June 24, 2021 Edition
-----
A pretty quiet week in the US with the G7 and NATO meetings over and the focus moving back to domestic issues.
In the UK the
COVID situation seems to be getting worse with the delta variant seemingly
taking over both the UK and the world. The Russians and The Royal Navy seem to be unhappy with each other over Crimea. Watch this space!
In Australia
ScoMo is in quarantine while the last week of parliament happens for the next six
weeks or so! The big worry is a worrying COVID outbreak in Sydney. Not clear how it will play out!
-----
Major Issues.
-----
PM looks to Howard’s 2001 victory for an election strategy
With predictions of a worsening election climate looming, pundits predict Scott Morrison will call an election this year and base his strategy on John Howard’s 2001 campaign.
Laura Tingle Columnist
Jun 11, 2021 – 2.54pm
The 2001 federal election is remembered as the Tampa election: the campaign when a group of asylum seekers in a stranded Indonesian fishing vessel were rescued in the Indian Ocean by the captain of the MV Tampa, a Norwegian container ship.
Amid the escalation of fear about national security after the 9/11 attacks in the US, the incident sparked the ugly escalation of border protection rhetoric and spawned the famous John Howard campaign launch declaration that “we will decide who comes to this country and the circumstances in which they come”.
People arriving in boats, the dark suggestions went, could possibly be terrorists, among other things. Four young boys among the 433 asylum seekers on the Tampa were subsequently taken in by New Zealand.
A quarter of Australians say they are worse off than a year ago, despite all the talk about the economic bounce back and a buoyant job market.
-----
https://www.afr.com/world/europe/g7-delivers-for-morrison-on-china-20210614-p580q9
G7 delivers for Morrison on China
Hans van Leeuwen Europe correspondent
Jun 14, 2021 – 6.58am
Carbis Bay, Cornwall | The G7 leading democratic market economies have taken up the cudgels against China for the first time, in a boost to Prime Minister Scott Morrison’s quest for the West to “have Australia’s back”.
Mr Morrison’s trip to Britain for the G7 appears to have paid off, with the summit’s communique specifically pledging to tackle China’s market-distorting economic practices and its authoritarian actions in Hong Kong and Xinjiang.
Prime Minister wins G7 response to China trade threats.
The leaders also name-checked the South China Sea dispute, and promised to mobilise $US100 billion ($130 billion) for an infrastructure scheme to rival Beijing’s controversial Belt & Road Initiative.
-----
Economists are slowly revealing the weaknesses of their ‘rational’ theories
Economics Editor
June 14, 2021 — 5.45am
Economics is changing. It’s relying less on theorising about how the economy works, and more on testing to see whether there’s hard empirical (observable) evidence to support those theories.
Advances in digitisation and the information revolution have made much more statistical information about aspects of economic activity available, and made it easier to analyse these new “data sets” using improved statistical tests of, for instance, whether the correlation between A and B is causal – whether A is causing B, or B is causing A, or whether they’re both being caused by C.
But another development in recent decades is economists losing their reluctance to test the validity of their theories by performing experiments. Let me tell you about two new examples of empirical research by Australian academic economists, one involving data analysis and the other a laboratory experiment.
We see a lot of calls for reform that take the form: change taxes or labour laws in a way that just happens to benefit me directly, and this will make “jobs and growth” so much better for everyone.
-----
Anglican church must rethink doctrine that has left a trail of devastated lives
By Jane
June 14, 2021 — 5.00am
At the clergy wives’ conferences I used to attend as the wife of an Anglican minister, the high-profile Sydney Anglican leader, the Reverend Phillip Jensen, preached to us repeatedly about the cornerstone doctrine of male headship and female submission to male authority.
The topic recurred year after year, with excruciating detail – about submitting sexually, about prioritising our minister husband’s “needs” in every way, about taking on all the household and family load, without expecting it to be shared – because that would be taking our husbands away from the important work of gospel ministry.
At Moorewomen, the group for the wives of clergy in training at Moore Theological College, the same themes also recurred regularly – never say no to his demands for sex, never expect him to miss a ministry opportunity to help care for a sick child, never complain, always be ready to give and give and give, as that was our contribution to the work of God’s kingdom.
So I listened in disbelief last week when a panelist on ABC’s The Drum, the Reverend Michael Jensen, Phillip’s newphew, responded to presenter Julia Baird’s suggestion that the Sydney Anglican Church could perhaps consider a five-year “pause” or moratorium on teaching male headship and spend that time getting a grip on the church’s problem with domestic violence, a problem highlighted in the newly released National Anglican Family Violence Project report.
https://www.afr.com/policy/economy/pm-must-tell-the-truth-on-the-economy-20210614-p580qx
PM must tell the truth on the economy
Unless productivity rises, a re-elected Morrison government will have to break its spending promises. Neither party can shirk micro reform any longer.
Craig Emerson Columnist
Jun 14, 2021 – 11.36am
By the end of this month the Treasurer will have released Australia’s fifth intergenerational report. Since productivity growth has contributed 95 per cent of the improvement in Australians’ material living standards since 1901 the report’s productivity projections will reveal the level of concern within the government and Treasury about Australia’s long-term economic prospects. The stress-o-meter should be flashing red.
Australia’s previous intergenerational reports, dating back to 2002, seek to look four decades ahead. They simply assume Australia’s productivity growth in the coming 40 years will repeat our performance over the preceding 30 years. That averages 1.5 per cent per annum. But it includes the productivity boom years of the 1990s created largely by the Hawke-Keating program of microeconomic reforms.
From the turn of the century, Australia’s productivity performance began to slide and the longer it has gone on the worse it has gotten.
Over the period from 2015 until the COVID-19 pandemic struck, actual productivity growth was worse than the low-productivity scenario included in the 2015 intergenerational report. That is, we performed worse than the worst-case scenario, including some periods during which productivity didn’t increase at all – it actually went backwards.
-----
Politicians are elected to lead, not hide behind the boffins
Governments have made a mantra out of following expert advice. Their job is to weigh up expertise, not to pick some and ignore the rest.
Saul Eslake Contributor
Jun 14, 2021 – 2.39pm
Australia has for the most part been well-served by the willingness of the federal, state and territory governments of both major political persuasions to be guided by advice from epidemiologists and other medical experts in their responses to COVID-19.
That approach stands in stark contrast to that of the Trump administration in the US and, at least initially, the Johnson government in Britain (among others). And the results – 1179 cases and 36 deaths per million population in Australia compared with 100,356 cases and 1793 deaths per million in the US, and 66,134 cases and 1,886 deaths per million in the UK – bear out the wisdom of Australian governments’ willingness to follow “medical advice” (although there have been other factors involved in these differences).
However, more than a year after the onset of the pandemic, it may be appropriate to question the continued unquestioning reliance on “the medical advice” as the rationale for every government decision pertaining to the pandemic.
In the first place, such advice is far from uniform or monolithic. All along, the advice given to premiers and chief ministers by their respective chief medical officers has clearly differed – as evident from the differing willingness of various state governments to enforce lockdowns in response to virus outbreaks.
-----
As News Corp savages its enemies, the ABC must strive for unity. Which makes it the perfect target …
It’s a cliché to say that we all inhabit news silos these days but in general, people pay to read stories that reflect and reinforce their views
Mon 14 Jun 2021 16.01 AEST
Last modified on Mon 14 Jun 2021 16.59 AEST
The other day I got angry enough about an editorial in the Australian newspaper – which castigated in vicious terms two of the ABC’s most accomplished journalists – that I wrote a letter to the editor. A waste of time, of course: the letter wasn’t published.
So I posted it on Twitter, where it got thousands of likes, replies and retweets, almost all of them supportive. But as Ann Braine, a former teacher from Perth, tweeted: “Unfortunately those who should read it, won’t.”
She’s right. And they won’t read this either. The Guardian is not part of the diet of readers of the Australian, and vice versa.
-----
Economic nirvana is here, just ask the sharemarket
What’s not to like? Money is nearly free, and everything is hot, hot, hot. Only inflation can upset this paradise.
Vimal Gor
Jun 15, 2021 – 5.00am
I’ve heard it said that if you’re an optimist, become an equity fund manager. For those prone to worrying, become a bond fund manager.
My colleagues in equities are always looking for the blue sky while I am hunting for clouds and rain. My morose attitude has held me in good stead many times over my career, most notably going into the GFC and early last year as COVID-19 spread from China. However, most of the time equities grind higher and the clouds, unfortunately, prove harmless.
Right now, though, the sun is shining and everything is hot hot hot! US equities are at all-time highs, Australian house prices are up almost 10 per cent this year and superannuation balances are soaring. Owners of capital in risk assets are having a bonanza. The rich are getting richer, often earning more doing nothing, than actually working.
As a bond manager, Vimal Gor’s instinct for dark clouds means he’s not celebrating record asset prices like equity managers are. Simon Letch
This should start to make me worried, but what I worry about this time is different to the past 25 years.
-----
https://www.afr.com/markets/equity-markets/what-magellan-learnt-from-warren-buffett-20210614-p580qu
What Magellan learnt from Warren Buffett
The most important thing when assessing the quality of a stock is whether it possesses an economic moat, the group’s head of research Vihari Ross says.
Alex Gluyas Markets Reporter
Jun 15, 2021 – 5.00am
When assessing stocks for Magellan Financial Group’s global equities portfolios, group head of research Vihari Ross simply won’t consider a business if it doesn’t possess an economic moat.
The concept, which was coined by investment legend Warren Buffett, is the most important hurdle a company must get past to win a dollar of Magellan's $110 billion of funds under management.
“When it comes to the international fund, and Magellan more broadly, it’s the most important factor when assessing quality,” says Ross. “What it really means for us is, if a business doesn’t have a moat as we define it, then it will not be on our investment menu at all.”
In Magellan’s world, a business is a castle, so analysts must assess the robustness of the fortress, how wide and deep the moat is, and whether competitors or “crocodiles” lurk below.
-----
There’s an eerie calm in markets despite disturbing numbers
Stephen Bartholomeusz
Senior business columnist
June 14, 2021 — 11.56am
Last week’s headline US inflation number was the highest in 13 years and core inflation was the highest in nearly 30 years. Even though the numbers were higher than expected, Wall Street posted a new record and US bond yields fell.
What those reactions signal is that the markets have bought into, without reservations, the US Federal Reserve Board’s line that the surge in inflation is “transitory.”
Whether or not that remains the case might, in the near term, be determined by what the Fed says (it is unlikely to actually do anything) at Wednesday’s meeting of the Fed’s Open Market Committee.
At its last meeting in April “a number of participants” suggested that if the economy continued to rebound it might be appropriate “at some point in upcoming meetings” to start planning for a tapering of the central banks’ purchases of bonds and mortgages, currently running at $US120 billion ($156 billion) a month.
Any discussion at this week’s meeting of tapering of the Fed’s quantitative easing a program – a program that has seen the Fed’s balance sheet blow out from just over $US4 trillion before the pandemic struck to more than $US8 trillion – has the potential to roil markets that are, for the moment, exhibiting an eerie calm in the face of conventionally disturbing numbers.
-----
Dr Copper’s mixed signals suggest the global economy is at a delicate moment
Senior business columnist
June 15, 2021 — 11.59am
If the copper price is a forward-looking barometer of economic conditions, it’s recently been giving off mixed signals. That could suggest that we’re at something of a watershed for the global economy.
Copper has historically been a lead indicator for the global economy because of its acute sensitivity to ebbs and flows in global industrial activity. That’s why it has attracted the honorific “Dr Copper.”
Not surprisingly it crashed last year, falling more than 24 per cent as the onset of the pandemic brought global activity almost to a halt.
Subsequently, as the global wave of pandemic relief and stimulus was unleashed and China’s economy – which consumes about half the copper industry’s global output – rebounded sharply, the price started climbing.
-----
Conned on defence: now it’s time to fix the mess
· 7:10AM June 15, 2021
Upgrading the old Collins class submarines is an essential first step towards solving the diabolical defence mess facing the nation.
Given the heightened security concerns, unless we reverse the series of disastrous defence decisions made in recent years our long-term future as a nation will be bleak.
Because we had the wrong people in charge we have been “conned” by a series of deceptions of unprecedented global magnitude. We are set to spend hundreds of billions of dollars and get little worthwhile in exchange - and what we do get will be too late.
There is no other country in the world that that has made defence mistakes on such a grand scale. With the help of some of our best defence people (they are not in the defence department) I will go through the three main grand deceptions and the best solutions still available to us. None of the choices are pleasant.
-----
Sub experts urge Scott Morrison to go on Attack
· 9:51PM June 14, 2021
Some of the nation’s most experienced submariners are urging the government to slash years from the delivery of the nation’s $90bn Attack-class submarines by designing the boats around the clock and dramatically reducing their construction schedule.
The plan, obtained by The Australian ahead of Scott Morrison’s meeting this week with French President Emmanuel Macron, calls for the government to pile pressure on France’s Naval Group to “expedite Attack” by requiring the company to run a design team in each time zone.
It also calls for the government to push the capabilities of its soon-to-be-built digital shipyard in Adelaide, reducing the construction “drum beat” to one year per boat after the first Attack-class sub is “debugged”.
The government would have to shoulder additional risk but the reward would be the first Attack commissioned as early as 2030 – rather than the scheduled 2034 – and potentially another eight produced by 2040.
-----
Liberal MPs suggest radical plans to tackle housing affordability crisis
By Shane Wright and Jennifer Duke
June 16, 2021 — 5.00am
Liberal MPs are demanding the federal government consider radical plans to bring the runaway housing market under control after new figures showed the value of the nation’s homes soared by a record $450 billion in three months.
Sydney MP John Alexander said some of his own government’s policies were feeding into dysfunctional property market while Melbourne MP Tim Wilson said the tax system has to be overhauled to bring some balance back to house prices.
Data from the Australian Bureau of Statistics released on Tuesday showed dwelling prices jumped by 5.4 per cent through the March quarter, the largest quarterly lift since the end of 2009.
All cities reported an increase, led by Sydney (up by 6.1 per cent). Canberra prices jumped by 5.6 per cent, in Perth they were up by 5.2 per cent while in Melbourne they increased by 5.1 per cent.
-----
‘A new dawn’: Australia and Britain agree on historic trade deal
By Bevan Shields, Latika Bourke and Rob Harris
June 15, 2021 — 7.06pm
London: Working holiday visas will be extended for Australians up to the age of 35 in the historic trade deal just agreed with Britain after Prime Ministers Boris Johnson and Scott Morrison offered last-minute concessions over dinner at Downing Street.
On Tuesday night AEST, Morrison and Johnson held a joint press conference to announce the in-principle agreement - which could boost the Australian economy by up to $1.3 billion each year and offer exporters new options to pivot away from the volatile Chinese market.
Australian Prime Minister Scott Morrison and UK Prime Minister Boris Johnson announce the details of a free trade agreement.
Morrison said it was the most ambitious agreement that Australia had struck since its deal with New Zealand.
-----
The West is not coming to Australia’s rescue. We need new alliances
Contributor
June 16, 2021 — 9.02am
The summits of the G7 group and the NATO alliance over the past few days have produced an avalanche of headlines about a growing anti-China mood among Western nations and an appetite to stand up to Beijing’s assertiveness.
Let’s hope the Australian government is not taking these headlines too seriously, because the harsh truth is that there will be no Western alliance to contain China, and no united democratic front against Beijing’s authoritarianism. The sooner we realise this and build it into our foreign and defence policies, the safer we will be.
It’s important to stress that this is not an argument about Western “decline”, which is a vastly overstated prospect. The European Union is a massive and vibrant economic actor, and NATO is one of the most successful alliances in modern history. The United States remains fantastically powerful, and that won’t change in our lifetime. It has a resilient and growing economy, favourable demographics (lots of young people), tremendous capacity for innovation, a huge military, and it is surrounded by vast oceans to the east and west and friendly neighbours to the north and south.
But of course, China is huge too. Even if we accept all the pessimistic prognoses about China’s economic future – ageing population, ballooning debt, environmental disasters – it is safe to assume that a country which already boasts the world’s second-largest economy will hold on to that mantle, and might even ascend to first place.
-----
https://www.afr.com/property/commercial/after-50-years-the-a-reit-evolution-rolls-on-20210616-p581hs
After 50 years, the A-REIT evolution rolls on
Once upon a time, investors might have seen REITs as a safe, income-producing, set-and-forget sector. It was never really the case; it certainly isn’t now.
Robert Harley Contributor
Jun 17, 2021 – 5.00am
Australia’s listed real estate investment trusts quietly passed a milestone on April 28 with the 50th anniversary of the launch of the first A-REIT, now the GPT Group.
In that half-century of boom, bust and pandemic, the A-REITs have grown into a $133 billion sector – today’s 49 A-REITs account for about 7 per cent of the ASX – and have changed substantially in structure and focus.
More change is coming, as the REITs compete for global capital, as new real estate opportunities emerge, and as the sector leads the way on sustainability and governance.
-----
Jobless rate tumbles to pre-pandemic level: ABS
By Shane Wright
June 17, 2021 — 11.50am
Australia’s unemployment rate has tumbled to its lowest level since the start of the coronavirus pandemic after the country created more than 115,000 jobs in May.
The Australian Bureau of Statistics reported the jobless rate dropped 0.4 percentage points to 5.1 per cent. It was last at that level in February last year.
The under-employment level fell by 0.3 percentage points to 7.4 per cent, the lowest that has been since January 2014. It is now 1.4 percentage points below the rate at the start of the pandemic, with the largest drop among women.
The figures, which largely pre-date the Victorian COVID-19 lockdown, were driven by a 115,200 lift in employment, of which 97,500 were full-time positions.
-----
RBA governor Philip Lowe warns of businesses’ low wage ‘mindset’
June 17, 2021
Reserve Bank governor Philip Low says a “laser-like focus on costs” by businesses who would prefer to “ration output” rather than bake in higher costs is preventing the powerful jobs recovery from flowing through to pay rises.
Dr Lowe said there was a “predominant mindset” in corporate Australia that “if profits can’t be increased by expanding or by raising prices, then it has to be achieved by lowering costs”.
“This mindset can be helpful in making businesses more efficient, but it also has the effect of making wages and prices less responsive to economic conditions.”
In a speech in Toowoomba, Queensland, on Thursday, Dr Lowe noted the “V-shaped recovery” in farm output, which has surged 40 per cent since the middle of last year to reach a record high, alongside farm exports.
-----
UK legal boost for Murugappan family
10:10PM June 16, 2021
A British court’s rejection of Australian intelligence about Sri Lanka has given supporters of the Murugappan family hope that they will not be deported.
The Tamil family at the centre of a political storm over Australia’s hard line on boat arrivals was reunited in Perth on Tuesday, as Immigration minister Alex Hawke continues his review of their case.
On Wednesday, human rights lawyer Alison Battisson said it was highly relevant for Mr Hawke to consider that three judges of the UK Upper Tribunal had in May made strong criticisms of the information Australia has relied on when rejecting asylum seekers from Sri Lanka.
The tribunal decided not to use the 2019 report from the Department of Foreign Affairs and Trade, which claims Sri Lankans face a low risk of torture.
The judges wrote: “None of the sources are identified; there is no explanation as to how the information from these sources was obtained.”
-----
https://www.afr.com/politics/super-shake-up-assured-as-reforms-pass-senate-20210617-p581rz
Super reforms pass after government dumps ‘backdoor’ veto power
Michael Read Reporter
Jun 17, 2021 – 12.48pm
The Morrison government’s superannuation reform package cleared the Senate on Thursday after the government dropped a contentious power that critics feared would have given the government sweeping authority to intervene in the core business of super funds.
The Your Future, Your Super package passed 34 to 30 after the government secured the support of senators from One Nation, Centre Alliance and independent Jacqui Lambie.
Centre Alliance senator Stirling Griff told The Australian Financial Review that the powers “were excessive and unwarranted and there was no way we would support what was proposed until that was resolved”.
“The rest were sensible reforms that will benefit future retirees and hold the super funds to account,” he said.
The vote paves the way for the biggest shake-up to Australia’s $3 trillion super sector in years. The bill will now head back to the lower house, where its passage is highly likely.
-----
Morrison is hedging on asylum politics. So is Labor
The government is hedging on the politics and still believes the hardline view – that most voters are hostile to boat people – is the dominant one. So is Labor.
Phillip Coorey Political editor
Jun 17, 2021 – 8.00pm
It was nine years ago this month that Parliament experienced one of its more unedifying episodes.
As a search-and-rescue operation was under way north of Christmas Island after another boatful of asylum seekers foundered and people drowned, the Greens and the Coalition joined forces to block a measure that may have halted or slowed the flow of boats.
We never found out because, just as the Greens and Coalition joined forces in December 2009 to block a price on carbon and send energy policy into a political death spiral for more than a decade, their blocking of the Malaysia plan is remembered, at least within Labor, as another sliding doors moment. And not in a good way.
It was June 2012 and boats had been arriving in ever-increasing numbers since Labor, upon coming to power in November 2007, stupidly abolished the Howard government’s Pacific Solution.
-----
Australians want nation to ‘stick to its values’ in China dealings
By David Crowe
June 18, 2021 — 5.00am
Australians want a strong response to China over growing tensions on security and trade, with 62 per cent recently surveyed saying the nation should “stick to its values” despite the risk of retaliation from a major trading partner.
A majority of Australians believe the country should call out Beijing over its approach to Hong Kong and Taiwan, retaliate against Chinese trade sanctions and speak out on human rights abuses against the Uighur people.
But only 45 per cent support a stance that warns of armed conflict with China, with a new survey revealing strong objections on this point amid a vigorous political debate about the federal government’s rhetoric.
With diplomatic relations between Canberra and Beijing at their lowest point in decades, 54 per cent of respondents agree with a federal decision to cancel the Victorian government’s agreement with China on its Belt and Road infrastructure initiative, while 8 per cent oppose it and 38 per cent are undecided.
-----
Scott Morrison has a serious weakness: the Nats
Resources Minister Keith Pitt’s declaration that the Nationals have not committed to net zero by 2050 is effectively a declaration of war.
Laura Tingle Columnist
Jun 18, 2021 – 4.59pm
There was a certain pre-election nervous frisson abroad in Canberra ahead of the last sitting week before Parliament rises for the winter break.
Labor has launched into a couple of scare campaigns – mostly on social media – about Medicare and the prospect of pensioners across the board being put on a cashless welfare card.
Liberals in small-L seats, like such as Katie Allen in Higgins, have suddenly found a voice on issues like the Murugappan family from Biloela. And the Liberal Party secretariat has started sending out letters begging for donations.
Everyone seems to be getting into “clear the decks” mode: a time when you don’t want distractions and divisions in the way.
-----
https://www.afr.com/policy/economy/interest-rate-rise-in-early-2023-westpac-20210618-p582az
Interest rate rise in early 2023: Westpac
John Kehoe Economics editor
Jun 18, 2021 – 5.02pm
Westpac chief economist Bill Evans has brought forward his interest rate rise prediction to early 2023, after the “major game changer” fall in the unemployment rate to 5.1 per cent this week.
“It underscores the strength of momentum in the economy and endorses the range of other measures pointing to a very strong labour market,” Mr Evans said in a research note on Friday.
“The recovery is now clearly into a self-sustaining upswing and the need for emergency stimulus policies has eased significantly.”
The Reserve Bank of Australia’s latest guidance is that wages and inflation would not be strong enough to raise the record low 0.1 per cent cash rate until 2024 at the earliest.
After the creation of 115,000 jobs in May, revealed on Thursday, bank bill futures implied an RBA cash rate rise in late 2022.
-----
https://www.afr.com/policy/foreign-affairs/the-world-the-g7-forgot-about-20210617-p581xb
The world the G7 forgot about
Australia now has a number on its back in the international game. That’s more reason to live up to Western promises being made to the virus-hit developing world.
John McCarthy Contributor
Jun 18, 2021 – 2.05pm
At global summits, nobody gets everything they want. The trick is to persuade your audience – particularly your domestic one – that you have got most of it.
At the end of a busy week, most participants at the G7, the NATO summit, and Joe Biden’s meetings with European Union leaders could go home legitimately claiming wins.
The only glaring difference of view was a Brexit issue between Britain and the EU, relating to Northern Ireland (with Biden siding with the EU). But that is principally an important Euro-Atlantic question, not a global one.
Biden came to Cornwall looking good – with recent Pew polling showing a dramatic uptick since his inauguration as president in the way the United States is regarded internationally.
-----
We’re not just saving veterans; we might be saving ourselves
Former soldiers are often traumatised by the loss of tribal identity they suffer. But that is a problem in our wider society as well.
Tanveer Ahmed Contributor
Jun 18, 2021 – 11.33am
The concept of psychological trauma is inextricably linked to war. The upcoming royal commission into veterans’ suicides will be an examination of the correlation. But what it may ultimately reveal are deeper insights into our society.
The terms of reference for yet another royal commission are being bashed out. Its symbolic component isn’t being denied by the government.
“The royal commission will provide an important opportunity for healing and to rebuild trust, unite our veteran community, and restore hope,” said the Veterans Affairs Minister, Darren Chester.
There is no doubt a correlation exists between being a veteran and having a higher risk of suicide, despite the government spending billions each year on mental health-related payments.
This has been especially true in the past two decades.
Across the Western world, there has been an inverse relationship between combat deaths and servicemen claiming trauma and disability benefits.
-----
National Archives poised to get funding to save disintegrating records
By Shane Wright and Katina Curtis
June 19, 2021 — 5.00am
The National Archives will get a funding injection from the federal government to stop vulnerable parts of Australian history disintegrating, including war-time speeches by John Curtin and records of the Bounty mutineers.
The Age and The Sydney Morning Herald can reveal the government is close to finalising a package to help the National Archives immediately salvage documents, film and other at-risk materials while also safeguarding its long-term role.
Historians, writers and international experts have raised fears about the state of the Archives after The Age and The Sydney Morning Herald revealed in April the extent of problems facing the institution.
-----
Banking regulators poised to tighten lending standards to cool market
By Shane Wright and Clancy Yeates
June 19, 2021 — 5.00am
The Reserve Bank and the nation’s prudential regulator are poised to tighten lending standards in the face of soaring property prices and growing household debt as Treasurer Josh Frydenberg says higher house prices are good for the economy.
The Commonwealth Bank, the nation’s biggest lender, revealed it would increase the interest rate it uses to assesses new loan applications, while the RBA and the Australian Prudential Regulation Authority are considering ways to temper some of the heat across the national market in coming weeks.
Sydney’s median house value has climbed more than 15 per cent through the first 5 months of the year to $1.2 million while in Melbourne the median price is now at $908,000.
CoreLogic’s daily dwelling value index shows Sydney property values have increased by another 1.5 per cent through the first 17 days of June while in Melbourne they are up by 0.9 per cent.
-----
Australian nightmare looms even as Frydenberg prepares his election pitch
Political and international editor
June 19, 2021 — 5.30am
Josh Frydenberg now has enough talking points to get him all the way to election day. The economy is recovering strongly. As we learned this week, unemployment is back to its pre-pandemic level, and the minimum wage is to go up by 2.5 per cent. Bonus: the super guarantee levy is about to be hiked to 10 per cent. This is pretty good for a country that is still emerging from its worst downturn in a generation.
How good is the economy? “After the first recession in nearly 30 years, the Australian economy is roaring back,” the Treasurer told the House on Thursday. “An economy that is bigger, an economy that is stronger, an economy that is leading the world.
“Today, we saw unemployment fall for the seventh consecutive month, to 5.1 per cent, smashing market expectations. Participation was up. Underemployment was down.” All true.
Of course, Frydenberg has had a little help, as the Reserve Bank governor, Philip Lowe, pointed out this week: “It is also worth recalling that the economic recovery is being underpinned by unprecedented fiscal and monetary policy measures that will not last forever.” Okay, a tremendous amount of help.
-----
A PM running on Trump time risks getting left behind by Biden
Columnist
June 19, 2021 — 5.25am
Scott Morrison thought he had a relatively easy choice to make on climate change at the G7 summit in Cornwall last weekend. In his mind, there was an acceptable position between action and inaction that would assure Australia’s allies of our good intentions and appease his government’s junior Coalition partner, which wants nothing to do with the G7’s agenda.
To that end, the Prime Minister used the summit to sign new partnerships on clean energy technology and hydrogen with Japan and Germany, respectively the world’s third and fourth largest economies, while refusing to sign up to the G7’s ambitious targets to halve greenhouse emissions by 2030 and achieve net zero emissions by 2050. He also stayed on in London to strike a free trade agreement with Boris Johnson, Britain’s first such deal since leaving the European Union. In any other age, Morrison’s overseas trip would be big news; a sign of Australian relevance on the global stage.
Unfortunately, Joe Biden had no time for the PM’s attempt to chart a middle course on climate change and pointedly avoided a one-on-one meeting with Morrison. It was not the greatest snub an Australian leader has faced from a US president on climate change. Barack Obama, who Biden served as vice president, famously embarrassed Tony Abbott when the Liberal prime minister hosted the G20 summit in Brisbane in 2014. Obama used a speech to students at the University of Queensland urging Australia to step up on climate change.
Abbott could console himself that Obama’s agenda was being blocked by a Republican-controlled Senate, and that Canada, the country most like ours in terms of its economic dependency on resources, was still a member of the sceptics club at the time. But Morrison does not have that partisan luxury. Unlike Obama, Biden leads a credible, and accelerating, global push for net zero with every rich nation, including Canada, on board.
-----
Australia’s defence strategy must be focused on China, China, China
12:00AM June 19, 2021
Australia is following the wrong defence strategy. It is a mistake of perhaps mortal consequence. It involves a profound misreading of our national circumstances, and the continuation of old policies and old habits of thinking which are no longer relevant.
Scott Morrison and Defence Minister Peter Dutton are leading a move away from the old paradigm, but it is too slow, and too little.
Everything tells us our strategic circumstances have changed gravely for the worse, because of China’s new capabilities and new aggressiveness. But we are still muddling along with the old defence force structure underpinned by the old assumptions.
This is potentially deadly.
To put it at its plainest, we are continuing to pursue “a balanced force” when we urgently need to switch to an asymmetric approach which would impose massive costs on an aggressor.
-----
https://www.afr.com/property/residential/the-real-reason-house-prices-keep-rising-20210615-p5819s
The real reason house prices keep rising
Tax incentives and low interest rates get most of the blame for surging house prices in Australia but supply is just as important.
John Kehoe Economics editor
Jun 18, 2021 – 1.08pm
Sydney property developer Mark Bainey is deeply frustrated by the red tape from state and local government planning and zoning that’s fuelling housing affordability challenges for home buyers.
At Parramatta in Sydney’s west, his Capio Property Group acquired land to build a simple 12-apartment complex. He had allowed six to 12 months for the state and local governments to grant development approval but the back-and-forth with bureaucrats took 2½ years.
It’s a common story for most of his apartment and townhouse developments, which typically take two to three years for approval in NSW. “In a geographically constrained market like Sydney, it’s pushing prices up because there is not enough supply,” Bainey says.
“As a developer, we have the capacity to build what the market demands, but if there is not enough supply, price pressures are only going up,” he says. “The state and local governments are pushing up house prices for first home buyers because they are not approving enough stock.”
-----
Coronavirus And Impacts.
-----
PM doubles down on ‘hermit kingdom’ approach to COVID-19
Hans van Leeuwen Europe correspondent
Jun 13, 2021 – 5.14am
Carbis Bay, Cornwall | Prime Minister Scott Morrison has vowed that Australia will “take its own path” on fighting COVID-19, signalling that a first-hand view of Britain’s more liberal approach of “living with coronavirus” had not convinced him.
“I’d rather be living in the arrangements we have in Australia, than anywhere else in the world,” he said, doubling down on the international travel restrictions and the risk of new lockdowns that comes with the Australian policy.
Mr Morrison told reporters on Saturday that although Britain’s rapid and extensive vaccination rollout had apparently kept a check on hospitalisation rates and fatalities, the country was experiencing “very high numbers of cases”.
“At this stage of the pandemic, it is not clear where it goes next. And the additional strains that we’re seeing coming in through the pandemic, as we see that the pandemic rage through the developing world, and the potential for new strains and other things to occur - it means there is still much we don’t know,” he said.
-----
Pandemic hangover overwhelms already-stressed NSW health system
By Lucy Carroll
June 16, 2021 — 12.00am
Emergency departments are clogged with seriously ill patients and paramedics are responding to record numbers of life-threatening cases as doctors warn the after-effects of people delaying medical care in NSW due to COVID-19 restrictions are pushing the system to crisis point.
At one Sydney hospital, about 25 per cent of emergency patients — those needing the highest level of care behind people who need immediate resuscitation — were seen within the clinically recommended 10 minutes for treatment to start.
Emergency departments are at some of the busiest levels on record, with 759,157 people attending in NSW from January to March this year, about 86,000 more patients than in the same period in 2016, according to the latest Bureau of Health Information (BHI) quarterly report. People needing Triage 2 care — those with imminently life-threatening conditions — increased by more than 6 per cent to 99,816.
“We are getting busier and busier which is partly a hangover from lockdowns and delays in people getting routine medical care after COVID-19 hit,” said Dr Clare Skinner, president-elect of the Australian College of Emergency Medicine. “There was a slight pause during 2020 but now we are back to pre-pandemic levels with older patients, people with mental health conditions and children needing the most care.”
-----
Blood samples support theory COVID-19 was in US before Christmas 2019
By Nancy Dillon
June 16, 2021 — 6.31am
New York: A new study of blood specimens collected from 24,000 Americans found evidence that COVID-19 likely was present in the US as early as Christmas Eve 2019.
The new retrospective research, published online Tuesday by the journal Clinical Infectious Diseases, found that nine people spread across Illinois, Massachusetts, Wisconsin, Pennsylvania and Mississippi had detectable COVID-19 antibodies in their bloodstreams when they participated in the government’s All of Us Research Program early last year.
The positive specimen collected from one Illinois-based patient on January 7, 2020, suggests “the virus may have been present in Illinois as early as December 24, 2019,” a full month before Illinois confirmed its first official case of COVID-19 on January 24, 2019, the study found.
The disclosure comes as coronavirus deaths surpass 600,000 in the US.
-----
Climate Change.
-----
The Earth is warming faster than expected: NASA
By Tik Root
June 18, 2021 — 3.20pm
Washington: The amount of heat Earth traps has roughly doubled since 2005, contributing to more rapidly warming oceans, air and land, according to new research from NASA and the US National Oceanic and Atmospheric Administration.
“The magnitude of the increase is unprecedented,” said Norman Loeb, a NASA scientist and lead author of the study, which was published this week in the journal Geophysical Research Letters. “The Earth is warming faster than expected.”
Using satellite data, researchers measured what is known as Earth’s energy imbalance - the difference between how much energy the planet absorbs from the sun, and how much it’s able to shed, or radiate back out into space.
When there is a positive imbalance – Earth absorbing more heat than it is losing – it is a first step towards global warming, said Stuart Evans, a climate scientist at the University at Buffalo. “It’s a sign the Earth is gaining energy.”
-----
Royal Commissions And The Like.
-----
No entries in this section.
-----
National Budget Issues.
-----
Debt’s day of reckoning is coming
A reality check is due any day now, and word from Canberra’s insiders is it will be a ‘rude shock’ to a reform-shy political class.
By Tom Dusevic
June 12, 2021
The federal budget has virtually receded from public attention, yet there’s a long tail of what one observer described as the “triumphalism” of Josh Frydenberg’s May 11 speech. Amid a tumble of strong economic data, the Morrison government’s yearning for validation, from front pages to credit watchers, endures.
The economy is bigger than it was pre-pandemic. More people are in work, too. But in case you missed it, the government launched another phase of its “Our Comeback” advertising campaign to tell us how far we’ve come and why.
Short answer: $291bn in direct economic support. Future taxpayers, thank you for your service.
At some point, today’s consumption is going to show up in higher taxes or lower incomes, or both, because we haven’t adequately planned for or invested in our future, such is the opportunity cost of stimulus. That’s even before we consider spending quality.
-----
Aussie house prices rise at fourth-fastest rate in OECD over 20 years
John Kehoe Economics editor
Jun 14, 2021 – 7.00pm
Planning and zoning restrictions are a key problem behind Australia recording the fourth-fastest house price growth out of the world’s advanced economies over the past 20 years, according to a new report by the Organisation for Economic Co-operation and Development.
Local households are the second-most indebted in the world and it takes six years longer to afford a home in Australia: 16.4 years of disposable income for a 100-square-metre dwelling versus 10.4 years for the OECD average.
The cross-country analysis exposes how expensive Australian homes have become in the past two decades and that restrictive state and local government regulations are exacerbating the price pressures.
Paris-based OECD director of policy studies in the economics department, Luiz de Mello, said low interest rates had contributed to rising house prices.
-----
Unorthodox monetary policy here to stay: RBA
· June 15, 2021
The Reserve Bank has effectively ruled out ending its unprecedented $200bn bond purchasing program as scheduled in September, despite a national economy that is “transitioning from recovery to expansion”.
Minutes from the most recent RBA board meeting on June 1 showed the board “remained committed to doing what it reasonably could to support the Australian economy, and would maintain highly supportive monetary conditions until its goals for employment and inflation were achieved”.
The RBA’s commitment “to doing what it reasonably could to support the Australian economy” dovetails with a federal fiscal strategy aimed at driving unemployment below 5 per cent.
At the June meeting the central bank retained the cash rate at its record low of 0.1 per cent, and Tuesday’s RBA minutes reiterated that monetary policymakers would not consider hiking until inflation was “sustainably within the 2 to 3 per cent target range” – a prospect that was “unlikely” to be achieved until 2024 “at the earliest”.
-----
Health Issues.
-----
Greg Hunt says no to health insurers creep into US-style managed care
5:46PM June 17, 2021
Federal Health Minister Greg Hunt has put Australian health funds on notice that the government does not support the local industry creeping into US-style managed care, as concerns grow that insurers are already seeking to influence the delivery of healthcare services.
In the past year, Medibank has taken stakes in hospitals in Sydney and Melbourne, while Newcastle-based insurer NIB has proposed forming a “buying group” to manage contracts with healthcare providers and insurers.
While Medibank says its decision to take minority stakes in hospitals will preserve clinical autonomy, with doctors having the final say on care, and the Australian Competition and Consumer Commission has granted draft authorisation to NIB, health groups warn the moves are a step towards US-style managed care.
A spokeswoman for Mr Hunt said Australia’s health system relied on clinical autonomy and the government would protect that.
-----
International Issues.
-----
The message from the G7 is that the West has its limits with China
What was critical at the G7 summit was the message it sent out that the liberal democracies – the West– have finally been stirred into action by a belligerent and hostile China.
Alexander Downer Columnist
Updated Jun 13, 2021 – 10.21am, first published at 9.50am
There are two sorts of summits: bilateral and multilateral. Bilateral summits can be critical fuel for the engine of diplomacy but multilateral summits are another story.
Put 5, 10, 15 or even more leaders together in a room and you won’t get much. It’s not often that a multilateral summit of political leaders leads to anything very useful.
Normally, officials and ministers have pre-prepared agreements to announce, there is an array of photo opportunities carefully choreographed by a bevy of media advisers, messaging is sent out which has been carefully crafted on the back of focus group research and everyone flies home until the next summit.
Call me cynical, but I have attended many multi-lateral summits and that’s what’s happened: APEC summits, East Asian summits, climate change summits, Commonwealth summits, trade summits. They’re more about politics than they are about substance. Usually but not this time.
-----
Morrison powers up the Anglosphere to face China threat
Hans van Leeuwen Europe correspondent
Jun 13, 2021 – 8.43am
Carbis Bay, Cornwall | Prime Minister Scott Morrison has used his visit to the G7 leaders’ summit to breathe new life into the Anglosphere, joining a three-way meeting with US President Joe Biden and British Prime Minister Boris Johnson to discuss Indo-Pacific security.
The 40-minute three-way meeting, which appeared opportunistic rather than pre-planned, did not produce a full statement or any tangible outcome.
In a three-paragraph statement issued afterwards, the trio said they had “agreed that the strategic context in the Indo-Pacific was changing and that there was a strong rationale for deepening cooperation”.
-----
Biden welcomes new Israeli government as Netanyahu ousted
Susan Heavey
Jun 14, 2021 – 6.48am
Washington | US President Joe Biden said the United States remained committed to Israel’s security and would work with its new government after Israel’s parliament ended Benjamin Netanyahu’s 12-year run as prime minister on Sunday.
In a statement that made no mention of Mr Netanyahu, Mr Biden welcomed the new government coalition led by nationalist Naftali Bennett and sought to reaffirm US-Israel ties.
The White House said Mr Biden spoke with Mr Bennett on Sunday “to offer his warm congratulations”.
Mr Biden “expressed his firm intent to deepen cooperation between the United States and Israel on the many challenges and opportunities facing the region”, the White House said. “The leaders agreed that they and their teams would consult closely on all matters related to regional security, including Iran.
-----
South Korea can now build missiles able to reach Beijing, with US blessing
By Andrew Jeong
5:38PM June 13, 2021
For decades, the US kept tight limits on how far and how potent South Korea’s ballistic missiles could be, reflecting concerns that Seoul might unilaterally raise tensions with nearby China, North Korea and Russia.
But last month, the Biden administration removed the final limits on Seoul’s missile program, abolishing what had been a roughly 500-mile cap on South Korea’s ballistic-missile range. It is a key change: Seoul’s missiles, in theory, can now fly far enough to strike Beijing, Moscow or anywhere else.
Kim Jong Un’s regime in North Korea has been expanding its nuclear arsenal, and China’s military strength has been growing. The U.S., without provoking others by moving in its own weapons, can see a close ally develop technology that strengthens its own regional military deterrence. Seoul gets back its full nonnuclear weapons sovereignty after long advocating for such a move.
Having better-armed allies will help Washington, especially in light of worsening disputes with Beijing over Taiwan and the South China Sea, and ups the ante for China to participate in North Korean diplomacy, security experts say.
-----
Dramatic call by US bond investors
June 14, 2021
Arguably the best US futures indicator, the US 10-year bond rate, has been telling us the same story for the past 15 months – expect higher inflation and interest rates as a result of the pandemic recovery and American government stimulations.
Some 15 months ago, bond interest rates started their journey from 0.3 per cent to rise above 1.6 per cent causing huge losses in the bond market as prices fell to deliver those higher rates. As was predicted, in recent months the bond market has been taking a breather and trading between 1.5 per cent and 1.6 per cent.
But then the US economy recorded its biggest surge in inflation in nearly 13 years with consumer prices rising in May by 5 per cent over the 2020 levels. In addition, overall prices jumped at a thumping 9.7 per cent annualised rate over the three months ended in May.
The bond bears, believing they had been vindicated, had champagne glasses at the ready as they waited for the bond yield to rise. Instead it fell to 1.428 per cent – its lowest level since March – before recovering marginally.
-----
Public bonhomie, China nuance and Brexit bickering filled G7 menu
After four years of Donald Trump’s presidency, when diplomatic shouting matches were more likely features at G7 summits than cosy alfresco dining, there was a collective sigh of relief.
George Parker and Jasmine Cameron-Chileshe
Updated Jun 14, 2021 – 12.20pm, first published at 12.12pm
Carbis Bay, Cornwall | The images of Joe Biden and fellow G7 leaders chatting at close quarters on a Cornish beach as they enjoyed barbecued lobster may not have been the best advert for social-distancing rules in times of pandemic. But the beach cookout was designed to send another message: under renewed American leadership, the world’s leading western democracies are back in business.
After four years of Donald Trump’s presidency, when diplomatic shouting matches were more likely features at G7 summits than cosy alfresco dining, there was a collective sigh of relief. “This is the first time in four years they’ve actually got along,” said one British official.
The warmth towards Biden was reflected in the bonhomie between the US President and France’s Emmanuel Macron, walking along the white sand of Carbis Bay, arms draped around each other. “The US is back,” Biden said. Macron shot back: “Yeah definitely.”
UK Prime Minister Boris Johnson, revelling in the role of host after Brexit, called the three-day meeting “historic”. After the disruption of the Trump years, there was genuine agreement on global issues among the leaders of what Johnson called the Democracy XI: the US, the UK, Canada, France, Germany, Italy, Japan and guests from Australia, South Korea and South Africa. India’s Narendra Modi attended virtually.
-----
https://www.afr.com/world/asia/china-dismissive-but-wary-of-g7-narrative-20210614-p580ta
China defiant, but wary of G7 narrative
China says the days when a ‘small group of countries’ dictates global decisions are long gone. But it also acknowledged the risk of a unified front against it.
Michael Smith China correspondent
Updated Jun 14, 2021 – 2.17pm, first published at 2.09pm
Beijing was its typical defiant self in the face of the West’s agreement to toughen its stance against the country’s human rights abuses, economic coercion and regional aggression, but it also acknowledged the risk of a unified front against China.
US President Joe Biden also suggested a global infrastructure plan to rival Xi Jinping’s Belt and Road Initiative and called for a phase-two probe into the origins of the coronavirus was one of cool indifference.
An editorial published in China’s hawkish Global Times newspaper on Monday was both dismissive and reflective in the face of the G7’s communique.
“This signals China will face more pressure exerted by Western platforms,” the editorial said.
“The US will make a more co-ordinated effort to crack down on China and more countries will join hands with the United States.”
-----
Snub or no snub, Morrison got what he came for
Australia, along with India, South Korea and South Africa, was invited to the G7 for one reason – China. And the outcome of the G7 was good for Australia.
Phillip Coorey Political editor
Jun 14, 2021 – 2.56pm
There is some conjecture over why Boris Johnson gatecrashed what was widely-anticipated as being the first face-to-face bilateral meeting between Joe Biden and Scott Morrison.
Labor and Morrison’s other detractors have portrayed it as a diplomatic dressing down by a US President unimpressed with Australia’s refusal thus far to commit to net zero emissions by 2050, and with a Prime Minister deemed to be too close to Donald Trump.
The latter reason lacks substance given there was none closer to Trump than Johnson.
Nevertheless, had the evolution of a bipartisan meeting into a tripartite gathering been a snub of sorts, it would have been an extremely churlish act by the US, the worst since Bill Clinton left John Howard waiting in the rain outside the Oval Office in 1999.
And that was after Clinton imposed tariffs on Australian lamb the night before Howard arrived in Washington DC, knowing the Australian PM wanted to lobby against the intended move.
-----
https://www.afr.com/world/europe/nato-trains-its-sights-on-china-20210614-p5810h
NATO trains its sights on China
Hans van Leeuwen Europe correspondent
Jun 15, 2021 – 1.46am
London | Leaders of the trans-Atlantic military alliance NATO have backed up the West’s toughening line on the strategic challenge from China, vowing to work together to address Beijing’s “coercive policies” and “assertive behaviour”.
The meeting of 30 leaders from Europe and North America in Brussels on Monday followed up the weekend G7-Plus meeting in Britain, attended by Prime Minister Scott Morrison, where the world’s biggest democratic economies squared up to China for the first time.
“China is increasingly running up against NATO, whether it be in Africa, in the Mediterranean, or more specifically in the Arctic, as they are trying to engage more,” Canadian Prime Minister Justin Trudeau said on the NATO summit sidelines.
“We need to make sure that as an alliance, even though we are much more Atlantic than Pacific, we are aware of the global influences that China is having.”
While the summit communique explicitly labels NATO’s traditional bugbear Russia as a threat, on China the language does remain softer - reflecting many Europeans’ desire to leave the door visibly ajar for cooperation, particularly on climate change and arms control.
-----
Democracy on the defensive as G7 leaders dither over China
Political and international editor
June 15, 2021 — 5.00am
So long as Donald Trump was at the table, the G7 had an excuse. Trump was a saboteur of unity and a vandal of democracy. It was just three years ago that he walked out on a G7 summit, rejected the group’s communique, derided his Canadian host, Justin Trudeau, as “dishonest and weak” and threatened most of the leaders present with more tariffs.
Now he’s gone, the G7 has no excuse for inaction. So what did we see at the weekend’s summit?
We saw the leaders of the world’s seven richest democracies awakening to the fact that they face a challenge of historic proportions from the Chinese Communist Party. This overshadowed everything. But the leaders ended up in a bugger’s muddle over what to do about it.
The G7 – in order of economic heft the US, Japan, Germany, Britain, France, Italy and Canada –invited four extras. The so-called “extension partners” were India, South Korea, Australia and South Africa, also in order of economic weight. While these guests participated in the meetings, they’re not members; their signatures do not appear on the G7 communique.
-----
China raising stakes with ‘new world of warfare’
· By Larisa Brown and Bruno Waterfied
· The Times
· June 15, 2021
China is “changing the nature of warfare” by investing heavily in modern military capabilities such as robots, facial recognition software and artificial intelligence, the head of Nato has warned.
Jens Stoltenberg, the secretary-general, said China’s military build-up and coercive behaviour presented security risks to the western alliance.
In a press conference following the Nato summit yesterday in Brussels, he said the alliance must spend more on defence to beef up its defences and counter threats from Beijing and Russia. He also described relations with Russia as at their lowest point since the end of the Cold War.
Boris Johnson, who travelled to meet world leaders in Brussels, insisted that the alliance did not want a new Cold War with China, but said it did pose “challenges”.
The meeting came as it emerged that Porton Down, Britain’s top-secret research laboratory, was hiring hundreds of scientists, including specialists in space and artificial intelligence, to counter threats from China and Russia. Over the next three months jobs will be advertised for about 300 defence scientists to work for Porton Down, also known as the Defence Science and Technology Laboratory, at its site near Salisbury and other locations across the country after it received extra funding.
-----
The Delphic message from the bond market
The bond market offers contradictory answers as to why rational investors would buy bonds with yields below the inflation rate.
Karen Maley Columnist
Jun 16, 2021 – 5.00am
Top US central bank officials face a difficult challenge this week in working out how to reconcile the message to financial markets that monetary policy will remain extremely accommodative, despite the unexpectedly strong rebound in US economic activity, and the surge in inflation.
Investors are on edge as they await this week’s meeting of the US Federal Reserve’s interest rate-setting committee.
That’s because there is a widespread expectation that US central bank officials will broach the difficult subject of how the Fed should go about scaling back its massive $US120 billion ($156 billion) monthly asset purchase program, a process known as “tapering”.
Fed boss Jerome Powell has signalled he will proceed very gingerly and will signal the central bank’s plans for “tapering” its bond purchases well in advance.
-----
Trump pushed Justice Department to help him overturn election
MICHAEL BALSAMO and COLLEEN LONG
Jun 16, 2021 – 2.45am
Washington DC | During the last weeks of his presidency, Donald Trump and his allies pressured the Justice Department to investigate unsubstantiated claims of widespread 2020 election fraud, despite his former attorney general declaring there was no evidence of it, newly released emails show.
The emails, released Tuesday by the House Oversight Committee, reveal in new detail how Trump, his White House chief of staff and other allies pressured members of the US government to challenge the 2020 election over false claims, even though officials at Homeland Security and Justice, as well as Republican election leaders across the country, repeatedly said there had been no pervasive fraud. Former Attorney General William Barr, a longtime Trump loyalist, was among those who said there was no evidence of such fraud.
The emails also show the extent to which Trump worked to enlist then-acting Attorney General Jeffrey Rosen in his campaign’s failing legal efforts to challenge the election result, including suggesting filing a brief with the US Supreme Court.
The ones sent to Rosen include debunked conspiracy theories and false information about voter fraud. Trump’s lies about the election helped spur on the violent mob that stormed the US Capitol on January 6 in a failed effort to stop the certification of Joe Biden’s victory.
-----
Putin, Xi friendship ‘driven by their hatred for West’
Russia seeks to regain its global prestige as China aims to be the hegemonic power of Asia. This conjoining of Beijing and Moscow’s strategic ambitions increases the potential for conflict in the world.
By Paul Dibb
June 16, 2021
The final communique on Sunday of the Group of Seven summit expressed serious concerns about China’s and Russia’s destabilising behaviour and said the world’s most powerful democracies would defend a free and open Pacific based on the rule of law.
The situations across the Taiwan Strait and the East and South China seas were singled out for concern. But in my view, for European members of NATO, Russia will remain their priority concern – not least because of Moscow’s display of overwhelming military force along Ukraine’s borders recently
The growing challenge from China tends to crowd out attention to other enduring threats, including those coming from the military alignment of Moscow and Beijing. We need to address both challenges simultaneously.
In 1997 Zbigniew Brzezinski, the national security adviser to president Jimmy Carter, said the most dangerous scenario to the US would be a grand coalition of China and Russia, an “anti-hegemonic” coalition united not by ideology but by complementary grievances. He argued it was imperative that no challenger emerged capable of dominating Eurasia and thus of challenging the US for global dominance.
-----
Where is Trump now? Florida coast becomes Republican power base
Lured south by sunshine, golf and money, the former president’s allies and hangers-on have formed an alternate universe that revolves around Mar-a-Lago.
Joshua Green
Jun 16, 2021 – 12.06pm
Since he left Washington in turmoil in January, Donald Trump has spent the bulk of his brief, contentious post-presidency holed up in what Karl Rove calls his “Fortress of Solitude” – Mar‑a‑Lago, his private club in Palm Beach. It’s an odd sort of isolation: Although he’s largely cut off from the outside world, Trump is hardly alone.
Tossed from the White House, banished from Facebook and Twitter, Trump has never seemed more distant from public consciousness. But while he can’t broadcast out, those same platforms offer a surprisingly intimate glimpse into his new life, thanks to the prolific posting of the club’s guests.
At every moment of his day, Trump is bathed in adulation. When he enters the dining room, people stand and applaud. When he returns from golf, he’s met with squeals and selfie requests. When he leaves Mar-a-Lago, he often encounters flag-waving throngs organised by Willy Guardiola, a former professional harmonica player and anti-abortion activist who runs weekly pro-Trump rallies in Palm Beach.
“Give me four hours and I can pull together 500 people,” Guardiola says. Trump recently invited the self-proclaimed “biggest Trump supporter in the country” for a private consultation at his club.
-----
https://www.afr.com/policy/economy/more-fed-members-raise-2022-rate-rise-prospects-20210617-p581ou
Fed signals first rate rises will come in 2023
Matthew Cranston United States correspondent
Jun 17, 2021 – 5.58am
Federal Reserve officials expect to start raising interest rates next year with two hikes by 2023, as the central bank revised up inflation and economic growth forecasts.
The more hawkish outlook triggered a sell off in US 10-year bonds, pushing yields up and smashing the Australian dollar which immediately fell 1 per cent to US76.28¢ from US77.07¢ before the announcement.
“Inflation has come in ahead of expectations in the last few months,” Federal Reserve Chairman Jerome Powell said after its two-day meeting. “Is there a risk that inflation could be higher than we think? Yes.
“There is a lot of uncertainty. We need to see how things evolve in coming months. This is an extraordinarily unusual time.”
The Fed now expects headline inflation to be 3.4 per cent for this year, up from its forecast just three months ago of 2.4 per cent, while core inflation is expected to be 3 per cent, up from the bank’s March forecast of 2.2 per cent.
However, both of these inflation forecasts drop back down next year.
-----
https://www.afr.com/policy/economy/economic-nationalism-joe-biden-style-20210616-p581ig
Economic nationalism, Joe Biden-style
Biden won’t start many trade wars, but he won’t sign many trade deals either.
Paul Krugman Contributor
Jun 16, 2021 – 1.58pm
If you’re under 50, you probably don’t remember when Japan was going to take over the world. But in the late 1980s and early ’90s, many people were obsessed with Japan’s economic success and feared American decline.
The supposedly non-fiction sections of airport bookstores were filled with volumes featuring samurai warriors on their covers, promising to teach you the secrets of Japanese management. Michael Crichton had a best-selling novel, Rising Sun, about the looming threat of Japanese domination, before he moved on to dinosaurs.
The policy side of Japanophilia-Japanophobia took the form of widespread calls for a national industrial policy: government spending and maybe protectionism to foster industries of the future, notably semiconductor production.
Then Japan largely disappeared from America’s conversation – cited, if at all, as a cautionary tale of economic stagnation and lost decades. And we entered an era of self-satisfied arrogance, buoyed by the dominance of US-based technology companies.
-----
https://www.afr.com/world/north-america/biden-politely-reads-riot-act-to-putin-20210617-p581s1
Biden politely reads riot act to Putin
After more than two decades in power, this Russian bear was unlikely to change its habits. Biden’s aim is to coax and cajole Putin into a moderately less dangerous stance. That goal is more difficult than it sounds.
Edward Luce Columnist
Jun 17, 2021 – 10.32am
Summitry, contrary to a former British prime minister, is nothing like tennis. The outcome is rarely “game, set and match”. By the wide-eyed standards of Joe Biden’s last four predecessors, all of whom held ill-fated summits with Vladimir Putin, Biden went into this one with low expectations.
There were no illusions about his meeting of minds with the Russian leader, let alone souls. The modesty of Biden’s goal — to stabilise relations with America’s chief military adversary — conveyed a realism that eluded earlier presidents.
All of which is far less exciting for the world media. Biden did not praise Putin’s ability to restore Russian freedom and prosperity, as Bill Clinton did in 2000 shortly after Putin was elected president. Nor did he get a sense of Putin’s soul, as George W Bush claimed in 2001, and trust what he saw.
He did not aim for an ambitious “reset” of US-Russia relations, as Barack Obama fatefully did in 2009. Most notoriously Biden’s tone was a million miles from the one-man admiration society Donald Trump brought to Helsinki when he met Putin alone in 2018.
-----
The Fed just got everyone’s attention with its abrupt change of tone
Stephen Bartholomeusz
Senior business columnist
June 17, 2021 — 11.55am
At its last meeting in April, US Federal Reserve Board chairman Jerome Powell indicated that the Fed was in no hurry to raise US interest rates. Now, it seems, it is thinking about it.
Confronted by data last week that core inflation is running at its highest level in nearly 30 years and an economy that is rebounding harder and faster than they had previously anticipated, the expectations of members of the Fed’s Open Market Committee (FOMC) have shifted markedly.
Where they were ultra-dovish at their last meeting they are now mildly hawkish, a shift in stance that caused the US sharemarket to slide, the US dollar to strengthen and bond yields to spike.
At the core of the markets’ abrupt change in mood, from complacency and a conviction that the Fed would keep US rates ultra-low indefinitely to unease, was the release of the FOMC members’ projections after this week’s meeting.
-----
The US should spurn the false promise of protectionism
America’s economy suffers from inequality and poor labour performance, but this is not due to global trade.
Martin Wolf Columnist
Jun 16, 2021 – 10.50am
Protectionism is back, above all in the US. The driving forces behind it are xenophobia and nostalgia. Arguments can be made for a degree of self-sufficiency, for reasons of national security. But those arguments need meticulous assessment.
This is not what has been happening, certainly not under Donald Trump. But though the tone is different under Joe Biden, the reality is not, alas. On the contrary, protection has become one of the few issues on which there is bipartisan consensus.
The communiqué issued by the leaders of the G7 stated: “We have agreed ... to ... secure our future prosperity by championing freer, fairer trade within a reformed trading system.” This papers over cracks between the US, increasingly doubtful about trade, and, say, Germany, dependent on trade for its prosperity, as is true of all the smaller high-income countries.
It is not surprising that a large country with a sophisticated economy and diverse resources, such as the US, tends to trade less intensively than smaller ones and so cares less about it. It gains many of the benefits of trade through internal specialisation.
-----
Fed tiptoes back from massive monetary stimulus
Markets are fretting that we’re close to reaching the high watermark for monetary stimulus, with the US central bank suggesting that interest rates could start climbing in 2023.
Karen Maley Columnist
Jun 17, 2021 – 4.27pm
US Federal Reserve boss Jerome Powell faces a difficult balancing act.
On the one hand, he’s clearly encouraged by the US economy’s vigorous recovery from the pandemic.
But he also doesn’t want investors to become overly anxious that the Fed’s extraordinary monetary stimulus – which has helped propel the US stock market to record levels – will be taken away any time soon.
That’s why Powell was keen to emphasise that the Fed’s future rate rises are far from being set in concrete.
At his press conference after the US central bank’s two-day policy meeting, Powell emphasised that this was an “extraordinarily unusual time”, and emphasised that forecasts for the timing of future interest rate hikes should be taken with a “big grain of salt”.
-----
Xi Jinping’s effort to break Australia’s will has only solidified it
June 18, 2021 — 5.00am
China’s President Xi Jinping asked Australians whether they were prepared to stand up for their sovereignty if he applied some economic pain. We now know their answer.
“Yes”.
While China is applying punitive trade bans to over $20 billion worth of Australian exports, holding two Australian writers in prison on political charges, and refusing any high-level contact, Australian public sentiment is firm.
Sixty-two per cent of respondents to today’s Resolve Political Monitor, conducted for The Sydney Morning Herald and The Age by Resolve Strategic, say Australia should be guided by the principle of “sticking to our values and speaking up” in its confrontation with Xi’s China.
Fewer than a quarter - 23 per cent - say Australia should “think twice before antagonising China”.
-----
Helen Clark slams WHO for opposing China travel bans, jury out on lab leak
June 17, 2021 — 5.28pm
London: Australia and New Zealand were right to ban flights from China at the first sign of the pandemic last year, despite objections from the World Health Organisation and Beijing.
That is the view of former New Zealand prime minister Helen Clark who co-chaired the international expert panel that spent a year investigating the coronavirus outbreak.
She said that the WHO was wrong to oppose the “absolutely essential” travel bans first introduced on flights from China, and then extended to Europe and the rest of the world as the pandemic spread from Wuhan where the virus was first detected.
“We did that even though it was against the advice of the WHO and the international health regulations which discourage constraints on travel,” she said.
The Independent Panel for Pandemic Preparedness and Response co-chair made the forceful comments to the Australian-based Rekindling Hope podcast hosted by opposition frontbencher and former treasurer Chris Bowen and former Labor candidate Sam Crosby.
-----
For Republicans, ‘crisis’ is the message as the party outrage machine fires up
By Jonathan Weisman
June 18, 2021 — 6.01am
Washington: House Republican leaders would like everyone to know that the United States is in crisis.
There is an economic crisis, they say, with rising prices and overly generous unemployment benefits; a national security crisis; a border security crisis, with its attendant homeland security crisis, humanitarian crisis and public health crisis; and a separate energy crisis.
Pressed on Tuesday on whether the nation is really so beleaguered, the No. 2 Republican in the House, Representative Steve Scalise of Louisiana, thought of still more crises: anti-Semitism in the Democratic ranks, “yet another crisis,” he asserted, and a labour shortage crisis.
“Unfortunately, they’re all real,” he said capping a 25-minute news conference in which the word “crisis” was used once a minute, “and they’re all being caused by President Biden’s actions.”
As Americans groggily emerge from their pandemic-driven isolation, they could be forgiven for not seeing the situation as quite so dire. They might also be a little confused about which of the many outrages truly needs their focus: the border, perhaps, but what about Dr. Anthony Fauci and the Wuhan lab leak theory, the teaching of critical race theory in the nation’s schools, the fact that some schools are not fully reopened, Representative Ilhan Omar, or all those transgender athletes competing in high school sports?
-----
‘String of disasters’: China’s shipping delays set to widen trade chaos
June 18, 2021 — 10.20am
The global shipping industry, already exhausted by pandemic shocks that are adding to inflation pressures and delivery delays, faces the biggest test of its stamina yet.
When one of China’s busiest ports announced it wouldn’t accept new export containers in late-May because of a Covid-19 outbreak, it was supposed to be up and running again in a few days. But as the partial shutdown drags on, it’s further snarling trade routes and lifting record freight prices even higher.
Yantian Port now says it will be back to normal by the end of June, but just as it took several weeks for ship schedules and supply chains to recover from the vessel blocking the Suez Canal in March, it may take months for the cargo backlog in southern China to clear while the fallout ripples to ports worldwide.
“The trend is worrying, and unceasing congestion is becoming a global problem,” A.P. Moller-Maersk, the world’s No. 1 container carrier, said in a statement.
-----
Hardline judge under US sanctions elected Iran’s next President
By Parisa Hafezi
Updated June 19, 2021 — 4.57pmfirst published at 4.06pm
Dubai: Hardline judge Ebrahim Raisi has been elected President of Iran in a lacklustre campaign where he was widely regarded as front-runner, despite being personally sanctioned by the US.
Raisi, a protege of Iran’s Supreme Leader Ayatollah Ali Khamenei, will have a key role in discussions with the United States about the prospect of a renewed nuclear pact.
At 9am Saturday local time (3.30pm AEST), the two other candidates, former Revolutionary Guard commander Mohsen Rezaie and moderate Abdolnaser Hemmati both congratulated Raisi, although the official result has not yet been declared.
Rezaei’s concession in a post on Twitter came as Iran’s outgoing President Hassan Rouhani also acknowledged the winner in the country’s vote Friday was “clear,” though he didn’t immediately name judiciary chief Ebrahim Raisi.
-----
I look forward to comments on all this!
-----
David.
No comments:
Post a Comment