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In the US Trump is going on in his usual divisive way while the Congress has failed to develop a fifth COVID rescue package. This has led Trump to try and bypass Congress with Executive Orders. Will be interesting to see how that goes. Meanwhile there are hints that the pandemic is peaking, just. We will be clear in a few weeks I believe.
In the UK people are saying they are really over the whole thing, but sadly the virus does not seem to agree!
In Australia we are seeing elements of the political consensus fray a little over Victoria’s woes and we are all hoping what they are doing is going to work and really re-flatten the curve. In the meantime the Budget is becoming more and more strained and JobKeeper is extended and eligibility for it is loosened.
Elsewhere there is horror and anger regarding the Lebanese explosion and its sequelae. What a terrible mess.
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Major Issues.
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https://www.afr.com/companies/financial-services/fundies-back-dividend-ban-etf-probe-20200803-p55i24
Fundies back dividend ban, ETF probe
Aleks Vickovich Wealth editor
Aug 4, 2020 – 12.01am
Most Australian and global investment managers would support a ban on companies paying dividends or executive bonuses and review of the booming exchange-traded fund market amid the coronavirus pandemic.
A survey of more than 13,000 members of the CFA Institute, a global professional body for the investment management and research industry, in April found 75 per cent believe securities regulators should "ban companies who receive emergency support" from distributing dividends, repurchasing stock or paying bonus remuneration to executives.
"The COVID-19 crisis could trigger unethical behaviour," says CFA Societies Australia CEO Lisa Carroll.
Of the 251 Australian survey respondents, 82 per cent agreed with the proposition that the regulator should enforce such a ban.
The findings indicate mass support for the action taken in early April by governments and central banks, including those of New Zealand and the European Union, to ban the distribution of capital to shareholders which could otherwise be deployed to the public health crisis.
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'Profoundly compromised': Labor ramps up attacks on delayed submarines
August 4, 2020 — 12.00am
Australia's future submarines are needed more than ever because of the coronavirus pandemic, Opposition defence spokesman Richard Marles will warn, accusing the Morrison government of failing Australians on national security.
Declaring Labor the natural party of national security, Mr Marles will say the claim that conservative governments are better at handling the nation's defences was one of the "great conceits" of Australian politics.
Mr Marles will also renew his criticism of the Morrison government's handling of its relationship with China, saying its "muscular language" has done nothing to improve Australia's strategic circumstances.
Mr Marles's speech at the National Press Club in Canberra on Tuesday will be the strongest signal yet that Labor is looking to openly attack the government over its traditional strong point of national security, particularly its handling of massive defence projects such as the $90 billion future submarine program and the $45 billion future frigates.
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How to protect yourself from Ponzi planners
What’s this? A financial planner jailed for stealing money! Graeme Walter Miller got six years last week for a Ponzi scheme and you have to ask, after all the reforms, how do we trust anyone with our investments?
Miller’s case is exceptional even by the dismal standards of rogue advisers.
There was no intention of guiding clients towards building wealth. Instead, Miller’s scheme quite literally invested none of the money he received from nine key clients over four years.
More than $1.8m was misappropriated as Miller played a game — taking money in and paying some of it back out in dividends while pocketing large amounts — as first demonstrated by Charles Ponzi in Boston in the 1920s.
If, as an investor, you are exceptionally diligent you can check and see if an adviser has qualifications or whether they are a member of the Financial Planning Association.
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Vaccine confronts humanity with next moral test
The US government says the COVID-19 vaccine will be developed "at warp speed". But vaccines take years to develop, for good reasons.
John Authers
Aug 5, 2020 – 6.17am
The coronavirus pandemic has stress-tested the world. Beyond challenging human fortitude, national health services and international rivalries, it has forced a series of moral choices. Many have provoked impassioned disagreement – over whether governments can force businesses and schools to close, over sacrifices for the sake of the elderly and, most bitterly and surprisingly, over whether being asked to wear a simple face mask infringes individual liberty.
The toughest moral test lies ahead. The biomedical industry and research facilities around the world are progressing toward creating a vaccine that would offer the best chance to end the pandemic and return life to normal. But the moral dilemmas provoked by the development and distribution of a vaccine will drive ever deeper debates.
The issues strike at profound divisions between schools of ethics. The newly published Ethics and Pandemics, an anthology edited by philosophy professor Meredith Schwartz of Ryerson University in Toronto, presents contrasting views of academics, doctors and commentators along with a series of impossibly difficult case studies. The scientific, economic and political choices involve moral issues that have divided ethicists for centuries.
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The virus is far from Australia's only threat in 2020
The Morrison government wants the big powers of the US and China to live up to their special responsibilities to the world but he's also trying to boost options for greater cooperation among medium sized countries in the Indo Pacific.
Jennifer Hewett Columnist
Aug 5, 2020 – 4.28pm
Scott Morrison sounds PM-style polite but blunt. Both China and the US have a special responsibility to uphold a “common set of rules” that build an international society, he says.
The Prime Minister’s foreign policy address to an American audience on Wednesday is as much an appeal to the US President as it is to China’s.
But neither leader will pay that message much heed as both countries hurtle towards ever more open confrontation, including the dangerous escalation of military tensions.
That makes a volatile three months to November’s US election look particularly high risk given Donald Trump’s determination to bolster his chances by blaming China for the economic and health crisis.
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https://www.afr.com/chanticleer/howard-marks-on-why-market-bulls-are-winning-20200806-p55j25
Howard Marks on why market bulls are winning
Chanticleer is Australia's pre-eminent business column.
Aug 6, 2020 – 10.19am
Sometimes it’s reassuring to know that someone else is going through the same things you are. Particularly when the someone is a billionaire and one of the world’s most respected investors.
“We stay in the same one place for both work and non-work leisure; weekdays aren’t very different from weekends; and the idea of vacation seems almost irrelevant: where would we go and what would we do?” asks Howard Marks, the founder and head of of Oaktree Capital.
“My acronym of choice is SSDD, the family-friendly translation of which is ‘same stuff, different day.’”
Like many of us here in Melbourne, where the harsh stage four lockdown is in full effect, Marks is coming to grips with the fact the early lockdowns in the US have proven to have been wasted – although the reasons for that have been different than in Melbourne.
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'Go for the whole hog': MPs push for parliamentary probe into CCP influence at universities
By Fergus Hunter and Eryk Bagshaw
August 8, 2020 — 12.00am
Federal MPs are pushing to ramp up parliamentary scrutiny of Chinese Communist Party influence at Australian universities as concerns grow about the sector's reliance on revenue from Chinese students and research partnerships.
Education Minister Dan Tehan on Friday announced a review of the sector's efforts to protect free speech and academic inquiry on campuses after two universities were this week embroiled in controversy over their responses to Chinese student criticism.
But politicians from across the major parties and the crossbench are calling for separate probes to more comprehensively examine universities' reliance on China, given growing fears about the risk to the integrity of higher education in Australia.
Crossbench MP Bob Katter welcomed the government's decision to review universities' implementation of a model code to protect free speech and academic freedom but said it would not go far enough and the government needed to "go for the whole hog".
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Climate Policy
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Morrison prepares a gas plan to boost economy out of the pandemic
By David Crowe
August 7, 2020 — 8.00pm
Gas projects will gain federal support to drive down energy costs for industry and households in what Prime Minister Scott Morrison calls a broader plan to lift the economy through the pandemic.
Mr Morrison backed the use of gas to help Australian industry solve its energy challenges, signalling he would act "in the months ahead" to tackle the problems caused by the COVID-19 outbreak.
Three cabinet ministers are working on ways to cut gas prices, raising the prospect of measures in the October budget to address years of industry calls to boost domestic gas supplies.
The next test is a NSW regulatory decision due on September 4 on whether Santos can develop the Pilliga gas field in the state’s north on the condition all the gas goes to the domestic market.
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Coronavirus And Impacts.
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https://www.afr.com/politics/federal/victoria-faces-tougher-restrictions-20200802-p55ho3
'Shock and awe': Victoria declares state of disaster
Fiona Buffini, Kris Swales and Natasha Boddy
Updated Aug 2, 2020 – 5.11pm, first published at 6.39am
Key Points
- Australia has 17,783 virus cases, 6722 are active, and 208 deaths.
- Worldwide, there are 17 million cases and over 667,000 deaths.
- Subscribe to our daily newsletter, Need to know, here.
Melbourne moves to stage four lockdown until at least September 13
Victoria has reported 671 new virus cases, 7 more deaths on Sunday and revealed 760 mystery cases, which Premier Daniel Andrews suggested there was far more virus in the community than previously thought.
The Premier has announced tough new restrictions for at least six more weeks, saying continuing the current strategy was untenable as it would take six months to reduce case numbers.
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'Six weeks to four months' to eliminate virus
John Kehoe Senior writer
Aug 2, 2020 – 3.28pm
Tougher lockdown measures in Victoria will take between six weeks and four months to have a very high chance of eliminating COVID-19 and there is a risk the state ends up in ongoing stop-start "limbo", infectious disease experts have warned.
There are more than 6000 known active COVID-19 cases in Victoria and health officials are worried more than 50 new positive cases each day have no identified infection source, undermining efforts to contain the virus through contact tracing.
Premier Daniel Andrews said on Sunday under the existing stage three restrictions it would take "too long", about six months, to suppress the virus to very low levels.
So the state government was resorting to new people movement restrictions and would announce stricter business operating rules, including reduced output, fewer hours and workplace closures, on Monday, he said.
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Tourism’s collapse could trigger next stage of the crisis
This is where we move from a public health emergency and mass unemployment to widespread insolvencies in myriad industries.
Rana Foroohar Contributor
Aug 3, 2020 – 9.34am
Last summer around this time, I did an interview with Ulf Lindahl, the chief executive of currency manager AG Bisset. At the time there was growing concern that the unwinding of the unprecedented corporate debt bubble created over the past decade could cause a sharp economic downturn.
He put forth a novel idea — that global tourism might be at the centre of the storm when it struck. “Everyone goes on vacation”, he said, “but it’s also the thing that you can cut back on quickly — unlike your car or your phone.”
If people did stop travelling because of some unforeseen economic shock, he posited, the effects would ricochet through nearly every industry and business, from manufacturing to real estate, restaurants, luxury goods, financial services — you name it. All this would risk setting off a raft of corporate insolvencies, high unemployment and a sharp downturn.
While many might have agreed with his thesis, nobody could have predicted the COVID-19 pandemic. Now the coronavirus-related collapse in world tourism, which represents more than 10 per cent of global economic output, according to the World Travel and Tourism Council, may well trigger the next stage of this crisis, in which we move from a public health emergency and mass unemployment to widespread insolvencies in myriad industries.
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Why 30-year bonds are the heavy tanks of the COVID-19 war
The higher-yielding Australian long end has attracted enormous investment capital from international investors who are funding the deficit to deal with the COVID-19 health disaster.
Chris Dickman
Aug 3, 2020 – 12.01am
Ahead of the battle for Hamel, General John Monash faced problems: casualties, the deadly flu epidemic of 1918 and a drop in recruiting levels had depleted his infantry. Monash needed a strategy that would use manpower sparingly and specifically and fortunately he had better-engineered tanks.
Last week, the Australian Office of Financial Management issued a new $15 billion 30-year government bond. The lengthening of the maturity profile of Australian government bonds is an important development.
In some ways, these newly born longer-dated bonds are not that different to a generation of better tanks.
The Australian 30-year bonds were issued at 1.94 per cent, more than 2 percentage points over the German equivalent (minus 0.1 per cent). Japanese 30-year bonds trade at 0.5 per cent, UK 30-year Gilts at 0.9 per cent, and US 30-year Treasuries at 1.2 per cent.
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https://www.afr.com/politics/victoria-is-now-infecting-the-entire-national-mood-20200802-p55hrm
Victoria is now infecting the entire national mood
The angst and anxiety now spreading across the nation due to the escalating catastrophe in Victoria just made it too hard to argue for anyone to ease anything at the moment.
Phillip Coorey Political editor
Aug 2, 2020 – 5.46pm
Last week, when the federal government was leaning on Western Australia to open its borders to states that posed no health risk, it knew it was an unpopular call but believed it to be right.
Today, it still believes it to be right but the backlash from the west, where Premier Mark McGowan has an approval rating somewhere in the 90s, was overwhelming.
Despite the backing of senior WA federal cabinet ministers Mathias Cormann and Christian Porter, the case was hopeless and on Saturday, Scott Morrison wrote to McGowan to announce a retreat.
The Commonwealth withdrew as a participant in Clive Palmer's High Court challenge to the constitutionality of the hard border closures, and its public pressure campaign to ease the closures and open up to South Australia, the NT and Tasmania, would also cease.
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Lockdown will test Australia's willingness to sacrifice
John Kehoe Senior writer
Aug 3, 2020 – 11.14am
In past global crises, young men went to war and sacrificed their lives to protect future generations, a prominent senior politician says.
In the age of COVID-19, Australians are giving up their livelihoods to protect, overwhelmingly, the health of older generations most susceptible to the lethal virus.
With Victoria entering a harsher lockdown for at least another six weeks, the pros and cons will be debated for decades to come.
Melburnians will have experienced lockdowns for about 100 days by September, with no guarantee it won’t be longer than that, or that we won’t be back at this point again in coming months.
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https://www.afr.com/policy/economy/carpet-bombing-the-victorian-economy-20200803-p55i43
Carpet-bombing the Victorian economy
Victoria is in its own world of pain with businesses and individuals now suffering an extreme lockdown that will decimate the economy and spread across borders.
Jennifer Hewett Columnist
Aug 3, 2020 – 7.28pm
Little wonder Daniel Andrews’s daily press conference was later than normal. Closing down or severely restricting thousands more businesses in the state is a very complicated political business.
All those details aren’t just ticks and crosses in a government policy announcement but devastating hits to hundreds of thousands of individual Victorians - their jobs, their livelihoods, their struggling businesses, their ambitions, their hopes.
The federal government had been encouraging the state to make further restrictions as targeted as possible to try to limit the level of economic devastation now inevitable. But the Andrews government sounds far more alarmed about its inability to control the virus and determined to use the next six weeks to do that no matter the cost.
The result is less like careful economic targeting, more like economic carpet-bombing.
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Victoria's deep business freeze to hit 250,000 workers
Patrick Durkin and Simon Evans
Aug 3, 2020 – 7.37pm
Victorian Premier Daniel Andrews' lockdown will lead to another 250,000 workers being stood down under unprecedented restrictions that will close all professional services offices, most retail shops and drastically limit manufacturing, construction and building sites for six weeks.
Chief executives and small businesses warned they might not survive the deep freeze on business, as they slammed a lack of consultation and deep confusion over the draconian measures.
The Premier admitted that "whenever you draw a line or whenever you write a list" there will "always be anomalies of people on any side of line that you draw".
"Bunnings, you will no longer be able to go into a Bunnings store but you will be able to collect goods without making contact with anybody," Mr Andrews said.
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Don't pull out the rug too soon: Global economy at risk of a 'double dip' recession
By Ambrose Evans-Pritchard
August 4, 2020 — 8.37am
The economic collapse in Spain and France over the last quarter was a massacre. Italy's GDP fell back to levels last seen in the early Nineties. The picture emerging on both sides of the Atlantic from official GDP data is as traumatic as feared, but it is also in one sense a statistical mirage. An induced economic coma for three months is akin to an extended holiday.
It is not the end of the world as long as the tissue of the economy is kept whole and lost output is fully buffered by fiscal transfers, and so long as support is continued until a V-shaped recovery takes hold - and whittles down the extra debt load.
But this is not what is happening. The pandemic is still wreaking havoc and stimulus is running out before the rebound reaches self-sustaining "escape velocity". Cliff edges are approaching: furlough payments for workers are being cut; and loan guarantees for firms will expire, as will moratoria on corporate layoffs.
"We're going to hit a crunch in September and October," said David Owen from Jefferies.
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Banks' deferred loans hit $274b as more borrowers pause payments
By Clancy Yeates and Charlotte Grieve
Updated August 4, 2020 — 4.34pmfirst published at 3.06pm
Australian banks allowed borrowers owing another $40 billion to pause their repayments in June as an emergency response to the coronavirus, taking the total value of deferred home loans and small business loans to $274 billion.
As banks signalled they would seek to support struggling customers in Victoria, official figures on Tuesday showed that even before the state's second lockdown, the total stock of deferred loans held by banks was accumulating.
The Australian Prudential Regulation Authority (APRA) said $40 billion in loans were approved for deferral in June, more than double the $18 billion in loans that exited deferral during the month.
In an attempt to cushion the economy from COVID-19's impact, banks have allowed borrowers thrown into financial distress to pause their loan payments for up to six months, with the possibility to extend the deferral period to 10 months or until March next year.
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CSL boss calls for new virus strategy
John Kehoe Senior writer
Aug 5, 2020 – 12.00am
The chairman of global biotechnology giant CSL, Brian McNamee, has warned that Melbourne's lockdown will have "devastating" economic, social and health costs and called for governments to put forward a credible virus strategy that is "not seen as blunt or punitive to the wider society".
The Melbourne-based medical doctor and chairman of Australia's second most valuable company, which is working to develop a COVID-19 vaccine, Dr McNamee said elimination of the virus in Victoria "seems remarkably ambitious from where we are now".
Dr McNamee questioned the Victorian government's stage four lockdown imposed this week.
"The direct and indirect costs are staggering and the devastating consequences are not well enough understood," he said in an interview with The Australian Financial Review.
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Hundreds exposed, but NSW schools have 'extremely low' COVID-19 infections
By Kate Aubusson
August 4, 2020 — 5.07pm
NSW schools and childcare centres have recorded extremely low rates of transmitting coronavirus, despite having ample opportunity to infect hundreds of students and teachers.
The world-first investigation of COVID-19 transmission rates challenges recent US research that suggested infected young children carried 10 to 100-fold greater amounts of the virus in their upper respiratory tracts.
But the Sydney-based study found schools were only as safe from COVID-19 as their communities, with investigators warning outbreaks and failures to heed public health advice would leave them vulnerable.
On Tuesday, the researchers at the National Centre for Immunisation Research and Surveillance (NCIRS) and University of Sydney released the findings of their investigation tracking all confirmed cases of COVID-19 in NSW schools and childcare centres in terms one and two, as well as their preliminary findings for term three.
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Sweden's economy takes record hit but avoids 'horror show' after controversial COVID-19 approach
By Tom Rees
August 6, 2020 — 10.12am
Sweden's light-touch lockdown failed to spare its economy from a historic plunge in GDP as COVID-19 triggered a collapse in exports and spending.
Output contracted by a record 8.6 per cent in the second quarter compared with the previous three months, but the Nordic nation suffered a much smaller hit than many European economies. Despite some of the most relaxed COVID-19 restrictions in the world, its exporters were hit by tumbling global demand and household spending slumped as the virus struck.
"The economic crunch over the first half of the year is in a different league entirely to the horror shows elsewhere in Europe," said David Oxley at Capital Economics.
It is "still likely to be among the best of a bad bunch this year", he said, pointing to signs of a rebound at the start of the third quarter. While the hit to GDP was lower than the 12 per cent slump in the eurozone in the second quarter, Sweden's Nordic neighbours have managed to avoid both a health and economic crisis.
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Convalescent plasma reduced death rate among COVID-19 patients, study signals
· The Wall Street Journal
COVID-19 patients who received transfusions of blood plasma rich with antibodies from recovered patients reduced their mortality rate by about 50 per cent, according to researchers running a large US study.
The researchers presented their data analysis over the weekend in a webinar for physicians interested in learning about so-called convalescent plasma, with data slides that were reviewed by The Wall Street Journal. The researchers said they saw signs that the treatment might be working in patients who received high levels of antibodies in plasma early in the course of their illness. They based their conclusions on an analysis of about 3000 patients.
Patients who at three days or less after diagnosis received plasma containing high levels of antibodies against the coronavirus had a mortality rate of 6.6 per cent at seven days after the transfusion. That compared with a mortality rate of 13.3 per cent for patients who got plasma with low levels of antibodies at four days or more after diagnosis. That indicates reduced mortality of about 50 per cent, the researchers said.
At 30 days after transfusion, the mortality rate was reduced by about 36 per cent, investigators reported.
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Morrison left looking like bystander at COVID-19 car crash
As the Victorian disaster unfolds, dashing economic forecasts, all the Prime Minister can do is write bigger cheques.
Phillip Coorey Political editor
Aug 6, 2020 – 8.00pm
Just under six weeks ago, the Victorian government was reasonably confident it had under control what was then a relatively modest outbreak of the coronavirus.
That, at least, was what it was briefing.
At the very end of June, when new cases linked to hotel quarantine bungles were about 40 per day and restrictions were being contemplated, the Premier's office was confident the daily numbers would remain at that level for a week or so before being brought under control.
It did not believe entire suburbs would need to be closed off, as some were speculating, but the spread could be contained by limiting the closures to no more than groups of streets.
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When will Victoria’s COVID-19 crisis peak?
The lesson for investors is the importance of accounting for the possibility of irrational decisions from policymakers.
Christopher Joye Columnist
Aug 7, 2020 – 10.36am
The Victorian government is apparently secretly predicting that its COVID-19 crisis will not peak – in terms of the daily number of new cases – until the final week of August when reported infections will reach 1100 persons per day.
In early July our proprietary COVID-19 models forecast a very different outcome with a peak expected sometime between July 13 and July 26 depending on how good the Victorian government was at thwarting transmission.
These models combine the historical Victorian COVID-19 infection trajectory with a future path conditioned on the containment experience in other countries with serious outbreaks.
The models then enable us to discount the Victorian government’s containment efficacy to allow for policymaking error. If we predicated our Victorian forecast on, individually, the Italian, South Korean, Chinese, British, German or French paths, a reasonable downside case appeared to be around July 26.
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https://www.afr.com/policy/economy/victoria-s-shutdown-threatens-critical-deliveries-20200807-p55jl5
Victoria's shutdown threatens critical deliveries
Patrick Durkin, Simon Evans and Phillip Coorey
Aug 7, 2020 – 6.30pm
Critical deliveries of food, medicines and school supplies are at risk as a midnight lockdown of distribution centres, required by Victoria's virus shutdown, threatens to disrupt supply lines and parcel deliveries.
Australia Post chief executive Christine Holgate is preparing to operate with only two-thirds of drivers, posties and parcel processors after this weekend which she warned would cause major bottlenecks and delays not just in Victoria but across the country.
Just hours before the Friday night deadline, postal centres, warehouses and transport were carved-out and secured an extension until Sunday night to comply with new rules.
Business groups still hoped that concessions granted to supermarkets for their warehouse and distribution centres could be extended to other industries to guarantee supply lines.
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Victoria's epic battle to keep supply chains open
Aug 8, 2020 – 12.00am
Jason Bush started getting text messages a week ago that "bad things might happen" in Victoria as the state's COVID-19 crisis escalated.
Mr Bush, a Toll Group executive general manager who oversees 14 warehouses for healthcare, retail and consumer goods companies, held talks with his team on how they would manage if Victoria went beyond stage three restrictions.
"But what we weren't expecting when the [stage four] announcements came out on Monday were how industry-specific they would be," Mr Bush told AFR Weekend.
With some industries forced to shut, others staying open and others only allowed to operate with major restrictions, Mr Bush would spend the rest of the week developing "multiple contingency plans".
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https://www.afr.com/politics/federal/virus-leaves-no-room-for-politics-or-ideology-20200807-p55jgq
Virus leaves no room for politics or ideology
The reality of a long and deep economic depression – and one in which no one can confidently predict the end – has been sinking in.
Laura Tingle Columnist
Aug 7, 2020 – 5.00pm
When the Sydney Opera House closed its doors to live audiences in March, as COVID-19 started to close down our world, the last thing staff did was hang a single lightbulb on the stage in each theatre.
They are called "ghost lights" and have a long theatrical tradition.
Ange Sullivan, the head of lighting at the House, explained at the time the lights have two main functions.
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Coronavirus: Young face life of disability
The COVID-19 pandemic could leave Australia with a long-term epidemic of people suffering from heart disease, lung scarring, diabetes and other chronic conditions as warnings grow that young people who contract a severe illness may face a life of disability.
Scientists looking for a “signature” of COVID-19 in infected cases say it could reveal that even patients who have recovered develop disease risks they didn’t have before contracting the virus.
The research suggests that abnormalities detected in blood samples of infected patients are linked to diabetes, liver dysfunction, abnormal levels of cholesterol and higher risk of coronary heart disease.
The research, to be published shortly by the Australian National Phenome Centre, Addenbrookes Hospital in Cambridge in the UK and other agencies, may flag that COVID-19 infections could trigger a massive increase in the healthcare burden across the planet.
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Accountability in a pandemic: Why aren't more people mad at Dan Andrews?
Jacqueline Maley
Columnist and senior journalist
August 8, 2020 — 11.43pm
Daniel Andrews’ government had one main job, more or less. It was up to the Victorian community to manage social-distancing and self-isolation. But as soon as it became clear the vast majority of Australia’s coronavirus cases were coming from overseas arrivals, the need to create an inviolable hotel quarantine system was laid totally bare. That was on his government.
All states had to rush their quarantine set-up, and the process was messy, involving much human distress and some very bad hotel food.
It has become increasingly clear, despite Premier Andrews’ attempts to deflect questions, that his government bungled this in Victoria with the appointment of private security contractors to manage the hotel quarantine inmates.
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Coronavirus: We’ve made mistakes, but it might have been worse
Naturally the thoughts of all Australians go out to our fellow countrymen and women enduring stage-four lockdown in Victoria. The spread of the virus there is alarming. The toll of the lockdown on people’s mental health must be significant. The economic impact is disastrous.
While many who are simply trying to cope with the situation are supportive of the efforts of the state government, others are highly critical of Premier Daniel Andrews. Failures of hotel quarantine seemingly caused this second wave, and structural problems in Victorian health have meant that the contact tracing system has been second rate. At first glance these are state government let-downs. But the situation isn’t that simple.
I have written before about the culpability of the commonwealth in these failures, even if the state government has mismanaged its affairs. Quarantining is explicitly defined as a commonwealth power according to section 51 (ix) of the Constitution. The fact it has become a shared responsibility between tiers of government doesn’t change that.
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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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Sydney and Melbourne house prices tumble through July
By Shane Wright
August 3, 2020 — 10.14am
Sydney and Melbourne house values tumbled through July with warnings the reduction of government and private bank support through the final three months of the year could weaken the property market even further.
CoreLogic on Monday reported that Sydney house values dropped by 1 per cent last month to be down 2.4 per cent over the quarter. Despite the drop, Sydney values are still up by 13.2 per cent over the past year.
Values for units and apartments dropped by 0.7 per cent in July to be 1.4 per cent softer over the past three months. Like houses, the apartment sector is still up over the past year, by 9.5 per cent.
Melbourne house values dropped by 1.4 per cent in July to be down by 3.8 per cent over the past quarter. Melbourne's housing market has taken the biggest hit of any capital city in the county over the past three months.
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Weak inflation tells us: it's the demand side, stupid
Ross Gittins
Economics Editor
August 3, 2020 — 12.00am
Despite the remarkable 1.9 per cent fall in the consumer price index (CPI) in the June quarter, we face no imminent threat of deflation. But it’s not as improbable a fate as it used to be.
Apart from in headlines, one negative quarter does not deflation make. Deflation occurs when price falls are modest, widespread and continuous, the product of chronically weak consumer demand. Businesses cut their prices as the only way to get people to buy what they’ve produced. Their goal is not to make a profit, but to reduce their losses.
Paradoxically, deflation – which was dogging Japan not so many years ago – is to be feared. Why buy now if prices are falling? Why not wait until they’re even lower? But the longer consumers wait, the more prices fall. And the faster they fall, the more businesses cut production and lay off workers. The economy implodes.
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Investment to hit lowest level for 20 years
Private business investment is set to slump by 15 per cent this year — hitting its lowest point as a share of the economy in almost two decades — amid record falls in confidence and rising unemployment.
The Deloitte Access Economics Investment Monitor, released on Monday, warns that the collapse in demand and confidence has caused businesses to consolidate their operations and “make savings where they can”.
The federal economic and fiscal update released by Josh Frydenberg last month forecast business investment to plunge 12.5 per cent and dwelling investment by 16 per cent across 2020-21.
Deloitte Access Economics partner Stephen Smith said the impact of COVID-19 was “likely to see an increase in the number of investment projects being cancelled or delayed” and fewer new projects announced.
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Increasing real interest rates, Victorian lockdown make RBA decision tougher
By Shane Wright
August 3, 2020 — 7.45pm
Increasing real interest rates and Victoria's stage-four lockdown will force the Reserve Bank to re-examine policy settings and its forecasts for the national economy amid growing evidence the jobs market has deteriorated in the past fortnight.
The RBA board is expected to hold official interest rates at their record low of 0.25 per cent at its Tuesday meeting – the first since Victoria was forced to shut key parts of its economy and tight restrictions were imposed on its border with NSW.
But the unfolding economic disaster in Victoria could force the bank to consider a proposal floated by governor Philip Lowe late last month, when he said there was scope to move rates to just 0.1 per cent.
Since the RBA's last meeting, inflation has suffered its biggest quarterly drop since September 1931, during the Great Depression. The 1.9 per cent fall in consumer prices in the March quarter increased the nation's real level of interest rates – the rate investors, savers or lenders receive after allowing for inflation.
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https://www.rba.gov.au/media-releases/2020/mr-20-18.html
Media Release Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2020-18
Date 4 August 2020
At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.
The global economy is experiencing a severe contraction as countries seek to contain the coronavirus. Even though the worst of this contraction has now passed, the outlook remains highly uncertain. The recovery is expected to be only gradual and its shape is dependent on containment of the virus. While infection rates have declined in some countries, they are still very high and rising in others. International trade remains weak, although there has been a strong recovery in industrial activity in China over recent months.
Globally, conditions in financial markets remain accommodative. Volatility has declined and there have been large raisings of both debt and equity. The prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields remain at historically low levels.
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State of disaster: many businesses won't survive Melbourne's extreme lockdown
Elizabeth Knight
August 3, 2020 — 5.18pm
The expectations that Australia’s September quarter GDP would show the nascent signs of an economy climbing out of recession must now surely be dashed in the wake of Victoria’s stage-four lockdowns.
The Andrews government’s decision to move to a stage-four lockdown, which is necessary from a health perspective, will be devastating for a large section of the economy. While NSW may not catch the COVID-19 bug, it will feel some of the symptoms of Melbourne’s economic malaise.
Prime Minister Scott Morrison has announced that there will be pandemic leave for those affected by the virus but who have no sick leave.
The $185 billion deficit that 10 days ago federal Treasurer Josh Frydenberg forecast for 2020/21 now looks wildly optimistic. Frydenberg said Treasury would be redoing its economic update, delivered last month, in light of the new restrictions on Victorian business.
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Virus reminder: governments need to be better, not smaller
Ross Gittins
Economics Editor
August 5, 2020 — 12.00am
One good thing the coronavirus has done is slow the pace of our lives, leaving us more time to think about them. And since the main device being used to stop the spread of the virus has been to reduce physical contact between people, it hasn’t been hard to see that what matters most to us is face-to-face contact with family and friends.
People of middle age fret about not being able to visit elderly parents. The great Dr Brendan Murphy, flat out advising the Prime Minister, really misses being able to hug his granddaughters.
(Grandsons and granddaughter, in my case.) Teenagers take their family for granted, but miss their friends. Younger kids realise they actually like going to school and mixing with others.
The virus has also thrown into relief our rights as individuals versus our obligations to the group. The prevailing political and economic ideology highlights the individual and plays down the group, but in emergencies like this even our squabbling federal and state politicians see that the only way of coping is to co-operate rather than compete.
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More companies to get JobKeeper from September in $15 billion backflip
By David Crowe
August 6, 2020 — 10.30pm
Employers will gain easier access to the JobKeeper wage subsidy from the end of September in a $15 billion federal backflip to deal with the economic damage from sweeping Victorian shutdowns.
Treasurer Josh Frydenberg will reverse the tougher eligibility rules announced less than three weeks ago to ensure more companies can qualify for the payment, which drops to $1200 a fortnight from September.
Hours after predicting another jump in unemployment from the shutdowns, Mr Frydenberg gained cabinet approval to add to the $85.7 billion cost of the scheme.
The government told employers on July 21 that it would tighten JobKeeper rules for the second phase of the scheme by requiring them to show a fall in turnover in the two quarters to the end of September.
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Early super withdrawers ‘won’t lose much in the long run’, says Grattan Institute
The retirement incomes of individuals who have drawn on their superannuation early shouldn’t fall much, says the Grattan Institute, undermining calls to lift the compulsory rate of super saving to 12 per cent to make up for the early withdrawals.
A 35-year-old who withdrew $20,000 from their superannuation fund this year, or the full amount allowed under the government’s early release scheme enacted to people through the recession, would see their retirement income fall by about $900 a year, according to analysis by Grattan.
“Someone earning a median wage of about $60,000 today can expect total super income through retirement to fall by about $80,000 in today’s dollars,” said Brendan Coates, a research fellow at Grattan. “But their total retirement income would fall by only $24,000, or about $900 each year, because their lower super balance at retirement would be largely offset by larger pension payments.”
That would see their replacement rate — retirement income as a share of pre-retirement income — fall from 89 per cent to 88 per cent, which is “still well above the 70 per cent benchmark used by the OECD and others”, he said.
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Recovery from ‘shock without modern precedent’ will take ‘several years’: RBA
Reserve Bank of Australia assistant governor Luci Ellis says the Australian economy will now take “take several years” to return to its pre-pandemic path, as the Victorian lockdowns bury hopes of a smoother recovery from the COVID-19 recession.
Speaking almost immediately following the release of the RBA’s latest quarterly economic outlook, the Statement on Monetary Policy, Dr Ellis described the hit from the health crisis here and abroad as a “shock without modern precedent”.
The central bank’s economists calculate the cost of the Victorian second wave of infections and associated intensified social distancing measures will reduce growth in national real GDP by 2 percentage points over the September quarter. This compares with Treasury’s preliminary estimate of 2.5 percentage point hit, as revealed by Scott Morrison yesterday.
“The situation in Victoria will reduce growth in the September quarter and push out the recovery beyond that,” Dr Ellis said.
“That said, activity is expected to continue to recover in much of the country over the rest of this year and next,” she said.
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https://www.smh.com.au/politics/federal/no-v-no-u-we-re-now-in-swoosh-territory-20200807-p55jld.html
No V, no U – we're now in Swoosh territory
By Shane Wright
August 7, 2020 — 3.45pm
Nike may want to trademark the Australian economic recovery. The sporting company's ubiquitous Swoosh is now the expected shape of Australia's slow grind out of recession.
The Reserve Bank's monetary policy statement is clear that any thought of a V- or U-shaped recovery has been abandoned.
The economy does not get back to its pre-virus level until 2022. Unemployment is still above 7 per cent by the time we get around to Christmas of that year. Wages growth is a pipedream with about 35 per cent of firms surveyed by the bank saying they are going to freeze workers' pay.
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Covid-19 requires an inquiry — and a complete economic rethink
Time for an inquiry. In fact, make that two.
The royal commission into Australia’s handling of the coronavirus pandemic will be a long, dismal affair although we might have to wait for a change of government for it to be appointed — the current group of political leaders would prefer to focus on the future while giving themselves an A for effort.
And admittedly the effort has been, and still is, stupendous. There has never been a time in Australia’s peacetime history when politicians, public servants and health officials have worked so hard and under such stress.
Will there be an inquiry into Australia’s response? There certainly should be — this is unlikely to be the last pandemic, so lessons need to be learned.
The agenda is already looking quite long: the Ruby Princess, Victoria’s hotel quarantine debacle, the earlier NSW quarantine debacle, whether an elimination strategy should have been pursued instead of suppression, the way nursing homes operate, the state border controls, whether masks should have been mandated earlier, why didn’t the COVIDSafe app work, why didn’t the Australian government get some of that US intelligence about a nascent pandemic that President Trump was ignoring in late 2019 (or did they get it and ignore it as well?), and so on.
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Health Issues.
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Government chose 'futile bureaucratic exercise' over aged care reform, Liberal MP says
By David Crowe
August 4, 2020 — 12.00am
A former Coalition minister has slammed the federal government's handling of aged care and called for major structural change in a submission that exposes years of failure to help older Australians.
One of Tony Abbott's own ministers after the 2013 election, Liberal Senator Concetta Fierravanti-Wells, says the government has not had the political fortitude to fix the sector after spurning calls for action when it took power.
"The failure of the Abbott government to act at that critical time sowed the seeds of the predicament that the aged care sector is facing today," she writes in a submission to the aged care royal commission.
She also names Prime Minister Scott Morrison as one of the social services ministers responsible for aged care in federal cabinet during the time she says the government squandered a chance for reform.
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https://www.smh.com.au/national/fault-lines-in-aged-care-exposed-20200806-p55j8v.html
Fault lines in aged care exposed
David Crowe
Chief political correspondent
August 7, 2020 — 12.05am
Very few politicians will ever take the risk of telling their own government how badly it failed, but that is what happened this week when one of Scott Morrison’s backbenchers called out years of neglect in aged care.
Concetta Fierravanti-Wells gave the Prime Minister and his ministers a brutal assessment of the broken system that is supposed to look after more than 1 million older Australians.
Another round of evacuations of residents has begun at St Basil's in Fawkner, where 124 cases of COVID-19 have been so far confirmed in residents and staff.
It was a blast of cold air for a government that likes to warm itself with the notion of a job well done in this pandemic, when the job is not nearly over.
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Treat obesity with surgery, not exercise: study
· The Times
Obesity should be treated with therapy and surgery rather than diet and exercise, according to a pioneering study.
Doctors in Canada are being told to disregard a patient’s weight, size and willpower and instead treat them as suffering from a chronic illness caused by trauma, genetic factors or mental health problems. The national guidelines were written by 62 Canadian experts, who analysed half a million peer-reviewed articles and interviewed obese people.
They were produced by Obesity Canada and the Canadian Association of Bariatric Physicians and Surgeons and published this week in the Canadian Medical Association Journal.
“Obesity is now clearly defined as being a chronic, relapsing, often progressive disease … not simply as something that you can fix by going on a diet,” Arya Sharma, one of the authors, told The Times.
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International Issues.
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https://www.afr.com/world/north-america/the-new-deal-s-big-lesson-for-joe-biden-20200802-p55hoi
The New Deal's big lesson for Joe Biden
If he wins, Joe Biden and team should emulate Roosevelt's energy, pragmatism and message of hope over fear to get US capitalism going again.
David Brooks
Aug 2, 2020 – 12.34pm
The US just endured its worst economic quarter in recorded history. If this trend had continued for an entire year, American economic output would have been down by about a third.
So I'm hoping Joe Biden and his team are reading up on Franklin Roosevelt and the New Deal. The New Dealers succeeded in a moment like this. Their experience offers some powerful lessons for Biden as he campaigns and if he wins.
Economic and health calamities are experienced by most people as if they were natural disasters and complete societal breakdowns. People feel intense waves of fear about the future. They want a leader, like Franklin Delano Roosevelt, who demonstrates optimistic fearlessness.
They want one who, once in office, produces an intense burst of activity that is both new but also offers people security and safety. During the New Deal, Social Security gave seniors secure retirements. The Works Progress Administration gave 8.5 million Americans secure jobs.
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North Korea has 'probably' developed nuclear devices for its missiles
Michelle Nichols
Aug 4, 2020 – 8.40am
New York | North Korea is pressing on with its nuclear weapons program and several countries believe it has "probably developed miniaturised nuclear devices to fit into the warheads of its ballistic missiles", according to a confidential UN report.
The report by an independent panel of experts monitoring UN sanctions said the countries, which it did not identify, believed North Korea's past six nuclear tests had likely helped it develop miniaturised nuclear devices. Pyongyang has not conducted a nuclear test since September 2017.
The interim report, seen by Reuters, was submitted to the 15-member UN Security Council North Korea sanctions committee on Monday (Tuesday AEST).
"The Democratic People's Republic of Korea is continuing its nuclear program, including the production of highly enriched uranium and construction of an experimental light water reactor. A Member State assessed that the Democratic People's Republic of Korea is continuing production of nuclear weapons," the report said.
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'Competition without catastrophe': US policy with China if Biden wins
Peter Hartcher
Political and international editor for The Sydney Morning Herald and The Age
August 4, 2020 — 12.00am
We have a pretty good idea of Donald Trump’s approach to China from here to election day in three months’ time – a frenzied flurry of fists.
He asked Xi Jinping to help him get re-elected by being a friend. When that didn’t work, he decided Xi would help by being a foe. Trump seems intent on using all measures, short of war. And, if things get out hand, maybe even that, too.
But what about the alternative president, the Democrats’ candidate, Joe Biden? How would he treat China?
Biden isn’t campaigning as a friend of China’s. No one in US politics wants to hug the panda any more. Three out of four Americans distrust China, according to last week’s Pew poll. The contest in campaign 2020 is to see who can hit the panda harder.
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Large blast rocks Beirut, one Australian killed
Samia Nakhoul and Yara Abi Nader
Updated Aug 5, 2020 – 8.14am, first published at 2.44am
Beirut | A huge explosion in a port warehouse district near the centre of Beirut killed more than 70 people, injured nearly 4000 others and sent shockwaves across the Lebanese capital on Tuesday, shattering windows and causing apartment balconies to collapse.
"There are many people missing until now. People are asking the emergency department about their loved ones and it is difficult to search at night because there is no electricity," minister Hamad Hasan told Reuters. "We are facing a real catastrophe and need time to assess the extent of damages."
At least one Australian was killed.
Officials expected the death toll to rise sharply as emergency workers dug through rubble across a swathe of the city to rescue people and remove the dead. It was the most powerful blast to hit Beirut in years, making the ground tremble.
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Three cruise ships are fighting COVID-19 outbreaks as industry returns
Graham Rapier
Aug 5, 2020 – 9.34am
Key Points
- Two cruise ships in Europe and one in the South Pacific have experienced coronavirus outbreaks during their return.
- The industry has been hobbled by the pandemic thanks to high fixed costs associated with ships.
- In the US, sailings aren’t set to resume until October and the cases internationally could be a bad sign.
The first cruise ships to resume sailing are off to a rocky start.
At least three cruise lines – Norway’s Hurtigruten, Germany’s AIDA, and Paul Gauguin in the South Pacific – are battling outbreaks within crew ranks or among passengers, according to news reports.
Hurtigruten cruise line in June became the first cruise line to begin sailing again amid the coronavirus pandemic following a three-month pause. By July 17, however, hundreds of passengers had tested positive in an outbreak that eventually hospitalised four crew members. The ship isn’t set to sail again until September.
In Germany, 10 crew members on two separate AIDA ships tested positive, USAToday reported. In a press release, the Carnival-owned company said all affected crew members would be quarantined. Both ships are set to sail again this month.
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The stuff of memes: Australian reporter's hard-hitting Trump interview goes viral
By Farrah Tomazin
August 5, 2020 — 6.58am
It had all the withering satire of an ABC sketch featuring comedic duo John Clarke and Bryan Dawe.
The musings of an American president struggling with the facts. The baffled expressions of an Australian journalist refusing to accept the spin. And all the subject matter you'd expect to find in a game of 2020 Nightmare Bingo: Global Pandemic! Sex Trafficking! Civil Uprisings!
Except this wasn't satire at all, but a serious political interview with US President Donald Trump merely 91 days from one of the most consequential elections in US history.
US President Donald Trump said the coronavirus outbreak is as under control as it can get in the United States, where roughly 156,000 people have died amid a patchy response to the public health crisis.
To the credit of Axios reporter Jonathan Swan - a former Sydney Morning Herald scribe and the son of our own coronavirus guru Dr Norman Swan - the 37-minute interview was an eye-opener from the start.
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A defeat for Donald Trump is not a defeat for autocracy
Mr Trump is not losing this election because of his authoritarianism. If anything, it is through his laxity that he has forfeited public trust.
Janan Ganesh Contributor
Aug 6, 2020 – 10.19am
Three-word slogans, starting with a verb, are the currency of the populist. “Take back control” and “Build that wall” served the Anglo-American wing of that movement handsomely in 2016.
Leaders become verbose in office — courtiers, those patient listeners, encourage bad habits — but one of Donald Trump’s best-performing tweets of late honours the format. “OPEN THE SCHOOLS!!!” howled the US President, to 400,000 retweets in 24 hours.
The sentiment, you will notice, is the opposite of authoritarian. But then so was his first response to COVID-19: the slowness to close things, to encourage or even to respect mask-wearing. And so is the White House line on fiscal relief.
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The US dollar's slide is a warning that America has lost its grip on the virus
By Olivia Konotey-Ahulu and Susanne Barton
August 6, 2020 — 8.08am
The dollar is flashing a warning sign to US policymakers - get a grip on the virus.
After hitting an all-time high in March, a gauge of the greenback lost 10 per cent of its value, with declines accelerating in recent weeks as infections spread seemingly unchecked across the nation. Much of the sell-off has come during New York trading hours, suggesting domestic investors are closing out bets on US strength and spurring renewed questions about the supremacy of the dollar. Meanwhile, a popular model that's guided dollar traders for the past two decades has warped.
It's a rapid reversal in fortune. Early on in the pandemic, the dollar soared after investors sought safety in US assets like Treasuries while the virus stormed through Europe. But with cases now exploding at home, the ineffectual American response to the disease has become a millstone for the currency, spurring concern about lasting damage to the US economy that could keep interest rates and growth low for years.
"What people are most desperately waiting for is good news on virus control, that I think is number one," said Stephen Jen, chief executive at Eurizon SLJ Capital. "The currency bet is mainly a bet on relative control of the virus, not reflecting the fundamental strength of the economies in question."
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Russia interfering in US election to hammer Biden, help Trump
Julian E. Barnes
Aug 8, 2020 – 9.29am
Washington | Russia is using a range of techniques to denigrate Joe Biden, US intelligence officials said Friday (Saturday AEST) in their first public assessment that Moscow continues to try to interfere in the 2020 campaign to help President Donald Trump.
At the same time, the officials said China preferred that Trump be defeated in November and was weighing whether to take more aggressive action in the election.
Those conclusions were included in a statement released by William R. Evanina, the director of the National Counterintelligence and Security Centre.
But officials briefed on the intelligence said that Russia was the far graver, and more immediate, threat. While China seeks to gain influence in American politics, its leaders have not yet decided to wade directly into the presidential contest, however much they may dislike Trump, the officials said.
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'They can only suffer so much': Explosion leaves Beirut teetering on the brink
Beirut is a city familiar with destruction. But this week's blast is a fresh blow for a country already on the verge of collapse.
By Bevan Shields and Anna Patty
August 7, 2020
Samah Hadid was standing at the window of her Beirut home when the building started shaking and a pink mushroom cloud formed before her eyes. The Australian dived into a corner seconds before the ceiling collapsed - a moment of instinct which may have saved her life.
"The explosion ripped through the apartment, destroying pretty much everything," Hadid says. "It took me a few minutes to recover, to realise what had happened and to see the destruction before me.
"I ran out of the building to seek safety. As I was doing so, many of my neighbours were injured. The staircase was just full of blood."
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Beirut explosion: The last bloody straw for a crumbling nation
This week’s Beirut blast levelled large parts of the port, devastated the city’s historic Christian quarter, carved a huge crater into the waterfront and sank a 7500-tonne cruise ship in the harbour. A massive shockwave, made visible by early evening humidity, was felt 250km away in Cyprus, knocking people to their knees in the Lebanon mountains as a mushroom cloud rose over the city.
Unsurprisingly, some in the blast area believed they were under atomic attack. If initial assessments prove accurate, the 2750 tonnes of ammonium nitrate involved would make this one of the largest conventional explosions in history, with a potential yield of 1.8 kilotons — well within the range of modern low-yield tactical nuclear weapons.
The two other largest non-nuclear blasts in history, the 1917 Halifax disaster in Canada and the 1947 Texas City explosion, both also involved ships in port and flattened large urban areas while killing hundreds. The Texas blast was caused by a burning cargo ship carrying 2100 tonnes of the same chemical — ammonium nitrate — as in the Beirut explosion, and generated eerily similar effects. A deadly 2015 blast in the Chinese port of Tianjin also involved hundreds of tonnes of ammonium nitrate, raising questions about zoning and safety in storage facilities that are often close to urban central business districts and residential areas. In Beirut, the dockside hangar holding the ammonium nitrate was right next door to a grain silo that stored almost all of Lebanon’s grain supply. That silo is now almost totally destroyed, even as worldwide rice and wheat prices continue to climb in the midst of shortages caused by COVID-19.
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Trump bypasses Congress, signs controversial executive orders
By Jeff Stein and Erica Werner
August 9, 2020 — 7.48am
Washington: US President Donald Trump has signed several executive orders he said would provide economic relief to millions of Americans, moving forward after talks with Democrats faltered.
The orders marked an extraordinary attempt by Trump to wrestle away some of Congress's most fundamental, constitutionally mandated powers – tax and spending policy. The proposals could be challenged in court.
One of the executive orders aims to provide $US400 in weekly unemployment aid for millions of Americans whose $US600 in weekly benefits expired last month. Trump said 25 per cent of this money would be paid by states, many of which are already dealing with major budget shortfalls and have pleaded with Congress for more aid.
US President Donald Trump has signed four executive orders after talks over a coronavirus stimulus relief bill broke down.
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I look forward to comments on all this!
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David.
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