February 17 2022 Edition
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The stand-off
between the US and Russia has dominated the news globally. It is still unclear
just what is going on and what is planned. No war as yet!
The big news in the UK is that somehow Boris seems to be the PM!
In OZ it is
not clear just where we are with many different issues as the Morrison
Government seemingly is loosing control of the agenda and failing to deliver
coherent policy in many areas.The last few days have seen the Government go totally crazy on reasons to dislike Labor - most untrue!
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Major Issues.
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Albanese should start by opening door to a China reset
If he prevails at the ballot box, Anthony Albanese should quickly make a speech recalling Labor’s very different relations with Beijing to show that diplomacy, not bellowing, retains salience.
James Curran Columnist
Feb 6, 2022 – 1.41pm
Anthony Albanese must have thought that on China policy, he had Labor’s door locked and bolted.
Not only does he see no daylight between Labor and the government on Taiwan, Hong Kong, the South China Sea and human rights, he also aspires to an economic relationship with China that prevailed under John Howard.
Seen in one light, Mr Albanese’s facsimile of the government’s policy underlines the broad bipartisanship on Australia’s China challenge.
But still the sallies come from government ministers, declaring Albanese ‘soft’ on China.
The Labor leader would expect nothing less: he knows the Morrison cabinet will not relinquish this electoral truncheon. But while the government looks desperate, Albanese, if he becomes prime minister, will also confront China’s continued assertiveness and the question of how America’s internal travails will impact its foreign policy over the next two presidential terms.
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Proxy advice shake-up’s real target is shareholder social activism
Gabriel Radzyminski
Feb 6, 2022 – 2.07pm
Whether we realise it or not, most Australians have an interest in the ability of shareholders to hold the directors of the companies we own to account. For most of us, this is through our superannuation or pension products.
In short, we believe new regulations the Treasurer Josh Frydenberg recently enacted on proxy advice will severely restrict proxy advisory firms from providing advice to their clients that may be at odds with board voting recommendations. They also establish the principle of regulating against contrary views.
Like some in the asset management industry, we considered the proposed changes to be “a solution in search of a problem”. We consider the current Australian Financial Services Licence (AFSL) regime fit for purpose.
The government, some outspoken directors and CEOs, and the director lobby groups have couched the new regulations as being about improved transparency, accountability and eradicating errors. This seems to us like Orwellian “newspeak” and “doublethink”.
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https://thenewdaily.com.au/finance/finance-news/2022/02/07/real-estate-building-society-alan-kohler/
6:00am, Feb 7, 2022 Updated: 8:09pm, Feb 6
Alan Kohler: Australia is an over-borrowed building society
Permanent building societies were heavily geared financial outfits, owned by members, that specialised in residential real estate.
They were all the rage in the 1980s, until suddenly they weren’t, when interest rates went up.
The leader of the pack, Pyramid Building Society, borrowed too much for expensive properties, and when the music stopped in 1989, it couldn’t find a chair and went bust.
Then the species went extinct.
Oh dear. That’s what Australia is now: A permanent building society that has borrowed too much for expensive properties, is now facing higher interest rates and, as it happens, is about to have an AGM to elect directors.
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Scientific research needs freedom, not political interference
The Australian government’s veto of six research grants is ignorant of one of the basic tenets of science: freedom and trust will be richly rewarded in the long-term.
Enno Aufderheide
Feb 7, 2022 – 5.00am
Science is supposed to be useful. Such an expectation is nothing new, but in the face of a pandemic and climate change it has, perhaps, never been truer than it is today. And with the aid of revolutionary mRNA technology, science did indeed manage to develop an effective weapon against the virus in record time.
So, is it not obvious to channel public funding for research into the areas in which the biggest problems have to be solved? Is it not legitimate for governments to want to do what Australians are currently doing and steer research in a direction where taxpayers’ money promises the greatest benefit to society?
The obvious answer, of course, is yes. But what is obvious is not necessarily right. People using this argument fail to understand how most breakthroughs in research really come about; that is, completely unplanned. Anyone going for an MRI scan today is benefitting from fundamental research – the curiosity-driven, unexpected discovery of spin quantisation by Otto Stern and Walther Gerlach in 1920. At the time, nobody suspected that it might be used for medical applications.
There are many such examples in which this process of acquiring scientific knowledge leads to completely unplanned discoveries that unexpectedly turn out to be of enormous importance at a later stage. “The Usefulness of Useless Knowledge” was the title chosen for a paper on the subject by Abraham Flexner, the first secretary general of the Institute for Advanced Study in Princeton, in 1939.
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Is Australia ready for war? The army’s battle for relevance
In the first of a four-part series exploring Australia’s preparedness for war, we examine the army’s role in modern combat - and why the nation still spends billions of dollars on tanks.
February 7, 2022
Australia’s military identity is inexorably linked to the army. Historically, our notion of war has been largely informed by the two world wars, when Australia’s significant contributions involved heavy losses – young men who were willing to put their lives on the line from the bloody catastrophe of Gallipoli to the desperation of Kokoda.
More recently, the army has played a key role in Afghanistan and Iraq, as well as in peacekeeping and stabilisation missions in Bougainville, East Timor and the Solomon Islands.
But with China’s enormous military build-up, there is growing concern that Australia needs to prepare for a war with a major power.
While the likelihood of an actual war is still remote, Beijing’s actions – which include militarising disputed features of the South China Sea and increasing military pressure on Taiwan – have made the prospect of a conflict more likely, especially with the US intent on remaining a major power in Asia.
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Reality check as PM faces another ‘unwinnable’ election
Columnist
February 7, 2022 — 5.30am
Last week, there was a sense that the atmosphere of federal politics had dramatically shifted. Nobody is yet saying this election is unwinnable for Scott Morrison, but suddenly the prospect of somebody (foolishly) making that bold assertion doesn’t feel far off.
The last prime minister to win an unwinnable election was Morrison himself. Before him it was probably Paul Keating – who, in 1993, hoping to dissuade voters from expressing their anger at the ballot box, said, “Voters may wish to punish Labor. But they must be careful not to punish themselves.”
And so it was interesting when, last week, Morrison offered his own blunter version of the line. The Prime Minister said he understood people’s frustration. But, he said, “when you walk into the ballot box and you vote for Anthony Albanese and the Labor Party, that’s what you get. And then you’ve got to live with it.”
The line was not just an echo of Keating; it was another iteration of Morrison’s assertion the day before that the election was a choice, not a referendum on the government. As journalist Dennis Atkins pointed out, this in turn was the same tactic Morrison used last time, when he memorably said, “You vote for me, you’ll get me. You vote for Bill Shorten and you’ll get Bill Shorten.” That this is the second election in a row Morrison has had to ask voters to look past the government’s record is the most important thing here – and it says much.
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ABC decision shows it’s time to clear the barnacles
The Coalition has held its nose and ended a funding freeze for the ABC. Key seats depend on it.
Phillip Coorey Political editor
Feb 7, 2022 – 1.01pm
The decision to end an $84 million funding freeze for the ABC underscores the political predicament in which the government finds itself.
These days the Coalition, and much of its support base, barely bothers to disguise its disdain for the national broadcaster from which it feels it has never received a fair shake and which it believes has become more biased against it in recent years.
There are more than a few within the government, if they had their druthers, who would have no compunction privatising the ABC or at least making it run commercials to help pay for itself.
Instead, Communications Minister Paul Fletcher announced on Monday a thawing of Malcolm Turnbull’s indexation freeze of the ABC’s three-year funding deal.
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The credit cycle is now turning down
Bond market investors are getting nervy as the credit cycle turns south, and rising interest rates leave them nursing capital losses – or even default – on their corporate bonds.
Karen Maley Columnist
Feb 7, 2022 – 5.13pm
The global credit cycle is beginning to turn, as investors, faced with the inexorable rise in global bond yields, are increasingly turning their backs on riskier corporate and sovereign debt.
As central banks slashed interest rates to cushion the impact of the coronavirus pandemic, risky companies benefited from investors’ rising risk tolerance and their hunger for yield. This pushed corporate borrowing costs to record lows, and spurred a major rally in share prices.
At the same time, the massive bond-buying programs launched by the world’s major central banks helped to push bond yields to artificially low levels, and to suppress the extra returns that investors demanded for taking on additional risk.
But the credit cycle has now turned down, as the combination of stronger US economic activity and a surge in inflation has fuelled expectations that the US central bank will raise interest rates multiple times this year.
The yield on the US 10-year bond – considered the global risk-free rate – finished last week at 1.93 per cent, its highest level since December 2019.
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What happens if the religious freedom bill passes?
The controversial religious freedom bill is being debated in the House of Representatives on Tuesday. What will it actually mean if it becomes law?
Tom McIlroy Political reporter
Feb 8, 2022 – 2.30pm
What is the religious freedom bill?
Prime Minister Scott Morrison wants new anti-discrimination protections for people of religious faith, including in education and employment. The Coalition argues current anti-discrimination laws protect attributes such as age, ethnicity and gender, but religious belief remains an obvious gap. The new law will give protection to people with religious faith and those with no belief.
Who is pushing it and why?
The Prime Minister promised a religious freedom bill before the 2019 election, tapping into his own religious constituency and lingering anger among conservative Liberals after the same-sex marriage debate around fears that allowing same-sex marriage would threaten religious freedom.
Mr Morrison has argued the bill would provide protection for people of faith at a national level, particularly given there are no religious discrimination protections in place in NSW and South Australia.
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People of faith need this law, but it could be ‘modern liberals’ who scuttle it
By John Steenhof
February 9, 2022 — 8.40am
″There have been cases of pigs’ heads being left outside Islamic schools or mosques. The Jewish schools in Sydney and elsewhere need armed guards … In Geelong just four or five years ago we saw five different churches burnt down. It was almost not reported in the press… We’ve seen discrimination against Christians—the young man sacked from his job in a cafe simply because the owner said, ‘We don’t want Christians here.’ There is this sort of thing. It is on the rise. It’s unreported. It’s not right.″
This was the powerful evidence given by Professor Patrick Parkinson of Freedom for Faith at the Senate Inquiry into the Religious Discrimination Bill.
As principal Lawyer of Human Rights Law Alliance, I provide legal assistance to people experiencing discrimination because of their faith. Sadly, in modern Australia, almost 30 per cent of Australians have experienced discrimination because of their religion or religious views.
If the Federal Parliament genuinely wants equal protection for people who face discrimination for their deeply held religious beliefs in this country, by the end of this week, national laws will be passed. Astoundingly, however, indications are that there could be a deficit of compassion among our elected representatives to implement even this unremarkable legislative measure.
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The good and the bad of the religious discrimination bill: the Law Council’s verdict
By Tass Liveris
February 9, 2022 — 8.20am
There is no question that it should be unlawful to discriminate against a person because of their religious belief or activity. Much of the Religious Discrimination Bill currently under consideration by Parliament is worthy of our support.
For example, its objects specifically refer to the indivisibility and universality of human rights and their equal status in international law. It is right that we should not be discriminated against on the basis of our religion, or lack of religion, in relation to economic and social opportunities, access to goods, services and facilities, education and in many other areas. To the extent that the bill provides this protection, it fills gaps in our existing federal anti-discrimination laws.
However, other provisions in the bill are at odds with human rights of equal status and may unfairly and disproportionately allow the limitation of those rights.
Clause 12 , for example, currently proposes that certain “statements of belief” will not constitute discrimination under any commonwealth, state or territory anti-discrimination law. This privileges manifestation of religious belief over other human rights such as freedom from discrimination on the grounds of sex, sexual orientation and gender identity, race, age – and religion itself.
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Why do bonds matter so much to the sharemarket?
By Paul Benson
February 8, 2022 — 10.20pm
The sharemarket has taken a hit recently as volatility accelerates.
Causes include inflation fears, COVID-19 variants, rising oil prices and geopolitical tension between Russia and the Ukraine.
However, one of the most significant drivers has been falling bond prices.
So, why do bonds matter so much to the sharemarket?
The key to understanding bonds is appreciating the relationship between a bond’s price and its yield. Put simply, they move in opposite directions. Think about a bond as having a maturity value of $100. The investor who holds it will receive $100 when the bond matures.
Recent falling bond prices tell us the bond market expects interest rates will rise in the future.
If the current market interest rate is 2 per cent, then one year away from maturity the appropriate price for that bond would be $98. The price, therefore, is the $100 maturity minus whatever the interest rate is. If the interest rate rose to 4 per cent, then the bond would fall to $96.
Now, this is greatly simplified and the math nerds will note that 2 per cent on $98 does not get you to exactly $100. But it is close enough to explain the relationship.
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Sorry, PM, but you’re just not up to the job
11:00PM February 8, 2022
It has played on my mind for months that some readers believe I am too hard on Scott Morrison; that I fail to understand that if the Liberals lose the coming election, Anthony Albanese will be our next leader. And that this alone should be reason to back the Prime Minister.
It reminds me of a message I received years ago from a senior Liberal. “What team are you on?” they asked in response to a column that was critical of the Liberal government. I raise this not to titillate with another round of who-said-it. What matters is that I am not on the Liberal team. Nor am I a Labor-loving sycophant.
Like many voters, I am a small-L liberal and this means holding a Liberal government to account. No government enjoys criticism but they ought to respect it more from a liberal than the demented hit-jobs from the left.
The Morrison government’s biggest failures are twofold. First, it hasn’t understood what good governments do to nourish a democracy, defending basic liberal principles, not only when those values are popular but when they are unpopular too. That is our duty as liberals: to defend values fundamental to democracy so we can hand them on in a healthy state to the next generation so they will learn from our leadership and do the same.
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Labor fires fresh shot in ABC and SBS wars
7:40PM February 8, 2022
Labor has accused the Coalition of trying to regulate the ABC and SBS by “stealth”, heralding a fresh pre-election battle over political interference in Australia’s national broadcasters.
On Monday, the federal government announced the ABC would receive a boost in taxpayer funding to $3.28bn over the next three years, while SBS was awarded $953.7m over the same period – deals warmly welcomed by the respective media organisations.
In letters to the managing directors of the ABC and SBS, Communications Minister Paul Fletcher outlined the funding hikes and attached “statements of expectations” that requested greater transparency over how the ABC and SBS spend their news budgets, staff regional newsrooms and deliver adequate Australian content.
On Tuesday, Labor communications spokeswoman Michelle Rowland said Mr Fletcher’s requests for heightened transparency at the ABC and SBS were “concerning”.
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Frydenberg has launched a needless attack on investors
The business community should be alarmed about the Treasurer’s unilateral attack on proxy advisers.
John Kehoe Economics editor
Feb 9, 2022 – 2.41pm
Milton Friedman famously said the duty of company directors was to serve the financial interests of their shareholders.
Treasurer Josh Frydenberg has overturned that notion by his assault on proxy advisers that prioritises the interests of directors and undermines shareholder-led capitalism.
Frydenberg has imposed disproportionate regulations on proxy advisers to protect business directors and executives from full scrutiny and accountability for the use of shareholder funds.
Proxy firms play an important role advising large investors about shareholder votes on executive remuneration and other crucial corporate social responsibility issues.
The investment and business community should be alarmed about the Treasurer’s unilateral attack on the country’s capital markets.
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Magellan shows the dangers of key-person risk
Making Hamish Douglass the face of the firm built it into a giant, but created a problem with succession planning that is now being exposed.
James Thomson Columnist
Feb 10, 2022 – 9.57am
It was almost five years ago that I got a taste of the cult of Hamish.
I’d joined a crowd of 2000 clients, financial advisers and investors at the Melbourne Convention Centre to watch a presentation on global markets by Magellan Financial Group’s co-founder and chief investment officer, Hamish Douglass.
Over the course of about an hour and a half, Douglass talked about everything from investment philosophy to geopolitics to technological innovations. It was an impressive performance – there were videos, props and even a costume change, when Douglass adopted the famous black turtleneck of Steve Jobs.
It might have been a little corny, a little slick and at times a little awkward, but it was also incredibly effective.
Where many fund managers take pride in flying below the radar, Douglass quite deliberately became the personification of Magellan, presenting himself as a clear, accessible, reasonable voice for the Australian market.
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Barnaby the barnacle proving difficult to remove
Award-winning political commentator and author
February 10, 2022 — 5.00am
Finding ways to bury the Deputy Prime Minister during an election campaign without killing him is just one more dilemma Liberals and Nationals now need to resolve if Barnaby Joyce stays as leader.
While debate continues about whether Prime Minister Scott Morrison has sunk irretrievably from asset to liability, there is no doubt at all that Joyce is a liability. It is the first time senior Nationals can remember going to an election with a leader who was a drag on their ticket as well as on the Liberals.
Barnaby is one big barnacle Morrison cannot remove. Nor can he compel the Nationals to do it for him. The Nationals remain split between those who remain wedded to Joyce and those who want him gone, who reckon he has crossed over from quirkiness to craziness, but fear it is too close to the election for such upheaval.
Morrison had already begun to limit his appearances with Joyce. Outside of Parliament they will become rarer and during the campaign only when absolutely unavoidable.
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Is Australia ready for war? The air force’s biggest problem with China is how to get there
February 10, 2022
After a significant loss of life and equipment, the US Air Force stops China from capturing Taiwan. They do this by confining Chinese forces to a single area, preventing a total takeover.
There’s a catch. The 2020 war game relied on a number of capabilities not yet in operation, including a futuristic fighter jet that penetrated deep into contested zones.
The US and Australia’s newest fifth-generation fighter, the F-35, still played a role – attacking Chinese surface ships and protecting American and Taiwanese assets from Chinese aircraft.
But as Lt. Gen. Clint Hinote remarked, the F-35 Joint Strike Fighter was “not the one that’s pushing all the way in [Chinese airspace], or even over China’s territory”. This is because of its inability to travel long distances over the Pacific without a refuelling tanker nearby, which was too dangerous in the Taiwan war game.
Australia currently has 44 F-35 fighters, and will have 72 by the end of 2023, with an option to buy another 30.
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Religious freedom wedge became the PM’s exploding cigar
The government certainly did not intend to wedge itself but that’s what happened. And Percy Punter has no idea what’s going on other than there was more chaos and ill-discipline inside the government.
Phillip Coorey Political editor
Feb 10, 2022 – 8.00pm
It has long been a truism of sound government that you do the irky stuff early in a new term, bed it down in the second year and, as Peter Costello once observed, “fight like hell” in the third.
Which sort of has more than a few people wondering why, only at five minutes to midnight, the Morrison government decided to finally fulfil its election promise to legislate for religious freedom.
Whatever the reasons, the pandemic among them, Scott Morrison had to deliver on what was always going to be a controversial promise, if only to placate the conservatives in his ranks who are increasingly disenchanted with what they believe is not a very conservative administration.
And then there are the religious communities that backed the Coalition overwhelmingly at the last election, to the point that Labor realised only afterwards that these communities – many of them ethnic – had well and truly deserted the progressive side of politics.
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It’s Labor’s choice to reform bloated health and education sectors
Is Anthony Albanese up to the challenge of driving national productivity by reforming dysfunctional public services?
Nick Hossack Columnist
Feb 10, 2022 – 12.38pm
The case for Anthony Albanese to be elected the next prime minister is reasonable if he commits to reforming health and education, two portfolio areas that are politically fraught for Coalition governments.
Long term, success in nearly all Australia’s strategic and domestic challenges will come down to whether we can boost productivity.
Can we produce more goods and services with fewer hours of work, less oil, less coal and less money?
It took the conservative-leaning Coalition to restrict gun ownership after the Port Arthur shootings in 1996, and it will probably take a Labor government to reform social service departments.
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Frydenberg outsmarted himself in proxy battle
The embarrassing defeat of Josh Frydenberg’s regulations on the proxy advice industry is the corporate equivalent of the government’s humiliation over its religious discrimination bill. The government outsmarted itself.
Jennifer Hewett Columnist
Feb 10, 2022 – 5.27pm
Josh Frydenberg’s ill-advised assault on proxy advisers should teach the Treasurer a hard lesson. Silly policy changes suddenly introduced for no sound reason can make for embarrassing defeat. It’s even worse when he tries to sneak those changes through the back door of regulation – only to have it slam in his face.
And while some of his reform package of regulations for the proxy advice industry was certainly defensible in terms of ensuring greater transparency, his overreach was not.
It’s another awkward example of the government outsmarting itself. Red faces all round. For the Morrison government, it meant a very bad parliamentary week got even worse.
The Senate overturning Frydenberg’s new regulations affecting proxy advisers is the corporate equivalent of the fiasco of the abrupt shelving of the religious discrimination bill. The proxy debacle won’t get anything like the same attention from the public and the media, but it’s another prominent fail mark on an issue the government had declared important.
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Early rate hike could threaten 4 per cent unemployment: RBA governor Philip Lowe
February 11, 2022
Raising interest rates too early could threaten the chance of reaching a 50-year low in unemployment of below 4 per cent this year, the governor of the Reserve Bank Philip Lowe said on Friday.
Addressing a parliamentary committee, Dr Lowe again said the RBA board was prepared to be patient to see actual inflation sustainably within the 2 to 3 per cent target band and for wages to rise.
“We have scope to wait and see how the data develop and how some of the uncertainties are resolved”, Dr Lowe told the House of Representatives economic committee in his twice-yearly appearance.
“Countries with higher inflation rates have less scope here.
“I recognise that there is a risk to waiting but there is also a risk to moving too early. Over the period ahead we have the opportunity to secure a lower rate of unemployment than was thought possible just a short while ago.
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https://www.afr.com/wealth/personal-finance/how-to-survive-a-market-crash-20220208-p59us1
How to survive a market crash
Think you can time getting in and out of equities to stay ahead? Here’s why the experts say you’re wrong.
Michael Read Reporter
Feb 11, 2022 – 5.00am
With a rocky start to the year for global sharemarkets amid fears of looming interest rate hikes, the spread of the omicron variant and a threatened Russian invasion of Ukraine, some investors may be considering dialling down the risk in their super portfolio. But while it may seem tempting to shift some of your super into cash, financial planners say the best way to withstand a market crash is to stand your ground and stay invested.
Trying to time the market by selling shares and then buying back in later is fraught with difficulty, they say.
“The danger is that most people only get out of the market after bad days and only get back into the market after good days happen, so the danger is that you’re missing out on the best days,” says AMP Capital chief economist Shane Oliver.
Further illustrating the danger in this is a worked example from Colonial First State showing that an investor who stayed invested after the GFC would be $80,000 ahead compared with switching out of equities and getting back in a year later.
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These are the ludicrous dying days of the 46th Parliament
In a frantic week it was hard to see how the scares can escalate, except we know that they will.
Laura Tingle Columnist
Feb 11, 2022 – 4.52pm
Sometimes it is hard to keep up, so let’s just quickly recap the political week.
It started with revelations that the Deputy Prime Minister thought the Prime Minister was a “hypocrite” and “a liar”, and that he had “never trusted him”.
There was the mad day of a rush of announcements, whatever their policy merit, designed to shore up the government’s standing in particular electorates, or to hose down political flashpoints: international borders would be open in just a couple of weeks (instead of at Easter, as had long been forecast); a better funding deal for the ABC; rapid antigen tests wouldn’t be free but they would be tax-deductible.
Then there was dealing with the aged care crisis. Yes, the Australian Defence Force would be brought in to help after all, despite all the previous irritated insistence by the Prime Minister that it wouldn’t. But Scott Morrison insisted he was still right, because they would be being brought in only in very specific and limited circumstances.
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There’s a growing defeatism in the government’s ranks. It’s chaos
Political and international editor
Updated February 12, 2022 — 8.42amfirst published at 5.30am
What does Scott Morrison stand for? He would say he stands for freedom of religion. But this week he proved incapable of delivering a legal protection for it.
He would say he stands for the protection of school kids from discrimination. But this week he showed he was prepared to allow transgender kids to suffer discrimination.
He would say he stands for a united government. But this week the government suffered a mutiny when five Liberal MPs crossed the floor of the House of Representatives to vote with Labor and the crossbench.
Bridget Archer, Trent Zimmerman, Fiona Martin, Katie Allen and Dave Sharma broke Liberal ranks to prevent schools from having the legal right to discriminate against trans students. And a Liberal senator, Andrew Bragg, said he was prepared to do the same in the upper house if necessary. It was not. The government withdrew its religious freedom bill.
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Parliament’s motley crew caused religious bill havoc
6:33PM February 11, 2022
Disappoint or cause dismay. These were the options left open to the Morrison Government, after a poorly drafted and ill-thought-out amendment to the Religious Discrimination Bill was passed in the early hours of Thursday morning.
This left the Government with no choice but to shelve what was – and remains – a key priority.
The Religious Discrimination Bill was the product of a consultation process that dates back to Turnbull’s commissioning of the Religious Freedom Review in 2017.
The bill that came out of this process contained moderate but important protections, reflecting the desires and concerns of Australians across our community. As faith communities have made clear, it was the minimum they considered acceptable. And it came with a promise to prohibit LGBTQ students being expelled from faith-based schools on the basis of their sexuality – though in fact that rarely arises.
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Big swings against Coalition in three of four NSW by-elections
11:27PM February 12, 2022
The NSW Government has suffered a backlash in four by-elections held across NSW on Saturday, with the Perrottet government on track to lose its safe Liberal seat of Bega, while suffering a marked swing in Gladys Berejiklian’s former electorate of Willoughby.
In results likely to raise concerns about the Coalition’s prospects at the impending federal election, the electorate of Bega was claimed by Labor following a 13.2 per cent swing away from the government in early counting. In Willoughby, where Labor did not run a candidate, the swing to an independent was even steeper at 18 per cent.
The only silver lining appeared to be in the seat of Strathfield where the Liberal Party had thrown significant resources to reclaim the electorate. These efforts proved unsuccessful but the swing was minuscule by comparison and could go either way; Labor appeared likely to retain the seat with a slim margin, according to early counting.
A by-election in the regional seat of Monaro also appeared likely to see it retained by the Nationals, although a larger than expected anti-government swing of about 6 per cent had been recorded with 40 per cent of the vote counted.
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COVID 19 Information
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New data shows how boosters are dramatically reducing deaths
Tom Burton Government editor
Feb 4, 2022 – 5.36pm
NSW data is showing infected people over the age of 60 who have been received a booster are about a third less likely to end up in ICU or die than those with two doses.
The new figures cover the six-week period up to mid-January when NSW was dealing with both omicron and delta variants. It also shows the same boosted group are 90 per cent less likely to suffer a severe outcome than infected people who have had one dose or are unvaccinated.
The data underlines why health authorities have been urging baby boomers, the elderly and those with health problems to urgently get their third vaccination shot.
Around 41 per cent of eligible adults or 8,631,286 people have been boosted, after a further 212,610 people received their third dose Thursday. On the current run rate this means it will take to nearly Easter in mid-April before all double-dosed people have received a booster.
The figures confirm what other countries are seeing, with a newly released US study from the Centres for Disease Control and Prevention of omicron patients in Los Angeles showing people who are “fully vaccinated” but without a booster are 5.3 times more likely to end up in hospital from COVID-19.
The study found, for the week ending January 8 after omicron had become prevalent, that unvaccinated COVID-19 patients were 23 times more likely to end up in hospital than triple-vaccinated people.
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https://insightplus.mja.com.au/2022/4/covid-related-myocarditis-what-you-need-to-know/
COVID-related myocarditis: what you need to know
Authored by Sarah Colyer
MYOCARDITIS is increasingly diagnosed in the COVID-19 era, but it’s at least partly due to increased awareness of the condition and advances in detecting milder cases, experts say.
Speaking with InSight+, Associate Professor Andrew MacIsaac, Director of Cardiology at St Vincent’s Hospital in Melbourne, stressed that myocarditis remained a “rare and mostly mild condition”.
His team has seen several cases of SARS-CoV-2-related myocarditis since 2020 and one definitive case of myocarditis related to the Comirnaty (Pfizer) vaccine.
“We have had to admit some people with myocarditis, but we haven’t had anyone with long term complications from having it,” Associate Professor MacIsaac said.
Awareness of the condition has grown as a result of its association with COVID-19 and mRNA COVID-19 vaccines, so that cardiologists are seeing increasing numbers of suspected cases, he said.
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Boosters every six months not a viable strategy, says Doherty chief
Tom Burton Government editor
Feb 7, 2022 – 5.00am
Administering repeated mRNA vaccines is not a viable strategy, and there is a strong need to develop broad-based vaccines and therapeutics to protect against future variants, says the head of the Doherty Institute.
With many more medical tools available to prevent severe disease, Professor Sharon Lewin predicted that Australia would begin to move away from “blunt” population controls to a testing and isolation approach that focused on reducing disease risk, rather than infection control, similar to the Danish response.
Denmark has just lifted all restrictions, including wearing masks, despite there still being a high number of omicron cases. It has taken a similar highly technical approach to the pandemic to Australia and has vaccine levels similar to or better than the most populous Australian states.
But while Professor Lewin was optimistic about the course of the pandemic, she said it was important to have a “scenario plan” for future more virulent variants. This would avoid the problems thrown up by the contagious omicron variant, which had been unanticipated by governments and scientists around the world.
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Doubts cast over AstraZeneca jab ‘probably killed thousands’
‘Bad behaviour’ by scientists and politicians blamed for damaging reputation of Covid vaccine
Last modified on Mon 7 Feb 2022 20.52 AEDT
Scientists and politicians “probably killed hundreds of thousands of people” by damaging the reputation of the AstraZeneca vaccine, according to an Oxford scientist who worked on the jab.
Prof John Bell said: “They have damaged the reputation of the vaccine in a way that echoes around the rest of the world.”
“I think bad behaviour from scientists and from politicians has probably killed hundreds of thousands of people – and they cannot be proud of that,” he told a BBC Two documentary
When the Oxford/AstraZeneca jab was rolled out in the UK government advisers recommended under-40 should be offered an alternative due to a link to very rare blood clots.
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Anthony Fauci says US exiting ‘full-blown’ pandemic, global Omicron toll at 500,000
By Annabelle Timsit
February 10, 2022 — 6.52am
Washington: While half a million people around the world have died of COVID-19 since the Omicron variant of the coronavirus was first detected in November, US President Joe Biden’s top medical adviser says the United States is exiting “the full-blown pandemic phase” of the coronavirus crisis.
It’s a sobering statistic and a reminder of the pandemic’s ongoing toll – even as cases start to decline in nearly every US state.
About 100,000 of the deaths since Omicron was declared a “variant of concern” occurred in the United States, the World Health Organisation said on Tuesday. WHO incident manager Abdi Mahamud said in an online Q&A session the death toll was “tragic” given the availability of “effective vaccines.” He said there had been 130 million reported cases of the coronavirus globally since Omicron.
Anthony Fauci told the Financial Times that decisions on coronavirus restrictions in the United States will be increasingly made on a local level, “as we get out of the full-blown pandemic phase of COVID-19, which we are certainly heading out of”.
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Climate Change.
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Australia’s battery capacity set to double within months
Colin Packham Energy and Resources reporter
Feb 7, 2022 – 5.00am
Australia’s battery capacity will double this year as major projects come online, heightening pressure on the country’s fossil fuel power generators that are struggling to compete against soaring renewable energy generation.
Battery capacity in Australia during 2021 totalled about 0.4 gigawatts but it marked a year of major construction projects beginning and much of this is expected to come online this year, Rystad Energy data shows.
With many large-scale projects set to be operational, utility-scale battery capacity will top 1.1 GW by the second half of 2022, Rystad expects.
Costs are declining and operators are being incentivised by energy arbitrage, which is storing energy when it is cheap and providing it when prices are high.
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https://thenewdaily.com.au/finance/finance-news/2022/02/10/aged-care-national-insurance-alan-kohler/
6:00am, Feb 10, 2022 Updated: 9:10pm, Feb 9
Alan Kohler: Aged care needs compulsory national insurance
It’s obvious that aged care is underfunded.
Everybody knows it, and elderly residents will see it displayed in crisp khaki next week when soldiers show up to call the bingo.
The Australian Defence Force is the only part of the government that is not underfunded.
After more than 40 inquiries and reviews into aged care since 1981, culminating in last year’s royal commission, it remains in perpetual crisis.
And although there have been endless efforts to improve its oversight and regulation, the core problem is money – no better illustrated than by the appearance of well-paid members of the ADF in the nursing homes to fill staffing gaps.
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Royal Commissions And The Like.
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You don’t need to have a big lump sum for aged care
Understanding how accommodation payments work and knowing your options can help to avoid panic over financing options.
Louise Biti Contributor
Feb 8, 2022 – 5.00am
If you have looked at the room prices for residential care and wondered how you or a family member would be able to find the eye-watering lump sums sometimes requested, you could feel a bit stressed. But the good news is that you may not need that lump sum of money to pay for the room.
Aged care room prices are quoted as a lump sum, with prices ranging up to $2 million for a room. On average, you might expect to be quoted around $400,000-$700,000. This can panic people who don’t have that much money sitting in a bank account or who don’t want to sell assets. It may also see them delay a necessary move.
But there are options. With a bit of research and good advice, you can choose a payment method that works best for you.
Think about the last time you moved home. You had to pay to live in that home, but you could choose to buy or rent.
Your choice may have been driven by what was available or what you could afford, but also by your preferences for how to structure your finances and your other objectives.
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Aged care crisis a clue – we’ll be paying higher taxes, whatever we’re promised
Economics Editor
February 9, 2022 — 5.30am
Do you like paying tax? No, I thought not. With so many other calls on our pockets, it’s easy to tell ourselves we’re already paying enough tax – probably more than enough.
Trouble is, our reluctance to put more into government coffers doesn’t stop us demanding the government spends more on additional and better services.
This presents a problem for politicians on both sides. They solve it by ensuring that, particularly in election campaigns, they tell us what we want to hear, not the unvarnished truth.
They’re often promising a tax cut sometime after the election, but also telling us their plans to spend more on this and more on that. What they don’t mention is what might have to happen after the election to ensure the tax cuts and spending increases don’t add too much to government debt.
But we’ve become so distrusting of our politicians that, in more recent years, they spend less time telling us how wonderful their own policies are and more time telling us how terrible the other side’s policies would be. Fear works better than persuasion.
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The hapless politics of our aged care catastrophe
Columnist
February 12, 2022 — 5.30am
The hard numbers of the pandemic – the death toll, and their influence on the political cycle – caught up with Scott Morrison’s government this week. When the Prime Minister informed Parliament on Tuesday that “some 682 people” who caught the Omicron strain of the coronavirus “have died in aged-care facilities” he would have known that a grim new threshold had been crossed.
The Omicron wave was now officially more deadly for older Australians than the Victorian wave of 2020, which claimed 665 lives in aged care.
The PM might have been tempted to reprise his blame-the-states routine. Remember, he said it was Victoria’s fault that the virus had escaped hotel quarantine and entered all those Commonwealth-regulated aged-care homes, while Treasurer Josh Frydenberg accused Premier Daniel Andrews of presiding over “the biggest public policy failure by a state government in living memory”.
But the option of shifting responsibility was no longer available to Morrison and his ministers. What he didn’t mention, but would surely be aware of, is that the aged care deaths to date from Omicron have clustered inconveniently in Liberal states facing cut-throat appointments with voters. NSW accounts for 32 per cent of the nation’s population, but has suffered 45 per cent of the aged-care deaths since mid-December, based on my calculations using the federal Department of Health’s daily charts. South Australia has 7 per cent of the Australian people living within its borders, but 13 per cent of the Omicron toll.
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National Budget Issues.
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Australia lags inflation curbs as US jobs stun, CPI to hit record high
Matthew Cranston and William McInnes
Feb 6, 2022 – 12.56pm
Washington/Sydney | Australia runs the risk of being left behind in a global central banking effort to contain inflation as financial markets almost fully price in a 0.50 percentage point rate rise by the US Federal Reserve next month, following a surprisingly strong employment report that included red-hot wage growth.
But offsetting wage growth is an expectation by economists that US consumer prices will this week record their biggest increase in 40 years.
The US economy added 467,000 jobs in January, well ahead of the consensus forecast of 150,000 and shocking numerous forecasters who expected a negative number.
Friday’s jobs report also showed the biggest increase in wages in nine months, up 0.5 per cent in January. That brought annual wage growth to 5.7 per cent, well above the market estimate of 5.2 per cent.
President Joe Biden said the “extraordinary job report” was a sure indicator of further wage growth.
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Frydenberg draws budget line in the sand over COVID-19
Phillip Coorey Political editor
Feb 6, 2022 – 10.30pm
Josh Frydenberg says it is time to “draw some clear lines in the sand” on government spending, return to normalised budget settings and “hand the baton” to the private sector, as he announces COVID-19 tests will be tax-deductible for workers and businesses, rather than free as Labor has promised.
The federal Treasurer has also commissioned the next scheduled five-yearly review of the economy by the Productivity Commission with a particular focus on the fault lines exposed by the pandemic and how to help governments enhance productivity in the post-pandemic era.
And in a further move to wean the economy off ongoing calls for support, the government will announce within days the reopening of international borders to foreign tourists.
“I really do not believe that is far away,” Scott Morrison said on Sunday, ahead of a meeting today of the National Security Committee of cabinet that will consider medical advice.
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Interest rate rises will be a good thing - provided they’re not too soon
Economics Editor
February 7, 2022 — 5.00am
Sometimes I think you can divide the nation’s economy-watchers into those desperate to see the Reserve Bank start raising interest rates and those desperately hoping it won’t. As usual, the sensible position is somewhere between them.
To some, interest rate rises are always a bad thing. They’re either speaking from self-interest or they’re victims of a media that unfailingly assumes all its customers are borrowers and none are savers. Tell that to your grandma.
What gets missed in all the angst is that the need to raise rates is always a good sign. A sign the economy’s growing strongly – perhaps too strongly. Trust the media to see the glass as always half empty.
In the present debate, however, the financial-market urgers fear we have a burgeoning problem with inflation, which must be stamped out quickly if it’s not to become a raging bushfire.
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Extra funding for ABC as freeze on indexation ends
11:00PM February 6, 2022
The Morrison government has given the ABC a pre-election pay rise, committing to a $3.28bn support package over the next three years and scrapping its controversial indexation freeze on the national broadcaster’s budget.
The funding boost, announced ahead of next month’s federal budget, amounts to an increase of just over 1 per cent per annum from July this year to June 2025.
SBS will receive $953.7m over the next three years, an increase of $56.7m over the current triennium.
In announcing the new funding commitment for the ABC and SBS, Communications Minister Paul Fletcher said the early announcement of the financial boost would assist the public broadcasters to “develop their forward plans”.
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Government debt in Australia is well below average – but the number is deceptive
Satyajit Das
Borrowing funds services and keeps taxes low, but true prosperity cannot be built on excessive cheap credit
Last modified on Mon 7 Feb 2022 10.58 AEDT
Economics in Australia is frequently reduced to debates around government debt. Claims and counterclaims about profligacy and borrowings overlook several issues.
First, the current scale of the debt is unprecedented outside of wars. At the end of 2021, global debt was US$295tn – 350% of everything the world produces in a year, compared with 282% in 2008. The major increase is in government debt, which has reached a record 99% of global output. US, eurozone and Japanese government debt is now at 103%, 98% and 257% of output respectively.
Australia’s federal debt is forecast to peak at less than 40% of output by 2025, well below the average for advanced countries. But the number is deceptive.
It excludes borrowings by state and local governments, which over the same period will rise to around 20% of output, but could be greater depending on state infrastructure spending. It disregards contingent liabilities, such as New South Wales’ controversial Transport Asset Holding Entity, which holds public transport assets helping improve the state’s finances. It ignores exposure to private-public partnerships used to finance infrastructure, which governments may have to support to ensure essential services.
It overlooks implicit government guarantees for Australia’s “too big to fail” banking system, which is heavily exposed to households carrying debt of around 130% of output, among the world’s highest.
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https://www.afr.com/policy/economy/lowe-warns-of-abrupt-effect-from-us-rate-rises-20220211-p59vn3
Lowe warns of ‘abrupt’ effect from US rate rises
John Kehoe Economics editor
Feb 11, 2022 – 11.18am
Reserve Bank of Australia governor Philip Lowe has warned investors local financial markets were at risk of an “abrupt adjustment” if surging US inflation forced the Federal Reserve to raise interest rates faster than expected.
Dr Lowe also said when local interest rates begin to rise, possibly later this year, he hoped the RBA cash rate would eventually hit at least 2.5 per cent over coming years.
Westpac economists forecast that rising interest rates would cause house prices to fall 14 per cent through 2023 and 2024.
The RBA governor affirmed his willingness to be patient before increasing the official 0.1 per cent cash rate, in contrast to money market traders pricing in five RBA interest rate rises this year.
He said there were fundamental differences between Australia’s moderate inflation and wages growth compared with major price pressures in the US.
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Health Issues.
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Costs of dementia heading to $26bn
The cost of Alzheimer’s disease and dementia to the nation is expected to rise by more than 70 per cent to $26.6bn a year by 2041, placing significant strain on hospitals and the aged-care system.
The number of people with all forms of dementia is predicted to rise to more than a million within 35 years, up from 487,000 today, according to a report by the National Centre For Social And Economic Modelling.
The direct cost of the conditions – including aged-care services and hospitalisations – is expected to be $9.8bn within 20 years. The indirect costs – including informal care provided by relatives, lost productivity and income support, are tipped to amount to $16.8bn.
Hospitalisations because of dementia and Alzheimers will increase by 76 per cent from 7342 currently to 12,924 by 2041. The cost to the aged-care sector will rise to $6.8bn while the cost of formal care in the community will be $29.8bn.
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International Issues.
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China, Russia accuse AUKUS pact of increasing arms race risk
Michael Smith North Asia correspondent
Feb 6, 2022 – 8.32am
Tokyo | China’s President Xi Jinping has backed Russia’s stand-off with the West over Ukraine and accused the United States and its allies, including Australia, of increasing the risk of an arms race in an extraordinary show of solidarity with Vladimir Putin on the sidelines of the Winter Olympics.
Mr Xi, seizing on the Games in Beijing to try to bolster China’s diplomatic standing, also met with the presidents of Egypt, Serbia, Kazakhstan, and Turkmenistan on Saturday as territorial tensions in Europe and Asia Pacific forge deeper alliances between enemies of the US.
However, it was Mr Xi’s meeting with Mr Putin just hours before the Olympic opening ceremony on Friday night (AEDT) that raised fresh fears China and Russia could call on each other for help if they pursue territorial ambitions for Taiwan and Ukraine.
China and Russia said in a joint statement that they opposed any expansion of the North Atlantic Treaty Organisation in Europe and warned there were “no forbidden areas of co-operation”. The statement referenced a new relationship between the two powers that was “superior to political and military alliances of the Cold War era”.
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Russia could seize Kyiv in days, cause 50,000 civilian deaths: US
Karen DeYoung, Dan Lamothe, John Hudson and Shane Harris
Feb 6, 2022 – 5.41pm
Washington | Russia is close to completing preparations for what appears to be a large-scale invasion of Ukraine that could result in up to 50,000 civilian deaths, decapitate the government in Kyiv within two days and launch a humanitarian crisis with up to 5 million refugees fleeing the resulting chaos, according to updated US military and intelligence assessments briefed to lawmakers and European partners over the past several days.
The rising concerns come as the Russian military continues to send combat units to the Ukrainian border in both its own territory and Belarus. As of Friday (Saturday AEDT), seven people familiar with the assessments said, there were 83 Russian battalions, with about 750 troops each, arrayed for a possible assault. That is up from 60 two weeks ago, and comprises about 70 per cent of what Russian President Vladimir Putin needs to have in place if he wants to maximise the operation.
Those more than 62,000 troops are backed by tens of thousands of additional personnel to provide logistics, air power and medical support. US officials have said the Russian presence along Ukraine’s borders totals more than 100,000; one Western security official put the number at 130,000.
Russia has long bristled over Ukrainian independence. Ukraine was part of the now-defunct Soviet Union, and parts of its territory for centuries were ruled by Russia. Ukraine also aspires to NATO membership, which Mr Putin adamantly rejects.
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Stronger, tighter, bolder: China-Russia ‘alliance’ rings a bell
Political and international editor
February 8, 2022 — 5.30am
One of the two Chinese athletes who carried the Olympic torch to its climactic point in opening the Beijing Winter Games on Friday, Dinigeer Yilamujiang, is not only a photogenic 20-year-old cross-country skier. She also happens to be a Uighur – the only one among China’s 176 competitors.
The Beijing Winter Olympics has been branded the “genocide games” to protest against the Chinese government’s continuing repression of the Uighur ethnic minority in the north-western province of Xinjiang.
With about 1 million Uighurs forcibly detained at any one time in high-walled incarceration centres, ten of the world’s democratic states – including Australia – have declared diplomatic boycotts of the Games. Another half-dozen, including New Zealand, declined to send any official representatives under the pretext of COVID-19 concerns.
So, the appearance of a beaming Ms Yilamujiang lighting the Olympic cauldron in the Bird’s Nest arena was a striking gesture. How could this be a genocidal regime when it’s celebrating a star Uighur athlete for all the world to see?
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‘Barbaric growth’: China tightens grip on engine that powers its economy
Senior business columnist
February 9, 2022 — 11.58am
After destabilising its giant property and tech sectors last year the Chinese Communist Party is now foreshadowing more crackdowns on its private sector to prevent the “barbaric” growth of capital.
Commentary in the party’s official mouthpiece, the People’s Daily, this week sought to put some flesh on the bones of the plans for this year that the party’s leadership developed at last December’s Central Economic Work Conference.
China should, it said, support and guide the healthy development of capital. Efforts to prevent the “disorderly” expansion of capital had produced initial results and the “order” of market capitalism was improving.
“Preventing the disorderly expansion of capital does not mean doing without capital but means orderly development of capital,” the paper said. It also said, despite its reference to “barbaric capital,” that preventing its growth doesn’t mean China is against private capital.
Last year China’s “three red lines” policy, restricting leverage in its property companies, triggered an implosion in the sector that has been the largest contributor to its growth, a meltdown which has yet to stabilise amid a cascade old defaults by major property developers and massive losses for offshore capital providers.
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https://www.afr.com/world/north-america/us-inflation-jumps-to-a-40-year-high-20220211-p59vjf
US inflation jumps to 40-year high, signalling 0.5pc rise in March
Matthew Cranston United States correspondent
Feb 11, 2022 – 1.04am
Washington | US inflation hit a 40-year-high in January after food, electricity, and shelter drove a bigger than expected rise in the consumer price index and pushed financial markets to price in a higher chance the Federal Reserve will hike rates by 0.50 percentage points in just over a fortnight.
The consumer price index climbed 7.5 per cent from a year earlier following a 7 per cent annual gain in December, according to Labor Department data released Thursday. Economists had expected the annual figure of 7.3 per cent.
Inflation rose 0.6 per cent in January from a month earlier, ahead of the 0.4 per cent expected by economists.
The surprise increase had Fed futures markets increase the odds of a 50 basis point increase in the official Fed funds rate at the bank’s March meeting to over 50 per cent.
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The Fed may have to force a recession to get inflation under control
By Robert Burgess
February 11, 2022 — 6.30am
There were no encouraging signs in the Labor Department’s report that showed the consumer price index surged a greater-than-forecast 7.5 per cent in January from a year earlier, marking a fresh four-decade high. The gains were broad and deep, suggesting that inflation is becoming entrenched and potentially putting the Federal Reserve in a no-win situation.
Immediately after the release of the CPI report, the money markets priced in the possibility that the central bank will be forced to raise interest rates higher and faster than it has projected, including a 50-basis-point increase at policy makers’ March 15-16 meeting. Traders also now expect a full percentage point of increases by the end of July, according to Bloomberg News. Moreover, the difference between short- and long-term bond rates — better known as the yield curve — continued to collapse.
What all this means is that the markets increasingly see the only way for the Fed to get inflation under control is to engineer a sharp slowdown in the economy, and perhaps even force a recession. This would be the hard landing that policy makers have wanted to avoid.
As recently as Wednesday, Federal Reserve Bank of Cleveland President Loretta Mester, who votes on monetary policy this year, said she didn’t see a “compelling case” for a half-percentage-point increase. In a sign of what may come if the Fed decides to do what Mester said was unlikely, the S&P 500 Index quickly fell 1 per cent and bond yields soared after Federal Reserve Bank of St. Louis President James Bullard, who is also a voter this year, told Bloomberg News on Thursday that he supports raising interest rates by a full percentage point by the start of July. That implies at least a half-percentage-point increase at one of the three meetings between now and then.
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https://www.afr.com/policy/foreign-affairs/this-is-a-turning-point-in-cold-war-2-0-20220210-p59vcq
This is a turning point in Cold War 2.0
In 1972, Henry Kissinger triangulated Beijing against Moscow. Now Vladimir Putin and Xi Jinping are playing the same manoeuvre against the US.
Stephen Roach Contributor
Feb 11, 2022 – 12.28pm
History’s turning points are rarely evident with great clarity. But the February 4 joint statement of Russian President Vladimir Putin and Chinese President Xi Jinping as the Winter Olympics opened in Beijing may be an exception – signaling a new turning point in a new Cold War.
Triangulation was America’s decisive strategic gambit in the first Cold War. Richard Nixon’s rapprochement with China, 50 years ago this month, isolated the former Soviet Union at a time when its economic foundation was starting to crumble. As Henry Kissinger put it in his opus, On China, “The Sino-US rapprochement started as a tactical aspect of the Cold War; it evolved to where it became central to the evolution of the new global order.” It took time for the strategy to succeed. But, 17 years later, the Berlin Wall came down and the Soviet Union imploded.
Never one to ignore the lessons of history, China is opting for its own triangulation gambit in a nascent Cold War II. A China-Russia tandem could shift the global balance of power at a time when America is especially vulnerable. This points to a worrisome endgame.
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https://www.afr.com/world/asia/xi-and-putin-s-plan-for-a-new-world-order-20220210-p59vfe
Xi and Putin’s plan for a new world order
Does an alliance between the world’s two most powerful autocracies signal the start of a second cold war, or were Xi Jinping and Vladimir Putin just posturing on the sidelines of the Olympics?
Michael Smith North Asia correspondent
Feb 11, 2022 – 2.01pm
Tokyo | As thousands of performers warmed up in Beijing’s “Bird’s Nest” stadium for the Winter Olympics opening ceremony last week, Xi Jinping and Vladimir Putin were putting on a show of their own.
Just 20 minutes’ drive away in the Chinese capital’s Diaoyutai State Guesthouse, the world’s two most powerful autocrats, wearing matching ties, posed for photographs in front of a row of Chinese and Russian flags.
Xi described Putin has his “best friend” and the two presidents declared “there are no forbidden areas of co-operation”. They later released a 5000-word communiqué which signalled a new era of strategic co-operation between China and Russia at a time when both powers have respective territorial claims over Ukraine and Taiwan.
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https://www.afr.com/wealth/personal-finance/the-wide-ranging-effects-of-us-inflation-20220209-p59v3e
The wide-ranging effects of US inflation
Markets are still pricing in interest rate increases that are way below where the Fed thinks it is going in the next couple of years, writes Christopher Joye.
Christopher Joye Columnist
Feb 11, 2022 – 12.48pm
Blockbuster inflation data overnight has forced markets to converge with our expectation of six to seven rate rises from the US Federal Reserve this year. Annual headline inflation in the US printed at 7.5 per cent in January, the highest reading in 40 years. More worryingly, core inflation punched through 6 per cent for the first time since 1984.
On a three-month annualised basis, core inflation is running at 7 per cent. SGH Macro’s Fed watcher Tim Duy comments that “there is only one way to say this: assuming the Fed’s primary job is price stability, the Fed has arguably missed the most significant macro call since 1966”.
Rather than decelerating as the Fed had hoped, US inflation continues to accelerate, and the details suggest it is broad-based, bleeding into services as well as supply chain disrupted goods. There is also more evidence of the burgeoning wage/price spiral that we have repeatedly warned about: Goldman Sachs says that “strong wage growth likely contributed [to the inflation numbers], and we will continue to monitor this as a key inflation risk for 2022”.
The immediate price action after the data release was revealing. At first, US equities slumped about 1 per cent, but then quickly recovered to trade up on the day. This is the post-GFC “buy-the-dip” reflex at work. It was, however, torpedoed by Fed voter James Bullard, who jumped on the data to call for a 50 basis point rise in March and a total of 100 basis points by July. Bullard even flagged the possibility of a rare inter-meeting move before March. Equities promptly tanked, closing down 1.8 per cent.
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Canadian truckies blockade border with the US
By Michel Comte
AFP
4:12PM February 10, 2022
Canadian police have threatened to arrest truckie-led protesters who have shut down central Ottawa and on Wednesday opened a new front for the movement against compulsory vaccines by blocking North America’s busiest border crossing.
As the protests disrupted cross-border trade, Prime Minister Justin Trudeau lambasted the movement as “unacceptable”.
With more people joining the blockade of the Ambassador Bridge between Windsor and the US city of Detroit in solidarity with the two-week truckies protest in the capital, Mr Trudeau warned the action threatened the country’s economic recovery.
“Blockades, illegal demonstrations are unacceptable, and are negatively impacting businesses and manufacturers,” he said in the House of Commons. “We must do everything to bring them to an end.” To the protesters, he said, “You can’t end a pandemic with blockades … You need to end it with science. You need to end it with public health measures.”
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I look forward to comments on all this!
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David.
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