyclones, are on average nearly 2.7 times higher, according to Canstar, which monitors insurance premiums.
“We are not suggesting current bushfires will cause premiums to rise 2.7 times,” said a spokesman for Canstar, which compiled the analysis.
“But using recent natural disaster events in cyclones in north Queensland, premium increases are looking inevitable.”
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Sustainable investments: what's on offer
Confused about where to invest and how the different funds operate? We outline their screen processes and their returns.
Jan 11, 2020 — 12.00am
This is a snapshot of passive and active managed funds that specialise in sustainable investing and are open to retail investors.
BetaShares Sustainability Leaders Diversified Bond ETF (GBND)
Launched in November 2019, GBND is among the more innovative sustainability offerings for retail investors in recent years. The ETF has strict eligibility criteria for bond issuers and green bonds in its underlying index must be certified by the Climate Bonds Initiative.
The ETF overcomes concerns about the true sustainability of green bonds and provides investors with low-cost exposure to responsible investing in the fixed-interest part of their portfolio. The annual fee is 49 basis points.
BetaShares also offers the Australian Sustainability Leaders ETF and Global Sustainability Leaders ETF. Both track indices that screen companies on sustainability performance.
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Australia is no longer the lucky country
Jan 14, 2020 — 8.58am
The book The Lucky Country was written about Australia in the 1960s, and since then the label has stuck. For anyone slogging their way through a British winter, the image of Australians on the beach seemed impossibly alluring.
On my first visit to the country, 25 years ago, a Sydneysider teased me: “You guys used to deport your convicts here. Now what do you think?” Naturally, we were sitting outside at a barbecue with beers in our hands.
In the decades afterwards, Australia’s luck seemed only to improve. Asia’s boom created huge demand for the country’s commodities. For the past three decades, Australia has not suffered a single recession — a unique record in the developed world.
With a population of just 25 million to share the riches of an entire continent, prosperity seemed guaranteed long into the future. While the US and the UK fretted about the erosion of middle-class lifestyles, the “Australian dream” powered ever onwards.
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Moving to ultra-low emissions is an opportunity, not a threat
Peter Martin
Economics editor, The Age
January 13, 2020 — 4.54pm
One of the dominant ideas buzzing around the internet is that there’s little we can do to escape the prospect of more frequent and worse bushfires - ever. That’s because there’s little we can do to slow or reverse climate changes.
Australia accounts for just 1.3 per cent of global emissions. That’s much more than you would expect on the basis of our share of world’s population, which is 0.33 per cent. But even if we stopped greenhouse gas emissions as soon as we could and started sucking carbon back in (as would be possible with reafforestation) it’d make little difference to total global emissions, which is what matters – or so the argument goes. But this argument ignores the huge out-of-proportion power we have to influence other countries.
There’s no better indicator of that than in Ross Garnaut’s new book Super-power: Australia’s low-carbon opportunity. Garnaut conducted two climate change reviews for Australian governments, the first in 2008 for the state and Commonwealth governments, and the second in 2011 for the Gillard government. In the second, he produced two projections of China’s emissions, based on what was known at the time.
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Emissions pressure prompts energy plans
The government is finalising an energy sector investment roadmap which considers more than 100 new technologies and hopes for 50 per cent renewables by 2030.
Rebecca Gredley
Australian Associated PressJanuary 14, 20206:51am
Future plans for Australia's energy sector are being mapped out by the federal government, as pressure continues to mount for a more ambitious emissions reduction goal.
The Morrison government is set to release a draft technology roadmap later this year, The Australian reported on Tuesday.
The roadmap lays out an investment blueprint and includes more than 100 new technologies and hopes for at least 50 per cent of energy sources to be renewable by 2030.
It comes as Energy Security Board chairwoman Kerry Schott has called for national leadership to co-ordinate the sector, with electricity supply otherwise at risk.
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The absurdity of extreme bushfire politics is totally out of hand
While large chunks of Australia continue to burn, both sides of the ideological spectrum are obsessed with politics and ignoring reason.
To be described in the same day as both a left-wing apologist for bushfire arsonists and a climate-denying right-wing nut job who’s part of some disinformation campaign was an interesting experience.
It’s not a new thing to upset the left and the right simultaneously, especially in recent years when just about everything in modern life is hyper politicised.
My first editor many years ago told me that if coverage of a contentious issue disappoints both ends of the ideological spectrum, you’ve probably done something right.
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Bushfire crisis: Health insurers brace for spike in health claims
Health insurers are bracing for a rise in claims stemming from the nation’s bushfire crisis as doctors warn of the potential long-term effects of breathing in hazardous levels of smoke.
Thick haze — delivering some of the worst air quality in the world — has blanketed Australia’s major capital cities for weeks as bushfires devastate large parts of the country. NSW and Victorian health authorities have issued multiple alerts, urging people to stay indoors, as air quality drops to hazardous levels and has triggered a range of health conditions, including asthma, heart attacks and strokes.
The move is expected to provide another headwind for the private health sector, which is battling intense pressure on profit margins, given surging healthcare costs in the face of political pressure to keep premium increases capped.
While health insurers say it is too early to gauge the full financial impact of the fires, given the lag time it takes hospitals to process claims, they are expecting claim numbers to rise. Many insurers have committed to shorter claim turnarounds and are waiving premiums for at least three months to better assist fire-affected customers.
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BlackRock's climate epiphany
The world's largest fund manager is putting climate change at the heart of its engagement with the thousands of companies captured in its $US7 trillion in assets under management.
Jan 14, 2020 — 8.00pm
There are few people in global capital markets with the antennae for sensing tipping points in investor sentiment as good as those on the head of BlackRock chief executive Larry Fink.
After a 40-year career in finance he has lived through the inflation spikes of the 1970s and early 1980s, the 1987 stockmarket crash, the Asian currency crisis of 1997, the dotcom bubble of 1999-2000 and the global financial crisis.
But he says in his latest annual letter to global CEOs that none of these events can be compared in scale or impact with the much more structural, long-term crisis caused by climate change.
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BlackRock dumps thermal coal
Jan 14, 2020 — 8.00pm
BlackRock, the world's largest fund manager, is dumping more than half a billion dollars in thermal coal shares from all of its actively managed portfolios, as part of a more active global stance on climate change driven by chief executive Larry Fink.
The coal ban, which includes any company earning 25 per cent of its revenue from thermal coal, will apply to BlackRock's $US1.8 trillion ($2.6 trillion) in actively managed equity portfolios.
"Climate change has become a defining factor in companies’ long-term prospects," Mr Fink wrote.
It will not affect the balance of the fund manager's $US5.2 trillion in assets under management that are managed in passive exchange-traded and index funds.
But as part of a new sustainable investment policy, BlackRock will help clients screen out fossil fuels from passive portfolios.
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BlackRock seeks to regain lost ground in climate fight
The world’s largest asset manager has been talking about the risks of global warming for years. Yet critics argue that it has failed to live up to its own rhetoric.
Attracta Mooney and Owen Walker
Updated Jan 15, 2020 — 9.59am, first published at 9.53am
Larry Fink’s annual finger-wagging letter to chief executives has become a feature of the corporate governance calendar, often setting the agenda for global companies and shareholders alike.
In recent years the head of BlackRock has railed against short-termism and political dysfunction, argued for US companies to repatriate overseas cash, and warned businesses they must contribute more to society.
His latest missive, sent on Tuesday, centred on climate change and its impact on investment risk. “Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance,” the chief executive of the world’s biggest fund manager wrote.
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Science Minister says climate denial a waste of time in wake of fires
By Mike Foley
January 14, 2020 — 11.00pm
Australia's bushfire crisis has prompted a blunt warning from Science Minister Karen Andrews to those she says are wasting time arguing about whether climate change is real.
Ms Andrews will convene a roundtable meeting of top scientists on Wednesday to kickstart work in response to the "devastating and surprising" bushfires this summer.
"Every second we spend discussing if climate change is real is a second we don't spend addressing these issues. Let's move on and get over this," she told the Sydney Morning Herald and The Age.
Ms Andrews warned unnecessary debate could distract from the urgent need to develop new bushfire adaptation and mitigation techniques. Her intervention is another step in the Coalition's recent shift in rhetoric over climate change, after a decade of divisions over the issue dominating the party room.
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The carbon tax that will work
Stop saying we are too small to make a difference. Canberra can set policies that will force our big peers to follow suit.
Jan 15, 2020 — 3.12pm
Australia has been burning in an apocalyptic fashion consistent with the "earlier, for longer" bushfire seasons that climate science predicted a decade ago. That’s as close to a physics room experiment as we are going to get on this in Australia.
Let’s not argue about the climate science. There are emissions caused by human activity (power generation, industry) and non-human contributors (volcanoes, wetlands). The Earth’s surface is no longer absorbing enough carbon dioxide to keep the balance. It doesn’t matter where the circle starts. We can’t control volcanoes. But we can influence human activity and we have science to measure and guide the need for action. The nations that disappeared due to climate change in the distant past (such as those of the forests and grasslands of Arabia, and many others) didn’t have the science. They aren’t there any more.
Many more Australians are waking up to this — politicians had better too. The bushfires are a catalyst.
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Counting the costs of our scorched summer
The immediate costs of the bushfires will be hefty. The bill will get bigger if climate change is not addressed.
Jan 16, 2020 — 12.00am
Watching the devastating loss of life, homes and wildlife unfold over the last several weeks has been heartbreaking for all of us. Australia’s characteristic resilience has been dashed against the reality of a hostile climate. Now is surely the time for us to take stock and find ways to minimise the risk of such disasters in the future.
Part of this will involve understanding that these fires are not just a humanitarian problem, they are an economic one as well.
The Treasurer, Josh Frydenberg, has foreshadowed a $2 billion bushfire rebuilding package and suggested that the $5 billion 2019-20 budget surplus forecast may be in jeopardy. While the cost to the budget will be significant, the overall cost to the economy will be far greater.
The Black Saturday fires in Victoria cost $4.4 billion in lost output. With fires in the current season now affecting a much larger area (450,000 hectares for Black Saturday versus 8.4 million hectares so far in 2019-20), the cost of this summer’s fires is likely to be considerably higher.
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Tourism industry takes $1b hit as Australians cancel their holidays
By Anthony Galloway
January 15, 2020 — 11.00pm
Tourists are abandoning regional Victoria and NSW in droves, with cancellation rates of more than 60 per cent even in towns outside the bushfire zones causing economic damage of up to $1 billion.
The vast majority of cancellations come from Australians choosing to stay home, leaving industry experts to call for new campaigns urging people to get back out and spend money on their holidays.
International visitors have so far not been cancelling to the same extent but industry experts warn Australia's reputation as a "pristine" destination will take a hit due to worldwide coverage of the devastating fires and loss of wildlife.
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Our greatest security threat is climate change, so mobilise the ADF
John Hewson
Columnist and former Liberal opposition leader
January 16, 2020 — 12.00am
Life is about and defined by choices – how we make them, what we decide, and how we live with the consequences. Governments have a particular responsibility as we rely on them to make choices on our behalf, especially the bigger national choices that we feel somewhat powerless to make or influence, while they use our money to fund them.
It is reasonable for us to expect these choices will be in the national interest, rather than to favour a particular group or interest, or for short-term political benefit.
It is of considerable concern as to just how far we have drifted from this ideal. Sadly, the drift has occurred over several governments, so only tends to be recognised as it becomes a crisis. This is certainly the case with both current national disasters, the drought and the bushfires. Our governments were poorly prepared for both, and are struggling to respond.
Both major parties, over the past couple of decades, played short-term political games with climate change rather than address its magnitude and urgency. We are left in the unimaginable position of still having no climate action plan, no energy policy, no national disaster plan, no waste-management policy, no fuel security strategy, and no transition strategies to achieve a low-carbon society by mid-century.
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2019 second hottest year on record
Last year was the second hottest year on record for average land and ocean temperatures, according to the world’s major weather agencies.
US centres NOAA and NASA and Britain’s Met Office all ranked 2019 slightly behind 2016, which was an El Nino year.
The Met Office said the past decade was the warmest on record with the past five years the warmest in its 170 year temperature series.
NASA said because weather station locations and measurement practices change over time, the interpretation of specific year-to-year global mean temperature differences has some uncertainties.
“Taking this into account, NASA estimates that 2019’s global mean change is accurate to within 0.1 degrees Fahrenheit, with a 95 per cent certainty level”, it said.
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The path to zero emissions is expensive - but not impossible
Don't despair – we have the technology to beat climate change without turning out the lights or giving up our lifestyle.
Jan 18, 2020 — 12.00am
As his train passes through Philadelphia, Saul Griffith sketches out a plan for Australia to take the fight to climate change.
The Sydney-born entrepreneur, who now lives in the US, has won plaudits and garnered an increasingly large profile in his adopted country for an optimistic message that says climate change can be overcome.
It won’t be done through stainless steel water bottles or keep cups, but according to the man with a doctorate from MIT, who has worked for NASA and sold a company to Google, it’s simply an engineering problem.
Granted it’s a very large problem, but not an insurmountable one.
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Financial shock looms for those looking to rebuild, RFS boss warns
By Deborah Snow
January 18, 2020 — 12.05am
Those who lost homes during the state’s ravaging bushfires may face higher than expected re-building costs because of the need to comply with tougher standards, Rural Fire Service Commissioner Shane Fitzsimmons has warned.
“It’s not going to be the same as it was before, there is going to be a new normality,” Mr Fitzsimmons told the Herald.
He said the RFS had been given a role in advising on building and planning regulations in bushfire prone areas since the early 2000s, but that left the “legacy development” of the previous 200 years.
“Look at some of the most beautiful, picturesque areas where people can live, in amongst the trees, up on the tops of ridge-lines overlooking valleys, and through some of the most scenic and beautiful places: the tranquillity, the wildlife, it’s a lovely place to live but inherent with that lifestyle is extraordinary risk,” he said.
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The advice I wish I knew before my house burnt down
By Diana Simmonds
January 17, 2020 — 4.00pm
A couple of years ago our house burnt to the ground. According to the fire brigade, it was an electrical fault and unforeseeable. Also unstoppable, as it turned out. One hundred years of beautiful timbers and a lifetime of furnishings, memories and family was destroyed in about an hour.
As it turned out, that was the easy part. And our nightmare experience is now what thousands of people across Australia may well be facing in coming months. Here’s what happened and here’s what you need to be aware of, although it may be unfortunately too late for some of you.
Our house was insured diligently and according to company advice (increase premium by $XX each year, sign here) for more than 20 years. Yet after the fire, the insurance company didn’t respond for weeks. Then there was suspicion: “Why did you increase your premiums every year?” Next, the infuriating “Where is the receipt? What was it worth?” of, for example, an historic cedar table purchased from Old Government House at auction 30 years ago.
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News | January 9, 2020
Study Confirms Climate Models are Getting Future Warming Projections Right
By Alan Buis,
NASA's Jet Propulsion Laboratory
NASA's Jet Propulsion Laboratory
There’s an old saying that “the proof is in the pudding,” meaning that you can only truly gauge the quality of something once it’s been put to a test. Such is the case with climate models: mathematical computer simulations of the various factors that interact to affect Earth’s climate, such as our atmosphere, ocean, ice, land surface and the Sun.
For decades, people have legitimately wondered how well climate models perform in predicting future climate conditions. Based on solid physics and the best understanding of the Earth system available, they skillfully reproduce observed data. Nevertheless, they have a wide response to increasing carbon dioxide levels, and many uncertainties remain in the details. The hallmark of good science, however, is the ability to make testable predictions, and climate models have been making predictions since the 1970s. How reliable have they been?
Now a new evaluation of global climate models used to project Earth’s future global average surface temperatures over the past half-century answers that question: most of the models have been quite accurate.
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Royal Commissions And The Like.
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Financial planners reveal what's wrong with their industry
Financial planners argue that their industry is increasingly focused on the wealthy, as an emphasis on tailor-made solutions inhibits the greater use of technology.
Jan 15, 2020 — 12.00am
There are few articles that I've written in the course of my journalistic career that have triggered such a vigorous response from readers as last week's column "The national scandal that is financial planning".
There was, I argued, a huge failing with the country's superannuation system that has resulted in Australians amassing some $3 trillion in retirement savings. And that is the lack of an adequate system by which people can access good quality, affordable financial advice when they reach retirement age.
Now, it's clear that for financial advice to be a viable industry, it not only needs to ensure that consumers receive a high-quality service. It also has to ensure that those working in the industry are able to generate a sufficient return for the skilled advice they provide.
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Super funds hold antidote to rising financial anxiety
Jan 14, 2020 — 5.03pm
Superannuation funds will need to fill the vacuum left by the exodus of financial advisers and provide quality affordable advice to the alarming number of Australians worried about retirement, says former super system reviewer and ASIC deputy chairman Jeremy Cooper.
Research conducted by fund manager and annuities provider Challenger and National Seniors Australia has found 53 per cent of Australians over 50 are worried about outliving their savings, with 20 per cent worrying frequently about the longevity risk posed to their retirement.
The results indicate a slight increase on the anxiety levels reported in 2018 and a significant increase on the 37 per cent who said they were worried in 2017. The spike in anxiety has coincided with changes to age pension eligibility, taper rates and superannuation rules, which came into effect on January 1, 2017.
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National Budget Issues.
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US-China trade deal threatens Australian exporters
By Eryk Bagshaw and Matthew Knott
January 16, 2020 — 5.27pm
Australian markets smashed through record highs after the United States and China signed the first phase of a trade deal that could put an end to more than two years of tension and hit local exporters.
Former prime minister Kevin Rudd, who was in the White House for the signing of the deal, said China's commitments to purchase more US goods were "phenomenally large" and posed a major risk to Australian agricultural exporters and the coal and liquefied natural gas (LNG) industries.
The agreement could see the US leapfrog Australia as the largest exporter of LNG as the $US200 billion ($290 billion) deal compels China to purchase energy, manufacturing and agricultural goods in exchange for the US cutting tariffs on $US110 billion worth of imports.
President Donald Trump signed a trade agreement Wednesday with China that is expected to boost exports from US farmers and manufacturers and is aimed at lowering tensions in a long-running dispute between the economic powers.
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Donald Trump’s ‘greatest’ trade deal delivers us mixed blessings
For Donald Trump, it was — naturally — the greatest, most beautiful trade deal ever.
For Australia, the “phase-one” US-China trade deal inked on Thursday was a mixed blessing. Billions of dollars in resource and agricultural exports could dry up if China lives up to its promise to drastically ratchet up purchases of US dairy, beef and energy exports.
For all the fretting, some of our exporters have done brilliantly out of the US-China trade war, which ramped up in late 2018, effectively shutting off a raft of US exporters from Chinese buyers.
“We’ve doubled the volume of cotton exports, almond exports have shot up six-fold,” said Tim Hunt, an agriculture analyst at Rabobank.
That said, a detente between the US and China, however fleeting or vague it proves, naturally boosted share prices and confidence on Thursday.
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Health Issues.
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'Nothing helped': New hope for those living with migraine
By Rachel Clun
January 13, 2020 — 12.00am
A "revolutionary" new class of migraine preventative drugs that exclusively targets the illness is offering life-changing treatment for millions of Australians who suffer from the condition.
In a report published in the Medical Journal of Australia on Monday, Dr Michael Eller says the new drugs give hope to patients for whom other treatments have failed.
“I’ve got many patients who have had significant benefit from it who have been burdened from awful headaches for decades,” the Monash Medical Centre neurologist said.
At least 15 per cent of the population live with either occasional or chronic migraines, the MJA report says. A Deloitte white paper commissioned by pharma company Novartis, which produces one of the new drugs, found the economic cost of migraine to Australia was $35.7 billion.
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Psychedelic drugs could be the next medical breakthrough
The unmet need in mental health is huge. If psychedelics can reduce that misery, the benefits would be mind-blowing.
The Lex Column
Jan 13, 2020 — 11.29am
Time for a change of mind? Drugs like magic mushrooms and ecstasy are widely banned. But brain-altering drugs are showing promise in treating intractable mental health problems.
Last year, a treatment derived from party drug ketamine became the first new type of antidepressant to be approved in decades. London’s Imperial College and Baltimore-based Johns Hopkins opened psychedelic research centres, a sign that the subject is edging into the mainstream.
Last month a magic mushroom medicine passed its first clinical safety trial. Key ingredient psilocybin appears to “reboot” the brain by stimulating the serotonin system. It might help treat depression, opioid addiction, Alzheimer’s disease, post-traumatic stress disorder (PTSD) and anorexia.
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In-home care plan to cut hospital costs
Patients with mental health problems, chronic disease and undergoing rehabilitation will be increasingly diverted out of hospitals and cared for in the home, with growing evidence of better care outcomes and greater cost efficiencies for governments.
Federal Health Minister Greg Hunt is leading negotiations with the states and territories over the expansion of home hospital services, with the commonwealth set to push through changes that would allow states to be funded in more circumstances when care takes place outside the hospital.
The expansion of home hospital services is one item on the table under a new National Health Reform Agreement in the advanced states of negotiation.
Negotiations are also under way with private health insurers and private hospitals to allow greater funding of healthcare outside of hospitals.
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Twice as many Australians die from sepsis than previously thought
By Rachel Clun
January 17, 2020 — 1.53am
Twice as many Australians die from sepsis each year and three times as many people are diagnosed with the condition than previously thought.
A study, published in The Lancet on Friday, found there were 49 million sepsis cases and 11 million deaths from the condition worldwide in 2017.
While previous estimates put the number of Australian cases at 18,000 and deaths at 5000, co-author Professor Simon Finfer said thanks to their more accurate picture of the scale of the problem the number of cases was 55,000, with 8700 deaths.
"About 15 per cent of people who get sepsis die," said Professor Finfer, from the George Institute for Global Health.
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Vaccine 'needed' as whooping cough evolves
Updated January 16, 2020 — 9.00pmfirst published at 8.57pm
A new whooping cough vaccine is needed as the virus evolves into a potential superbug, researchers warn.
University of New South Wales microbiologist Dr Laurence Luu said the virus was learning to survive in hosts whether or not they had been vaccinated.
But Dr Luu said people should still be getting vaccinated to protect themselves, with a new vaccine not needed for at least another five to 10 years.
"Right now the vaccines are still very effective against the current strain," Dr Luu said.
Dr Luu and his colleagues' work was published in the medical journal Vaccine on Thursday.
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As antibiotic resistance threatens millions of lives, is phage therapy the best alternative?
With a new wave of deadly superbugs seriously threatening public health across the globe, scientists are hoping phage therapy will become a weapon of mass bacterial destruction.
By Greg Callaghan
January 18, 2020
Just after 10pm on a still Sunday night in March 2016, Jeremy Barr, having cleaned up the dinner dishes in his San Diego apartment, was thinking about bed when his mobile phone buzzed into life with a FaceTime call. Barr instantly recognised the mane of striking salt-and-pepper hair and trimmed beard on the screen. It was his laboratory supervisor at San Diego State University, Professor Forest Rohwer, one of the world’s leading microbial ecologists, and his tone was urgent.
Rohwer, a 47-year-old with a thoughtful demeanour, began quizzing the young scientist from Brisbane about his research into bacteriophage therapy – “phage therapy”, for short – which turns viruses into chemical weapons against antibiotic-resistant bacterial infections. Rohwer was curious about how Barr removed toxins from phages, so they were safe to use in humans.
“What’s this about Forest?” interrupted Barr, who’d been working at Forest’s San Diego lab for four years on a postdoctoral fellowship. Rohwer explained that a local man had contracted a superbug while on holiday in Egypt and the most powerful antibiotics had failed to work. Now on the brink of multi-organ failure, the man would almost certainly die within days unless the infection could be stopped in its tracks. Could bacteria-eating phages be put to work to kill the deadly disease?
Phages, unlike antibiotics, are not drugs. Rather, they are hunt-and-kill viruses.
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International Issues.
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US v Iran: the costs of an erratic president
While Donald Trump has all but declared victory, the inconsistent decision-making in the White House has alarmed allies.
Jan 12, 2020 — 11.29am
Washington/Tehran | “Deterrence is the art of producing in the mind of the enemy the fear . . . to attack,” said Dr Strangelove in the classic cold war movie.
Some of Donald Trump’s defenders have taken to citing that comic masterpiece in defence of his drone strike 10 days ago on Qassem Soleimani, Iran’s most powerful military figure. It was the first time since the second world war the US had overtly targeted a foreign government official.
Mr Trump can be impulsive, his defenders concede. He may even take his advisers by surprise. But at least he keeps the enemy off-balance. The fact that Iran confined its missile retaliation early on Wednesday morning to military buildings that host US troops in Iraq only reinforced their view. The US president’s surprise strike had cowed Iran’s clerics, they said.
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How the US and Iran approached the brink of war
Peter Baker and Ronen Bergman
Jan 13, 2020 — 12.00am
Washington The plane was late and the kill team was worried. International listings showed that Cham Wings Airlines Flight 6Q501, scheduled to take off from Damascus, Syria, at 7.30pm for Baghdad, had departed. But, in fact, an informant at the airport reported it was still on the ground, and the targeted passenger had not yet shown up.
The hours ticked by, and some involved in the operation wondered if it should be called off. Then, just before the plane door closed, a convoy of cars pulled up on the tarmac carrying General Qassem Soleimani, Iran's security mastermind, who climbed on board along with two escorts. Flight 6Q501 lifted off, three hours late, bound for the Iraqi capital.
The plane landed at Baghdad International Airport at 12.36am, and the first to disembark were Soleimani and his entourage. Waiting at the bottom of the gangway was Abu Mahdi al-Muhandis, an Iraqi official in charge of militias and close to Iran. Two cars carrying the group headed into the night - shadowed by American MQ-9 Reaper drones. At 12.47am, the first of several missiles smashed into the vehicles, engulfing them in flames and leaving 10 charred bodies inside.
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Taiwanese, like Hong Kongers, pin hopes to a future of liberty
The crushing electoral victory of Taiwanese President Tsai Ing-wen and her Democratic Progressive Party doubles the trouble for Chinese leader Xi Jinping, with Hong Kong still in turmoil.
It also underlines in spades the unflinching commitment to liberal democracy of a generation of young Taiwanese — as well as Hong Kongers – who overwhelmingly insist on drawing their identity from their homelands, rejecting Beijing’s portrayal of them as “Chinese”.
This was underlined by Ms Tsai’s raucous reception from the mostly young crowd at her victory celebration outside DPP headquarters in Taipei late on Saturday.
More than 75 per cent of eligible voters turned out on Saturday, up from 66 per cent at the last election, in 2016. They delivered her a margin of almost 20 percentage points over her Kuomintang (KMT) challenger Han Kuo-yu.
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It's energy inequality that we need to worry about
Climate change may have reached a point of no return. But poor access to energy options in developing countries means continued use of toxic fuel sources.
Jan 13, 2020 — 10.16am
The scientific evidence increasingly indicates that the world may soon reach a point of no return regarding climate change. So, rather than worrying almost exclusively about economic and political inequality, rich-country citizens need to start thinking about how to deal with global energy inequality before it’s too late.
While denizens of the world’s wealthiest economies debate the fate and fortune of the middle class, over 800 million people worldwide have no access to electricity. And more than two billion have no clean cooking facilities, forcing them to use toxic alternatives such as animal waste as their main cooking fuel.
Furthermore, per capita carbon dioxide emissions in Europe and the United States are still vastly higher than in China and India. What right do Americans, in particular, have to complain as China increases production in smokestack industries to counter the economic slowdown caused by its trade war with the US? To many in Asia, the inward-looking debate in the West often seems both tone deaf and beside the point.
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Taiwan votes for sovereignty and against Beijing's autocracy
The dramatic political comeback of Taiwan's President underlines Australia's concerns about China's attempts to impose its will and influence.
Jan 12, 2020 — 4.50pm
Taipei: One year ago, there was widespread gloom among Taiwan’s government figures. The ruling pro-independence Democratic Progressive Party had just suffered heavy defeats in local elections. President Tsai Ing-wen’s prospects had been written off.
Yet this weekend, Taiwan’s first female leader was re-elected in a landslide to claim a new four-year mandate. Tsai – a 63-year-old admirer of Margaret Thatcher and former law academic –- defeated the opposition Nationalist leader Han Kuo-yu in the best result for any presidential candidate since Taiwan began holding democratic elections in 1996. The DPP also maintained its legislative majority.
Taiwan’s resilient economy contributed to the victory, but Tsai’s dramatic political comeback is widely seen as a rebuke to Beijing’s attempts to impose its will and influence on this robust island democracy of 24 million people.
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President Tsai's Taiwan victory makes the region safer
The game is up for the use of force by Beijing, and for intervention by the US. Australian policy makers should take note.
Jan 13, 2020 — 3.38pm
At a time of unmitigated gloom in international affairs, Saturday’s re-election of Tsai Ing-wen for a second term as Taiwan’s leader is a particularly bright spot. Not only did she defeat the more China-friendly KMT leader, but the election was conducted in a civilised and orderly manner. The strength of and confidence in Taiwan’s still relatively young democratic institutions were on full display. The prospect of re-unification has just receded much further into the distant future.
Beijing could hardly have been surprised by the result. After trailing in the polls for the past two years, her approval rating began to rise inexorably from September. She went into the election with a healthy lead in the polls, winning the election by around 20 per cent.
Many domestic issues, of course, featured prominently in the election. These are common across the developed world – slow economic growth, increasing income inequality, inadequate public investment in social services and infrastructure. Similarly are weak productivity growth and an ageing population.
Against the background of the unexpected Hong Kong protests, mass civil disobedience and at times nihilist anarchy, the election on this occasion became more than previously one about Taiwan’s future relations with mainland China.
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Alliance-wrecker Trump will make China great again
The protectionist, unilateralist, illiberal US President is the real-life “Manchurian Candidate” who will destroy America's strategic alliances given enough time in power.
Jan 14, 2020 — 2.00pm
Financial markets were cheered recently by the news that the United States and China have reached a “phase one” deal to prevent further escalation of their bilateral trade war. But there is actually very little to cheer about.
In exchange for China’s tentative commitment to buy more US agricultural (and some other) goods, and modest concessions on intellectual property rights and the renminbi, the US agreed to withhold tariffs on another $US160 billion ($232 billion) worth of Chinese exports, and to roll back some of the tariffs introduced on September 1.
The good news for investors is that the deal averted a new round of tariffs that could have tipped the US and the global economy into recession and crashed global stock markets.
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France, Germany, Britain trigger Iran dispute mechanism
Jan 14, 2020 — 11.00pm
Paris | France, Britain and Germany confirmed on Tuesday that they had triggered the dispute mechanism in the Iran nuclear deal given Tehran's ongoing violations, but said they were not joining the United States campaign to exert maximum pressure on Tehran.
"We do not accept the argument that Iran is entitled to reduce compliance with the JCPoA," the three countries said in a joint statement, saying they had no choice but to trigger the process that could eventually lead to UN sanctions.
"Instead of reversing course, Iran has chosen to further reduce compliance."
Iran took a further step back from its commitments to the 2015 pact, with six world powers, by announcing on January 6 that it would scrap limits on enriching uranium, though it said it would continue cooperating with the UN nuclear watchdog.
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Russia's prime minister, parliament resign
Isabelle Khurshudyan
Jan 16, 2020 — 7.13am
Moscow | Russia's prime minister submitted his resignation Wednesday (Thursday AEDT) as part of a surprise government shake-up directed by President Vladimir Putin as he looks to an eventual transition of power and to ensure his influence after his term ends in 2024.
Putin accepted the resignation of Dmitry Medvedev, a longtime ally and political partner who once served as president. Medvedev, however, will remain in Russia's power structure as the Security Council's deputy chairman, which has been compared to a vice presidency.
Less than three hours after Medvedev's resignation, Putin offered the post of prime minister to Mikhail Mishustin, the head of the Russian tax service who is viewed as a possible placeholder as Putin reshapes Russia's power structure.
The sweeping moves came shortly after Putin gave his annual address to Russian lawmakers and proposed major constitutional changes that included transferring more power to parliament, including the ability to name the country's prime minister. Currently, the post is selected by the president.
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Beijing may let Hong Kong retain independence beyond 2047: Carrie Lam
January 16, 2020 — 4.45pm
Hong Kong: Chief Executive Carrie Lam said on Thursday that the "one country, two systems" framework under which the city enjoys freedoms unknown in China could continue after its 2047 deadline if loyalty to Beijing is upheld.
Lam's comments at the Legislative Council appeared to be an appeal to those in the city who see Beijing as tightening its control over the semi-autonomous territory's civic, economic and political life.
Hong Kong has been wracked by often violent anti-government protests since June, although they have diminished considerably in scale following a landslide win by opposition candidates in races for district councillors late last year.
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Vladimir Putin has killed too many people to just step aside as Russian President
The Economist
What is Vladimir Putin playing at? Russia’s President took Kremlin watchers by surprise late on Wednesday (AEDT). In his annual state of the union speech, he announced a radical overhaul of the Russian constitution and a referendum on its proposed (and still unclear) terms. This bombshell was followed by another. Prime Minister Dmitry Medvedev resigned along with the entire cabinet. The reasons for Medvedev’s ejection and replacement by an obscure technocrat remained a riddle wrapped in a mystery.
To understand what might be going on, start with a simple fact. In the past 20 years, Putin’s regime has killed too many people and misappropriated too many billions to make it plausible that he would ever voluntarily give up effective power. Under the constitution, he cannot run again for president when his term expires in 2024, since no one is allowed more than two consecutive terms. So everyone has always assumed that one way or another he would game the rules to remain top dog.
He already has form on this. His first two terms as president ran from 2000 to 2008. Term-limited out for the first time, he became prime minister for four years, during which time Medvedev served as a distinctly neutered president. In 2012 Putin was back in the suddenly re-empowered presidency, and he was re-elected to a second term in 2018. The only enigma has ever been what job he would jump to in 2024.
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Evil at the heart of Russia
Vladimir Putin is not just a power-hungry autocrat, he is also the world’s most despicable thief.
January 16, 2020
He is doing so as part of a set of sweeping constitutional changes. These warrant close attention, not only for the sake of understanding Russia in the 2020s, but to better grasp the mechanics and tactics of other political figures around the world who are entrenching authoritarian regimes.
What Xi Jinping has done in China, what Recep Tayyip Erdogan has done in Turkey, what Rodrigo Duterte has done in The Philippines and what Nicolas Maduro has done in Venezuela all have a good deal in common.
The entire Russian cabinet resigned this week, pending major constitutional reforms. As Dmitry Medvedev, the outgoing Prime Minister and long-time Putin crony, put it on Russian state television, with the President sitting next to him: “These changes, when they are adopted, will introduce substantial changes not only to an entire range of articles of the constitution but also to the entire balance of power, the power of the executive, the power of the legislature, the power of the judiciary.”
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The Middle East ‘isn’t worth it any more’ for the US
Martin Indyk
· The Wall Street Journal
Earlier this month, despite Donald Trump’s repeated pledge to end American involvement in the Middle East’s conflicts, the US was on the brink of another war in the region, this time with Iran.
If Iran’s retaliation for the Trump administration’s targeted killing of Tehran’s top commander, Major General Qassem Soleimani, had resulted in the deaths of more Americans, Washington was, as Mr Trump tweeted, “locked and loaded” for all-out confrontation.
Why does the Middle East always seem to suck the US back in? What is it about this troubled region that leaves Washington perpetually caught between the desire to end US military involvement there and the impulse to embark on yet another Middle East war?
As someone who has devoted four decades of his life to the study and practice of US diplomacy in the Middle East, I have been struck by America’s inability over the past two administrations to resolve this dilemma.
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I look forward to comments on all this!
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David.
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