September 29,
2022 Edition
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The world
seems to be lurching to be overwhelmed by issues around most of the major
powers being in conflict for a real risk of a global recession affecting the
UK, Europe, the US and much of Asia. We seem to be in some pretty difficult
times right now…
In OZ
Parliament is now back after the death of the Queen and it will be interesting
to see how things play out and what the Budget looks like in the face of an
upcoming recession.
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Major Issues.
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https://www.afr.com/politics/federal/a-nation-shorn-of-britishness-is-still-waiting-for-the-republic-20220915-p5bi90
A nation shorn of Britishness is still waiting for the republic
Republicans
will need to make the case as to why only an Australian head of state can
provide the basis of reassurance and belonging for a modern, 21st-century
nation.
James Curran Historian
Sep 18, 2022
– 1.20pm
At the end of
the 1954 royal tour to Australia, the political cartoonist George Finey
depicted NSW Labor premier Joe Cahill standing at Circular Quay. Cahill, an
Irish Catholic, was drawn staring into the distance, bereft as the Queen’s ship
sailed through Sydney Heads on its way back to Britain.
Plumes of
black smoke from its funnel wafted over the harbour. He looked forlorn, his
brow furrowed. The caption was blunt: “Alone”.
Cahill had
been constantly by the Queen’s side during her time in NSW on that visit. At
the state dinner, he compared the Queen’s arrival in Sydney to the landing of
Arthur Phillip in Sydney Cove in 1788.
“It was from
that very point that our British civilisation fanned out to encompass a
continent” he said. “Our origin is British, our soul is British. We think
British, we act British.”
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https://www.afr.com/property/residential/luxury-homes-hardest-hit-by-property-slump-20220919-p5bj48
Luxury homes hardest hit by property slump
Michael Read Reporter
Sep 19, 2022
– 8.23am
Homeowners in
Australia’s most expensive suburbs are bearing the brunt of the national
property price downturn, with Reserve Bank research finding people who own
houses rather than apartments are the most vulnerable to rate rise-induced
price swings.
The Reserve
Bank of Australia’s head of domestic markets, Jonathan Kearns, said the
sensitivity of house prices to interest rates differed regionally and by type
of housing.
Speaking on
Monday morning, Dr Kearns said properties in places with inflexible housing
supply, high levels of mortgage debt, more investors and higher incomes were
more vulnerable to an interest rate-driven property price downturn.
“These
estimates do not indicate that these factors cause housing prices to be more
responsive to changes in interest rates, but they do highlight that the
sensitivity of housing prices to interest rates is not going to be uniform
across the country,” he told The Australian Financial
Review Property Summit.
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https://www.afr.com/property/commercial/rising-inflation-and-interest-rates-turn-property-boom-on-its-head-20220918-p5bj1t
Rising inflation and interest rates turn property boom on its head
There’s still
money for high-quality Australian office investments, the AFR Property Summit
hears.
Sep 19, 2022
– 7.21pm
The Australian Financial
Review Property Summit heard barbecue-stopping warnings of precipitous
falls in record house prices as the pandemic boom has been turned on its head
by rising inflation and interest rates.
Barrenjoey
chief economist Jo Masters said that if the Reserve Bank normalised interest
rates in line with market pricing, Sydney house prices
could fall by up to 30 per cent. Yet that would still return house prices
to just below pre-pandemic levels.
The summit
also heard a more nuanced story about the correction in property values at the
end of the era of ultra-cheap money.
Jonathan
Kearns, the Reserve Bank’s head of domestic markets, told the summit that while
the central bank’s financial stability risk modelling – which estimates a 15
per cent correction over the next two years – showed how sensitive house prices
were to interest rates, this was not a forecast or prediction.
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https://www.afr.com/politics/federal/us-choppers-get-the-nod-from-albanese-20220920-p5bjma
US choppers get the nod from Albanese
Andrew Tillett Political
correspondent
Sep 20, 2022
– 8.00pm
Australia has
confirmed it will buy another 12 submarine-hunting helicopters in an arms deal
worth about $2.5 billion, allowing the navy to create a third squadron amid
rising regional tensions over China’s militarisation.
Former prime
minister Scott Morrison had announced the purchase during the election
campaign, using it in
a bid to help improve the Liberal Party’s chances of winning the NSW marginal
south coast seat of Gilmore, where the navy’s aviation wing is based.
The Albanese
government’s decision to go ahead with the order comes despite the defence strategic review
that is under way, which is meant to be considering the military’s
acquisition schedule for new weapons and platforms.
The contract
with US defence giant Lockheed Martin subsidiary Sikorsy will expand the size
of the navy’s fleet of MH-60R Seahawk, or Romeo, helicopters from 24 to 36. The
purchase completes the navy’s plan to axe its six MRH-90 Taipan helicopters,
which have suffered from maintenance issues and high operating costs.
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https://www.afr.com/politics/federal/bold-action-call-to-spend-1-5b-on-creating-semiconductor-industry-20220920-p5bjfh
‘Bold action’ call to spend $1.5b on creating semiconductor industry
Phillip Coorey and Tom McIlroy
Sep 21, 2022
– 6.00am
The Albanese
government should invest $1.5 billion to establish a domestic industry to
manufacture semiconductors, rather than continue to
rely on increasingly risky overseas providers, principally Taiwan,
Australia’s pre-eminent national security think-tank has recommended.
In a new
report, the Australian Strategic Policy Institute said the COVID-19 pandemic,
as well as coercive trade practices by China, demonstrated that Australia could
no longer rely on free-trade principles for the supply of such a crucial
product.
“In this
environment, bold action is warranted. Continuing to do what we did before is
not an option because it will undermine the national interest,” the report
says.
“A new
approach is needed that’s in part heretical to our old, market-based approach
but is driven by necessity: government intervention that works in
tandem with industry expertise and drive.”
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https://www.afr.com/politics/federal/we-re-still-in-deficit-minister-stares-down-spending-calls-20220921-p5bjpx
‘We’re still in deficit’: Gallagher stares down spending calls
Phillip Coorey Political
editor
Sep 21, 2022
– 5.23pm
Finance
Minister Katy Gallagher has been forced to emphasise that the budget remains
mired in deficit, as she faces calls for more spending prompted by revelations
of a $50 billion windfall.
A day after
announcing the 2021-22 budget deficit would be about $50 billion lower than the
most recent forecast of $80 billion, Senator Gallagher stressed that the
windfall was temporary, and the government was still borrowing money for
everyday expenses.
“We were
forecasting a deficit in the order of $80 billion. Now it will come in just
over $30 billion for the end of the last financial year,” she said.
“So it is not
as if the budget is in surplus or that there is extra money lying around. We
are still borrowing a lot, we still have $1 trillion of debt to manage and
these are some of the pressures that we have to work through.”
Despite the
shrinking of last year’s budget deficit, Treasurer Jim Chalmers said the
deficits for this year and beyond would worsen because of the spiralling costs of
health, aged care, the National Disability Insurance Scheme, interest payments
on debt, and defence.
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https://www.theaustralian.com.au/commentary/a-global-grief-for-the-queen-that-has-defied-belief/news-story/b43cf53049a41333df624605822e62fe
A global grief for the Queen that has defied belief
DAVID HURLEY
12:00AM
September 22, 2022
Of all the
things I witnessed while in London for the state funeral service of the Queen,
two experiences struck me.
The first, an
early morning walk through Green Park. It was far from the pomp and ceremony of
formal events. I was in my exercise gear. There were thousands upon thousands
of tributes – flowers, handwritten messages and other tokens, including a
sleuth of Paddington Bears.
Even in the
early hours there were crowds of people: they weren’t taking selfies or posing.
They were respectful of each other but largely contained in their own intimate
and individual reflection on a remarkable individual.
The second
was the moment the casket carrying the Queen was lowered into the royal vault
at St George’s Chapel in Windsor. I hadn’t thought that I would be emotional.
But I was.
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https://www.afr.com/policy/economy/global-economy-on-a-knife-s-edge-says-rba-deputy-governor-20220921-p5bjvp
Global economy ‘on a knife edge’, says RBA deputy governor
Jonathan Shapiro
Senior reporter
Sep 21, 2022
– 5.23pm
Reserve Bank deputy governor Michele
Bullock says rising interest rates, energy shocks in Europe and a highly
indebted and locked down economy in China have put the global economy on a
“knife edge”.
Ms Bullock
said China, the United States and Europe all posed economic stability threats,
albeit for different reasons.
“The outlook
for the world economy is looking quite uncertain and quite worrying,” she said.
“That
obviously has implications for us because of the tendency to flow through to
commodity prices. It’s very uncertain and on a bit of a knife edge.”
The main
risk, Ms Bullock was uncertainty as to how the United States and European
economies would handle sharply rising interest rates.
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https://www.afr.com/markets/equity-markets/barrenjoey-predicts-recession-as-dollar-forecasts-tumble-20220923-p5bklr
Barrenjoey predicts recession as dollar forecasts tumble
Vesna Poljak and Michael Read
Sep 23, 2022
– 5.37pm
Investment
bank Barrenjoey declared a short and shallow Australian recession is a
“probable” scenario after increasing its peak cash rate forecast to 3.35 per
cent in December following the US Federal Reserve’s hawkish policy decision
this week.
The sweeping
influence of the Fed forced up projections for the Reserve Bank’s cash rate and
prompted strategists to warn of further currency pain for the Australian
dollar.
Friday’s 1.9
per cent fall on the S&P/ASX 200 Index extended the week’s losses to 2.6
per cent when local shares returned to trading after the Queen Elizabeth II
public holiday.
“The RBA can
lag the Fed but there is likely a limit to that,” Barrenjoey said on Friday,
implying weaker growth and employment. Its previous peak rate forecast was 2.85
per cent.
Financial
markets lifted the implied probability of a 0.5 percentage point cash rate
increase from the Reserve
Bank at the October policy meeting to 66 per cent from 60 per cent.
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https://www.afr.com/politics/federal/regime-change-a-chance-to-confront-our-history-more-honestly-20220922-p5bk2c
Regime change a chance to confront our history more honestly
The
Queen’s death has raised a whole range of complex issues behind that stability
she represented to so many people. They are bubbling closer to the surface in
her absence, amid a sense of regime change.
Laura Tingle Columnist
Sep 23, 2022
– 1.38pm
While much of
the world – and our media – have spent the past fortnight eulogising a woman
who represented dignified stability and certainty, things have been taking a
much darker turn into instability and uncertainty.
You have to
wonder how we would be thinking about the world if Queen Elizabeth had
not died two weeks ago.
For within
that fortnight we have seen events in Russia and Ukraine take extraordinary
turns: huge
territorial and military gains by Ukraine for sure but as a result, on the
downside, an alarming picture of an autocrat under intense pressure, Vladimir
Putin, becoming more desperate in the measures he has been prepared to take,
and the rhetoric he has been prepared to use, to maintain control.
It’s been a
while since the head of a nuclear state actually threatened to use tactical
nuclear weapons in a conflict already under way.
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https://www.smh.com.au/business/the-economy/how-the-psychology-of-humans-explains-the-inflation-resurgence-20220922-p5bkbz.html
How the psychology of humans explains the inflation resurgence
Ross Gittins
Economics
Editor
September 23,
2022 — 11.45am
The beginning
of wisdom in economics is to realise that models are models – an oversimplified
version of a complicated reality. A picture of reality from a particular
perspective.
I keep
criticising economists for their excessive reliance on their basic,
“neoclassical” model – in which everything turns on price, and prices are set
by the rather mechanical interaction of supply and demand.
It’s not that
the model doesn’t convey valuable insights – it does – but they’re often too
simplified to explain the full story.
Sometimes I
think Reserve Bank governor Dr Philip Lowe is like someone whose brain has been
locked up in a neoclassical prison. But in his major speech
on inflation two weeks ago, he showed he’d been thinking well outside the bars,
looking at various models for a comprehensive explanation of how inflation
could shoot up so quickly and unexpectedly.
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COVID-19 Information.
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All quiet on
the COVID front apparently. Not sure I believe it!
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Climate Change.
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We are being
overwhelmed by the here and now right now but it has not gone away!
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Royal Commissions And The Like.
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https://www.theaustralian.com.au/nation/politics/no-improvement-in-agedcare-nutrition/news-story/6bd8c0c621c4b392509123a0b2c63124
No improvement in aged-care nutrition
Stephen Lunn
10:04PM
September 22, 2022
Mandatory
nutrition screening in nursing homes has been left off a new list of aged-care
quality indicators, despite the Albanese government saying better food was one
of its priorities for improving the sector, dietitians warn.
And the
government continues to measure unplanned weight loss in nursing homes as a
benchmark of dietary improvement when it should be focused instead on the more
pressing concern of malnutrition, Dietitians Australia chief executive officer
Robert Hunt says.
New
guidelines from the Department of Health and Aged Care released this week list
a range of new quality indicators that residential aged-care providers will be
required to monitor and report on. These include daily activities,
incontinence, hospitalisations and quality of life for nursing home residents,
but not nutrition.
“It shows the
new federal government really isn’t giving food and nutrition in aged-care
facilities the priority required, or that it said it would,” Mr Hunt said.
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National Budget Issues.
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https://www.afr.com/politics/federal/albanese-china-attend-reception-of-the-century-amid-tensions-20220919-p5bj41
Expected rate rises will cause recession: leading economist
Michael Read
19-08-2022
Back to the
Australian Financial Review Property Summit, Barrenjoey chief economist Jo
Masters says the Reserve Bank will tip the Australian economy into recession if
it lifts rates in line with market forecasts.
“If the
Reserve Bank follows market pricing, we will have an economy in recession and
we will have house prices down materially,” Masters told the summit.
The Reserve
Bank has lifted rates by 2.25 percentage points since May, and markets are
pricing the cash rate will reach 3.3 per cent by the end of the year, before
peaking at 3.9 per cent in April next year.
Masters
expects house prices will fall by 25 per cent in Sydney and by 16 per cent
nationwide, taking price to income ratios back to pre-pandemic levels.
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https://www.afr.com/politics/federal/why-stage-three-tax-cuts-should-be-here-to-stay-20220904-p5bfbi
Why stage three tax cuts should be here to stay
If Labor
gives into the Greens and teals, this broken election promise will go down as a
Kevin Rudd-style ‘economic conservative’ moment.
Andrew Bragg Contributor
Sep 18, 2022
– 11.58am
Misguided
Greens and independents are
urging Treasurer Jim Chalmers to drop the stage three tax cuts that were
legislated by the former Coalition government.
A seemingly
innumerate statement from independent MP Monique Ryan says it all about this
debate. Ryan has said: “Anything that’s going to give $243 billion to
top-income earners over our society is inadvisable.”
The last time
I looked, a carpenter on $66,000 or a midwife on $78,000 were not “top income
earners”. It would be a huge mistake to let Ryan and co have their way.
The reversal
of what has already been legislated with the support of the Labor Party and
removal of stage three tax cuts would result in significant tax increases for
millions of middle-income Australians.
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https://www.smh.com.au/business/the-economy/reserve-bank-of-australia-s-rate-hikes-raise-risk-of-recession-20220918-p5biyf.html
Reserve Bank of Australia’s rate hikes raise risk of recession
Ross Gittins
Economics
Editor
September 19,
2022 — 5.00am
Our sudden,
shocking encounter with high inflation has brought to light a disturbing truth:
we now have a dysfunctional economy, in which big business has gained too much
power over the prices it can charge, while the nation’s households have lost
what power they had to protecting their incomes from inflation.
It has also
revealed the limitations and crudity of the main instrument we’ve used to manage
the macro economy for the past 40 years: monetary policy – the manipulation of
interest rates by the central bank.
We’ve been
reminded that monetary policy can’t fix problems on the supply (production)
side of the economy. Nor can it fix problems arising from the underlying
structure of how the economy works.
All it can do
is use interest rates to speed up or slow down the demand (spending) side of
the economy. And even there, it has little direct effect on the spending of
governments or on the investment spending of businesses.
Its control
over interest rates gives it direct influence only on the spending of
households. And, for the most part, that means spending that has to be done on
borrowed money: buying a home. But also, renting a home some landlord has
borrowed to buy.
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https://www.theage.com.au/national/australia-news-live-world-leaders-gather-on-eve-of-queen-s-funeral-labor-urged-to-act-on-paid-parental-leave-20220919-p5bj3x.html?post=p545xs#p545xs
Treasurer warns of tough budget conditions
By Shane
Wright
19-08-2022
Treasurer Jim
Chalmers has used a meeting with his Indonesian counterpart to warn the
situation facing the Australian budget is getting tougher.
Chalmers, who
will present his first budget on October 25, said during a ceremony with
long-term Indonesian Finance Minister Sri Mulyani that both global and domestic
factors are hitting the budget.
The October
25 budget will cover the 2022-23 financial year. It follows the budget that was
released by then treasurer Josh Frydenberg in March ahead of the federal
election for the same time period.
It’s the
first time that two budgets for the same financial year have been developed.
Chalmers said
“deeply concerning global conditions” would provide the backdrop to next
month’s budget.
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https://www.theaustralian.com.au/nation/government-spending-balloons-to-highest-share-of-economy-ever-as-labor-prepares-first-budget/news-story/b8e8058261ca4c343e0300a9b23754e5
Government spending balloons to highest share of economy ever as Labor
prepares first budget
Patrick Commins
10:00PM September
18, 2022
Government
spending has ballooned to its highest share of the economy in history, with
experts warning more public expenditure is on the way as Labor prepares its
first budget, including promises on child care and wages.
Taxpayers are
bearing an increasingly heavy burden to fund higher expenditure at all levels
of government, a load that has been made heavier by major new commitments over
the past 2½ years to fund services such as the NDIS, aged care, health care,
child care and defence.
Evidence of
the expanding scope of government in the economy comes as the Albanese
government on Monday announced an extra $1.4bn to extend Covid response
measures.
The largest
component of the spending will include $840m in additional funding for the Aged
Care Support Program – which reimburses providers for the costs incurred in
managing Covid-19 – with $35m for ongoing onsite PCR testing in aged care.
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https://www.smh.com.au/politics/federal/australia-needs-national-discussion-around-paying-for-government-spending-treasurer-20220920-p5bjjt.html
Australia needs ‘national conversation’ around paying for government
spending: Treasurer
By Rachel Clun
September 20,
2022 — 3.51pm
Australia
must prepare itself for a robust discussion about how to fund future government
spending, the Treasurer has warned, as he revealed next month’s budget will be
constrained to “bread and butter” spending amid rising cost-of-living pressures
and slowing economic growth.
The budget
deficit for the last financial year will be about $50 billion lower than the
$78 billion forecast in March, but Jim Chalmers cautioned on Tuesday it was
only a temporary improvement and there were unavoidable costs that Labor will
have to deal with in its first budget.
Treasurer Jim
Chalmers and Minister for Finance Katy Gallagher held a press conference in
Canberra.
Chalmers
promised “responsible cost-of-living relief” on October 25 as the government
funds its election promises, including expanding the childcare subsidy from
July and providing cheaper prescription medicines from January.
The
government will also spend $10.8 million on an inquiry by the consumer watchdog
into the costs of childcare ahead of the subsidy’s expansion. Starting early
next year, the Australian Competition and Consumer Commission will look at what
factors have driven childcare costs up by 41 per cent over the past eight
years.
“Our
investment in cheaper childcare is a cost-of-living measure with an economic
dividend,” Chalmers said.
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https://www.smh.com.au/politics/federal/reserve-bank-s-bond-program-helped-save-jobs-and-economy-20220921-p5bjpg.html
Reserve Bank’s bond program helped save jobs and economy
By Shane Wright
September 21,
2022 — 9.38am
The Reserve
Bank’s purchase of almost $300 billion in federal and state government debt
through the COVID-19 pandemic kept more people in work, increased the economy
by at least $25 billion and helped finance billions in extra infrastructure
projects, a review of the program has found.
During the
depths of the pandemic, the RBA was buying $5 billion a week worth of federal
and state government debt as part of its quantitative easing
program aimed at safe-guarding the economy.
The bond
purchase program (BPP) was the first time the Reserve effectively printed money
to stabilise the economy which during the June quarter of 2020 suffered its
biggest three-month contraction since the Great Depression.
By the time
the program finished in February this year, the bank had bought $224 billion of
federal debt and $57 billion issued by the states and territories.
The Reserve
Bank review of the BPP, released on Wednesday, found it reduced the interest
rate on federal debt by about 0.3 percentage points and narrowed the gap
between federal and state government debt interest rates.
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https://www.afr.com/policy/economy/rba-s-qe-experiment-could-cost-58b-20220921-p5bjq2
RBA’s experiment could cost $58b
Jonathan Shapiro
Senior reporter
Updated Sep
21, 2022 – 12.01pm, first published at 10.14am
The Reserve
Bank of Australia will not pay a dividend to the government “for a number of
years” as it nurses balance sheet losses that could top $58 billion from its
historic bond purchase program.
The central
bank also flagged a $44 billion paper loss on its portfolio for financial year
2022 as sharply rising bond yields erode the value of its assets.
Still, the
Reserve Bank defended its $300 billion of bond
buying as part of its quantitative easing strategy, arguing it was
effective in lowering
borrowing rates and weakening the currency to support the economy during
the pandemic.
The findings
of the Reserve Bank’s internal review of the program, which ran from November
2020 to February 2022, were published on Wednesday.
It involved
the purchase of long-term state and federal government bonds, and was separate
to the ill-fated
yield curve control policy experiment in which the Reserve Bank intervened
to anchor the three-year bond rate to the cash rate.
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https://www.afr.com/policy/tax-and-super/stage-three-tax-cut-debate-is-over-before-it-even-started-20210616-p581ev
Stage three tax cut debate will be cancelled
Labor
running a ‘big national conversation’ about ‘how we fund the things that we
value’ will end up only one way – a discussion on how to raise taxes.
John Roskam Columnist
Sep 22, 2022
– 2.50pm
And so it
begins. And no one should be in the least surprised. Perhaps what is surprising
is that it didn’t happen even sooner.
Labor has
been in office in Canberra for less than four months and already Treasurer Jim
Chalmers says he wants “a
big national conversation about the structural position of the budget and
how we fund the things that we value not just in our economy, but in our
society”.
The Labor
Party running a “big national conversation” about “how we fund the things that
we value” will end up only one way. It will be a discussion about how
to raise taxes.
Reserve Bank
governor Philip Lowe said as much last week. He also pointed out that despite
unemployment at a 50-year low and the highest terms of trade on record,
Australia still somehow managed to have an enormous budget deficit.
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https://www.afr.com/politics/federal/why-the-october-budget-is-a-softening-up-exercise-20220919-p5bj56
Jim Chalmers says no to any more self-licking ice creams
If the
Albanese government is going to hit us hard to cover the structural deficit, it
is equally important for it not to waste our money.
Phillip Coorey Political
editor
Sep 22, 2022
– 8.00pm
In the
lead-up to the federal election, Jim Chalmers gave several speeches in which he
made it clear Labor would not be cowed by a traditional Coalition debt and
deficit scare campaign.
With the
budget in ruins thanks to the profligacy demanded by the COVID-19 pandemic,
Labor figured, correctly, that the polity was no longer as fiscally disciplined
as it once was.
The regard
for surpluses and low debt – embedded into the national mindset, especially
during the Howard years – had been supplanted by the law of the jungle. Numbers
once regarded as eye-watering became eye-glazing as billions upon billions were
shovelled out the door during the pandemic.
In that
context, Labor saw no risk in going to an election not only promising a
slightly worse budget bottom line – $8.4 billion over the forward estimates –
but actually making a virtue of it. It called it “better debt”.
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https://www.smh.com.au/politics/federal/the-five-black-holes-in-the-federal-budget-20220919-p5bj8q.html
The five black holes in the federal budget
By Shane Wright
September 23,
2022 — 4.20am
Jim Chalmers
and Katy Gallagher have inherited the fiscal cost of Australia’s fight to stave
off the COVID pandemic.
The treasurer
and finance minister, who in a month’s time will deliver the re-do budget of
2022-23, face a fiscal abyss spreading into the next decade that can be
measured in trillions of dollars.
And five key
areas of expenditure growth – the health system, National Disability Insurance
Scheme (NDIS), aged care, defence and the interest bill on government debt –
shape as battlegrounds in the budget repair war.
These five
areas are among the most politically contentious in the budget, affecting
millions of voters. They are heavily influenced by ingrained demographic
changes such as the ageing cohort of baby boomers or, like defence and interest
costs, determined by global factors outside the control of government.
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https://www.theaustralian.com.au/commentary/breadandbutter-budget-we-just-have-tohave/news-story/c230799ae9c8487733780ce64df3f535
Bread-and-butter budget we just have to have
JIM CHALMERS
10:02PM
September 22, 2022
Between now
and handing down the budget in less than five weeks, I’ll have the opportunity
to confer with my international counterparts in Washington on the deteriorating
conditions we all face.
The deeply
concerning developments around the world, as well as new pressures on spending,
provide the backdrop for the budget my colleagues and I are working on. These
global challenges we confront are intensifying, not dissipating: inflation is
rampant; central banks are responding with blunt and brutal rate rises; and
growth is slowing.
The economies
of the US and Britain are in reverse; China’s has slowed markedly; and the war
in Ukraine sparked an energy crisis that shows no signs of abating. This is why
the International Monetary Fund won’t rule out another global recession.
At the same
time, the ongoing impacts of Covid-19 have already forced us to fund billions
of dollars in new spending for healthcare, aged care and emergency financial
support – which the previous government had not budgeted for.
The final
budget outcome for last year will show a substantially smaller deficit figure
than what was first projected – not just because of a big temporary boost from
commodity prices but also because billions of dollars that were promised
weren’t invested, are now spilling into later years and still have to be paid
for.
-----
Health Issues.
-----
https://www.smh.com.au/healthcare/program-to-stop-bad-medicine-at-risk-after-government-pulls-funding-20220919-p5bj4v.html
Program to stop bad medicine at risk after government pulls funding
By Liam Mannix
September 20,
2022 — 5.00am
Key points
·
The government has pulled funding from the group
behind Choosing Wisely, meaning it will likely close.
·
Choosing Wisely is trying to improve healthcare
by cutting out procedures that are expensive and don’t work.
·
The decision has been condemned by multiple
health stakeholders.
·
However, there is a real debate over whether
Choosing Wisely actually did its job well at all.
A major
initiative to stop doctors performing expensive but useless or risky procedures
is under threat after the federal government pulled funding.
The possible
closure comes as debate rages over whether the program, called Choosing Wisely,
managed to achieve its goals, or became little more than a forum for medical
professionals to snipe at each other.
Choosing
Wisely launched in Australia in 2015 as part of a global campaign to stop
“low-value” tests and treatments that are expensive and do not work well.
Medical societies were asked to publicly name low-value treatments so doctors
and patients could avoid them.
-----
https://www.theage.com.au/national/victoria/well-done-monkeypox-cases-drop-as-sutton-lauds-community-response-20220923-p5bkm6.html
‘Well done!’: Monkeypox cases drop as Sutton lauds community response
By Lachlan Abbott
September 23,
2022 — 7.08pm
Chief Health
Officer Brett Sutton has lauded the Victorian response to monkeypox as new
infections have dropped across the state, despite fears case numbers would rise
after an early spike.
The most
recent figures on the Victorian Department of Health website show active
monkeypox cases had fallen from 27 on September 2 to just seven on September
16. Victoria has recorded 67 monkeypox cases in total, but this tally has only
grown by two since September 2.
“Victoria has
had no MPX [monkeypox] cases for a few weeks now, having had significantly
early growth in cases,” Sutton tweeted on Friday afternoon.
“Lo and
behold, those pillars of a public health response work. Case isolation, contact
tracing and early testing through close engagement with at-risk community. Well
done!”
-----
https://www.smh.com.au/national/prescriptions-for-adhd-medication-double-in-a-decade-20220922-p5bk61.html
Prescriptions for ADHD medication double in a decade
By Mary
Ward
September 25,
2022 — 5.00am
Prescriptions
for ADHD medications have more than doubled within a decade and scripts for
adults now outnumber those for children, as rising numbers of adult women are
diagnosed with the disorder.
People
seeking treatment for Attention Deficit Hyperactivity Disorder, or ADHD, are
facing months- long waiting lists to see a psychiatrist, with some clinicians
attributing the increase in adult cases to historical
under-diagnosis, particularly in young girls.
Annual data
from the Pharmaceutical Benefits Scheme showed prescriptions for the two most
commonly used ADHD medications, methylphenidate (Ritalin) and dexamphetamine,
passed 1 million last year.
The greatest
increase was seen in adults on Ritalin, which increased almost three-fold to
160,000 scripts in 2021. The number of adult scripts for dexamphetamine roughly
doubled to close to 390,000.
-----
International Issues.
-----
https://www.afr.com/world/europe/putin-under-pressure-what-is-russia-s-next-move-20220918-p5biye
Putin under pressure: what is Russia’s next move?
Dramatic
retreat on the battlefield is only one of a number of Ukraine setbacks that the
Russian leader faced last week. Some believe he has little choice but to order
a significant escalation of the conflict.
Max Seddon,
Polina Ivanova and Ben Hall
Sep 18, 2022
– 9.07am
Moscow/Berlin/London
| In late August, occupation authorities in the eastern Ukrainian town of Kupyansk
held celebrations to mark Russian Flag Day.
A few dozen
people – including both pro-Kremlin activists and locals who had stayed in the
town after it was captured by Russian forces six months ago – unfurled an
enormous 60-metre by 40-metre Russian tricolour on the main square, then waved
flags and danced to a medley of patriotic tunes.
Just a few
weeks later, the Russian occupying forces were gone after a surprise Ukrainian
attack forced them to surrender more than 3000 square kilometres of territory,
leaving tanks, armoured vehicles and supplies.
The
stunning reversal has shattered the mantra, repeated by senior officials
visiting occupied territories over the northern spring and summer, that “Russia
is here forever” in south-eastern Ukraine.
-----
https://www.smh.com.au/world/europe/hard-reign-charles-will-struggle-to-keep-kingdom-united-20220915-p5bib6.html
Hard reign: Charles will struggle to keep kingdom united
Nick Bryant
Journalist
and author
September 18,
2022 — 7.30pm
In the
ascension to the throne of King Charles III, we have been watching a modern man
with an Edwardian persona, a prescient thinker who often reverts to the
vocabulary of the 18th century.
In his
television address to the nation and Commonwealth, he described his late
parents as his “darling Mama” and “dear late Papa”, terms of endearment which
sounded like dialogue from a Jane Austen novel. Yet he also openly expressed
his love for Harry and Meghan, displaying an emotional largesse which would not
have sounded out of place on Oprah.
His travails
with leaking pens and inconveniently placed ink pots have served almost as a
royal Rorschach test. They reveal a moderniser trapped in the body of a
traditionalist, an impatient new monarch impeded by instruments of the past.
In many ways,
then, his internal contradictions reflect the tensions that lie at the heart of
modern-day Britain, between those whose politics is driven by nostalgic
nationalism and those preferring a forward-thinking, cosmopolitan approach. It
is a divide that reflects, if not exactly mirrors, the Brexit breach.
----
https://www.smh.com.au/world/asia/joe-biden-says-again-us-forces-would-defend-taiwan-if-china-invaded-20220919-p5bj6b.html
Joe Biden says again US forces would defend Taiwan if China invaded
By David
Brunnstrom
September 19,
2022 — 9.57am
Washington:
US President Joe Biden said in an interview broadcast on Sunday that US forces
would defend Taiwan in the event of a Chinese invasion.
Asked in a
CBS 60 Minutes interview if US forces would defend the self-ruled island
claimed by China, he replied: “Yes, if in fact, there was an unprecedented
attack.”
Asked to
clarify if he meant that unlike in Ukraine US forces, men and women, would
defend Taiwan in the event of a Chinese invasion, Biden replied: “Yes.”
Since taking
office, Biden has repeatedly used language about Taiwan that appears to change
longstanding US policy.
Last year,
Biden or his aides needed to clarify his remarks on Taiwan on at least four
separate occasions, including his description of the island as “independent” -
China’s oft-stated red line for an invasion.
-----
https://www.smh.com.au/world/europe/biden-baulks-as-ukraine-asks-us-to-send-powerful-weapons-20220918-p5bixz.html
Biden baulks as Ukraine asks US to send powerful weapons
By David E.
Sanger, Anton Troianovski, Julian E. Barnes and Eric Schmitt
September 18,
2022 — 11.06am
Washington:
Flush with success in north-east Ukraine, President Volodymyr Zelensky is
pressing President Joe Biden for a new and more powerful weapon: a missile
system with a range of 190 miles (305 kilometres), which could reach far into
Russian territory.
Zelensky has
insisted to US officials that he has no intention of striking Russian cities or
aiming at civilian targets, even though President Vladimir Putin’s forces have
hit apartment blocks, theatres and hospitals in Ukraine throughout the war. The
weapon, Zelensky says, is critical to launching a wider counteroffensive,
perhaps early next year.
Biden is
resisting, in part because he is convinced that over the past seven months, he
has successfully signalled to Putin that he does not want a broader war with
the Russians – he just wants them to get out of Ukraine.
A shipment of
long-range guided missiles, which could also give Ukraine new options for
striking Crimea, the territory Russia annexed in 2014, would likely be seen by
Moscow as a major provocation, Biden has concluded.
-----
https://www.theaustralian.com.au/business/wealth/us-federal-reserves-quantitative-tightening-sows-seeds-for-a-market-rebound/news-story/8a2dcb85c0d4dac54daf89d405566926
US Federal Reserve’s quantitative tightening sows seeds for a market
rebound
Roger
Montgomery
6:00AM
September 17, 2022
The US
Federal Reserve activated a policy at the beginning of the year that can be
crudely put as follows: bring down the balance sheet and boost the US dollar.
So far, the
Fed has been successful on both fronts. The dollar is close to parity with the
euro, at a near four-decade high against the pound and at more than a
three-decade high against the yen.
Success,
however, eventually leads to an end of the policy that brought it about, and
sharemarket investors should be attuned to any change in course. In the short
term, success by the Fed is negative for shares. And the Fed knows it.
On the other
hand, when the Fed’s current balance sheet posture eventually ends it could be
very good for equities.
Quantitative
tightening (QT) is part of a central bank’s policy to reduce its balance sheet
and liquidity. It is a reversal of quantitative easing (QE) which resulted in a
cumulative $US9.8 trillion injected into markets at its peak during Covid-19,
and triggered the massive rallies in equity markets around the globe from March
2020 to January 2022.
-----
https://www.smh.com.au/world/europe/i-just-met-president-zelensky-an-even-larger-presence-than-social-media-suggests-20220919-p5bj59.html
I met President Zelensky, an even larger presence than social media
suggests
Mick
Ryan
Military
leader and strategist
September 19,
2022 — 12.32pm
The past two
weeks have answered a central question of the Russo-Ukraine War; can the
Ukrainians undertake the offensives required to liberate their people and
reoccupy their territory? They have answered this question emphatically with
their very successful and ongoing Kharkiv offensive.
During this
offensive, I had the opportunity to visit Ukraine and to speak with high-level
military and government officials. I even had the privilege of meeting with
President Zelensky. In person, he is an even larger presence than his social
media suggests. Slight of stature but enormously engaging, funny and
charismatic, one only has to be in his presence for a short time to see why his
leadership has been central to Ukraine’s efforts in this war.
I took away
three key observations from the visit.
First, the
Ukrainians are competent. This is a gross understatement. No military this
century has had to fight across all the domains of war concurrently, and do so
against a larger and better-armed adversary. The Ukrainians clearly spent years
preparing. The most important preparation was not physical but intellectual.
They re-trained their troops away from Soviet centralised command methods to
adopt more decentralised command and control. This has been a clear difference
between the two belligerents and has given the less well-armed Ukrainians a
significant battlefield advantage.
-----
https://www.afr.com/world/europe/the-world-bids-farewell-to-a-beloved-monarch-20220919-p5bj3a
The world bids farewell to a beloved monarch
Hans van Leeuwen
Europe correspondent
Sep 20, 2022
– 2.43am
London | The
world has bid farewell to Queen Elizabeth II, in possibly the most widely attended
and watched funeral in history.
More than 200
political leaders and royals were among the 2000 people packed into Westminster
Abbey on a cloud-scudded Monday morning for an elaborate, carefully staged
state funeral lasting only an hour.
The Queen’s
coffin then made stately progress through central London atop a 121-year-old
artillery carriage, towed by naval personnel and attended by her family and a
panoply of colourfully dressed troops.
Queen
Elizabeth II has been laid to rest at St George’s Chapel inside Windsor Castle.
-----
https://www.afr.com/policy/economy/a-bit-rich-for-governments-to-blame-their-central-banks-20220918-p5bj1v
A bit rich for governments to blame their central banks
Governments
may be forced to acknowledge their own complicity in the inflation that they
are so keen to be rid of.
Adrian
Blundell-Wignall Economist
Sep 19, 2022
– 8.15pm
For years
central banks undershot inflation targets, due in large part to the China
globalisation supply shock. Governments didn’t complain and enjoyed low
borrowing costs.
With the
opposite problem of inflation, politicians are now calling for a review of
central bank inflation-targeting frameworks. British Prime Minister Liz Truss
is insisting on a review of the Bank of England, and Treasurer Jim Chalmers has
already ordered one here.
But
governments are not focused on the right issue, which involves their own role
as accomplices in the recent inflation.
During 2020
and 2021, the US Federal Reserve and the European Central Bank adjusted their
policy frameworks in the direction of long-run targets as Australia has done
for years. With inflation now rising, the IMF suggested an adjustment for the
US: “As an alternative to the Summary of Economic Projections, the Federal
Reserve could begin publishing ... an internally consistent economic projection
and rate path, produced by Fed staff and potentially endorsed ... by the FOMC
[Federal Open Market Committee].”
In other
words, nothing new to add.
-----
https://www.afr.com/world/europe/not-standing-with-putin-how-asia-s-view-of-the-war-is-shifting-20220919-p5bj45
‘Not standing with Putin’: How Asia’s view of the war is shifting
Henry Foy,
Max Seddon and John Reed
Sep 19, 2022
– 7.26am
Brussels |
Moscow | New Delhi | Public admonishments of Russian President Vladimir Putin
by China and India over his invasion of Ukraine signal a shift
in global perceptions of the war, Western officials have said, amid efforts
by Europe and the US to erode the Kremlin’s international support.
The chiding
of Mr Putin by Indian Prime Minister Narendra Modi and the Russian leader’s
acknowledgment of concerns raised by Chinese President Xi Jinping last week
were signs of discomfort with Moscow, three Western officials said. The
remarks, at a summit in Uzbekistan, came days after a Ukrainian attack forced
Russia’s army to surrender more than 3000 square kilometres of territory.
The comments
were “a genuine and clear signal” of annoyance, one senior European official
said, adding that India and China could now adjust their actions towards both
Russia and the West.
A senior
European minister told the Financial Times they interpreted the comments as
“actual criticism”.
“From Modi especially. I
don’t think that he likes this,” the minister added. “It was way better to be
in a position of ambiguity where you can be friendly with both sides. And
benefit from being friends with -both.”
-----
https://www.smh.com.au/world/asia/russia-is-struggling-to-annexe-ukraine-but-china-is-annexing-russia-pretty-effortlessly-20220919-p5bj57.html
Russia is struggling to annexe Ukraine, but China is annexing Russia
pretty effortlessly
Peter Hartcher
Political and
international editor
September 20,
2022 — 5.00am
Russia is
struggling to annexe Ukraine. But China is annexing Russia pretty effortlessly.
Vladimir
Putin’s bungled invasion of Ukraine has damaged his political standing at home
and weakened Russia’s position abroad.
One telltale
sign was the summit shenanigans at a meeting of the Shanghai Cooperation
Organisation’s leaders last week. A notoriously petty Putin power play was
turned against him.
The Russian
dictator often made foreign leaders suffer the humiliation of an extended wait
before arriving for scheduled summits. For instance, he once kept
Donald Trump waiting for 45 minutes and India’s Narendra Modi for 50. He
routinely kept Ukrainian leaders waiting three or four hours. But the record
was when he made German
Chancellor Angela Merkel suffer an insufferable 4¼ hours.
So there was
notable schadenfreude last week when four nations’ leaders made Putin wait.
Modi took his opportunity to drive home Putin’s downgrading in the
international order, and so did the leaders of Turkey, Azerbaijan and
Kyrgyzstan.
-----
https://www.theaustralian.com.au/business/the-wall-street-journal/russia-expands-attacks-on-civilian-targets-after-battlefield-losses/news-story/c937036e7989d4296f1320ed2cddcec6
Russia
expands attacks on civilian targets after battlefield losses
By Isabel
Coles and Evan Gershkovich
The Wall
Street Journal
5:28PM
September 19, 2022
Russia is intensifying
a campaign of long-range missile strikes targeting Ukraine’s key infrastructure
after facing major setbacks on the battlefield that have raised concerns about
further escalation from Moscow.
Britain’s
Ministry of Defence said late on Sunday that Russian strikes had increasingly
picked out civilian targets over the past week, even when no immediate military
benefit could be perceived.
The aim, it
said, was to “undermine the morale of the Ukrainian people and government”,
which has been buoyed by the success of a recent offensive in the northeast of
the country. The Ukrainian breakthrough in the Kharkiv region compelled
Russian forces to relinquish more territory in a matter of days than they had
gained in months of grinding combat, dramatically altering the momentum of
the war.
Since then,
Russian missiles have hit a dam, threatening to flood the city of Kryvyi Rih
days after electricity in much of eastern Ukraine was knocked out by a strike
that disabled the main power station in the country’s second-largest city of
Kharkiv. A sustained Russian effort to destroy Ukrainian power stations, dams,
bridges and pipelines could over time severely degrade the country’s ability to
function, especially as winter sets in.
-----
https://www.theaustralian.com.au/world/the-times/out-of-options-the-west-needs-to-be-ready-for-vladimir-putins-next-move/news-story/5cf8a360f249add0effa56d83856d122
Out of options? The west needs to be ready for Vladimir Putin’s next move
By William
Hague
The Times
6:25AM
September 20, 2022
“Everything
is fine, and there is no need to worry at all,” the Egyptian foreign minister
said to me on the phone in February 2011. As he spoke, the TV showed a million
angry people in Cairo demanding the fall of the Mubarak regime of which he was
a member. I had called him to ask for more security for our embassy and British
nationals, but he was adamant that we could relax - “this was all anticipated”.
Two days
later, his government was overthrown. Yet his words illustrate an important
truth about autocratic governments: when in trouble they cannot admit any
setback or danger, initially to others but sometimes even to themselves. At all
costs they have to show their leader is fully in control, lest the slightest
dent in their omnipotence shatters the entire, hollow structure of power on
which they sit. They adopt a kind of institutionalised stupidity, denying
reality for as long as possible.
The Russian
version of events in Ukraine is now an extreme and risible version of this
inability to admit they are in trouble. The flagship Moskva sank under tow in
stormy seas, it was said, even though the weather was fine; the retreat from
Snake Island was a “goodwill gesture”; devastating explosions at Crimean bases
were merely numerous accidents, and the headlong recent retreat from Kharkiv
was a “regrouping”. The Kremlin will say anything rather than admit that Putin
has blundered on a vast, historical scale, with a radical underestimation of
the country he chose to bully and wished to annihilate.
-----
https://www.afr.com/world/europe/britain-s-enduring-appeal-that-shaped-our-world-20220919-p5bjc0
Britain’s enduring appeal that shaped our world
What brought
billions to watch the Queen’s funeral was the enduring qualities in British
history that should not be obscured by its sometimes controversial colonial
past.
Sep 20, 2022
– 7.35pm
The first
royal funeral at the new abbey in Westminster was Edward the Confessor’s in
early 1066. With Elizabeth II’s funeral on Monday, the British have been doing
the same thing in the same place for almost 1000 years. In 2022, billions
watched on television and heads of governments representing much of the world’s
population attended in person. What brought them was not a royal family that’s
now a sort of high-class soap opera. The real drawing power is the enduring
qualities in British history – including the British enlightenment that
Australia inherited – that should not be obscured by its sometimes
controversial colonial past.
The huge
crowds on London’s streets and the flocking of world
leaders there was a spontaneous response that no one could have just
ordained. They came to bury a British monarch with no power, except to remind
people they have more in common than not. This is crystallised political
legitimacy. It is what emperors, kings and presidents were happy to literally
share a bus with each other to be part of.
London is a
global city even without its empire. Much of the pomp on Monday – the red
coats, plumed helmets and medals – was symbolic holdovers from the relatively
recent imperial past. But
the ideas behind these trappings of power are still very much alive. It is
too much to say that Britain invented the modern world, as some historians do.
But in the Enlightenment achievements it spread around the globe – like the
rule of law, the ideal of free trade, the empirical tradition and the first
industrial revolution – and the English language that lets the world
communicate, Britain has done more than its share of shaping the world we live
in. That was the secret pull for statesmen and spectators alike on Monday.
-----
https://www.afr.com/world/asia/the-new-dynamic-of-the-no-limits-relationship-is-a-problem-for-xi-20220920-p5bjev
The new dynamic of the ‘no limits’ relationship is a problem for Xi
A
seriously weakened and embarrassed Russia is already a much less useful partner
for China. And the results of the war in Ukraine are still unfolding.
Gideon Rachman Columnist
Sep 20, 2022
– 9.18am
On February 4
this year – three weeks before Russia’s invasion of Ukraine – Vladimir Putin
met Xi Jinping in Beijing. A joint statement by the two leaders said friendship
between Russia and China “has
no limits”.
Seven months
on, Xi may be regretting those words. Speaking before a meeting of the Shanghai
Co-operation Council in Uzbekistan, Putin promised to address the “questions
and concerns” that China has about the Ukraine war.
Neither Putin
nor Xi chose to elaborate on those concerns in public. But it is not hard to
guess. The war has weakened Russia, destabilised Eurasia and strengthened the
Western alliance. None of that looks good, viewed from Beijing.
The February
4 statement made it clear that the foundation of the Russian-Chinese friendship
is shared hostility to American global leadership. A swift Russian victory in
Ukraine, coming just a few months after the chaotic US withdrawal from
Afghanistan, would have been another serious blow to US prestige and power.
That would have suited Beijing well; and might even have set the stage for a
Chinese attack on Taiwan.
-----
https://www.afr.com/world/europe/russia-s-elites-are-split-over-vladimir-putin-s-uncertain-future-20220920-p5bjia
Russia’s elites are split over Vladimir Putin’s uncertain future
For 21 years,
Putin was a highly convenient political leader for Russia’s ruling elites,
preserving the status quo. But suddenly, he’s turned into a destroyer.
Tatiana
Stanovaya
Sep 21, 2022
– 5.00am
Ukraine’s
successful counterattack means that for the first time in Russian President
Vladimir Putin’s 22 years in power, he has to deal with elites who disagree
with him – on strategic decisions over Russia’s war in Ukraine and how the war
may end.
Having
launched the war not just
without any internal discussions, but without even informing key players,
Putin has taken huge risks politically. If the war were going well, that gamble
would have paid off, but today, as Ukraine is counterattacking and Russia is
retreating, questions about Putin’s decisions are mounting.
There are
fears that Russia may lose outright. If the president fails to convince the
elites that he remains a strong leader with a clear understanding of where he
is taking the country, uncertainty may become a significant political risk to
Putin’s regime.
It’s true
that a portion of the Russian elites – the most
powerful, ambitious, and dominating players – consider the war a disaster.
But virtually everyone in the elite not only empathises with Putin’s political
motives but also shares his understanding of the situation and motives in
launching the war.
-----
https://www.afr.com/policy/foreign-affairs/putin-announces-partial-mobilisation-for-russian-citizens-20220921-p5bjyg
Putin announces partial military mobilisation in Russia
Karl Ritter
Sep 21, 2022
– 4.39pm
Kyiv |
Russian President Vladimir Putin on Wednesday announced a partial mobilisation
in Russia as the war in Ukraine reaches nearly seven months and Moscow loses
ground on the battlefield.
Mr Putin’s
address to the nation comes a day after Russian-controlled regions in eastern
and southern Ukraine
announced plans to hold votes on becoming integral parts of Russia. The
Kremlin-backed efforts to swallow up four regions could set the stage for
Moscow to escalate the war following Ukrainian successes.
Mr Putin said
he has signed a decree on the partial mobilisation, which is due to start on
Wednesday.
“We are
talking about partial mobilisation, that is, only citizens who are currently in
the reserve will be subject to conscription, and above all, those who served in
the armed forces have a certain military specialty and relevant experience,” Mr
Putin said.
The
referendums, which have been expected to take place since the first months of
the war, will start on Friday in the Luhansk, Kherson and partly Russian-controlled
Zaporizhzhia and Donetsk regions.
-----
https://www.afr.com/markets/equity-markets/wall-st-advances-as-fed-statement-awaited-20220709-p5b0c4
Wall St tumbles as Fed reaffirms higher rate path
Timothy Moore Before the
Bell editor
Sep 22, 2022
– 3.03am
All three
major benchmarks closed sharply lower, after the Federal Reserve’s updated view
and plan to tackle persistent inflation with higher interest rates for longer
than some market participants hoped.
“We are
moving our policy stance purposefully to a level that will be sufficiently
restrictive to return inflation to 2 per cent,” Powell told a press conference
in Washington.
Powell also
said a soft landing for the US economy will be “very challenging” to achieve.
·
On Wall St: Dow -1.7% S&P 500 -1.7% Nasdaq
-1.8%
·
In New York: BHP -2.8% Rio -3.4% Atlassian -1.2%
·
Tesla -2.6% Apple -2% Amazon -3%
Consumer
discretionary stocks paced all 11 of the S&P 500’s industry sectors lower
on the day. The VIX settled up 3 per cent to 27.98. The NYSE Fang + Index fell
2.6 per cent.
The Dow fell
522 points to finish below 31,200. The S&P 500 shed 66 points to 3789.93.
-----
https://www.afr.com/world/north-america/federal-reserve-lifts-key-rate-by-0-75pc-20220922-p5bk15
Federal Reserve lifts key rate by 0.75pc
Matthew Cranston
United States correspondent
Sep 22, 2022
– 4.05am
Washington |
The Federal Reserve raised interest rates by 0.75 percentage point for a third straight
time, lowered its economic forecast for the US and increased its expectations
for higher inflation and unemployment.
Fed chairman
Jerome Powell said policymakers were “strongly committed” to curbing inflation
and that there was no easy way to do this but to keep lifting rates.
The central
bank officials now forecast the official fed funds rate to reach a high of 4.6
per cent in 2023 before stepping down to 3.9 per cent in 2024. The bank does
not expect to cut rates at all next year.
“We’re
committed to getting inflation back down to 2 per cent because we think that a
failure to restore price stability would mean far greater pain later on,” he
told a press conference in Washington on Wednesday (Thursday AEST).
The target
range for the benchmark federal funds rate is now between 3 per cent and 3.25
per cent – the highest since before the 2008 financial crisis, and up from near
zero at the start of this year.
-----
https://www.afr.com/world/north-america/biden-accuses-putin-of-irresponsible-nuclear-threats-20220921-p5bk0w
Biden accuses Putin of making ‘irresponsible’ nuclear threats
Matthew Cranston
United States correspondent
Sep 22, 2022
– 7.24am
New York | US
President Biden has condemned Russia’s unprovoked invasion of Ukraine and
accused President Vladimir Putin of making “irresponsible” threats to use
nuclear weapons, while urging nations to strengthen their commitment to nuclear
non-proliferation.
Speaking at
the United Nations General Assembly overnight (AEST), Mr Biden accused Russia
of “shamelessly” violating the core tenets of United Nations membership by
invading Ukraine on February 24.
“A permanent
member of the UN Security Council invaded its neighbour, attempted to erase a
sovereign state from the map. Russia has shamelessly violated the core tenets
of the UN charter,” he said.
The speech
came just hours after Mr Putin escalated
the seven-month war by ordering a Russian mobilisation to fight in Ukraine
and made a thinly veiled threat to use nuclear weapons, in what NATO called a
reckless act of desperation in the face of a looming Russian defeat.
-----
https://www.afr.com/policy/foreign-affairs/india-s-modi-is-a-rising-geopolitical-force-20220920-p5bjg8
India’s Modi is a rising geopolitical force
The focus
in Samarkand was on Putin and Xi. But it was India’s prime minister who played
his cards most shrewdly.
John McCarthy Former
Australian ambassador
Sep 21, 2022
– 1.29pm
The gathering
of the Shanghai
Co-operation Organisation in the Uzbek city of Samarkand last week focused
heavily on the bilateral meeting between China’s Xi Jinping and Russia’s
Vladimir Putin, dominated as it is by the course of the Russia-Ukraine war and
the slower-moving crisis over Taiwan.
Unlike the
“no limits” agreement between Xi and Putin at their last meeting in February on
the eve of Russia’s invasion, there was not much advance on their relationship.
The SCO
brings together China, Russia, Iran, Kazakhstan, Kyrgyzstan, Tajikistan,
Uzbekistan, Pakistan, and India – 40 per cent of the world’s population.
And it was
India’s Prime Minister Narendra Modi who came out with his authority enhanced,
while after his reversals in Ukraine, the Russian leader was in no position to
press on Xi for anything.
-----
https://www.afr.com/world/north-america/trump-sued-by-new-york-over-fraudulent-asset-valuations-20220922-p5bk13
Trump sued by New York over ‘fraudulent’ asset valuations
Erik Larson
and Bob Van Voris
Sep 22, 2022
– 3.34am
New York |
Donald Trump and three of his children were sued for inflating the value of his
real estate company’s assets, the culmination of a years-long probe by the New
York attorney-general into the former president.
Attorney-General
Letitia James filed the suit on Wednesday (Thursday AEST) in New York state
court, naming Mr Trump, the Trump Organisation, and Donald Trump jnr, Ivanka
Trump and Eric Trump, who are senior executives at the company. Ms James is
seeking penalties including a permanent ban on the four Trumps running
companies in New York, their home state.
“Donald Trump
falsely inflated his net worth by billions of dollars to unjustly enrich
himself and to cheat the system, thereby cheating all of us,” Ms James said at
a press conference.
The suit is
the latest legal threat to Mr Trump as he weighs another run for
the presidency in 2024. He is already facing a federal criminal
investigation of his handling of classified documents that FBI agents recovered
from his Florida Mar-a-Lago home. The Justice Department also continues to
investigate his actions preceding the January 6 assault on the Capitol.
-----
https://www.smh.com.au/world/north-america/putin-s-aggression-should-make-your-blood-run-cold-biden-to-un-20220922-p5bk12.html
Putin’s aggression should make your blood run cold: Biden to UN
By Farrah Tomazin
September 22,
2022 — 2.54am
New York: US
President Joe Biden has delivered a stinging rebuke of Russia’s aggression
towards Ukraine, telling global leaders that Vladimir Putin’s actions – including his latest
threat to unleash nuclear weapons – should make the world’s “blood run
cold”.
Hours after
Putin declared a partial military mobilisation to call up as many as 300,000
reservists and hinted he was prepared to deploy “all the means at our
disposal”, Biden used a speech at the United Nations General Assembly to accuse
the Russian president of war crimes.
He also
called out China for what he said was an “unprecedented nuclear build-up
without any transparency”.
“A nuclear
war cannot be won, and must never be fought,” he told the General Assembly.
Biden also
used his UN address to clarify his position on Beijing after explicitly saying
over the weekend he would be prepared to send in US troops to defend Taiwan if
China makes an unprecedented attack.
-----
https://www.news.com.au/world/europe/sky-high-airfares-queues-at-borders-and-thousands-arrested-following-putins-partial-mobilisation/news-story/6d51dc2fcd800b5c634b70e947e7948d
Sky high airfares, queues at borders and thousands arrested following
Putin’s partial mobilisation
Panicked
Russians are fleeing for the border while airfares have jumped to ten times the
normal price after Putin’s desperate mobilisation plan.
Benedict Brook
September 22,
2022 - 10:53AM
Hundreds of
Russian protesters were arrested as protests broke out across 15 cities for the
first time since Mr Putin launched his invasion of Ukraine.
Russians are
fleeing the country after Vladimir Putin announced a partial mobilisation to
save his faltering war in Ukraine.
On the day of
Putin’s speech, it was claimed that Google’s top search term in the country was
“how to leave Russia”.
Huge queues
were seen at some border posts.
Meanwhile,
demonstrations have broken out in major cities. That’s despite any opposition
to the war being an arrestable offence.
-----
https://www.theaustralian.com.au/world/the-times/escalation-reveals-cornered-putin-is-getting-desperate/news-story/c160f98f4927334b0d0cb468b7f6d90a
Escalation reveals Vladimir Putin is getting desperate
Roger Boyes
The Times
September 22,
2022
Putin is
cornered. Squeezed between pro-war nationalists and a swelling anti-war
sentiment among Russia’s metropolitan youth, confronted by battlefield losses
in Ukraine and an increasing loss of face abroad, the Russian leader has chosen
to escalate.
He gave a
clue to his future behaviour in his ghosted autobiography 22 years ago. As a
kid in the tenements of Soviet Leningrad, he recalled, he and his gang would
chase rats with sticks. One day he chased a huge rat to the end of a corridor.
“Suddenly it lashed around and threw itself at me,” he wrote. “Now the rat was
chasing me.” The young Putin jumped over a landing and just managed to slam the
door on the nose of the pursuing rodent.
His
extraordinary speech tried to present Russia’s predicament in similar terms.
The West, he claimed, was attempting to dismember Russia (reality check: Russia
is striving to weaken and undermine western unity).
Moreover, he
claims, the West is using nuclear blackmail against Moscow (reality check:
Putin threatens Ukraine and the West with a nuclear attack). It’s a Cold
War-style inversion of reality. It is supposed to signal both a reluctance and
a readiness for a showdown.
-----
https://www.theaustralian.com.au/commentary/putin-is-already-defeated-and-shouting-at-russians-not-us/news-story/a54003a6e5f0c0c297e0dcef63a0c25c
Putin is already defeated and shouting at Russians, not us
David
Aaronovitch
The Times
September 22,
2022
Above all,
the thing to remember is that Vladimir Putin didn’t expect it to turn out like
this. By now, seven months after he gave the command to attack, eastern Ukraine
was supposed to be formally annexed to Russia following the necessary
plebiscites.
A pliant
Vichy regime in Kyiv would curse the dead-or-fled Zelensky as a fool and get on
with the business of rooting out “Nazis”. The West would fulminate and sanction
for a while but a rejuvenated Trump, rising partly on the back of Biden’s
humiliation, might say it was all Europe’s problem and promise to hold a
“best-ever” meeting with the victorious Russian president. Gas and oil would once
again flow freely westwards, passing the money going the other way.
So Putin’s
address yesterday was the address of a defeated man. As such it was one of two
speeches he could have made. The speech ungiven, of course, was the one that
began to prepare the Russian people for a Kremlin peace initiative. We can
imagine some of its rhetorical components: the blood shed, the danger of
escalation, Russia’s historic commitment to world peace, how most objectives
have been met with cast-iron guarantees of autonomy for the gallant Donbas,
yadayada.
But of course
not. Instead we got the only other possibility: the doubling down. There was
the illusion of limited victory, embodied in the promise of fake votes in the
“liberated territories”, the “whatever-it-takes” rhetoric of more soldiers and
the suggestion of incredible but unused weapons.
-----
https://www.afr.com/policy/foreign-affairs/zelensky-presents-plan-to-end-war-with-russia-20220922-p5bk80
Zelensky presents plan to end war with Russia
John Hudson
Sep 22, 2022
– 3.14pm
New York |
Ukrainian President Volodymyr Zelensky unveiled a plan to end the nearly
seven-month war between Russia and Ukraine on Wednesday (Thursday AEST) at the
annual gathering of world leaders at the UN General Assembly.
The
five-point plan urged world powers to punish Russia and surge military aid to
Kyiv in an effort to force Moscow forces out of Ukraine, which Russia invaded
on February 24.
“Russia wants
war, it’s true, but Russia will not be able to stop the course of history,” Mr
Zelensky said.
The remarks
were an implicit rebuke of non-Western and developing countries that called on
Ukraine and Russia to immediately engage in a negotiated end to the conflict.
“Russia will
be forced to end this war, the war it has started,” Mr Zelensky said. “I rule
out that the settlement can happen on a different basis.”
-----
https://www.afr.com/world/europe/three-possible-endings-for-the-war-in-ukraine-20220921-p5bjrz
Three possible endings for the war in Ukraine
Despite
Ukraine’s recent success on the battlefield, there is a certain undertow of
anxiety across Europe about how the war might come to an end.
Thomas Friedman
Contributor
Sep 22, 2022
– 8.00am
Last week was
an interesting week to be in Europe talking to national security experts,
officials and business executives about Ukraine. Ukraine and its allies had just forced Russian
invaders into a chaotic retreat from a big chunk of territory, while the
presidents of China
and India had seemed to make clear to Russian President Vladimir Putin that
the food and energy inflation his war has stoked was hurting their 2.7 billion
people.
On top of all
that, one of Russia’s
iconic pop stars told her 3.4 million followers on Instagram that the war
was “turning our country into a pariah and worsening the lives of our
citizens”.
In short, it
was Putin’s worst week since he invaded Ukraine – without wisdom, justice,
mercy or a Plan B.
And yet …
maybe I was just hanging around the wrong people, but I detected a certain
undertow of anxiety in many of my conversations with Ukraine’s European allies.
-----
https://www.afr.com/markets/debt-markets/rba-to-follow-fed-s-lead-as-australian-dollar-hit-2-year-low-20220922-p5bk1r
Powell warns of US recession
Cecile Lefort Markets
reporter
Sep 22, 2022
– 10.46am
US Federal
Reserve chairman Jerome Powell has conceded that the world’s largest economy
might be heading for a recession, but the need to defeat inflation is so urgent
that interest rates will keep going up at the expense of growth and American
jobs.
“No one knows
whether this process will lead to a recession or, if so, how significant that
recession would be,” he admitted on Wednesday (Thursday AEST) after raising the
US benchmark rate 0.75 percentage points to 3 per cent to 3.25 per cent. The
Fed upgraded its projected peak policy rate to 4.6 per cent in 2023 from 3.8
per cent.
The Fed's
hawkish move puts more pressure on the Reserve Bank to deliver a fifth outsized
0.5 percentage point interest rate increase when it meets next month. Mr
Powell's comments pushed the US dollar up against other currencies, tipping the
Australian dollar below US66¢ for the first time since May 2020.
A lower
Australian dollar increases the price of imported goods, strengthening the case
for a higher cash rate to minimise currency pain.
-----
https://www.afr.com/policy/foreign-affairs/putin-in-secret-plan-to-mobilise-one-million-men-20220923-p5bkdr
Putin in secret plan to mobilise one million men
Nataliya
Vasilyeva
Sep 23, 2022
– 9.12am
Istanbul |
Vladimir Putin has secretly approved a law that could send a further one
million men to fight in Ukraine, according to information leaked from the
Kremlin.
The target,
revealed to a Russian newspaper, is more than triple the number given under Mr
Putin’s “partial
mobilisation” plan.
The new
figure is likely to exacerbate fears of conscription among Russians – a worry
that has already sparked mass protests and queues to leave the country since
the plan was announced on Wednesday.
It comes as
some protesters detained at the anti-war rallies were threatened with
deployment to the frontlines and reports that men with no military experience
were being called up, despite the Kremlin’s assurances that would not happen.
Stories emerged from the remote region of Buryatia, a major source of soldiers
in the first wave of the invasion, that university students were being pulled
straight out of class.
-----
https://www.afr.com/world/europe/bank-of-england-rate-hike-avoids-more-aggressive-step-20220922-p5bkcs
Bank of England lifts key rate by 0.5pc in split decision
Philip
Aldrick and David Goodman
Updated Sep
23, 2022 – 2.50am, first published at Sep 22, 2022 – 9.39pm
London | The
Bank of England delivered a second consecutive half-point interest-rate
increase in its battle to bring down inflation, as three officials pushed for
the institution to join its global peers in moving at an even quicker pace.
The move to
2.25 per cent was backed by five of the nine-member Monetary Policy Committee,
including governor Andrew Bailey, while one voted for a smaller move. It was
the seventh increase in a row, with officials voting to tighten policy at every
meeting since December.
The MPC
lowered its forecast for peak inflation from more than 13 per cent to less than
11 per cent and suggested a deep recession may be averted as a result of new
Prime Minister Liz Truss’ energy relief plan.
Details of
that plan, as well as tax cuts and other measures, are due to be unveiled on
Friday, and the MPC noted that the aid will support demand, with implications
for inflation.
The committee
said it would “respond forcefully as necessary” if price pressures look more
persistent, reinforcing the view that tightening is far from done. That,
coupled with the push for a three-quarter point move from some officials, may
set the stage for a bigger increase later this year.
-----
https://www.afr.com/policy/foreign-affairs/twin-dangers-expose-global-risks-20220922-p5bk96
Twin dangers expose global risks
Australia
can feel insulated from global economic shocks, but the US Fed’s latest
interest rate rise and threats from Vladimir Putin show its perceived stability
is fragile.
Jennifer Hewett
Columnist
Sep 22, 2022
– 5.12pm
The preferred
Australian narrative is of a resilient domestic economy that can withstand
global shocks and take advantage of new opportunities far better than most.
Jim Chalmers’
announcement this week of a $50 billion improvement to the budget bottom line
last financial year reinforces this idea even though the Treasurer is keen to
emphasise the good news on the deficit is strictly temporary.
That won’t
deter all those calls for more spending in next month’s budget. But mounting
global risks should soon ensure the prospect of a gloomier outlook heading into
2023 will become “message received” by the Australian public.
These are
clearly not just economic threats.
Vladimir
Putin restating a willingness to use nuclear weapons actually sounds far more
ominous now that his seven-month-long war on Ukraine has gone so badly wrong.
This weekend’s sham referenda in four Ukrainian territories is an obvious
pretext to declare them part of the Russian motherland, supposedly justifying
the use of tactical nuclear weapons if threatened. Putin’s mobilisation of as
many as 300,000 Russian reservists to compensate for accumulating Russian
disasters on the battlefield is another sign of military desperation. But
desperate despots facing humiliating defeats are extremely dangerous.
-----
https://www.afr.com/companies/financial-services/why-powell-is-finally-using-the-r-word-20220922-p5bk2f
Why Powell is finally using the R word
Central
bankers are always loath to utter the R-word, but Federal Reserve boss Jerome
Powell is now emphatic that he will accept recession as the necessary cost of
reducing US inflation.
Karen Maley Columnist
Sep 22, 2022
– 5.18pm
It’s shown an
extreme reluctance to do so all year, but finally the US Federal Reserve
is conceding that its spate of supersized rate hikes – it has now delivered its
third consecutive 0.75 percentage point rate hike – will likely tip the US
economy into recession.
And, for the
first time, Fed boss Jerome Powell has publicly entertained the prospect that
the world’s largest economy could be headed for a recession.
“No one knows
whether this process will lead to a recession or, if so, how significant that
recession would be”, Powell responded when asked whether rising rates will
crimp economic activity.
“We certainly
haven’t given up the idea that we can have a relatively modest increase in
unemployment. Nonetheless, we need to complete this task.”
-----
https://www.afr.com/markets/equity-markets/wall-st-drops-uk-markets-collapse-in-broad-rout-20220924-p5bkna
Dow plunges anew, UK markets collapse in broad rout
Timothy Moore Before the
Bell editor
Sep 24, 2022
– 4.30am
Shares
tumbled anew in New York as fears of a recession drove key benchmarks below or
almost below their June lows, with losses trimmed in a last-minute buying
reprieve.
All 11
S&P 500 industry sectors fell, with energy down 6.8 per cent as US oil slid
below $US80 a barrel.
·
On Wall St: Dow -1.6% S&P 500 -1.7% Nasdaq
-1.8%
·
In New York: BHP -4.6% Rio -5.8% Atlassian -1.4%
·
Tesla -4.6% Apple -1.5% Amazon -3% Chevron -6.5%
The Dow slid
486 points to 29,590, its lowest close of 2022; it earlier fell more than 800
points. The VIX leapt 9.4 per cent to 29.92; it briefly topped 32. The S&P
500 settled at 3693.
ASX futures
ended down 82 points or 1.25 per cent to 6478. The S&P/ASX 200 shed 125.5
points or 1.87 per cent on Friday.
“Unsettling
market volatility is going to be here for a while as Wall Street broadly
downgrades their end of year S&P 500 targets,” Oanda’s Edward Moya said in
a note.
-----
https://www.afr.com/markets/currencies/larry-summers-warns-pound-may-tumble-ast-us1-on-naive-uk-policies-20220924-p5bknb
Larry Summers warns pound may tumble below $US1 on ‘naive’ UK policies
Christopher
Anstey
Updated Sep
24, 2022 – 6.22am, first published at 4.47am
Former
Treasury Secretary Lawrence Summers blasted the economic policies being adopted
by newly installed UK Prime Minister Liz Truss, saying they’re creating the
circumstances for the pound to sink past parity with the US dollar.
“It makes me
very sorry to say, but I think the UK is behaving a bit like an emerging market
turning itself into a submerging market,” Summers told Bloomberg Television’s
“Wall Street Week” with David Westin.
“Between
Brexit, how far the Bank of England got behind the curve and now these fiscal
policies, I think Britain will be remembered for having pursuing the worst
macroeconomic policies of any major country in a long time.”
Truss’s
government has set out the most radical package of tax cuts for the UK since
1972, reducing levies both on worker pay and companies in an effort to boost
the long-term potential of the economy. Economists are concerned the package is
unaffordable and will trigger a currency crisis over concerns about rising
debt.
-----
https://www.afr.com/world/europe/investors-flee-as-uk-bets-the-lot-on-tax-cuts-massive-borrowing-20220923-p5bkn5
Investors flee as UK bets the lot on tax cuts, massive borrowing
David
Milliken and Andy Bruce
Sep 23, 2022
– 10.36pm
London |
Britain’s new finance minister Kwasi Kwarteng unleashed historic tax cuts and
huge increases in borrowing on Friday in an economic agenda that floored
financial markets, with sterling and British government bonds in freefall.
Kwarteng
scrapped the country’s top rate of income tax, cancelled a planned rise in
corporate taxes and for the first time put a price tag on the spending plans of
Prime Minister Liz Truss, who wants to double Britain’s rate of economic
growth.
Investors
unloaded short-dated British government bonds as fast as they could, with the
cost of borrowing over 5 years seeing its biggest one-day rise since 1991, as
Britain raised its debt issuance plans for the current financial year by £72.4
billion ($121 billion). The pound slid below $US1.11 for the first time in 37
years.
Kwarteng’s
announcement marked a step change in British economic policy, harking back to
the Thatcherite and Reaganomics doctrines of the 1980s that critics have
derided as a return to “trickle down” economics.
-----
https://www.afr.com/markets/equity-markets/goldman-slashes-year-end-s-and-p-500-target-to-3600-20220924-p5bkne
Goldman slashes year-end S&P 500 target to 3600
Timothy Moore Before the
Bell editor
Sep 24, 2022
– 6.55am
Goldman
Sachs’ equity strategist David Kostin has taken a machete to his mid-August
year-end target for the S&P 500, slashing it by 16 per cent to 3600. It was
previously 4300.
“The expected
path of interest rates is now higher than we previously assumed, which tilts
the distribution of equity market outcomes below our prior forecast,” Kostin
wrote.
The S&P
500 fell 1.7 per cent o 3693; the benchmark has tumbled 10.6 per cent in the
last month.
Kostin said
the decision to revise the target came after the Federal Reserve’s revised rate
projections released earlier this week.
“The higher
interest rate scenario that we now incorporate into our valuation model
supports a price to earnings of 15 times from a prior forecast of 18 times,” he
said.
-----
https://www.afr.com/markets/equity-markets/european-stocks-benchmark-sinks-into-bear-market-20220924-p5bknc
European stocks benchmark sinks into bear market
Sagarika
Jaisinghani and Macarena Munoz
Sep 24, 2022
– 5.03am
Europe’s
Stoxx 600 Index joined US and regional peers in a bear market as fears of a
looming recession hammered demand for risk assets.
The index
sank 2.3 per cent by the close in London, to the lowest level since December
2020. Total declines from a January record high are now 21 per cent, confirming
a technical bear market.
Energy and
miners led the sell-off among sectors today as commodities slumped on reduced
demand concerns as global rate hikes weigh on economic growth. More defensive
sectors like food and healthcare outperformed, while cyclicals slumped.
The European
equity benchmark is the last major regional index to cross the bear market
threshold after the German DAX and the Euro Stoxx 50 closed in that territory
in March, and the S&P 500 followed in June amid concerns about staunchly
hawkish central banks, with this week’s outlook by the Federal Reserve adding
to fears.
-----
https://www.afr.com/politics/federal/vladimir-putin-s-nightmare-scenario-20220923-p5bker
Vladimir Putin’s nightmare scenario
The
world’s awash in pessimism as the Ukraine conflict escalates. But scenarios for
ending Putin’s aggression are also mounting.
Andrew Clark Senior writer
Updated Sep
23, 2022 – 11.53am, first published at 10.20am
History gives
Grigory Rasputin, the “mad monk” from deepest Siberia, a bad rap. He’s pictured
as a depraved schemer who inveigled his way into Russia’s corridors of power
during the final, chaotic years of Tsar Nicholas II’s reign.
But a
plain-speaking Rasputin would be an asset in Vladimir Putin’s Kremlin right
now. It’s the same Rasputin who warned the Tsar not to mobilise his forces
against Germany at the beginning of World War I because it would spell
disaster.
“It will be
the end for all of you,” Rasputin presciently told Nicholas II, according to a
biography of the leader of the subsequent Russian Revolution, Vladimir Lenin,
titled Lenin the Dictator, and written by the Hungarian-British historian and
journalist, Victor Sebestyen.
More relevant
to the escalating war
between Russia and Ukraine, the pre-World War I Russian Interior Minister Pyotr
Durnovo, who was from the far right, predicted with what Sebestyen calls
“remarkable accuracy” the onset of revolution should the Tsar declare war on
Germany.
Of course the
two situations are different. The Tsar’s army used obsolete equipment, was
badly led and no match for the German Army. Its collapse led to chaos in Russia
followed by revolution.
-----
https://www.smh.com.au/business/markets/dow-sinks-to-2022-low-as-recession-fears-roil-world-markets-20220924-p5bknp.html
Dow sinks to 2022 low as recession fears roil world markets
By Damian J.
Troise and Alex Veiga
September 24,
2022 — 8.17am
Stocks have
fallen sharply worldwide on worries an already slowing global economy could
fall into recession as central banks raise the pressure with additional
interest rate hikes.
The Dow Jones
Industrial Average fell 1.6 per cent on Friday, US time, closing at its lowest
level since late 2020. The S&P 500 fell 1.7 per cent, close to its 2022 low
set in mid-June, while the Nasdaq slid 1.8 per cent.
The selling
capped another rough week on Wall Street, leaving the major indexes with their
fifth weekly loss in six weeks.
Energy prices
closed sharply lower as traders worried about a possible recession. Treasury
yields, which affect rates on mortgages and other kinds of loans, held at
multiyear highs.
European
stocks fell just as sharply or more after preliminary data there suggested
business activity had its worst monthly contraction since the start of 2021.
Adding to the pressure was a new plan announced in London to cut taxes, which
sent UK yields soaring because it could ultimately force its central bank to
raise rates even more sharply.
-----
https://www.smh.com.au/world/europe/in-moscow-war-suddenly-went-from-near-invisible-to-urgent-and-personal-20220923-p5bke3.html
In Moscow, war suddenly went from near-invisible to urgent and personal
By Special
Correspondent in Moscow
September 23,
2022 — 11.12am
Until this
week, Russian President Vladimir Putin’s Ukraine war had been almost completely
invisible to most Muscovites.
Prominent “Z”
signs – the war’s symbol – had disappeared from awnings, shop windows and even
private cars in Russia’s capital by April. Closed-down branches of McDonald’s
and Starbucks were replaced by local lookalike clones. Restaurants, cafes and
nightclubs continued a roaring trade. After a short period of panic buying at
the beginning of the war, supermarket shelves were full – including many
sanctions-busting imported goods – and the ruble even rose to new heights.
Citywide
festivities continued as normal, and with the exception of a handful of shows
deemed “unpatriotic” by a new Duma committee, the theatres were packed too.
“Moscow is an enchanted kingdom where everything is completely, completely
normal and nothing bad is happening anywhere,” joked one prominent Moscow
theatre producer. “Definitely in no way the capital of a country fighting the
biggest war of the 21st century.”
On Wednesday
that illusion came crashing down in the wake of Vladimir Putin’s belligerent
speech announcing partial mobilisation.
-----
https://www.afr.com/politics/federal/pro-kremlin-tv-turns-on-putin-s-mobilisation-20220925-p5bkrk?post=p546m2
7.27AM 25
September 2022
Pro-Kremlin TV turns on Putin’s mobilisation
Reuters
The strongly
pro-Kremlin editor of Russia’s state-run RT news channel expressed anger on
Saturday that enlistment officers were sending call-up papers to the wrong men,
as frustration about a military mobilisation grew across Russia.
Wednesday’s
announcement of Russia’s first public mobilisation since World War II, to shore
up its faltering invasion of Ukraine, has triggered a rush for the border by
eligible men, the arrests of over 1000 protesters, and unease in the wider
population.
Now, it is
also attracting criticism from among the Kremlin’s own official supporters,
something almost unheard of in Russia since the invasion began seven months
ago.
“It has been
announced that privates can be recruited up to the age of 35. Summonses are
going to 40-year-olds,” the RT editor-in-chief, Margarita Simonyan, railed on
her Telegram channel.
“They’re
infuriating people, as if on purpose, as if out of spite. As if they’d been
sent by Kyiv.”
In another
rare public sign of turmoil at the top, the defence ministry said the deputy
minister in charge of logistics, four-star General Dmitry Bulgakov, had been
replaced “for transfer to another role”. It gave no further details.
-----
https://www.afr.com/world/asia/us-sending-dangerous-signals-on-taiwan-says-china-20220924-p5bkpb
US sending ‘dangerous signals’ on Taiwan, says China
Humeyra
Pamuk, Michael Martina and David Brunnstrom
Sep 24, 2022
– 2.30pm
New York |
China has accused the United States of sending “very wrong, dangerous signals”
on Taiwan after the US secretary of state told his Chinese counterpart on
Friday that the maintenance of peace and stability over Taiwan was vitally
important.
Taiwan was
the focus of the 90-minute, “direct and honest” talks between Secretary of
State Antony Blinken and Chinese Foreign Minister Wang Yi on the margins of the
UN General Assembly in New York, a US official told reporters.
“For our
part, the secretary made crystal clear that, in accordance with our
long-standing one-China policy, which again has not changed, the maintenance of
peace and stability across the Strait is absolutely, vitally important,” the
senior US administration official said.
China’s
foreign ministry, in a statement on the meeting, said the United States was
sending “very wrong, dangerous signals” on Taiwan, and the more rampant
Taiwan’s independence activity, the less likely there would be a peaceful
settlement.
“The Taiwan
issue is an internal Chinese matter, and the United States has no right to
interfere in what method will be used to resolve it,” the ministry cited Wang
as saying.
-----
https://www.theaustralian.com.au/news/latest-news/china-fm-calls-on-russia-ukraine-not-to-let-war-spill-over/news-story/2267e13cf726b6e2384dc504125aa05c
China, India call for negotiated way out of Ukraine war
AFP
September 25,
2022
China and
India on Saturday called at the United Nations for a negotiated end to the
Ukraine war, stopping short of robust support for traditional ally Russia.
India, unlike
China, has a warm relationship with the United States but it has historic ties
with Russia, its traditional defense supplier.
-----
https://www.afr.com/policy/economy/inflation-fight-are-central-banks-going-too-far-too-fast-20220925-p5bkrx
Inflation fight: Are central banks going too far, too fast?
Chris Giles and Valentina Romei
Sep 25, 2022
– 9.25am
London | With their bills sharpened and talons on
display, the world’s central banks fully adopted the posture of the hawk this
week. Backed by sharp rises in interest rates and currency intervention, they
have used pointed language to advertise their singular aim of defeating the
scourge of inflation.
In
one of the most sudden shifts in global economic policymaking in decades,
central bankers say they have had enough of rapid price rises and insist they
are prepared to act to restore price stability, almost at any cost.
But
after a week of dramatic announcements from central banks around the world, at
least some economists are beginning to ask — are they going too far, too fast?
The
US
Federal Reserve has been by far the most important actor in this shift of
temperament. On Wednesday, it raised its main interest rate by 0.75 percentage
points to a range between 3 and 3.25 per cent. At the start of the year, this
rate had been close to zero.
-----
I look
forward to comments on all this!
-----
David.
