January 10, 2019 Edition.
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Is has been a pretty messy week for Trump with the Democrats taking over in the House. He wants a wall, they do not and so the Government is shut down still!
The Brexit vote in Parliament happens soon now and the outcome is not at all clear!
In Australia the care-taker LNP Government continues to pretend it is in power and makes all sorts of decisions and remarks most just choose to ignore.
Ugly racist riots in Victoria are both bad and sad. That they are happening at all is a genuine worry I believe.
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Major Issues.
Financial downturn signals flashing red
- 12:00AM December 29, 2018
Perhaps you haven’t realised but 2019 is shaping up as the most uncertain year for the economy since the financial crisis struck a decade ago, prompting governments and central banks to intervene on an unprecedented scale.
Investors sense trouble, at least. The world’s biggest stockmarket, on Wall Street, has shed trillions of dollars in value since it peaked in September. The second biggest, Japan’s, has had the worst December slump since 1949. The bond market has given the global economic outlook a big thumbs down, dragging the yield on 10-year US government bonds back below 2.8 per cent.
“Many of the financial and economic indicators that signal the start of a downturn are now flashing red in advanced economies,” says Simon MacAdam, an economist at Capital Economics in London.
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To Help Put Recent Economic & Market Moves in Perspective
- Published on December 27, 2018
Ray Dalio Influencer
A number of people have asked me to explain what’s now going on in the markets and economy. As you probably know by now, I believe that everything (i.e., all reality) works like a machine with cause-effect relationships that drive what happens, and that to be effective it’s essential to have a good mental model of how those machines/realities work and to have good principles for dealing with them well. So, I believe that economies and markets work like machines with basic cause-effect relationships (including human nature) interacting to cause their movements. Since economies are the aggregates of the markets that make them up, to understand how economies work one has to understand how markets work. My mental model of how markets and economies work is described in brief below and is conveyed more simply in my 30-minute animated video “How the Economic Machine Works” (located here). In order to help you understand what’s happening now, and more importantly to give you the template I use so that you can use it to figure out what’s happening without me, I’d like you to see it within the context of how the market and economic machines work because if you understand that, you can understand these things on your own.
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Dutton's attack on Turnbull dents Coalition election hopes
By Shane Wright
30 December 2018 — 5:42pm
The Morrison government is facing fresh internal questions over its ability to fight the next election after sharp criticism by Home Affairs Minister Peter Dutton of former prime minister Malcolm Turnbull.
Coalition insiders were left stunned by Mr Dutton's move to go into the new year with a fresh attack on Mr Turnbull and draw attention to the internal divisions which have derailed the government's efforts to rebuild after the August leadership challenge.
Mr Dutton, who was defeated by Scott Morrison in the Liberal leadership ballot, used an interview with News Corporation to argue the government would have faced political annihilation if it had stuck with Mr Turnbull.
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35 years ago, Isaac Asimov was asked by the Star to predict the world of 2019. Here is what he wrote
By
Thu., Dec. 27, 2018
Originally published Dec. 31, 1983
lf we look into the world as it may be at the end of another generation, let’s say 2019 — that’s 35 years from now, the same number of years since 1949 when George Orwell’s 1984 was first published — three considerations must dominate our thoughts:
In 1983, American writer Isaac Asimov wrote that by 2019, “It is quite likely that society, then, will have entered a phase that may be more or less permanently improved over the situation as it now exists.” (Mondadori Portfolio)
1. Nuclear war. 2. Computerization. 3. Space utilization.
If the United States and the Soviet Union flail away at each other at any time between now and 2019, there is absolutely no use to discussing what life will be like in that year. Too few of us, or of our children and grand· children, will be alive then for there to be any point in describing the precise condition of global misery at that time.
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Malcolm Turnbull 'spiteful, indecisive': Dutton
Updated 30 Dec 2018 — 11:12 AM, first published at 10:07 AM
Four months after losing the leadership spill he instigated, Peter Dutton has broken his silence in an extraordinary spray at Malcolm Turnbull.
Calling the deposed prime minister spiteful and indecisive, the Home Affairs Minister told Brisbane's The Sunday Mail that Mr Turnbull had brought about his own downfall through his lack of political nous.
"Malcolm had a plan to become Prime Minister but no plan to be Prime Minister," was Mr Dutton's damning evaluation.
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Where did it all go wrong for markets - and what is next?
By Tom Rees
Updated 31 Dec 2018 — 9:30 AM, first published at 30 Dec 2018 — 12:07 PM
In 2018 there has been no place to hide for investors. A tumultuous year has seen bubbles burst, volatility make a long-awaited return, the record bull run face its greatest threat and trillions wiped off plunging assets.
An unnatural calm on markets has been pushed aside by worries that the economic cycle is about to turn as central banks shut off the stimulus taps and trade tensions show no sign of abating. Copper, oil, emerging-market equities, Chinese stocks and US tech giants all entered a bear market this year - a fall of more than 20pc from an index's 52-week high - while 93pc of all assets lost value in dollar terms in 2018, a record according to Deutsche Bank.
US Treasury secretary Steven Mnuchin last week reassembled the "plunge protection team" - the heads of the Federal Reserve, Securities and Exchange Commission and Commodity Futures Trading Commission - to discuss the mayhem rattling markets as stocks continued to tumble sharply ahead of Christmas.
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Find parenting tough? Be glad you're not American
By Ross Gittins
31 December 2018 — 12:05am
I have a news flash: being a grandad beats being a parent. Parenting is now a much tougher gig, whereas grandparenting is all care and no responsibility. And it’s a lot cheaper.
These thoughts are prompted by an article in the New York Times, in which Claire Cain Miller writes that parenthood in the United States has become much more demanding than it used to be.
“Over just a couple of generations,” she writes, “parents have greatly increased the amount of time, attention and money they put into raising children. Mothers who juggle jobs outside the home spend just as much time tending their children as stay-at-home mothers did in the 1970s.”
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Rocky times ahead require a stable federal government
By Tony Walker
31 December 2018 — 12:15am
Blindsided by a dysfunctional Donald Trump administration, Australia can forget about escaping the madness that has engulfed Washington as it awaits the next unpredictable manoeuvre.
This is the world we find ourselves in, untethered from the sort of American stabilising role we have come to take for granted.
If you found 2018 disconcerting, there is no reason to believe things will settle down next year. Indeed, they may get worse as that administration finds itself increasingly under siege.
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Opal Tower: 'Fridge buyers have better consumer protection than apartment buyers'
27 Dec 2018 — 11:45 PM
The cracked concrete slab in Sydney Olympic Park's Opal Tower – which triggered the second evacuation of residents in four days on Thursday – exposes a lack of protections for apartment buyers that must be resolved if rapidly urbanising Australia is going to become a high-rise nation.
Builder Icon bears liability for defects in the 36-level tower under a statutory warranty scheme and the deep pockets of its Japanese parent Kajima Corporation – or its insurers – will bear the costs of fixing the building and accommodating residents, a point Icon repeated on Thursday as it started moving them out to speed up its investigation.
But for all the inconvenience, uncertainty and lost value for owners – not to mention tenants – of the 392 apartments in the tower completed only months earlier, they are still in a better position than most owners of problematic off-the-plan apartments with problems, who enjoy less consumer protection than the buyer of a fridge, said Stephen Goddard, a solicitor and the chairman of lobby group Owners Corporation Network of Australia.
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Credit cards and credit disappearing going into new year
By Shane Wright
31 December 2018 — 1:41pm
Australians are ditching their credit cards in record numbers amid signs a general slowdown in lending for property investment and personal goods is accelerating into the new year.
Official figures compiled by the Reserve Bank show that for the first time the number of credit cards in a calendar year will fall.
Over the past 12 months the number of card accounts has dropped by 4.3 per cent with a little over 16 million now held by Australians. At its peak there was an estimated 17.4 million credit card accounts in the country.
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Australian stockmarket’s late dive caps worst year since 2011
- By Alex Druce
- AAP
- December 31, 2018
A late dive amid light volumes has seen the Australian share market finish lower on the last day of the year, confirming 2018 as the worst 12 months for the bourse since 2011.
At the earlier-than-usual close at 2.10pm (AEDT) the S&P/ASX200 index closed down 7.9 points, or 0.14 per cent, at 5645.0.
The benchmark index had been up 0.67 per cent at noon.
Meanwhile, the broader All Ordinaries closed 6.6 points, or 0.12 per cent, lower at 5715.0, having also been higher throughout the day.
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ASX ends worst year since 2011 with worst post-GFC December quarter
31 Dec 2018 — 2:59 PM
A poor December quarter has driven the local sharemarket to its worst yearly performance since 2011, as the benchmark index hit a two-year low in the final few days of trading for 2018.
The S&P/ASX 200 Index ended the quarter 561.2 points, or 9 per cent, lower at 5646.4, its worst quarterly performance since September 2011.
On Monday, Australian shares closed the last session of the year 0.1 per cent lower after China's Purchasing Managers' Index fell to 49.4 in December, a sign of slackening demand and rising pressure on the country's economy.
It was a poor quarter for global equity markets as economic growth concerns in the US and continued market volatility pushed the Nasdaq into a bear market for the first time since the global financial crisis. While falls on the local market weren't as bad, it still recorded its worst December quarter since the GFC.
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Investors retreat: Investment mortgage loans grow at slowest pace on record in November
Updated 31 Dec 2018 — 2:06 PM, first published at 1:47 PM
Investors retreated further in November, as investment mortgage borrowing grew just 1.1 per cent, its slowest annual pace on record.
Lending figures reported by the Reserve Bank of Australia on Monday showed that the stock of investor housing loans stood at $593.7 billion for the month in seasonally adjusted terms, unchanged from October, even as owner-occupier loans rose 0.4 per cent from October to $1.209-trillion.
"November's credit data deliver a continuation of recent themes – softness in investor credit, modest gains in owner occupied credit and better news for business credit," JP Morgan chief economist Sally Auld said.
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How to beat Labor's dividend franking crackdown
By John Kehoe
27 Dec 2018 — 12:00 AM
Financial advisers are devising ways to restructure share portfolios and superannuation funds to minimise the impact of Labor's proposed ban on cash refunds for dividend franking credits.
If Labor wins the election, as opinion polls suggest, it plans to stop investors who pay no or little income tax – except pensioners – from claiming tax refunds for excess imputation credits from as early as July 1, 2019, to save the federal budget about $5 billion a year.
Bill Bovingdon, chief investment officer of Altius Asset Management, a specialist cash and bond manager, said retirees could restructure their financial affairs to minimise the impact.
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Twenty years on, only the names have changed
1 January 2019 — 12:01am
The annual release of the federal Cabinet papers is usually a chance to reflect on issues long since settled.
Every January 1, as the country collectively recovers from New Year celebrations, the Cabinet papers acted as a time capsule that was unearthed for a fresh and critical examination.
Even as the gap between the creation of the documents and their release to the public has narrowed, under a process started by the Rudd government, there always appeared a clear delineation between then and now.
Not so with the release today by the National Archives of Australia of the papers from John Howard's cabinet deliberations of 1996 and 1997.
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Leveraged to the hilt: The world has a $264 trillion problem
1 January 2019 — 11:11am
If a steady tightening of global central bank liquidity created havoc in equity markets in the closing months of 2018 imagine what it might do to global debt markets in 2019.
The response of the major central banks in the US, Europe, China and Japan to the financial crisis in 2008 was to encourage governments, businesses and households to borrow to maintain some level of economic activity in the face of the threat of another Depression.
The US Federal Reserve Board, European Central Bank, People’s Bank of China and the Bank of Japan all lowered their policy rates towards zero and subsequently began injecting massive doses of ultra-cheap liquidity into the global financial system. It was just over a year ago that the Fed became the first of those banks to start withdrawing liquidity from the system, nearly a decade after the crisis.
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What the economy really needs more of: trees
By Ross Gittins
1 January 2019 — 12:00pm
I think the first economist must have been named Horatio. He’s the one who had to be reminded there were more things in heaven and earth than dreamt of in his model.
I try to keep my horizons wide by regularly consulting my second-favourite website, The Conversation (with academics who know a lot of interesting things about a lot of topics), to which I’m indebted for most of what follows.
We’re meant to know all about photosynthesis, but did you realise it means that, “with a bit of sun, a tree uses the natural miracle of photosynthesis to combine a little water with carbon dioxide from the air to produce the building blocks for its own growth, as well as oxygen,” according to Associate Professor Cris Brack, of forest measurement and management at the Australian National University?
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Best investments in 2018? Look to luxury
- By Avantika Chilkoti
- The Wall Street Journal
- January 1, 2019
Who beat the market this year? Investors who like the finer things in life.
Luxury assets, including wine, art, classic cars and fancy coloured diamonds, outperformed stocks and bonds in 2018.
“People are looking for a place for their cash, and the security of holding something physical is appealing,” said Anthony Maxwell, director at Liv-ex, the London-based wine exchange. “They are looking outside securities, and gold is not what it used to be.”
Investors who put money into art at the beginning of the year saw an average gain of 10.6 per cent by the end of November, according to Art Market Research’s Art 100 Index, the closest thing the industry has to a benchmark.
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In 2018 the Australian government chased its energy tail. Here's a more hopeful story
While the federal government dithered, business, the states and the public took matters into their own hands to dramatically change the energy picture
Tue 1 Jan 2019 10.00 AEDT Last modified on Tue 1 Jan 2019 11.12 AEDT
While the government continued to trash Australia’s international reputation by reaffirming allegiance to coal on the global stage, lying about progress on our climate commitments and dismissing the findings of the landmark IPCC report, the transformation in our electricity sector tells a different and hopeful story.
Attacks by the former prime minister Tony Abbott and his environment minister Greg Hunt on the renewable energy target, and the investment strike that followed, are a fading memory. Momentum is now unstoppable.
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Where to for Sydney property in 2019? Experts expect further price falls
Updated 01 Jan 2019 — 2:18 PM, first published at 12:00 AM
After a relentless five-year run of strong price growth across Sydney's property market, 2018 marked the moment prices fell for the first time over a 12-month period since 2012.
In 2014, prices grew 12.8 per cent followed by a whopping 14.9 per cent in 2015. Price growth began to wane in 2017 when dwelling values increased by just 3.2 per cent.
Property prices have now fallen 7.2 per cent over the year to date, according to CoreLogic – and 9.5 per cent since they peaked in July 2017 – with industry experts anticipating more pain to come for homeowners in the new year.
AMP Capital's Shane Oliver expects prices in Sydney to drop by another 10 per cent over the 2019 calendar year.
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A third of financial planners tipped to leave industry due to new laws
1 January 2019 — 12:05am
Nearly a third of financial planners could be wiped from the industry as a result of new education standards for financial planners that come into effect on January 1, experts predict.
In a move to "professionalise" the sector, all financial advisers will be required to hold a relevant tertiary-level degree, sit a three-and-a-half hour benchmark exam and adhere to a renewed code of ethics to be qualified as of Tuesday.
"It's a turning point for the financial planning standard," said Dante De Gori, CEO of Financial Planning Association of Australia.
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Junk bond fears: Will 2019 see investors burnt by risky US corporate debt?
By Karen Maley
01 Jan 2019 — 11:00 PM
Are investors about to learn the hidden perils lurking in speculative US corporate debt?
For the past decade, US companies have been on an unprecedented borrowing binge, taking advantage of ultra-low interest rates to load up on debt, either to fund mergers or leveraged buyouts, or to buy back their shares. As a result, US corporate debt has climbed to roughly 46 per cent of US gross domestic product, the highest level on record.
Until two months ago, yield-starved investors were more than happy to lend hundreds of billions of dollars to risky, heavily geared companies, and to accept that there would be few restrictions on how firms used the funds they borrowed.
They hoovered up high-yield bonds (also known, less flatteringly, as "junk bonds") pushing the size of the market from around $US680 billion ($970 billion) at the end of 2007 to an estimated $US1.2 trillion by 2018. And they showed little hesitation when even businesses with low credit ratings decided to water down loan covenants, which are supposed to protect investors.
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Property market ends 2018 with 4.8 per cent fall in house prices: Corelogic
Updated 02 Jan 2019 — 10:52 AM, first published at 10:00 AM
Falling property prices gathered momentum in December to end 2018 down 4.8 per cent across the country, the weakest conditions in a decade, according to CoreLogic's latest home value index.
The deterioration of Sydney and Melbourne's property markets accelerated last month with values declining 1.8 per cent and 1.5 per cent respectively, compared with 1.4 per cent and 1 per cent in November.
Darwin also contributed to an overall weaker market with prices dropping by 1.8 per cent over the month, followed by a fall of 1 per cent in Perth and 0.2 per cent in Brisbane.
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Will there be a global recession in 2019?
By Tom Rees
02 Jan 2019 — 11:00 AM
After its worst end to a year since the Great Depression, Wall Street is suddenly a bargain.
The S&P 500's forward price-earnings ratio - a gauge of a stock's value against analysts' earnings forecasts - indicates that US stocks have not been this cheap in four years. Another, the price-earnings to growth ratio, suggests that only in the depths of the financial crisis could investors snap up cheaper stock.
But investors are reluctant to sink their money into the dying bull run as the curtain falls on a miserable year.
The index based on the market capitalisations of 500 big companies listed on the New York Stock Exchange or NASDAQ retreated 13.1 per cent from its 52-week high in early October.
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An anti-Nationals group is rising and wants Barnaby Joyce gone
By Max Koslowski
2 January 2019 — 12:05am
Emerging anti-Nationals organisation Anyone But Nats will start the new year with $60,000 in the bank and a mission to take on the perennial rural party at the NSW and federal elections, with Barnaby Joyce as its prime target.
The group's foundation, and growing support, comes after the Nationals' scandal-plagued 2018, starting with former leader Mr Joyce's affair and ending with Mallee member Andrew Broad's "sugar baby" controversy, where the former assistant minister sent messages to a younger woman with the online alias "Sweet Sophia Rose".
Anyone But Nats will support viable candidates in Nationals-held seats. Beginning in the NSW town of Mudgee in February, the group will run a series of community forums at regional centres in key electorates to whip up support, including Armidale, Tamworth, Gunnedah, Narrabri and Broken Hill.
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ETF surge amid market turmoil raises fresh questions in active v passive debate
Updated 02 Jan 2019 — 3:23 PM, first published at 3:07 PM
Ordinary investors nursing some losses after a torrid year may take solace in the fact that market legends are also starting 2019 looking a bit worse for wear.
One wearing some particular bruises is well-known value investor David Einhorn, whose prominent firm Greenlight Capital posted a 34 per cent loss in 2018, according to Bloomberg. It was the biggest annual loss ever for the 22-year-old fund.
Greenlight's main hedge fund fell 9 per cent in December, and Bloomberg estimated that its funds under management may have dropped from $US6.3 billion at the start of 2018 to less than $US5 billion at the start of 2019.
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From pizzas to credit cards - how to encourage better consumer behaviour
02 Jan 2019 — 11:00 PM
When the British government last year proposed laws to cap the number of calories in a pizza at just under 1000 as a way of fighting the long-term costs to society of obesity, it resonated strongly with behavioural economists.
The calorie cap is just another way of nudging people to behave in a way that protects them from themselves while reducing the long-term costs to society from poor decision making. These policies are sometimes referred to as libertarian paternalism.
The idea, which was pioneered by behavioural economists, is to use rules, regulations and laws to affect human behaviour while respecting freedom of choice.
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Financial Review quarterly survey of economists: consumption growth at risk
By Vesna Poljak
Updated 02 Jan 2019 — 7:57 PM, first published at 7:00 PM
Australian households probably have too much debt but it will become a problem only if interest rates rise and unemployment increases, top economists agree, channelling their concerns into the risks to consumption growth in the year ahead.
Reserve Bank of Australia deputy governor Guy Debelle admitted in December that 10 years after the global financial crisis nobody had any reliable idea of how much debt was too much.
"We still don't really have a great handle on what level of leverage is dangerously excessive for governments, households, banks and corporates. This surely is a major challenge for the economics profession to address," Dr Debelle said at the time.
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Merril Lynch: Policymakers 'oblivious' to global growth collapse
By Tim Boyd
Updated 02 Jan 2019 — 8:32 PM, first published at 8:00 PM
Confidence among chief financial officers has collapsed to levels not seen since 2016 and is almost on par with levels in early 2012, according to analysis of a Duke University CFO survey by The Bank of America Merrill Lynch.
Duke University's quarterly survey of CFOs provided "surprising insights into the world economy and financial markets," Merrill Lynch said.
Using the results from the survey, the bank said it was implied that the global purchasing managers' index will fall to 47.3 points by February 2019, from its current level of 52 points.
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Australia, as designed in the 1890s, is past its use-by date
By John Hewson
2 January 2019 — 11:00pm
On Friday morning last week I put on the TV in Queensland to catch the final stages of the Sydney to Hobart yacht race on commercial television, claimed to be live, revealing Wild Oats XI still well short of the finishing line. At the same time I switched on my laptop only to read that Wild Oats had won nearly an hour earlier – skipper Mark Richards had already claimed “redemption” in the media, drank a “shoey”, and been thrown in the Derwent.
Not only does this make a mockery of the so-called “live coverage of breaking news” but, yet again, emphasises the continuing stupidity of so many aspects of our Federation – in this case with Queensland having decided against daylight saving, unlike the other East Coast States - NSW, Victoria, and Tasmania. It boggles my mind that we happily persist with a multiplicity of time zones, while China, with a bigger land mass than Australia, has just one time zone.
Sure, this is, in itself, of minor significance. But, at a time in our history where it is perhaps more important than it has ever been to be able to take a national view, and to formulate policy and govern in the national interest, the anachronistic structure and operation of our Federation is a very significant disadvantage and restraint.
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Winning your loyalty: Australia's retail data war is heating up
By Patrick Hatch
3 January 2019 — 12:00am
Loyalty schemes used to be relatively simple. Customers would present one of their many loyalty cards at a checkout to be rewarded with points or other inducements to shop again.
But these schemes are now being used in a far more powerful and effective ways, by tapping into the data collected on each individual customer to understand their behaviour and what they want.
In sign of how significant the potential upside is for both traders and data crunchers, one of the industry's global pioneers, dunnhumby, has now set up shop in Australia with the hope of working with local retailers.
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Chaos is just a vote away
BARNABY JOYCE
- 12:00AM January 3, 2019
The new year is going to change our nation.
This may be a trite, repetitious warning, but this time it is going to happen. We have arrived at the space where indoctrination has beaten logic.
We want an economy that has no baseload power but does have cheap power.
We export uranium but refuse to use it.
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Apple cites China slowdown as it cuts revenue forecasts
- By Micah Maidenberg
- Dow Jones
- 8:55AM January 3, 2019
Apple has lowered its sales forecast for its fiscal first quarter, a rare revision to its guidance, which it blamed on slowing sales of smartphones and other devices in China.
Apple chief executive Tim Cook said in a letter to investors that the company now predicts revenue of around $US84 billion for the quarter ended December 29.
Previously the company said it expected between $US89 billion and $US93 billion in revenue for the quarter. Analysts surveyed by FactSet forecast projected revenue more than $US91 billion.
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Shock Apple downgrade worries global investors
Updated 03 Jan 2019 — 1:09 PM, first published at 11:34 AM
A shock revenue downgrade by United States technology giant Apple has sparked concerns among global investors that a slowdown in the Chinese economy is worse than initially feared.
The maker of the iPhone which had a $US1 trillion market capitalisation last year said on Wednesday that its quarterly revenues would be $US84 billion substantially below its prior estimates largely as a result of a of a dramatic slowdown in Chinese sales.
The announcement, which is believed to be Apple's first ever pre-earnings release, stunned the market and triggered a 7.5 per cent decline in the share price in after hours trading.
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Falling dollar reflects global concern all is not well in the Australian economy
The rosy forecasts from the Reserve Bank for the economy are pipe dreams – investors know this and are selling Australian dollars
Thu 3 Jan 2019 13.52 AEDT Last modified on Thu 3 Jan 2019 14.34 AEDT
The Australian dollar was hit hard overnight, Australian time, slumping below 70 US cents before a sharp and more extreme move saw it temporarily crash to a low of 67.40 US cents. It subsequently recovered marginally, but remains weak at around 69.40 US cents.
Rather than focus on the micro aspects of minute-by-minute or hour-by-hour moves in the dollar, which can be more noise than substance, the trend for the dollar over the past year has been down.
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Chinese seek more of Australia's healthcare industry
Updated 03 Jan 2019 — 7:26 PM, first published at 7:00 PM
You would think that a $2 billion hostile takeover offer launched in the deadly quiet period in the first week of January and under the cover of the SCG test match between Australia and India would have the benefit of surprise.
The secrecy conditions were ideal for Jangho Hong Kong's hostile offer for healthcare company Healius given that most brokers and fund managers remain on holiday and the country's premier market-moving column, Street Talk, is having a well-earned break.
But it looks to Chanticleer's jaundiced eye that a sniff of the bid leaked before the offer was first revealed publicly on Thursday. The stock jumped about 9.4 per cent on Wednesday for no apparent reason. Turnover on Wednesday was much heavier than the previous four trading days.
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The AFR View
Guardians of the Liberal Party legacy
03 Jan 2019 — 11:00 PM
The past 12 months has brought open warfare between social liberals and social conservatives within the Liberal Party. However, it has been the rapid regression of some sections of the party towards Trump-esque big government conservatism that has been the most transformational force within the party.
Last year, former prime minister Tony Abbott called for the nationalisation of energy generation through the government-funded construction of a coal-fired power plant. This was a poorly thought out piece of populist virtue signalling, and downright socialism more at home in Ben Chifley's Labor Party than the modern-day Liberals
When he was quizzed on how energy policy in a potential Dutton administration would differ from a Turnbull government, the Home Affairs Minister paused, before identifying the removal of the GST on electricity bills. That's an extraordinary leap from the traditional Liberal position on the GST as a key plank in any tax reform plan. Former prime minister John Howard almost lost government in 1998 in an attempt to introduce as broad a GST as possible. Both WA Liberal backbencher Andrew Hastie and NSW Senator Jim Molan have cosied up to major unions in disputes over the course of the year. Hastie even spoke at a rally organised by Bill Shorten's old union, the AWU.
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Disordered, unplanned: everyday terrorism is spreading like a virus
By Waleed Aly
3 January 2019 — 6:36pm
Contagion. That was my first thought when two disparate countries witnessed two apparent terrorist attacks in the earliest hours of 2019. In Japan as in Germany, a man drove a car into crowds of pedestrians in what has now become an achingly familiar scene. In both cases, only injuries were inflicted, although one victim’s injuries in Germany are life-threatening. But beyond these superficial similarities, the cases have just about nothing in common.
The Japanese driver was a 21-year-old, who said he “would not make any excuses” for his self-declared act of terror because it was “in retaliation for an execution”. Perhaps he’s referring to a particular execution, or perhaps this was his protest against capital punishment; at this stage we don’t know. Meanwhile, in Germany, police arrested a 50-year-old who officials said “had the clear intention to kill foreigners”, and had been making anti-foreigner comments during his arrest. He managed to hit some Syrian and Afghan citizens. We’re told he may have been treated for mental illness in the past. There’s no common profile here. No similar age, no common ideological orientation. Even the mental illness component hasn’t yet been raised in the Japanese case. All that’s left is the method. Ramming pedestrians has now become its own thing, a phenomenon in its own right rather than the exclusive tool of anyone or anything. In short, it has become contagious.
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Battle of the netball courts: how the election campaign will be fought
By Shane Wright
3 January 2019 — 6:00pm
Scott Morrison and the rest of the Liberal Party face a daunting task to map out a winning election campaign strategy.
Like a general with his army surrounded on all sides and no easy means of escape, the PM has limited choices ahead of him and his government.
It is not just because opinion polls put him behind Bill Shorten by between eight and 10 points on a two-party preferred basis. Those margins point to an electoral wipeout of between 25 and 30 seats across the country.
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Australia deserves a place in the G8, study finds
- January 4, 2019
Australia is one of the ten most powerful nations in the world and deserves a place in the G8, an audit of geopolitical capability has found.
The Henry Jackson Society in the UK says that Australia is even more politically powerful than Russia because it is a “hemispheric power’’ capable of projecting itself and defending its own interest within the southern hemisphere. The study has found that Russia, however, is only a regional power.
Russia, invited to join the G7 by former US president Bill Clinton has been sidelined since its 2014 invasion of Crimea.
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Chinese look to exit apartment projects
- 12:00AM January 4, 2019
Scores of east coast property development sites, some able to take 400-unit apartment towers, will hit the market within months as Chinese developers crippled by a lack of finance are forced to sell.
The move comes as Chinese investors are pulling back from some of the world’s key commercial real estate markets, as Beijing continues tight restrictions on capital outflows.
Matrix founder Andrew Antonas, one of the largest sellers of residential development sites in NSW, has at least 12 large-scale residential development sites already on the market.
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Property borrowers brace for $300b interest-only credit crunch
04 Jan 2019 — 11:00 PM
Borrowers with interest-only mortgages worth about $300 billion are bracing for a credit crunch as their fixed terms, taken out at the height of the property boom, begin to expire.
About 900,000 loans – or about one in six mortgages based on the nation's $1.7 trillion mortgage loan book – will need to be extended with their existing lenders, switched to higher principal-and-interest repayments or transferred to a new lender.
It is contributing to explosive growth for the lightly regulated shadow banks that are targeting subprime borrowers with easier terms and faster approval times, according to new analysis.
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Stock markets torn between fear and fundamentals
By Elizabeth Knight
5 January 2019 — 12:05am
World stock markets are being torn between the competing forces of fear and fundamentals. Since September fear has been a clear winner.
For the first couple of days of 2019 it appeared the market had taken a dose of anti-anxiety medication. But it took only one big shock - a downgrade in Apple’s revenue forecast - to smash the veneer of calm.
The response to Apple’s particular predicament was based on real fundamentals. The broader market reaction - a 2.8 per cent fall in the US Dow index on Thursday night - was mostly fear related. Apple itself tumbled 10 per cent.
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If the Liberals were serious about women, they could look to the UK
By Latika Bourke
6 January 2019 — 12:00am
Quota is not a dirty word, but from watching some women in conservative politics you'd be forgiven for thinking it was. On Friday, the most senior woman in the Liberal Party went as far as to say quotas should be part of the discussion ... and then stopped.
"At this point I don’t support or oppose quotas, but I do know that as an organisation there is more that we can do," Senator Payne said.
But if the Liberal Party wants to get serious about addressing its glaring gender imbalance, it could do worse than following the example of the Conservatives in Britain.
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Two great setbacks to democracy could be reversed in 2019
By Crispin Hull
5 January 2019 — 12:00am
This year there is every prospect that democracy’s two biggest set-backs in the past two decades will be reversed – the 2016 Brexit referendum in Britain and the US presidential election.
Britain is perhaps in a better position than the US. It loaded the gun, pointed the gun at its foot and pulled the trigger, but there is still time to put the bullet back in the gun before a grievous self-inflicted wound is caused.
The US, on the other hand, has already endured two years of consequences and will have to endure its dangerously erratic pathological liar as President for yet another two years, unless a legal or congressional crowbar levers him out of the White House.
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Rethinking retirement: the view from around the globe
By Katie Robertson
5 January 2019 — 12:15am
The golden years look very different depending on where in the world you are, and, increasingly, which generation you are in. Ageing populations and decreasing birthrates are spurring countries across the globe to reassess how retirement works - and what needs to change in order to extend the benefits available today to future retirees.
Scott Morrison said he believed the government no longer needed to raise the pension age from 67 to 70.
In September, Prime Minister Scott Morrison abandoned plans, first announced under Tony Abbott, to raise the retirement age to 70. However the pension age will still increase from 65 to 67 by 2023, a decision made under Kevin Rudd.
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Scott Morrison denounces ‘ugly’ far right protests at St Kilda
- January 6, 2019
Scott Morrison has denounced the far right protests, which included neo-Nazis, which erupted on Melbourne’s St Kilda Beach yesterday.
Up to three people were arrested yesterday as nearly 300 far right protesters took over the south Melbourne beach and had minor scuffles with a larger group of anti-racism demonstrators.
The Prime Minister thanked Victoria Police for their work in keeping far right and counter-left protesters apart, and said the far-right protests were “ugly”.
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Euro enters third decade in need of reform
- By The Economist
- 12:00AM January 5, 2019
The euro is a survivor. The new currency, brought into being on January 1, 1999, has defied early critics, who thought it doomed to failure.
It has emerged from its turbulent teenage years intact, cheating a near-death experience, the debt crisis of 2009-12. It is now more popular than ever with the public.
But fundamental tensions attended its birth. Although the euro has made it this far, they still hang over it. If Europe’s single currency is to survive a global slowdown or another crisis it will require a remodelling that politicians seem unwilling or unable to press through.
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Living up to the worthy ideals of a sainted namesake
DYSON HEYDON
- 12:00AM January 5, 2019
Campion College is a small liberal arts college covering key aspects of Western languages, literature, history, philosophy and theology, together with mathematics and science. It has a Catholic ethos.
Naming it after Edmund Campion made a significant statement. Campion was born in 1540. He was executed in 1581. He was canonised in 1970.
His biographer Evelyn Waugh said his career was that of scholar, priest, hero and martyr. He noted that Campion’s life was “a simple, perfectly true story of heroism and holiness”.
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Financial Services Royal Commission Issues.
More Hayne pain as banks drop $80bn
- 12:00AM December 31, 2018
More than $80 billion has been scoured from the market value of banking royal commission targets this year, with analysts tipping more pain in coming months following the inquiry’s final report and a likely change of government in Canberra.
Analysis by The Australian reveals the nation’s second-largest bank, Westpac, whose home-lending practices were excoriated during commission hearings, is the biggest dollar-value loser, with more than $22bn or 20 per cent of its market capitalisation amputated over the year. And more than half of the value of the banking system’s so-called “fifth pillar”, AMP, has evaporated in the light of commissioner Kenneth Hayne’s scrutiny after it was exposed for repeatedly misleading the corporate regulator about its fee-for-no-service scandal.
Also shedding half its capitalisation was wealth manager IOOF, where investors fought a sliding share price all year only to give up ground in a sudden plunge earlier this month after the prudential regulator moved to exile its chief executive, Chris Kelaher, and other senior officers from the super industry.
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Overhauled ASIC unveil new plan to get tougher and litigate first
02 Jan 2019 — 11:00 PM
The corporate regulator's overhauled leadership team is vowing to get tougher on business misconduct and take greater risks going to court as part of a new, litigate-first strategy, newly appointed regulator Sean Hughes warns.
The threat comes as the Australian Securities and Investments Commission reveal they have been deluged with corporate breach reports and complaints in the wake of the Hayne royal commission and want to run their budget "close to empty" to turn around the perception they are the soft cop on the beat.
Mr Hughes, the former head of New Zealand's regulator, who Nationals senator John Williams said should be leading ASIC, has warned the public will need to accept the regulator will lose more cases and take longer to secure a result.
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Corporate chiefs warn gun-shy banks could hurt the economy
- 1:42PM January 3, 2019
Some of the nation’s most powerful corporate chiefs have echoed Treasurer Josh Frydenberg’s call on the banks to kickstart “affordable and timely’’ lending, saying Australia must not return to the “bad old days”.
Corporate leaders including former mining boss Hugh Morgan, property developer Bruce Dixon, Westpac director Peter Nash, South32 chairman David Crawford and financial services CEO Ahmed Fahour warn that gun-shy banks could drag the nation’s economy to a grinding halt if they become risk averse to lending in the wake of the Hayne royal commission.
Many, such as Ansell chairman Glenn Barnes, also defended the banks from what are seen by some as beat-ups and public attacks, with a viable banking system regarded as integral to the health of the economy.
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Business warns of fallout from royal commission lending crunch
By Nick Toscano
4 January 2019 — 12:05am
Some of Australia's top business leaders have sounded warnings over the "unintended" fallout from the banking royal commission, including a crunch on lending by nervous banks, which they believe poses the biggest threat to the economy in 2019.
Ahead of the Hayne royal commission's final report, due to be handed down next month, prominent business figures attending the KPMG Couta Boat Classic race, raised concerns on Thursday about the impact of the "heightened risk alert" that was gripping the banking sector and causing a tightening of new lending to companies and would-be home buyers, driving a downturn across the housing market.
David Crawford, chairman of mining giant South32 and former chairman engineering behemoth LendLease, said companies and individuals alike were struggling to obtain funding in the current climate.
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Want a credit squeeze with that fall in house prices?
By Shane Wright
3 January 2019 — 6:15pm
Ben Chifley wanted to nationalise the banks to make sure ordinary Australians weren't ripped off by the big end of town.
Josh Frydenberg knows better. He just wants to jawbone them into lending because "it's in the banks' interests, it's in the economy's interests, and it's certainly in the public's interests".
While Chifley's plan was an electoral disaster, the problem facing Frydenberg is an economic one that business leaders and prospective homebuyers are starting to appreciate.
The banking royal commission, which the Turnbull government fought to prevent, has exposed some of the loose practices and worse employed by our major financial institutions.
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Aussie experts warn of worrying consequence of royal commission
Our dodgy banks were dragged over the coals at the royal commission — but it could spell “economic disaster” for our country.
Aussie rich-lister Christian Beck made headlines after sensationally claiming he couldn’t get a bank loan despite his $775 million fortune last year.
In an August interview with The Australian Financial Review, the tech entrepreneur and founder of Australian Technology Innovators — a company with a $231 million revenue in 2017 — said he was denied a loan by “paranoid” banks cracking down on lending thanks to the Financial Services Royal Commission.
“It’s stupid, it’s crazy, I can definitely afford it,” Mr Beck told the publication at the time.
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National Budget Issues.
500,000 energy customers to get power bills cut after pressure on AGL, Origin
Updated 01 Jan 2019 — 6:23 AM, first published at 6:22 AM
Half a million energy customers in NSW and Victoria will have the cost of their power bills cut following pressure from the government on companies such as AGL, Origin and Energy Australia.
Households who are longtime customers in NSW whose standing offers have expired will see a 10 to 15 per cent reduction in their bills, saving them about $200 a year, The Age reports.
Residential customers in Victoria will save about $313 a year thanks to reductions of 10-35 per cent.
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Borrowers and brokers brace for new year credit changes
27 Dec 2018 — 11:45 PM
Borrowers, brokers and financial advisers are bracing for big changes from January 1 as lending rules, rates and qualifications for offering financial advice are rolled out for the new year.
The moves follow recommendations from several industry reviews, policy changes by prudential regulators and industry attempts to get ahead of expected proposals from the banking royal commission on responsible lending.
Loan assessment for mortgage applicants with credit cards will be based on the assumption the customer is making repayments based on clearing the debt over three years, regardless of the contractual terms of the credit card contracts.
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Howard government told without a carbon price, emissions would rise
By Shane Wright
1 January 2019 — 12:01am
The Howard government was urged more than 20 years ago to consider an emissions trading scheme, while its signature plans to deal with Australia's greenhouse gas emissions were considered by its own departments to be merely aimed at deflecting global criticism.
As the Morrison government continues to fight a debilitating internal battle over how to deal with climate change, previously secret papers from the 1990s reveal a suite of major government departments said the most effective and efficient way to deal with greenhouse gases was to impose a carbon price.
Cabinet papers from 1996 and 1997 released on Tuesday by the National Archives reveal the beginnings of the Howard government's drawn-out response to the threat posed by rising greenhouse gas emissions and the way some of those issues are still playing out in the Morrison government.
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Financial Review quarterly survey of economists: Reserve Bank to hike in 2020
By Vesna Poljak
01 Jan 2019 — 11:00 PM
The Reserve Bank of Australia could leave interest rates untouched for another 12 months, according to leading economists, who say the central bank's conviction that the next move in rates is up is starting to drift.
The first quarterly survey of economists by The Australian Financial Review for 2019 finds that the Reserve Bank expects to be in a position to raise interest rates but has become less upbeat over the past quarter. The median economist surveyed agrees the next move is up, but a rate hike to 1.75 per cent is now seen arriving by June 2020, pushed out from the second-half of 2019.
The tightening of credit conditions through 2018, the residential property price correction, slowing growth and dip in business confidence have tempered optimism as the global tightening cycle heads to its conclusion in 2019. That being so, the Australian economy is still recording consistent employment gains and benefiting from public spending keeping activity buoyant.
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Financial Review quarterly survey of economists: ASX to bounce back in 2019
By Tim Boyd
01 Jan 2019 — 11:00 PM
If the majority of economists are right, 2019 will be a rewarding year for the Australian equity market, and the negative wealth effect linked to the 2018 downturn in property prices will not be enough of a force on households to hold back consumption growth.
The S&P/ASX 200 Index ended the year at 5646.4 points, or 6.9 per cent below its opening level of 6065 points. The index reached a decade high at the end of August of 6352.
"The stock market should do very well. I think the ASX 200 could rise 20 per cent or so towards 6500, aided by more accommodating monetary policy and a turn in the housing market," predicts Stephen Koukoulas from Market Economics, who is also anticipating the Reserve Bank returns to easing policy.
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Investment: Superannuation and house prices post dire result in 2018
By Tim Boyd
01 Jan 2019 — 11:45 PM
Investors have suffered from a double blow to their net wealth as the sharemarket tumbled and house prices fell at a near record rate producing flatlined superannuation returns for the year.
Data provided to The Australian Financial Review from research house SuperRatings showed the median balanced super fund posted a zero per cent return for the year to December 31. This is the lowest return since 2011 and the result was largely driven by volatility in equity markets through the back half of last year.
Investors in the median balanced super fund have enjoyed gains for the last six years, including double-digit returns for three of those years. Returns ranged from 5.6 per cent in 2015, up to 16.3 per cent in 2013.
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Aussie property market facing the moment of truth
By Shane Wright
2 January 2019 — 7:00pm
They are the two critical questions that will keep the Reserve Bank, the Morrison government, the Shorten opposition and homeowners in our largest cities awake.
Just how much further can house prices fall? And what will be the economic fallout from the wealth destruction that comes with a house price correction?
A year ago, CoreLogic released its end-of-2017 report into the nation's major property markets by noting that the overall growth rate was at the "fastest pace since 2009".
Twelve months later, CoreLogic was noting that after a 4.8 per cent drop in values through 2018 that the country was facing "the weakest housing market conditions since 2008".
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Investors to pay ‘world’s highest capital gains tax under ALP’
- 12:00AM January 5, 2019
Josh Frydenberg has launched a pre-election assault on Labor’s plan to halve the capital gains tax discount, warning that hundreds of thousands of Australians will be taxed at the “highest rates” in the Western world.
Shifting his focus from Bill Shorten’s proposal to limit negative gearing to new dwellings and the “retiree tax”, the Treasurer yesterday cited government analysis that showed Australians would be taxed up to 36.75 per cent on their capital gains under Labor’s policy, up from 23.5 per cent now.
By comparison, US taxpayers face a 23.8 per cent tax on capital gains, the British pay 28 per cent on residential property and 20 per cent on other assets, while Canadians are taxed at 16.5 per cent, according to the modelling.
Analysis obtained by The Weekend Australian also revealed 885,530 taxpayers reported a capital gain in 2015-16, with about half of their investments in shares and a quarter in real estate.
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Health Issues.
Public hospitals being bled by foreign tourists
- 12:00AM December 31, 2018
Tens of millions of dollars in public hospital debts are being run up by tourists, foreign workers and international students each year, prompting a renewed bid to make them pay their way.
However, a NSW proposal to require all visitors to take out health insurance, separate to any travel insurance they might have, has served only to highlight the complexity of the problem.
When NSW Health Minister Brad Hazzard put the proposal on the agenda for the Council of Australian Governments Health Council, he received the cautious backing of several states and his federal counterpart, Greg Hunt.
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‘For 30 years I’ve been obsessed by why children get leukaemia. Now we have an answer’
Newly knighted cancer scientist Mel Greaves explains why a cocktail of microbes could give protection against disease
Sun 30 Dec 2018 20.00 AEDT Last modified on Sun 30 Dec 2018 23.30 AEDT
Mel Greaves has a simple goal in life. He is trying to create a yoghurt-like drink that would stop children from developing leukaemia.
The idea might seem eccentric; cancers are not usually defeated so simply. However, Professor Greaves is confident and, given his experience in the field, his ideas are being taken seriously by other cancer researchers.
Based at the Institute of Cancer Research in London, Greaves has been studying childhood leukaemia for three decades. On Friday, it was announced that he had received a knighthood in the New Year honours list for the research he has carried out in the field.
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Raids to hit rogue health insurers
- 12:00AM January 1, 2019
Health funds have been warned that investigators will raid their offices if there is a suspicion they have tried to cover up cases of members being misled or having their claims unfairly denied.
As insurance premiums continue to increase at a faster rate than inflation, and more Australians drop private hospital policies, there are lingering concerns about affordability, and complaints from members who find themselves without cover when they need it.
Under a package of reforms introduced by Health Minister Greg Hunt, the Private Health Insurance Ombudsman has been given the power to raid insurers and insurance brokers to resolve complaints.
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Hopes of melanoma breakthrough from cells that 'put cancer to sleep'
By Aisha Dow
1 January 2019 — 3:00am
They fight viruses and bacteria in our skin, brain, lungs and gut.
Now Australian scientists have also discovered that these special immune cells have the power to put melanoma tumours ‘‘to sleep’’, potentially paving the way for new treatments.
It has previously been known that tissue-resident memory T cells help fight cancer, but until now researchers have not understood how they do so.
In research published on Tuesday in the prestigious Nature journal, researchers from Melbourne’s Peter Doherty Institute and Telethon Kids Institute revealed they had discovered that the T cells had the ability to halt the growth of melanoma cells.
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Cabinet papers 1996-97: Medicare control that almost was
- 12:00AM January 1, 2019
The Howard government considered taking total control over Medicare provider numbers given to doctors — to determine how and where they could practice — in a bid to slow growth in the health budget.
But worried about a possible constitutional challenge, and protests from doctor groups, the government opted for regulatory and training restrictions.
Its decision to restrict doctor numbers, while not doing anything significant to address workforce maldistribution, led to Australia becoming reliant on overseas-trained doctors in regional and remote areas.
Cabinet meetings before the 1996-97 budget discussed a paper that then health minister Michael Wooldridge was asked to prepare on options to restrict Medicare provider numbers on a geographic basis. The move could potentially have allowed the government to not only control numbers and locations of doctors but influence their billing.
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Labor risks insurers’ push for deregulation
- 12:00AM January 2, 2019
Labor’s bid to have the Productivity Commission examine the process for deciding health insurance premium increases may inadvertently reignite the industry’s push for deregulation.
Under the Coalition government, the deregulation push reached the advisory committee that worked on a reform package introduced by Health Minister Greg Hunt.
Documents obtained by The Australian under Freedom of Information laws shed new light on the proposal to remove the minister’s responsibility for deciding premiums, subject to a public interest test, and let the market take over.
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Fisher & Paykel Healthcare CEO Lewis Gradon talks company culture
02 Jan 2019 — 11:00 PM
Lewis Gradon is not your typical chief executive of a major listed company. The Fisher & Paykel Healthcare boss doesn't take himself too seriously: to relax he goes fishing with his wife or watches Spanish soap operas to brush up on his language skills.
That hobby paid off in September, when he gave a five-minute speech in Spanish to about 1000 staff at the company's manufacturing plant in Tijuana, Mexico, just south of the California border.
The Kiwi boss of the $7 billion healthcare giant says employees in Mexico appreciated the effort. "You wouldn't find a CEO of a US company necessarily coming down here and doing that," he says.
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What is pill testing?
The recent deaths of young people after taking party drugs at festivals has prompted calls for organised pill testing at events. So what would that look like? And why is it so controversial?
By Yan Zhuang
3 January 2019 — 7:00pm
In the early hours of the new year, a 20-year-old man died of a suspected drug overdose after attending a music festival in country Victoria. His death followed that of a 22-year-old man after a NSW music festival – the fourth such death in NSW since September. The deaths of these young people have reignited the debate around pill testing.
But what is it, exactly, and why is it so controversial?
What is pill testing for?
Recreational drugs can be covertly cut with poisonous or “filler” substances. Uncertainty about strength and purity can lead to accidental overdoses. Pill testing exposes what a tablet really contains and how pure it is.
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Headwinds for healthcare in 2019
02 Jan 2019 — 11:00 PM
The traditionally defensive healthcare sector faces two major hurdles in 2019: a protracted royal commission into aged care and a federal election.
Both of these are significant events that will challenge many companies, although there are pockets of upbeat news.
JP Morgan analyst David Low says the aged care sector, which includes players such as Regis Healthcare, Japara Healthcare and Estia Health, will be very challenging. "We see some value but the protracted royal commission process doesn't leave us much optimism in the near term," he adds.
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New funding for tick bite research
The federal government is injecting nearly $3 million funds into research on tick bite symptoms, which the health minister says affect thousands of Australians.
Australian Associated Press January 5, 20198:30am
Researchers in Perth and Melbourne will receive nearly $3 million in federal government funding for studies aiming to reduce the debilitating symptoms of tick bites.
Professor Peter Irwin from Murdoch University will receive more than $1.9 million for his research to determine the causes of debilitating symptom complexes attributed to ticks (DSCATT).
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Health fund changes mean you may need to pay more for cover
Sue Dunlevy, National Health Reporter, News Corp Australia Network
January 5, 2019 9:00pm
Subscriber only
More than six million Australians are at risk of losing critical health fund benefits when sweeping health reforms take effect in April, new analysis shows. From April 1 all health fund policies will have to be divided into Gold, Silver, Bronze and Basic categories.
The government has set new rules outlining which medical procedures must be covered at a minimum for each of these levels of cover.
Health funds will be able to provide cover above the minimum level by offering Bronze “plus” and Silver “plus” insurance.
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International Issues.
Former US commander Stanley McChrystal calls Donald Trump dishonest, 'immoral'
By Felicia Sonmez
Updated 31 Dec 2018 — 9:19 AM, first published at 9:17 AM
Washington | Retired Army General Stanley McChrystal, the former commander of US forces in Afghanistan, sharply criticised US President Donald Trump on Sunday, calling him immoral and untruthful and taking aim at his foreign policy decisions.
In an interview on ABC News' This Week, McChrystal told host Martha Raddatz of Trump, "I don't think he tells the truth". The general also responded affirmatively when asked whether he believes Trump is "immoral".
McChrystal said that contrary to Trump's claim, the Islamic State militant group, also known as ISIS, has not yet been defeated.
"I don't believe ISIS is defeated," he said.
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Departing chief of staff John Kelly paints a dim portrait of Trump
By Aaron Blake
31 December 2018 — 9:50am
Washington: A few months ago, a senior Trump administration official wrote a controversial anonymous oped in the New York Times that said forces within the administration were working to rein in President Donald Trump's potentially damaging whims.
In an interview, Trump's departing chief of staff, John Kelly, basically confirmed that's exactly what has happened for the past two years.
"In the phone interview [on] Friday, Kelly defended his rocky tenure, arguing that it is best measured by what the president did not do when Kelly was at his side," says a Los Angeles Times interview.
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Trump abandoned the 'wall' idea long ago says departing chief of staff
By Maggie Haberman
31 December 2018 — 10:38am
Washington: The concrete border wall that President Donald Trump has repeatedly called for as a signature campaign promise is not actually a wall and has not been since "early on in the administration," the outgoing White House chief of staff, John Kelly, said in an interview published on Sunday.
The comments further muddy the administration's position as Trump demands that Democrats provide $US5 billion ($7.1 billion) in funding for a wall on the south-western border with Mexico, an impasse that has led to a partial government shutdown after the president abruptly pulled out of a compromise deal to keep the government funded through February.
They were also notable given Trump's insistence for most of his term that the border would have a wall, not the "steel slat barrier" he has pivoted toward in the past few weeks.
"To be honest, it's not a wall," Kelly told The Los Angeles Times.
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Mohamed El-Erian echoes Donald Trump in wanting the Fed to have a 'better feel'
By Ros Krasny
Updated 31 Dec 2018 — 7:12 AM, first published at 7:09 AM
New York | The Federal Reserve realises that it can't put its key policy tool, the federal funds rate, on autopilot, and that it needs to better communicate its policy decisions, said Mohamed El-Erian, Allianz SE's chief economic adviser.
"Even the Fed is understanding that it needs to communicate better," El-Erian said in an interview on Fox News Sunday. It needs to "show that it is more sensitive to markets and what's happening outside," or what President Donald Trump has called getting "a better feel for what's going on," El-Erian said.
He dismissed suggestions the US is facing a recession, saying that the economy was likely to continue growing at 2.5 per cent to 3 per cent absent a "major policy mistake."
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Elizabeth Warren jumps in first
By Jennifer Rubin
Updated 01 Jan 2019 — 3:41 AM, first published at 3:39 AM
Washington | US Senator Elizabeth Warren, a Democrat from Massachussetts, a fiery populist on the left, announced she is forming an exploratory committee for a 2020 presidential run.
Her earnest plea for working people and her attack on the rich and powerful provide a stark contrast both to President Donald Trump's right-wing economic agenda and to more centrist Democrats. ("Billionaires and big corporations decided they wanted more of the pie. And they enlisted politicians to cut them a bigger slice.")
Warren is the first in a batch of Senate Democrats - Cory Booker of New Jersey, Kamala Harris of California, Kirsten Gillibrand of New York and Sherrod Brown of Ohio , to name just four - likely to announce early in 2019. In this case, being first doesn't really confer any benefits, especially when one announces on New Year's Eve when most Americans aren't focused on politics.
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Quitting Europe without a deal will hardly sink the UK
- 12:00AM January 1, 2019
Theresa May’s hopeless Brexit deal with the EU, which would leave the country in thrall to Brussels’ rules without a say, is scheduled to face the House of Commons after January 14. Its likely demise paves the way for Britain “crashing out” of the EU by the end of March without a deal. Let’s hope so.
You too must be sick of the fearmongering by liberal economic elites about the supposed dire consequences of a no-deal Brexit. Britain survived the Armada, Napoleon and Hitler, but leaving a dubiously beneficial supranational bureaucracy that it joined only in 1973 will apparently cause the biggest recession in a century.
Never mind that the British Treasury’s forecasts before the 2016 referendum have proved gobsmackingly wrong. They claimed a Brexit vote would sap Britain’s GDP by 3.6 per cent and lift unemployment by about 500,000. In fact economic growth has accelerated, and the unemployment rate has fallen to 4.1 per cent, its lowest since the 1970s.
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Opinion: Roubini: President Trump is flirting with mutually assured economic destruction
Published: Dec 31, 2018 12:11 p.m. ET
Now that financial markets see the danger of the Trump presidency, the risk of a financial crisis and global recession has grown
By Nouriel Roubini
NEW YORK (Project Syndicate) — Financial markets have finally awoken to the fact that Donald Trump is U.S. president. Given that the world has endured two years of reckless tweets and public statements by the world’s most powerful man, the obvious question is: what took so long?
For one thing, until now, investors had bought into the argument that Trump is all bark and no bite. They were willing to give him the benefit of the doubt as long as he pursued tax cuts, deregulation, and other policies beneficial to the corporate sector and shareholders. And many trusted that at the end of the day, the “adults in the room” would restrain Trump and ensure that the administration’s policies didn’t jump the guardrails of orthodoxy.
These assumptions were more or less vindicated during Trump’s first year in office, when economic growth and an expected increase in corporate profits — owing to forthcoming tax cuts and deregulation — resulted in strong stock-market performance. In 2017, U.S. stock indexes rose more than 20%.
Predictions: Trump goes, unexpected candidate emerges in 2019
The views expressed by contributors are their own and not the view of The Hill
As a new chapter in American history unfolds with the start of another year, here are some predictions for the political scene in 2019:
- Donald J. Trump’s presidency will not survive 2019;
- The downward trajectory of every aspect of his tenure indicates we are headed for a spectacular political crash-and-burn — and fairly soon;
- His increasingly erratic and angry behavior, his self-imposed isolation, his inability and refusal to listen to smart advisers that he hired, all are leading him to a precipice;
- Meanwhile, the global and U.S. economies are softening in great part because of the unnecessary and ill-conceived trade war he launched against Canada and our European allies; if he wanted to conduct a legitimate trade war against China, wouldn’t it have made more sense to have trading allies such as Canada and Europe with us, instead of making them our adversaries?
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'Trump of the tropics,' Jair Bolsonaro takes Brazil sharply to the right
By Ellis Rua & Marina Lopes
2 January 2019 — 7:56am
Brasilia: Jair Bolsonaro, a former army captain who has promised radical measures to cut soaring crime and widespread corruption, was sworn in as Brazilian president on Tuesday, marking the country's starkest shift to the right since its return to democracy three decades ago.
Bolsonaro, 63, rode a populist revolt against the traditional political class to take the presidency. He has pledged to take South America's largest nation in a new direction – adopting an iron-fisted approach to crime, allowing citizens to arm themselves for self-defence, and promoting more development in the environmentally sensitive Amazon.
An ardent admirer of President Donald Trump, Bolsonaro has vowed to move this nation away from its left-leaning foreign policy.
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Mitt Romney: The president shapes the public character of the nation. Trump’s character falls short.
Mitt Romney, a Republican from Utah and the party’s 2012 nominee for president, will be sworn into the U.S. Senate on Thursday.
The Trump presidency made a deep descent in December. The departures of Defense Secretary Jim Mattis and White House Chief of Staff John F. Kelly, the appointment of senior persons of lesser experience, the abandonment of allies who fight beside us, and the president’s thoughtless claim that America has long been a “sucker” in world affairs all defined his presidency down.
It is well known that Donald Trump was not my choice for the Republican presidential nomination. After he became the nominee, I hoped his campaign would refrain from resentment and name-calling. It did not. When he won the election, I hoped he would rise to the occasion. His early appointments of Rex Tillerson, Jeff Sessions, Nikki Haley, Gary Cohn, H.R. McMaster, Kelly and Mattis were encouraging. But, on balance, his conduct over the past two years, particularly his actions this month, is evidence that the president has not risen to the mantle of the office.
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A Chinese warship armed with an electromagnetic railgun appears to have set sail
By Ryan Pickrell
02 Jan 2019 — 8:25 AM
A Chinese navy warship armed with what looks like a mounted electromagnetic railgun has apparently set sail, possibly for testing in the open ocean.
The Type 072II Yuting-class tank landing ship Haiyangshan and its weapon were spotted along the Yangtze River at the Wuchang Shipyard in Wuhan last year.
The latest photos of the test bed ship, which appeared on social media a few days ago, show the ship mounted with the suspected railgun on the vessel as it roams the high seas, Task & Purpose reported.
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Factory activity in Asia weakens on China slowdown, trade disputes
By Marius Zaharia
Updated 02 Jan 2019 — 3:34 PM, first published at 3:29 PM
Hong Kong | Factory activity weakened across Asia in December as the Sino-US trade war and a slowdown in Chinese demand hit production in most economies, strengthening the case for a pause in interest rate hikes in the region in 2019.
A series of purchasing managers' indices for December released on Wednesday mostly showed declines or slowdowns in manufacturing factory activity across the region. In China, the Caixin/Markit PMI slipped into contraction territory for the first time in 19 months, broadly tracking an official survey released on Monday.
China's weakness spilled over to other Asian economies, with Malaysia's manufacturing activity shrinking to its weakest pace of expansion since it launched the survey in 2012 and Taiwan contracting to its lowest since September 2015. The widespread weakness hit regional stock markets.
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Taiwan 'must and will' be reunited with the mainland says Xi Jinping
By Peter Martin
Updated2 January 2019 — 7:30pmfirst published at 3:46pm
Beijing: Chinese President Xi Jinping has insisted that mainland China and Taiwan be united into one nation in the clearest sign yet that he wants to settle the 70-year dispute during his tenure.
"China must and will be united, which is an inevitable requirement for the historical rejuvenation of the Chinese nation in the new era," Xi told a gathering in Beijing to mark the 40th anniversary of a landmark Beijing overture to Taipei after the US and China established relations.
To do so, China and Taiwan should enter into "in-depth democratic consultations", he said.
But Taiwan's President Tsai Ing-wen hit back, saying the island would not accept a "one country, two systems" political arrangement with China, while stressing all cross-strait negotiations needed to be on a government-to-government basis.
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The future might not belong to China after all
By Martin Wolf
03 Jan 2019 — 10:57 AM
Do not extrapolate from the recent past. China has had a hugely impressive four decades. After their triumph in the cold war, both the west and the cause of liberal democracy have stumbled. Should we conclude that an autocratic China is sure to become the world's dominant power in the next few decades? My answer is: no. That is a possible future, not a certain one.
The view widely held in the 1980s that Japan would be "number one" turned out to be badly mistaken. In 1956, Nikita Khrushchev, then first secretary of the Communist party of the Soviet Union, told the west that "We will bury you!" He proved utterly wrong.
The examples of Japan and the Soviet Union highlight three frequent mistakes: extrapolating from the recent past; assuming that a period of rapid economic growth will be indefinitely sustained; and exaggerating the benefits of centralised direction over those of economic and political competition. In the long run, the former is likely to become rigid and so brittle, while the latter is likely to display flexibility and so self-renewal.
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Democrats back in charge of US Congress, Nancy Pelosi nominated Speaker
By Julie Hirschfeld Davis
Updated 04 Jan 2019 — 8:22 AM, first published at 7:27 AM
Washington | On a day of pomp and pageantry, ebullient Democrats assumed control of the House on Thursday (Friday AEDT) and elected Representative Nancy Pelosi of California to be speaker, returning her to a historic distinction as the first woman to hold the post at the pinnacle of power in Congress, second in line to the presidency.
The investiture of Pelosi, whose talent for legislative manoeuvring is surpassed only by her skill at keeping her fractious party in line, placed her at the fulcrum of divided government opposite an increasingly combative President Donald Trump. With Trump, his presidential campaign and his businesses all under federal and state investigations, her handling of him will likely define the 116th Congress.
Her election came on Day 13 of a government shutdown that has dramatised the shifting dynamics in Washington. Trump's insistence on a wall on the Mexican border has come to embody harsh immigration policies that will run headlong into newly energised Democratic opposition.
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Donald Trump and a Democrat Congress, prepare for the Year of the Wolves
By David Brooks
Updated 04 Jan 2019 — 10:54 AM, first published at 10:44 AM
In Willa Cather's novel My Antonia, there are two kind Russian farmers named Peter and Pavel who have settled on the Nebraska prairie. On his deathbed, Pavel tells the story of how they came to emigrate there.
Many years before, back in Russia, the two young men had been the groomsmen at a friends' wedding. The party went on well after midnight and eventually a caravan of seven sledges carried the families through the snow, back to where they were staying. As they rode, faint streaks of shadow hundreds of them could be seen dashing through the trees along the trail. Suddenly, the howling of wolves erupted from all directions.
The horses took off and the wolves attacked. The rear sledge hit a clump and overturned. The shrieks were horrific as the wolves pounced on their human prey. Another sledge tipped and then another, and the swarms of wolves descended on the families.
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Jerome Powell says Fed can be 'patient', won't quit if Donald Trump asks him
By Jeanna Smialek and Rich Miller
Updated 05 Jan 2019 — 8:56 AM, first published at 5:46 AM
Atlanta | Federal Reserve chairman Jerome Powell pledged to be patient with any future interest-rate hikes, allaying Wall Street concerns that the central bank will snuff out the US economic expansion and pledging to stay even if President Donald Trump asks him to resign.
Potentially laying the groundwork for a pause in the Fed's campaign of gradual rate hikes, Powell said that he's "listening sensitively to the message that markets are sending" about downside risks to growth.
"With the muted inflation readings that we've seen, we will be patient as we watch to see how the economy evolves," Powell said Friday (Saturday AEDT) on a panel with his predecessors Janet Yellen and Ben Bernanke at the American Economic Association's annual meeting in Atlanta.
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Regional powers urge Venezuela's Maduro to step down
By Franklin Brecino
5 January 2019 — 10:14am
Lima: A dozen Latin American governments and Canada have delivered a blistering rebuke to Venezuelan President Nicolas Maduro, questioning the legitimacy of his soon-to-begin second term and urging him to hand over power as the only path to restoring democracy in his crisis-wracked South American country.
The sharp criticism came at a meeting in Peru's capital of foreign ministers from countries including Argentina, Brazil and Colombia, all of which have been weighing how to confront the increasingly authoritarian Maduro while absorbing a growing exodus of Venezuelans fleeing economic chaos.
In a statement, the Lima Group urged Maduro to refrain from taking the presidential oath next Thursday and instead cede power to the opposition- controlled congress until new, fairer elections can be held.
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I look forward to comments on all this!
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David.
