December 27, 2018 Edition.
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The lunacy of the Trump Administration has exploded. He has fired Gen. Mattis, threatened to fire Jay Powell, Chair of the Fed Reserve and is pulling troops out of Syria and Afghanistan against most advice. Add to this we have had share-market plunge and then recovery and he Trump even went to see the troops in Iraq!
Brexit is on hold again till early Jan.
In Australia it really seems to be going to hell in a handbasket with the Morrison Government having wandered off the reservation and the Opposition hoping not to fluff their chances of winning. I might be speaking out of turn but I think the Government and the RBA have been spooked and are panicking about house prices – which may lead to major policy errors we will all pay for. Not good at all!!!! Saddest over the period we have seen far to many drownings - more swimming education is needed and soon!
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Major Issues.
Auction clearances still at 40pc but properties are selling after auction
Fewer than four in every 10 homes are selling at auction, even as vendors cut price expectations to meet a market slowed by tight credit rules and longer processing times for mortgage applications.
The preliminary clearance rate for capital cities fell to 43.8 per cent in the week to Saturday from the previous week's 45.3 per cent, CoreLogic figures showed.
The previous week's initial number was subsequently revised down to 41 per cent once more auction results were included and a similar pattern would likely push the more recent final figure below the 40 per cent-mark, the data provider said on Sunday.
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How a World Order Ends
And What Comes in Its Wake
A stable world order is a rare thing. When one does arise, it tends to come after a great convulsion that creates both the conditions and the desire for something new. It requires a stable distribution of power and broad acceptance of the rules that govern the conduct of international relations. It also needs skillful statecraft, since an order is made, not born. And no matter how ripe the starting conditions or strong the initial desire, maintaining it demands creative diplomacy, functioning institutions, and effective action to adjust it when circumstances change and buttress it when challenges come.
Eventually, inevitably, even the best-managed order comes to an end. The balance of power underpinning it becomes imbalanced. The institutions supporting it fail to adapt to new conditions. Some countries fall, and others rise, the result of changing capacities, faltering wills, and growing ambitions. Those responsible for upholding the order make mistakes both in what they choose to do and in what they choose not to do.
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Don't blow this - not now: Bill Shorten's message at Labor's quasi election launch
By Tony Wright
16 December 2018 — 2:13pm
It was more election campaign launch than national conference gee-up.
All the elements were there.
The signage: A Fair Go for Australia; the anxious, jangled nerves when protesters invaded the stage, causing a false start for Opposition Leader Bill Shorten; and then, Shorten’s build-up to the announcement of what he called “the biggest national housing program since the Second World War”.
Labor Leader Bill Shorten addresses the Labor National Conference in Adelaide. Shorten makes his pitch to the party as well as voters with his vision for a fairer Australia.
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Checking on lunch kebabs: Has the home loan crackdown gone too far?
By Clancy Yeates
15 December 2018 — 12:10am
When Carla Jenkins recently sought to refinance a loan over a house she bought six years ago, she faced a very different vetting process from her bank than last time around.
Jenkins, 30, bought the house near Hornsby in Sydney's upper north with a partner in late 2012, and is now looking to take on the debt on her own after a break-up in the relationship.
Her current income is the same as the joint income she and her former partner had in 2012; her credit record is clean; the amount she wants to borrow is virtually the same as in 2012; and the house itself is worth much more, after renovations and a property boom.
Yet the bank is requiring her to jump through far more hoops.
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Ipsos poll points to grim election result for Scott Morrison
Little wonder Bill Shorten looked so confident as he addressed the ALP national conference in Adelaide, selling a party "ready to serve, ready to lead, ready to deliver a fair go for Australia".
At this stage, the biggest political risk for the opposition is making its sense of certainty about the election a little too obvious.
The latest Ipsos poll commissioned by The Australian Financial Review, the last of a tumultuous year, won't bring much Christmas cheer for Scott Morrison.
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Labor affordable housing policy aims to deflect negative gearing claims: Grattan
Labor's affordable housing announcement was an attempt to deflect criticism that its negative gearing plans would push up rents for lower-income renters, Grattan Institute chief executive John Daley said.
The announcement on Sunday of a rental subsidy scheme to create 250,000 affordable dwellings over 10 years would also commit a Labor government to spending money on new housing that the private sector would provide more efficiently – without subsidy – if the government changed planning rules to boost new housing, Mr Daley said.
"It has the appearance of helping people at the bottom, whereas the reality is it helps a small group of people at the bottom in a fashion much akin to a lottery," Mr Daley said in an interview.
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All over despite the shouting at this Labor conference
As Bill Shorten was scheduled to deliver his keynote speech to launch Labor's triennial national conference, the Prime Minister decided to announce David Hurley as Australia's next vice-regal.
This was not a pre-Christmas scraping-off-of-the-barnacles exercise like last week's announcements on religious freedom, an anti-corruption body or recognising West Jerusalem as the Israeli capital
This was a relatively important announcement which happens once every five years and, despite the PM's protestations, didn't have to be made for months.
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Government staffer put on 'indefinite leave' after sending vile text message to female journalist
By Bevan Shields
16 December 2018 — 6:49pm
A government staffer has been put on "indefinite leave" after texting an expletive-laden tirade to a female journalist who recently criticised a federal MP.
News Corp journalist Annika Smethurst opened a text message from a Liberal National Party staffer last Sunday night that was littered with abuse, including the terms "feminist c--t" and "bitch". The staffer also wished the recipient's family died "of painful cancer".
The texts were sent to Smethurst after the award-winning journalist wrote a piece critical of Queensland senator Barry O'Sullivan's track record with women in politics.
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Time and again, Morrison must fix problems the Liberals created
By David Crowe
16 December 2018 — 11:45pm
It has become commonplace to observe that Scott Morrison is ending the year by removing barnacles from the Coalition in the hope of smoother sailing into the election.
What he is really doing is defusing limpet mines his own side have attached to their collective hull.
Opposition Leader Bill Shorten is facing a challenge to his $32 billion policy to scale back negative gearing, with voters split on the tax plan just as Labor cements its lead over the Coalition by 54 to 46 per cent in two-party terms.
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World's financial structure is 'unstable'
By Ambrose Evans-Pritchard
17 December 2018 — 11:00am
The pillars of the global financial system are fundamentally unstable and could lead to a frightening chain reaction in the next crisis, the world's top watchdog has warned.
Giant central counterparties (CCPs) that clear much of the $US540 trillion ($750 trillion) nexus of derivatives are themselves vulnerable to failure in times of extreme stress. This is a worry looming ever larger as rising US interest rates expose the weak links in global debt markets.
The Bank for International Settlements (BIS) said in its quarterly report that the CCPs could cause "a destabilising feedback loop, amplifying stress". The implicit message is that well-meaning regulators may have made the financial architecture more dangerous.
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Andrew Broad resigns from Morrison ministry over bombshell sex scandal allegations
By David Crowe
17 December 2018 — 11:31am
Assistant minister Andrew Broad has quit the frontbench in the wake of a sex scandal that could rock the Morrison government, amid claims he met a “sugar baby” in overseas hotels on a trip funded by taxpayers.
Mr Broad has been named in a New Idea magazine feature that says he spent time in Hong Kong with a “blonde beauty” who used the online alias “Sweet Sophia Rose” on a website to connect young women with wealthier older men.
The claims are now the subject of a referral to the Australian Federal Police.
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A Young Liberal's lament: Turnbull's taken the 'base' with him
By Hugo Robinson
17 December 2018 — 11:30am
The base is back. The ousting of the dastardly leftist Malcolm Turnbull has resulted in the single largest bump in the polls in Australian political history and the Coalition is now poised to take the 2019 general election with an 8 per cent swing towards it.
A jubilant Prime Minister Scott Morrison stands shoulder to shoulder with the freshly minted Premier of Victoria, Matthew Guy, to announce live on television that the Paris Agreement lays shredded at the bottom of the rubbish bin, stained with the tears of hippies. The words “fair dinkum” echo throughout every true blue Aussie household as schoolchildren salute the framed photos of the 35 brave men and women who voted against Malcolm Turnbull in the August leadership spill.
But this conservative fever dream has not transpired at all. Julia Banks has fled to the crossbench. Wentworth, a seat the anti-Labor side of politics has held since Federation, has been lost to an independent and the Victorian Liberals have been obliterated. The lastest Herald Ipsos poll has found a swing against the Coalition that would lead to an 18-seat wipe-out if repeated at the election.
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PM’s Israel fallback leaves Australia in an absurd situation
- 11:00PM December 16, 2018
The majority of the “wise men” expert panel created to advise the Prime Minister, Scott Morrison, rejected his fallback compromise of recognising West Jerusalem as Israel’s capital but keeping the Australian embassy in Tel Aviv.
Morrison’s retreat at the weekend confirms he should never have raised the option of moving the embassy since the cost to Australia in foreign policy, diplomatic and trade terms would have been substantial and unnecessary.
The best that can be said is that a grand folly has been avoided. Morrison needed a face-saving fallback and his departmental advisers knew this. There is, however, no national-interest justification in Morrison’s compromise as the expert panel majority recognised. The big test is yet to come: how exactly will Indonesia react?
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Shorten reveals the fix for an unfair Australia
- 11:00PM December 16, 2018
Bill Shorten’s keynote speech to the ALP national conference reveals a politically formidable agenda years in the making from a superior Labor electoral machine.
Shorten’s message to the party and public is that Labor is united, stable, determined and ready to govern. As leader he has tapped into the changing mood of Australia, its economic fears, its social hopes and its environmental concerns, all presented under the over-arching banner of fairness and attacking inequality.
Anything Shorten loses in popularity he wins back in political craft.
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Andrew Broad built himself a pedestal, then fell off it
By Bevan Shields
17 December 2018 — 5:32pm
The last time the Nationals were in crisis over a sex scandal, Andrew Broad reached for the words of American evangelist Billy Graham, who had died in North Carolina just hours earlier.
"When wealth is lost, nothing is lost; when health is lost, something is lost; when character is lost, all is lost," the Nationals MP tweeted in February. "Telling words for the leadership of the National Party."
The words were a direct hit on Barnaby Joyce as the deputy prime minister battled to save his job amid a messy affair with staffer Vikki Campion. The public rebuke was the beginning of the end for Joyce, who was gone within days.
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Super members on track for loss in 2018
- December 18, 2018
Super members are on track for their first annual loss in seven years, following two months of declines as market volatility continues to test global markets.
According to superannuation research company SuperRatings, super members invested in the median balanced option made a negative return of 0.6 per cent in November, following a 3.1 per cent decline in October.
Ongoing market weakness in December is likely to erode what’s left of the gains held in median balanced funds by the end of the calendar year, which at the moment are sitting on a return of about 1.8 per cent, SuperRatings said.
That is before investment fees, tax and implicit asset-based administration fees.
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How to keep the news coming
By Ross Gittins
19 December 2018 — 12:00am
If you thought the Australian Competition and Consumer Commission’s latest report on “digital platforms” was about the debatable ways Google and Facebook treat their users, you’re a victim of the news media’s reluctance to bother their audience with the worrying state of their own finances.
The report was really about the effect of digital disruption on what it calls “news and journalistic content”. So great has the disruption been that the day may come when most newspapers cease to exist.
That wouldn’t be quite so terrible if their companies continued to publish news on the internet. But unless they can find a way to make their digital products adequately profitable, it’s possible even this could cease.
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Housing and China top risks facing economy: Treasury and RBA
By Shane Wright
18 December 2018 — 3:28pm
A deteriorating domestic housing market and gyrations in China are growing as the biggest risks to the federal budget and the economy, putting a question mark over the election plans of Scott Morrison and Bill Shorten.
Both the Treasury and the Reserve Bank have raised their concerns on top of warnings there may be a broader economic fallout from the banking royal commission including further changes to the lending practices of major banks.
Mr Morrison and Mr Shorten will go to the election promising superior economic and budget management with both making major promises predicated on continuing growth in tax revenues.
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The Faustian bargain of nationalism
By Martin Wolf 19 Dec 2018 — 11:41 AM
The history of humanity's rise from savannah ape to masters of the planet is one of Faustian bargains. The agricultural revolution brought huge increases in population, but lowered living standards for many. What is true of productive systems is also true of ideologies.
Of none is this more true than nationalism — an engine of both development and destruction. We need to recognise and manage both aspects of its personality — the beneficent and the diabolical.
Nationalism is, above all, an extraordinarily powerful social force. As we were reminded by the commemoration of the 1918 armistice, tens of millions of people have fought and died in national armies, often willingly, since the beginning of the previous century. They died en masse for what Benedict Anderson called an "imagined community": "imagined", because the vast majority of its members are unknown to those whose national identity they share, and "community", because it recognises a primary bond of loyalty and support.
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APRA sacrifices sensible interest-only loan cap on property’s altar
- December 19, 2018
Interest-only loans have surged to a heady 18 per cent of all outstanding mortgages and are a “ticking time bomb”, forcing financial regulators to place severe curbs on lending and requiring banks to check more regularly with borrowers who may have no plans to pay down their loans.
It sounds familiar, but that’s actually the current situation in the UK, where the Financial Conduct Authority has since 2012 taken extraordinary steps to reign in loose standards in the banking sector after finding interest-only loans, which don’t require repayment of a loan’s principal amount for a period of generally five years, helped fuel a housing boom ahead of the global financial crisis.
The situation couldn’t be more different here today, with the Australian Prudential Regulation Authority appearing to have buckled to political pressure and the concerns of its sister regulator, the Reserve Bank, by scrapping its own crackdown on interest-only loans, getting rid of the restriction that interest-only loans make up at most 30 per cent of all new lending. The rule had been in place for only 18 months.
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Sydney property prices keep the Reserve Bank of Australia awake at night
By Michael Heath Updated 19 Dec 2018 — 12:55 PM, first published at 8:31 AM
Sydney's plunging house prices are usurping a prolonged wage slump as the key worry for the central bank, with markets now showing more chance of an interest-rate cut than a hike in 2019.
Prices in Australia's biggest city have tumbled 10 per cent and some economists are tipping a similar fall next year.
While the central bank isn't panicking just yet, a 15 per cent nationwide drop in prices would cut about $1 trillion from the housing stock value. That could deal a major blow to consumption, which props up about 60 per cent of the economy.
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Musk, Trump, Khashoggi, riots and war games: 5 symbols of a disturbing year
By Peter Apps
20 Dec 2018 — 9:45 AM
From the rapprochement between North and South Korea at the Winter Olympics in January to December's frantic news agenda, 2018 has had no shortage of surprises. Below are my key picks for the defining moments of the year.
1. Elon Musk, Mars, and a roller-coaster year for billionaires
On February 6, Elon Musk's Falcon Heavy rocket blasted into space from Florida and sent a cherry-red Tesla roadster hurtling towards Mars. It was a powerful statement about the influence and ambition of a new generation of tech billionaires.
Overall, however, 2018 would be a rough year for the group, and Musk was no exception. By July, he was embroiled in a high-profile spat with a British cave rescue diver over a miniature submarine he had hoped would help rescue 12 boys trapped underground in Thailand, just one of a series of increasingly negative headlines.
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Facebook 'shaky' ground for advertisers, says Initiative global CEO Mat Baxter
By Max Mason
20 Dec 2018 — 9:57 AM
Influential media buyer Mat Baxter has declared Facebook a no-go zone for advertising clients after the social media giant's latest scandal found to hand over intimate personal information of its users to third parties without permission.
An investigation by The New York Times published earlier this week showed internal documents where Facebook gave tech giants such as Microsoft, Amazon, Spotify, Yahoo and Netflix special access to users private personal data without their permission or knowledge.
An Australian based in the US, Mr Baxter, global chief executive of media buying agency Initiative, which is part of IPG Mediabrands, said it was time to take a collective stand against the egregious behaviour of Facebook.
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Leakers don't know the cold desperation of opposition, warns acting PM McCormack
By Shane Wright
20 December 2018 — 12:00am
Acting Prime Minister and Nationals leader Michael McCormack has flayed leakers within the government as selfish promoters of their own agenda who do not understand the cold desolation of opposition.
Mr McCormack told The Sydney Morning Herald and The Age there were people actively working against the interests of the government who should consider leaving politics if they continued to white-ant their fellow MPs.
In a wide-ranging discussion of the scandal surrounding Nationals member for Mallee, Andrew Broad, and the pressures facing the government, Mr McCormack said it was time for some Coalition politicians to realise the electoral damage they were causing.
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Unemployment rate edges higher as participation rate picks up
- By Alex Druce
- AAP
- December 20, 2018
Australia’s unemployment rate edged higher in November to a seasonally adjusted 5.1 per cent, despite market expectations the rate would remain unchanged. Part-time employment drove a 37,000 increase in the number of people with jobs during the month, better than a consensus expectation of 20,000 extra jobs, but Thursday’s data from the Australian Bureau of Statistics showed overall unemployment increased by 12,500 people to 683,100.
This included a 6400 drop in the number of people in full-time employment. Overall male unemployment increased 11,500 persons, and female unemployment increased 1000 persons.
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As risk spreads a global credit 'heart attack' is just months away
By Ambrose Evans-Pritchard
Updated 20 Dec 2018 — 12:52 PM, first published at 12:17 PM
London | Surging borrowing costs for companies in the US and Europe threaten recession within months and resemble events leading up to the global credit "heart attack" in August 2007.
Risk spreads on American high-yield debt have jumped 130 basis points to 446 since early October. The weakest CCC junk grades have jumped 280 points to 1,233.
Credit experts say this is the delayed fallout from months of double-barrelled monetary tightening by the US Federal Reserve. It is raising interest rates and at the same time shrinking its balance sheet by $Us50 billion ($70 billion) a month, perhaps draining more liquidity from global financial markets than intended.
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With Fed rate cut and volatile markets, we're in uncharted waters and investors unhappy
By Ambrose Evans -Pritchard
21 Dec 2018 — 11:05 AM
London | Monetary tightening by central banks is like trying to pull a brick across a rough surface with elastic: nothing happens; still nothing happens; then it leaps up and hits you in the face.
The US Federal Reserve's Jerome Powell may have a broken nose after asserting stubbornly this week that he would go on shrinking the Fed's balance sheet by $US50 billion ($70.5 billion) a month, even though the world economy is coming apart at the seams. Markets expected a rise in interest rates at Wednesday's meeting. But they did not expect the Fed's "dot plot" sketch to schedule two more rate rises in 2019.
It is the double-barrelled nature of this tightening that makes it so potent, and so unpredictable for a global financial system that has racked up $US12.8 trillion of offshore dollar debt and has never been more leveraged to US borrowing costs.
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Government's tin ear on emissions risks a repeat of Victorian Liberals disaster
20 Dec 2018 — 6:00 PM
During the final and tumultuous sitting week for 2018, senior Labor Party officials and strategists in Canberra found time for a debriefing on Daniel Andrews' rout of the Victorian Liberal opposition at the November state election.
Contrary to the public utterances from both sides at the time, the party's research and post-mortem showed federal factors played a bigger role in the result than anyone had let on.
"The feds were absolutely toxic down there," said one participant in the meeting, attributing it to the spectre that the Liberal hard right, although a minority, had engineered the ouster of Malcolm Turnbull and was now pulling the strings in the Morrison government.
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Australia blasts China for hacking Australian companies
By John Kehoe
Updated 21 Dec 2018 — 11:10 AM, first published at 7:52 AM
The Morrison government has taken the unprecedented step to publicly rebuke China for stealing commercial secrets from Australian businesses, joining foreign allies in a coordinated push back against Beijing's state-sponsored cyber attacks on entities around the world.
Australian mining companies, universities and high-tech businesses are believed to be among the thousands of global victims targeted by China's economic espionage committed through cyber attacks.
Within hours of US prosecutors charging two Chinese nationals with computer hacking attacks on a wide range of American government agencies and corporations and accusing China of trying to overtake the US as the world's superpower, Foreign Affairs Minister Marise Payne and Home Affairs Minister Peter Dutton on Friday issued a strongly-worded joint statement condemning China.
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Why a strong economy may not save Morrison
By Shane Wright
21 December 2018 — 12:00am
The headlines on the day's papers could not be any worse for a government seeking re-election. A million people out of work. A double digit jobless rate, the worst in a decade. It was March 12, 1993.
The next day, Australians would go to the polls – and deliver Paul Keating a stunning victory that some pundits at the time opined would set up the former treasurer for two further terms in office. Liberal strategists believed the horrendous economic news that led TV and radio bulletins on top of the wall-to-wall coverage across newspapers would kill Keating and the then 10-year-old Labor government.
Fourteen years later, and just weeks out from the 2007 election, the Howard government was sitting on a beautiful set of economic numbers. The economy was growing at a robust 4.3 per cent. The jobless rate was the same level while the number of people actually out of work was at its lowest since the early 1980s.
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Australia set to dramatically overshoot Paris emissions target
- December 21, 2018
Australia is on track to dramatically overshoot its 2030 Paris carbon emissions target, despite Scott Morrison’s claims the nation would meet its commitment “in a canter”.
The latest carbon emissions projections, released by Environment Minister Melissa Price today, predict Australia will reduce its carbon emissions by just 7 per cent on 2005 levels by 2030, well under the promised 26 per cent.
The figure show Australia is projected to emit 563 megatonnes (Mt) of carbon dioxide in 2030, with transport and agriculture emissions all continuing to rise.
A 26 per cent reduction in 2005 carbon emissions by 2030 would require 448 Mt of emissions or less.
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We’re running on borrowed time
- 12:00AM December 22, 2018
A battered, bruised, tottering Australian exceptionalism is still alive: after 27 years without recession, a budget on the edge of surplus, unemployment down to 5.1 per cent and a dysfunctional politics without the crisis of America, Britain or France, the Australian story still radiates hope amid the deepening gloom.
But the warning lights for Australia are flashing everywhere: its public policy failures are symbolised by the energy policy fiasco, wage increases are weak, housing values are falling, household debt is at record levels, business and finance are discredited, the culture is fractured, institutions are damaged, trust is broken and disillusionment with mainstream politics is rife.
The public disposition constitutes a blend of complacency, indifference and retreat to the personal and family domain. There is a feeling that the nation must do better, but no agreement on how to achieve this goal. The age of disruption and fragmentation is taking its toll on Australia with the disintegration of shared values and agreed pathways to the future.
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The year capitalism started losing people: why profit is not enough
- 12:00AM December 22, 2018
This time last year I wrote a column headed “The four great bubbles of 2017”, to end the year.
It told the stories of four booms/bubbles: the Chinese consumer boom, cryptocurrencies, artificial intelligence and lithium through the three top-performing stocks on the ASX that year (Bubs Australia, My Fiziq and AVZ Minerals) plus ethereum, at that time the second-biggest cryptocurrency after bitcoin.
Their gains in 2017 were all in the thousands of per cent — 10-baggers one and all — and they truly embodied the spirit of the year. The MSCI global index returned an exceptional 20 per cent, led by the US techs and, while the ASX 200 managed just 7 per cent capital growth, held back by the banks, the Small Ordinaries returned 16 per cent and the mid-caps even more, 18 per cent.
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Wall Street’s rally looks like it’s ending following another day of big losses on US markets
- AP
- December 22, 2018
After almost 10 years, Wall Street’s rally looks like it’s ending.
Another day of big losses on Friday US time left the US market with its worst week in more than seven years. All of the major indexes have lost 16 to 26 per cent from their highs this during the northern summer and autumn. Barring huge gains during the upcoming holiday period, this will be the worst December for stocks since 1931. There hasn’t been one major shock that has sent stocks plunging.
After a sharp early gain on Friday, the S&P 500 index retreated 50.80 points, or 2.1 per cent, to 2,416.62. The S&P 500, the benchmark for many index funds, has fallen 17.5 per cent from its high in September.
The Dow Jones Industrial Average sank 414.23 points, or 1.8 per cent, to 22,445.37. The Nasdaq skidded 195.41 points, or 3 per cent, to 6,332.99. The Russell 2000 index of smaller-company stocks lost 33.92 points, or 2.6 per cent, 1,292.09.
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The 5G revolution has only just begun
12:00AM December 22, 2018
It’s the favourite buzzword of the telco industry and consumers can expect to hear a lot more about 5G in 2019.
And it’s not just the telco operators who are excited.
The next evolution of mobile technology is a big deal for equipment-makers like Ericsson, Nokia and Cisco, chipmakers like Qualcomm, and smartphone makers.
Apart from mobile operators looking to use 5G to give their networks a serious capacity boost, the technology is a godsend for equipment makers looking to revive their stagnating businesses by selling 5G equipment and software.
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Renewables to be cheaper than coal even without climate policy, CSIRO says
By Cole Latimer
21 December 2018 — 1:30pm
The CSIRO and the energy market operator say existing coal plants are still one of the lowest cost forms of power but new wind and solar farms will soon be cheaper, even without a carbon price.
The join energy cost report co-authored by CSIRO and the Australian Energy Market Operator also found more batteries would be needed to support the growing level of renewables, and the grid would need to lean heavily on consumers to use less power at peak times.
“Our data confirms that while existing fossil fuel power plants are competitive due to their sunk capital costs, solar and wind generation technologies are currently the lowest-cost ways to generate electricity for Australia, compared to any other new-build technology," CSIRO chief energy economist Paul Graham said.
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Big pile-on: Scott Morrison has nowhere to go on energy policy
By Ben Potter
Updated 22 Dec 2018 — 10:26 AM, first published at 21 Dec 2018 — 11:45 PM
The Morrison government's woes this week haven't revolved entirely around Asian sex tourism. Far from it.
If Prime Minister Scott Morrison and Energy Minister Angus Taylor harboured any doubts that their "big stick" energy policies were friendless in important places at the start of the week, they would have been swept away by a quadruple pile-on led by their NSW Coalition government colleagues and rammed home by Kerry Schott's Energy Security Board.
NSW Energy Minister Don Harwin, Dr Schott, the ESB, Australian Energy Market Commission and EnergyAustralia chairman Graham Bradley assailed the Morrison government's big stick policies – abandoning emissions goals for electricity, default-reference pricing for household bills, tough new penalties such as huge fines and divestment, and government underwriting of new generation.
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Unlikely as it once seemed, Shorten on cusp of becoming PM
12:00AM December 22, 2018
Whatever you think of Labor’s plans for government, there is no denying the opposition’s willingness to present a large target. It has spelled out detailed policies and has gone ahead with its national conference on the eve of an election campaign.
Liberals, those who think beyond the end of their nose, worry that Labor’s policy approach taps into the political zeitgeist, with scripts advocating higher taxes, but with the goal of more spending — an issue voters care about — and reintroducing more rigidity in the industrial relations space at a time voters are more concerned about their workplace rights than union power.
Many readers won’t ascribe to such an approach to government, but the problem is that a growing cohort of the voting public does, especially younger Australians who haven’t experienced the dividends of liberal economic reforms and the importance of fiscally sustainable policies when hard economic times hit.
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Financial Services Royal Commission Issues.
New Zealand capital demand could lead to major bank asset sales: Macquarie
The Reserve Bank of New Zealand's surprise call for the major banks to significantly lift capital levels there could result in them cutting back the supply of credit to the NZ economy and potentially the sell down of NZ operations, said Macquarie banking analyst Victor German, describing the proposals as a new, material risk for the sector by "bringing back uncertainty around banks' capital positions".
After the Reserve Bank of New Zealand said on Friday that it wanted to increase its current tier 1 minimum capital ratio from 8.5 per cent to 16 per cent, which sent bank stocks sharply lower, Mr German told Macquarie clients over the weekend each of the major banks may need to deploy an additional $3.5 billion to $5.8 billion into their NZ operations over the next five years, or a total of about $18 billion.
Flagging a potential strain in the relationship between the Australian Prudential Regulation Authority and RBNZ, also the prudential regulator of banks in New Zealand, Mr German said banks may be able to use some of their Australian capital to fund the new capital requirement across the Tasman but "we would be surprised if APRA was comfortable with around $18 billion of capital leaving the system".
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ACCC wins watchdog of the year, as others lick their wounds
By Ross Gittins
17 December 2018 — 12:01am
It’s been an infamous year for Australia’s economic regulators. Most ended it with their lack of vigilance exposed, their reputations battered and their ears stinging from judicial rebuke.
The biggest loser is the Australian Securities and Investments Commission, followed by the Australian Prudential Regulation Authority. But the mismanagement of the national electricity market became more apparent. And neither the Reserve Bank nor Treasury emerged unscathed.
Just one regulator had a good year, the Australian Competition and Consumer Commission. It worked hard, discharging its duties with vigour and initiative, taking on powerful business interests, seeking and being granted hugely increased maximum penalties, and fighting to make up for the negligence of its fellow regulators.
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Coalition's biggest enemy is within as sex scandal hits budget sell for six
By Jennifer Hewett 17 Dec 2018 — 10:00 PM
Deep breaths everyone, please. Josh Frydenberg and Mathias Cormann were determined not to let publicity over yet another National Party sex scandal spoil their big day out selling the new budget bottom line. But it's another awkard example of the government's badly timed exposure to political alchemy in reverse.
Rather than converting base metals into electoral treasure, even the largest gold nuggets become tarnished by the poisonous atmospherics and mad, bad behaviour emanating from the centre of Australian politics. So, naturally, talk of "sugar babes" in Hong Kong instantly overwhelmed talk of budget surpluses in Canberra. Financial alchemy simply can't compete.
Who could have predicted the New Idea magazine on the overseas escapades of Nationals MP Andrew Broad would instantly become required Christmas reading?
Deputy Prime Minister Michael McCormack says he has accepted the assistant minister's resignation and wants to make sure his ministers "are always doing the right thing".
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Corporate watchdog vows to seek harsher penalties for stockbrokers
By Paulina Duran
20 December 2018 — 9:58am
Australia's corporate regulator says it will seek harsher punishment, including possible criminal sanctions, for stockbroking houses that benefit unlawfully from IPOs or other capital raisings.
In a report published on Thursday, the Australian Securities and Investments Commission said a study it conducted found too many mid-sized stockbrokers were allocating new shares to employees despite conflicts of interests from the moves.
"Where personal interests take precedence over client interests this may reduce the allocation available for clients and result in poor advice or outcomes for clients," the report said.
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ASIC loses super advice test case against Westpac
By Clancy Yeates
21 December 2018 — 6:00pm
The corporate regulator has lost a key argument in a crucial test case over how banks can provide general financial advice to clients, after it accused Westpac of breaching financial advice laws.
However, Federal Court judge Jacqueline Gleeson did find Westpac breached part of the Corporations Act by failing to do all things necessary to ensure it provided financial services "efficiently, honestly, and fairly".
In a case that was being closely watched in the advice industry, the Australian Securities and Investments Commission (ASIC) in 2016 accused Westpac-owned BT funds management of breaching financial services laws through a sales campaign that resulted in almost $650 million in superannuation money being rolled over with BT.
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National Budget Issues.
MYEFO 2018: Coalition $9.2b election war chest
A revenue surge from strong corporate profits and employment growth have the federal government's budget on track to be $15 billion better off than previously forecast over the next four years, arming the government with a pre-election spending war chest.
The government's mid-year economic and fiscal outlook (MYEFO) published on Monday reveals the government has locked in $9.2 billion of secret spending and/or tax cuts due to be announced between now and next year's election campaign.
The Morrison government is forecasting an underlying cash deficit of $5.2 billion this financial year, well below the $14.5 billion deficit forecast in the May budget and the smallest since before the financial crisis hit in 2008.
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Budget improves leaving Coalition with billion-dollar election war chest
By Shane Wright
17 December 2018 — 9:56am
The Morrison government has unveiled the best budget numbers in a decade, paving the way for a $10 billion pre-election tax and spending spree.
The mid-year budget update, released by Treasurer Josh Frydenberg on Monday, shows the budget deficit falling to $5.2 billion this year before showing a $4.1 billion surplus in 2019-20.
But it also shows a slowdown in the economy with workers likely to endure even more wages pain with no sign of a sharp lift in pay rates.
Mr Frydenberg said this year's deficit, a $9.3 billion improvement on what was predicted in May, was a combination of tight control of spending as well as better revenues.
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Timing is everything in a budget update that gives Scott Morrison a fighting election chance
By David Crowe
17 December 2018 — 9:46am
Timing is everything in a budget plan that reveals a $9.3 billion gain this year but reserves firepower for the coming election.
Treasurer Josh Frydenberg has significant room for an upside surprise next year, in a bid to prove to jaded voters that a budget surplus is on the way.
He has also squirrelled away $8.9 billion in revenue decisions – most likely tax cuts – and another $1.4 billion in spending measures that are being kept secret for the campaign ahead.
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The truth behind the Coalition's mid-year budget update
By Ross Gittins
17 December 2018 — 1:13pm
Wow. Under Scott Morrison’s inspired leadership, the budget is almost back to surplus and the economy is ticking over nicely. And having brought home the bacon, Santa ScoMo can deliver our reward, scattering little presents from now until the election.
It’s a lovely thought, but the truth is less heroic. An old saying would assess the position outlined in the midyear budget review as: good things come to those who wait. Or, franker: better late than never.
To be boasting about how much better the budget balance is looking is a bit rich, coming from a government that, five long years ago, talked its way into government by claiming we faced a "budget emergency" of debt and deficit that only the Liberals could fix because they had good economic management in their DNA.
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APRA removes interest-only lending cap, says it's served its purpose
By James Eyers Updated 19 Dec 2018 — 10:19 AM, first published at 10:08 AM
The Australian Prudential Regulation Authority has removed the 30 per cent limit on interest-only lending and 10 per cent investor growth cap, declaring they have "served their purpose".
With housing prices coming off sharply in Sydney and Melbourne over recent months, APRA chairman Wayne Byres said on Wednesday the lending benchmarks "were always intended to be temporary".
He said that "both have now served their purpose of moderating higher risk lending and supporting a gradual strengthening of lending standards across the industry over a number of years".
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Leave the surplus champagne on ice for the moment
- 12:00AM December 18, 2018
In two years, for the first time since the global financial crisis of 2008, the federal government’s receipts may exceed its outlays by a margin of 0.8 per cent.
That’s assuming China’s economy continues to power ahead, the trade war with the US fizzles out, wage growth accelerates to 3 per cent and the economy shrugs off sharp falls in house prices in its two biggest cities.
Put like that, the fanfare surrounding the prospect of a $4.1 billion surplus in 2020, announced in yesterday’s mid-year budget update, is a little odd. This would be a rounding error for a government expecting to collect $506bn in that year, and would follow a string of deficits that have seen the commonwealth’s net debt almost double to about $350bn since the Coalition won office in 2013.
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Banks must keep lending: Josh Frydenberg
By John Kehoe
21 Dec 2018 — 11:00 PM
Federal Treasurer Josh Frydenberg has delivered a festive-season public message to banks to ensure healthy lending flows to households and small business, in order to avoid a royal commission-induced credit squeeze that could crimp the economy.
Small business annual credit growth slowed to below 3 per cent in the September quarter, half of the 6 per cent expansion in early 2016 and well below the 20-year average of 8 per cent, based on figures on loans below $2 million compiled by the Reserve Bank of Australia.
Some banks have become more circumspect about lending, though some small business operators have also reduced demand for loans because of the falling value of their personal homes. Typically, small business owners use their home as collateral for secured lending from banks.
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Oliver's twist: The economist breaking from the pack on next rate move
By Elizabeth Knight
22 December 2018 — 12:00am
Ask a hundred experts about their expectations for where the market will be in 2019 and you will get as many different opinions. But poll 38 economists on the direction of the next interest rate move and 35 will say the Reserve Bank will put them up.
It’s easy to see why. The RBA has been saying just that after each monthly rate meeting - albeit with differing levels of conviction.
Thus the pack of economists can take some comfort.
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Health Issues.
More aged care funding in budget update to help those who want to stay in their own homes
By David Crowe
16 December 2018 — 7:14pm
Older Australians will gain from a federal spending boost on aged care support and in-home help, as the Morrison government commits more than half-a-billion dollars to the services in its latest budget update.
The measures include 10,000 new home care packages offering services like clinical care, nursing and mobility help, nutrition, hydration and meal preparation for those who can stay in their homes rather than move to an aged care facility.
The packages will be available in early 2019 and fund services worth up to $50,000 per person.
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MYEFO to boost aged funding by $552m
The Morrison government will chase the grey vote in Monday's mid-year budget update by promising more than half a billion dollars to create another 10,000 in-home aged care places and other cost-of-living support for the elderly.
Prime Minister Scott Morrison will badge the $552 million in extra assistance as a virtue of strong economic management as his government hands down an economic update that will show a dramatic lessening of the budget deficit for this year and a surplus next financial year.
The 10,000 extra places are in addition to the 14,000 in-home places that were funded in the May budget by reallocating $1.6 billion that was unspent on nursing home care.
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Dementia studies get $185m in funding
Researchers in Queensland testing the use of ultrasound technology to treat Alzheimer's disease are the first to receive new dementia-focused funding.
Australian Associated Press December 18, 201811:00am
Australian research aimed at improving the diagnosis, treatment and prevention of dementia will receive $185 million from the federal government over the next decade.
A Queensland study investigating using ultrasound technology to treat Alzheimer's disease will get $10 million, Health Minister Greg Hunt said on Tuesday.
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Billions set aside for health in budget update
- 12:00AM December 18, 2018
Health looms as a key election priority for the Morrison government, with billions of dollars set aside in the budget update that also provides targeted support for older Australians and those living in regional and remote areas.
The government has softened its stance on after-hours GP services and delayed other contentious decisions, but has yet to respond to a broader Medicare review.
Having pre-empted the MYEFO with the announcement of a $1.25 billion Community Health and Hospitals Program last week, the government has used the update to also promise $1.4bn for new listings on the Pharmaceutical Benefits Scheme. The PBS commitment comes after the government set aside $1bn in the budget for future listings.
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'Revolutionary' cancer drug using genetically modified cells approved
By Esther Han
19 December 2018 — 12:00am
A revolutionary cancer therapy that supercharges a patient's immune cells to hunt and destroy cancer cells has been approved for use in Australia, ushering in a new era in medicine.
Desperate patients with aggressive blood cancers who have not responded to conventional treatments have been heading overseas to receive a shot of the "custom-made" drug and experiencing "miraculous" results.
In a last-ditch attempt, Daniel Clarke, 45, and his family dropped everything and travelled to Boston so that he could undergo CAR-T therapy for diffuse large B cell lymphoma (DLBCL). One month later, scans showed the cancer was gone.
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Private health insurance premiums to rise 3.25pc in April
Updated 19 Dec 2018 — 5:37 PM, first published at 11:16 AM
Private health insurers are hopeful more Australians will take up cover and existing members will stop downgrading policies after the government said premiums would rise by an average 3.25 per cent next year – the lowest annual increase in 18 years.
Despite private health insurers paying for $20.5 billion of medical care in the past year, up 3.4 per cent on the prior year, insurers are under pressure due to customers turning their backs on the sector.
In a November review, the Australian Competition and Consumer Commission found more Australians are downgrading or dumping their private health insurance because of rising premiums. More than 13 million consumers have been lowering policies or scrapping them all together in the face of rising premiums and more out-of-pocket costs. The government invests about $6.4 billion annually in the private health insurance rebate, which subsidises the cost of cover.
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$400m NDIS support for ‘second tier’ disabled
- 12:00AM December 20, 2018
Almost $400 million will be handed out to non-government organisations over three years to help disabled Australians not eligible for the National Disability Insurance Scheme.
Social Services Minister Paul Fletcher will announce the $398m in so-called information, linkages and capacity building (ILC) grants today, fulfilling an obligation under the design of the NDIS to support people who do not qualify for top-tier funding with community services.
The Productivity Commission estimates there are about 4.3 million people in this category, compared with the 475,000 eligible for the uncapped NDIS which gives money directly to people to spend on the help they need.
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Slight increase in GP bulk billing rate
The Australian GP bulk billing rate has increased by 0.2 per cent for the September quarter, according to federal government figures.
Australian Associated Press December 21, 20189:05am
More Australians are visiting their doctor for free, according to Australian government statistics, which show a slight increase in the country's GP bulk billing rate.
The GP bulk billing rate rose by 0.2 per cent for the September quarter, bringing the overall rate to 86.1 per cent, health minister Greg Hunt said on Friday.
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International Issues.
Malaysian government slams Australia's West Jerusalem decision
By James Massola & Karuni Rompies
16 December 2018 — 3:47pm
Jakarta: Malaysia has lashed Australia's decision to recognise West Jerusalem as the capital of Israel, describing it as a "humiliation" of the Palestinians and their quest for a homeland.
In a statement released by the Malaysian ministry of foreign affairs on Sunday, the south-east Asian government also said Australia's decision was premature.
The strongly worded statement from Malaysia contrasts sharply with the muted initial response from Indonesia, and underscores the fact that Canberra's decision has put Australia's allies, trade partners and neighbours offside.
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New Brexit referendum gains traction as way to end gridlock
By Robert Hutton Updated 16 Dec 2018 — 6:25 PM, first published at 6:12 PM
London |In the corridors of the UK Parliament, an idea that four months ago seemed laughable is now being seriously discussed. Is another referendum a way out of the Brexit deadlock?
Speaking privately, some ministers raise it unprompted. At a press conference on Tuesday, leaders of the smaller opposition parties urged the government to consider it as a contingency worth preparing for.
Most significantly, Prime Minister Theresa May has floated it as a possible outcome. She still says she opposes the idea and that it would reduce trust in the political process - but it's still a shift for her to even mention it.
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Why Winston Churchill is still an antidote to today's idiocies
By Bret Stephens16 Dec 2018 — 11:45 PM
Earlier this year, retired astronaut Scott Kelly posted a harmless tweet quoting Winston Churchill's famous line, "In victory, magnanimity." Left-wing Twitter went berserk, and Kelly felt obliged to grovel.
"Did not mean to offend by quoting Churchill," he wrote. "My apologies. I will go and educate myself further on his atrocities, racist views which I do not support."
We live in a time in which decent and otherwise sensible people are surrendering too easily to the hectoring of morons or extremists. Think of Prime Minister Theresa May of Britain and the hard-core Brexiteers. Or of what used to be called the Republican establishment and Donald Trump.
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Jokowi may now throw the Australian trade deal under a bus
By Ross Taylor16 Dec 2018 — 11:45 PM
The Morrison government's decision to formally recognise West Jerusalem as the capital of Israel is a case of trying to produce the least harmful outcome from an ill-timed and poorly handled issue.
Given that both Morrison and Indonesia's President Joko "Jokowi" Widodo will face robust national elections during the first half of 2019 – and whose respective hard-line conservative factions are already pushing their respective leaders to show strength on the issue of Jerusalem – it was folly for Australia's Prime Minister to even raise the issue at this time. It was always going to "wedge" both leaders, with no satisfactory outcome.
The risk that our Prime Minister faces now of course is that the Palestinian supporters in the Middle East and Australia will be outraged by Australia's decision, whilst Israel will hardly applaud the recognition of East Jerusalem as a future capital of Palestine. Meanwhile in Indonesia, the ultra-conservatives – lead by the radical Islamic Defenders Front (FDI) – will demand that recognition of Israeli sovereignty over any part of Jerusalem be totally unacceptable to the government of Indonesia. The message from Morrison is also likely to be quite confused or misunderstood by most people in the Muslim world seeing "West Jerusalem" as simply "Jerusalem".
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Hero or villain? Robert Mueller is Washington's invisible man
By Roxanne Roberts
17 December 2018 — 4:41am
Washington: Mueller. Mueller. Mueller. Mueller. Mueller. Mueller. Everywhere, at any hour, it's Mueller time.
Special Counsel Robert Swan Mueller III is the second-most famous man in Washington. Time magazine just ranked him No. 3 on their Person of the Year list – after crusading journalists and US President Donald Trump.
It is impossible to spend a day in Washington without hearing or reading Mueller's name. He will go down in history, for better or worse, as one of the pivotal figures of the Trump era.
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Liberals make a risky bet on a Donald Trump recession
By Edward Luce Updated 17 Dec 2018 — 9:56 AM, first published at 9:50 AM
Nobody deserves an economic downturn more than US President Donald Trump. But forecasts of America's looming recession are at the very least premature.
That widely held expectation is driven partly by hope. It has become an article of faith among Mr Trump's opponents that his 2020 campaign will coincide with a collapse of US growth. That would doom his re-election chances. It would also deliver a richly earned finale to the most fiscally irresponsible presidency since that of George W Bush.
There would be poetic justice in such an outcome. But Mr Trump's opponents are bad at differentiating between what "is" and what "ought to be". Depending on what you want to see, the numbers could point either way.
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America, China and the art of confrontation
By Gideon Rachman18 Dec 2018 — 9:56 AM
Tell me how this ends? was the despairing question attributed to American generals as they contemplated the quagmires in Vietnam and Iraq. The same question needs to be asked by US policymakers now, as they consider the escalating tensions between America and China.
The world's two most powerful countries are locked into confrontations on a range of issues, including trade, technology, espionage and control of the South China Sea. Broadly speaking, there are two ways of interpreting these clashes. The first is that Donald Trump's administration is determined to reset the US-China relationship. The second is that the US has now embarked on an effort to block China's rise.
The first approach focuses on objectionable Chinese behaviour; the second objects to the very idea of China as a rival superpower.
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Federal Reserve rate decision could spark a market tantrum
By Stephen Bartholomeusz
18 December 2018 — 12:15am
As has been the case for much of this year, when the US Federal Reserve's decision on interest rates is announced this week, the greater significance will be in what its members say rather than what they do.
The markets are expecting the Federal Open Market Committee, when it announces its decision (Thursday our time), to raise the federal funds rate by 25 basis points.
That would be the fourth such increase this year and the ninth since the Fed began this cycle of raising rates in December 2015. The futures market is pricing in an 80 per cent or so probability of an increase.
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US teens dump drugs and turn to electronic cigarettes
- AP
- 12:00AM December 18, 2018
Twice as many US high school students used electronic cigarettes this year compared with last year, an unprecedented jump in an annual survey of teen smoking, drinking and drug use.
It was the largest single-year increase in the survey’s 44-year history, far surpassing a mid-1970s surge in marijuana smoking.
The findings, released yesterday, echo those of a US government survey earlier this year. That survey also found a dramatic rise in vaping among children and prompted federal regulators to press for measures that make it harder for kids to get them.
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Clouds grow over German economy after stocks hit bear market
Updated 19 Dec 2018 — 4:30 AM, first published at 4:29 AM
Berlin | Worries are growing about the strength of the German economy, Europe's largest, after a key indicator suggested fears about trade wars and Brexit are hitting business activity and after the country's main stocks index slid into a bear market.
The Ifo Institute said its business confidence index dropped to 101 points for December from 102 points in November as managers' view of both their current circumstances and their prospects for the next six months fell. That's the fourth drop in a row and the lowest reading in 27 months.
Uncertainty over the economy is growing just as the European Central Bank last week confirmed it will end its €2.6 billion stimulus program conducted through bond purchases. The ECB says the economy is strong enough to halt the stimulus, but is keeping other support measures such as record low interest rates in place. The ECB has indicated rates will not rise before fall 2019, and has indicated it could delay any first hikes in case of unexpected economic trouble.
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UK steels itself for 'no-deal' Brexit
19 December 2018 — 7:04am
London: Britain's government ramped up preparations on Tuesday for the possibility that the country could leave the European Union in 101 days without a divorce deal - putting soldiers on standby and warning thousands of businesses and millions of households to get ready for the worst.
With the country's departure set for March 29, it remains unclear whether British lawmakers will approve the divorce agreement that Prime Minister Theresa May's Conservative government has negotiated with the EU.
The alternative, a "no-deal" Brexit, risks plunging the British economy into recession and touching off chaos at the borders.
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Fed's Jerome Powell denies Trump and investors their easy money
By Jacob Greber
Updated 20 Dec 2018 — 8:50 AM, first published at 7:58 AM
Washington | He might be the loudest, but Donald Trump isn't the only tantrum-prone Fed watcher. Investors seem to be suffering the same malaise.
The immediate reaction to the latest US Federal Reserve rate increase - the ninth since late 2015 - appears to have been consternation that chairman Jerome Powell hasn't given them what they want: an immediate halt to further increases.
This is not new ground for the Fed. It's sticking to its guns: rates can continue to go higher because the economy is fundamentally "very healthy", Powell said.
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Russia's influence campaigns may be more sophisticated than we thought
By Chris Zappone
19 December 2018 — 11:42am
Russian political interference campaigns may work differently than we have previously understood, with new research suggesting they may be both more advanced and more targeted.
Social media influence campaigns, which have been successful in swaying political opinion particularly in the United States, appear to be zeroing in on topics that create a specific political response in their target populations, rather than simply stirring divisions between communities.
The aim, according to lawyer and researcher John Fuisz, is to shift the outcomes of political races for or against an incumbent.
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US markets got what they expected from the Fed but still aren't happy
By Stephen Bartholomeusz
20 December 2018 — 11:21am
Sometimes you have to be careful what you wish for. The markets got what they were expecting from the US Federal Reserve board on Wednesday but were still bitterly disappointed.
In the lead-up to the meeting of the Fed’s Open Market Committee, markets had priced in a 25 basis point rate rise in the federal funds rate (to a range of 2.25 to 2.5 per cent) and a signal from the committee that there would be two more rate increases next year rather than the three it had previously pointed to.
That’s exactly what the Fed delivered, the fourth 25 basis point increase this year and the ninth in the cycle of hiking that started in December 2015.
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US Federal Reserve interest rate increase sets a new precedent
- 6:57AM December 20, 2018
The US Federal Reserve’s decision to increase rates by 0.25 per cent was one of the most difficult decisions ever made by an American central bank.
And when combined with this week’s APRA backdown in Australia, we can see that the rules that govern central bankers and Australian banking regulators are changing, probably irreversibly.
As I describe below, on the share and bond markets there was initial hesitation. But then shares fell sharply and bonds rose sending yields lower. If those market trends continue into 2019 then the Federal Reserve’s prediction of two rate 2019 increases is simply most unlikely to happen. If the Fed were to ignore the market, it would bring on a US recession.
And watch out Australia.The world’s fear of Chinese and global slowdowns is trashing our dollar. Currency traders will be pondering whether to raid our currency.
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US Defence Secretary Jim Mattis resigns over Donald Trump's shock Syria withdrawal
By Jacob Greber
Updated 21 Dec 2018 — 12:06 PM, first published at 9:36 AM
Washington | In another blow to Donald Trump's besieged administration, US Defence Secretary Jim Mattis resigned in protest over the president's controversial decision to withdraw troops from Syria and his contempt for America's closest allies.
Described as the last "adult" in Mr Trump's cabinet where he was seen as a stabilising force in an administration suffering rates of top-level staff turnover, General Mattis released a withering resignation letter that failed say anything positive about the president.
Setting a new standard for a Trump White House exit backhander, the retired Marine Corps general said the president had a right to a secretary of defence whose views were "better aligned with yours".
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Twitter plunges as Citron says site is 'uninvestable'
By Selina Wang
Updated 21 Dec 2018 — 5:53 AM, first published at 5:50 AM
New York | Twitter shares plummeted after Citron Research said a report by Amnesty International documenting the abuse of women on the platform shouldn't be ignored by investors.
"Twitter has become the Harvey Weinstein of social media," Citron said in its report, setting a new price target of $US20. "Advertisers will soon be forced to take a hard look at all sponsorships with Twitter."
The shares fell as much as 13 per cent to $US28.51, the most since July. The broader markets also fell amid concerns of a government shutdown. At 1.33pm in New York the stock was 12.2 per cent lower.
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Trump's presidency is so much worse than I thought
By Charles M. Blow
20 December 2018 — 3:33pm
I will be going on leave soon - today is my last column for a while because of the holiday schedule - to write what I believe to be the most important thing that I've ever written. No, it's not about US President Donald Trump, just in case you were wondering.
But since I have written almost exclusively about Trump for more than two years, please allow me this parting assessment: it is so much worse than I thought.
My original objections to Trump, the things that pushed me into the Resistance, were his immorality, dishonesty, fraudulence and graft. I freely admit now that I was seeing only the pointy edge of an enormous machine. I had no idea how immoral Trump actually is.
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The five biggest corporate PR disasters of 2018
By Kara Alaimo
21 December 2018 — 1:04pm
Major companies made plenty of public-relations blunders in 2018, including Lockheed Martin's campaign that unwittingly produced images documenting how the arms contractor's products are used to kill children, as well as Under Armour's admission that it had paid for staff trips to strip clubs.
With no shortage of incidents to choose from, here are my top five corporate fiascos:
1. Facebook's silence about its data breach
The social media giant reportedly chose to stay silent even though it had known for three years that Cambridge Analytica - the consulting firm hired by President Donald Trump's 2016 campaign - improperly accessed information on millions of people.
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US Defense Secretary Jim Mattis' letter to President Trump
Updated 21 Dec 2018 — 4:51 PM, first published at 3:58 PM
Defense Secretary Jim Mattis sent the following letter to President Donald Trump on Thursday as he stepped down from his post
Dear Mr President:
I have been privileged to serve as our country's 26th Secretary of Defense which has allowed me to serve alongside our men and women of the Department in defense of our citizens and our ideals.
I am proud of the progress that has been made over the past two years on some of the key goals articulated in our National Defense Strategy: putting the Department on a more sound budgetary footing, improving readiness and lethality in our forces, and reforming the Department's business practices for greater performance. Our troops continue to provide the capabilities needed to prevail in conflict and sustain strong US global influence.
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Jim Mattis' resignation letter as devastating as any military hardware
By Laura Tingle
21 Dec 2018 — 4:45 PM
As a four-star Marine Corp General, Jim Mattis is schooled in the art of lethal force. His resignation letter to US President Donald Trump will probably not be actually lethal to the presidency, it is as devastating as any piece of military hardware.
Unable to keep serving Trump after his advice – and that of other senior advisers – was ignored on a withdrawal from Syria (among other things), Mattis achieved that glorious double in his letter of never directly attacking the president, while not missing any of his questionable strategic calls.
Mattis expressed his belief in the crucial role of America's alliances in being "resolute and unambiguous in our approach to those countries whose strategic interests are increasingly in tension with ours," singling out China and Russia; and "in advancing the international order".
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US government shutdown ensured after House adjourns with no agreement
By Ginger Gibson
22 December 2018 — 11:15am
Washington: The US government was headed toward a partial shutdown at midnight on Friday after President Donald Trump's fellow Republicans in the Senate failed to muster the votes needed to approve $US5 billion he has demanded for a border wall fiercely opposed by Democrats.
Trump said the impending shutdown of key parts of the federal government could last "a very long time," and he sought to blame Democrats.
They, in turn, put the blame squarely on him for his Thursday demand for wall funding after earlier backing bipartisan short-term government funding legislation passed by the Senate on Wednesday without any such money.
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Trump's America: How long can the system hold?
By Jacob Greber
21 Dec 2018 — 11:00 PM
Washington | In the late summer of 2013, just months before Donald Trump hosted the now infamous Miss Universe pageant in Moscow, a poll in Louisiana threw up a startling and weird result.
It showed the voters of the humid southern state, home to New Orleans, weren't sure whether it was then-president Barack Obama or his predecessor George W Bush at fault for the federal government's "poor" response when the levees broke after Hurricane Katrina.
The devastating storm hit New Orleans in August 2005. That was more than three years before Obama took office, yet nearly one in three Republicans in the state blamed Obama, rather than Bush.
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Markets would 'erupt' if Trump fired Fed chairman Jerome Powell
By Vildana Hajric and Elena Popina
Updated 23 Dec 2018 — 8:50 AM, first published at 8:46 AM
New York | Now it's spiralling drama over Federal Reserve autonomy that frazzled investors must cope with as stocks lurch toward a bear market.
Word President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell was going down poorly Saturday on Wall Street, a place not known for its sympathy with Powell's policies. Most investors saw the prospect as ill-advised meddling that could sow more agitation in a stock market that just had its worst week in almost a decade.
"There's an old joke: the beatings will continue until morale improves," said Keith DeGreen, chief executive officer at DeGreen Capital Management LLC in Scottsdale, Arizona. Ousting a Fed chief because his policies are scaring investors "will likely spur more selling, ironically," he said.
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'He just refounded ISIS': Fox News bucks Trump, again
By Aaron Blake
22 December 2018 — 9:55am
Washington: This week, conservative lawmakers and commentators convinced President Donald Trump to pull a last-minute about-face in the government shutdown debate.
The White House had sent signals that it wouldn't insist on border wall funding, but these conservatives rightly noted this might be Trump's last chance to get his wall before Democrats take over the House.
Could it happen again?
Fox and Friends host Brian Kilmeade on Friday morning tore into Trump's other controversial decision this week - to pull US troops out of Syria - and he did it right to the face of Trump's own press secretary, Sarah Sanders.
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Trump has discussed firing Fed chairman Powell
By Steve Holland
23 December 2018 — 10:05am
US President Donald Trump has privately discussed the possibility of firing Federal Reserve chairman Jerome Powell, a move that could roil already volatile financial markets, two sources familiar with situation said on Saturday.
The sources, however, said they do not expect Mr Trump to dismiss the US central bank chief, despite the president's public and private objections to the Fed's interest rate-hiking campaign and his repeated criticisms of Mr Powell, whom he appointed.
The White House and a Fed spokeswoman declined to comment.
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Trump and Syria: Withdrawal symptoms
- 12:00AM December 22, 2018
Donald Trump’s decision to bring all US troops home immediately from Syria has prompted predictable outrage from foreign policy hawks, who see the move as ceding influence to Iran, Russia and Hezbollah.
These concerns — along with rumours of an imminent similar withdrawal from Afghanistan — likely triggered Defence Secretary Jim Mattis’s abrupt resignation announcement, issued late on Thursday, Washington time.
Mattis was expected to leave soon anyway and Trump has been telegraphing discontent with him for some time, but the combination of sharp policy differences and the way the President blindsided his Department of Defence seems to have been the last straw for the long-suffering Defence Secretary.
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I look forward to comments on all this!
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David.
