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In the US there are 2 major themes The first is that major financing stimulus is definitely on the way with passage today and second is that while we see a lot of improvement with COVID there are real fears that some States are opening too soon!
In the UK taxes are to rise to try and pay for COVID as cases and deaths are improving. A really hard place for the UK right now!
In Australia we are seeing the Government trying to shut down discussions around sexual assault and sexual harassment as discussions around these topics is draining pretty much all oxygen from the other work of Government. Good luck with seeing improvement, there are simply too many questions and issues that are not resolved as of the current time.
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Major Issues.
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https://www.afr.com/markets/debt-markets/the-rba-has-done-enough-for-the-bond-market-20210228-p576gv
The RBA has done enough for the bond market
Recent volatility in bond markets has prompted calls for the RBA to do more. Martin Place should ignore these voices, and allow markets to run the course, says Grant Wilson.
Grant Wilson Contributor
Feb 28, 2021 – 11.04am
This past week has had elements of Oliver Twist begging “please sir I want some more”.
Yet this is not March 2020, when global fixed income markets broke down completely. Nor is it September 2008, when US yields repriced higher, despite the onset of the GFC.
Nor is it July 2012, when European Central Bank president Mario Draghi vowed to do “whatever it takes” in order to rescue the euro area from an existential crisis.
This was just a rough week for bond markets.
To be sure, there were a few highlights, notably the 2s5s10s butterfly, a derivative contract based on yield differentials in US treasuries, shifting an unprecedented 21 basis points on Thursday.
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Warren Buffett warns of ‘bleak future’ for debt investors
Eric Platt
Updated Feb 28, 2021 – 3.47pm, first published at 3.35pm
New York | Warren Buffett warned that debt investors faced a “bleak future” days after a sell-off pummelled government bonds and sent reverberations through global stock markets.
The 90-year-old chief executive of Berkshire Hathaway told shareholders in his closely followed annual letter that it was best to eschew the fixed-income market, in which the company is itself a large player.
“Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future,” he wrote. “Competitors, for both regulatory and credit-rating reasons, must focus on bonds. And bonds are not the place to be these days.”
Treasury prices slid dramatically last week, driven by shifts from investors who see faster economic growth taking hold. Optimism around a global expansion has also rekindled concerns about a spike in inflation, however nascent, and the prospect that central banks may have to adjust their stimulative policies.
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Equity market rally hinges on the RBA
William McInnes Reporter
Feb 28, 2021 – 3.20pm
An aggressive tone from the Reserve Bank to stem the sharp rise in bond yields could be a boon for the local sharemarket, which struggled to move higher through February despite a largely positive earnings season.
The 70 basis point increase in the Australian 10-year bond yield through the last two weeks of February meant the S&P/ASX 200 Index could only manage a 1 per cent gain for the month, as expectations for inflation and a swift economic recovery meant investors swapped equities for bonds.
“It was a very big move in the bond world and that’s unsettling markets,” said Maple-Brown Abbott chief investment officer Garth Rossler.
“I don’t think anyone thinks these bond rates are going to go away and it obviously is challenging valuations. The market will be under a bit of pressure if rates continue to move higher.”
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Trade war forces universities to go global
China’s economic coercion of Australian higher education could be severe and sustained. The long-term response must be to find new international student markets in Asia, India and Africa.
Dirk van der Kley Contributor
Feb 28, 2021 – 2.03pm
International education is the obvious choice for China’s next round of economic coercion against Australia.
Education ($12 billion in exports to China in FY2018-19) remains the only export to China valued over $10 billion annually that China can restrict without suffering major economic pain.
Coal ($16 billion in exports to China in FY2018-19) has already been hit with restrictions. Restrictions on gas ($14 billion in FY18-19) and iron ore ($63 billion in FY 18-19) exports would hurt China too.
Given recent experience with Chinese government restrictions on wine, beef and other exports, moves against higher education could end up being severe and sustained. There are many potential trigger points on the horizon which could prompt Beijing to use education flows as an economic weapon such Victoria’s Belt and Road memorandum of understanding being vetoed by the Foreign Minister.
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https://www.afr.com/chanticleer/the-other-bad-news-about-bond-yields-20210228-p576ft
The real message bonds are sending on stocks
Rob Almeida says equity markets should be more worried about the tepid growth rates implied by bond markets than the recent sharp jump in yields.
Mar 1, 2021 – 12.00am
Robert Almeida, the Boston-based global investment strategist at the $US600 billion ($760 billion) fund manager MFS Investment Management, doesn’t mind the cold. That’s just as well, given the city has just shivered through an Arctic blast that sent temperatures as low as -12°.
But like many in global markets right now, what’s got Almeida hot under the collar is bond yields – although not for the reason you think.
Fears the post-pandemic economic recovery could lead to an inflation outbreak led to a jarring rise in bond yields. The yield on 10-year US Treasuries, which started the year at 0.91 per cent, spiked from 1.49 per cent to 1.61 per cent on Thursday before ending the week at 1.42 per cent. The Australian 10-year rate jumped 20 basis points to 1.93 per cent on Thursday and was at 1.9 per cent on Friday.
Equity markets were naturally spooked at the speed of the move. Wall Street’s benchmark S&P 500 Index ended the week down 2.4 per cent and the S&P/ASX 200 Index fell 1.8 per cent. Investors are clearly somewhat rattled. Although it’s worth noting markets have only retreated to their February starting points. The S&P 500 has risen more than 70 per cent since the lows of last March, with the ASX 200 up 47 per cent.
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https://www.afr.com/wealth/personal-finance/bank-of-mum-and-dad-beware-the-risks-20210224-p575er
Bank of Mum and Dad – beware the risks
Be sensible about what you promise, especially if there are other children who will expect the same support.
Michael Hutton Contributor
Mar 1, 2021 – 12.00am
The idea of people helping their children to buy a home, or buying it for them, was virtually unheard of 20 years ago – only the ultra-wealthy would consider such an approach.
Today, of course, things are different. Exorbitant property prices around Australia, particularly in cities, has made buying a home very challenging for young people without some form of assistance from their parents.
Most parents are happy to help their children take their first steps on the property ladder, but they need to be careful. It can be easy to get carried away and end up putting your own position at risk.
It’s important to be sensible about what you promise, especially if there are other children who will expect the same support.
First and foremost, parents should look after themselves. This doesn’t mean being entirely selfish, but keep in mind there’s no point in becoming a financial burden on your children later in life because you’ve made too many sacrifices now.
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PM cannot hope minister rape claim will simply vanish
Peter Hartcher
Political and international editor
March 1, 2021 — 5.00am
A minister in the federal cabinet has been accused of committing rape. Since Friday evening, this fact has been public knowledge. It’s shocking and it’s impossible to unhear or unknow.
But which minister? His identity is not public knowledge. Yet.
In the meantime, the accusation has the potential to taint all 16 male federal cabinet ministers, although several are too young to have committed a crime alleged to have happened in 1988.
Worse, it taints Australia. The Prime Minister and his government can be accused of sheltering an alleged rapist. In the room where our best people are supposed to decide the greatest matters of state sits a man who has alleged to be one of our worst.
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Battle of ideas can’t be fought with censorship
Universities around the world are a focal point for fierce debate about freedom of speech. This reflects the prominent role of universities in our society as institutions of learning that must engage with all points of view. The search for truth must start with an open mind.
Some governments have become frustrated with the protection of freedom of expression in higher education. The UK is a good example. Its Education Secretary has proposed several new measures to stamp out unlawful “silencing” on campuses. These include the appointment of a free-speech champion and fines for universities and student unions that restrict freedom of speech. Universities will also be subject to a new duty to “actively promote” freedom of speech and risk deregistration if they fail to do so.
The debate in Australia is no less active, with the Coalition government prosecuting the case that free speech is under threat in higher education. Its response began with a thorough review of the sector in 2019 by former High Court chief justice Robert French. His report found “no evidence” of a “free speech crisis” on Australian campuses but did identify problems and recommended that universities adopt a new model code on freedom of speech.
Many universities have been reluctant to adopt the French model code. This led the government to appoint Professor Sally Walker to determine how much progress had been made. Her December 2020 report showed only nine of Australia’s 42 universities have policies fully aligned with the French model code. A number are mostly or partially aligned, and six have policies that are not aligned. Universities have different reasons for not adopting the model code. Some have felt they already have sufficient protections in place, and others that there is no problem to be solved.
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https://www.afr.com/markets/debt-markets/all-your-bond-market-questions-explained-20210301-p576of
All your bond market questions explained
The RBA has doubled the value of bonds it buys to $4 billion a day. Why is the RBA doing this, why is the bond market important, and what does it mean for stocks?
Jonathan Shapiro Senior reporter
Mar 1, 2021 – 3.04pm
The bond market has existed for hundreds of years and, while most of the time its machinations are uneventful, every now and again it reminds us it’s the boss of everything.
We are now living through one of those moments as a sharp rise in yields has forced us to rethink the risks and rewards in financial markets and put seemingly all-powerful central banks back on notice.
To help understand past, present and future bond market conniptions, here is an explainer that we will keep updated for the latest developments.
What is the bond market?
The bond market is arguably the oldest financial securities market on the planet. It is where governments, corporations and other lenders borrow money to finance their activities.
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If money is practically free, why is nobody investing it?
Negative interest rates won’t help when it is clear that there are other reasons entrepreneurs have lost their mojo.
Stephen Grenville Contributor
Mar 1, 2021 – 2.32pm
Paul Samuelson, the doyen of economic textbook authors, said that if inflation-adjusted interest rates were zero and expected to remain so, it would be profitable to flatten the Rocky Mountains in order to lower transport costs.
The US has had negative real rates for the entire period since the 2008 financial crisis. The Federal Reserve chairman has promised that this will continue for the foreseeable future. Yet the Rockies remain untouched. What has happened?
Academically inclined economists argue that the global savings/investment balance has forced interest rates down to zero. Monetary policy would normally apply stimulus by reducing interest rates even further, but has come up against the “zero lower band” – interest rates can’t go much below zero in nominal terms.
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Frydenberg must think long-term with super
Treasurer Josh Frydenberg’s plan to allow people to access their super savings for a house deposit will throw further fuel on the raging property conflagration.
Karen Maley Columnist
Mar 1, 2021 – 6.07pm
At a time when house prices are rising at a blistering pace, you might think the last thing Treasurer Josh Frydenberg would decide to do would be to throw yet more fuel on the property bonfire.
But that is what will happen if he pushes ahead with plans to make the country’s $3 trillion superannuation system “more flexible” by allowing workers to dip into their retirement savings to cover expenses such as housing.
At first glance, the idea might have some appeal. After all, why shouldn’t people be allowed to use their retirement savings to fund their way into the property market? Especially as there is no doubt owning your own house outright is the best way to ensure a comfortable retirement.
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Marise Payne’s inaction gives comfort to murderous regime
Peter Hartcher
Political and international editor
March 2, 2021 — 5.00am
The people of Myanmar are not intimidated by the generals who seized power four weeks ago in a coup. The protest rallies, the civil servant strikes, have only grown. We have now seen the generals’ response.
Troops are opening fire with live ammunition on unarmed civilians. The Myanmar military killed at least 18 peaceful protesters on Sunday, according to the UN, the deadliest day since the military annulled parliament. This is a calculated escalation of violence in this south-east Asian nation of 55 million.
Yet still the people are unbowed. A BBC reporter on Hledan Road in the country’s main city, Yangon, said: “Two people were shot dead here and one was badly injured. But the people did not retreat.” On the contrary: “More protesters occupied the road, blocking the area with shields and carts and readying themselves to take on the police.”
The people waited more than half a century for the army to give them their democratic due – from the 1962 military coup until the election that allowed Aung San Suu Kyi to take the leadership in 2016.
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Take some advice about financial advice
It’s a pity that the only time the issue of financial advice makes the headlines is when there is a drama. In the case of the late Melissa Caddick, a circle of investors are facing losses of more than $20m.
How can these incidents occur?
The outstanding issue is the presence of so-called ‘‘unlicensed advisers’’ in the market.
At the very least an investors should always do basic checks to ensure they are dealing with an adviser who is licenced by the Australian Securities & Investments Commission.
At The Australian every year we publish The List: Austraila’s top 100 Financial Advisers. Anyone on the list goes through a rigorous examination managed by the US-based Barron’s group to make it into the rankings.
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Superannuation assets top $3 trillion for first time
Australia’s total superannuation assets have now passed $3 trillion, as the nation’s giant pool of savings grows steadily despite a wave of withdrawals throughout 2020.
Data from the prudential regulator show the 2.2 per cent climb in national savings between December 2019 and 2020 took total superannuation assets to $3.04 trillion by the year’s end.
Almost $12bn was added in MySuper products total assets, on the back of increased scrutiny by the Australian Prudential Regulatory Authority.
APRA’s MySuper heatmaps have been used to name and shame poorly performing superannuation funds, while also lauding those who meet and beat benchmarks set by the regulator.
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Rate hikes a ‘disaster’ for markets, says Hamish Douglass
Sarah Turner Reporter
Mar 2, 2021 – 3.55pm
Magellan chairman and billionaire Hamish Douglass has warned that if central banks are forced to lift interest rates following an outbreak of inflation, then equity markets face a huge reckoning.
In the meantime, investors should brace for more volatility, the fund manger said, especially given the pandemic-fuelled rise of retail investing culminating in the GameStop share trading frenzy.
Bond yields surged in February as investors started to price in the potential for higher interest rates to arrive more quickly than expected as economic growth improved, vaccinations were deployed, and $US1.9 trillion of US fiscal stimulus was added.
The sharp rise in yields invites one of the most important debates in markets, the fund manager said: will inflation prove to be temporary or permanent?
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‘Deeply concerning’: One in five Chinese Australians threatened or attacked during coronavirus
By Anthony Galloway
March 3, 2021 — 12.00am
One in five Chinese Australians say they were physically threatened or attacked because of their Chinese heritage in the past 12 months, with most blaming the COVID-19 pandemic and the breakdown in relations between the two countries.
More than a third (37 per cent) of people in Australia with Chinese heritage surveyed by the Lowy Institute reported being treated differently or less favourably and 31 per cent said they were called offensive names.
When asked about factors that contributed to these experiences, 66 per cent pointed to the COVID-19 pandemic and 52 per cent to the state of Australia-China relations.
Osmond Chiu was one of three witnesses with Chinese-Australian heritage asked last year by Liberal senator Eric Abetz to “unequivocally condemn” the Chinese Communist Party during a Senate inquiry into issues facing diaspora communities in Australia. He later described the questioning as “demeaning”, saying it “felt like a gotcha loyalty test”.
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How government bond yields impact your investments
Elizabeth Moran explains how a spike in government bond yields impacts your investments.
By Elizabeth Moran · 4 Mar 2021
A big fuss is being made over government bond yields, but if you don’t invest in bonds, what difference does that spike in yields make to you?
To explain, I’ll need to take you through some basic economics but bear with me.
To start, the Reserve Bank of Australia (RBA) is our central bank and acts on behalf of the Australian Government to implement its policies. Its duty is to:
Contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. It does this by conducting monetary policy to meet an agreed medium-term inflation target, working to maintain a strong financial system and efficient payments system, and issuing the nation’s banknotes.
So, it has competing priorities – full employment, economic prosperity, inflation and a strong financial system. For some time, the RBA has let the medium-term inflation target of 2-3 per cent drift below its target, preferring to encourage economic prosperity and combat unemployment.
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Morrison to launch 10-year critical minerals ‘value-add plan’
Jacob Greber AFR correspondent
Mar 3, 2021 – 10.30pm
Prime Minister Scott Morrison will press business and industry to help lift efforts to develop as quickly as possible a domestic critical minerals processing capacity amid fears China is too dominant.
While Australia is already a fast-growing global supplier of the rare earth and other critical minerals needed for a vast array of technologies from fighter jets to electric vehicles and iPhones, it’s only capturing a small share of the overall potential benefit because it doesn’t process those materials.
On Thursday Mr Morrison will release a 10-year “road map” to create more processing capacity as well as opening the door to applications for a $1.3 billion fund to help manufacturers ramp up production, and commercialise products for global supply chains.
“The government will be looking at opportunities to not only collaborate with industry and to make strategic investments, but also for industry players and businesses to work together to invest in strategic projects that will boost Australia’s manufacturing capabilities and expertise in the resources sector,” the government says in the report.
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Having kids doesn’t guarantee a conscience, says Tame
Andrew Tillett and Hannah Wootton
Mar 3, 2021 – 4.53pm
Australian of the Year and sexual abuse survivor Grace Tame has criticised Prime Minister Scott Morrison for referring to his experience as a father when responding to the alleged rape of a former government staffer.
Ms Tame also said federal politics was not immune to “cover-up culture” and abuses of power amid the sexual assault allegations that have rocked Canberra.
She also said comments by Defence Force chief Angus Campbell to military cadets not to make themselves prey by being out late, alone, drunk and attractive were “unhelpful”.
Appearing at the National Press Club ahead of International Women’s Day, Ms Tame called on governments to adopt a nationally consistent framework around sexual assault, including a definition of consent and education on grooming of children.
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https://www.afr.com/policy/tax-and-super/super-performance-test-sets-wrong-priority-20210303-p577ak
Super performance test ‘sets wrong priority’
Ronald Mizen Reporter
Mar 3, 2021 – 6.24pm
The Morrison government’s Your Future, Your Super reforms will push superannuation trustees to choose short-term investment strategies over long-term options that generate higher returns for members.
That is the conclusion of new research by industry think tank the Conexus Institute, which investigated the impact of a superannuation product performance test to come into effect later this year.
Super funds will be ranked, with underperformance classified as products that return less than 0.5 percentage points below their benchmark per year over an eight-year period.
Many funds have raised concerns about the conflict they will face between managing portfolios in the best interests of members and managing portfolios under the new test, with some suggesting it could prompt funds to abandon lucrative infrastructure and property investments.
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La Trobe Uni to cut 300 more jobs, laments ‘unsympathetic’ government
By Adam Carey
Updated March 4, 2021 — 8.31amfirst published March 3, 2021 — 7.29pm
Staff at La Trobe University have been told the university will shed another 250 to 300 full-time equivalent jobs this year, potentially taking the total number of lost jobs at the beleaguered institution past 500.
University vice-chancellor John Dewar also lamented to staff in a meeting on Wednesday that the Morrison government was largely unsympathetic to the university sector’s plight, despite the loss of billions of dollars and thousands of jobs.
In candid comments about the tense relationship between universities and the Coalition, Professor Dewar said the federal government “thinks it is our fault we are reliant on international student revenue”.
“They think we are naive about foreign interference, particularly from China; and think we don’t take issues of freedom of speech or academic freedom seriously enough.”
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https://www.afr.com/policy/economy/greensill-on-the-brink-20210304-p577p5
Greensill on the brink
The Financial Review’s take on the principles at stake in major domestic and global stories.
Mar 4, 2021 – 6.15pm
Greensill Capital was born from a simple financial need, the long waits that founder Lex Greensill endured to get paid for produce in his days on the Queensland family farm. Yet his company is now on the brink after ending up closer to the financial engineering wonderland of pre-2008 Wall Street. That too had begun with the simple idea of democratising US housing finance, with slicing and selling of loans spreading the risk – until the realisation it had hidden the risk instead in a pyramid of creditors and counter-parties.
London-based Greensill grew into one of the world’s biggest supply chain financiers. It lends money to large companies to fund early payment to smaller suppliers, in exchange for a discount on their invoices. Greensill pocketed some of the discount, then packaged up the loans into short-term bonds for sale through investor funds, using the higher credit rating of the big customer. That also helped it compete against big banks.
But for months Greensill has struggled to renew crucial insurance cover on its loans. Its day-to-day funder, Credit Suisse, also alarmed at Greensill’s exposure to one particular customer in Sanjeev Gupta’s GFG Alliance steel empire – also known for its imaginative financing – has frozen the $10 billion Greensill bond funds it runs. On Sunday, Mr Greensill told this newspaper’s Street Talk column: “It is categorically untrue that we are in any sort of safe harbour position”. The next day, they were. This week regulators temporarily closed Greensill’s German bank, and a fire sale of assets began.
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PM, if you believe Porter, say so. If not, ask him to resign
David Crowe
Chief political correspondent
March 4, 2021 — 5.59pm
Scott Morrison and Christian Porter were too clever by half when they met on Wednesday last week to talk about claims the Attorney-General raped a young woman three decades ago. The Prime Minister and Attorney-General knew one of their colleagues had a written account from the woman who had claimed the rape, and they knew the document had been sent to police.
But they did not read it. They did not try to read it. They did not ask for it.
Very few people have seen the document but it was not hard for Morrison and Porter to find. It had been sent to Liberal backbencher Celia Hammond, who the Prime Minister named last week to review the party’s culture and the treatment of women.
Hammond received the document on the afternoon of Wednesday, February 24, when it arrived with an anonymous letter. She forwarded it to the Australian Federal Police and told Morrison’s office about the claims.
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The ethical foundations of liberal democratic politics are eroding in Australia
Simon Longstaff
Contributor
March 5, 2021 — 5.00am
Every rape, every sexual assault, every act of harassment or bullying is abhorrent. It does not matter where these wrongs occur. It does not matter who is involved. There are no allowances or exceptions. Although neither equal in degree nor effect, each offence violates a fundamental principle, most closely associated with the 18th century philosopher Immanuel Kant, namely that of “respect for persons”.
This principle recognises every person as possessing intrinsic dignity – irrespective of age, gender, culture, sexual orientation or any other marker of difference. It establishes our basic equality and forbids us ever to use another person merely as a means to an end. Thus, the prohibition against slavery, torture, genocide and all the great evils of which people are capable.
The NSW Division of the Liberal Party has recognised this in its inaugural mandatory code of conduct and ethics, which requires members to “treat others with dignity, courtesy and respect”.
What, then, are we to make of the fact that, in response to recommendations to update the members’ code of conduct and appoint a compliance officer, the leaders of the houses in the NSW Parliament have explicitly rejected just such an ideal – specifically jettisoning a proposal that members of Parliament be obliged to treat others with dignity, courtesy and respect?
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https://www.afr.com/politics/federal/damage-done-pm-struggles-to-change-the-message-20210304-p577xt
Damage done: PM struggles to change the message
Scott Morrison should be basking in the glory of a vaccine rollout and a remarkable economic recovery. Instead, two of his senior ministers are on the ropes. Where did it all go wrong?
Phillip Coorey Political editor
Mar 6, 2021 – 12.00am
Every three months or so, pollster John Scales and his team from JWS Research conduct a nationwide survey to identify the issues that keep voters awake at night, as well as gauge how the voters rate the government’s handling of such concerns.
The latest True Issues survey was conducted between February 18 and February 22, just as the Parliament was dominated by debate over the alleged rape of former Liberal staffer Brittany Higgins in 2019 by a colleague, why the Prime Minister wasn’t told, and the broader questions about workplace culture that were raised.
The explosive allegations that Attorney-General Christian Porter, as a 17-year-old, had raped a 16-year-old co-competitor at a 1988 school debating championship in Sydney, had yet to surface.
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https://www.afr.com/chanticleer/don-t-let-fraud-kill-financial-advice-20210305-p57858
Don’t let fraud kill financial advice
Paying for sound financial advice is essential in a world where slick product spruikers and fraudsters have used low interest rates to take money from naive investors.
Mar 6, 2021 – 12.00am
When Chanticleer this week heard a first-hand anecdote about Melissa Caddick, the Sydney woman who stole about $30 million using a Ponzi scheme, it gave an insight into her flawed personality.
The incident happened 20 years ago when a Sydney fund manager was approached by a friend and asked to give Caddick a job. After the friend spoke highly of her, the fund manager gave her a mundane clerical job in the back office.
About six months after Caddick started work, the fund manager’s accountant rang him to say there were several anomalies in the accounts. The accountant asked him to go down to National Australia Bank and check the cheques.
At the bank, the fund manager found two company cheques worth $5000 and $10,000 with forged signatures.
He went back to the office, asked Caddick if she had forged them, and when she said yes, his good nature got the better of him. Instead of calling the cops, he gave her a second chance. He simply asked her to leave immediately.
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https://www.afr.com/wealth/personal-finance/bonds-blow-up-equity-market-again-20210305-p5785p
Bonds blow up equity market – again
The assumed defensive hedge afforded by fixed-rate bonds in respect of equities has broken down, forcing investors to consider other options.
Christopher Joye Columnist
Mar 5, 2021 – 2.19pm
For years, we’ve argued that investors should not rely on the age-old assumption that fixed-rate bonds are a powerful equity hedge. We cited data showing that over the past 100-plus years, the strong negative correlation between fixed-rate government bonds and stocks was the exception rather than the rule, which appeared only in deflationary shocks such as the global financial crisis.
For much of our modern history, a positive correlation between fixed-rate (rather than floating-rate) bonds and equities has held, especially during inflationary cycles, which is where we may be heading. This is why there is merit in diversifying into floating-rate bonds with zero interest rate duration risk, which offer greater protection against rising interest rates than fixed-rate debt. Whereas a fixed-rate bond’s price declines when interest rates rise, the floating-rate security should not be affected, holding all other variables constant.
The need for this protection will be pressing if policymakers are indeed successful with their ambitious goals of exhausting the persistent excess labour supply that has been evidenced since the GFC, and reigniting much stronger wages growth, which has been elusive in Australia.
As was the case for a brief period in 2018 when 10-year government bond yields in the US surged above 3.2 per cent as a result of wages growth rising above 3 per cent, a positive correlation between fixed-rate bonds and equities has recently re-emerged. In February, the benchmark fixed-rate bond index, called the AusBond Composite Bond Index, suffered the worst monthly loss since its inception 31 years ago, falling 3.6 per cent. Since their peak in mid-February, Aussie and US equities are also off about 4 to 5 per cent.
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Money traps to avoid when moving back to Australia
Here’s what to add to your financial checklist if you’re an expat returning home.
Duncan Hughes Reporter
Mar 5, 2021 – 12.00am
Australian expats heading home during the global COVID-19 health threat face financial traps unless they take steps to review their tax liabilities and protect property investments and superannuation.
Nearly 40,000 Australians stranded overseas have registered with the Department of Foreign Affairs and Trade as wanting to return. But they are unable to secure flights.
About 465,000 Australians have returned since last March, when the government recommended reconsidering the need to travel abroad.
Peter Bembrick, tax partner with HLB Mann Judd Sydney, says those working abroad for even a short time, typically two or three years, “could face a hefty tax bill” on their return.
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It started on Instagram. Now Chanel’s petition is leading a sex education revolution
By Natassia Chrysanthos
March 6, 2021 — 5.00am
Chanel Contos was in the back room of the converted London warehouse she lives in, her phone buzzing every few seconds with new social media notifications, when she decided to go public with her story of teenage sexual assault.
Her petition for earlier sex education in schools, which began as an Instagram poll, was just beginning to reveal hundreds of testimonies from former Sydney schoolgirls about sexual assaults they had experienced at the hands of their male peers. And it was showing no signs of slowing.
Running on adrenaline, Ms Contos made the call to put her face to the story. She rang her father first, to give him a heads up. “He was at a party, and I said: ‘I have to tell you something. I’m about to do an interview with The Sydney Morning Herald. By the way, I got sexually assaulted when I was 13. Bye!’ He was like: ‘What?’ It was confronting for dad at first.”
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‘It’s our turn’: Inside the Christian Right conference plotting a political takeover
By Michael Koziol
March 7, 2021 — 12.00am
Craig Kelly was lauded as a hero, a federal MP likened his colleagues to nappies and people joked about needing a World War to distract from gender identity debates.
But the main lesson from the “Church and State” conference last weekend in Brisbane was how conservative Christian activists are attempting to grow their numbers and influence within the Coalition, and believe opposition to transgender rights will be key to their political success.
Several prominent Christian Right figures spoke of the need to be more explicit in their political activism, especially in the Liberals and Nationals, in the face of what they called an “existential” threat to the practise of Christianity.
Liberal National MP George Christensen said it was “simple maths” that getting more Christians into the Coalition would change its centre of gravity. “Politics is all about numbers,” he said. “The more people that you have in that broad church that are from the conservative Christian wing the more it’s going to lean in that direction.”
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https://www.smh.com.au/national/culture-of-silence-keeps-abuse-systems-in-place-20210305-p577zp.html
Culture of silence keeps abuse systems in place
By Grace Tame
March 6, 2021 — 11.55pm
In recent weeks, the once unspoken horror of sexual abuse has become the dominant focus of public conversation. But the events playing out in the centre of our nation – and the corrupt cultures they’re exposing as a result – are not unique to Parliament. Abuse of power – invisible and therefore untraceable – is a cornerstone of all sexual violence.
This issue is far too important to be politicised. It transcends all divides. It affects us all.
As is often the case when a systemic issue is suddenly pulled out of the shadows and thrust into the spotlight, there has been widespread shock and disbelief as to how something so evil as sexual abuse could not just exist, but do so ubiquitously.
The answer is painfully simple: silence. Evil thrives in silence.
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Coronavirus And Impacts.
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J&J’s one-shot vaccine receives FDA advisers’ backing
Robert Langreth and Riley Griffin
Feb 27, 2021 – 9.24am
Johnson & Johnson’s single-shot coronavirus vaccine won the backing of a panel of US government advisers, paving the way for authorisation of a third US immunisation against the deadly virus.
Experts advising the US Food and Drug Administration voted 22-0, with no abstentions, that the benefits of the vaccine outweigh its risks in adults 18 and older, a decision that could help bolster the vaccine supply as new variants continue to spread. The FDA usually follows the nonbinding recommendations of its advisory panels and could authorise the shot within days.
The J&J shot is highly anticipated because it can be kept in a refrigerator for three months, an advantage over the mRNA vaccines that must be frozen when stored for longer periods, and its single-shot regime.
“This is a relatively easy call,” said said Eric Rubin, a committee member who’s also editor-in-chief of the New England Journal of Medicine. “It clearly gets us way over the bar, and it’s nice to have a single-dose vaccine.”
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Italy blocks AstraZeneca vaccine export to Australia
Hans van Leeuwen and Andrew Tillett
Updated Mar 5, 2021 – 5.48am, first published at 3.21am
London/Canberra | Italy has blocked a shipment of 250,000 doses of AstraZeneca’s COVID-19 vaccine bound for Australia, embroiling the Morrison government in Europe’s outbreak of vaccine nationalism.
Brussels officials confirmed that the newly installed Italian government of Prime Minister Mario Draghi had vetoed the shipment under a European Union export control mechanism brought in on January 30 to keep coronavirus vaccines in the bloc.
Mario Draghi is working on an overhaul of Italy’s slow and uneven vaccination campaign, focusing on logistics and recruiting the military to help. Bloomberg
Federal Health Minister Greg Hunt told state counterparts on Thursday afternoon that their allocations of the AstraZeneca vaccine were being cut without providing an explanation why, The Australian Financial Review understands.
The first doses of the AstraZeneca vaccine are due to begin being administered in South Australia on Friday.
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WHO investigators to scrap interim report on probe of Covid-19 origins
· The Wall Street Journal
A World Health Organisation team investigating the origins of Covid-19 is planning to scrap an interim report on its recent mission to China amid mounting tensions between Beijing and Washington over the investigation and an appeal from one international group of scientists for a new probe.
The group of two dozen scientists is calling in an open letter on Friday AEDT for a new international inquiry. They say the WHO team that last month completed a mission to Wuhan — the Chinese city where the first known cases were found — had insufficient access to adequately investigate possible sources of the new coronavirus, including whether it slipped from a laboratory.
Their appeal comes as the US — which recently reversed a decision to leave the WHO — lobbies for greater transparency in the investigation, saying it is waiting to scrutinise the report on the Wuhan mission, and urging China to release all relevant data, including on the first confirmed infections in December 2019, and potential earlier ones.
Beijing, meanwhile, is pressing for similar WHO-led missions to other countries, including the US, to investigate whether the virus could have originated outside China and spread to Wuhan via frozen food packaging.
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Covid is serious and governments had to respond
Last weekend in Inquirer, Steve Waterson wrote a provocative analysis of Australia’s response to COVID-19 in which he castigated our political leaders for what he saw as their extreme policy over-reaction to the pandemic. While there is much to discuss about the specific actions governments have taken and their unintended consequences, the debate should take place in the context of sound epidemiological analysis.
In this regard, there are several key areas that must be clearly understood about the pandemic and how it has all unfolded.
First is the question of how serious this disease is. The crudest measure of disease severity is how many deaths it causes and on that score COVID comes out far worse than seasonal influenza, with which it is sometimes compared. The best way to understand this is to look at what happened to countries hit by the full force of the pandemic before they had a chance to take preventive actions. For 27 countries of the World Health Organisation’s European region that participate in a real-time mortality reporting project, the number of weekly deaths surged from under 60,000 to more than 90,000 in March and April last year before national lockdowns came into effect.
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https://www.afr.com/policy/economy/the-covid-19-bubble-is-heading-for-a-hard-landing-20210305-p5781h
The COVID-19 bubble is heading for a hard landing
The US Federal reserve is now a prisoner of the forces it has unleashed. The COVID-19 bubble will crash in a stagflationary bust.
Nouriel Roubini Contributor
Mar 5, 2021 – 12.25pm
The US economy’s K-shaped recovery is under way. Those with stable full-time jobs, benefits, and a financial cushion are faring well as sharemarkets climb to new highs. Those who are unemployed or partially employed in low-value-added blue-collar and service jobs – the new “precariat” – are saddled with debt, have little financial wealth, and face diminishing economic prospects.
These trends indicate a growing disconnect between Wall Street and Main Street. The new sharemarket highs mean nothing to most people. The bottom 50 per cent of the wealth distribution holds just 0.7 per cent of total equity-market assets, whereas the top 10 per cent commands 87.2 per cent, and the top 1 per cent holds 51.8 per cent. The 50 richest people have as much wealth as the 165 million people at the bottom.
Rising inequality has followed the ascent of big tech. As many as three retail jobs are lost for every job that Amazon creates, and similar dynamics hold true in other sectors dominated by tech giants. But today’s social and economic stresses are not new. For decades, strapped workers have not been able to keep up with the Joneses, owing to the stagnation of real (inflation-adjusted) median income alongside rising costs of living and spending expectations.
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WHO chief promises ‘full transparency’ as scientists raise concerns about COVID-19 probe
By Latika Bourke
March 6, 2021 — 6.00am
London: The head of the World Health Organisation has promised full transparency amid concerns from a group of scientists that the organisation’s investigation into the origins of COVID-19 had been compromised by China.
WHO experts also said it could take decades and many more trips to China to understand how the virus started and jumped to humans, infecting more than 100 million people and killing at least 2.5 million worldwide.
On Thursday, a group of scientists, including a trio of Australians, said in a five-page open letter that the WHO’s joint team was not granted the independence nor unrestricted access required to determine all possible scenarios for how the virus might have occurred, including the theory that it leaked from the Wuhan Institute of Virology, which studies bat viruses.
“Because the joint team investigation falls short of the mark, we believe it essential for the international community to outline how a full and unrestricted investigation could be organised,” the scientists said.
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The first real-world data for COVID vaccines is in - and it’s really good news
By Liam Mannix
March 6, 2021 — 11.30pm
The first real-world data for COVID-19 vaccines is in – and the vaccines’ effectiveness have once-again shot past scientists’ expectations.
Vaccines are typically less effective in the real-world than in clinical trials. But in data from Israel and the United Kingdom, both of whom have managed to vaccinate a large slice of their population, vaccine effectiveness appears to be matching that seen in clinical trials.
There are also positive signs the vaccines will significantly cut viral transmission, although it is too early to draw firm conclusions.
In Britain, Pfizer’s mRNA vaccine appears to be 88 per cent effective at preventing symptomatic infection in those aged over 80.
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Pandemic property boom: will it get too hot to handle?
By Matt Wade
March 6, 2021 — 12.01am
Here we go again - interest rates are at an historic low and housing markets are running hot.
Property tropes missing from the city’s narrative for years are back in the news. Dumps are selling for squillions; big crowds are showing up at auctions; reserves are being smashed.
House prices in Australia jumped by 2.1 per cent in February, the biggest month-on-month gain in almost 18 years according to CoreLogic’s national home value index.
A year ago, as the coronavirus pandemic took hold, a swag of experts predicted a house price rout. But the unprecedented government stimulus unleashed to nurse the economy through the pandemic crisis has been very favourable for residential property.
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Climate Change.
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No entries in this topic.
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Royal Commissions And The Like.
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https://www.afr.com/politics/federal/pm-mulls-aged-care-tax-20210301-p576m8
PM mulls aged care tax
Phillip Coorey and Tom McIlroy
Mar 1, 2021 – 8.00pm
Scott Morrison is open to a tax increase to find the tens of billions of dollars extra that will be needed to fix a troubled and underperforming aged care sector, but is unlikely to move unless he has Labor’s support.
As an alternative, the government is exploring compelling a greater use of retirement savings, including superannuation, when people go into aged care, to help find the money needed.
The federal government has committed almost half a billion dollars in an immediate response to the 148 recommendations in the final report of the aged care royal commission.
The Prime Minister left open the option of an income tax rise or an increase to the Medicare Levy following the release on Monday of the two-year Royal Commission into Aged Care Quality and Safety report.
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Aged care workforce needs higher pay and better education
Carrie LaFrenz Senior reporter
Mar 1, 2021 – 5.33pm
The royal commission into aged care has made 148 wide-ranging recommendations, with professionalising the workforce through more education, better training and higher wages being a key for corporate facility operators.
Health Minister Greg Hunt outlined a $452 million, five-year road map to address the deep-rooted issues in the sector on Monday, noting the final report’s recommendations should “shape the culture for better respect of our elders.”
A minimum quality and safety standard for staff time in residential aged care, including an appropriate skills mix and daily minimum staff time for registered nurses and personal care workers for each resident, and at least one registered nurse on site at all times, was recommended by the commissioners.
The report found Australia’s aged care system is understaffed and the workforce is underpaid and undertrained.
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Dignity in life and death: Commission recommends more nurses and palliative care
By Julie Power
March 1, 2021 — 8.00pm
Shannon Ruddock’s 81-year-old father’s last weeks of life were spent in such pain in a Sydney aged care facility that he begged to be thrown under a bus.
Her father, Vincent Paranthoiene, was shuffled between a Sydney hospital and an aged care facility whose staff were ill-equipped to treat his pain before he died in late 2017. That made Ms Ruddock determined to campaign for aged care residents to have a “good death”, and for dignity at the end of their lives.
The Aged Care Royal Commission’s final report calls on the government to recognise that palliative care and end-of-life care, like dementia care, is a “core business” for aged-care providers.
Given that almost a third of people using residential aged care will die within one year of entering care, the report said palliative care should not be seen as an optional extra.
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https://www.afr.com/politics/federal/aged-care-a-test-for-the-country-20210302-p57707
Aged care a test for the country
The eight-volume final report of the royal commission into the nation’s troubled aged care sector shows major reforms are needed to make the system work well.
Tom McIlroy Political reporter
Mar 3, 2021 – 12.01am
Minutes before Scott Morrison stepped up to speak at Sydney’s Kirribilli House on Monday, public servants quietly delivered dozens of boxes to an unremarkable hallway on the second floor of federal Parliament.
Inside were thousands of pages making up the eight-volume final report of the royal commission into the nation’s troubled aged care sector, the result of more than two years of work. Journalists scrambled to read the brief of evidence – detailing poor standards, myriad challenges, funding gaps, exploding demand and gut-wrenching neglect.
“It will test my government, it’ll test the budget and it’ll test the Parliament,” Morrison said, emotional after reflecting on his own father’s death in an aged-care home little more than a year earlier.
At least the 20th such report on aged care in little more than two decades, all sides of politics, advocates for the elderly and industry players agree it must spark systemic and lasting change.
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Sky-high home-care fees for a few hours’ respite
John Murray, 82, has been looking after his wife, Pat, 80, since she was diagnosed with dementia three years ago.
Pat Murray receives a couple of hours a week in home care, which gives her husband “a little bit of respite” and an opportunity to carry out jobs on their farm in Kersbrook, just outside of Adelaide in South Australia, such as feeding cattle.
“It can be full-on when she’s not with us, but she’s not too bad today,” he says. “It can get quite frustrating when they (dementia sufferers) don’t communicate.”
John Murray, who once worked for the South Australian Institute of Sport, says navigating home-care packages has been impossible, with private contractors often “robbing” carers and aged-care recipients with exorbitant fees.
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National Budget Issues.
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https://www.afr.com/policy/economy/debt-cost-spike-presents-a-few-challenges-for-rba-20210228-p576g7
Debt cost spike presents a few challenges for RBA
John Kehoe Senior writer
Mar 1, 2021 – 12.00am
Government interest costs are on track to blow out by $15 billion over the next two years because of a sudden jump in bond yields, putting pressure on the Reserve Bank of Australia to consider more aggressive interventions in bond markets to suppress borrowing costs.
Rising economic optimism – stoked by the vaccine rollouts, easing health restrictions, high commodity prices and a planned $US1.9 trillion ($2.47 trillion) stimulus by US President Joe Biden – has fuelled a jump in borrowing costs around the world, particularly in Australia and New Zealand.
In an attempt to contain surging bond yields and the strong Australian dollar, the RBA stepped in with more than $7 billion of federal and state government bond purchases in the secondary market last week.
But investors bet against RBA governor Philip Lowe’s expectation that the cash rate would remain anchored at 0.1 per cent until at least 2024.
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‘Extraordinary’: Property values rise at fastest pace in 17 years
Michael Bleby Senior reporter
Mar 1, 2021 – 10.02am
Property values rose at their fastest pace in almost 17 years in February, the combination of ultra-cheap credit and low stock levels put Sydney and Melbourne on track to hit new record highs.
Rising prices lifted home values up 2.1 per cent across the country, the highest national monthly number since August 2003.
The number of homes listed for sale dropped 26 per cent from a year earlier even as transaction numbers for the three months to February leaped 35 per cent year-on-year, new numbers from CoreLogic showed on Monday.
“These are some extraordinary numbers,” CoreLogic head of research Tim Lawless said.
“It’s absolutely showing the market is rising quickly in value but it’s happening virtually everywhere around the country.”
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https://www.smh.com.au/politics/federal/the-budget-beat-is-changing-20210225-p575w6.html
The budget beat is changing
By Shane Wright
March 1, 2021 — 5.00am
Budget surpluses and fiscal responsibility have been hallmarks of the Australian economic and political discourse for more than three decades.
Through Paul Keating and Peter Costello, to Wayne Swan and even a pre-pandemic Josh Frydenberg, the north star of federal budget stewardship has been about finding a way back to, or staying in, surplus.
On occasion, governments have faltered in this pursuit. In almost all of these cases, it was due to events beyond their control.
Keating, Swan and then Frydenberg were all delivered economic circumstances that demanded deficits. To try otherwise would be disastrous, measured in lines of unemployed people and shuttered shops.
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The real reason to worry about MMT is not the theory but the practice
Economics Editor
March 1, 2021 — 5.00am
Many people are alarmed by “modern monetary theory”, the seemingly radical idea that the government should cover its budget deficit simply by creating money. But in his new book, Reset, Professor Ross Garnaut, one of our most respected economists, has joined the young turks.
And that’s not all. Last Monday I wrote about the things Reserve Bank governor Dr Philip Lowe doesn’t feel he can say out loud in this era of unconventional “monetary policy” (the manipulation of interest rates). Something else he doesn’t want to say is that the Reserve is funding the budget deficit already.
(By the way, what follows ignores the present flurry in bond markets, where some players have leapt to the conclusion that inflation’s about to take off. I wish. Don’t worry, the market will return to reality soon enough.)
Until Garnaut’s intervention, this issue has seemed divided between two groups. One is younger economics graduates who think of this revolutionary new idea that the federal government shouldn’t bother borrowing to finance its budget deficits but simply print all the money it needs – thus avoiding all that debt and interest payments – as a breakthrough that would transform the management of our economy and hasten our return to full employment.
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We may have just seen the end of a 40-year bull market for bonds
Stephen Bartholomeusz
Senior business columnist
March 1, 2021 — 11.59am
For investors, and central bankers, there’s an important question posed by the turbulence in financial markets last week as bond yields spiked and share prices tumbled. Was that a mini “tantrum” or a preview of a more structural and historic change?
For weeks bond yields have been edging up and sharemarket volatility has increased amid discussion of reflation – the prospect of a sharp rebound in economic activity as vaccines roll out and, in the US, the Biden administration pours another $US1.9 trillion ($2.5 trillion) of stimulus into its economy – and what that might mean for inflation and interest rates.
Last week bond yields spiked and there was a big selloff of equities. The US 10-year bond yield hit 1.61 per cent on Thursday – its highest level in more than a year –before sliding back to a still-elevated 1.46 per cent on Friday. Wall Street fell 3 per cent from mid-week.
An indication that the trading might have been something other than a momentary bout of volatility was that it appears to have been sparked by a US Treasury Department auction of seven-year notes.
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https://www.afr.com/policy/economy/rba-doubles-daily-bond-buying-to-4b-20210301-p576nr
RBA doubles daily bond buying to $4b
Matthew Cranston Economics correspondent
Mar 1, 2021 – 12.12pm
The Reserve Bank has doubled the size of its daily quantitative easing program, announcing it would increase bond purchases from $2 billion to $4 billion.
The announcement immediately drove the yield, or borrowing cost, on longer term bonds down.
The 10-year bond yield decreased to 1.61 per cent from 1.72 per cent. The 10-year yield had risen to as high as 1.95 per cent last Thursday when bonds were sold off. The five-year yield traded at 0.70 per cent.
The RBA announced at 11am on Monday that it intended to buy $4 billion in bonds ranging from November 2024 through to May 2028. The bonds will be bought after 3.25 pm on Monday.
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https://www.rba.gov.au/media-releases/2021/mr-21-03.html
Media Release Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2021-03
Date 2 March 2021
At its meeting today, the Board decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program.
The outlook for the global economy has improved over recent months due to the ongoing rollout of vaccines. While the path ahead is likely to remain bumpy and uneven, there are better prospects for a sustained recovery than there were a few months ago. Global trade has picked up and commodity prices have increased over recent months. Even so, the recovery remains dependent on the health situation and on significant fiscal and monetary support. Inflation remains low and below central bank targets.
The positive news on vaccines together with the prospect of further significant fiscal stimulus in the United States has seen longer-term bond yields increase considerably over the past month. This increase partly reflects a lift in expected inflation over the medium term to rates that are closer to central banks' targets. Reflecting these global developments, there have been similar movements in Australian bond markets. Changes in bond yields globally have been associated with volatility in some other asset prices, including foreign exchange rates. The Australian dollar remains in the upper end of the range of recent years.
In Australia, the economic recovery is well under way and has been stronger than was earlier expected. There has been strong growth in employment and a welcome decline in the unemployment rate to 6.4 per cent. Retail spending has been strong and most of the households and businesses that had deferred loan repayments have now recommenced repayments. The recovery is expected to continue, with the central scenario being for GDP to grow by 3½ per cent over both 2021 and 2022. GDP is expected to return to its end-2019 level by the middle of this year.
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https://www.afr.com/policy/economy/rba-holds-nerve-on-rates-bond-buying-20210302-p576z1
RBA holds nerve on rates, bond buying
Matthew Cranston Economics correspondent
Mar 2, 2021 – 2.46pm
The Reserve Bank has held the official cash rate at 0.1 per cent and maintained the size and parameters of its $200 billion quantitative easing bond buying program.
The central bank said it had “brought forward” some bond buying this week to restore functionality to the bond market which had experienced a sell off last week.
“Bond purchases under the bond purchase program were brought forward this week to assist with the smooth functioning of the market,” governor Philip Lowe said in his statement.
“The bank is prepared to make further adjustments to its purchases in response to market conditions.”
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https://www.afr.com/policy/economy/rba-prepared-to-do-more-qe-20210302-p5773q
Lowe gives first signal more QE is coming
John Kehoe Senior writer
Mar 2, 2021 – 6.20pm
For the Reserve Bank of Australia, there is a fine line between being alert to and captive to ructions in the bond market.
RBA governor Philip Lowe on Tuesday showed he would not be pushed into perpetually increasing the size of quantitative easing (QE), while, paradoxically, signalling the bank was preparing to extend the duration of QE beyond September this year.
The RBA board met on Tuesday in the wake of a vicious global bond market sell-off, which Australia was at the epicentre of when government borrowing costs last week spiked.
The central bank responded with a doubling of its daily bond purchases to $4 billion on Monday.
Yet the RBA is characterising the temporary extra QE as a “bring forward” of its initial $100 billion, six-month program.
The move should not be extrapolated to bake in a permanently higher QE level.
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Economy grows by 3.1 per cent in fourth quarter, smashing expectations
Australia’s rapid recovery from the worst downturn in nearly a century has been confirmed by national accounts figures which showed the economy expanded by 3.1 per cent in the December quarter.
The lifting of harsh restrictions in Victoria underpinned the stronger-than-anticipated lift in economic activity through the quarter, the ABS said. The September quarter growth figure was also revised higher, to 3.4 per cent from 3.3 per cent.
It was the first time in the over 60-year history of the national accounts that GDP has grown by more than 3 per cent in two consecutive quarters, the ABS said.
Australia’s economy is now only 1.1 per cent smaller than it was a year ago, the ABS data showed. Annual output through 2020, however, was 2.4 per cent, or $48bn, less than in 2019, revealing the hit to economic activity as a result of the health crisis.
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The hidden warning behind rising bond yields
Jonathan Shapiro Senior reporter
Mar 4, 2021 – 3.52pm
A key Reserve Bank official says rising global bond yields could pose a threat to financial stability if the reason for the increase is that investors are less certain about the outlook for inflation and interest rates.
The central bank’s head of financial stability, Jonathan Kearns, said on Thursday that the sharp rise in Australian bond yields was in response to a spike in global interest rates.
There was little to worry about if the market was simply factoring in the prospects of higher inflation and economic growth, as incomes and asset prices would also increase.
But he warned that if the increase in rates reflected an increasing risk premium, “where there’s uncertainty about future conditions”, that would be factored into the valuation of assets such as housing and equities and result in a decline.
“If you have a significant fall in asset prices where there is a higher degree of leverage, then that can have great implications for the financial system and financial stability,” he said in an interview hosted by credit rating agency Moody’s Investor Services.
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Health Issues.
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‘We are failing on mental health’: Premier pledges biggest social reform in generation
By Jewel Topsfield
March 2, 2021 — 10.09am
The use of restraint and seclusion in mental health care would be eliminated within ten years and compulsory treatment would be used only as a last resort under reforms recommended by the Royal Commission.
The Royal Commission into Victoria’s mental health system found it was overwhelmed and cannot keep up with the number of people who seek treatment.
There was an over-reliance on medication, the perspectives of people with mental illness were overlooked, families and carers were left out and services were difficult for many people to afford.
Premier Daniel Andrews has committed to implementing all 65 recommendations in the report, tabled on Tuesday morning in Parliament, which he said would “serve as our blueprint for the biggest social reform in a generation”.
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More than 2500 cancer diagnoses missed in Victoria during pandemic curbs
By Melissa Cunningham
March 1, 2021 — 12.01am
More than 2500 cancer diagnoses were missed in Victoria during the state’s coronavirus restrictions last year, with a steep fall in the detection of prostate, skin and breast cancers, along with head and neck tumours.
Modelling by the Victorian Cancer Registry at the Cancer Council, published in the Medical Journal of Australia on Monday, estimates there were 2530 cancers missed or delayed diagnoses between the beginning of April and the middle of October.
The registry also found there were 5446 fewer pathology notifications, used for lifesaving cancer screening, than expected over the period, a drop of about 10 per cent on the previous year.
Victorian Cancer Registry director Sue Evans said any delay in a cancer diagnosis meant the disease would be detected at a later stage when there were potentially fewer treatment options and survival rates plummeted.
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Bees revealed as Australia’s most dangerous venomous creature
By Mary Ward
March 3, 2021 — 12.01am
Carly Morton’s late husband, Glenn, was at a family picnic when he first experienced a bad reaction to a bee sting. He went to hospital, where medication relieved his symptoms.
“The doctor we spoke to, as he was being discharged, said they weren’t sure if it was anaphylaxis,” she said. “We left thinking it wasn’t that serious.”
Glenn visited a GP and was prescribed an EpiPen. Over the next few years, the engineering surveyor had two further bad reactions to bee stings near his home in Perth.
In 2018, on site at a mine near Cataby, about 170 kilometres north of Perth, Glenn was stung again while he was working alone. He administered his EpiPen, but the reaction proved fatal.
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International Issues.
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https://www.afr.com/world/asia/end-the-condescension-to-start-new-era-with-indonesia-20210225-p575x4
End the condescension to start new era with Indonesia
Canberra either ignores or needlessly provokes Jakarta. This must stop if our vital near north neighbour is to play a bigger role in countering China in the region.
James Curran Columnist
Feb 28, 2021 – 12.18pm
In 1986, the head of the newly merged Department of Foreign Affairs and Trade, Stuart Harris, argued that Australia is “an isolated country in the sense that there is a lack of regional links; there is no region or grouping to which we belong naturally, and no easy alliances that are immediately of use to us”.
That quest for belonging found an answer in Bob Hawke’s creation of APEC in 1989, then with Paul Keating’s elevation of that forum to a leader’s summit. Subsequent governments, albeit with different emphases, likewise made regional engagement their watchword.
Indonesia has always been central to that story.
Yet like India, Indonesia does not fit so snugly into the strategic framework in which many eminent Australians would like it to. Last year’s Defence Update mentioned it only once.
But in recent years the relationship has continued to be one of mutual invisibility. Tony Abbott’s promise of “more Jakarta, less Geneva” struggled to deliver, while renewed momentum under Malcolm Turnbull has stalled.
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China’s reality check on universities
Jennifer Hewett Columnist
Feb 28, 2021 – 5.50pm
Australian universities can no longer hide widening cracks in their business models and teaching standards. How they will change as a result is still uncertain. But the urgent need to acknowledge changed reality is a good start.
In 2020, universities argued that the decline in international students was financially devastating and required massive cuts in staff in lieu of greater government assistance and with no access to JobKeeper. But this abrupt fall in the international student market was supposed to be temporary. The universities’ focus was on how to bring back those students, especially Chinese students, in even greater numbers once the worst of the COVID-19 crisis was over. Keeping money flowing from Chinese students and from Chinese research facilities and partnerships was considered the key to growth.
Yet relying so heavily on this was always a dangerous illusion, particularly given evidence of the declining quality of university education for so many domestic students.
On average, fees from international students made up 25 per cent of university revenue but in several institutions, financial dependency was higher still. The lopsided nature of enrolments was particularly obvious in schools such as business and IT where Chinese students with limited English skills often became the overwhelming majority in classes.
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Donald Trump hints he could run again for presidency
By Matthew Knott
Updated March 1, 2021 — 10.27amfirst published at 8.06am
Orlando, Florida: Former president Donald Trump has teased another run for the presidency in 2024, brushing off talk of starting a new political party and vowing drive his Republican enemies out of office in his first speech since leaving the White House.
Trump revived his false claims that he was the true victor of the November election and that Democrats rigged the result against him - lies that inspired his supporters to storm the Capitol on January 6.
He also indicated that he would campaign against Republicans in Congress who had voted to impeach him and work to replace them with candidates who are loyal to him and his “America first” agenda.
Former US President Donald Trump is speaking at the Conservative Political Action Conference, his first public address since leaving the White House on January 20.
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QAnon crowds plotting to storm the US Capitol again this week, police fear
By Rozina Sabur
March 1, 2021 — 8.00am
Washington: Thousands of National Guard troops will remain in Washington until mid-March amid fears a QAnon conspiracy theory that Donald Trump could still be inaugurated this week will lead to another attack on the US Capitol.
Followers of the QAnon cult have claimed Trump will reclaim the presidency on March 4, the date presidents were inaugurated up until 1933, when inauguration day was moved to January 20.
Online posts about March 4 from QAnon devotees, who believe Trump is working to take down a cabal of “deep state” politicians, have caused alarm among US security officials who fear further violence could occur.
Almost 5000 National Guard troops will remain in the US capital until March 12, in part because of concerns of a repeat of the violent scenes on January 6, according to Adam Smith, chairman of the House Armed Services Committee.
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Europe’s economic recovery is under threat before it has really begun
By Ambrose Evans-Pritchard
March 2, 2021 — 6.45am
Wild moves in the $US21 trillion ($27.3 trillion) US Treasury market have become disorderly. Shockwaves are pulsating through the international financial system and threaten to snuff out Europe’s economic recovery before it has even begun.
Central bankers have long been fretting over what might happen if incipient inflation and gargantuan debt issuance starts to set off an exodus from global bond funds. They had their first real taste late on Thursday in the US. The implied cost of borrowing rocketed for much of the world economy.
The US Federal Reserve must navigate a narrow strait between the opposite perils of Scylla and Charybdis: damned if it does nothing, and allows the turmoil to continue; but equally damned if it capitulates again, opts for easy stimulus to suppress yields and falls further behind the curve (in the eyes of bond vigilantes).
As matters now stand, the Fed has lost control over US monetary policy. Investors are betting that the overhang of excess M3 money created since COVID-19 began will combine with the Biden administration’s war economy stimulus - 13 per cent of GDP, including the pre-Christmas package - to lift the economy rapidly out of its malaise.
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https://www.afr.com/companies/financial-services/china-s-vexing-debt-issue-20210302-p57704
China’s vexing debt issue
As the Chinese political elite prepare to gather in Beijing, there have been two conspicuous warnings on the country’s lingering debt problem.
Karen Maley Columnist
Mar 2, 2021 – 4.11pm
As thousands of delegates from around China head to Beijing this week for the annual meeting of parliament, two recent developments highlight the thorny challenges facing the world’s second largest economy.
In the first place, there are the problems lurking in the country’s debt-laden real estate sector.
Chinese property developer, China Fortune Land Development, became the latest real estate group to default, when it failed to meet a $US530 million ($683.5 million) bond repayment that was due on Sunday.
In a statement to the Singapore stock exchange on Friday, the group, which specialises in developing industrial parks, said it intended to meet its obligations, but needed time to address short-term liquidity issues.
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The great reflation trade in global bond markets
Key questions include how central banks respond to the surge in rates and whether there are any circuit breakers that could stall – or reverse – the recent rate rise.
Nathan Sheets Contributor
Mar 2, 2021 – 12.00am
US President Joe Biden’s administration has adopted a “go big or go home” strategy, with a $US1.9 trillion ($2.45 trillion) fiscal stimulus package poised to gain approval by mid-March and a sizeable infrastructure bill likely to be pushed through later this year.
This stimulus, coupled with the vaccination campaign’s mounting gains, has lifted the outlook for US growth, with many analysts expecting the economy to expand at a 6-7 per cent pace this year.
Along with rising growth expectations, there is a parallel debate about inflation. As a vaccinated economy shakes off the constraints of the pandemic, demand is likely to run ahead of supply, at least temporarily. Firms will need some time to bring back workers, formulate production schedules, restart supply chains, and ramp up production.
Under these circumstances, occasional bottlenecks and shortages could drive up inflation. Central banks, however, are already promising to look through such developments – labelling them “one-off shifts in relative prices” and not indicative of broad-based or sustained inflation.
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The Biden economy is at risk of growing too fast
By N. Gregory Mankiw
March 3, 2021 — 7.45am
You are driving down a highway you’ve never been on before, eager to get to your destination. You’re in a hurry but also want to avoid a ticket.
One problem: You don’t know the speed limit. How hard do you push on the accelerator?
That is roughly the question facing the Biden administration and Congress as they debate the size of the next round of fiscal stimulus. They want to reach full employment as soon as possible. But if the economy accelerates too much, they risk a speeding penalty in the form of excessive inflation.
One thing drivers might do is recall similar highways they have been on before. If fiscal policymakers do that, some might decide against further stimulus. According to the Committee for a Responsible Federal Budget, the fiscal packages already in place, measured as a percentage of gross domestic product, are about a quarter larger than those enacted during the Great Recession of 2008. And they are being carried out much faster.
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Senior diplomat warns Australians who make ‘enemies’ of China will be ‘cast aside in history’
A senior Chinese diplomat has warned that people in Australia who “choose to make enemies of China” will be “cast aside in history”.
March 3, 2021 11:18am
A senior Chinese diplomat has warned that people in Australia who “choose to make enemies of China” will be “cast aside in history”.
Speaking at a Lunar New Year dinner in Canberra on Monday night, China’s Deputy Head of Mission Wang Xining defended the country’s handling of COVID-19 and hit out at media organisations in particular, saying there were “some people in Australia who choose to make enemies to sustain a living” and that they had “brainwashed” the public with “negative portraits of China”.
“History will prove that it is wise and visionary to be China’s friends, and your children and grandchildren would be proud of you to be China’s friends and they will benefit from the relationship with China,” Mr Wang said, according to a transcript of the speech posted on the Chinese Embassy website.
“Those who deliberately vilify China and sabotage the friendship between our two countries and do damage to our long-term friendship and benefits out of their sectoral or selfish interest will be (cast) aside in history.
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Chinese envoy defends ‘panda huggers’ and blames media over ‘totally ridiculous’ concerns
A senior Chinese diplomat in Canberra has blamed the Australian media and “totally ridiculous” security concerns for the breakdown in Australia’s relationship with China.
Addressing an audience of business people at a Chinese Lunar New Year dinner, China’s deputy head of mission Wang Xining said the rising power would remember who was on its side during the bilateral dispute.
“History will prove that it is wise and visionary to be China’s friends,” said Minister Xining in the first lengthy address given by China’s embassy in Canberra since he spoke at the National Press Club six months ago
Mr Wang also delivered a warning to those “people in Australia [who] choose to make enemies to sustain a living”.
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UK’s woes not just deep but worryingly enduring
After the massive response to the pandemic, the needed long-term vision for a country facing an uncertain future is absent. If the one big innovation is an unexpectedly large tax on corporations, what is the plan for economic growth?
Martin Wolf Columnist
Mar 4, 2021 – 9.58am
In his response to the COVID-19 crisis, Rishi Sunak, chancellor of the exchequer, has shown himself to be flexible and pragmatic. This Budget reinforces that impression. But it tells us four more important things. One is that the pandemic is going to leave a nasty long-term legacy.
Another is that Sunak wants to hold on to the mantle of fiscal sobriety. A third is that this government is abandoning the economic ideas it clung on to for so long. The last is that the government has no growth strategy. One might describe this as old-fashioned realistic Conservatism. An alternative label might be defeatism.
As expected, despite the success of the vaccine rollout, Sunak has had to extend the expensive support of the economy. If government feels obliged to compel people to stay at home and businesses to close, it has to compensate them. Thus, the furlough scheme will be extended to September, as will support for the self-employed.
The universal credit uplift of £20 a week will also continue for a further six months. In all, Sunak has raised the pandemic-related support to households, businesses and public services by a further £44.3 billion ($57 billion), so taking its cost to £344 billion or 16 per cent of gross domestic product.
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Jittery stocks, jumpy bonds: Why markets are troubled by signs of recovery
By Matt Phillips
March 4, 2021 — 10.44am
Investors had no trouble gliding past the death and economic devastation wrought by the pandemic last year to drive Wall Street to record highs. An increasingly healthy economy is what is making them panic.
In recent days, the S&P 500 stock index has wobbled, suffering its worst weekly performance in a month last week, before rising on Monday, only to dip again on Tuesday and in early trading on Wednesday. The bond market, too, is showing anxiety, with yields rising sharply as returns in the market for US Treasury bonds have fallen roughly 3 per cent this year.
The market conniptions are a direct result of several developments that point to the brightening prospects of recovery in the world’s largest economy. Vaccinations are rising, retail sales and industrial production have been surprisingly solid, and perhaps most important, the Biden administration is expected to push its $US1.9 trillion ($2.4 trillion) stimulus plan through Congress in the coming days.
“We haven’t seen this scale of fiscal response before, and the market is struggling with how to process that,” said Julia Coronado, founder and president of Macropolicy Perspectives, a markets and economics consulting firm. Because the United States has never before pumped so much money into the economy, Coronado said, the market is “questioning what some of the unintended consequences could be.”
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‘There will be problems’: China fears the blowback from global financial bubbles
Stephen Bartholomeusz
Senior business columnist
March 3, 2021 — 12.21pm
Global markets are awash with liquidity, with the risk of financial “bubbles” rising as central banks continue to pour monetary stimulus into their economies in response to the COVID-19 pandemic. That has China’s authorities worried.
In unusual, and unusually blunt, comments on Tuesday, the head of China’s Banking and Insurance Regulatory Commission, Guo Shuqing, said China was very worried that foreign asset bubbles would burst soon and identified the US markets as representing the greatest risk to the global economy.
The massive injections of liquidity into the US and European financial markets from their stimulus measures in response to the pandemic had pushed asset valuations above levels justified by economic fundamentals, risking a “serious run in the opposite direction,” Guo said.
“If financial markets diverge too much from the real economy, there will be problems,” he said.
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Britain doesn’t just have a health crisis - it’s got a major economic headache, too
By Bevan Shields
March 4, 2021 — 8.53am
London: British taxpayers are being warned that wartime-levels of borrowing are unsustainable, although workers will be largely spared in a budget which targets big business to help pay for the mammoth spending which has shielded the economy from near-collapse.
The government will have spent at least £407 billion ($730 billion) on stimulus payments, wage subsidies and other support by the time the coronavirus crisis is hoped to subside next year, pushing borrowing to heights not seen since World War II.
Chancellor Rishi Sunak on Wednesday spent billions more to keep the economy afloat while restrictions are phased out. But he warned debt as a share of GDP would peak at nearly 100 per cent and sacrifices would have to be made to pay it down.
Other countries in Europe are facing the same problem but are wary of returning to controversial austerity measures or dipping into pay packets when workers are already struggling.
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Airbase hosting US troops in Iraq hit by rockets
March 3, 2021 — 11.12pm
Baghdad: At least 10 rockets targeted a military base in western Iraq that hosts US-led coalition troops on Wednesday, the coalition and the Iraqi military said. It was not immediately known if there were any casualties.
The rockets struck Ain al-Asad airbase in Anbar province at 7.20am (local time), coalition spokesman Colonel Wayne Marotto said. No one claimed responsibility for the attack.
The Iraqi military released a statement saying the attack did not cause significant losses and that security forces had found the launch pad used for the rockets. It was found in the al-Baghdadi area of Anbar, an Iraqi military official said on condition of anonymity to discuss the attack with the media.
It was the first attack since the US struck Iran-aligned militia targets along the Iraq-Syria border last week, killing killed one militiaman and stoking fears of a possible repeat of a series of tit-for-tat attacks that escalated last year, culminating in the US drone strike that killed Iranian General Qassim Soleimani outside the Baghdad airport.
Wednesday’s attack targeted the same base where Iran struck with a barrage of missiles in January last year in retaliation for the killing of Soleimani. Dozens of US service members were injured, suffering concussions in that strike.
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Last chance to buy shares in the dip, US expert Larry Jeddeloh warns
Larry Jeddeloh is bearish on US bonds and bullish on shares with the current correction “the last major dip to buy” as quantitative easing drives a renewed surge like that of the late 1990’s.
In early May 2020, the influential Minneapolis-based founder of The Institutional Strategist newsletter and institutional advisory service TIS Group said the Fed’s unprecedented monetary stimulus — including near-zero interest rates and “whatever-it-takes” approach to financial asset purchases — was the main force behind a 12.7 per cent rise in the S&P 500 in April, its best month since 1988, and that the Fed was aiming to head off a negative wealth effect from Wall Street.
“You could make a case that we’re going back to the highs in the S&P 500,” he told The Australian at the time. The S&P 500 surged 75 per cent in the next nine-months, but the US 10-year bond yield rose 101 basis points, and recently unsettled the US share market and risk assets globally.
“We’ve been out of bonds now for over a year, which has turned out to be fine, but I got a lot of complaints about this in March-April last year as the equity markets came down and this sort of hyper-view that we were heading for a deflationary bust took hold,” Mr Jeddeloh told UBS clients in a conference call on Wednesday. In his view the forty year downtrend in US rates is “done”.
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Biden puts Australia and allies at centre of China strategy
Jacob Greber AFR correspondent
Mar 4, 2021 – 2.10pm
US President Joe Biden has put Australia and other Asian allies at the centre of an aggressive foreign policy strategy that paints China as the primary threat to the world order and calls on democracies including the US to show they can still deliver for their people.
Describing Washington’s alliance with Canberra as one of America’s “greatest strategic assets”, the administration released a muscular “interim” national security statement that formally acknowledged and effectively endorsed the hawkish China shift that developed under Donald Trump.
“We cannot pretend the world can simply be restored to the way it was 75, 30, or even four years ago,” the administration said on Wednesday (Thursday AEDT).
“Democracies across the globe, including our own, are increasingly under siege.”
In his first speech as America’s top diplomat, Secretary of State Antony Blinken warned the rising power of a “more assertive” China ensured it was the “only country with the economic, diplomatic, military, and technological power to seriously challenge the stable and open international system”.
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https://www.afr.com/policy/economy/are-inflation-fears-justified-20210301-p576vn
Are inflation fears justified?
Longer-term inflation risks are skewed much more to the upside than markets or policymakers seem to realise.
Kenneth Rogoff Columnist
Mar 4, 2021 – 10.36am
Massive fiscal and monetary stimulus programs in the United States and other advanced economies have fuelled a raging debate about whether higher inflation could be just around the corner.
Ten-year US Treasury yields and mortgage rates are already climbing in anticipation that the US Federal Reserve – the de facto global central bank – will be forced to hike rates, potentially bursting asset-price bubbles around the world. But while markets probably overstate short-term inflation risks for 2021, they do not yet fully appreciate the longer-term dangers.
To be clear, huge macroeconomic support is unequivocally needed now and for the foreseeable future. The pandemic-induced recession is worse than the 2008 global financial crisis, and parts of the US economy are still in desperate straits. Moreover, despite promising vaccine-related developments in the fight against the coronavirus, things could get worse.
Against this backdrop, the real inflation risk could materialise if both central-bank independence and globalisation fall out of favour. In the near term, policymakers are right to worry that, if the economy continues to heal, stimulus measures and consumers’ cash savings will fuel an explosion in demand. But this is unlikely to lead to an overnight inflation blowout, mainly because price growth in modern advanced economies is a very slow-moving variable.
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Powell says ‘disorderly’ market conditions would concern him
Rich Miller
Mar 5, 2021 – 5.03am
Federal Reserve chairman Jerome Powell said the central bank is monitoring financial conditions, while adding that the economy is still a long way from achieving a full recovery from the COVID-19 pandemic.
“We monitor a broad range of financial conditions and we think that we are a long way from our goals,” he said in a Wall Street Journal webinar on Thursday (Friday AEDT).
“I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals.”
Bond yields have shot higher in recent weeks on mounting expectations of stronger economic growth and faster inflation. Trading has been turbulent at times as dealers have struggled to keep up with the order flow.
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China’s next great leap forward could be a setback for Australia
By Eryk Bagshaw
March 5, 2021 — 5.19pm
Australia’s economic partnership with China is beset not just by short-term fundamental political differences, but now faces structural change that will present far longer-lasting challenges to the Australian economy.
On Friday, Premier Li Keqiang opened this year’s marquee week-long political event, the National People’s Congress, by foreshadowing the Chinese Communist Party’s five-year plan: economic growth driven by self-reliance; domestic demand as the key driver of this trade powerhouse; and an aim to cut consumption per unit of GDP by 13.5 per cent and cut carbon dioxide emissions by 18 per cent.
To do it, it will build one of the world’s largest networks of electric-vehicle charging stations, ramp up battery storage and crisscross high-voltage transmission lines from wind and solar farms in remote western China to power cities down its more populated east coast.
These are goals that any country could aspire to, but it poses a fundamental risk to Australia’s terms of trade.
The recent surge in the value of Chinese purchases from Australia is deceptive. Despite the ongoing diplomatic spat over wine, lobster, barley and others, the value of our exports to China rose by 21 per cent in December. But well over half of all of that is iron ore and coal.
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With a stroke of his pen, Biden erases Trump’s legacy
Joe Biden has been US President for just over six weeks but already the contrast between the Biden White House and that of Donald Trump could not be more stark.
· From Commentary
March 5, 2021
Joe Biden has been US President for just over six weeks but already the contrast between the Biden White House and that of Donald Trump could not be more stark.
Unlike Trump, Biden has enjoyed a relatively smooth start to his presidency. He has not yet made a major blunder and although he faces a range of steep challenges from Iran to border security, the economy, the coronavirus and from the left of his own party, so far Biden has been sure-footed.
By this stage of the Trump presidency, his national security adviser Michael Flynn had already resigned for misleading vice-president Mike Pence over his contacts with Russians. Trump had argued with prime minister Malcolm Turnbull over the refugee deal, placing a cloud over the Australia-US relationship. And Trump had already fallen out with FBI director James Comey, whom he would later sack, triggering the Mueller investigation.
Four years on, the Biden White House is a very different beast. It is more structured, more measured and, from a news perspective, more boring.
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Pope Francis in historic meeting with Iraq’s Grand Ayatollah
By Anmar Khalil and Nicole Winfield
March 6, 2021 — 5.54pm
Najaf: Pope Francis met with Grand Ayatollah Ali al-Sistani, one of the most senior clerics in Shiite Islam, in Iraq’s holy city of Najaf on Saturday to deliver a message of peaceful coexistence, urging Muslims to embrace Iraq’s long-beleaguered Christian minority.
The historic meeting in al-Sistani’s home was months in the making, with every detail painstakingly discussed and negotiated between the ayatollah’s office and the Vatican.
When the time came, the 84-year-old pontiff’s convoy, led by a bullet-proof vehicle, pull up along Najaf’s narrow and column-lined Rasool Street, which culminates at the golden-domed Imam Ali Shrine, one of the most revered sites in the world for Shiites. He then walked the few metres to al-Sistani’s modest home, which the cleric has rented for decades.
A group of Iraqis wearing traditional clothes welcomed him outside. As a masked Francis entered the doorway, a few white doves were released in a sign of peace.
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US Senate passes Biden’s $2.47 trillion COVID-19 aid plan
By Tony Romm, Jeff Stein and Erica Werner
March 7, 2021 — 7.54am
Washington: The US Senate has approved a $2.47 trillion coronavirus relief plan as Democrats muscled through a marathon debate - and overcame dissent from moderates within their own ranks - to move closer to delivering President Joe Biden his first legislative victory.
Democrats voted to adopt the bill without any Republican support after a more than 24-hour, around-the-clock session. It will now fall to the House to consider the sweeping package once again before it can become law and any of the aid can be dispersed.
The Senate’s passage of the measure marked an early win for Biden and his congressional Democratic allies, who had promised in the wake of the 2020 presidential election to authorise a robust package of new coronavirus aid - including another round of one-time payments to families - as one of their first acts.
“I promised the American people help was on the way,” Biden said Saturday. “Today, I can say we’ve taken one more giant step of delivering on that promise.” He predicted stimulus cheques could go out as soon as this month.
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China game plan to overtake US as world’s top economy by 2035
China’s leaders have outlined their plan to overtake the US as the world’s biggest economy by 2035, ramping up spending on science and innovation as Beijing attempts to shock-proof its juggernaut economy from further American sanctions.
Premier Li Keqiang on Friday revealed a growth target of “above 6 per cent” for 2021 — conservative by China’s standards — in a major address delivered in front of more than 2000 of the country’s political elite, including President Xi Jinping.
But a greater focus of Mr Li’s speech in Beijing’s Great Hall of the People were details of the leadership group’s longer term plan to double the size of its economy in the next 15 years, an ambitious target flagged by Mr Xi last November.
In the government’s work report — an annual policy-focused speech similar to a budget speech in Canberra — Mr Li declared “innovation” and “technology self-sufficiency” were now key priorities, committing to increase China’s research and development funding by “at least 7 per cent” over the next five years.
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I look forward to comments on all this!
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David.
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