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The July 4th celebrations this year have been over shadowed by Trumps increasing white nationalism and the out of control COVID-19 disaster. He now seems very likely to be a one-term president if the Economist is to be believed.
In the UK the re-opening is off and rolling. The next two weeks will be very interesting!
In OZ we have seen a new and much more
forward Defence Policy and issues in cyber-security. Worse we have seen the virus nail Victoria which has put in a 6 week lockdown. We seem to be on a knife edge....
Hong Kong is also looming as a major issue with all 3 countries. We wait and watch…
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Major Issues.
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https://www.afr.com/policy/economy/alan-kohler-cosies-up-to-fantasy-economics-20200624-p555t1
Alan Kohler cosies up to fantasy economics
The face of the ABC's finance reporting is promoting an economic theory that argues deficits don't matter and the Reserve Bank shouldn't be independent.
Aaron Patrick Senior correspondent
Jun 29, 2020 – 12.01am
Out there, on the wild fringes of economics, modern monetary theory is picking up momentum.
MMT, as it is known, is a panacea for troubled times. Government deficits don't matter, printing money doesn't drive inflation, and central bankers can't be trusted.
Although MMT has few mainstream adherents in the economics profession, in Australia the non-theory theory has picked up an influential disciple: Alan Kohler, a former editor of this newspaper and the face of the ABC's finance coverage.
In the past week Kohler has been pushing a pro-MMT book written by an American academic and economic adviser to Bernie Sanders, Stephanie Kelton.
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'I don't think they will return': NAB's McEwan warns 15 per cent returns are gone
By Clancy Yeates
June 29, 2020 — 12.00am
National Australia Bank chief executive Ross McEwan has declared the days of shareholders enjoying a high return on equity of about 15 per cent are in the past, and banks should better reward long-term customers.
Six months into his time as chief executive after the bank's leadership purge last year, McEwan does not shy away from the challenges facing NAB, saying the bank is too complex and reforming its culture may take up to five years.
However, the banking veteran maintains the lender is on a path to simplifying its operations, focusing more on customers and ultimately lifting returns - despite the deeply challenging backdrop of the coronavirus recession.
"We've still got a lot of work to simplify this bank, but we're on a path," he says in an interview with The Sydney Morning Herald and The Age.
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How best to handle Beijing
There is no quick fix for our challenges with China, but a strategy of engaging and constraining it suits Australia far better than following the US’s lead.
By PETER VARGHESE
· From Inquirer
June 27, 2020
There is no quick fix for our challenges with China. But clarity of objectives, holding firm when it matters, discipline in messaging and a clear-eyed sense of the national interest will help stabilise the relationship.
As I explain in a China Matters policy brief, “engage and constrain” should be the two guide rails of our approach to China, starting with the following assumptions:
● For the foreseeable future China will retain its authoritarian political system and likely will remain our largest trading partner.
● China is not an enemy but it is not in Australia’s interests for an authoritarian state to dominate the region, set its rules or shape its strategic culture.
● The US will stay deeply engaged in our region and is determined to remain the predominant strategic power. That is in Australia’s interests, but not if it is pursued through a full-throated containment policy.
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Belated crackdown has made Victoria a pariah
The Andrews government instituted the toughest restrictions on its citizens and kept them the longest. Yet it's Victorians who are now the COVID-19 pariahs. What went wrong?
Jennifer Hewett Columnist
Jun 29, 2020 – 4.08pm
The contrast between months of Daniel Andrews’ stern rhetoric and the practical flaws now evident in Victoria’s approach is rebounding on the Premier.
Of all the states, Victoria faced the strictest and most long-lasting restrictions to try to control the spread of COVID-19. Andrews was regularly withering in his criticism about suggestions these rules should be relaxed in line with the timetable in NSW.
Even at the beginning of June, that difference was palpable. The mood in Sydney felt far more buoyant as more shops and cafes reopened, in contrast to a continuing hard shutdown in the deserted streets of Melbourne.
Yet it’s Victorians who are now regarded as pariahs nationally as the growing outbreak in Melbourne becomes the focus of community and political alarm.
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Three million Australians cut spending as virus recession hits income
By Shane Wright
June 29, 2020 — 3.51pm
More than 3.5 million Australians have cut spending or reduced their home loans to survive the coronavirus recession with warnings the economy could take an even larger hit unless immigration levels are boosted.
A special survey by the Australian Bureau of Statistics pointed to a lift in employment across the country, however, it revealed the pandemic's broader economic impact will last longer than feared with many households unwilling to return to their pre-virus spending ways.
Scott Morrison has told 2GB the government needs to be cautious about providing too much financial support for the unemployed because it could discourage them from seeking out extra work.
The Morrison government is considering a review of its key $70 billion JobKeeper wage subsidy program plus its $550-a-fortnight coronavirus supplement for people on welfare payments including JobSeeker, Youth Allowance and Parenting Payment.
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Economists warn Australia still too tied to China
Tom Richardson Markets reporter and commentator
Jun 30, 2020 – 9.37am
Australia's leading economists have warned an escalation of its trade spat with China threatens to lead to a big economic fallout, as the decoupling between the US and Chinese economies gathers pace.
Australia's four largest exports — coal, iron ore, education, and tourism — rely heavily on Chinese demand, with around 40 per cent of total exports currently accounted for by China.
For now, Australia has some strategic bargaining power as China has no real alternative high-volume iron ore source, but every export remains at immediate risk from rising political tensions.
"All are vulnerable to decoupling between the US and China if Australia and China were to engage in a proxy trade war," independent economist Craig Emerson told The Australian Financial Review's June 2020 quarterly economist survey.
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https://www.afr.com/politics/coronavirus-could-kill-off-populism-20200630-p557hw
Coronavirus could kill off populism
Populists hate to be unpopular. That is why Donald Trump and Jair Bolsonaro have proved so bad at handling COVID-19, a crisis that brings nothing but grim news.
Gideon Rachman Columnist
Jun 30, 2020 – 9.20am
Populists hate to be unpopular. That is why they have proved so bad at handling COVID-19, a crisis that brings nothing but grim news — death, economic destruction and curtailed freedoms.
Donald Trump, the US President, and Jair Bolsonaro, Brazil’s President, are the two most prominent populist leaders in the Western world. The disastrous results of their approach to coronavirus are now becoming apparent. Last week, Brazil became the second country in the world, after the US, to record more than 50,000 Covid-19 deaths.
The distinguishing characteristic of the Trump-Bolsonaro approach to COVID-19 is a fatal inability to face reality.
Mr Trump virtually ignored the virus through January, February and half of March. At various times he has suggested that it would disappear by magic and that injections with disinfectant might be a good remedy. As new cases and deaths continue to surge, Mr Trump’s latest bright idea is to argue that America should simply stop testing, in the hope that reality will disappear if it is simply ignored.
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ASX climbs 1.4pc on last day of financial year
Tom Richardson Markets reporter and commentator
Jun 30, 2020 – 4.44pm
The S&P/ASX 200 finished the last day of the financial year up 82.9 points, or 1.4 per cent to 5897.9 points. Despite Tuesday's gains the market fell 10.9 per cent in financial 2020, its first annual decline in since financial 2016 and worst return in eight years.
Ben Clark a portfolio manager at TMS Capital said the day's gains most likely reflected a better-than-expected lead from Wall Street and optimism over news that Queensland is to reopen its borders. New South Wales will enter phase three lockdown restrictions on July 1.
"Typically you also get some pretty strong tax loss selling leading into the end of the financial year," said Mr Clark. "Technically it's not meant to happen, but it's maybe dried up.
"We had some pretty aggressive selling yesterday on the news around the latest virus numbers in Victoria and our market has materially underperformed what's gone on globally in the last week or two. A combination of these things is why we're seeing a stronger bounce than the futures suggested this morning. "
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https://www.afr.com/chanticleer/what-we-learned-from-an-historic-financial-year-20200630-p557lb
What we learned from a historic financial year
The 2020 financial year will go down as the worst in eight years as measured by the S&P ASX200, which was down 10.9 per cent. But many will remember it for its astonishing volatility and tech supremacy.
Jul 1, 2020 – 12.00am
It is time to say farewell to one of the most astonishing financial years in the history of the Australian sharemarket.
It was a year that defied conventional thinking about market valuations, business cycles and risk assessment. Those who panicked and went to cash because of the coronavirus and stayed in cash through the pandemic are probably regretting it now.
The smart money doubled down on big global tech and bought the beaten down local tech darlings at the nadir of the market in March.
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https://www.afr.com/policy/economy/defence-build-up-underscores-the-security-alarm-20200701-p557uh
Defence build-up underscores the security alarm
That there will be no let-up in Australia’s defence build-up in the post-COVID-19 recession-hit world highlights the alarm in Canberra about the regional security picture.
Jul 2, 2020 – 12.00am
Prime Minister Scott Morrison has sent a powerful message to China that there will be no let-up in Australia’s defence build-up in the post-COVID-19 recession-hit world. While admirals and generals around the globe – including the US – are bracing to fight for much scarcer public funds, Australia is pushing in the opposite direction. Canberra is devoting part of its China resources boom dividend to defence, to hedge against the rising power of China itself.
Since Xi Jinping took office, the assumption that China’s rise would be benign, or that it would eventually want to converge with the West as a more liberal society – former prime minister Tony Abbott even welcomed President Xi to the Australian Parliament by proclaiming China’s commitment to becoming fully democratic – have been overtaken by the militarisation of the South China Sea, the crackdown on Hong Kong, and the repression of the Uighur minority.
Australia has grown prosperous by supplying raw materials to the biggest industrialisation that the world has known, and then tourism, education, health services and food. But now we need to spend on protecting ourselves from the potential disruption of the power balance in the region by China’s emergence. In these times of a new Sino-US cold war, security and prosperity have become co-dependent. Barack Obama said he would pivot American power to Asia, but did not follow through. Now Donald Trump’s "America first" policies have cast real doubt on US commitment to the regional overall.
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https://www.afr.com/politics/federal/new-missiles-for-defence-in-270b-arms-build-up-20200630-p557kg
New missiles for defence in $270b arms build-up
Andrew Tillett Political correspondent
Jun 30, 2020 – 10.30pm
Australia will be armed with long-range missiles for the first time as part of a $270 billion build-up of the Defence Force over the next decade as the Morrison government looks to keep up with the regional arms race being fuelled by China's militarisation.
Signalling a more aggressive posture to deter potential adversaries, Prime Minister Scott Morrison will declare on Wednesday that Australia will never surrender its sovereignty nor seek to intimidate neighbours.
But he will admit that the technology edge enjoyed by the US and its allies can no longer be taken for granted and the Indo-Pacific is the epicentre of rising strategic competition.
"We must face the reality that we have moved into a new and less benign strategic era – one in which the institutions and patterns of co-operation that have benefited our prosperity and security for decades are under increasing strain," Mr Morrison will say in a speech to Australian Defence Force cadets.
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https://www.afr.com/politics/federal/pm-channels-churchill-as-china-fears-grow-20200630-p557h7
PM channels Churchill as China fears grow
Announcing a rearmament of the Australian Defence Force, there is little ambiguity about who the Prime Minister's speech is directed at.
Phillip Coorey Political editor
Jul 1, 2020 – 12.00am
For some time now, the Australian government, like many others, has been negotiating a new relationship with China.
The renegotiation operates on the assumption that the key economic driver, the trade relationship, still has a lot of momentum, despite the odd flare-up.
The restructure of the diplomatic relationship, or what's left of it, is much more fraught. After today, it is likely to be more so.
The government formed the view some time ago that China had crossed a line – that its modus operandi is one of coercion and that's the way it will continue to roll.
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China the unspoken threat at centre of new defence strategy
By Peter Hartcher
July 1, 2020 — 12.00am
Australia has snapped awake from a long slumber with its new defence strategy.
It doesn't propose major new fleets of subs or strike fighters beyond the pre-existing plans. That's partly because they take many years and Australia has realised it has no years left.
Prime Minister Scott Morrison announces the 2020 Defence Strategic Update.
The new plan instead seeks urgently to arm Australia with much more lethal weapons. Indeed, the Morrison government's strategy commits Australia to acquiring weapons systems that it long resisted for fear of seeming too aggressive.
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Australia to buy ship-killing missiles and shift focus to Indo-Pacific
By Anthony Galloway and Peter Hartcher
June 30, 2020 — 10.30pm
Australia will acquire long-range missiles to protect overseas forces, allies and the mainland against rising threats including China.
Prime Minister Scott Morrison will on Wednesday deliver a major update to the nation's defence strategy, including the purchase of long-range anti-ship missiles from the United States to equip its fleet of Super Hornets.
It will also investigate the possibility of acquiring new long-range missiles that can be launched from the land in the future, including hypersonic missiles that can travel at least five times the speed of sound.
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Giant defensive steps in a region edging closer to conflict
The Morrison government is changing the international and strategic orientation of the Australian nation. We are now, for the first time since the Vietnam War, living in a region with a strong chance of major power conflict. And we have decided to acquire serious military strike power as part of our deterrence.
These are huge decisions. The government is right to make them. The process has been led by Scott Morrison and Defence Minister Linda Reynolds.
The capability decisions are eye-watering in their consequences, and their dollar amounts.
But they are underpinned by a hard-headed and undeniable strategic analysis.
The government on Wednesday publishes the Strategic Update and the Force Structure Plan.
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https://www.afr.com/policy/foreign-affairs/what-would-owen-harries-do-20200701-p557ui
What would Owen Harries do?
Tom Switzer Columnist
Jul 2, 2020 – 12.00am
Australia is a typical middle power that benefits from the status quo in the region. We want to keep enjoying the best of both worlds: unconstrained trade with China under the US security umbrella.
Anything that disturbs that regional equilibrium is self-evidently not in our national interest. This has been the Canberra policy consensus for generations.
However, as the Prime Minister observed on Wednesday, we confront a “new and less benign strategic era”, one that is “poorer, more dangerous and more disorderly”.
As a result, Australia needs to “sharpen our focus on our region and enhance our capability”. Hence the new Force Structure Plan strategic policy that puts regional adversaries on notice that we will respond with force if needed.
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Defence plan makes it clear we must prepare for risk of armed conflict
Rory Medcalf
Contributor
July 2, 2020 — 12.00am
Australia must and will prepare for the real risk of armed conflict in its region: that was the bracing message of the new defence plan launched by Prime Minister Scott Morrison on Tuesday.
The document is innocuously titled the Defence Strategic Update. But that is a euphemism for something of profound significance to the nation's future – a blueprint for a military capable of fighting major wars, and thus in principle helping to prevent them from breaking out.
At one level, this is simply about government executing its first duty: providing for the security of the nation, its interests and values.
What has changed is that the government now recognises a rapidly worsening horizon of risk and knows it can no longer defer hard choices about what the Australian Defence Force is for.
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'Deeply unsettled': Defence Minister says China's actions risk security
By Anthony Galloway
July 2, 2020 — 12.00am
Defence Minister Linda Reynolds will warn China's actions have "deeply unsettled" the Indo-Pacific region and put at risk the security of Australia and its neighbours, as the Morrison government looks to acquire an anti-ballistic missile defence shield for the first time.
Senator Reynolds will on Thursday declare the growing competition between the United States and China has forced Australia to rethink its strategy to defend the nation, as it looks to roll out a series of long-range anti-ship missiles under a $270 billion build-up of the defence force over the next decade.
The Morrison government on Wednesday released a major update to its 2016 Defence White Paper, acknowledging it no longer had a decade to defend against potential threats with the possibility of military conflict in the region.
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If we’re sliding towards conflict then the money must flow
Scott Morrison’s speech at the launch of the Defence Strategic Update was fascinating. No fewer than four times he said that the deterioration in Indo-Pacific security was as concerning as the slide to global war in the 1930s.
In a comment not in his prepared notes, the Prime Minister said: “That period of the 1930s has been something I have been revisiting on a very regular basis, and when you connect both the economic challenges and the global uncertainty, it can be very haunting.”
My sense is that Morrison and Defence Minister Linda Reynolds understand just how dangerous our security situation is getting. We are heading to a potential military crisis at some point in the next year or two around the first island chain that borders the approach to the People’s Republic of China.
The biggest change in the Strategic Review is temporal, not geographic. The Indo-Pacific — now defined for Defence planning purposes as the northeastern Indian Ocean, Southeast Asia, Timor Leste and the Pacific Islands — has been at the core of Australian strategic thinking for decades.
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New defence plan is a robust pivot to our own backyard
Scott Morrison's goal of creating a serious regional deterrent still depends on working with the US, an ally that does not always share the same goals.
Peter Leahy
Jul 2, 2020 – 12.34pm
With the release of a 2020 Defence Strategic Update and a new Force Structure Plan by Prime Minister Scott Morrison there is a welcome hint of a distinctly Australian defence strategy.
It’s clarity, ambitions and focus on our region are welcome.
Priority will be given to shaping the Indo-Pacific region. It is clearly in our national interests that our region be open and free from coercion and hegemony and that we are able to pursue our interests and defend our values.
This welcome new strategic focus should see the end of faraway adventures. Recently we have been drawing down our efforts in the Middle East where, after two decades, we have achieved little, because of the absence of a clear strategy.
Mr Morrison has suggested that the post COVID world will be poorer, more dangerous and more disorderly. He sees a less benign strategic era and the Indo Pacific as the epicentre of rising strategic competition. He has warned us that the risk of miscalculation and conflict is increasing.
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Sunny third-quarter economic outlook turns cloudier
With health concerns forcing a growing number of US states to backtrack on reopening, the depth and breadth of the economic recovery is at risk.
Mohamed A. El-Erian
Jul 2, 2020 – 4.05pm
A few weeks ago, the expectation was that the onset of the third quarter would mark the close of a highly damaging and uncertain second quarter for the US economy and, importantly, herald a sharp and durable reversal.
Instead, with health concerns forcing a growing number of states to either stop or reverse their reopenings, and with some businesses and households withdrawing from active economic re-engagements, a cloud is now forming over the third quarter, threatening the depth and breadth of the economic recovery.
With an initial phase of seemingly healthy reopenings, and with government relief measures in full force, high-frequency indicators of economic wellbeing (household confidence, new jobs and retail sales) started improving in May or deteriorated at a slower rate (jobless claims). Such absolute and relative improvements were countering what was shaping up to be a brutal set of economic data for the second quarter as a whole, including the largest contraction in gross domestic product on record. But with a continuing uptick in economic data that repeatedly beat consensus expectations, the thinking was the hit to this year's GDP could be contained to 5 to 8 per cent, with the prospects of recovering the entire loss of output in 2021.
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In a world of bad options, stocks are the default choice
Even at reduced returns and high volatility, the ability of stocks to recapture most inflation and prosper when nominal assets, real assets and governments are struggling, can make them seem like a haven.
Aaron Brown
Jul 2, 2020 – 9.30pm
At the bottom of the stock market crash three months ago, I wrote:
"There are four big unknowns for investors. First, how long and deep will be the reduction in economic activity from social isolation? Second, how much money will the government spend during that period, and how will it deal with the increased debt afterwards? Third, what will be the long-term public health impact? Fourth, what permanent changes will result?"
Even though the S&P 500 Index just had one of its best quarters ever, surging some 20 per cent, the questions remain relevant today. But we have a lot more information about the answers.
I used S&P 500 dividend futures to answer the first question, and concluded the market expected a 20 per cent decline in real activity bottoming in July 2020, followed by faster growth to catch up with pre-virus predictions by the end of 2022. That led me to dismiss diminished payouts as a major worry for stock investors since the present value loss from the missing dividends was less than 3 per cent of stock market value.
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Bridgewater's Ray Dalio says capital markets no longer 'free'
Katherine Burton, Erik Schatzker and Hema Parmar
Jul 3, 2020 – 7.30am
Recent central bank actions mean capital markets are no longer "free", according to Bridgewater Associates's Ray Dalio, founder of the world's largest hedge fund.
"Today the economy and the markets are driven by the central banks and the coordination with the central government," said Dalio, speaking at the Bloomberg Global Asset Owners Forum on Thursday (Friday AEST).
As a result, "capital markets are not free markets allocating resources in traditional ways".
The COVID-19 pandemic brought economic activity to a standstill and sent markets spiralling downward in March. The Federal Reserve's unprecedented multi-trillion dollar response eased concerns and helped fuel a shock recovery in financial markets even as the US economy continues to struggle.
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'A national security scandal': Kevin Rudd names three gaps in defence strategy
By Anthony Galloway
July 2, 2020 — 9.50pm
Former prime minister Kevin Rudd has declared there are "major gaps" in Australia's new defence strategy, accusing the Coalition government of a "botched" submarine program and failing to build up the nation's cyber defences fast enough.
Mr Rudd also hit out at the government's Pacific "step-up", saying its aid spending in the region has only just recovered to where it was in 2013, which had opened the door to China "because Australia was seen as an unreliable aid partner".
Mr Rudd's predecessor, John Howard, welcomed the Morrison government's major update to its defence strategy, saying China under President Xi Jinping was now a much more assertive and authoritarian power than when he was prime minister. Mr Howard said the Morrison government's defence build-up was part of a deterrence strategy to encourage Beijing to reverse course.
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Unspoken danger in buying more missiles to defend Australia
Sam Roggeveen
Contributor
July 3, 2020 — 12.00am
The strategic update which Prime Minister Scott Morrison launched in Canberra this week marks some important changes in the government's thinking about Australia's defence. It formally acknowledges that our own region should be the top priority, with US-led operations in the Middle East demoted. It also recognises that Australia needs to be more self-reliant, perhaps a tacit acknowledgment that the alliance with America is of diminishing value.
But there was one other announcement that got attention from journalists and commentators, a far-reaching new military program for the Australian Defence Force which Morrison described in anodyne military jargon as "longer range strike weapons".
"Far reaching" has a double meaning here. Firstly, Morrison is talking about developing the ability to bomb targets potentially thousands of kilometres away, with high accuracy. But secondly, a capability like that could reshape our defence posture and our relations with our neighbours.
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Long-range missiles likely to earn a quiet 'thank you' from neighbours
By James Massola
July 2, 2020 — 5.08pm
Australia's decision to purchase longer range anti-ship missiles, part of a revised 10-year defence strategy, has caused few ripples throughout south-east Asia.
In fact the upgrade in Australia's strike capacity is likely to be quietly welcomed by our allies in the region. They are under no illusions about how much the security environment has changed as China has grown into a great economic power with an expanding military presence in the region, and the United States has become a less reliable security partner.
As former prime minister Malcolm Turnbull observed recently, there is nothing that nation can do - short of war - to demilitarise the islands China has claimed in the South China Sea.
It is in that context that Australia has decided to bolster its strike capabilities to defend itself and its allies in the region.
The reaction from Jakarta is instructive. Responding to the announcement, the Indonesian government said it shared Australia's concern about growing instability in the region and stressed the need for peace, rather than military conflict, in the South China Sea.
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https://www.afr.com/politics/federal/australia-now-more-alone-in-a-dangerous-region-20200702-p558j0
Australia now more alone in a dangerous region
The sobering reality of the latest defence review is that we can’t just keep riding shotgun to the US.
Laura Tingle Columnist
Jul 3, 2020 – 4.15pm
It’s a couple of years ago, in one of those cavernous meeting rooms in a big Sydney hotel where the most interesting thing to look at is the bowl of mints in front of you, and the biggest dilemma how to have one without making the wrapping rattle too loudly.
Some of the best policy analysts on the United States are in the room and the subject at hand is the Australia-US alliance. Up in the back corner, dubbed cheerfully by some of its inhabitants as the "Naughty Corner", sits Hugh White, professor of strategic studies at the Australian National University and principal author of the 2000 Defence White Paper.
It’s the naughty corner because White has questioned the continuing global influence of America, particularly in our region, and argued that China will soon be the dominant power. In his 2017 Quarterly Essay, Without America, White wrote of the US coming to realise it can’t be the dominant power in Asia, even if it blusters and behaves like it is.
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https://www.afr.com/world/north-america/trump-is-not-the-right-man-for-this-crisis-20200702-p558iz
Trump is not the right man for this crisis
Donald Trump's characteristically erratic and narcissistic mishandling of the triple-whammy health, economic, and racial crises means he deserves the defeat he is headed for in November.
Jul 4, 2020 – 12.00am
Back in February, Donald Trump had a trade deal with China, a roaring US economy delivering strong job growth including record low black unemployment, and had dodged impeachment over the Ukraine scandal in the Republican-controlled Senate.
The US President's re-election seemed guaranteed. Then came the global pandemic that has killed 130,000 Americans, shut down large parts of the US economy, and led to the highest unemployment since the Great Depression. Now, four months out from the November election, Mr Trump trails in the polls by double digits.
Even worse for the President’s re-election chances is that the US labour market recovery and the fall in the jobless rate in the June quarter now threatens to stall. An explosion in new COVID-19 cases is forcing some US states to delay or reverse their reopening plans. With US infection rates exceeding 50,000 per day for the first time, America may have an out-of-control second wave of the pandemic on its hands.
This will ensure that the focus remains on what is both the chief obstacle and the chief objection to Mr Trump being returned to the White House. This is Mr Trump himself, based on his characteristically erratic and narcissistic mishandling of the triple-whammy health, economic, and racial crisis that has shaken America this year.
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Australia's military muscle receives a shot in the arm
The Morrison government is building up Australia's military but will it be enough to protect the country?
Andrew Tillett Political correspondent
Jul 3, 2020 – 3.42pm
On the day Scott Morrison outlined plans to build up Australia's Defence Force, Chinese President Xi Jinping further cemented his grip on China's military apparatus, bringing the reserve forces directly under the control of the Communist Party's all-powerful Central Committee and Central Military Commission.
Previously, command of the reservists was shared with local party committees. Now they are under the "absolute leadership" of the ruling party.
Publicly, Defence Minister Linda Reynolds maintains Defence's strategic update and force structure plan is not about any one country, but everyone knows it is all about China.
There are genuine questions emerging about whether Australia is muscling up sufficiently and quickly enough to be in a position to deter China from threatening its interests and be able to respond if they are attacked.
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How modern monetary theory affects your portfolio
The pandemic recession has rapidly thrust a previously arcane economic theory squarely into the spotlight: Modern Monetary Theory.
MMT is an item of hot debate and, whether you agree or disagree with it, in terms of investment outcomes, it hardly matters. The important thing is to understand what it might mean for your portfolio.
Running the risk of brutal simplification, you might say MMT holds that governments can print money, and this “debt” need not be repaid. It also suggests that inflation does not come from printing money and it also implies the government can — and should — provide full employment. At any time, such theories might remain within the circles of academic debate. But just now as governments have little choice but to lift deficits, print money and find answers for high unemployment, it is getting a serious hearing.
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Universal incomes: a collision of economic orthodoxy and compassion
Having learned to stop worrying so much about the deficit, at least for the time being, governments around the world are now worrying about how to stop paying universal basic incomes (UBIs) to people who aren’t working.
They’re providing emergency UBIs in a variety of ways, although they certainly don’t call them that: the US has simply added $US600 a week to the average weekly unemployment benefit of $US385; in Australia’s it’s called JobSeeker Allowance, plus the JobSeeker Supplement, at about $750 per week.
These measures were introduced in a rush by world governments as they shut down their economies in March, because they rightly feared the health crisis turning into a runaway financial and banking crisis as millions of borrowers — household and business — defaulted on their loans. They also recognised that it was government decisions that had thrown people out of work and decimated incomes, not the economic cycle, so there was a moral obligation as well.
But now it’s turning into moral hazard. As Scott Morrison said this week: “What we have to be worried about now is that we can’t allow the JobSeeker payment to become an impediment to people going out and doing work”, or as the headline on The Australian’s article on the subject put it more pithily: “Jobless opt for dole as businesses struggle to find workers despite unemployment surge”.
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Bushfire Crisis And Climate Policy
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No articles in this section
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Coronavirus And Impacts.
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https://www.afr.com/policy/economy/no-time-now-for-wish-lists-20200628-p556ww
No time now for wish lists
Because the government's hands will be full dealing with the realities of the COVID-19 recovery, pre-crisis favourite policy ideas shouldn't be top of the agenda.
John Daley Contributor
Jun 29, 2020 – 12.00am
One should never waste a good crisis. So a lot of people are arguing that now is the perfect time to enact whatever was their favourite policy reform well before COVID-19 came along.
But the world has really changed, and policy priorities need to reflect the new reality.
Grattan Institute’s Recovery Book, published on Monday, lays out the huge agenda of issues that governments need to deal over the next six to 12 months if Australia is to recover from COVID-19.
Governments should stick to their knitting, or Australia’s economy and society could unravel.
Governments enacted a string of emergency measures to respond to the epidemic. Think JobKeeper, the JobSeeker supplement (which effectively doubled unemployment benefits), loan guarantees to small businesses, relief from state taxes and fees, suspension of the usual rules for residential tenancies, commercial tenancies and insolvency, and deferral of many loan and rent payments.
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Economy will need $90b more stimulus: Grattan Institute
John Kehoe Senior writer
Jun 28, 2020 – 10.30pm
Federal and state governments should inject a further $70 billion to $90 billion in spending stimulus over the next two years to avoid long-term unemployment "scarring" and to boost the economic recovery in the wake of COVID-19, a new report by the Grattan Institute says.
The think tank's report, The Recovery Book:
What Australian governments
should do now, said governments must refine and "eventually" unwind
the emergency crisis measures including the JobKeeper
wage subsidy, small business
loan relief, a moratorium on tenant evictions and insolvency protections for directors.
Grattan warned suddenly "turning off the tap" in late September on $14 billion a month of emergency spending on JobKeeper and a doubled JobSeeker unemployment benefit could leave many households struggling to pay their bills and businesses in slow-to-recover sectors, such as tourism and hospitality, unable to survive.
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Young workers face $32,000 income hit as calls grow for more stimulus
By Shane Wright
June 28, 2020 — 11.59pm
Young Australians entering the workforce in the nation's worst recession will take a decade-long $32,000 hit to their incomes, with calls growing for the Morrison government to develop a new $30 billion stimulus package to avoid an even deeper downturn.
Analysis by consultancy firm EY shows people in their late teens and early 20s trying to find work will pay a long-term financial penalty that could result in workers switching jobs more often to find a decent pay packet.
Unemployment among 15- to 24-year-olds reached 16.1 per cent in May, the highest level since the middle of 1997. It would have been far worse but for a collapse in the participation rate, which at 59.9 per cent is its lowest on record.
EY said that before the coronavirus pandemic, wage growth was already 10 percentage points lower than for the decade to 2016. But the recession, with the prospect of lower wage growth over coming years, would deliver an even bigger blow, especially to young people.
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Government must spend more to support recovery
By Brendan Coates and Danielle Wood
June 29, 2020 — 12.01am
Qantas laid off 6000 workers last week. Deloitte is cutting 700 jobs. Unless governments act, there’s going to be a lot more of this. Australian governments must urgently develop an economic transition plan for the next six to 12 months.
Australia has been luckier and has managed the COVID-19 crisis better than most. But Australia is far from back to normal. We will be living in a "with-COVID" world rather than a "post-COVID" world for a long time.
Despite an initial bounce as the lockdown eased, the economy faces significant headwinds: weak underlying demand, a global recession, higher household and business debt and slower population growth. A second wave of the virus would further undermine any recovery.
The economic transition plan needs three components. First, governments should close eligibility gaps and fix design flaws in the JobKeeper wage subsidy. JobKeeper should move to upfront payments and expand to cover temporary workers and short-term casuals. The federal government should also introduce a separate part-time payment rate to better target the scheme.
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‘Window is closing’ for America to get the coronavirus pandemic under control, as global cases pass 10 million
The number of worldwide confirmed coronavirus infections passed ten million yesterday (Sunday) and deaths from the virus exceeded half a million.
Less than six months after the health authorities in Wuhan, China, first reported patients falling ill because of a mysterious new virus, COVID-19 has now spread to more than 170 countries, becoming the most disruptive global pandemic in modern history and one of the deadliest.
Although the rate of new infections has receded in east Asia and Europe, the first regions to be affected, cases are multiplying rapidly in South Asia, Africa and particularly Latin America where Brazil, the second most affected country, reported 38,693 new cases on Saturday. Peru, Chile and Mexico have all climbed into the top 11 countries globally by cases.
The global centre for both overall infections and fatalities remains the United States, which has recorded more than 2.53 million cases and 125,000 deaths, according to data compiled by the Johns Hopkins University in Baltimore.
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https://www.afr.com/policy/economy/jobtweaker-lever-needed-to-pull-back-from-cliff-20200630-p557gz
JobTweaker lever needed to pull back from cliff
The Melbourne spike shows the recession is fast changing shape. So a second wave of government supports must extend the emergency lifeline for the economy beyond September.
Chris Richardson Contributor
Jun 30, 2020 – 2.58pm
Australia’s economy is held together by lots of sticky tape. And that’s truly great news. JobKeeper and JobSeeker are the standouts, but a whole range of policies have swung into action to cushion our living standards.
Our ability to do that was made easier - both economically and politically - by our relatively strong position: the federal budget was balanced and debt was low when the crisis hit.
Even better still:
- We got the money into pockets faster than we did during the global financial crisis.
- Our success against the virus cut the cost of our emergency measures – a virtuous cycle.
- And the fall in interest rates is so big there’s little change in expected federal interest costs – yes, debt is up, but the drop in rates is even more dramatic, and it will gradually apply to old debts as well as new ones.
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Millennial super-spreaders causing most infections
Tom Burton Government editor
Jul 2, 2020 – 9.11am
Millennial super-spreaders could be responsible for the majority of new COVID-19 cases, according to three separate international academic research projects.
A recent study by the London School of Hygiene and Tropical Medicine and similar US research found that only one in about 10 people are spreaders of the disease.
A Japanese study also found that up to half of these spreaders were people aged from 20 to 40 years old. This was echoed by US academic research from Georgia which identified a similar youth bias among super-spreaders.
However, the Japanese study of over 3000 cases suggests it is not the age that is causing the spread.
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https://www.smh.com.au/national/scott-morrison-is-not-going-to-duck-this-crisis-20200703-p558w5.html
Scott Morrison is not going to duck this crisis
Peter Hartcher
Political and international editor for The Sydney Morning Herald
July 4, 2020 — 12.01am
It was just a couple of lines in a prime ministerial speech but it gives telling insight into how Scott Morrison sees himself, the country and the world. “We have been a favoured isle, with many natural advantages for many decades,” he said on Wednesday. “But we have not seen the conflation of global economic and strategic uncertainty now being experienced here in Australia, in our region, since the existential threat we faced when the global and regional order collapsed in the 1930s and 1940s.”
It was a terrible time. The Great Depression threw the world into poverty and misery, and fascists rose up to exploit the people’s anger. Led by Hitler in Germany and Tojo in Japan, the fascists cast democracy aside and promised their people a path to national greatness by crushing their neighbours.
It was a moment when human freedom everywhere was in imminent danger of being extinguished. “'The 1930s’ is not so much a label for a period of time than it is rhetorical shorthand – a two-word warning from history,” as Jonathan Freedland of The Guardian once put it. Liberty survived at the expense of the deadliest war in human history.
Morrison continued: “That period of the 1930s has been something I have been revisiting on a very regular basis, and when you connect both the economic challenges and the global uncertainty, it can be very haunting.”
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https://www.afr.com/politics/victoria-public-housing-towers-locked-down-20200704-p5590j
Victoria public housing towers locked down
Natasha Boddy Work & Careers reporter
Updated Jul 4, 2020 – 4.44pm, first published at 4.34pm
Key Points
- Victoria records 108 new cases of COVID-19
- 3000 residents from 9 public housing towers locked down
- Postcodes 3031 and 3051 added to suburban lockdown
- Hundreds may have been exposed, deputy chief health officer Dr Annaliese van Diemen said.
- First time in Australia towers have been locked down, acting chief medical officer Professor Paul Kelly said.
Victoria has recorded 108 cases of COVID-19 on Saturday, its second-biggest daily increase since the start of the coronavirus pandemic.
Up to 3000 residents of nine public housing estates in Flemington and North Melbourne have been placed into immediate lockdown and they will not be able to leave their homes for any reason. The hard lockdown will be in place for at least five days to ensure all residents can be tested.
It comes after 23 cases across 12 households in those areas were identified in recent days.
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WHO reports record daily increase in global coronavirus cases, up more than 212,000
We have made our live blog of the coronavirus pandemic free for all readers. Please consider supporting our journalism with a subscription.
July 5, 2020 — 3.55am
The World Health Organisation reported a record increase in global coronavirus cases on Saturday, with the total rising by 212,326 in 24 hours.
The biggest increases were from the United States, Brazil and India, according to a daily report. The previous WHO record for new cases was 189,077 on June 28. Deaths remained steady at about 5,000 a day.
Global coronavirus cases exceeded 11 million on Friday, according to a Reuters tally, marking another milestone in the spread of the disease that has killed more than half a million people in seven months.
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https://www.afr.com/politics/federal/manatory-testing-urged-for-the-covid-19-capital-20200703-p558qa
Mandatory testing urged in Melbourne's virus battle
Hannah Wootton and Patrick Durkin
Jul 3, 2020 – 6.23pm
Mandatory testing of COVID-19 should be imposed in Melbourne's ten hotspots to contain Victoria's outbreak, after the Andrews government revealed 10,000 people in lockdown have refused to be tested and new suburbs including the home of the Melbourne Cup risk being shut down.
As Victorian Premier Daniel Andrews came under pressure to sack his health minister over Victoria's failed pandemic response, the business community warned quick action was needed to protect jobs in the rest of the state or risk derailing the Prime Minister's plans for economic recovery.
Victoria recorded its fifth straight day of 60 plus cases on Friday and with 442 active cases, has passed NSW, which has 373 active cases. NSW joined other states in recording no new cases on Friday, leaving Melbourne exposed as the COVID-19 capital of Australia.
Of the 442 active cases in Melbourne, more than 300 are outside the lockdown of the 36 suburbs covering some 300,000 people. Flemington, which is outside the lockdown, emerged as the new hotspot although the government did not give numbers of new infections in the suburb.
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Royal Commissions And The Like.
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There are no entries in this section.
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National Budget Issues.
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Never forget that governments have no money – it is always ours
Governments have become so pervasive it’s easy to forget they have no money of their own. They fund themselves in two ways: taxation and borrowing.
Modern Monetary Theory, a set of ideas with growing appeal, especially on the left of politics, posits a third way: simply creating money. Governments can instruct their central banks to create money, which their treasuries can spend on whatever they want, ideally soaking up spare capacity in the economy, so the argument goes. It would be wonderful were this true, but there is no third way.
MMT is the left-wing version of the extreme supply-side economics of the 1980s that propounded that government could raise tax revenue by lowering taxes.
If there really were a costless way to finance government spending it would have been discovered by now. In the economic menu of life there are lunches of varying costs, but there are still no free ones. “Money creation” is just another form of borrowing.
Imagine the government made JobKeeper payments without issuing bonds or raising taxes. The Reserve Bank would have to “create money” by making a loan to the Treasury, recording it as an asset. At the same time these billions in JobKeeper payments would be recorded as an increase in the value of banks’ deposits held with the Reserve Bank, an offsetting liability of the Reserve Bank.
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RBA warns policy support needed for 'quite some time'
Jonathan Shapiro Senior reporter
Jun 30, 2020 – 12.33pm
The unprecedented expansion of the central bank's balance sheet will not lead to an outbreak of inflation, Reserve Bank deputy governor Guy Debelle asserted on Tuesday.
In response to the economic shock and market turmoil of the COVID-19 crisis, the Reserve Bank stepped in to buy $40 billion of government bonds.
But Dr Debelle told the Economic Society of Australia webinar he did not see this injection of liquidity into the system as "posing any risk of generating excessively high inflation in the forseeable future".
"Indeed, the opposite seems to be the more likely challenge in the current economic climate. That is, that inflation will remain below the RBA’s target," he said.
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Avoiding an economic 'cliff' will require more spending
Clancy Yeates
Banking reporter
July 1, 2020 — 12.05am
In just over three weeks, Treasurer Josh Frydenberg will reveal the government’s plan for overcoming what many fear is a looming economic "cliff".
From the end of September, businesses that have been kept on life support are bracing for pain on many fronts, as a wave of emergency support is withdrawn. Wage subsidies will expire, repayments on bank loans will resume after a six-month freeze, and a ban on evictions ends, just to name a few possible challenges.
It may go against the instincts of some in the Coalition, but if the government wants the economy’s better-than-expected run during the coronavirus crisis to continue, it should err on the side of responding with further targeted stimulus.
And that’s not just the view of those supporting a bigger role for government – it’s the advice of that bastion of economic orthodoxy, the International Monetary Fund, or IMF. "Where fiscal space permits, as targeted fiscal support is unwound, it can be replaced with public investment to accelerate the recovery and expanded social safety net spending to protect the most vulnerable," the IMF said last week.
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Half a million Australians wipe out their super balances
Industry Super Australia says nearly half a million Australians have reduced their retirement balances to zero through early access to superannuation.
Latest figures by ISA estimate more than 480,000 workers have wiped their super balances clean in the first round of the government’s COVID-19 support measure, which has allowed people to dip into their retirement savings early.
Of those, 395,000 are aged under 35.
As of Wednesday, account holders who are facing financial hardship due to the pandemic are able to access a second $10,000 slice of super in the new financial year.
ISA, which represents 15 industry funds including AustralianSuper and Hostplus, said the incoming second tranche will heighten fears more Australians will make a big dent in their savings.
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Price falls gain momentum as fiscal cliff looms
Ingrid Fuary-Wagner Reporter
Jul 1, 2020 – 10.15am
National property prices have fallen for a second month in a row and accelerated as uncertainty builds about the fiscal cliff expected in September.
Melbourne and Perth led the pack with a fall in property values of 1.1 per cent in June, followed by a 0.8 per cent decrease in Sydney, a 0.4 per cent fall in Brisbane and a drop of 0.2 per cent in Adelaide, according to CoreLogic's hedonic home value index.
Prices in Hobart and Darwin grew by 0.3 per cent and Canberra values increased slightly by 0.1 per cent. Nationally, prices fell by 0.7 per cent.
"There is a bit of momentum gathering in the magnitude of [price] declines," CoreLogic's head of research, Tim Lawless, said. "Last month nationally we reported a 0.4 per cent of a drop, that's now picked up to 0.7 per cent, which is nearly double... but it is still less than a 1 per cent drop since the market moved through its peak."
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Why the economic recovery will be a long, slow slog
CBA chief economist Stephen Halmarick warns that even though total spending on CBA credit and debit cards is 4 per cent higher than this time last year, "the momentum of the improvement has slowed".
Karen Maley Columnist
Jul 1, 2020 – 11.59pm
Stephen Halmarick gets a better view of what's happening in the economy than most of his peers.
As chief economist of the Commonwealth Bank of Australia – the country's largest lender – he has access to an extraordinary treasure trove of real-time data on the income and spending patterns of millions of Australians.
And right now that data show that the early, quick jump in economic activity as a result of the blockbuster fiscal and monetary stimulus measures that were introduced to cushion the economy from the worst ravages of the coronavirus pandemic is beginning to run out of steam.
That suggests the economy faces a much more bumpy and uncertain recovery ahead, until consumers regain the confidence to open their wallets, and businesses decide that they can afford to take a risk.
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https://www.afr.com/property/residential/no-end-to-pandemic-pain-for-landlords-20200701-p557x0
No end to pandemic pain for landlords
In the face of the pandemic, landlords have been called on to support their tenants. Many have been happy to help. But they are not happy to see their rights eroded in quite unprecedented ways.
Robert Harley Contributor
Jul 1, 2020 – 7.38pm
The relationship between Australia’s landlords and tenants, a relationship anchored in law and fundamental to property investment, is being transformed by COVID-19.
In the face of the pandemic, landlords have been called on to support their tenants. Many have been happy to help. But they are not happy to see their rights eroded in three, quite unprecedented ways.
Top of the list is the commercial tenancies code of conduct for small and medium-enterprise tenants which was introduced by the Morrison government, legislated in differing ways by the state governments, and due to expire in the spring.
With the September deadline for many COVID-19 initiatives approaching, and some setbacks in the fight to beat the pandemic and save the economy, Treasury is already assessing the initiative.
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03 July, 2020 12.33pm
Budget outlook deteriorates further
Australia’s budget deficit is set to blow out by $230bn this year, representing a “staggering” 11.7pc of GDP, according to Westpac’s latest modelling.
Chief economist Bill Evans and senior economist Andrew Hanlan have revised higher their estimates of the deficit blow out, tipping the government to extend the JobKeeper package by three months or $35bn, and with an additional $15bn stimulus package of personal tax cuts, low income subsidies and infrastructure spend to come on budget day in October.
The bank estimates a defecit of $95bn or 4.8pc for FY20, and $230bn for FY21, from previous $80bn and $170bn respectively.
They note that their estimate of cyclical defecit - that which is associated with the business cycle - has blown out to 2.75pc for 2019/20, from initial expectations of 2pc, and they now see the cyclical deficit in the current year to be at 5pc.
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Multibillion-dollar plan to help businesses survive or close
By Shane Wright
July 3, 2020 — 11.00pm
A multibillion-dollar plan to help struggling small businesses either prosper beyond the coronavirus pandemic or exit with dignity is being developed by the Morrison government as part of its efforts to grow the economy and drive down unemployment.
The package, which recognises many small businesses face bankruptcy when the JobKeeper program ends at the same time as pandemic insolvency protections, will form part of the government's budget recovery strategy and could cost more than $10 billion.
The government, business organisations and the insolvency sector are expecting a surge in bankruptcies once the $1500-a-fortnight JobKeeper wage subsidy scheme winds up in September.
Despite the nation being in its worst recession since the 1930s, bankruptcy and insolvency actions are actually in steep decline. But laws introduced by the government in March that made it more difficult to start insolvency actions at the height of the crisis are due to finish in late September.
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What Ken Henry really thinks about tax reform
By Jessica Irvine
July 4, 2020 — 12.02am
“Just call me a ‘has been’,” jokes Ken Henry on the phone from his farm up near Port Macquarie, where he’s spent lockdown with his wife, two adult children and their families.
I’ve just asked Australia’s former Treasury Secretary, who stood down last year as chairman of NAB after the banking royal commission, for his current affiliations. Henry says he has a few irons still in the fire, including as chairman of Australian National University's Sir Roland Wilson Foundation.
But we agree mention of this will needlessly eat up too much of my word limit for my weekend feature on the future of tax reform.
We decide, instead, to play a game of “yes, no, maybe” on the top five recommendations of former Telstra boss, David Thodey’s tax review, released this week.
OK, I decide we should play the game. But Henry obliges. He seems in a convivial mood. He only warns he must be a bit careful, because he is yet to provide his formal feedback to the review.
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Health Issues.
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New research aims to show what really works for anxiety and depression
By Julie Power
June 29, 2020 — 4.55pm
Avoiding caffeine, taking multivitamins, going on a low-protein, high-carb or ketogenic diet, taking a vacation, swimming with dolphins, rock climbing and juggling are touted online as cures for anxiety and depression.
They may have other benefits but, like a third of 440 treatments, there is insufficient or no scientific evidence to support these claims, research by Beyond Blue has found.
Beyond Blue's lead clinical advisor Dr Grant Blashki said the non-profit mental health organisation commissioned researchers from the University of Melbourne to review the scientific evidence-based literature on 440 treatments for depression and anxiety. These included psychological, medical, complementary and lifestyle interventions.
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International Issues.
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America faces a record surge in new infections
America's position as the world's leader in coronavirus cases and deaths is in large part the result of human error, and the still-rising caseload stands as a stark reminder of the blunders that have characterised the national response
Toluse Olorunnipa, Josh Dawsey and Yasmeen Abutaleb
Jun 28, 2020 – 8.47am
Washington | Six months after the novel coronavirus was first detected in the United States, a record surge in new cases is the clearest sign yet of the country's historic failure to control the virus – exposing a crisis in governance extending from the Oval Office to state capitals to city councils.
President Donald Trump – who has repeatedly downplayed the virus, sidelined experts and misled Americans about its dangers and potential cures – now finds his presidency wracked by an inability to shepherd the country through its worst public health calamity in a century.
The dysfunction that has long characterised Trump's White House has been particularly ill-suited for a viral outbreak that requires precision, focus and steady leadership, according to public health experts, administration officials and lawmakers from both parties.
As case numbers began rising again, Trump has held rallies defying public health guidelines, mused about slowing down testing for the virus, criticised people wearing masks and embraced the racially offensive "kung flu" nickname for a disease that has killed at least 123,000 Americans.
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Small business the canary in US economic coal mine
If you are looking to predict the shape of the US economic recovery, don’t look at the markets. Talk to the owner of a local café.
Rana Foroohar Contributor
Jun 29, 2020 – 10.16am
If you are looking to predict the shape of the US economic recovery – be it V, W, L or even K – don’t look at the markets. Look instead at the small and medium-sized businesses that represent 50 per cent of employment in the country.
They are the best economic indicator in America right now. They are also in trouble.
More than 70 per cent of them have been helped by emergency benefits since the start of the pandemic. But those benefits end this month – even as the typical small business only has enough cash reserves to cover two weeks of costs in lieu of any revenues.
At the same time, the Paycheck Protection Program, or PPP, will return to its pre-COVID-19 levels by the end of July. That means that unemployment benefits will shrink to around 40 per cent of what they are now, with a major impact on consumer spending.
Assuming no other fiscal stimulus or aid, this combination will lead to a new wave of small business failures. I worry that some of my favourite local establishments will be among them.
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'Mayhem': Gripped by pandemic, India's healthcare system buckles
By Joe Wallen and Sweta Dash
June 29, 2020 — 12.23pm
Delhi: It took a long time for Pramila Minz, 28, to persuade her mother to relocate from her remote village to New Delhi. When Gurubari Minz, 55, began showing COVID-19 symptoms, her daughter was comforted by the belief she would receive the best possible healthcare now she lived in the Indian capital.
Pramila took her mother to Safdarjung Hospital on June 10, but after conducting a CT scan and X-ray, a doctor refused to admit her because of a shortage of staff and beds.
People trickled into religious shrines in India as the federal government lifted most restrictions on public places, even as the country added a record number of infections in a single day.
She was rejected by five other major hospitals in New Delhi during a frantic 24-hour search. Gurubari's condition worsened: she was experiencing breathing difficulties and drifting in and out of consciousness.
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A bloody ‘peace’ as Afghans see off another invader
Trust no one, question everything — it’s a simple rule that keeps you alive in Afghanistan. That is why the US-Taliban peace deal signed this year and being implemented across Afghanistan was snake-bitten before the ink was dry.
Last week was the deadliest for Afghan National Security Forces in the 19-year war. The Taliban launched more than 400 attacks across 32 provinces, killing 290 Afghan soldiers and wounding 500. By any measure, that’s a strange peace deal.
These events coincided with a report exposing a secret Russian unit paying the Taliban to kill US soldiers. Whether that is true or just more disinformation, US President Donald Trump should stick to withdrawing all US troops from Afghanistan. Leave it to the Afghans.
Afghanistan is deeply seductive. Its people and ancient landscape really draw you in. Yet, as so many nations have learned, this same fascination leads to disappointment and defeat. History is littered with lessons on Afghanistan. According to an old Pashtun myth, Alexander the Great’s mother Olympias wrote him a letter getting on his case about taking so long to knock off a primitive, poverty-stricken people. So Alexander captured three tribal chiefs and sent them back to Macedonia, each one carrying an offering of soil. They were to deliver the soil as a token to Olympias from her son. But outside the Queen’s chambers, the three chiefs got into a fight and killed one another. Olympias wrote to her son: “Now I understand.”
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Spectre of shutdowns returns as US hospitals near crisis levels
Jacob Greber United States correspondent
Jun 30, 2020 – 12.05pm
Washington | States and cities across America are pausing or reversing plans to reopen their battered economies as a surge in COVID-19 cases threatens to overwhelm hospitals across the country's south.
Record infection numbers are being recorded across several states, including Florida, Arizona, Texas and California, where the caseload in Los Angeles Country is rising by more than 2000 a day.
With Independence Day approaching, pressure is growing on mayors and governors to avoid fanning the pandemic's flames by allowing large groups to congregate.
More than 15 states are now paring back on reopening plans and, even areas where the crisis has ebbed, such as New Jersey and New York, are looking at turning back the clock.
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America headed to a 'very disturbing' place: Anthony Fauci
Jacob Greber United States correspondent
Jul 1, 2020 – 4.19am
Washington | America's pandemic is at risk of spiralling out of control, said the nation's top infectious diseases expert Anthony Fauci as he warned of a "very disturbing" future in which cases of COVID-19 could surge by more than 100,000 a day.
As the Federal Reserve chairman Jerome Powell told congress that a full economic recovery was "unlikely until people are confident that it is safe", in a nearby hearing the normally resolute Fauci delivered an unusually bleak outlook on Tuesday (Wednesday AEST).
"We are now having 40-plus-thousand new cases a day," he said. "I would not be surprised if we go up to 100,000 a day if this does not turn around, and so I am very concerned."
New cases have risen by an average of more than 39,000 over the past week, up 40 per cent in just seven days, with infections increasing by more than 5 per cent in 40 states. Those numbers are larger than the worst days in April, when the virus slammed into New York, New Jersey, Washington state and Connecticut.
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The sharemarket has predicted who will win the presidency since 1984
Matthew Fox
Jul 1, 2020 – 8.19am
Key Points
- Since 1984, the S&P 500 has correctly predicted every single presidential election based on its price movements in the three months leading up to the election.
- And since 1928, the S&P correctly predicted the next US President 87 per cent of the time.
- As we approach this November's election, investors should keep an eye on the sharemarket to gain clues as to which candidate may win the election: incumbent Donald Trump or Joe Biden.
Since 1984, the sharemarket has correctly predicted who will win the US presidential election, according to LPL Financial’s senior market strategist, Ryan Detrick.
And going back to 1928, the S&P 500 has correctly predicted who will win the US presidential election 87 per cent of the time.
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https://www.afr.com/policy/economy/how-to-survive-this-crisis-20200701-p557wg
How to survive this crisis
Maybe this disaster will bring one benefit: we will find not just that government is back, but that the demand for sensible government run by competent people is back. That would not make such a calamity worth having.
Martin Wolf Columnist
Jul 1, 2020 – 10.19am
The IMF’s World Economic Outlook Update for June is not a cheerful document. Yet it does contain a cheerful point: the second quarter of 2020 should be the nadir of the COVID-19 economic crisis. If so, the challenge is to produce the best possible recovery.
The downgrade of the IMF’s forecasts since April is large, with global growth forecast at minus 4.9 per cent this year, down from minus 3 per cent in April. Next year’s growth is forecast to be 5.4 per cent.
Global output is, as a result, expected slightly to exceed 2019 levels in 2021. Yet, in the fourth quarter of 2021, the gross domestic product of high-income countries would still be below levels in the first quarter of 2019. Output would also be some 5 per cent below levels implied by pre-COVID-19 growth trends.
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The worst-case scenario is unfolding in Brazil
The South American nation may become a laboratory for what happens when a deadly and little-understood pathogen spreads without much restriction.
Julia Leite and Simone Preissler Iglesias
Jul 1, 2020 – 6.20am
On a recent afternoon in São LuÃs, the capital of Maranhão state in northeastern Brazil, Hosana Lima Castro sits on a flimsy plastic chair in front of her house as stray dogs sniffed potholes in the narrow street and a few neighbourhood kids launched kites. The bar across the way, where a few months ago an acquaintance of Castro’s had been shot, is closed because of the pandemic.
Her job at a convenience store has disappeared too, so Castro, who’s 43 and shares her modest home with her father, two brothers, and two of her kids, has nowhere else to be. Although the novel coronavirus is widespread across Brazil’s north-east, she isn’t wearing a mask. Nor is anyone else in her crowded neighbourhood, where basic services have been so neglected that many residents have no access to clean water.
Castro’s brother, Moises, a garbage collector, was the first in her family to get sick. Then her other brother, Luciano, did too, followed by their father, Francisco, who has diabetes. He suffered badly, struggling to breathe and running a soaring fever. But no one in Castro’s household went to the hospital – a place that some in São LuÃs believe makes patients sicker than when they came in, or worse. “That would be a death sentence,” Castro says.
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Is the Fed about to nationalise financial markets?
Stephen Bartholomeusz
Senior business columnist
If the US Federal Reserve Board does what markets are expecting, indeed demanding, and implements yield curve control, it will create something quite unprecedented: The world’s most powerful central bank will control not just the volume of money in the world’s largest economy, but also its price.
As discussed last week, the Fed is closely monitoring our Reserve Bank’s cautious push into unconventional monetary policies - the RBA's capping of yields on bonds with maturities of up to three years at 0.25 per cent.
Since the global financial crisis, the Fed has adopted far more aggressive policies than the RBA. It expanded its balance sheet dramatically in the post-crisis environment, buying trillions of US dollars worth of bonds and mortgages through a series of "quantitative easing" programs that flooded the US financial system with cheap cash.
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'President for life': Putin's poll victory secures path to rule Russia until 2036
By Bevan Shields
July 2, 2020 — 7.04am
London: Sweeping new powers that pave the way for Russian President Vladimir Putin to rule for 12 more years after his term ends in 2024 have been rubber stamped in a controversial national poll marred by claims of irregularities and intimidation.
Putin, 67, has ruled Russia as either president or prime minister since 1999 and was due to leave the Kremlin in 2024. The removal of the ban on presidents serving two consecutive terms means he will have the option of running for office for a further 12 years until 2036. By that point, he would be 84.
The Central Election Commission said early counting showed 76 per cent of voters had backed a package of constitutional changes which includes the removal of a rule preventing presidents from serving more than two consecutive six-year terms.
The national vote, which was not legally required but Putin held anyway to give the amendments more legitimacy, has been derided as a sham by opposition parties and criticised by election monitors on the ground as rigged.
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Johnson opens door to three million Hong Kongers, declaring China's actions a 'serious breach'
By Latika Bourke
July 2, 2020 — 6.37am
London: Britain will open its borders to more than three million Hong Kongers, declaring China's new security law for the territory a "clear and serious breach" of the Sino-British declaration that guarantees autonomy from Beijing.
As police in Hong Kong arrested around 370 people under the new laws, Prime Minister Boris Johnson told the Commons on Wednesday afternoon that Britain would honour its promise to offer citizenship to more than three million Hong Kongers.
The announcement came as the British consular worker Simon Cheng who was detained and tortured last year over the Hong Kong protests announced he had been granted asylum to live in the United Kingdom.
He welcomed the "lifeboat" and said he hoped his own case would set a precedent for other victims to seek protection from Beijing's "political persecution".
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I look forward to comments on all this!
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David.
