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The really amazing thing is just how calm and in control the Biden Administration feels compared with what came before! The blizzard of Executive Orders continues and we are certainly seeing the unwinding of much of he policy rubbish pushed by Trump. Watch the various investigations of Trump and the Capitol Invsasion – a lot is going on!
In the UK there is a sense that the COVID19 pandemic may just be easing a little but the economic damage is really looking horrific.
Parliament has now begun for the year and the same-old same-old seems to be on again. No sign of he a renewed vision for the country just yet!
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Major Issues.
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ABC defends use of ‘Invasion Day’ to mark Australia Day celebrations
· Steve Jackson
The ABC has defended its decision to officially refer to January 26 as “Invasion Day”, maintaining it would be inappropriate to insist that staff only call it Australia Day or “use any one term over others in all contexts”.
The national broadcaster attracted a barrage of criticism — and was accused of stoking national disunity and promoting its own political agenda — after publishing a story on its ABC News website in which the terms “Invasion Day” and “Australia Day” were used interchangeably.
Scores of Australians were quick to register their disapproval online after the article — an otherwise unassuming guide to activities taking place in capital cities around the country on Australia Day this week — was uploaded on Sunday morning.
The news story, entitled “Australia Day/Invasion Day 2021 events for Sydney, Melbourne, Canberra, Brisbane, Perth, Adelaide, Hobart and Darwin”, described the January 26 public holiday as “one of the most polarising dates on the Australian calendar”.
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Australia Day/Invasion Day 2021 events guide for Sydney, Melbourne, Canberra, Brisbane, Perth, Adelaide, Hobart and Darwin
24 January, 2021
One of the most polarising dates on the Australian calendar is back, though this year the coronavirus pandemic could mean fewer crowds at events around the country.
January 26 marks Australia Day or Invasion Day, typically seen as a celebration of the nation or a day of sorrow for the colonisation of an ancient culture.
For many First Nations people, it is a day to mourn the past and galvanise the community to address ongoing systemic racial injustice.
For others, it's a chance to spend time with family and friends at the beach or around barbeques.
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Not ‘interchangeable’: Communications Minister slams ABC’s ‘Invasion Day’ article
By Lisa Visentin
January 25, 2021 — 10.11am
Communications Minister Paul Fletcher has lashed the ABC for an online article that detailed Australia Day and Invasion Day events, claiming the public broadcaster suggested the two names were interchangeable.
Mr Fletcher, who initially decided not to weigh into the issue citing the editorial independence of the public broadcaster, said in a statement on Monday that the article was “incorrect”.
“The ABC has clearly got this one wrong,” Mr Fletcher said.
“The name of our national day is well understood and supported, and for the ABC to suggest otherwise -- that in some way Invasion Day is interchangeable with Australia Day -- is clearly wrong.”
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ABC buckles after ‘Invasion Day’ controversy
The ABC has removed references to Australia Day as “Invasion Day” from a story posted at the weekend after criticism from Communications Minister Paul Fletcher and others.
Mr Fletcher on Monday said it was “clearly wrong” to describe Australia Day in that way, the second time the government and the public broadcaster have been at odds after a stoush over the airing of a controversial episode of Four Corners focusing on Attorney General Christian Porter in November.
The ABC’s guide to Australia Day activities taking place around the country now only refers to “Invasion Day” in the fourth sentence – with changes to the headline and a number of paragraphs.
There is growing division about whether January 26, the day the First Fleet arrived in 1788, should remain Australia Day because of the impacts of European arrival on Indigenous Australians.
The ABC, in a statement, said its default terminology remained Australia Day but that it recognised and respected “that community members use other terms for the event, including ‘26 January’. ‘Invasion Day’ and ‘Survival Day’ … so our reporting and coverage reflect that”.
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Superannuation funds push for $5000 handout to low-income workers
By Jennifer Duke and Nick Bonyhady
January 25, 2021 — 12.00am
Some of the biggest superannuation funds are proposing the Morrison government hands out $5000 to low-income earners for retirement after one million young workers cleared out the majority of their super to stay afloat during the coronavirus pandemic.
The futures of young workers who have lost livelihoods and career paths during the coronavirus-induced recession have sparked global concern. Unions and super funds are warning this cohort needs special attention from the federal government.
The Australian Institute of Superannuation Trustees pre-budget submission requests a federal government contribution into super of up to $5000 for those earning less than $39,837 who withdrew money from their retirement accounts last year. AIST’s members include major funds managing billions of dollars of assets like Australian Super, Hostplus, Cbus and Hesta. The lobbyists will also encourage the Morrison government to continue with the legislated plan to increase the compulsory super rate from 9.5 per cent to 12 per cent by 2025.
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Australia watches from the sidelines as others rush to join a new boom
Stephen Bartholomeusz
Senior business columnist
January 25, 2021 — 11.56am
America is experiencing a cash box boom, with exchanges in the UK, Europe and Singapore eager to cash in on the phenomenon. Australia, meanwhile, sits on the sidelines with no plans to join the new financial gold rush.
In the US there is a boom - some say bubble - in SPACs, or “special purpose acquisition vehicles;” listed shell companies probably more familiar to Australia investors as the “cash box companies” last seen – before the ASX and Australian Securities and Investments Commission effectively prohibited them – during the sharemarket boom that burst in October 1987.
In the US they have become extraordinarily popular, with about 250 SPACs listed last year, raising more than $US80 billion ($104 billion). In the December quarter alone there were more than 40 SPAC listings, raising $US3.6 billion, which for the first time was more than was raised via traditional initial public offerings, or IPOs.
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Indigenous domestic violence rates ‘astronomical’ according to new report by Centre for Independent Studies
A nationwide analysis of crime and disadvantage in Aboriginal communities has concluded “high rates of domestic violence are one of the key factors that separate remote Indigenous communities from the rest of Australia”.
The Centre for Independent Studies policy paper — In Worlds Apart: Remote Indigenous disadvantage in the context of wider Australia — includes a comparison of domestic violence rates in areas where at least half of all residents are Indigenous, areas where at least 20 per cent of residents are Indigenous and areas where fewer than 20 per cent of residents are Indigenous.
The report found domestic violence rates were up to 1034 per cent higher than the average for the relevant state or territory in locations where at least half of all residents were Indigenous.
Report author Jacinta Nampijinpa Price, director of the Indigenous research program at the Centre for Independent Studies and the deputy mayor of Alice Springs, said the purpose of the policy paper was to demonstrate the problems regional and remote Indigenous communities faced.
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Rupert Murdoch slams ‘woke’ culture in Australia Day award speech
Nick Turner
Jan 26, 2021 – 9.45am
Rupert Murdoch, the billionaire mogul behind Fox News, has taken issue with the silencing of debate on social media, saying censorship has hobbled discourse with “awful woke orthodoxy”.
Mr Murdoch, 89, made the rare public remarks during a brief video to accept a lifetime achievement award from the Australia Day Foundation. The clip was posted online by the Herald Sun, a Melbourne newspaper owned by the media mogul’s News Corp.
Rupert Murdoch made rare public remarks during a brief video to accept a lifetime achievement award from the Australia Day Foundation.
“For those of us in media, there is a real challenge to confront,” he said. “A wave of censorship that seeks to silence conversation, to stifle debate and ultimately stop individuals and societies from realising their potential.“
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I asked would the US defend Australia if we were attacked? The answer is sobering
Peter Hartcher
Political and international editor
January 26, 2021 — 12.00am
It’s the nagging question that sits at the back of the Australian mind whenever the US alliance is under discussion. But it’s rarely asked out loud in polite company: If Australia were under military attack, would the Americans sacrifice blood and treasure to help?
Yet we have to ask. National independence, national survival might one day depend on the answer. Doesn’t the ANZUS treaty answer the question? No, it does not. The treaty carefully, deliberately avoids any firm commitment to action.
Of course, it’s a hypothetical question. But so is most defence planning. And the question has become less hypothetical in recent years. China is much more nakedly aggressive under Xi Jinping. And America less reliable under Donald Trump.
So I asked Trump’s first serious national security adviser, the man who took the post after the disgraced Michael Flynn was removed after all of 24 days.
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Australia calls for ‘restraint and peace’ as Chinese military escalates Taiwan incursions
By Eryk Bagshaw
January 25, 2021 — 5.22pm
Australia will face significant pressure to join US military action in the Taiwan Strait if China’s military escalates threats to its island neighbour, say strategic experts, after days of harassment from Chinese bombers and fighter jets.
Defence Minister Linda Reynolds on Monday called for “restraint and peace” after China sent more than two dozen warplanes over the strait at the weekend.
The show of force came days after US President Joe Biden’s inauguration and the publication of the Trump administration’s Indo-Pacific strategy, which recommitted the US to defending Taiwan.
“The Australian government continues to watch very carefully what is happening in the Taiwan Strait,” Reynolds said. “We would say to all parties to settle their disputes peacefully and to do it in accordance with international law. And to take into consideration the wishes of people on both sides of the strait.”
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Tony Abbott seeks return to values
Tony Abbott will lead a new movement to defend and revive traditional Australian values, as a report to be published on Tuesday warns of a collapse of living standards over the past two decades.
Appointed a fellow of the Institute of Public Affairs, the former prime minister told The Australian on Monday that he would be “dealing with issues upstream of politics” that would help to shape political debate.
While it was important to discuss and dispute mainstream Australian values, and a rethink of how we want to live our lives was needed, Mr Abbott declared: “It is not the time for the politically correct woke reset which seems to be brewing.”
Mr Abbott said people should “shun cheerleading” even on Australia Day. He said the plight of Indigenous Australians had to be recognised, but Australians “could not underestimate the damage being done” by a decline in the way we live.
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Standby for ‘third wave’ of ETFs
It’s being tagged as the third wave of Exchange Traded Fund Investing.
First came the plain vanilla funds that mirrored the best known indices, then came the funds created to capture action in sectors such as fixed income. Now the third wave has arrived in the form of thematic funds and when they come right, they pay off handsomely.
They work in the same way as any ETF - a basket of stocks is created and sold to investors as a single listed product with low fees. But thematic funds concentrate on megatrends - secular growth themes that are expected to last for many years such as the rush for battery metals to power electric cars
No surprise then the best performing ETFs just now are thematic funds that have targeted stocks that feed into the boom in new technologies.
It’s as an alternative path for the small investor in specialist markets that these new style ETFs should be at their best. Certainly many small investors may have been frustrated by the sensational returns offered in technology stocks that can be both difficult to select or even impossible to obtain on the ASX.
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Scott Morrison warns against ‘cancelling’ Australia Day
Tom McIlroy Political reporter
Jan 26, 2021 – 1.26pm
Scott Morrison has warned against “cancelling” recognition of Australia Day on January 26, describing the date as the moment the journey to a modern nation began.
Amid growing debate about celebration and recognition on January 26, the Prime Minister used a flag raising and citizenship ceremony in Canberra on Tuesday to defend the national day, when he said “the course of this land changed forever”.
“There is no escaping or cancelling this fact. For better and worse, it was the moment where the journey to our modern Australia began. And it is this continuing Australian journey that we recognise today.
“Our stories since that day have been of sorrow and of joy. Of loss and redemption. Of failure and success.”
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Time to take the silver out of the cupboard?
With strong support for the underlying price, here's how to invest in the precious metal.
Elio D'Amato Contributor
Jan 26, 2021 – 12.00am
In times of uncertainty, investors seek the allure of precious metals as a hedge against catastrophe. Although gold receives the attention of most, it is silver that has shone brightest among the coronavirus-induced global doom and gloom.
Through 2020 the price of silver rose 46 per cent. It outperformed gold, which was no mean feat as it too enjoyed its best annual performance in 10 years. So are there still opportunities to be had holding silver and related stocks?
There are many factors that suggest support for the underlying price of silver. First is its role as a store of value and a hedge against quantitative-induced inflation, liquidity-driven market volatility, and geopolitical sovereign and health risks.
Second, other than for investment purposes and in contrast to gold, silver has industrial uses such as in solar panels, water filtration, jewellery, electronics, aeronautics, photographic and X-ray film, dentistry and other medical instruments. The growth in demand for these will support underlying demand.
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https://www.afr.com/wealth/personal-finance/themes-to-bank-on-in-2021-20210122-p56w7p
Themes to bank on in 2021
Investors face a two-tier market containing both very expensive and some reasonably valued opportunities. This is a time for caution and research.
Mark Draper Contributor
Jan 26, 2021 – 12.00am
The latest IPO and tech company might be exciting, but there are more important themes investors should be paying attention to in 2021.
The dire predictions of 2020 that house prices would collapse, credit growth would fall by 8 per cent and unemployment would reach levels not seen since the 1990s recession did not eventuate.
Instead, Roger Montgomery, chief executive of Montgomery Investments, expects house prices to rise. “Investors should know that the single most important driver for short- and medium-term property prices is credit availability.”
Hugh Dive, CEO of Atlas Funds Management, points to recent ABS data which showed credit growth in November 2020 was a record $24 billion, up 5.7 per cent from October.
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Liberals will see you die broke in the name of ‘efficiency’
The government has concocted a narrative about capital ‘hoarding’ to avoid a justified increase in the super guarantee.
Paul Keating Former prime minister of Australia
Jan 27, 2021 – 12.00am
Superannuation Minister Jane Hume finally came clean in these pages on the government’s superannuation endgame (January 22).
In a banal piece where bikinis, of all things, are tied to superannuation policy, Hume argues superannuants should be slaked of all super accumulation before they die.
You die battling to have afforded your own coffin.
This is a twist on the “use it or lose it” principle.
This is the game John Daley, Brendan Coates, Mike Callaghan and Karen Chester have been up to all along.
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Australians will die battling to afford their own coffin: Keating
Ronald Mizen Reporter
Jan 27, 2021 – 12.00am
The Morrison government is engaging in warped social engineering on retirement policy and Australians will die battling to afford their own coffin, former prime minister Paul Keating has declared, as the battle lines are drawn in the retirement debate set to dominate the first half of the year.
Writing exclusively in The Australian Financial Review on Wednesday, Mr Keating lashed policy experts pushing for retirees to eat into their capital base to fund retirement instead of relying solely on investment income.
“This is not simply a version of ‘let them eat cake’, now they must eat the plate too,” the political father of compulsory super said. “It means you die broke. And that this, obviously, is the policy direction of the government.”
Mr Keating was writing in response to an article penned by Superannuation Minister Jane Hume in Friday’s Financial Review in which she gave the strongest signal yet the government is preparing to dump the legislated rise in the superannuation guarantee from 9.5 per cent to 12 per cent in the May budget.
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IMF upgrades growth view but sees uneven recovery
Phillip Coorey Political editor
Jan 27, 2021 – 12.00am
The rollout of coronavirus vaccines over coming months, and the impact of fiscal support packages, especially in the United States, Japan and Europe, will result in stronger global growth this year than was forecast just three months ago, the International Monetary Fund says.
The IMF’s growth estimate for 2020 has also been substantially upgraded by almost a full percentage point due to a stronger than expected recovery in the second half of last year in many countries, including Australia.
But the IMF, in its latest World Economic Outlook, cautions there remains “exceptional uncertainty” surrounding the projections and it will not be until the end of 2022 that local transmission of the virus “everywhere” will be “brought to low levels”.
It also says that policy responses must address the increased inequality the pandemic has caused, that they should be used as an opportunity to fight climate change, and that economic lifelines being offered by government should be pared back as conditions improve but not withdrawn where still needed.
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What Australia needs from the new Biden administration
America’s role as a beacon of democracy has been dented. Our future relationship must be more practical, and even transactional.
Alexander Downer Columnist
Jan 26, 2021 – 1.32pm
The greatest diplomats have three qualities. First, they understand their own country’s priorities and interests and the moods of their own people. Secondly, they have the intellectual capacity to grasp the history and the zeitgeist of the country to which they’re accredited. And thirdly, through a combination of intellectual prowess and networking, they are able to exercise influence over the government to which they are accredited.
So now we have a new administration coming in to office in Washington. From our chief diplomat – the foreign minister – down, Australia needs to start exercising these qualities and fast.
First and foremost, I’m sure the embassy in Washington, led by the ambassador, is furnishing Canberra with a large amount of information on the likely positions of the Biden administration on issues of significance to Australia. If precedence is any guide, the embassy will be flooding Canberra with cables based on conversations with incoming members of the administration and people who know them well. That is good information to have.
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Nationals’ coal crusade an expensive political fantasy
By Mike Foley
January 26, 2021 — 6.53pm
Nationals senator Matt Canavan has again called on the federal government to dig out some funding to build a coal power plant, but the Morrison government’s new energy policies mean new coal power is dead, if not buried.
Nevertheless, support for a new coal plant remains an impossible test for Nationals leader Michael McCormack.
Senator Canavan on Tuesday released a Nationals backbench policy for new coal power, which he said would lower electricity prices and grow manufacturing.
“We believe the government should build a coal-fired power station because that remains Australia’s cheapest form of reliable power,” he said.
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Latest CommSec state economy report shows NSW performance at eight-year low
A new report from the nation’s largest banking group has revealed the performance of the NSW economy has hit fresh lows.
Gerard Cockburn
NCA NewsWire
January 27, 202112:00am
Premier Gladys Berejiklian has announced the New South Wales government will turn its focus to research and development to generate more jobs as the…
A new report by the nation’s biggest banking group has revealed New South Wales is one of the worst performing state economies in Australia.
In the latest State of the States report published by Commonwealth Bank’s share trading arm, CommSec, the most populous state slid in the rankings to its lowest position in eight years.
Mining heavy weight Western Australia and NSW were equally ranked sixth, while Tasmania topped the quarterly survey for economic performance due to a surge in equipment investment, retail spending and a rise in relative population growth.
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No convenience for Nationals voters in Coalition ‘marriage’
Political potency brings leverage for outcomes in regional Australia. Regional Australia provides the seats that tip the scales of government and as such the desire for power professes its love for regional Australia, whereas urban votes demand love.
The Liberals get the final numbers to be a government from the Nationals’ regional seats.
Politics is business, not love. The ambition, avarice, plotting, subtext, private WhatsApp groups tearing each other to pieces and venting to the fourth estate would not bode well for any relationship. There is no “marriage of equals”. As time progresses, one party is completely dominated by the other, existing in the shackles of the expectation for harmony. For better or worse, till death will the Coalition part.
If the Liberals and Nationals are in a “marriage”, as is often said in a creepy saccharine way, then the wedding photo of the couple is a bit of an anachronism. In question time to the right of the dispatch box, where the Prime Minister sits, is no longer the Deputy Prime Minister, leader of the Nationals, but the Treasurer. He moved into the picture recently with the COVID pandemic and it does not look like he is for moving out of the frame.
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Life about to get more complicated for SMSF trustees
Rejoicing at the indexation of the transfer balance cap from July 1 because you’ll get more in tax-free pension phase? How it will work is likely to be frustrating.
John Maroney Contributor
Jan 28, 2021 – 12.00am
Since July 1, 2016, the complexities in administering superannuation accounts, particularly SMSFs, has significantly increased. There are numerous thresholds, caps, indexation methods and limits that require constant monitoring and reporting.
This is not only difficult for trustees and members, but also their advisers, who in many cases are unable to access the necessary data in an accurate and timely fashion.
The different total superannuation balances (TSBs), individual transfer balance caps (TBCs) and imminent proportional indexation, the lack of SMSF adviser access to the Australian Taxation Office (ATO) portal and the intended removal of annual TBC reporting obligations all combine to create excessive complexity.
From July 1, this is only going to get more complicated.
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The foundations of this bull market are wobbling
Senior business columnist
January 28, 2021 — 11.57am
There are three pillars holding up otherwise overheated sharemarkets. Two of them are wobbling.
The sharp selloff on Wall Street on Wednesday – the S&P 500 index fell 2.6 per cent, its worst fall since October – followed disappointing results from some of the big tech companies and gloomy commentary from US Federal Reserve Board chairman Jerome Powell, who said the US was a long way from economic recovery.
The Fed, its near-zero policy rate and its massive and continuing purchases of Treasury bonds and mortgages - $US120 billion ($157 billion) a month - have been the key drivers of the US sharemarket since its meltdown last March as the threat of the pandemic first registered with investors.
The other big influences have been fiscal stimulus and the prospect of successful vaccines and their rapid rollout.
The “Biden surge” since Joe Biden’s inauguration earlier this month was attributable to his plans for a massive new $US1.9 trillion stimulus/relief package; plans that initially looked likely to be implemented urgently but are now faltering in the face of Republican opposition in the Senate.
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https://www.afr.com/politics/she-won-t-be-right-is-a-rising-worry-for-australians-20210127-p56xb3
‘She won’t be right’ is a rising worry for Australians
Some of the material things that made Australia special are being lost – and sometimes quite quickly.
John Roskam Columnist
Jan 28, 2021 – 3.16pm
Before The Economist magazine became the in-house journal for the woke business elite, it printed a fascinating article entitled “The burden of history” about how the past is viewed in the different countries of the European Union.
The piece began by quoting Javier Solana, then the EU’s foreign policy spokesperson who talked about how Americans and Europeans each interpret the exact same two words: “Ponder the phrase ‘that’s history’, and what it implies on either side of the Atlantic. When Americans say something is ‘history’, they mean it is no longer relevant… When Europeans say the same thing, ‘they usually mean the opposite’.”
How Australians regard history, in keeping with us as being a little bit American and a little bit European, falls halfway between the approach of the two continents. Sometimes debates about our past are dismissed as nothing more than attempts by conservatives to stir up the “culture wars”. At other times, such as this moment, in the midst of the discussion about whether the Australian constitution should be amended to provide a permanent Indigenous voice to Parliament, for example, it seems as if most of the country, or at least most of the media, is engulfed in the meaning of what happened 230 years ago.
The more we talk about our history the better. One of the many benefits of talking about history is that young people are beginning to appreciate the importance of events and dates – even if the teaching of history has long ceased to be about anything so mundane.
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Our dependence on China is a bigger issue than COVID: Michael Chaney
Sally Patten BOSS editor
Jan 29, 2021 – 12.15am
New-broom US President Joe Biden is likely to maintain his predecessor’s hardline approach to US-China relations, leaving Australia caught in the middle of a hostile relationship between its major strategic and trading partners, warns Wesfarmers chairman Michael Chaney.
This, Mr Chaney argued, was one of the key risks facing the Australian economy and would continue to present a challenging balancing act for the Australian government.
“Our dependence on China for both exports and imports is a big question going forward. I think it’s a much bigger issue than COVID-19,” Mr Chaney said.
“We’ve seen painful but relatively minor disruptions on some imports into China. Any major disruption to it through, for example, some sort of confrontation between the US and China would be really damaging to the Australian economy. I think we need to improve our relationship and I’m sure [Trade] Minister [Dan] Tehan will be endeavouring to do that as diligently as was [former trade minister Simon] Birmingham,” he said.
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‘It’s a red line’: Taiwan defence chair urges Australia to act over China war threats
By Eryk Bagshaw
January 29, 2021 — 12.35pm
The co-chair of Taiwan’s Foreign Affairs and Defence Committee says Australia should send a clear signal to Beijing that threats to Taiwan will not be tolerated, warning conflict over the island puts the entire Indo-Pacific in peril.
Wang Ting-yu called on all democratic countries to send a message to China days after the People’s Liberation Army sent dozens of fighter jets and bombers over the Taiwan Strait in a sharp escalation of military incursions in the region.
“Australia should send a clear signal that this is a red line,” he said in an interview from the Legislative Yuan, the island’s one-chamber parliament, in Taipei. “You can increase your country’s power but don’t harass, bully or intimidate your neighbour in a military way.”
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Act now or we face ecosystem extinction, says Graeme Samuel-led review
The natural environment, iconic places and endangered species are in trouble and need new, rigorously enforced national standards to protect them, an independent review of Australia’s environmental protection legislation has concluded.
The review, led by former competition watchdog chairman Graeme Samuel, found the environment was “not sufficiently resilient to withstand current, emerging or future threats, including climate change”.
Professor Samuel concluded that the current Environmental Protection and Biodiversity Act did not enable the commonwealth to effectively protect environmental matters of national importance, but the review, with 38 detailed recommendations, sets up potentially challenging rows over environmental policy.
Professor Samuel clarified a recommended environmental auditor and compliance oversight body should be located within the existing bureaucracy, having previously left open the possibility of a separate agency, as preferred by environmental activists.
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https://www.afr.com/world/asia/stakes-over-taiwan-couldn-t-be-higher-20210129-p56xqe
Stakes over Taiwan couldn’t be higher
Joe Biden would face the most agonising of choices if China moves against the disputed island. And so would Australia.
Hugh White Contributor
Jan 29, 2021 – 12.56pm
What will America do if China decides to use force against Taiwan? And how would Australia respond? These are perhaps the gravest questions now confronting leaders in Washington and Canberra, and they are far from hypothetical.
The fragile fudge that has kept the peace over Taiwan for the past 50 years has been strained almost to breaking point as US-China relations have darkened into a new cold war.
Now both sides seem to be stressing it further. Last weekend, as US carrier forces showed the flag in the South China Sea, Beijing launched provocative air manoeuvres around Taiwan. Neither side wants a war, but both sides hope to win their point without fighting by making the other back down.
The danger is that they will miscalculate one another’s resolve, especially in Beijing, where they must be sorely tempted to provoke a crisis with, for example, an air and sea blockade of Taiwan that is both militarily feasible and strategically effective in forcing Taiwan to yield.
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Japan’s call on East China Sea wins backing from experts
Andrew Tillett Political correspondent
Jan 29, 2021 – 5.18pm
Strategic policy experts have backed Japan’s call for Australia to step up military engagement in the East China Sea as Beijing ramps up tensions in the region through increasing incursions into Japanese and Taiwanese territory.
But the Morrison government has played a straight bat and says it values defence cooperation and is monitoring the situation with Taiwan and the East China Sea.
In an interview with The Australian Financial Review, Japan’s incoming ambassador to Australia, Shingo Yamagami, said he would like to see Australia and Japan step up joint naval exercises and transits.
“I think there is room for us to do more in the East China Sea,” he said.
Over the past decade, Japan has become increasingly concerned by Chinese coastguard vessels and warships sailing into waters around the disputed Senkaku Islands and at times harassing Japanese fishing boats. Chinese aircraft have also flown over the islands.
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The PM has transformed: now Morrison conquers from the centre
Peter Hartcher
Political and international editor
January 29, 2021 — 6.07pm
With the new year Australian politics has moved out of COVID crisis mode and into COVID management mode. And, on the face of it, this means federal politics has resumed business as usual.
Scott Morrison began the year in a baseball cap, drinking beer and touring an oil refinery and promoting gas in Queensland. Barnaby Joyce has emerged from an uncharacteristic silence to resume taking cracks at the cardboard cutout Nationals leader whatshisname. Labor is talking about itself and agonising about dumping another of its leaders. Because that always works so well. And the Greens? Who knows?
Next week is back to school for Federal Parliament and all the kids will be back with the same old games, grudges and graffiti. But a closer look reveals there has been a major change. The dominant figure in Australian politics always is the prime minister. And this Prime Minister has transformed. The noises in the Nationals and Labor are symptoms of his success in changing from national divider to national unifier, from punk politician to serious leader.
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Scott Morrison’s five major challenges for 2021
By David Crowe
January 29, 2021 — 7.30pm
Scott Morrison set a simple rule when he invited cabinet ministers to his Australia Day barbecue this week: wear thongs. The dress code was as relaxed at The Lodge as it was in most parts of the country after a summer that could have been so much worse.
Australia avoided a third wave of the pandemic despite the worst fears of doomsayers only weeks ago. But the cycle is not over. The community rolls from lockdown to release, from border bans to booking flights.
Thongs one day, masks the next. The turbulence will not stop.
Morrison cannot be sure which challenge will come next. But there are five big ones for the year ahead: the economy after JobKeeper; the vaccine rollout; climate change; aged care; and China.
“When the pandemic hit, the Prime Minister did the right thing by bringing in JobKeeper and doubling the JobSeeker payment – saving jobs and reducing poverty overnight,” says Cassandra Goldie, head of the Australian Council of Social Service.
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Why humans beat computers at knowing when to leap into the unknown
Ross Gittins
Economics Editor
January 30, 2021 — 12.00am
Two leading British economists who’ve launched a scathing critique of the unrealistic assumptions their peers have added to conventional economics to make it more tractable mathematically have not spared one of my great favourites: “behavioural economics”. It has lost its way, too.
The economists are Professor John Kay of Oxford University and Professor Mervyn King, a former governor of Britain’s central bank, the Bank of England. Their criticism is in the book, Radical Uncertainty: Decision-making for an unknowable future.
As I wrote in this column last week, economists have been working for decades to make their discipline more academically “rigorous” by using mathematical techniques better suited to the “stationary” physical world – where everything that happens is governed by the unchanging laws of physics – or to games of chance, where the probability of something happening can be calculated easily and accurately.
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There is no such thing as Australia anymore: the pandemic killed it
Jacqueline Maley
Columnist and senior journalist
January 31, 2021 — 12.00am
It is a tribute to our powers of self-delusion that we managed to celebrate Australia Day this year (or some of us did) with a straight face. This year there has been no Australia, not really – there has been a collection of states and territories acting according to the interests of their populations, held together in loose collaboration, but more often than not, at odds with each other.
Australia Day marks the beginning of the colony of NSW, not the inception of Australia, which did not even exist in the imagination until much later. And at no point in our history have the realities of federation been brought to bear more than during the pandemic.
State borders have been closed. State police kept out “foreigners” from interstate. State leaders swiped at each other and acted imperiously to exclude or eject the residents of other states. Often this happened without so much as a courtesy phone call to the leader of the affected state.
Premiers have become our protectors, and their surging political popularity shows how richly voters have rewarded parochialism.
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And now for the bad news, PM. Your reform agenda has come to nought
Columnist and communications adviser
January 30, 2021 — 12.00am
The Prime Minister has a convincing lead in the polls. He is governing from the centre-right, the sweet-spot of Australian politics. But he is not, as some have suggested, invincible. There are weaknesses in substantial areas that will become more evident as the year progresses.
For a start, his planned reform agenda has come to nought. Last April Scott Morrison announced in a press conference that he was looking at all the work done over the past decade on productivity “with fresh eyes”, and that: “We need to go through this process at the moment of harvesting all of these important policy options and how they can be utilised to have an effective and sustainable and strong recovery on the other side of the coronavirus.”
The fact that all these important policy options had been neglected for a decade was always a clue as to what would happen next: nothing. Some options were too hot to handle – within hours of the announcement, the Prime Minister ruled out raising or broadening the GST. Uncontroversial proposals, including vocational education reforms, were already under way. Many of the reforms most frequently argued for by the Productivity Commission and others – person-centred care in health, for instance – involve intertwined responsibilities and complex negotiations between the Commonwealth and the states.
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The darker and deeper side to the Holgate affair
If you wanted to bury something from the public, you’d release it late on Friday. Even better, a Friday sliding into a long weekend when most Australians are enjoying a last summer hurrah with the kids before school starts.
That’s what the Morrison government did to bury a report into the Holgate imbroglio which found no wrongdoing by the Australia Post chief executive. In addition to the tacky timing of its release, there are other reasons the report’s gory details warrant being laid out a week later.
The report’s findings expose Scott Morrison’s willingness to play low-rent populist politics to bring an end to a person’s career to boost his own. The report also reveals a woeful board culture at Australia Post, laced with incompetence and cowardice.
Most troubling, it inadvertently lays bare some dark truths about a society that departs from the rule of law and allows those in power to apply fuzzy, unknowable and arbitrary rules for their own purposes.
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Coronavirus And Impacts.
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Push for new laws to tackle COVID-19 misinformation ahead of vaccine rollout
By Lisa Visentin
January 25, 2021 — 12.01am
Immunisation and technology experts are urging Federal Parliament to pass new laws requiring social media giants to maintain a list of the most viral COVID-19 material to help combat misinformation as Australia prepares to roll out a vaccine.
The Doherty Institute in Melbourne, which has undertaken pivotal research informing Australia’s COVID-19 response, is among several health organisations that have signed an open letter urging politicians to act immediately to demand transparency from companies such as Facebook and Google.
“A ‘live list’ of the most popular
COVID-related material being shared on social media
can and should be generated – and updated in real time – by the major big tech
platforms,” the letter, which will be published online on Monday, says.
“Such a live list would help Australian medical experts identify and understand misinformation and to create community engagement responses.”
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Pfizer COVID-19 vaccine provisionally approved for Australian use
By Craig Butt and Liam Mannix
Updated January 25, 2021 — 10.06amfirst published at 9.42am
The Therapeutic Goods Administration, the country’s medical regulator, has provisionally approved the Pfizer COVID-19 vaccine for use in Australia.
Prime Minister Scott Morrison said the approval was a formal approval under the normal processes of the TGA and not an emergency measure, but warned that the crisis was far from over.
“I have a simple message to Australia, thank you Australia,” he said. “Thank you that you have put us in a situation that is the envy of most countries in the world today. We intend to keep it that way. We intend to remain vigilant.
“Once the vaccines start, that doesn’t mean you can jump on a plane to Bali the next day, that the masks or the quarantine arrangements disappear ... This will build, it will start at a small scale but it is not a silver bullet.”
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Vaccines may not work as well on virus variants: UK Health Minister
By Joe Mayes
January 25, 2021 — 6.02am
London: The British Health Minister warned that coronavirus vaccines may be less effective against new variants of the disease, such as those found in South Africa and Brazil, and that stricter border controls are justified.
“We don’t know the degree of that,” Matt Hancock said in an interview on Sky News on Sunday, commenting on the extent of any potential reduced efficacy of the vaccines. “In the meantime, we’ve got to have a precautionary principle that says let’s not bring these new variants back to the UK.”
Hancock’s warning came as Britain reported it had vaccinated more than 5 million people, including three-quarters of those over 80. Hancock said the government is conducting a vaccine trial on the South African variant to study its response to the inoculation, and that he’s concerned about new variants developing elsewhere.
“The new variant I really worry about is the one that’s out there but hasn’t been spotted,” he said, adding that the UK is offering its genome-sequencing capability to other countries to help them identify new strains. There are 77 known cases of the South African variant in Britain, and at least 9 cases of the Brazilian variant, Hancock said on the BBC’s The Andrew Marr Show.
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As Joe Biden says, this great US-Australia alliance will only grow stronger
Marise Payne
President Joe Biden’s clear and strong Inauguration Day commitment to seek unity and bipartisanship is reassuring and important, valued by Australia and the world. Australia wishes him, and all political interlocutors in the US, the very best in this endeavour. It is up to Americans to carry that forward, but Australia will be cheering them on.
A united America is a strong America, and a strong US is overwhelmingly in Australia’s interests.
Our values and perspectives align so closely that a future circumstance in which our foreign policy interests diverge to such an extent that our alliance and our close friendship is not of substantial mutual benefit is difficult to envisage. Our alliance is incredibly stable.
However, the evolving set of international challenges means that the way our two countries work together must also necessarily evolve.
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Vaccines will handle ‘all viral flavours’, early evidence suggests
By Liam Mannix
January 26, 2021 — 7.30pm
New and more dangerous varieties of COVID-19 from Britain and South Africa will be covered by the Pfizer and Moderna vaccines, preliminary evidence suggests, although the vaccines will be slightly less effective.
“We are yet to see a virus that can evade a vaccine response to a degree where it would be of significant concern,” said Associate Professor Stuart Turville, a virologist at the Kirby Institute.
“The vaccine responses so far have been strong in many studies and this level of strength will hopefully translate to cover many different viral flavours.”
Pfizer’s vaccine won regulatory approval in Australia on Monday and the federal government plans to roll it out from the end of February.
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The UK’s lesson in how not to manage a crisis
After lockdown number three, Boris Johnson’s government is learning (slowly) how to better manage its response to the pandemic.
Mohamed El-Erian Contributor
Jan 28, 2021 – 8.30am
British Prime Minister Boris Johnson’s recent warning the lifting of England’s third lockdown will be no “great open Sesame”, despite the fall in infections and encouraging progress of the country’s COVID-19 vaccination program, should come as no surprise to anyone who has been following the underlying dynamics of the virus. So, why did Johnson’s government not take this approach during the country’s first two lockdowns?
Although some remain inclined to point the finger at the government’s missteps, the explanation is more complex. It also holds important lessons for managing future crises.
After England’s initial lockdown last spring imposed a sudden and powerful brake on social interactions and significantly damaged the economy, the British government was keen to restore dynamism to particularly hard-hit sectors. For example, it launched an “Eat Out to Help Out” scheme, which offered discounts on meals in restaurants, pubs and cafes during August. Although the government was less permissive when the country exited the second lockdown in December, it did allow a certain amount of social and economic interaction and eased the restrictions further in much of the country for Christmas.
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Analysis ranks the countries that handled COVID-19 best
January 28, 2021 — 12.01am
Democracies have slightly outperformed authoritarian countries in suppressing the coronavirus, according to an analysis that found smaller populations and competent bureaucracies were the major factors in managing the global pandemic.
The COVID Performance Index compiled by the Lowy Institute ranked 98 countries’ handling of the COVID-19 outbreak, finding New Zealand performed the best while Australia sits in eighth place.
New Zealand was closely followed by Vietnam, Taiwan, Thailand and Cyprus, while the United States was the fifth-worst performing country.
There has been growing concern from western commentators that the failure of some democracies to suppress the virus will result in more countries losing faith in the model of liberal democratic government and turn to authoritarianism.
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Climate Change
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World’s Ice Is Melting Faster Than Ever, Climate Scientists Say
Research shows the Earth lost a sheet of ice 100 meters thick roughly equivalent to the size of the U.K. in recent decades
By Robert Lee Hotz
Jan. 25, 2021 4:00 am ET
From Antarctica to the Arctic, the world’s ice is melting faster than ever, according to a new global satellite survey that calculated the amount of ice lost from a generation of rising temperatures.
Between 1994 and 2017, the Earth lost 28 trillion metric tons of ice, the survey showed. That is an amount roughly equivalent to a sheet of ice 100 meters thick covering the state of Michigan or the entire U.K.—and the meltwater from so much ice loss has raised the sea level just over an inch or so world-wide, the scientists said.
“It’s such a huge amount it’s hard to imagine it,” said Thomas Slater, a research fellow at the U.K.’s University of Leeds Centre for Polar Observation and Modelling and the lead author of a paper describing the new research. “Ice plays a crucial role in regulating the global climate, and losses will increase the frequency of extreme weather events such as flooding, fires, storm surges and heat waves.”
The paper was published Monday in the European Geophysical Union’s journal the Cryosphere.
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GM sets 2035 target to phase out fuel, diesel vehicles
· The Wall Street Journal
General Motors has set a 2035 target date for phasing out petrol and diesel-powered vehicles from its showrooms globally, among the first major automakers to put a timeline on transitioning to a fully electric line-up.
GM’s goal, disclosed in a social-media post from chief executive Mary Barra, would mark a striking transition from its current business model. Vehicles that run on fossil fuels and emit pollution account for roughly 98 per cent of GM’s sales today and all of its profit. The large pick-up trucks and sport-utility vehicles that are the company’s biggest money makers are also among its least fuel-efficient vehicles.
America’s largest automaker by sales called the 2035 date to eliminate all tailpipe pollution an aspiration. Even so, many governments around the world, from California to Japan and the UK, have pledged to ban petrol- and diesel-powered cars by then.
GM previously had said it expects its own portfolio and the broader car market to go all-electric eventually, but company executives hadn’t discussed a time frame.
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Royal Commissions And The Like.
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No entries this week
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National Budget Issues.
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Exports surging despite China row
Australia’s exports of goods boomed last month despite rising trade tensions with China.
The goods trade surplus surged to $9bn in December — the fourth-highest on record and a $7.4bn increase from November — according to preliminary data from the Australian Bureau of Statistics. The goods trade surplus with China alone was $5.2bn.
Exports to Australia’s biggest trading partner rose $2.3bn or 21 per cent on the back of record exports of both iron ore and cereals.
In total Australia’s exports to China in December jumped to $13.39bn, the most since June and the fifth-highest since July 2019.
Imports from China fell 7 per cent or $641m after a spike caused by “lumpy” capital goods.
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Is Australia’s economy getting fatter? Surplus may not be a good thing
Ross Gittins
Economics Editor
January 27, 2021 — 12.00am
If you’re like many readers, you think economists and business people are obsessed with gross domestic product and dollars, dollars, dollars. So, as a never-to-be-repeated offer, today I’m going to write not about what Australia’s production of goods and services is worth, but what it weighs.
Believe it or not, Dr Andrew Leigh, a federal Labor politician and former economics professor, is just publishing the paper Putting the Australian Economy on the Scales in the Australian Economic Review.
Using a lot of ancient statistics and making various assumptions – so that his figures are, on his own admission, “rough” but still indicative – Leigh estimates that the physical weight of the nation’s annual output of goods and services has gone from 55,000 tonnes in 1831, to 6 million tonnes in 1900, 62 million tonnes in 1960, 355 million tonnes in 2000, and 811 million tonnes in 2018.
Of course, our population has grown hugely in that time, but the weight of output per person is also way up. It was less than a tonne in 1831, six tonnes in 1960 and 32 tonnes per person in 2018. That’s a 47-fold increase.
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Debt to double in next five years
Public debt will more than double to $1.75 trillion in the next five years and “seriously weaken” the financial position of states, territories and the federal government, according to new analysis by the Centre for Independent Studies.
The period of “Australian exceptionalism” – as one of the least publicly indebted nations – is over, according to the report authored by former NSW Treasury official Robert Carling, with the total cost of the pandemic to governments at $800bn.
“The days of Australia’s unquestionably strong public finances have passed … and we are now in a weakened position to respond to another crisis,” Mr Carling wrote.
“We are witnessing a huge change for the worse in the financial position of our governments and there is far too much acceptance and complacency about it,” he said.
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https://www.afr.com/policy/economy/tax-breaks-bulge-to-338b-over-next-four-years-20210128-p56xhe
Tax breaks bulge to $338b over next four years
Matthew Cranston Economics correspondent
Jan 29, 2021 – 12.01am
Australians will receive at least $338 billion in tax concessions on superannuation contributions and capital gains over the next four years, according to new analysis by Treasury.
The annual Tax Benchmarks and Variations Statement (TBVS) to be released on Friday is expected to show that in the 2020 financial year alone $50 billion in capital gains tax discounts were provided to people on their main residence.
Over the next four years that is projected to amount to $216 billion.
The main residence capital gains tax exemption is seen as a way to encourage people to buy their own home and not be penalised if they need to sell and move. The exemption on main residence capital gains is 100 per cent.
Under Labor’s last election policy, a 50 per cent capital gains tax discount on property investments was to be halved to 25 per cent.
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Health Issues.
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Doctor crisis: taxpayer billions fail to fix rural GP shortages
Rural and regional communities face a critical shortage of doctors despite billions of dollars in taxpayer funds having been spent on the problem over more than a decade, as medical graduates shun general practice and seek to become specialists.
The number of training places for rural doctors will fall this year because of a lack of applicants, while country communities around the nation struggle to fill vacancies and medical practices pay tens of thousands of dollars to overseas recruiters to find doctors.
Figures obtained by The Weekend Australian show 1027 medical graduates accepted a governmentfunded GP training position in 2020, a decline of 173 compared with 2015.
Rural Doctors Association of Australia chief executive Peta Rutherford said general practice was struggling to overcome a “declining applicant pool”.
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International Issues.
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Fauci on what working for Trump was really like
From denialism to death threats, Dr Anthony Fauci describes a fraught year as an adviser to the former US president on the COVID-19 pandemic.
Donald McNeil
Jan 25, 2021 – 9.14am
Washington | For almost 40 years, Dr Anthony Fauci has held two jobs. As director of the National Institute of Allergy and Infectious Diseases, he has run one of the country’s premier research institutions. But he has also been an adviser to seven presidents, from Ronald Reagan to, now, Joe Biden, called upon whenever a health crisis looms to brief the administration, address the World Health Organisation, testify before Congress or meet with the news media.
For Dr Fauci, 80, the past year has stood out like no other. As the coronavirus ravaged the country, Dr Fauci’s calm counsel and commitment to hard facts endeared him to millions of Americans. But he also became a villain to millions of others. Trump supporters chanted “Fire Fauci,” and the president mused openly about doing so.
He was accused of inventing the virus and of being part of a secret cabal with Bill Gates and George Soros to profit from vaccines. His family received death threats. On January 21, appearing in his first press briefing under the Biden administration, Dr Fauci described the “liberating feeling” of once again being able to “get up here and talk about what you know — what the evidence, what the science is — and know that’s it, let the science speak”.
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‘Graphs I never made’: Trump’s virus adviser says misinformation and denial rife
By Jan Hoffman
January 25, 2021 — 8.54am
New York: Dr Deborah Birx, the Trump administration’s coronavirus response co-ordinator, said on Sunday that crucial statements from the White House about the coronavirus pandemic were shaped by misinformation, denial about the severity of COVID-19 and the shadow of an upcoming election.
In an interview on the CBS program Face the Nation, Birx said that from the outset, progress against the virus was impeded by inconsistent and inept public messaging that played down the gravity of the pandemic and the immediate need for safety precautions. In the White House, she said, “there were people who definitely believed that this was a hoax”.
That disbelief in turn was echoed in many pockets across the United States, she said, because at the beginning of the pandemic, public officials did not fully describe the spectrum of disease that the virus could cause.
“And so they saw people get COVID and be fine,” and that bred scepticism, she explained.
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HSBC chief can’t stay silent as China’s crimes are exposed
By Christopher Williams
January 25, 2021 — 11.10am
Not every legacy of the crazed Trump presidency is ignoble or in line to be overturned by Joe Biden. The decision last week by Mike Pompeo, the outgoing secretary of state, to officially designate China’s abuse of the Uighurs as genocide was a unique moment of moral clarity as the administration reached its dark ending.
The shameful label is going to stick to the Chinese Communist Party (CCP).
Antony Blinken, Biden’s nomination as America’s next top diplomat, has already publicly concurred with Pompeo that a genocide is under way in Xinjiang, much to the irritation of the regime in Beijing.
It had hoped the new broom in Washington DC would be less confrontational on a host of issues, including concentration camps and forced sterilisations faced by its ethnic minorities.
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For wars of the future, Pentagon looks to distant past: the B-52
· The Wall Street Journal
Over the East China Sea —“Go back,” the Chinese air controller warned. “You are now approaching Chinese airspace. Turn around immediately or you will be intercepted.”
The crew of the B-52 lumbering 161 kilometres off China’s coast rebuffed the warning that crackled through the radio, and the 60-year-old aircraft stayed its course.
This was a bomber presence mission, a taxiing flight designed to demonstrate the US military’s long reach and uphold the right of international passage in disputed airspace.
It was also a window into the Pentagon’s plan to rely on aircraft from the earliest days of the Cold War to prepare for the wars of the future.
The February mission began at dawn at Andersen air force Base in Guam when the aircrew donned oxygen masks and “poopy suits,” puffy outer garments to keep out the cold in case the plane was forced to ditch in the ocean.
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Joe Biden and the ‘great rebalancing’ of the US economy
All of the trends that so depressed wages for 40 years are largely tapped out. All of this means that the deflationary headwinds to labour are at last decreasing.
Rana Foroohar Contributor
Jan 25, 2021 – 9.40am
“It’s time to reward hard work in America — not wealth.” That statement from US President Joe Biden is perhaps the most concise expression of the new administration’s economic policy plans. Mr Biden wants to increase the national minimum wage, raise taxes on corporations, and start to tip the balance of power between labour and capital.
The labour share of national income — the amount of gross domestic product paid out to workers, in wages and benefits — has been declining in the US and many other developed countries since the 1980s. The fall since 2000 has been particularly precipitous, leading to stagnant pay, growing inequality and a loss of consumer purchasing power.
But, in many ways, this is a difficult moment for the Biden administration to turn the tide. With unemployment still high due to the pandemic, there is no natural upward pressure on wages. And some economists argue that intervening to raise minimum wages now would discourage hiring.
In addition, many companies that survive the pandemic will be looking to cut costs by replacing workers with technology. Indeed, automation is one of the key factors behind the multi-decade decline in labour’s share of GDP, according to a 2019 study by the McKinsey Global Institute.
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You’ve got (expensive) mail: Brexit tax change stings Australians
Hans van Leeuwen Europe correspondent
Jan 26, 2021 – 8.18am
London | A post-Brexit change to Britain’s value-added tax system has come with a price tag for some Australian companies - and also for any Australian sending a parcel worth more than £39 ($69) to a friend or relative in Britain.
Britain is now levying its 20 per cent VAT (the equivalent of GST) on any incoming gift worth more than £39. And because the postal service has to withhold the parcel until the recipient coughs up, Royal Mail also adds a “handling fee” of £8 a time.
Courier companies are also charging similar fees, some of which are even higher.
Your correspondent experienced this in early January: a late-arriving Christmas present, with £41 written on the Australian customs sticker, cost an extra £16 in tax and Royal Mail charges.
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Xi Jinping warns against confrontation in veiled message to Joe Biden
China’s president Xi Jinping has said the “strong should not bully the weak” in a keynote address given days after the rising superpower sent dozens of warplanes into Taiwan’s airspace, engaged in a fresh border skirmish with India and continued a trade retaliation campaign against Australia.
Speaking at the World Economic Forum’s Davos forum over video, President Xi appeared to use the address to warn President Joe Biden against following the Trump administration’s hard line on China.
China’s leader also took a swipe at groupings such as the Quadrilateral Security Dialogue, or Quad, which includes America, Japan, India and Australia.
“To build small circles or start a new Cold War, to reject, threaten or intimidate others, to willfully impose decoupling, supply disruption or sanctions, and to create isolation or estrangement will only push the world into division and even confrontation,” Mr Xi warned.
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Biden is far more left-wing than you ever imagined
The war Biden is fighting belongs to the Sixties, the last great era of Keynesian economics, when Democrats expanded the welfare state, were open about it and won elections off it.
Tim Stanley
Jan 25, 2021 – 3.49pm
Joe Biden talks like a centrist but will govern from the left. On his social policy wish list is to ban discrimination based on “gender identity”, an end to religious exemptions from equality laws and amnesty for millions of illegal immigrants.
He might not get it all but the President’s strategy, belying his tone at the inaugural, is rather Trumpy: demand big to get big. Hence he’s asking Congress for a stimulus plan worth a staggering $US1.9 trillion ($2.5 trillion). The chutzpah reflects a significant shift in Democratic thinking.
Every general fights the last war. When Barack Obama came into office in 2009, the consensus within his administration was that he had to avoid Bill Clinton’s mistake of pursuing a radical agenda and spooking the middle class.
Fast-forward to 2021 and the thinking among Biden’s staff is that Obama was overcautious, that his post-credit crunch stimulus was too small and that he failed to establish a link in voters’ minds between voting Democrat and getting richer.
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The hunters become the hunted: short sellers under threat on Wall St
Elizabeth Knight
Business columnist
January 27, 2021 — 12.00am
The short selling hedge funds have long been the scourge of many in the corporate establishment. Welcome to the creation of a new era - one where the hunter has become the hunted - weaponised through social media.
Wall St is buzzing after stratospheric price gains have been experienced among a handful of traditionally unloved out-of-favour companies - most notable among them being clapped out retail chain GameStop, the former phone-maker Blackberry and homewares retailer Bed Bath & Beyond.
It’s the ultimate short squeeze.
By way of example, GameStop shares have exploded - up 245 per cent this year while Bed Bath & Beyond rose 40 per cent in one hour of trading on Monday.
In what is being billed as payback on the short sellers or the revenge of the masses, millions of small time day traders are engaged in feverish bidding on particular stocks to a point well in excess of fundamental value egged on by a barrage of posts on subreddit forum wallstreetbets.
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https://www.smh.com.au/world/europe/coronavirus-death-toll-passes-100-000-in-uk-20210127-p56x1x.html
‘Grim statistic’: Coronavirus death toll passes 100,000 in UK
By Latika Bourke
January 27, 2021 — 8.44am
London: Boris Johnson has said he did everything he could to prevent the loss of life, as Britain’s coronavirus death toll passed 100,000.
The British prime minister appeared sombre at a news conference held in Downing Street, during which he said he accepted full responsibility for the handling of the pandemic, promising that lessons would be learned.
While the steep decline in the rate of new COVID-19 infections continued on Tuesday, the death toll increased by another 1631 taking the overall toll to 100,162.
“It’s hard to compute the sorrow contained in that grim statistic, the years of life lost, the family gatherings not attended, for so many relatives, the missed chance even to say goodbye,” Johnson said.
Official data showed that more than 100,000 Britons have died within 28 days of a positive COVID-19 test, a grim new milestone. The country has lost more people to coronavirus than the number of civilians who were killed in the Second World War.
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Two-track Xi reveals China is in no mood for reconciliation
By Eryk Bagshaw
January 26, 2021 — 2.19pm
The 25-minute speech was a masterclass in double-speak.
China’s President Xi Jinping told world leaders to shelve their differences as his country blocks $20 billion in Australian exports. He warned confrontation would lead us to a dead end, after China flew two dozen warplanes over Taiwan at the weekend. He said the “strong should not bully the weak” as Beijing wipes out democracy in Hong Kong.
Two-track Xi was in full swing at the World Economic Forum in Davos overnight. The hypocritical divide between China’s actions and its leader’s spin is inexorable, but it does offer insight into how Xi wants the world to view China.
First, Xi wants the world to abandon “ideological prejudice”, an oft-repeated phrase that paints Communist China as the victim of Western liberal discrimination.
“Difference in itself is no cause for alarm,” he said. “What does bring alarm is arrogance, prejudice, and hatred. It is the attempt to impose hierarchy on human civilisation or to force one’s own history, culture and social system upon others.”
The comments are directed at the United States and its allies. Australia has become a vector through which China warns the West against acting on its ideological prejudices by restricting Chinese investment, political interference and condemning human rights abuses.
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Biden’s approach to China will need help from America’s mistrustful allies
Stephen Bartholomeusz
Senior business columnist
January 26, 2021 — 12.45pm
The most challenging set of policy issues that confront the Biden administration, and the one of most consequence to Australia, is how the US deals with China.
The Trump administration’s scattergun approach, with its trade wars and blizzard of sanctions, failed. It damaged the US, undermined its traditional alliances and weakened the US-led multilateral institutions that could have helped contain an increasingly assertive and belligerent China.
Nevertheless, while Trump’s policies might have been incoherent and their objectives confused, they highlighted China’s emerging threat to US supremacy and gave a sharper edge to discussions about the nature of its centrist economic model and the tactics it has employed, and is employing, to erode America’s economic, geopolitical and military strengths.
There will be no return to America’s past approach to China, built on a very western view that globalisation and economic liberalism would generate inexorable pressures for political freedoms and the eventual transformation of China into something more closely resembling the other major economies and societies in Asia. The advent of the Xi Jinping era ended that prospect.
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Indian and Chinese soldiers in brawl at disputed border
By Ben Farmer
Updated January 26, 2021 — 5.38pmfirst published at 12.47pm
Islamabad: Indian and Chinese soldiers armed with sticks and stones have brawled again along their disputed frontier, the Indian government said, as the neighbours’ months-long border stand-off continues.
Indian security officials said there were clashes after at least 18 Chinese soldiers tried to cross into Indian-claimed territory at Naku La in Sikkim on January 20.
Soldiers on both sides were carrying firearms, but did not use them.
A senior army official said that four Indian soldiers were wounded after they challenged the Chinese soldiers. All four Indian wounded had been hospitalised, and their condition was described as stable. The officer said the number of injured Chinese was “in double figures”.
An official army statement gave few details, describing the clash as a minor stand-off and saying it had been “resolved by local commanders as per established protocols”. The military asked journalists “to refrain from overplaying or exaggerating” the incident.
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The financial world’s ‘most important number’ refuses to die
Stephen Bartholomeusz
Senior business columnist
January 27, 2021 — 12.53pm
It’s proving more difficult to kill off the world’s most important number than the technocrats once thought.
The London Interbank Offered Rate, or LIBOR, has been the world’s key reference rate for financial transactions since the 1960s. It underpins trillions of dollars – an estimated $US400 trillion ($A516 trillion) of loans and derivative transactions globally.
LIBOR creates reference rates for short term unsecured loans that are used to price the yields for almost all floating rate financial products – corporate debt, securitised mortgages, derivatives – and has a range of maturities, from overnight to 12 months.
Unfortunately, the way the rate has been calculated in the past – a daily survey of a relatively small number of large banks of their estimated borrowing costs – made it vulnerable to manipulation.
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‘The end of our civilisation’: Putin raises prospect of global conflict
By Bevan Shields
January 28, 2021 — 5.34am
London: Vladimir Putin says the world risks spiralling into “all against all” conflict, as the Russian President faces fresh pressure over the attempted assassination and imprisonment of his main political rival.
Speaking to the World Economic Forum, Putin warned the coronavirus pandemic and widening economic inequality had created parallels to the 1930s and said a failure to deal with those tensions helped spark World War II.
“Nowadays such a heated conflict is not possible. I hope it is not possible in principle because it would mean the end of our civilisation,” Putin said.
“However the situation might develop unpredictably and uncontrollably if we sit on our hands doing nothing to avoid it.
“There is a possibility we may experience a natural collapse of global development that might result in a fight of all against all.”
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US government issues national terrorism warning, prompted by post-election violence fears
By Ben Fox and Eric Tucker
January 28, 2021 — 7.30am
Washington: The Department of Homeland Security issued a national terrorism bulletin, on Wednesday, local time, warning of the potential for lingering violence from people motivated by anti-government sentiment after President Joe Biden’s election, suggesting the January 6 riot at the Capitol may embolden extremists and set the stage for additional attacks.
The department did not cite a specific threat, but pointed to “a heightened threat environment across the United States” that it believes “will persist” for weeks after Biden’s January 20 inauguration.
It is not uncommon for the federal government to warn local law enforcement through bulletins about the prospect for violence tied to a particular date or event, such as July 4.
But this particular bulletin, issued through the the department’s National Terrorism Advisory System, is notable because it effectively places the Biden administration into the politically charged debate over how to describe or characterise acts motivated by political ideology and suggests that it sees violence aimed at overturning the election as akin to terrorism.
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America can defend Taiwan
Elbridge Colby
· The Wall Street Journal
The Biden administration faces a stark reality: Over the next four years it’s possible that China will try to take Taiwan. For the first time since 1950, Beijing may reasonably think it has a viable military option to force what it regards as a renegade province to heel. President Xi Jinping has said Taiwan must be part of China — and has signalled he intends to do something about it.
The stakes for America are immense. Keeping Taiwan out of Beijing’s grip is crucial for denying China’s goal of attaining regional hegemony and eventually global pre-eminence. The island occupies a pivotal geographic position. If Taiwan falls, China would have the ability to project military power throughout Asia. Japan, The Philippines, Southeast Asia and the Pacific islands would all be more vulnerable to China’s military.
The US has long opposed China’s belligerence toward Taiwan, and states in the region would read the US response to an attack as a bellwether of American reliability. Forgoing Taiwan’s defence would seriously undermine America’s credibility among already nervous Asian allies and partners. For these reasons, the recently declassified 2018 Indo-Pacific strategy specifically ordered the Pentagon to implement a defence strategy that will make the US capable of defending Taiwan.
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The GameStop reckoning was a long time coming
The GameStop saga is either a cautionary story about a bunch of reckless nerds destabilising the stock market for laughs or a David-and-Goliath morality tale.
Kevin Roose
Jan 29, 2021 – 8.20am
This week, the biggest story in the financial markets is the absurdist, pretty-sure-I-hallucinated-it drama involving GameStop, a struggling video game retailer that became the rope in a high-stakes tug of war between Wall Street suits and a crusading internet mob.
The simplest explanation for what happened is that a bunch of hyper-online mischief-makers in Reddit’s r/WallStreetBets forum — a clan of self-described degenerates with user names like “dumbledoreRothIRA” and “Coldcutcombo69″— decided it would be funny and righteous (and maybe even profitable, though that part was less important) to execute a “short squeeze” by pushing up the price of GameStop’s stock, entrapping the big-money hedge funds that had bet against it.
The strategy worked. Within two days, GameStop was the most heavily traded stock in the world; Elon Musk and Representative Alexandria Ocasio-Cortez got behind the revolt; and r/WallStreetBets users were posting screenshots of their suddenly inflated account balances.
The scheme’s originator, whose Reddit user name is unprintable in a family paper, claims to have turned an initial investment of $US50,000 into a windfall of more than $US40 million. One of the hedge funds that had shorted GameStop’s stock, Melvin Capital, had to get a $US2.75 billion bailout from two other investors after getting hammered with huge losses.
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https://www.afr.com/chanticleer/gamestop-turns-natural-order-of-markets-upside-down-20210129-p56xrc
GameStop turns natural order of markets upside down
The narratives that usually rule markets have been turned on their head by the GameStop drama, which looks like a bizarre upwards crash.
Jan 29, 2021 – 10.59am
The most fascinating aspect of the GameStop saga is how it has turned so many of the usual market narratives upside down.
Usually, it is the collapse in the stock’s price that causes carnage. In this case, it’s the sharp rise in GameStop shares that has financial markets in a flap.
Usually, markets rally because stocks go up. On Wall Street on Thursday night, stocks seemed to rally – in part at least – because certain stocks stopped going up.
Usually, volatility will result in a chorus of criticism for short sellers from a corner of the market. In this case, there is actually a corner of the market (quite rightly) defending the role of shorts.
Short sellers are also usually accused by some of manipulating the market for their own benefit. Now they are being painted by some as the victims of a form of manipulation by the Reddit mob.
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https://www.afr.com/markets/equity-markets/day-traders-shake-wall-street-to-its-core-20210129-p56xq6
Day traders shake Wall Street to its core
The GameStop saga has left investors wondering whether the rise of retail investor control is a flash in the pan or a new paradigm in investment returns.
Tom Richardson, James Thomson and Jonathan Shapiro
Jan 29, 2021 – 6.53pm
It’s the trading mania story that has captured the world’s attention, moving beyond the realms of market insiders, onto the nightly news and into the corridors of power. The tale of the little-known and struggling video game chain with 4000 stores across the United States that became the most heavily traded stock in the world is almost too wild to be true.
There are moments in financial history that define a generation, and the extraordinary battle between hedge funds and day traders over shares in GameStop, and the revolutionary movement it has unleashed, looms as one of those.
But GameStop’s rise from a company worth about $US200 million in April last year to a giant worth more than $US25 billion at one point this week is also the latest bewildering chapter in the long history of speculative mania and bubbles.
The saga has left red lights flashing for investors over the extreme volatility and valuations infecting equity markets. There is concern over the potential for this bizarre trading episode to trigger a repeat of the 30 per cent market rout last February and March.
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https://www.afr.com/world/north-america/the-gop-is-in-a-doom-loop-of-bizarro-20210130-p56y0n
The GOP is in a doom loop of bizarro
A party that buys into conspiracy theories and denies the legitimacy of its opposition isn’t getting saner, and still has a good chance of taking complete power in four years.
Paul Krugman
Jan 30, 2021 – 8.04am
Here’s what we know about American politics: The Republican Party is stuck, probably irreversibly, in a doom loop of bizarro. If the Trump-incited Capitol insurrection didn’t snap the party back to sanity — and it didn’t — nothing will.
What isn’t clear yet is who, exactly, will end up facing doom. Will it be the GOP as a significant political force? Or will it be America as we know it? Unfortunately, we don’t know the answer. It depends a lot on how successful Republicans will be in suppressing votes.
About the bizarro: Even I had some lingering hope that the Republican establishment might try to end Trumpism. But such hopes died this week.
On Tuesday Mitch McConnell, the Senate minority leader, who has said that Donald Trump’s role in fomenting the insurrection was impeachable, voted for a measure that would have declared a Trump trial unconstitutional because he’s no longer in office. (Most constitutional scholars disagree.)
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Why Taiwan might be the next global flashpoint
Why does China have Taiwan in its sights? What does Taiwan want? And how would the US – and Australia – be likely to respond if there was an attack?
By Eryk Bagshaw
January 29, 2021
An island 200 kilometres off the coast of China looms as the biggest international test of the Biden administration and Beijing’s relationship with the world. Characterised by its liberal democracy, resilient economy and the existential threat of invasion, Taiwan has lived under a cloud for more than half a century.
Its existence has seen Taiwanese and Chinese diplomats come to blows over a cake decorated with a Taiwan flag in Fiji, a Perth theatre forced to apologise to Chinese officials over a diplomatically sensitive performance and Qantas remove Taiwan from its list of country destinations.
Long a diplomatic flashpoint, it now threatens to become a military one.
Seven months after Hong Kong was subdued by the Chinese Communist Party, Beijing has turned its attention to the final territory not in its control under the “One China policy”, sending dozens of warplanes over the Taiwan Strait to mark the start of 2021.
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‘Dangerous signal’: Europe gives itself power to block vaccine shipments to Australia
By Bevan Shields
January 30, 2021 — 7.23am
London: European leaders have given themselves sweeping powers to block crucial coronavirus vaccine shipments to Australia in a ploy condemned as unethical, dangerous and selfish.
The new export restrictions, unveiled overnight Australian-time, grant the European Union final say on whether jabs produced on the continent by pharmaceutical giants Pfizer and AstraZeneca can leave the territory.
The Federal Government insists Australia’s vaccine program remains on track, despite concerns the EU could restrict the export of two of the jabs we are relying on.
The emergency scheme is the latest escalation in a brawl between the EU and two drug firms, which recently warned the number of doses available to Europe over the coming months would be slashed because of production problems.
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Stock frenzy echoes anti-establishment anger behind Trump rise, analysts say
By Michael Collins, Jessica Guynn and Sarah Elbeshbishi
January 30, 2021 — 2.53pm
Washington: You say you want a revolution?
Then look at what’s happening on Wall Street.
Small investors banding together on social media are taking on big investment firms by running up the stock price of GameStop, a struggling video game retailer whose shares were trading at around $US4 at the start of the coronavirus pandemic.
GameStop surged 68 per cent to $US325 ($425) on Friday, Saturday AEDT, after brokerage apps including Robinhood eased some restrictions on trading.
“We are witnessing the French Revolution of Finance,” declared Anthony Scaramucci, a financier who famously served as Donald Trump’s White House communications director for 11 days in 2017.
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‘Escalating nuclear crisis’: US national security adviser sends bleak warning on Iran
By Justin Sink and Anne Gearan
January 30, 2021 — 4.34pm
Washington: US President Joe Biden’s national security adviser has warned of “an escalating nuclear crisis” with Iran as the new White House administration seeks to salvage a multinational 2015 agreement that President Donald Trump abandoned.
Jake Sullivan told an event at the US Institute of Peace on Friday that Tehran was moving towards having enough fissile material for a nuclear weapon. Returning to the deal intended to limit the country’s nuclear program was a “critical early priority” for the Biden administration, he said.
“We would like to reestablish some of the parameters and constraints around their program that have fallen away over the course of the past few years,” Sullivan said.
The White House announced on Friday that Rob Malley, who served on the Obama administration team that negotiated the original Iran deal, would serve as an envoy to the Islamic Republic.
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I look forward to comments on all this!
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David.
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