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For the USA it seems there is only one issue and that is the rapidly expanding COVID-19 spread through so many States. We are now seeing the death rate rising and Trump actually wearing a mask. I fear this will end very badly indeed.
In the UK we are just waiting to see how the unlocking goes.
In OZ we have Victoria seriously locked down and the rest of the country raising their borders, terrified that the virus will sneak over the border. It is hard to know where we are – it will be clearer in a couple of weeks.
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Major Issues.
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Why Australia's strategic situation is far worse than we think
For all the dire warnings in last week's defence review, its chief fault lies in being far too optimistic.
Hugh White Contributor
Jul 6, 2020 – 12.00am
The federal government’s new Defence Strategy and Force Structure Review, released last week, paints a gloomy picture of Australia’s strategic circumstances. It warns of rising strategic rivalry, expanding military capabilities, and a growing risk of high-intensity conflict. But in fact, the review is not nearly gloomy enough, because it still makes a lot of unrealistically optimistic assumptions about what is happening strategically in Asia, and how Australia should be responding. That leaves the government’s new defence policy quite inadequate to the challenges ahead.
The problems start with the review’s ideas about where Asia is heading, and the scale of the strategic risks and challenges that presents to Australia. It paints a complacent picture of the countries of the region uniting with America to successfully resist China’s ambitions for regional hegemony. Australia’s key strategic task, it therefore suggests, is to play our part as a contributor to a united and successful regional effort to preserve a congenial, secure, rules-based order in Asia.
That takes a lot for granted. It assumes America has the strength and resolve to confront China effectively in Asia. It assumes the countries of the region will unite to support America in doing so. And it assumes that as a result China will be convinced or compelled to back off and abandon its ambitions.
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If Life Feels Bleak, It’s Because Our Civilization is Beginning to Collapse
2030 Will Be Even Worse than 2020. And 2040 Will Be Even Worse than That. Unless.
Jul 4 2020
There’s an old line from a movie called Office Space — do you remember that one? — that I’ve always loved: “Every day since I began work is worse than the day before it.” That’s kind of an apt summary for…everything…at the moment.
Life isn’t a happy thing right about now. It’s stressful, strange, upside-down. I’m weary with boredom, exhausted by isolation, tired of all the nothing…and I bet you are, too. So.
Is it just me, or living through the end of human civilization kind of…sucks?
There’s not — or there shouldn’t be, by now — any real debate on the point that we are now living through the probable end of human civilization.
The end of human civilization is now easy enough to see, over the next three to five decades. It’s made of climate change, mass extinction, ecological collapse, and the economic depressions, financial implosions, political upheavals, pandemics, plagues, floods, fires, and social breakdowns all those will ignite.
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https://www.afr.com/wealth/personal-finance/megatrends-to-be-on-the-watch-for-20200702-p558fy
Megatrends to be on the watch for
With markets dominated by big names or cohorts, don't forget to look for rewards outside the inner circle.
Giselle Roux Contributor
Jul 6, 2020 – 10.00am
Many asset classes are dominated by large positions that can have a distorting influence on performance and approach. The classic is the S&P 500 index where Microsoft, Apple, Amazon, Alphabet (parent of Google) and Facebook account for about 22 per cent of the market weight. At the peak of the 2000 internet boom, the top five stocks maxed at 18 per cent, while the long-term average is about 14 per cent. These are new times indeed.
Market watchers note historical peaks in sector weights. It is not that long ago that the big four banks accounted for nearly 40 per cent of the S&P/ASX 200; now they are collectively under 20 per cent.
Many investors probably don’t recall that in 2009 the biggest stocks in the global index included PetroChina, Exxon, ICBC, China Mobile and Walmart, an eclectic mix of peak oil prices, China growth and low-cost retail.
Equity momentum is currently driven by a handful of names. To be fair, that has commonly been the case, yet has also been the problem.
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Time to outlaw borrowing by self-managed super funds
The Murray Inquiry showed the risk of letting super funds borrow, and the Hayne commission highlighted the abuse of the loophole. Will the Coalition government fix it?
Karen Maley Columnist
Jul 7, 2020 – 12.00am
Will the Coalition government's comprehensive retirement income review finally tackle the vexed and politically fraught question of borrowing by superannuation funds?
Participants in the country's $2.7 trillion super industry eagerly await release of the review, led by former Treasury official Mike Callaghan.
It is expected to cast a critical eye over the super industry's politically sensitive "sacred cows" - such as the level of super guarantee levy, and the generous tax concessions that high-income earners pick up on their super contributions.
But there's also intense speculation over whether the latest review will recommend a ban on direct borrowing by super funds, especially now that house prices in many major cities are again heading lower.
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Reality check: Booming sharemarkets are about to face a big test
Stephen Bartholomeusz
Senior business columnist
July 6, 2020 — 11.40am
The US corporate earnings season starts this week, providing the first full insight into the worst impacts of the coronavirus on America’s biggest listed companies and a reality check for sharemarkets in the US and elsewhere.
While it will be a low-key start, with the big banks and some of the big tech companies due to report next week, the June quarter results will help fill in a vacuum in the market’s understanding of what the market expects - and is pricing in – to be the nadir of American companies’ fortunes.
The June quarter saw lockdowns of huge swathes of the US economy, before the stuttering re-openings of key state economies. It also saw a dramatic rebound in the US sharemarket from its March lows, with the market up almost 20 per cent for the quarter, the best quarterly performance since 1998.
Where the US market goes the rest follow, so the results from the big end of the US corporate sector will have a heavy influence on the direction of other markets, including the Australian market.
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Democracy will fail if we don't think like citizens
The health crisis could transform Western societies. But without a stable middle class, the state risks succumbing to plutocracy.
Martin Wolf Columnist
Jul 8, 2020 – 9.34am
It is clear then that the best partnership in a state is the one which operates through the middle people, and also that those states in which the middle element is large, and stronger if possible than the other two together, or at any rate stronger than either of them alone, have every chance of having a well-run constitution. Aristotle, Politics
COVID-19 has been a global shock. But will it be a transformative one? The answer is that it might be a transformative event for a number of Western societies, notably the US and UK.
For Western liberal democracies, the era after World War II can be divided into two sub-periods. The first, running roughly from 1945 to 1970, was the era of a “social democratic” or, as Americans might say, a “New Deal” consensus. The second, starting around 1980, was that of the “global free market”, or the “Thatcher-Reagan consensus”.
Between these two periods came an interregnum – the high-inflation 1970s. We are now living in what seems to be another interregnum, which began with the global financial crisis. That crisis damaged the ideology of the free market. But, across the Western world, valiant attempts were made to restore the ancien régime, through the rescue of the financial system, tighter financial regulation and fiscal austerity.
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https://www.afr.com/world/north-america/the-world-falls-apart-as-the-us-withdraws-20200708-p55a29
The world falls apart as the US withdraws
The Western-led world order is in crisis. If the US re-elects Donald Trump, this will be terminal.
Martin Wolf Columnist
Jul 8, 2020 – 10.22am
COVID-19 has not transformed the world, at least so far. But it has accelerated its development, technologically, socially and politically.
This has been strikingly true in international relations: the divide between China and the West and the failure of US leadership of the West have both deepened. The Western-led world order is in crisis. If the US re-elects Donald Trump, this will be terminal.
China is increasingly assertive. It pays no respect to Western pieties about human rights, as shown in the brutal treatment of the Uighurs and the new security law in Hong Kong.
Under Xi Jinping, emperor for life, the assertion of China’s status as a superpower and a despotism is complete. The abandonment of Deng Xiaoping’s celebrated advice to “hide your strength, bide your time, never take the lead” is unambiguous. Yet China must also be a partner in managing every global challenge.
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More than 40 per cent of China students heed Beijing's warnings
Robert Bolton Education editor
Jul 8, 2020 – 5.48pm
Nearly half of students in China who want to study in Australia say they will take notice of Beijing's warnings to be cautious about coming here, due to "discrimination" against Chinese people.
The data comes in a report from Swinburne University professor Marina Zhang and is part of a three-year study she has done on the motivation to study in Australia.
At least 40.6 per cent of Chinese students who had been studying in Australia and were waiting to return said the warnings from the education department in Beijing "would be critical" to their decision.
Among those who had never studied here but hoped to, 41.3 per cent would take the warnings into consideration.
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The rise of 'the Group': Morrison's powerful network of advisers
An influential group of advisers is shaping government policy on everything from the bushfires and the pandemic response to the fraught relationship with China.
Andrew Clark Senior writer
Jul 10, 2020 – 11.57am
In the early 60s American author Mary McCarthy published The Group. It’s a novel about eight young women graduating from exclusive Vassar College and facing the challenges of sexism, child-rearing and sexual relationships.
Nearly 60 years later, a local version of The Group is emerging to deal with the contemporary challenges of China, COVID-19 and the fiscal "bridge" designed to support our virus-ravaged nation.
The Australian version of the Group is largely male and spans cabinet ministers, senior bureaucrats, prominent business figures and former and current intelligence operatives.
Members include Prime Minister Scott Morrison, Treasurer Josh Frydenberg, Foreign Affairs Minister Marise Payne, Health Minister Greg Hunt, Home Affairs Minister Peter Dutton, Cabinet Secretary Andrew Shearer, Treasury Secretary Steven Kennedy, RBA boss Philip Lowe, Home Affairs department supremo Mike Pezzullo, ASIO boss Mike Burgess, FIRB head and one-time boss of both ASIO and ASIS David Irvine; former Fortescue mining CEO and COVID-19 supremo Nev Power; former Telstra boss David Thodey; and former Macquarie Bank head Nicholas Moore.
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Salman Rushdie survived an actual fatwa. Yet he still thinks the Twitter crowd has gone too far
Jacqueline Maley
Columnist and senior journalist
July 12, 2020 — 12.00am
Salman Rushdie knows a thing or two about fatwas – on Valentine’s Day in 1989, the Ayatollah Khomeini, Iran’s spiritual leader, proclaimed one ordering the writer’s execution over his 1988 book The Satanic Verses, which was considered blasphemous of Islam.
A bounty was put on Rushdie’s head, there were riots and book-burnings around the world, the book was (and still is) banned in many countries, translators of the book were attacked and the Japanese translator was murdered at his home.
Rushdie was given police protection, adopted an alias and went into hiding, on and off, for a decade.
He still lives with the fatwa, which has never been revoked, but now he lives more openly. He has said this is due to a conscious decision on his part, not because he believes the threat is gone. You can still earn yourself over $3 million by killing him.
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Sacred sites blast in WA exposes Australia's laws skewed to mining
By Melanie Burton and Jonathan Barrett
July 12, 2020 — 9.14am
When mining giant Rio Tinto blew up two ancient caves in Western Australia’s iron-ore rich Pilbara with state approval, the destruction was met with anger from indigenous landowners for whom the sites were of deep cultural and sacred importance.
Aboriginal activists have taken their fight to Rio Tinto headquarters over the blasting of a 46,000 year old heritage site.
The blasts in late May became one facet of the Black Lives Matter protests in Australia, which saw thousands of people demanding an end to racial inequality in a country where Aboriginal groups have long suffered higher rates of imprisonment, unemployment and lower life expectancy.
Now, however, the ground may be shifting.
The Western Australian government said it would push for indigenous groups, rather than a departmental committee, to be responsible for evaluating the importance of sacred sites.
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Bushfire Crisis And Climate Policy
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No articles in this section
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Coronavirus And Impacts.
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https://www.afr.com/markets/equity-markets/why-alternative-data-is-here-to-stay-20200705-p55941
Why alternative data is here to stay
Alternative data sources, typically the preserve of equity and commodity analysts, flew the coop through COVID-19, and are now a critical input to global macro.
Grant Wilson Contributor
Jul 5, 2020 – 10.28am
The infodemic that has accompanied COVID-19 has obscured an important development that looks here to stay.
So-called "alt-data", which are typically high in frequency and broad in sample, have become an indispensable input beyond the customary use cases of equity and commodity analysis.
In the typical cases, alt-data, such as credit card transactions, point-of-sale receipts, website usage, social media posts, along with freight and shipping metrics, are often used to estimate corporate earnings, and as a gauge of supply and demand conditions in commodity markets.
This space has grown rapidly over the past five years. A survey sponsored by Greenwich Associates, covering some $US15 billion ($22 billion) of assets under management in North America, found the spend on alternative data sets exceeded $US1 billion in 2019, compounding at around 50 per cent a year.
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Victoria to feel economic pain longer: Deloitte
Phillip Coorey Political editor
Jul 6, 2020 – 12.01am
Victoria is likely to be the worst-performing state economy during the COVID-19 crisis, suffering "prolonged misery" even as the national economy could recover more quickly than previously forecast.
Written just as the outbreak in Victoria intensified, Deloitte Access Economics' latest quarter business outlook warns "if you can't beat back the virus, then you can't open up''.
"And if you can't open up, your economy will struggle.''
While the Deloitte report assumes that the intensifying lockdown in Melbourne suburbs will suppress the virus outbreak of the past fortnight, it still predicts that Victoria's gross state product will contract 1.6 per cent in real terms this financial year, the worst of all the states.
"Victoria has had the strongest COVID restrictions across the country and now, with the prospect of a second wave returning and the reintroduction of restrictions, the state is likely to see some prolonged misery in particularly hard-hit sectors," Deloitte partner Chris Richardson wrote in the report.
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Economy to recover strongly, but wages and jobs will not
By Shane Wright
July 6, 2020 — 12.01am
The Australian economy will bounce out of the coronavirus recession but it will be a jobless turnaround, new forecasts suggest with real wages likely to fall until the middle of the decade and government debt to breach $1 trillion.
Ahead of the Reserve Bank's monthly board meeting, at which official interest rates are expected to remain at a record low 0.25 per cent, Deloitte Access Economics on Monday said it would be years before mortgage holders would have to worry about an increase in their costs.
The Morrison government is preparing an economic statement to be delivered by Treasurer Josh Frydenberg on July 23, with that expected to show the economy suffering its deepest recession since the 1930s and the budget on track for its largest deficit on record.
Deloitte Access is forecasting the economy to contract by 0.4 per cent through 2020-21 after shrinking by 0.1 per cent in 2019-20. That would be the first time the economy had suffered two years of negative growth since the early 1980s recession.
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'Play it safe': AMA calls for a nationwide freeze on lifting COVID restrictions
By Ashleigh McMillan
July 5, 2020 — 10.01pm
The Australian Medical Association has urged states and territories to temporarily stop lifting coronavirus restrictions in the wake of the spike in cases and outbreaks in Melbourne.
The AMA's president Tony Bartone said the 108 new cases revealed in Victoria on Saturday acted as a"stark reminder" that the pandemic is not yet over.
"These new outbreaks send a strong signal that the other states should rethink the pace of easing of their COVID-19 restrictions until community transmission in Melbourne is under control to avoid the risk of a similar situation playing out in their own communities," he said.
"Before rushing back to the pub, the footy crowds, or the big weddings and parties, Australia should pause and play it safe until the Melbourne hotspots are back under control."
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NSW-Victoria border to close after COVID spike
· NCA NewsWire
The border between NSW and Victoria will close from Tuesday night after crisis talks between the state premiers and Prime Minister Scott Morrison.
Victorian Premier Daniel Andrews made the announcement on Monday morning, noting the enforcement would take place on the NSW side of the border, as to not drain Victorian resources focused on countering the coronavirus spike in the state.
“From 11.59pm midnight tomorrow night, the border with New South Wales will be closed,” he said.
“That is the result of a phone hook-up between the Prime Minister and the Premier of New South Wales and myself just an hour or so ago, where we have - all of us - agreed that the best thing to do is to close the border.”
Mr Andrews said the closure would not affect everyone, with a permit system to be implemented for those living on border towns such as Albury-Wodonga.
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Infected people in the towers should be removed, experts say
Tom Burton Government editor
Jul 6, 2020 – 6.07pm
Residents of Melbourne's public housing towers who test positive for coronavirus should be removed and isolated, infection experts said, as early testing revealed a high level of infection in some of the towers.
The push to isolate infection cases came as a group of global scientists called for greater acknowledgement of the role of airborne transmission of the virus.
The recognition that micro aerosol droplets hanging in closed spaces could be spreading the disease suggests masks should be recommended in public environments such as public transport. It also reinforces the need to ensure air flow in office buildings and apartment complexes.
UNSW epidemiology professor Marylouise McLaws said she supported the use of masks and ensuring good air flow in closed building environments. Airborne infection is well accepted in close working conditions like hospitals. But she warned the evidence about how infectious airborne transmission is in non-close conditions was not conclusive.
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Banks give borrowers more time to repay loans
James Frost and Matthew Cranston
Jul 8, 2020 – 12.00am
Banks will continue to act as shock absorbers for the economy by extending six-month repayment holidays by another four months for households and businesses that can show they are viable borrowers.
The pledge of support will have banks shoulder the economic burden of the crisis through Christmas and well into 2021, as the six-month period for the first of the 800,000 customers who deferred more than $260 billion worth of loans back in March concludes.
The extension will deliver some much-needed relief for Victorian businesses ordered back into lockdown after the coronavirus spike forced Premier Daniel Andrews to return metropolitan Melbourne to stage 3 restrictions from midnight on Wednesday.
Federal Treasurer Josh Frydenberg thanked the banks and regulators for their efforts, confirming that the Australian Prudential Regulation Authority would extend more regulatory relief to the banks as part of the Team Australia effort to get to the other side of the crisis.
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Victoria's bitter $12b hit from return to lockdown
Andrew Tillett and Matthew Cranston
Jul 7, 2020 – 6.16pm
Melbourne's revived lockdown and border closure is set to cost Victoria's economy as much as $2 billion a week, delay business investment and snuff out the recovery in the jobs market.
As Victorian Premier Daniel Andrews ordered 5.1 million Melburnians to stay home for six weeks, economists said it would force the Morrison government to recast its planned July 23 economic statement, which will include details on the next phase of the JobKeeper wage subsidy scheme.
The lockdown comes as Reserve Bank of Australia Governor Philip Lowe warned of heightened uncertainty on the economic recovery.
"The outlook, including the nature and speed of the expected recovery, remains highly uncertain and the pandemic is likely to have long-lasting effects on the economy," Dr Lowe said.
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Australia should switch course and try to eliminate COVID-19
By Stephen Duckett and Will Mackey
July 9, 2020 — 12.01am
The explosion of new community transmissions in Victoria is a harsh reminder of the power and speed of COVID-19.
The lockdown of Melbourne is the right response, and lays bare the uncertainty that comes with the nation's suppression strategy, which involves lifting restrictions while there are still active infections in the community. National cabinet should abandon the suppression strategy and instead explicitly aim for elimination.
The nature of the virus has not changed. Given the chance, it will spread rapidly around Australia, as it has around the world. If our behaviour returns to pre-COVID normal while there are active cases in the community, outbreaks are inevitable.
Victoria now has more community transmission than at any point in the crisis. In the initial peak, in late March, there were 46 daily local cases identified. In the past fortnight, Victoria has had more than 60 local cases every single day. It only took a month for new local daily COVID-19 cases in Victoria to go from about one to more than 100.
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Good governance on coronavirus takes centre stage, cue applause
In this unexpected battle against an infuriating pandemic, Australia has had a few natural advantages that have helped us to succeed. Prime among these is our oft-noted island-nation status. But along with the world-class medical, police and border security services that stem from it, our major asset has been good governance.
In global political debates focused on grievance, alarmism, inequality and identity, we too often overlook the primacy of good governance. Private property rights, the rule of law and good governance ensure countries that are poorly endowed with natural resources thrive, and their absence sees potentially wealthy nations sink into squalor.
Even when we measure our experience against well-governed and prosperous countries with sophisticated border controls (albeit it sometimes across land borders), our pandemic performance is remarkable. Sadly, we have lost 104 people (and there will be more) from our population of 25 million.
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Masks needed to limit COVID-19 spread
Health authorities say Melburnians in coronavirus hot spots should wear face masks to help prevent further community transmission of COVID-19, reversing previous advice.
Deputy Chief Medical Officer Nick Coatsworth urged residents in metropolitan Melbourne and the Mitchell Shire – where a fast-spreading infection has pushed the Victorian government into reimposing strict restrictions – to cover their faces when they cannot maintain a physical distance from others.
“In those areas mask use, surgical or cloth masks, is recommended if you find yourself in a situation where you cannot socially distance,” Dr Coatsworth said.
“If you have to leave your home for any of those reasons for which it is permissible and you are likely to find yourself in a situation where you cannot maintain 1.5m distance it is advisable to be covering your face with a mask,” he said.
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'The assassin is out there': Virus calls for a new way of thinking
Peter Hartcher
July 11, 2020 — 12.01am
We got the idea into our heads that once we'd got through a couple of months of lockdown, we'd revert blissfully back to life as we'd known it. There were only two states of being. Locked down or set free. Serving time or party time. A bit like the concept of earthly life followed by entry into heaven. The sufferings and tribulations of this life will give way to eternal happiness.
Likewise, we got the idea that there were only two states of economic existence. Shut or open. Hibernating and awake, as Scott Morrison put it earlier. The virus has other plans. Victoria's bungling has been a spectacular setback. It has demonstrated how quickly the disease can surge back to plague proportions. Australians are dying of the virus. Again.
Returning to a shutdown would be "the very worst thing" Victorian Premier Daniel Andrews said in May. He was right. It's disruptive, depressing and costly. He's now living his own worst case, in company with 5 million fellow Victorians. The Economist magazine describes Victoria's situation as: "Lock, unlock, repeat." And it's not the only case. New outbreaks and "second waves" of COVID-19 infection are emerging around the world. Even in some of the countries most successful in containing the first.
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https://www.afr.com/wealth/personal-finance/borrowers-brace-for-more-mortgage-pain-20200709-p55aja
Borrowers brace for more mortgage pain
Debt counsellors fear low mortgage arrears are the "calm before the storm" as the official end to financial support packages looms in September.
Duncan Hughes Reporter
Jul 11, 2020 – 12.00am
Simon Levy deferred mortgage repayments on his Queensland seaside apartment in March because he wanted to preserve cash for other family needs after losing his long-time job as a project manager.
“It has been a nerve-racking time because I couldn't be sure what was going to happen with finding new work,” says Levy, father of a 10-year-old.
“My main concern became preserving cash to look after the family. COVID-19 and the lockdowns have created a lot of employment uncertainty in the workforce, particularly the prospects of getting another job,” he says.
Levy, who has been paying off a $225,000 ING standard variable mortgage on his three-bedroom Margate apartment for the past decade, specialises in building foundations for infrastructure projects.
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One job for every 10 people on the dole in NSW, Victoria
By Jennifer Duke
July 12, 2020 — 12.00am
Only one job is available for every 10 people unemployed in New South Wales and Victoria, raising concerns electorates with thousands of people on the dole will be hit hardest if the boost to JobSeeker is cut back in September.
There are 476,000 Australians receiving unemployment payments in NSW but less than 39,800 jobs were available in May, while 389,000 people in Victoria are on the dole jostling for 28,700 available roles, new government data provided by Labor shows.
The Government is refusing to rush its decision on the future of JobKeeper and JobSeeker despite fears the country is hurtling towards an economic cliff, so now a think tank has come up with its own plan.
In NSW, the electorates relying the most on the supplement are Fowler (Cabramatta, Liverpool, Canley Vale), where 15,970 people are on JobSeeker; Blaxland (Bankstown, Yagoona) with 14,580; Richmond (Ballina, Byron Bay, Tweed Heads) at 14,160; and McMahon (Fairfield, Merrylands, Mincinbury) with 13,830. In Sydney (Glebe, Redfern, Alexandria) 10,930 people are on the dole while 443 are receiving Youth Allowance, totalling $6.26 million in support.
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Royal Commissions And The Like.
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There are no entries in this section.
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National Budget Issues.
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Coronavirus: Threat to $12.5bn in education exports
Victoria’s second wave of coronavirus infections threatens to wipe out the state’s international education industry — worth $12.55bn — and leave more than 27,000 foreign students studying at Melbourne universities stranded overseas, with the sector saying the outbreak has put its national recovery at risk.
International education was Victoria’s biggest export by far in 2018-19, according to data from the Department of Foreign Affairs and Trade, outstripping tourism to the state by $6bn and Victorian wool exports by $10bn.
Victoria is the only state where education is the biggest export and it makes up close to 50 per cent of its entire services exports market. While NSW’s education export market was worth $13bn last year, it comes in a far second to the state’s $20bn in coal exports.
The Australian revealed on Monday that pilot programs to return small batches of current foreign students in NSW, Victoria, the ACT and South Australia were all now on hold due to the Melbourne COVID-19 outbreak.
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Home lending worst on record, but PM says don't panic
Matthew Cranston Economics correspondent
Jul 9, 2020 – 2.29pm
Lending to buy new property by both owner occupiers and investors has recorded it biggest monthly fall on record, but Prime Minister Scott Morrison says it's still too early to make any calls on any house prices.
New loan commitments for housing fell by 11.6 per cent in May - the worst on record. The value of new loan commitments for owner occupiers fell 10.2 per cent and new loans for investors falling 15.6 per cent - which is the lowest level since 2002.
The prime minister said the housing market here "hasn't driven by speculative investor bubbles or speculative credit, things like that, which we've seen occur in other countries".
Despite the record plunge in lending and three months of sliding house prices, Mr Morrison said there was no reason to panic about a collapse in house prices.
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https://www.afr.com/policy/economy/ten-ways-the-melbourne-lockdown-will-hit-you-20200709-p55ahg
Ten ways the Melbourne lockdown will hit you
Patrick Durkin BOSS Deputy editor
Jul 9, 2020 – 12.53pm
The six-week lockdown of Melbourne will crush consumer spending, cancel property sales, create more "zombie" businesses and slash $6 billion from the next quarter's national economic growth. Investment bank Morgan Stanley has analysed the big effects from Victoria's second wave. Here is their top 10.
1. A $6 billion hit to national GDP Victoria is a quarter of national GDP and employment, and a similar experience to the initial lockdown would reduce $6 billion from third-quarter GDP. "While we had anticipated virus flare-ups and government responses, we had not incorporated a widespread lockdown in our forecasts." Morgan Stanley's current economic forecasts assume a 3.2 per cent recovery in economic activity in Q3, following an 8.1 per cent decline in Q2.
2. Crimped consumer spending During the lockdown in April, consumers pulled back not just on categories where spending was restricted but also on a broader range of categories – suggesting that sentiment and caution played a role in the pullback.
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https://www.afr.com/politics/federal/new-phase-in-fight-to-revive-economy-frydenberg-20200710-p55aut
'New phase' in fight to revive economy
Matthew Cranston and Andrew Tillett
Jul 11, 2020 – 12.00am
Treasurer Josh Frydenberg has promised a further phase of income support targeted at the sectors most heavily hit by the COVID-19 pandemic as Melbourne reported a record 288 new virus cases.
"There will be another phase of income support targeted at those who continue to need it, recognising that some sectors will take longer to recover than others," Mr Frydenberg told AFR Weekend.
"We shouldn’t downplay the seriousness of events in Victoria, but at the same time, we cannot allow it to derail the progress being made across the country."
Acknowledging the big spike in virus cases in Victoria on Friday, the worst of any state during the crisis, Prime Minister Scott Morrison said the situation "remains very concerning" but that Victoria was being provided all the resources it needed to deal with the outbreak.
After the high number of new infections, all Melburnians are being advised to wear face masks in public as the entire city entered its first weekend in lockdown again.
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Health Issues.
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Cancer blood test a lifesaving breakthrough
A new blood test that detects the DNA of cancerous tumours is being made available to Australian patients for the first time, enabling targeted treatment that has given patients with terminal cancer a new chance at life.
Circulating tumour DNA testing is a blood test that uses genomic sequencing to detect the DNA of cancerous tumours. It can replace the need for invasive biopsies and can also be used to guide personalised treatment, including alternative treatments outside of chemotherapy.
Patients with blood cancers are now able to access ctDNA testing at the Christine and Bruce Wilson Centre for Genomics at the Peter MacCallum Cancer Centre in clinical trials, funded by charitable organisations the Snowdome Foundation and the Epworth Medical Foundation.
“This testing means in some cases we can get the same information without having to do a biopsy,” said Piers Blombery, who heads the Molecular Haematology Laboratory at the Peter MacCallum Cancer Centre.
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https://www.ausdoc.com.au/opinion/podcast-most-inefficient-healthcare-system-world
A podcast on the most inefficient healthcare system in the world
Antony is a medical reporter with a special interest in technology and pharmacy.
7th July 2020
The US sometimes seem like another planet — especially its healthcare system.
There’s no shortage of American medical podcasts, but the fact that it’s the most inefficient healthcare system in the world means their relevance to international listeners is sometimes limited.
And yes, the Advancing Health podcast by the American Hospital Association falls prey to this occasionally, so there are a few episodes about generic drug prices and Obamacare that you will probably want to judiciously skip.
However, many episodes do broach topics that will be interesting to Australian listeners, covering global, system-wide topics such as finding alternatives to opioids and cutting unnecessary interventions.
Both Australia and the US have distinct rural populations, and the podcast series has multiple episodes that focus interventions tailored for the regions, which are also interesting.
Overall, this podcast is worth a listen.
Listen to the Advancing Health podcast here
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Retirement village in liquidation after legislation change
Legislation brought in to regulate the retirement home sector is sending small-time operators into liquidation and threatening the viability of regional villages.
The amendment to the Retirement Villages Act, passed in Queensland last year, was intended to help former retirement village residents resell their properties to quickly access capital and deter operators from prioritising selling new developments that decreased demand for older units.
Under the retrospective law, if a retirement home unit owner cannot sell their property within an 18-month period, the village operator must purchase it from them at market value.
Cooloola Waters Retirement Village, a community of 44 homes at Tin Can Bay three hours’ north of Brisbane, is facing a bill of more than $2m to buy 14 homes that are due for sale.
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International Issues.
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Ugly truth: Trump's promise of a fading pandemic and a roaring economy has gone up in smoke
By Paul Krugman
July 6, 2020 — 9.33am
Just over two weeks ago The Wall Street Journal published an opinion piece by Vice President Mike Pence titled "There Isn't a Coronavirus 'Second Wave." The article was supposed to reassure the nation.
What it provided, instead, was a clear illustration of the delusions and magical thinking that have marked every step of the Trump administration's response to COVID-19, producing an epic policy disaster.
Put it this way: By now, according to Trump officials and sycophants, we were supposed to be seeing a fading pandemic and a roaring recovery. Instead, we have a fading recovery and a roaring pandemic.
About the pandemic: The Pence article cheerily declared that "cases have stabilised," with the daily average number of new cases only 20,000. Even that figure, as it happens, was five times the number in the European Union, which has a third more people than America does. Since then, however, new cases have soared, hitting more than 50,000.
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Coronavirus: Pandemic sours July 4 celebrations in United States
A surge in coronavirus cases sapped the fun out of July 4 celebrations in the US as the pandemic also accelerated through neighbouring Mexico, the rest of Latin America and South Africa.
Even Europe, which has largely been celebrating reopening, saw some setbacks, with authorities placing 200,000 people back under lockdown in Spain after a spike in infections that underlined how easily hard-won progress can be reversed.
The US remains by far the world’s hardest-hit country, logging a further 43,000 cases on Saturday (Sunday AEST) that brought its total number of infections to more than 2.8 million, with nearly 130,000 deaths.
The spiralling caseload cast a pall over traditional Independence Day celebrations, with beaches closed and the National Mall in Washington, usually crowded with spectators ready for fireworks, near deserted. Main Street parades were cancelled, backyard barbecues scaled down and family reunions put off.
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https://www.economist.com/united-states/2020/07/04/its-messing-with-texas
It’s messing with Texas
Greg Abbott is battling the coronavirus with one hand and his party’s lunatic fringe with the other
United States Jul 4th 2020 edition
Jul 4th 2020
IN THE FIRST months of the coronavirus pandemic, Greg Abbott seemed happy to let Texas’s 254 county and 1,214 city authorities take the lead. The state’s vastness—with its widening contrast between rural reaches and exploding metropolises—argued for local decision-making. And the conservative governor had little to gain by organising an economic lockdown that a minority of Republicans considered tantamount to treason. By late March, however, with Texas still relatively unscathed by the virus, Mr Abbott’s calculation changed. He struck down an effort to make mask-wearing legally enforceable in Houston. He also issued orders—ahead of almost any other governor—to reopen the bars and restaurants that local officials had shuttered. It must have seemed like good politics as well as economics at the time.
Texas is now a centre of the viral wave sweeping the South and West. The state is seeing well over 6,000 new infections a day, five times the number of a month ago. And most are in Houston, where scenes reminiscent of New York in April are unfolding. Last week the biggest hospital network in America’s fourth-biggest city said its intensive-care wards were almost full. Mr Abbott meanwhile ordered bars and other non-essential businesses to close again, forced restaurants to cut their capacity by half and urged Texans to wear masks, as he mostly does. The would-be pioneer of reopening has become the first governor to order a reclosing.
His policy twists have been heavily criticised from both sides of the aisle, with some justification. A cautious politician, whose preference for handing down edicts after slow deliberation reflects his background as a judge, Mr Abbott has shown more calculation than leadership during the crisis. He did not endorse the local officials he deferred to early on, but hid behind them. His move to countermand them reflected a decade-long Republican campaign to centralise power in Austin in order to peg back the Democratic cities. Even so, Mr Abbott deserves to be cut a little slack.
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The world economy took the express elevator down, now it faces steep stairs back up
By Enda Curran
July 7, 2020 — 8.04am
The world economy is entering the second half of 2020 still deeply weighed down by the coronavirus pandemic with a full recovery now ruled-out for this year and even a 2021 comeback dependent on a lot going right.
It's a scenario few if any predicted at the start of the year when most economists were banking on another year of expansion and a US and China trade agreement was meant to give corporate and investor confidence a shot in the arm.
Instead, the rare pandemic forced swathes of the global population into what the International Monetary Fund dubs 'The Great Lockdown.' Central banks and governments responded with trillions of dollars in unprecedented support to prevent markets from melting down and to keep furloughed workers and struggling companies afloat until the virus passed.
Even with those rescue efforts, the world is still suffering its worst economic crisis since the Great Depression. While some gauges of manufacturing and retail sales in major economies are showing improvement, hopes for a V-shaped rebound have been shattered as the reopening of businesses looks shaky at best and job losses risk turning from temporary to permanent.
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The UK is playing a dangerous game with China as trade tensions bubble
By Jeremy Warner
July 7, 2020 — 10.22am
Those of us who have argued for constructive engagement with China - in recognition of the futility of trying to economically contain this emerging superpower - are having to accept that events have moved on somewhat in recent months.
In the United States, the UK, and increasingly even the European Union, the Sinophobes have triumphed. The once pursued "golden era" of relations with China - so short-lived in practice that it scarcely justifies the term "era" - has given way to the same air of mutual hostility that characterises relations with Russia.
In large measure that's because of the actions of Beijing itself, which, rather than trying to accommodate Western sensitivities, has instead recklessly chosen to dial up the tensions to virtual breaking point.
The timing of China's new Hong Kong national security law, which in the UK Government's view breaches the "one country, two systems" treaty, seemed deliberately calculated to cause maximum Western offence, and has given further ammunition to those arguing for a reset in relations, both diplomatic and economic.
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https://www.afr.com/world/asia/welcome-to-the-new-police-state-of-hong-kong-20200707-p559rw
Welcome to the new police state of Hong Kong
Banned books, patriotic education, home searches and mass arrests: the events of the last 24 hours have shown there will be a price to pay for peace on the street.
Michael Smith China correspondent
Jul 7, 2020 – 4.29pm
Shanghai | Hong Kong's transformation from an international business city to a police state has taken less than a week.
The speed at which the Chinese government has moved to impose its authority on Asia's once-liberal finance hub has shocked many of the city's 7.5 million residents since national security laws were implemented at 11pm last Tuesday.
Books have been banned, a 15-year-old girl arrested for carrying stickers with a "HK Independence" slogan, pro-democracy activists have fled or quit their political parties, and political graffiti has been stripped from the city's walls. There are plans to introduce patriotic education in schools.
That was all before Monday afternoon, when things just got worse.
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United States formally submits withdrawal from the WHO
Shabtai Gold
Jul 8, 2020 – 6.11am
Washington | The United States officially notified the United Nations secretary-general of the country's withdrawal from the World Health Organisation, setting in motion the country's exit from the global body.
President Donald Trump in May said he would withdraw from the WHO, accusing the organisation of failing in the coronavirus pandemic and being a puppet of China. Trump also announced a funding halt to the WHO in a move that has drawn concern, including from US allies.
The move, effective July 6, 2021, was confirmed by a US senior administration official and the UN.
A spokesman for the UN noted that exit conditions include giving a one-year notice and "fully meeting" financial obligations.
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Mary Trump's explosive book on the President gets early release
July 7, 2020 — 6.54am
New York: A tell-all book by US President Donald Trump's niece that has been the subject of a legal battle will be released next week, two weeks earlier than originally scheduled, due to“high demand and extraordinary interest”, its publisher says.
The book by Mary Trump, titled Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man, was originally set for release on July 28, but will now arrive on shelves on July 14.
The revised date, announced on Monday, came after a New York appellate court cleared the way for the book's publication following a legal challenge by Trump's brother, Robert.
The White House did not respond immediately to a request for comment.
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The real threat to liberalism will come after Trump
US liberals have not had to contend with the fusion of populist ideas and operational nous. That luck seems unlikely to last.
Janan Ganesh Contributor
Jul 9, 2020 – 9.34am
These are far from certain to be Donald Trump’s last months in the White House. The US President’s deficit in national and state polls is daunting but recoverable.
His opponent, Joe Biden, has profited from an inconspicuousness that cannot last until the November election.
One external shock — a military skirmish, say, or a COVID-19 vaccine — and this campaign would be upended, to who knows whose favour.
All of that stipulated, it is not rash to ponder the future of the Republican party after Mr Trump. And to sense that his threat to liberalism has been an amateur version of what is to come.
That Mr Trump’s successors will retain the substance of his views, even harden them, is plain enough. A base that is still mesmerised by his nativism will punish much deviation from it.
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https://www.smh.com.au/world/north-america/biden-should-not-debate-trump-unless-20200708-p55aak.html
Biden should not debate Trump unless ...
Here are two conditions the Democrat should set.
By Thomas L. Friedman
July 8, 2020 — 8.00pm
I worry about Joe Biden debating Donald Trump. He should do it only under two conditions. Otherwise, he's giving Trump unfair advantages.
First, Biden should declare that he will take part in a debate only if Trump releases his tax returns for 2016 through 2018. Biden has already done so, and they are on his website. Trump must, too. No more gifting Trump something he can attack while hiding his own questionable finances.
And second, Biden should insist that a real-time fact-checking team approved by both candidates be hired by the non-partisan Commission on Presidential Debates – and that 10 minutes before the scheduled conclusion of the debate this team report on any misleading statements, phoney numbers or outright lies either candidate had uttered. That way no one in that massive television audience can go away easily misled.
Debates always have ground rules. Why can't telling the truth and equal transparency on taxes be conditions for this one?
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Don't be fooled by Europe's economic recovery plan
By Ambrose Evans-Pritchard
July 9, 2020 — 10.11am
The EU's Recovery Fund has taken on a sacral character out of all proportion to its macroeconomic significance. The weekend gathering of EU elites at France's Cercle des Economistes was one long celebration of this pandemic package.
I did not hear a single participant seriously question whether this clutter of measures - ostensibly worth €750 billion ($1.2 trillion) but stretched thinly until 2025 - will make any material difference given the scale of the COVID shock, or whether its structure will prevent the eurozone's north-south gap widening fatally as an asymmetric recovery takes hold.
That shock is immense. The IMF has slashed its forecast for 2020 yet again to -12.2 per cent for France, and -12.5 per cent for Italy and Spain even assuming a benign scenario and no second wave. They will claw back just half the lost ground in 2021. Political effects will hit with a delay as job subsidies wind down.
Gita Gopinath, the IMF's chief economist, drew up these figures after the outlines of the EU's Next Generation Recovery Plan were already known, so clearly she does not believe the "game-changer" rhetoric.
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China's fury over Australia's embrace of Hongkongers
Andrew Tillett and Michael Smith
Jul 9, 2020 – 6.41pm
China has blasted Scott Morrison's offer of a pathway to permanent residency in Australia for more than 12,000 Hongkongers and suspension of an extradition treaty as deplorable, with the government privately bracing for a trade backlash as punishment.
Declaring Beijing's national security crackdown undermined the territory's political autonomy, Mr Morrison also revealed the government would try to lure Hong Kong based businesses and headhunt entrepreneurial Hongkongers to relocate to Australia.
Travel advice for Hong Kong has also been updated, with the government warning Australians they "may be at increased risk of detention on vaguely defined national security grounds" and if concerned, should reconsider their need to remain in the territory.
Mr Morrison's offer of save haven is the most consequential humanitarian gesture to Chinese citizens since former prime minister Bob Hawke’s tearfully granted asylum to 27,000 students in the aftermath of 1989's Tiananmen Square massacre in Beijing.
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Lone wolf: The West should bide its time, friendless China is in trouble
By Ambrose Evans-Pritchard
July 10, 2020 — 12.00am
The ledger is brutally clear. Xi Jinping's regime has no allies of global economic weight or credibility.
Some 53 countries backed China's treatment of Hong Kong in the UN Human Rights Council, a body now under the thumb of Beijing. They make up just 4 per cent of the world's GDP. Most are authoritarian statelets locked into the neo-colonial infrastructure nexus of China's "belt and road" initiative.
The only G20 member to have lined up on China's side was Mohammad bin Salman's Saudi Arabia, a struggling middle-income autocracy running out of places to sell its oil.
The list offers a revealing view of the strategic order emerging in the early 2020s. The rich Western and Asian democracies, which still control the international economic system, are coalescing into a united front. China is starting to pay the exorbitant price for its wolf warrior diplomacy. Xi has given us a nasty foretaste of what the world will be like if the Communist Party ever attains global mastery.
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A fading legend: Warren Buffett used to move markets - now he barely causes a ripple
Stephen Bartholomeusz
Senior business columnist
July 9, 2020 — 11.49am
Something unusual happened this week. At the start of the week Warren Buffett announced a $US10 billion ($14.4 billion) acquisition. The market, however, just noted it and moved on.
For decades Buffett’s moves and words were pored over and analysed forensically by US analysts and investors for insights into the judgments of the "Oracle of Omaha" on the state of the market.
A large purchase by Buffett’s Berkshire Hathaway was regarded as a clear "buy" signal by the rest of the market. It changed sentiment and moved markets.
Berkshire’s purchase of Dominion Energy for $US4 billion plus the assumption of $US5.7 billion of debt – its biggest deal in four years – caused, however, barely a ripple of discussion.
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https://www.afr.com/world/north-america/can-trump-still-win-in-november-20200710-p55aul
Can Trump still win in November?
Jacob Greber United States correspondent
Jul 10, 2020 – 1.26pm
It may well be a political first. A TV advertisement aimed squarely at an audience of just one.
Released this week by the so-called Lincoln Project – a group of energised and well-funded disaffected former Republican campaigners who have vowed to bring down Donald Trump and install Joe Biden in the White House – the video features a tense female voice speaking directly to the President.
“Why do you think you’re losing, Donald?” she asks, as familiar images of administration cabinet officials, staffers, bureaucrats and even Trump family members flash by, many with their eyes covered by a black bar.
“It’s because you’ve got a loyalty problem … even your own family … whisper about you ... it’s everyone!”
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Why the risk of a major power conflict is rising
The dominant Western liberal-democratic trading system that has powered global prosperity since World War II is being challenged by an assertive alternative that has finally revealed its true intent.
Christopher Joye Columnist
Jul 10, 2020 – 10.25am
The raging conflict between central banks’ unprecedented interventions in financial markets and the global economy’s shocking underlying fundamentals makes for a confusing battleground.
On the one hand, we have the monetary and fiscal policy mavens appropriately committing to do “whatever it takes” to furnish the much-needed liquidity and stimulus bridge until that future date when (we hope) cheap and effective vaccines are widely available to finally cauterise this crisis.
On the other hand we have the harsh contemporary reality of mass unemployment, business failures, burgeoning public and private debt, and the most severe global recession since the Great Depression.
If that was not bad enough, one can overlay the most worrying geopolitical fracturing since the darkest days of the first Cold War.
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https://www.afr.com/policy/foreign-affairs/shinzo-abe-has-made-japan-a-leader-again-20200710-p55av8
Shinzo Abe has made Japan a leader again
China cannot dominate the Indo-Pacific region when Japan and India - and Australia too - are co-operating with each other.
Rory Medcalf Contributor
Jul 10, 2020 – 12.47pm
Australia’s forthright diplomacy in the age of COVID-19 involves consolidating new partnerships across our vast Indo-Pacific region. Last month the focus was strategic co-operation with Narendra Modi’s India. Now it is Japan.
On Thursday evening, Prime Minister Scott Morrison exchanged views with his Japanese counterpart Shinzo Abe in what was billed as a virtual leaders' meeting.
There’s nothing virtual about their leadership – Morrison is proving up to the challenge of strategic disruption, as his recent announcements on defence, cyber security and Hong Kong attest.
And Abe, whatever his political difficulties, has an exceptional legacy. He is Japan’s longest-serving prime minister and has done much to revive his country from its strategic melancholy of a decade ago.
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I look forward to comments on all this!
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David.
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