February 24 2022 Edition
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The Russo-Ukraine imbroglio – heading towards war apparently – is dominating the global headlines and worries and various sides position for advantage. All we can do is wait and watch – nervously.
In the UK the bis news has been some terrible record setting storms and winds.
In OZ we have seen national politics go into a total frenzy even though we are still months from an election. It will be a long a painful couple of months.
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Major Issues.
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https://www.afr.com/markets/debt-markets/the-great-bond-bear-market-is-long-overdue-20220213-p59vzw
The great bond bear market is long overdue
Mark Tinker
Feb 13, 2022 – 10.10am
With the US 10-year bond yield briefly breaking up through the 2 per cent level last week, it’s worth noting that global bond markets in general just completed an absolutely terrible month for performance in January, following on from an equally terrible year in 2021.
Indeed, last year saw the worst annual performance since 1999. However, this is not simply because concerns are rising about inflation -- although this is of course a factor -- far more important, in our view, is that the annual loss in 2021 has triggered a long overdue global reassessment of the whole point of owning bonds in an investment portfolio.
In Australia, thanks to the wonder of the dividend credits, most savers have little exposure to low yielding bonds, but for most of the pensioners in the rest of the world, so-called prudent regulation means they are heavily exposed to assets with a negative real (in some cases a negative nominal) yield, and are dependent on capital gains for their returns.
Now that disinflation is over, we don’t even have to debate whether the inflation is temporary or permanent, and since the Fed is no longer either lowering short rates or buying the bonds themselves, the question for long-term investors as opposed to traders has to be, 'why own any bonds at all?'
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‘Pathetically undergunned’: The navy’s nuclear dilemma
The navy has spent billions on new surface ships. But experts warn they’re all but useless against China. Modern naval warfare will be won underwater, and time’s running out for Australia to be ready.
February 14, 2022
Since Federation there have been two competing schools of thought on how Australia should assemble its defence forces. The names may have changed, but the divide is always present.
In the early 20th century it was the “Australianists” against the “imperialists”. Then it was “fortress Australia” versus “forward defence”. Since the end of the Vietnam War, it’s been “self-reliance” and the “US alliance”.
Are we building the Australian Defence Force to defend the continent and its approaches from an attack? Or is the aim to deploy the ADF further from home, alongside the United States and other allies, so that we keep the wider region stable and rely on a security guarantee from our big and powerful friend?
The truth is that Australia is always trying to do both, but in a world of finite resources the hard part is deciding where we sit on this spectrum so that we can structure our forces accordingly.
With the rise of China challenging the position of the US in the Asia-Pacific, this fundamental split is at the centre of the debate over how the Royal Australian Navy should be structured.
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Only one-third of voters are satisfied with Scott Morrison, new study reveals
NCA NewsWire
5:57AM February 14, 2022
Prime Minister Scott Morrison faces an uphill battle to win over Australians ahead of an anticipated May election, with the latest Newspoll showing Labor retains a convincing lead over the government.
The survey shows the Coalition’s primary vote remains on 34 per cent, the lowest since the 2018 Liberal leadership spill, while Labor has maintained its primary vote peak of 41 per cent – it’s highest since the spill.
The poll follows a chaotic week in parliament with the Morrison government pulling its Religious Discrimination Bill after five Liberal MPs crossed the floor to side with Labor on amendments to protect transgender students.
The Prime Minister also suffered damaging leaks from cabinet.
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Huge state by-election swings put Morrison on red alert
8:30PM February 13, 2022
Self-serving explanations for double-digit by-election swings against the Perrottet government at the weekend ignore a now tangible reality.
The general level of irritation in the community, in some cases palpable anger, isn’t confined to the Commonwealth and the Morrison government.
It is being directed at any incumbent government, at any level. The premiers also are finally now in the firing line.
You don’t need a focus group to reveal that with slow rollouts of vaccines over summer and the impact on parents’ daily lives with school going back, people are beyond frustrated.
And they don’t care whose fault it is.
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If Putin invades Ukraine, here’s what Australians need from Morrison and Albanese
Political and international editor
February 15, 2022 — 5.30am
If Scott Morrison ends up winning the federal election, he likely will have a 170-centimetre, 69-year-old ex-KGB agent to thank. If Vladimir Putin sends his forces across the border to invade Ukraine, a new atmosphere of anxiety and uncertainty will pervade Australia’s election atmospherics.
Already, airlines are diverting flights around Ukraine. Oil markets are skittish and the price of petrol in Australia is heading to $2 a litre. Wheat prices are rising worldwide. And not a single Russian missile has been fired yet.
The US administration reportedly thinks that an attack is now certain, with only the exact date unclear. Even Putin has withdrawn his diplomats from the Ukrainian capital, supposedly out of fear of “provocations” by the Ukrainians.
US President Joe Biden reportedly told his Ukrainian counterpart Volodymyr Zelenskyy to “prepare for impact”. You can see Australian political leaders doing just that.
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Stolen Generations survivors owe nobody their forgiveness, Prime Minister
Indigenous affairs reporter
February 14, 2022 — 7.26pm
Most people might find it unusual, or perhaps even somewhat insulting, to use an apology to lecture a victim on the power of forgiveness.
But the Prime Minister did just that on Monday as part of an annual address commemorating Kevin Rudd’s apology to the Stolen Generations in 2008.
“Sorry is not the hardest word to say,” Scott Morrison told the House, echoing his words from 14 years earlier. “The hardest is, ‘I forgive you.’ ”
“But I do know that such a path of forgiveness does lead to healing,” he continued. “It does open up a new opportunity. It does offer up release from the bondage of pain and suffering that no simple apology on its own can achieve.”
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Defence revises down planned availability of the F-35A jet fleet
February 15, 2022
Defence has revised down the planned availability of the nation’s fleet of F-35A fighter jets for the next four years, despite growing regional threats.
New budget estimates reveal the Joint Strike Fighters – Australia’s most potent air combat platform – have had their flying hours downgraded by 25 per cent this financial year, and by 17, 14 and 13 per cent in each of the following financial years.
The move follows repeated downgrades in F-35A flying hours, including by 36 per cent last financial year, amid US warnings the jets should be flown infrequently due to maintenance issues and parts availability.
Australia now has 44 F-35As, basing an initial four at RAAF Tindal – Australia’s most important northerly base. The fleet is scheduled to grow to 72 by the end of 2023, with an option to expand to 100 aircraft.
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What have SMSFs done to deserve this?
7:34AM February 16, 2022
Self-managed super funds have been actively disadvantaged by key government agencies which understate their returns by using inappropriate calculations, according to a new report.
The research from the University of Adelaide arrives as the SMSF sector has been struggling to compete with larger funds as a series of high-profile assessments suggest smaller funds are inferior to billion-dollar funds.
The new research – commissioned by the Self Managed Super Fund Association – says the ATO is using inappropriate comparisons which “produce lower estimates of investment returns, all else being equal”. The report concludes SMSFs achieve directly comparable returns with larger institutional funds.
Similarly, the Australian Securities and Investments Commission – which has said SMSFs with less than $500,000 have “lower returns” – has been taken to task. “The notion that smaller SMSFs deliver materially lower investment returns on average than larger SMSFs is not supported by the research results,” says the report.
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https://thenewdaily.com.au/finance/finance-news/2022/02/17/tax-reform-tony-abbott-alan-kohler/
6:00am, Feb 17, 2022 Updated: 5:42pm, Feb 16
Alan Kohler: How Tony Abbott killed tax reform
opinion
It wasn’t only climate change that Tony Abbott and the Coalition cynically weaponised a decade ago – they did it to tax reform as well.
The two things were merged in the ruthlessly dishonest, but effective description of Labor’s emissions trading scheme as a “carbon tax”, but the result was a full stop to any action on either climate change or tax reform for more than a decade.
In fact, 12 years after Abbott became leader of the Liberal Party by one vote, both the Coalition and the Labor party are still incapable of serious reform of the tax system, or serious action on climate change.
The ascension of Tony Abbott was truly one of Australia’s greatest economic disasters.
Now there is a new push from the Financial Review for another needless inquiry into the tax system to try to generate some momentum for reform that might lift productivity growth, which has been falling since Abbott knocked off Turnbull in 2009.
The goal, broadly, is to shift more taxation from income to consumption and assets, by increasing and broadening the GST and removing the capital gains tax discount and introducing an inheritance tax, among other things. But nothing will happen.
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https://www.afr.com/politics/federal/albo-can-lose-by-sticking-to-the-labor-script-20220215-p59wpq
Albo can lose by sticking to the Labor script
ALP-friendly issues such as Medicare haven’t worked at the last three elections. Labor can’t avoid talking about the economic and fiscal repair issues that matter to swinging voters.
Nick Dyrenfurth Researcher
Feb 16, 2022 – 1.18pm
At first glance it might appear odd for Labor leader Anthony Albanese to heed the example of the infamous ALP “rat” Billy Hughes. Yet World War I provides a salutary, if paradoxical, lesson in this federal election year.
Then Labor prime minister Hughes left Australia to attend the Imperial War Cabinet in London early in 1916, visiting troops on the Western Front, proceeding on a well-publicised speaking tour, urging a renewed war effort, and all but advocating for conscription for overseas service.
When Hughes returned on July 31, he was greeted by a full-page salutation in the Australian Workers’ Union’s Worker newspaper quoting his previous opposition to conscription: “Welcome Home to the Cause of Anti-Conscription”. Its editor, legendary Labor propagandist Henry Boote, warned Hughes not to mistake the “popping of champagne corks for the voice of the people”.
It was to no avail. A month after Hughes’ return, on August 30, 1916, having convinced the federal Labor caucus to put the matter to a national vote, he announced a referendum (technically a plebiscite) would take place in October for the purpose of introducing conscription. A month later, the AWU-dominated NSW Labor executive expelled him along with other parliamentarians.
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PM safe from challengers before poll but a target for the underminers
Award-winning political commentator and author
February 17, 2022 — 5.00am
There are three ways Scott Morrison can be removed as Prime Minister before the election. The first would be if Peter Dutton challenged him. The second would be if Josh Frydenberg challenged him. The third, and the least bloody, would be if his two closest confidantes, Stuart Robert and Ben Morton, told him he should step aside for the good of the Liberal Party because if he stayed, the government would be annihilated.
All three options have been canvassed internally but the chances of any one of them happening is close to zero. Dutton, who does not want to blow up the joint again, has ruled out a challenge. Frydenberg has also ruled out a challenge. Neither has denied their ambition, both would contest ferociously if there was a vacancy. Both have been not so subtly auditioning for the job, Dutton dropping bombs on Anthony Albanese over China and national security, and Frydenberg over economic management.
While it is as well to be prepared, there is unlikely to be an opening until and if Morrison loses the election.
Even if annihilation point was reached – and it hasn’t been – Robert and Morton would not approach Morrison, and he would not listen to them if they did.
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From ukuleles to Ukraine, we’re in uncertain times again
John Howard may have used a dog whistle rather than Scott Morrison’s bullhorn, but there’s a long and dishonourable tradition of security scares in election campaigns.
Phillip Coorey Political editor
Feb 17, 2022 – 8.00pm
Three years ago, Australia experienced a federal election campaign fought around tax, climate change and budget management.
At times it was rough and disingenuous, as election campaigns always are, but in relative terms, it was a reasonably edifying contest.
This time, with neither party having much of a policy agenda and the climate wars neutralised, all indications are of a contest devoid of policy substance and one focused more on fear and character assassination.
That was writ large this week, the penultimate sitting period before the election, when politics moved to a dark place where it looks set to stay until May.
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History shows markets rebound after a crisis
Russia’s threat to invade the Ukraine has sparked volatility across sharemarkets but it may not be as bad as investors fear.
Alex Gluyas Markets reporter
Feb 18, 2022 – 5.00am
The threat of a Russian invasion of Ukraine is a reminder to investors of how markets behave in a crisis – and what to expect if Russia does follow through.
As tensions escalated between the two countries this week, investors fled risk assets, sending equity markets tumbling, and piled into safe havens including gold and the US dollar. Strategists caution things could change at any time.
Regardless of whether an invasion occurs in coming days or weeks, history tells us that markets rebound swiftly and powerfully from the initial fall caused by even the most severe crises.
Over the course of 29 separate events dating back to Germany defeating France in 1940, it has taken the Dow Jones index 18 days on average from the beginning of the crisis to hit its bottom, with an average decline over that period of 11.6 per cent, according to data compiled by Bell Potter strategist Richard Coppleson.
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The interest rate debate is missing a crucial ingredient
Economics Editor
February 18, 2022 — 11.04am
The financial markets and financial press may have convinced themselves we have a serious inflation problem and must hit the interest-rate brakes early and often, but the clear message from our top econocrats is that they aren’t in such a hurry. Their eyes haven’t moved from the prize: seizing this chance to achieve genuine full employment.
Nothing in Treasury secretary Dr Steven Kennedy’s remarks to a Senate committee this week suggested he was anxious about our recent rise in prices, nor hinted that a rise in the official interest rate was imminent.
Indeed, “interest rates are still close to zero and expected to remain historically low for some time,” he said.
What little he said about inflation was that “the effects of COVID on inflation, often characterised as a combination of increased demand for goods [at the expense of demand for services] and supply-side shocks, are still passing through the economy.
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’Shifted expectations’: 1 in 5 Aussies quit their jobs in the last year
New research has unveiled the shocking extent of Australia’s “Great Resignation” and the key reason people are changing jobs.
February 18, 2022 - 9:46AM
NCA NewsWire
One in five Aussies quit their job in the past year – while another quarter are thinking about leaving now – as they refuse to put up with career stagnation, burnout and poor pay.
A new survey conducted by the National Australia Bank shows businesses are being forced to lift their game to retain talent amid the so-called “Great Resignation” of workers during the coronavirus pandemic, with workers increasingly looking elsewhere after some soul-searching.
The NAB survey, which polled 1200 people over November and December, found a lack of personal fulfilment, purpose, career limitations, mental health concerns and poor pay were the main factors forcing people to consider changing their jobs.
NAB executive for banking Julie Rynski said after decades of low employee turnover, two years of the coronavirus had forced people to consider what they really wanted out of life and their career.
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https://www.afr.com/policy/foreign-affairs/there-is-an-economic-front-line-too-20220217-p59xgv
There is an economic front line too
National security in Australia usually has a khaki tinge to it. But the fragility of global supply chains and potential for coercion means the economy is now being recruited as well.
Richard McGregor Columnist
Feb 18, 2022 – 12.34pm
The pandemic is unwinding in Australia and much of the developed world just as it started two years ago, with a desperate reliance on medical imports from China.
First it was masks and ventilators. Now it is rapid antigen test kits, without which schools wouldn’t have opened and thousands of workers including nurses and wait staff would be off work.
The over-reliance on China for essential health and medical equipment tells us many things, not least about the dynamism of the mainland’s economy.
Look on the backs of the packets of rapid antigen tests and you will invariably see the names of companies in cities in inland provinces that few outside of the localities have ever heard of.
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Are you mentally ill, or just very unhappy?
As rates of diagnosis rise, a fierce debate rages in psychiatry. Are you experiencing a parallel pandemic, or having a rational response to a traumatic world?
Sophie McBain
Feb 18, 2022 – 9.38am
One afternoon in December 2004, Samantha* left her house in northern England and walked to the nearby river. She tried not to think about her five young children, alone at home. She wanted to plunge into the water; she didn’t know how to swim.
Samantha’s 11-year-old daughter, alarmed by her mother’s absence, dialled 999, and the police found her on the riverbank. She was transferred to a psychiatric hospital, where she spent four days curled up in a ball, crying. She was already known to social services: Samantha had a violent ex-boyfriend and had been abused as a child before being taken into care at the age of 12. It was difficult to know how to be a good mother when she had never been mothered herself.
Shortly afterwards a psychiatrist, asked by the local authority to assess her, diagnosed Samantha with borderline personality disorder (BPD). Last year, Samantha read the report to me over Zoom. By then we had been speaking for three months. She was warm and solicitous – “But anyway, how are you?” she always asked – but now her voice was hard with rage. The report noted her “lack of a sense of personal responsibility” and “poor impulse control”; it accused her of “feigning a mental disorder while in hospital”.
“But that’s not me, that’s not who I am!” she remembers telling her solicitor, terrified. A social worker told her she needed to achieve greater “emotional stability”. (“If you could just close your eyes for a second and imagine someone taking your children away,” Samantha asked me, “how would you feel?“) But the psychiatrist deemed her disorder “untreatable”, and her children were removed.
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War on securocrats is a final descent into policy madness
The Coalition has doubled down in its attacks on current and former security mandarins to make its point.
Laura Tingle Columnist
Feb 18, 2022 – 5.07pm
If there was ever a time we needed to be having a serious conversation about defence and national security, it would probably be about now. Our relationship with our biggest trading partner is in the toilet. That major trading partner is on the rise, and our traditional allies – though apparently it is very rude to say this – are in decline.
Instead of pausing, taking stock and developing a slightly more detached strategic view of what Australia’s interests may be in this, we have retreated into traditional alliances that will deliver something unspecified to us in about 40 years’ time.
There is a very strong likelihood of a major war in Europe, in which both our biggest trading partner and the United States have significant interests.
But there is more.
Last year, the head of ASIO, Mike Burgess, announced the domestic security agency had dumped terms such as right-wing and Islamic extremism as “no longer fit for purpose”, and replaced them with broad terms of “ideologically motivated violent extremism” and “religiously motivated violent extremism”.
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Arise, Scott Morrison, our first full-term PM since Howard
Political and international editor
February 19, 2022 — 5.30am
When the House of Representatives adjourned at 4.59pm and MPs made their customary Thursday afternoon dash from Parliament House to Canberra airport this week, Scott Morrison silently achieved a major breakthrough.
The last realistic chance for anyone to challenge him for the leadership of the Liberal Party before the forthcoming election had passed uneventfully. There’s no longer any question. He will now lead the Coalition to the polls in May.
Morrison is set to become the first prime minister to serve a full term since John Howard. Parliament is expected to sit for only three more days before election day, and they are devoted to the federal budget. It’s not politically or practically workable to remove the prime minister as his government brings down the pre-election budget.
All the others since Howard had their prime ministerships terminated by their own party rooms. Kevin Rudd, Julia Gillard, Tony Abbott and Malcolm Turnbull, all terminated by their own colleagues with extreme prejudice. Kevin Rudd’s brief second prime ministership was ended by the voters.
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https://www.afr.com/policy/health-and-education/are-you-mentally-ill-or-just-very-unhappy-20220210-p59vhh
Are you mentally ill, or just very unhappy?
As rates of diagnosis rise, a fierce debate rages in psychiatry. Are you experiencing a parallel pandemic, or having a rational response to a traumatic world?
Sophie McBain
Feb 18, 2022 – 9.38am
One afternoon in December 2004, Samantha* left her house in northern England and walked to the nearby river. She tried not to think about her five young children, alone at home. She wanted to plunge into the water; she didn’t know how to swim.
Samantha’s 11-year-old daughter, alarmed by her mother’s absence, dialled 999, and the police found her on the riverbank. She was transferred to a psychiatric hospital, where she spent four days curled up in a ball, crying. She was already known to social services: Samantha had a violent ex-boyfriend and had been abused as a child before being taken into care at the age of 12. It was difficult to know how to be a good mother when she had never been mothered herself.
Shortly afterwards a psychiatrist, asked by the local authority to assess her, diagnosed Samantha with borderline personality disorder (BPD). Last year, Samantha read the report to me over Zoom. By then we had been speaking for three months. She was warm and solicitous – “But anyway, how are you?” she always asked – but now her voice was hard with rage. The report noted her “lack of a sense of personal responsibility” and “poor impulse control”; it accused her of “feigning a mental disorder while in hospital”.
“But that’s not me, that’s not who I am!” she remembers telling her solicitor, terrified. A social worker told her she needed to achieve greater “emotional stability”. (“If you could just close your eyes for a second and imagine someone taking your children away,” Samantha asked me, “how would you feel?“) But the psychiatrist deemed her disorder “untreatable”, and her children were removed.
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Alex Hawke: The political animal who became Morrison’s machine man
February 19, 2022 — 5.00am
In August 2005, when John Brogden resigned as NSW Liberal leader after humiliating himself at a function a month earlier, he stood up at a press conference and took responsibility. He also blamed Alex Hawke.
Brogden accused Hawke, then a 28-year-old staffer and president of the federal Young Liberals, of circulating dirt on him, which Hawke emphatically denied. At any rate it was extraordinary: the Opposition Leader naming and shaming a Young Liberal functionary as central to his downfall.
But to anyone who knew Hawke, or has come to know him since, it would not have been a shock. A political animal through and through, he has always played the game hard - which is what makes him such a useful right-hand man to Prime Minister Scott Morrison.
Most Australians had probably never heard of Alex Hawke until last month, when he spectacularly deported the unvaccinated world No. 1 tennis player Novak Djokovic on the eve of the Australian Open. Even amid that feverish affair he remained mysterious: as Immigration Minister, he signed the documents, but it was Morrison and Home Affairs Minister Karen Andrews who fronted the cameras and the world.
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A failure of Australia’s political market of ideas
The Financial Review’s take on the principles at stake in major domestic and global stories.
Feb 18, 2022 – 5.49pm
The last two weeks of this Parliament have been a failure of the political market in Australia. The political class should be pitching in with the best ideas to ensure Australia’s security and prosperity, subjecting them to scrutiny and comparison, before settlement on firm national policy.
Instead, Parliament has become a race to the bottom on personal rather than policy defects, a dead-end contest to make the other side look worse.
The one contested effort to pass new laws, on religious freedom, ended in fiasco with the Coalition splitting against itself. The rest was just attempts by both sides to spread fear and loathing on the campaign trail.
The Prime Minister twisted national security into lurid talk of Manchurian candidates. Labor turned deaths in aged homes, where the statistics need careful interpretation, into a story of government granny killers.
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National security looms over election
The Morrison government is banging the national security drum more furiously than before as it struggles to overcome a deficit in the opinion polls.
Andrew Tillett Political correspondent
Feb 18, 2022 – 11.16am
From committing the “last man and the last shilling” to World War I through to deciding who can come to Australia and the circumstances in which they come, khaki elections are not for the faint-hearted
But the Morrison government is banging the national security drum more furiously than before as it struggles to overcome a deficit in the opinion polls and internal divisions three months from election day.
Over the past fortnight, Opposition Leader Anthony Albanese and Labor have variously been painted as China appeasers and sleeper agents and the Communist Party’s pick for the next election, against a backdrop of Beijing’s designs on Taiwan and Russia menacing Ukraine.
It’s not as catchy as the “axis of evil” but Scott Morrison declared only he had the backbone to stand up to the “coalition of autocracies” threatening the global order in these “uncertain times”.
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COVID 19 Information
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Pandemic-hit unis cut up to 27,000 jobs in a year
Julie Hare Education editor
Feb 13, 2022 – 2.39pm
Universities cut up to 27,000 jobs in a single year as they sought to save themselves from the financial carnage of plummeting revenues as international students chose to stay home, defer or move to another country with more open borders.
Federal government data reveals that the number of full-time equivalent jobs fell from 130,414 in March 2020 to 121,364 a year later. But that data obscures the true total of job losses, as it does not count casuals and those on fixed term-contracts.
The actual number is probably about 27,000 says Andrew Norton, a higher education policy expert from the Australian National University.
Most of the job cuts were among professional workers, not academic staff, with full-time equivalent numbers dropping from 73,620 in 2020 to 66,907 last year.
“It is a very large number of job losses, but not quite as big as some of the apocalyptic estimates during 2020,” Mr Norton said.
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New case data shows the power of the booster shot
Tom Burton Government editor
Feb 14, 2022 – 6.35pm
New Victorian case data has underlined how effective third vaccination doses are against acute illness from the omicron virus, with people who have completed their full round of three doses 7.6 times less likely to end up in intensive care.
The data from hospital records for February 8 also showed someone who was unvaccinated was more than 34 times more likely to be in ICU than someone who had received three doses.
Looking at the state’s hospitalisation data since January 1, Chief Health Officer Brett Sutton said someone with three doses is about 4.5 times less likely than someone with two doses to go to hospital with COVID-19.
Based on daily hospitalisation per 100,000 people there were 0.5 persons with three doses, 2.3 persons with two doses and 3.08 persons with zero doses.
This means someone with three doses is about six times less likely than an unvaccinated person to go to hospital with the omicron variant of COVID-19.
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Climate Change.
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IPCC report to focus on living with climate change
By Marlowe Hood
AFP
4:08PM February 14, 2022
Nearly 200 nations kicked off a virtual UN meeting late on Monday to finalise what is sure to be a harrowing catalogue of climate change impacts – past, present and future.
Species extinction, ecosystem collapse, mosquito-borne disease, deadly heat, water shortages, and reduced crop yields are already measurably worse due to global heating.
Just in the past year, the world has seen a cascade of unprecedented floods, heatwaves and bushfires across four continents.
All these impacts will accelerate in the coming decades even if the carbon pollution driving climate change is rapidly brought to heel, the Intergovernmental Panel on Climate Change report is likely to warn.
A crucial, 40-page summary – distilling underlying chapters totalling thousands of pages, and reviewed line-by-line – will be made public on February 28.
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https://www.afr.com/companies/energy/origin-to-close-eraring-early-profit-rises-20220216-p59wx5
Origin to close Australia’s biggest coal plant early
Angela Macdonald-Smith Senior resources writer
Updated Feb 17, 2022 – 12.07pm, first published at 8.31am
Origin Energy is bringing forward the closure of its only coal-fired power plant by seven years to 2025 in a move that will accelerate the reduction in its carbon emissions but has heightened worries about security of supply and rising prices.
The NSW government announced plans to install a “super battery” to help replace the 2880-megawatt Eraring generator in NSW and act as a “shock absorber” in the grid. Eraring, the country’s biggest coal-fired power generator, will now shut down little more than two years after AGL Energy’s Liddell plant.
The decision confirms the much more rapid exit of coal power from the National Electricity Market as cheap renewables flood onto the market, despite coal power still meeting the bulk of demand for electricity through the year.
Federal Energy Minister Angus Taylor described the decision as “bitterly disappointing for all energy users” as well as for the 400 workers at the plant.
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Electricity industry executives express shock, disbelief at Origin’s Eraring power plant closure
6:27PM February 17, 2022
Shock, disbelief and “you’ve got to be F kidding” were the early responses from electricity industry executives after The Australian revealed the early closure of Eraring, the nation’s biggest coal plant.
It’s no secret that owners of coal plants are under immense pressure as ultra-cheap solar and wind rout the economics of running baseload plants 24/7.
Still, Origin’s decision to bring forward its retirement by a massive seven years to 2025 illustrates the much-hyped transition to clean energy will be rocky.
Eraring supplies a quarter of NSW’s power needs and its move will spark two key fears: that household electricity bills will soar as supply gets crunched and the entire grid will face fresh volatility as a reliable source of energy disappears.
There were already concerns about the loss of AGL Energy’s Liddell coal plant in April 2023 and the retirement of Eraring just over two years later will pose a serious risk to the stability of the nation’s power system.
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Royal Commissions And The Like.
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No entries in this category.
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National Budget Issues.
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Quantitative tightening may go active, on both sides of the Tasman
Grant Wilson Contributor
Feb 13, 2022 – 12.58pm
The ongoing surge in global inflation is intensifying criticism of large-scale asset purchases by central banks. Quantitative easing, as it has come to be known since the global financial crisis, is no longer an esoteric concept, nor a walled-off expert domain.
It is a lived experience, that risks becoming a lightning rod.
Its impact is no longer confined to exacerbating wealth inequality via asset price inflation, principally houses and equities. The criticism also extends now beyond complex issues of moral hazard for the financial sector.
QE is reducing the real cashflow of least advantaged households all around the world.
This will show up at the mid-terms in the US later this year. And it is writ large in the crypto sub-culture that has exploded over the past couple of years.
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https://thenewdaily.com.au/finance/finance-news/2022/02/14/reserve-bank-inflation-alan-kohler/
6:00am, Feb 14, 2022 Updated: 6:54pm, Feb 13
Alan Kohler: The Reserve Bank is fiddling while inflation burns
The Reserve Bank is in danger of getting left behind by inflation, which means we’re all in danger of getting left behind by galloping interest rates.
It was a bravely relaxed RBA governor Philip Lowe who appeared before the House of Representative standing committee on economics on Friday.
If I’d been on the committee, I would have asked him: How high will interest rates have to go?
To which he would have replied, with a smile: “That depends.”
And then I would have asked him: Is it true that the later you start raising rates, the higher they will have to go?
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Inflation threat poised to kill pre-election tax cut sweetener
By Shane Wright
February 14, 2022 — 5.00am
Ten million low and middle-income earners face a tax increase as the federal government debates whether to extend its $1080-a-year tax offset in next month’s pre-election budget or risk adding to growing inflation pressures that could force the Reserve Bank to lift official interest rates.
There are increasing concerns within the government, which faces budget deficits for the rest of the decade and gross debt surpassing $1 trillion by 2024-25, that while extending the offset for another year may be vital to the Coalition’s re-election chances, it could come at a huge economic cost.
The offset, worth up to $1080 and available to people earning less than $126,000 a year, has been extended by Treasurer Josh Frydenberg in his past two budgets. On both occasions, he said the offset would be important to supporting the economy through the COVID-19 recession, describing it as a stimulus measure.
The measure, which costs more than $7 billion, had been widely expected to be extended to the 2022-23 financial year as an election sweetener in the March 29 budget.
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Rate hike expectations firmly in 2022, but how high can they go?
Ronald Mizen Economics correspondent
Feb 15, 2022 – 2.20pm
The Reserve Bank of Australia board says it is committed to patiently waiting for inflation to be “sustainably” within its target band, but economists now view interest rate hikes this year as a certainty.
The Commonwealth Bank on Tuesday brought forward its tip for the first rise in the record-low 0.1 per cent cash rate from August to June this year, and told clients it expected a cash rate of 1 per cent by the end of 2022.
“Our expectation is that the RBA will shift to an explicit hiking bias at the May board meeting following a big upside surprise on the quarter two 2022 underlying CPI,” CBA head of Australian economics Gareth Aird said.
While acknowledging putting exact dates on rate hikes in a tightening cycle was “false precision”, Mr Aird indicated it was the profile for rate hikes over the next 12 months that mattered.
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Retirees face biggest cost of living hike in 11 years
By John Collett
February 15, 2022 — 11.00pm
Sharply higher prices, led by petrol and healthcare, are hitting retirees in the hip pocket, particularly those who live on their own.
Prices of goods and services that home-owning retirees typically buy rose 3.5 per cent in 2021 – the fastest annual increase since 2010.
Retiree home-owning singles faced even higher costs, with a rise of 3.9 per cent, figures from the Association of Superannuation Funds of Australia (ASFA) show.
About 250,000 people retire each year and there are now more than four million Australians aged 65 or more.
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https://www.afr.com/policy/economy/the-real-issue-is-how-higher-interest-rates-go-20220214-p59wce
The real issue is how high interest rates go
The RBA may struggle to get real interest rates above negative territory any time soon.
John Kehoe Economics editor
Updated Feb 16, 2022 – 12.11pm, first published at 12.04pm
Although August is firming as the most likely month for the Reserve Bank of Australia to first increase interest rates, a much more important issue is, how high will borrowing costs go over the next few years?
The answer will not only determine the financial squeeze on indebted households.
The peak interest rate will influence asset valuations for housing and shares, returns for bank depositors and have implications for wages, productivity and government debt sustainability.
It is a critical issue, especially in light of new figures from the Commonwealth Bank of Australia revealing about $500 billion of fixed rate mortgages are due to reset across the banks over the next two years.
The current average fixed rate of between 2.25 per cent and 2.5 per cent could almost double to nearly 4 per cent as the home loans are refinanced.
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Unemployment steady at 4.2pc in January
February 17, 2022
Unemployment was steady at 4.2 per cent in January but hours worked across the country plunged by 9 per cent, as the Omicron wave which triggered severe staff shortages across many industries did not translate into job losses.
The number of employed Australians lifted by 12,900 to 13,255,000 people, seasonally adjusted figures from the Australian Bureau of Statistics showed.
Full-time employment was down by 17,000 people, and part-time employment increased by 30,000 people.
The number of employed suggested a resilient labour market at the start of the year, but the impact of Omicron was seen in the 159 million fewer hours worked in January than the month before – an 8.8 per cent drop.
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It’s time to return to Costello economics, whoever wins the federal election
Co-Director of the e61 Institute for Economic Research
February 18, 2022 — 5.30am
Being the treasurer of Australia isn’t easy. Voters only give you a pass mark if you succeed in two very different tasks at the same time. They expect you to prudently balance the federal budget, but they also want you to help balance their own household budget with tax cuts and generous family payments.
This is much easier said than done because balancing the federal budget means keeping revenue high and spending low, while supporting family budgets often requires the exact opposite: tax cuts and higher spending.
This is the basic challenge that has faced every treasurer from the incumbent Josh Frydenberg all the way back to Arthur Fadden in the Menzies government.
The maestro in the modern era was, of course, Peter Costello (now chairman of Nine Entertainment, owner of this masthead), who drove the electoral success of the Howard government by consistently delivering both federal surpluses and family tax cuts.
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House price falls will cap RBA rate hikes
The Reserve Bank may only raise its cash rate to 1.25 per cent as house price declines limit the magnitude of this hiking cycle, writes Christopher Joye.
Christopher Joye Columnist
Feb 18, 2022 – 11.25am
Markets are increasingly pricing in the likelihood of military conflict between Russia and the Ukraine, which is amplifying volatility induced by the (belated) recognition that the US Federal Reserve will have to raise rates six to seven times this year alongside other central banks.
On the one hand, the overdue rates repricing could be spun as good news for equity and correlated crypto investors. At the time of writing, US equities were getting smashed, down 2.2 per cent on the day, as was bitcoin which had slumped 8.7 per cent to US$40,216. In contrast, that bona fide inflation hedge, gold, continues to climb.
You will doubtless start hearing equity advocates argue that all the bad rates news is in the price, which is true of 2022 if the Fed delivers on six to seven hikes. To be clear, this was not in the price late last year when we repeatedly highlighted these downside risks, and the market only expected three Fed hikes in 2022. US equities have since declined about 9 per cent.
The bigger problem for equities is the fact that the US market is still bizarrely only pricing in a terminal Fed funds rate of just 1.87 per cent, which is miles below the Fed’s “neutral” 2.5 per cent rate. It is further still from the restrictive, circa 3 per cent plus cash rate the Fed thinks it would need to impose to wrest an inflation spiral back to earth.
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Health Issues.
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Opioids give osteoarthritis sufferers small benefit but greater risks
By Stuart Layt
February 14, 2022 — 12.01am
Opioid-based drugs used to treat osteoarthritis have much smaller benefits than previously thought, while also increasing the risk of harm to the patient.
Osteoarthritis can be an extremely painful ongoing condition that causes joints to swell, and which is often managed with painkillers.
However the use of opioid drugs to manage chronic conditions has been the subject of much research in recent years, with the potential for negative consequences, especially long-term addiction issues.
Researchers led by Christina Abdel Shaheed from the University of Sydney and Wasim Awal from Griffith University combined the results of 36 studies from around the world, comprising nearly 9000 patients.
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Distress therapy is failing the young
4:55PM February 15, 2022
Early intervention services are failing to improve the condition of young people with mental health disorders, with a study of 1500 young people finding almost half were experiencing “deteriorating and volatile” ill health in the two years following therapy.
Another 16 per cent had “persistent impairment”, and just 19 per cent had stable good functioning, according to the longitudinal study conducted by academics at the University of Sydney’s Brain and Mind Centre.
“Our findings suggest that the current primary care-based model meets the needs of only a minority of young people seeking care, and that most require more comprehensive and multidisciplinary approaches,” the authors of the study said. “Only 35 per cent had good functional outcomes over two years; that is, only one in three people maintained an initially good level of function or substantially improved from a lower level of function.
“In contrast, functional impairment persisted in nearly two-thirds of participants, or their level of function deteriorated and was volatile.”
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The first steps to take when a person has dementia
The symptoms and diagnosis may be scary and overwhelming, but among the myriad questions is a raft of legal issues to consider.
Bina Brown Contributor
Feb 17, 2022 – 5.00am
It might start with the constant search for glasses or keys and perhaps forgetting the name of a recently visited restaurant, but the distinguishing factor between forgetfulness and Alzheimer’s disease is the ability to retrace your steps to find a lost object or recall the evening some time later.
For Nick Sheldon, the first signs that Jane, his partner of 44 years, had the most common form of dementia was when she would repeatedly ask the same question soon after Nick had answered.
Pretty soon, things started to disappear and couldn’t be found. While Nick knew something unusual was happening to this highly intelligent and organised woman, the crunch came when Jane suggested to Nick that they should get married. His nightmare day was when she left the apartment and it took eight hours for the police and others to find her. She doesn’t remember it.
Visits to her GP, a neurologist and geriatrician confirmed, through the myriad tests, that Jane had Alzheimer’s disease.
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Why psychiatry in Australia needs to take a good, hard look at itself
Psychiatrists in the UK are divided about the profession’s direction, but that’s not the case here.
Theo Chapman Weekend Fin editor
Feb 19, 2022 – 5.27am
In Australia, there are few dissenting voices when it comes to the psychiatric treatment of mental disorders, and the ones there are tend to have specific gripes about aspects of psychiatry rather than being part of an organisation with stated criticisms.
Outside Australia, however, traditional psychiatry is being systematically questioned from within its own ranks. This process should be a civilised discussion, informed by the results of well-designed studies, that leads to more effective treatment.
Instead, factions have formed and opposing views are shot down on Twitter and derided in professional journals.
At the centre of this storm is the Critical Psychiatry Network, which was founded in Britain in 1999 and has about 350 member psychiatrists, a third of whom are outside the UK.
The organisation differs from mainstream psychiatric practises primarily in its belief that the causes of mental health disorders, including bi-polar and schizophrenia, are not solely the result of something happening in the body (the biological disease model); what has happened to a person and the environment they live in (the socio-psychological model) is equally important.
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Morrison on a collision course with the states over hospital funding
By Josh Gordon and James Massola
February 20, 2022 — 5.00am
The Morrison government is on a collision course with the states over health funding months out from the federal election, with premiers demanding up to $20 billion to tackle the “extreme pressure” placed on the system by the COVID-19 pandemic.
A meeting of state and federal health ministers on Friday ended in a deadlock, after the NSW Liberal government distributed a list of state demands – including that the Commonwealth extend the COVID-19 response deal with the states for an extra year and abandon a 6.5 per cent growth cap on health funding, which has been blamed for eroding the viability of the hospital system.
The February 18 document, obtained by The Sunday Age and The Sun-Herald, also demands the Morrison government agree to a fairer and more sustainable funding carve-up for hospitals to “ensure a shared approach to public health funding in the new COVID-normal operating environment”.
The deadlock over health funding leaves the federal government facing a damaging health funding squabble with both Liberal and Labor states less than three months out from the federal election, which must be held by May 21
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‘We are at breaking point’: Regional Australians suffer as doctor shortages continue
February 20, 2022 — 9.00am
With stage four breast cancer, time is not on Roz Richards’ side. But Richards, who lives in Mount Hutton in Lake Macquarie, often waits more than one month to see a GP.
“I constantly have to wait at least five weeks for an appointment,” she says. “This is not acceptable as I need face-to-face appointments, as opposed to Telehealth appointments.”
Richards has no complaints about the care provided by her GPs, but says the difficulty in securing appointments has prolonged her health issues and delayed treatment.
“I am anxious and worried when I cannot get an appointment when I need one,” she says. “I am falling behind in tests I have to have done.”
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International Issues.
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China wants to become world’s most influential nation: US
Andrew Tillett Political correspondent
Feb 13, 2022 – 3.04pm
The US is warning its allies they face a “decisive decade” to stop China from re-writing the international order to suit Beijing and become the world’s most influential power.
The Biden administration’s long-awaited Indo-Pacific strategy, unveiled on the weekend, commits the US to boosting diplomatic, economic and security ties across the region, championing democracy and human rights, and supporting press freedom to combat disinformation.
It emphasises a need to build “resilience” in countries to help them make political decisions free from coercion, while preserving international rules, including freedom of navigation in the East and South China seas amid competing territorial claims.
“The People’s Republic of China is combining its economic, diplomatic, military, and technological might as it pursues a sphere of influence in the Indo-Pacific and seeks to become the world’s most influential power,” the strategy said.
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Why Boris Johnson is still the British Prime Minister
February 13, 2022 — 4.30pm
London: Last month it seemed like Britain might try to copy Australia’s record of the last decade and reach for its fourth prime minister in six years. Now there’s a chance Boris Johnson might survive.
Seriously wounded by revelations that he and his staff hosted parties in Downing Street while the rest of the country locked down, Johnson was waking up to headlines threatening backbench revolts, led by the class of 2019 – the MPs he helped elect at the end of that year.
To understand how his position could have deteriorated from where he stood when he won an 80-seat majority to the situation he finds himself just one year later – having to beg and cajole MPs against putting in letters against him – requires an understanding of the original transaction that saw him replace Theresa May as prime minister.
At the beginning Johnson had just two jobs – defeat then Labour leader Jeremy Corbyn and end the Brexit deadlock that May could not achieve. Having completed those tasks, Johnson and his ramshackle style are now in the spotlight.
And it’s not to everyone’s taste.
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Why Hungary’s election has gone to the dogs
By Oliver Moody
The Times
February 14, 2022
Like so many politicians aspiring to national office, Huba believes in a better and fairer world.
In Huba’s case, however, that better world involves ample scratches on the tummy and a more equitable distribution of meaty treats.
Huba is one of two dogs who have been put up for seats in Hungary’s parliament by a satirical party that could play a decisive role at the general election in seven weeks’ time.
The Hungarian Two-Tailed Dog party (MKKP) was founded as a joke in 2006, with policies such as free beer, eternal life and a Hungarian restaurant on Mars. At its first electoral outing it only fielded candidates called Nagy Istvan, the Hungarian equivalent of John Smith.
Vowing to “make Hungary smaller again” – an allusion to the 1920 Treaty of Trianon, which stripped Hungary of almost three quarters of the territory it had held before the First World War – the party proposed ceding “unnecessary regions” of the country to its neighbours.
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Getting inside the mind of Vladimir Putin
11:00PM February 13, 2022
The danger of war between Russia and Ukraine is hotting up. Despite endless talks with Western leaders and their senior officials, Vladimir Putin continues a massive build-up of Russia’s military capabilities all along Ukraine’s borders, as well as in Belarus – which would be the shortest invasion route to Kiev.
US National Security Adviser Jake Sullivan said on Friday: “We are in the window when an invasion could begin at any time should Vladimir Putin decide to order it.” According to reports of a call with European leaders, President Joe Biden now believes Putin has decided to go ahead with an invasion of Ukraine, and allegedly named specific dates when Washington believed it might happen. In Melbourne, US Secretary of State Antony Blinken said: “We’re in a window when an invasion could begin at any time and, to be clear, that includes during the Olympics.”
I need to stress at the outset, I do not endorse Moscow’s belligerent attitude and the threat being posed to the very peace of Europe. But we need to begin by recalling what happened to the Soviet Union as it collapsed in 1991 and how this calamity continues to dominate thinking in the Kremlin. Putin recalls the Soviet collapse as a time when gross injustice was done to the Russian people: “It was only when the Crimea ended up as part of a different country that Russia realised that it had not simply been robbed but plundered.”
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Putin, US intelligence and the global fight for the Ukraine narrative
Gideon Rachman Columnist
Feb 15, 2022 – 9.04am
I came across someone out of his mind with anger on the streets of Berlin last week. A tall, agitated man was hurling his bike around and screaming into the night air. The theme of his discourse seemed to be that the Russian president, Vladimir Putin, is the only trustworthy world leader and that the Americans are once again trying to trick Germany into a war.
It is tempting — but too sanguine — to dismiss scenes like that as meaningless. For the Ukraine crisis is taking place in a period when conspiracy theories are rife across the Western world. The leaders who are struggling to frame an effective and united response to Russia know that public opinion is critical. For every bike-throwing lunatic, there are many more citizens who are quietly mistrustful of their governments.
Public opinion in the West has rarely shown lower levels of trust in political leaders. The annual Edelman Trust Barometer reported in January a “collapse of trust in developed democracies” — with only 46 per cent of Germans, 44 per cent of Britons and 43 per cent of Americans trusting their governments.
The struggle over Ukraine is unfolding while the streets of Ottawa, Canada’s capital, are choked with anti-vaxxers — with copycat demonstrations taking place in Paris and planned for other western capitals. In the US, President Joe Biden still has to contend with conspiracy theories about his son’s past business dealings with Ukraine. In Britain, Boris Johnson, the prime minister has dabbled in conspiracy theories himself.
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How a Russian invasion of Ukraine will affect Australia
Ronald Mizen Economics correspondent
Feb 14, 2022 – 5.49pm
A Russian invasion of Ukraine could push oil prices above $US120 a barrel and lead to a global supply shock that drives inflation higher and hits still-fragile consumer confidence following the omicron COVID-19 wave.
With more than 130,000 Russian troops staged on the Ukraine border, US officials at the weekend warned an invasion could come at any time.
Higher oil prices sparked by war would hit households at the petrol bowser and further drive up headline inflation, said Andrew Ticehurst, economist and rates strategist at Nomura Australia.
Oil prices surged to seven-year highs on Monday and come after the national average unleaded petrol price last week rose by 5 cents to a record 176.9 cents a litre, according to the Australian Institute of Petroleum.
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Canada PM Justin Trudeau invokes emergency powers to tackle trucker protests
By Steve Scherer and David Ljunggren
Updated February 15, 2022 — 8.53amfirst published at 5.30am
Ottawa: Canadian Prime Minister Justin Trudeau on Tuesday (AEDT) said the government had invoked rarely used special measures allowing him to tackle protests that have shut some border crossings and paralysed downtown Ottawa.
“The blockades are harming our economy and endangering public safety,” Trudeau told a news conference. “We cannot and will not allow illegal and dangerous activities to continue.”
Frustration has grown with what critics see as a permissive approach by police to the demonstrations in the border city of Windsor, Ontario, and in Ottawa, the nation’s capital, where protests entered a third week.
“Despite their best efforts, it is now clear that there are serious challenges to law enforcement’s ability to effectively enforce the law,” Trudeau said.
Protesters blockaded the Ambassador Bridge, a vital trade route to Detroit, for six days before police cleared the protest on Sunday.
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Pentagon says China’s support for Russia ‘deeply alarming’
Matthew Cranston and Michael Smith
Feb 15, 2022 – 12.15pm
Washington/Tokyo | The Pentagon on Monday (Tuesday AEDT) called China’s “tacit support” for Moscow in the Ukraine stand-off “deeply alarming”, as Western powers fear an imminent Russian invasion of the ex-Soviet state.
Pentagon press secretary John Kirby said China’s position would make the Ukraine crisis even more challenging, as diplomats work overtime to defuse tensions.
“Their tacit support, if you will, for Russia is deeply alarming,” Mr Kirby told reporters of China. “And frankly, it’s even more destabilising to the security situation in Europe.”
It was the Biden administration’s strongest rebuke to China so far since President Xi Jinping last week backed Russia’s stand-off with the West over Ukraine and accused the US and its allies, including Australia, of increasing the risk of an arms race.
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https://www.afr.com/policy/economy/the-looming-threat-of-long-financial-covid-20220216-p59wwl
The looming threat of long financial COVID-19
Policymakers need to recognise the risks to global recovery as vulnerable nations face the spectre of a lost decade. They have been warned.
Martin Wolf Columnist
Feb 16, 2022 – 10.38am
Economic activity contracted in 90 per cent of the world’s countries in 2020. This exceeded the proportion hit by the two world wars, the Great Depression and the global financial crisis.
A pandemic, we now know, is a comprehensive disaster. It also bequeaths ill health and social and economic disruption. Among the most long-lasting legacies could be financial ones, especially in emerging and developing countries. The spectre of a lost decade looms for vulnerable nations. Determined action will be needed to prevent this.
That is the theme of the latest World Development Report (WDR), entitled Finance for an Equitable Recovery, prepared under the direction of World Bank chief economist, Carmen Reinhart, a renowned expert on global finance. She notes: “In 2020, the average total debt burden of low- and middle-income countries increased by roughly 9 percentage points of the gross domestic product, compared with an average annual increase of 1.9 percentage points over the previous decades. Fifty-one countries (including 44 emerging economies) experienced a downgrade in their sovereign debt credit rating.” Fifty-three per cent of low-income nations are now seen to be at high risk of debt distress.
Sharp rises in indebtedness were a necessary response to the pandemic. Indeed, the problem for most emerging and developing countries was that they could afford to borrow too little, with grave results for their populations. Partly as a result, COVID-19 has increased inequality not only inside countries, but also between them. Not least, the number of people in extreme poverty jumped by 80 million in 2020, the largest such rise in a generation.
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https://www.afr.com/world/europe/putin-names-his-price-for-peace-in-ukraine-20220216-p59wse
Putin names his price for peace in Ukraine
Hans van Leeuwen Europe correspondent
Feb 16, 2022 – 4.51am
London | Russian President Vladimir Putin has said war can be avoided if Ukraine and the West issue a cast-iron pledge never to allow Ukrainian membership of NATO, signalling his readiness to “go down the negotiations track”.
German Chancellor Olaf Scholz, standing next to Mr Putin after a make-or-break meeting in Moscow on Tuesday, said that although NATO and the EU did not agree with Russia’s demands, “there are some points in there that are worth discussing”.
“The diplomatic possibilities are far from being exhausted ... It should be possible to find a solution,” he said.
The constructive noises from the Scholz-Putin talks build on signals from the Kremlin – reconfirmed by Mr Putin on Tuesday – that Moscow is about to withdraw some of its forces from the border, raising hopes of a peaceful climbdown from the brink of a Russian invasion.
But even as the talks were going on, a cyber attack was reported on Ukraine’s defence ministry and two of its banks, which Kyiv said could be Russian handiwork.
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Putin’s economy is primed to brush off the West’s threats
By Ambrose Evans-Pritchard
February 16, 2022 — 11.20am
Russia has amassed foreign exchange reserves of $US635 billion ($888 billion), the fifth highest in the world and rising. It has a national debt of 18 per cent of GDP, the sixth lowest in the world, and falling.
The country has cleaned up the banking system and has a well-run floating currency that lets the economy roll with the punches.
It has a budget surplus and does not rely on foreign investors to cover government spending. It has slashed its dependency on oil state revenues. The fiscal break-even cost of a barrel of oil fell to $US52 last year, down from $US115 before the invasion of Crimea in 2014.
It is the paradox of Vladimir Putin’s tenure that he runs one of the most orthodox policy regimes on the planet. “The macroeconomic team at the central bank and the treasury are exemplary,” says Christopher Granville from TS Lombard.
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The world’s riskiest debt sector is booming
Senior business columnist
February 16, 2022 — 11.57am
There’s something quite perverse and disconcerting about seeing banks and other institutions flooding into the riskiest segment of debt markets even as investors in an only slightly less-risky segment start to head for the exits.
There is a rational, or at least semi-rational explanation for the divergence occurring at the high-yield end of the markets and the money going into the riskiest of loans.
Interest rates have started rising in an environment for borrowers still being impacted by the pandemic, however, and the seeds for a potential problem within the global financial system are being sown.
The trends are disturbing enough for regulators in the US and Europe to start issuing statements of concern about the risks in the riskier loans markets and the leveraged loan market in particular.
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Putin’s key demand impossible
Editorial
11:00PM February 15, 2022
Whatever happens in Ukraine, the West must remain implacable in rejecting Vladimir Putin’s key demand in the crisis – that the Kremlin effectively should have a power of veto over membership of NATO. The Russian despot wants Ukraine, a nation of 43 million, to give up forever any ambition to join what has been the West’s premier defence alliance for 70 years, protecting democracy in Europe and fighting terrorism. Mr Putin’s outrageous presumption is based on the bogus claim, propagated by the Kremlin, that Russia’s national security is under threat from an eastwards push by NATO. The only threat to Europe’s established borders is emanating from Mr Putin’s lawless aggression, just as it was in 2014 when he invaded and overran Crimea, breaking international law.
Mr Putin’s real goal, to return Ukraine to Moscow’s domination as it was in Soviet times, is central to the former KGB colonel’s desire to re-create the Soviet Union. Giving in to his demand for a veto over which former Soviet satellite states be allowed to join NATO or any group of democracies would be disastrous. Caving in would invite further revanchism from Mr Putin.
Ukraine, as a sovereign nation, has the right to join NATO. But there are stringent criteria for accession that Kiev cannot meet when parts of its territory, such as Crimea, are under occupation by Mr Putin’s proxies. There is scant likelihood of Ukraine acceding to NATO membership in the foreseeable future. Yet Mr Putin is using that as justification for his aggression, implying that what is happening to Ukraine also could become the fate of other independent nations, including the Baltic States. The West must be resolute in opposing his naked imperialism in seeking to destroy Ukraine’s democratically elected government. The stakes in the unfolding crisis are enormous.
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Vladimir Putin is not a throwback. He’s a very modern leader.
The Russian President is trying to bury the old world, not re-create it and he has the means and potentially the will to invade Ukraine. Welcome to our frightening new world.
Tom McTague
Feb 18, 2022 – 5.00am
There is a peculiar modern tendency to describe things we don’t like as belonging to the past. The Taliban are medieval, Donald Trump supporters backward, Brexiteers nostalgic for empire. Under this rubric, Vladimir Putin is a Soviet throwback and the war he may soon start in Ukraine, as John Kerry once remarked, is like some 19th-century skirmish transplanted into the 21st.
It is no doubt a comfort to imagine that these things that do not conform to our ideas of modernity are, therefore, not modern. To think this way means that we are modern and on “the right side of history”. In this way of looking at the world, all the bad things we see around us are like ghosts from the past whose deathly grip on progress might frustrate it for a while, and with potentially terrible consequences, but who cannot stop its wheels from eventually grinding on. This is, of course, total nonsense.
As brutal as the Taliban is, just like al-Qaeda and the Islamic State, it is not a medieval organisation but the product of our globalised age of digital propaganda, social media, and the like. Similarly, Trumpism is an expression not of 1950s America, but of today’s America.
And then there’s Putin, who, whatever we want to believe, is a man very much of our world. In fact, not only is he as modern as any Western leader but, compared with those who seem to think that modernity equates with sometime around the year 2000, he is considerably more modern.
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Test of nerves: Recession fears are gripping the US
By Ambrose Evans-Pritchard
February 18, 2022 — 11.05am
Warnings of an economic recession in the US are growing louder. Liquidity is drying up and the cost of borrowing has suddenly broken its moorings.
“The Federal Reserve is tightening into a cyclical slowdown and the risks are rising,” said Lakshman Achuthan, head of the Economic Cycle Research Institute (ECRI) in New York.
“Either the Fed will blink and give up on rate hikes or it will forge ahead until something breaks, meaning a stock market crash, or a recession, or both,” he said.
ECRI relies on early warning signals that catch turning points long before they are evident to laymen. As they say in ice hockey, you skate to where the puck is going, not where it is.
Monetarists are edging towards the same conclusion by a different route. For the last two years they have been the scourge of the New Keynesian establishment and the major central banks. They predicted correctly that inflation would approach double digits in the US, UK, and parts of Europe, as a mechanical consequence of extreme money creation 12 to 18 months earlier.
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How the West can confront the Xi-Putin axis
By James Forsyth
The Times
February 18, 2022
A new phase of history has begun. The liberal world order faces its greatest challenge since the fall of the Berlin Wall in 1989: not just with Russia’s actions on the border with Ukraine but China’s manoeuvrings in Asia. The burgeoning friendship between Vladimir Putin and Xi Jinping might be based on the idea that my enemy’s enemy is my friend. But it is no less of a threat for that.
Moscow and Beijing are united by a desire to end the US-led world order. Both want their spheres of influence acknowledged and respected. Both fear the spread of democracy and want to make the world safe for autocratic regimes.
One immediate benefit for Russia and China of their closer links is they can force the US to split its attention between two theatres. Joe Biden pulled out of Afghanistan to focus better on China but now finds himself warning Americans about the economic consequences of a land war in Europe. US troops are heading to Nato’s eastern flank, the Pentagon is working out how to resupply Ukraine over land in the event of a conflict, and the State Department and the White House are involved in frantic diplomacy. It’s a win for Russia, which craves attention, and a win for China, which doesn’t. Tellingly, the Russian troop build-up has been made possible in part by the fact that, according to experts, there are fewer forces on Russia’s border with China and Mongolia than at any point in the past 100 years.
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https://www.afr.com/world/asia/fighter-jets-are-suddenly-all-the-rage-in-asia-20220216-p59x5a
Fighter jets are suddenly all the rage in south-east Asia
As geopolitical tensions ratchet up in the region, so are budgets for military spending – with state-of-the-art aircraft topping the shopping list for many countries.
Emma Connors South-east Asia correspondent
Feb 18, 2022 – 11.56am
Singapore | Master Sergeant Joshua Forest and his colleagues from the US Air Force struck out at the Singapore Airshow this year. The space allotted to the two Lockheed Martin F-35 stealth fighter jets they were guarding was in the far corner of the display field, a long walk in the tropical sun from the air-conditioned exhibition halls.
But Forest, a maintenance specialist, said many had made the trek. “Yep, we’ve had plenty of military folks come by. There’s a lot of interest in fighter jets in this part of the world. These countries are growing, they want to protect their trade and they have some security concerns.”
Australia is among the US allies that have F-35s in their fleets, along with South Korea and Japan. Singapore will follow soon. Thailand has also expressed an interest, though it’s not clear if Washington will allow that sale to go through or if Thailand’s defence ties with China will sink it.
Washington has cleared the way, however, for Indonesia to purchase Lockheed Martin F-15s, as south-east Asia’s largest country sets off on an aviation shopping spree. Last week the F-15 news came hot on the heels of confirmation Jakarta had inked a deal to buy Dassault Rafale fighter jets from France.
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Massive blasts hit Ukraine after car bomb
Two blasts have rocked Ukraine just hours after a car belonging to a pro-Russian rebel leader was blown up in a suspected ruse to give Vladimir Putin an excuse for war.
Nick Parker, Jerome Starkey, Katie Davis and The Sun
February 19, 2022 - 11:26AM
Explosions have reportedly been heard in the Russian separatist city of Luhansk in eastern Ukraine just 40 minutes apart amid fears of an “imminent” invasion, The Sun reports.
Part of a gas pipeline caught fire late on Friday after being struck by a “powerful explosion”, Interfax news agency reported. It comes hours after a car bomb was detonated in Donetsk, eastern Ukraine.
Major General Denis Sinenkov was not believed to be in his car when the huge blast shook the separatist-held city.
It was feared to be a Kremlin-inspired “false flag” con to give Vladimir Putin his excuse to invade Ukraine – as his fighting force rose to 190,000.
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Putin has ‘made the decision’ to invade Ukraine: Biden
AFP
February 19, 2022
US President Joe Biden believes Russian leader Vladimir Putin has decided to invade Ukraine and that the attack could begin “in the coming days.”
“As of this moment, I’m convinced he’s made the decision. We have reason to believe that,” Mr Biden said, adding that Washington has “significant intelligence capability” to back the claim.
“We believe they will target Ukraine’s capital Kyiv, a city of 2.8 million innocent people,” he said of Russian forces.
But with US Secretary of State Antony Blinken scheduled to speak with Russian Foreign Minister Sergei Lavrov on Thursday, Mr Biden said there was still time for negotiations to defuse the crisis.
“Diplomacy is always a possibility,” he told a press conference overnight.
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Ukraine conflict live updates: Massive explosion, rebels declare full military mobilisation
Rebel leaders in Ukraine have called the situation “critical” and announced a “general mobilisation”. Follow our live coverage.
Staff writers
February 20, 2022 - 8:29AM
The conflict between Russia and Ukraine is heating up, with a “powerful explosion” rocking a gas pipeline near Luhansk in eastern Ukraine.
The blast has been blamed on sabotage, according to Tatiana Bogorodko, the head of Luhanskgas, which manages the gas pipeline.
European Commission President Ursula von der Leyen said in a speech that the “world has been watching in disbelief” as Russia masses troops on the border with Ukraine. Russia has repeatedly denied having plans to invade.
Rebels in eastern Ukraine have declared a full military mobilisation, just hours after they ordered women and children to evacuate to southern Russia due to fears of a conflict.
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I look forward to comments on all this!
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David.
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