-----
We have now had the Democratic and Republican pre-election conventions to endorse Trump and Biden for the presidential election. Right now it is hard to know what will happen as the US is bitterly and deeply divided. I fear there will be great uncertainty and fear pervade the next few months and that there will be protests and violence no matter who seems to win. The mood won't be helped as Trump focuses on law and order! From my perspective I really hope Trump gets thumped convincingly.
In the UK a second wave seems to be building as it is in Continental Europe. Uncertain times and Brexit is looking more and more confusing and worrying as well. Difficult times!
In OZ political consensus seems to be under
considerable strain and it is hard to know what will happen next. It is a worry
to see the fracturing as the economic damage is really ramping up. This issue
has a long way to run sadly. The drop of the GDP by 7% has surely focused all pollies on what comes next!
-----
Major Issues.
-----
https://www.afr.com/companies/financial-services/asic-lurches-from-bad-to-worse-20200823-p55oek
ASIC lurches from bad to worse
Frictions between ASIC commissioners are bubbling up at a time when the corporate cop has suffered some humiliating legal setbacks, causing many to wonder just what has gone wrong.
Karen Maley Columnist
Aug 24, 2020 – 12.00am
What has gone so wrong with the Australian Securities and Investments Commission?
There were widespread hopes that the Morrison government's moves to bolster its powers and budgetary resources would finally allow the country's top corporate cop to be able to tackle white-collar criminals.
But a sense of gloom has now descended on ASIC amid signs that it is mired in decision-making paralysis at a time when tensions between the six commissioners are flaring regularly.
The renewed sense of despondency is particularly difficult for ASIC's large legion of talented and committed staff, whose morale was badly battered by the excoriating criticisms made of their employer by the Hayne royal commission.
Still, many turned down lucrative job offers from the banks in the hope that a revitalised ASIC would finally tackle corporate misconduct.
-----
So what exactly is the point of the Labor Party in 2020?
Shaun Carney
August 23, 2020 — 11.17pm
Next week the Labor Party will find itself marking the 10th anniversary of the day Prime Minister Julia Gillard signed a deal with the Greens. There can be no celebration; at the national level, the ALP continues to be unable to get out from under that ill-starred moment. The agreement with the Greens ultimately sealed the fate of the government led by Gillard and later Kevin Rudd, crippling Labor’s ability to craft an effective and electorally saleable set of policies on climate change and energy.
All these years later, the ALP seems as far away from a coherent approach to these policy areas as it was after it was smashed at the 2013 election at which Tony Abbott’s coalition rode to victory vowing to axe the carbon tax that flowed from the deal with the Greens.
Right now, the ALP is in the throes of a very willing internal debate about the role of gas and renewable energy, with agriculture spokesman Joel Fitzgibbon warning that it could break the party in two. Fitzgibbon, who represents a coal seat in the Hunter Valley, has raised the prospect of Labor falling apart as it tries to satisfy the seemingly disparate constituencies of inner-city greenies and regional blue-collar workers. He wants the ALP to champion the use of fossil fuels for export and for industry.
Meanwhile, the energy spokesman, Mark Butler, appears to favour doubling down on renewables and is encouraging party activists to steer the party towards a purer stance.
-----
https://www.afr.com/politics/federal/wa-notches-up-major-win-in-border-wars-20200825-p55p1f
WA notches up major win in border wars
Brad Thompson and Ronald Mizen
Aug 25, 2020 – 3.14pm
A precautionary approach should be taken to stopping COVID-19 because the worst case scenario would be catastrophic to the community, the Federal Court has ruled in Clive Palmer's bid to overturn WA's border ban.
The decision will be seen as a major victory for Western Australia, which initially lost a bid to have the matter reheard after the Commonwealth unexpectedly withdrew from the case earlier this month.
Justice Rangiah said the risk to the health of Western Australians was a function of two factors: the probability that COVID-19 would be imported, and the seriousness of the consequences of an outbreak.
"The border restrictions have been effective to a very substantial extent to reduce the probability of COVID-19 being imported into Western Australia from interstate," Justice Rangiah said.
-----
https://www.afr.com/politics/federal/pm-seeks-veto-powers-over-china-deals-20200826-p55pfe
PM seeks veto powers over China deals
Phillip Coorey Political editor
Aug 26, 2020 – 10.30pm
The Commonwealth is seeking powers to torpedo new and existing agreements between a foreign power and state governments, local councils or universities, in a move aimed primarily at curbing infiltration by China.
This includes the 2018 Memorandum of Understanding which Victorian Premier Daniel Andrews signed with China on its Belt and Road Initiative, and any infrastructure contracts that result from it.
Declaring all levels of government in Australia must speak with one voice on national security, Prime Minister Scott Morrison will introduce legislation next week enabling the federal government to override the states, and urge the Parliament to pass it before Christmas.
On the passage of the legislation – which will use the external affairs powers under the Constitution – states and territories, local councils and public universities have six months to present the Commonwealth with a stocktake of their existing arrangements with foreign governments or foreign government bodies.
-----
Morrison asserts power in one area where he can
By David Crowe
August 26, 2020 — 10.30pm
Scott Morrison is pulling rank on the premiers in one area where his powers are clear.
After butting heads with state leaders over the response to the pandemic, the Prime Minister is asserting his authority in foreign policy, the national interest and the rise of China.
This is a message to all leaders but to Victorian premier Daniel Andrews more than anyone, thanks to his government's bilateral agreement with China.
It is a necessary fix to the problem revealed when the Andrews government signed up to the Belt and Road Initiative last year without consulting the Department of Foreign Affairs and Trade.
While the draft law on foreign agreements is not about the coronavirus, it comes at a time when the federation is fracturing under the pressure from a new threat.
-----
How worried should you be about falling home prices?
Jessica Irvine
Economics writer
August 27, 2020 — 12.00am
One of the biggest risks hanging over Australia's fragile COVID economy is the prospect of a property market bust. Right now, despite rising joblessness, most affected Australians are able to keep making mortgage repayments thanks to expanded government support and generous bank repayment holidays.
But what will happen when those pillars of support are unwound, as they inevitably must be?
If large numbers of homeowners are unable to keep up on loan repayments, they could be forced to sell. If they all sell at once, that could accelerate the decline we're already seeing in home values.
Of course, young would-be home buyers might cheer falling home prices. But if it's associated with a larger collapse in the economy – as a negative wealth effect deals a body blow to consumer spending – young buyers will also find it harder to save a deposit.
So everyone should be a bit worried about the future for Australia's debt-fuelled property market.
-----
China deal: Sovereignty rules with the flex of constitutional muscle
A symbolic reassertion of Australian national sovereignty against the states and a more explicit rejection of Chinese President Xi Jinping’s defining strategy — the Belt and Road Initiative — has seen the Morrison government flex its political muscles over constitutional powers.
The states have overreached on two counts — their unjustified, albeit popular, closure of most borders and the earlier decision of the Andrews Labor government in Victoria to sign up to China’s BRI — with Scott Morrison building political pressure on the former and now using constitutional authority to repeal the latter.
Facing pressure this week over the conditions in aged-care accommodation, the Prime Minister sought to switch the political debate to the national interest imperative demanding that Australia deal with Beijing with “one voice”, thereby picking a guaranteed electoral winning issue. The announcement by Morrison and Foreign Minister Marise Payne of a new Australian foreign relations bill to override state governments in making agreements with foreign governments is an assertion of national responsibility, the aim being to tear up Premier Daniel Andrews’s BRI deal with China.
This bill attacks Andrews at his weakest point. His overreach on China lacks a constitutional foundation. Andrews is going to be humiliated. It will deepen the fracture between the Morrison and Andrews governments — witness the petulant response from Andrews this week. “There is only one sovereignty in Australia and it’s Australian,” Morrison said in a rebuttal to other levels of government.
-----
Retailers and landlords are fighting to their own deaths
Something has to give with retail tenancy. The way they’re going there will be a catastrophe, with receivership on both sides.
The war between landlords and retail tenants is currently being fought as a sort of duel between two “champions”, like the war between the kings of Mycenae and Thessaly in the movie Troy.
In this case the champions are Peter Allen of Scentre (Boagrius) and Scott Evans of Mosaic Brands (Achilles), with Solomon Lew holding his spare spear. Allen locked Evans out of 129 of his stores (biff!); Evans said he’ll close 500 stores (whack!).
Unlike the one between King Agamemnon and King Triopas, this proxy battle is likely to develop into something bigger and bloodier, and the problem is that both sides are fighting yesterday’s battle, using yesterday’s ideas.
Scentre’s Peter Allen is desperately trying to preserve the principle of fixed square-metre rent because he and other landlords can only think in terms of space. Their world revolves around occupancy, rent per square metre and valuation.
-----
Why investing will never be the same
This was meant to be a dreadful earnings season and it was indeed miserable for many companies. But it turned out to be something more than that: a fork in the road with a new era of winners and losers forged in the COVID crisis.
Winning in a big way are the online champions such as consumer finance stock Afterpay or online retailer Kogan. However, they have not taken the prize exclusively; they are flanked by incumbents that have read the winds of change and captured the uplift, such as retailer JB Hi-Fi.
In contrast, the companies that were once the backbone of any share portfolio — the big banks, the property trusts and the big-name department stores — are caught in midstream and being punished severely.
Off to one side are the big miners — BHP, Rio Tinto and Fortescue — where no amount of strategic miscalculations can offset a remarkable upswing in the iron ore price, which is now more than double the price the government had allowed for in the federal budget.
-----
Household savings climb as Aussies hunker down for recession
By Caitlin Fitzsimmons
August 30, 2020 — 12.00am
Households are using the pandemic year to build their nest eggs and gird against recession, with savings and investments trending higher since the start of 2020.
The average total balance of Commonwealth Bank savings accounts and term deposits, which accounts for a large portion of the market, is up 5 per cent over the January-July period. That would be boosted by the $33.3 billion in superannuation withdrawals under the federal government's emergency early-access scheme.
Commonwealth Bank chief economist Stephen Halmarick said the recession was "real for people who have lost their jobs" and there was more pain to come since the bank expected unemployment to rise from 7.5 to 9 per cent by the end of this year.
However, the overall numbers showed that so far, many people had maintained or increased their incomes during COVID-19 and were making precautionary savings.
-----
'More organised, sophisticated and security conscious than before': Right-wing extremist threat growing
By Anthony Galloway
August 30, 2020 — 12.00am
Australian security agencies are on alert for extremists who could have been inspired by the Christchurch mosque killer and other massacres overseas, as small far-right cells across the country are becoming more organised and sophisticated than ever before.
The concern is being heightened by extreme right-wing groups increasingly attracting people from a military background who know how to use weapons, as well as a younger membership who aren't displaying obvious signs of their extremism - making them harder to detect.
Brenton Tarrant, 29, was sentenced last week to life in prison without parole after pleading guilty to slaughtering 51 worshippers at two New Zealand mosques.
The Morrison government has opened the door to the Australian-born white supremacist serving out his sentence in Australia.
-----
Everyone is sorry, no one is responsible: COVID exposes lack of ministerial accountability
Peter Hartcher
Political and international editor for The Sydney Morning Herald and The Age
August 28, 2020 — 7.13pm
We may not have eradicated the virus but Australia seems to have done a thorough job of eradicating any remaining shred of the accountability of government ministers. Just about everyone is being asked to make sacrifices for the public good. The front-line health workers who risk their own health for the health of the country are the people who bear the heaviest burden.
Millions of other citizens are expected to accept loss of income, loss of personal liberties, loss of wellbeing. And just about everyone is held to account. Those who don't are admonished, fined and, in the case of the woman who snuck across the border into Western Australia by hiding on a truck, jailed for six months.
Just about everyone, that is, except those at the very top. We have three glaring failures.
One. Who was the NSW Minister for Health before the Ruby Princess plague event? Brad Hazzard. His department made multiple "serious", "inexplicable" and "basic" errors in handling the disembarkation of passengers from the cruise ship, according to the special commission of inquiry into the event.
Those errors led to the biggest source of infection in Australia to that point. Sixty-two people caught the virus due to those who disembarked.
-----
Think pandemics are bad? Prepare for the main event
· The Times
Standing beneath the skies of England’s Nottinghamshire, one Times letter writer said that it was as if night had turned to day. In Preston, another correspondent spoke of “luminous waves” that “rolled up in quick succession” – bright enough to cast an eerie and flickering shadow.
Twelve hours later, on the other side of the world, an Australian miner was yet more poetic about what, for him, were the Southern Lights.
“A scene of almost unspeakable beauty presented itself,” he said, recalling that night in September 1859. “Lights of every imaginable colour were issuing from the southern heavens, one colour fading away only to give place to another if possible more beautiful than the last.”
It was, he said – and he was almost certainly right – the greatest aurora ever recorded.
There
were other oddities that night and in the day that came after. In some
telegraph stations, signals failed to send. In others, communications continued
despite the fact the power was disconnected. In still more, sudden jolts and
sparks set the paper used to record messages on fire.
-----
Climate Policy
-----
Bushfire inquiry warns NSW to expect worse
Finbar O'Mallon Reporter
Aug 25, 2020 – 12.47pm
The inquiry into the 2019-20 bushfire season in NSW has warned people to expect worse as the state's fire season begins.
"It showed us bushfires through forested regions on a scale that we have not seen in Australia in recorded history," the report, which was released on Tuesday, said.
The NSW government says it has accepted the report's 76 recommendations, which call for more bushfire research, funding and training, and an established body to oversee it.
Premier Gladys Berejiklian said people were still rebuilding and dealing with the trauma of the horror fire season, which killed 26 people in NSW and razed nearly 2500 homes.
-----
Coronavirus And Impacts.
-----
https://www.afr.com/policy/economy/hope-wearing-thin-in-down-and-out-victoria-20200823-p55ogx
Hope wearing thin in down and out Victoria
Victoria is deep in winter gloom but the official advent of spring next month won't relieve that. Instead, Daniel Andrews is extending the likely timetable for economic lockdown. So much for hope.
Jennifer Hewett Columnist
Aug 23, 2020 – 3.36pm
Scott Morrison may have declared last week one of "hope" as he busily promoted the notion of a vaccine early next year amid falling numbers of new coronavirus infections in Victoria.
Reality is much less malleable. Welcome to this week.
Not only is the hope of finding an effective vaccine still elusive in terms of both timing and any certainty - what is increasingly clear is that although case numbers in Victoria are indeed slowly but steadily falling, they are likely to remain too high for the government to follow its promised timetable of a mid-September end to the state's extreme restrictions.
That is a huge new hurdle for the federal government's October budget and its hopes of trying to prod the national economy into a revival of sorts. It is not just the borders of other states remaining slammed shut and re-enforcing the hit to national business confidence, supply chains and sectors ranging from Queensland tourism to the airline industry.
-----
Fast spreading mutation now Australia's most common strain of COVID-19
By Jewel Topsfield
August 24, 2020 — 11.49pm
A mutation of the coronavirus which appears to increase infectivity is now the most common form of the virus in Australia.
International researchers found a newer strain of SARS-CoV-2, the virus which causes COVID-19, was more infectious in laboratory tests but did not make patients sicker.
The mutation, known as D614G or the G-variant, is now the most prevalent form of the virus in Australia according to the Bedford lab, which pulls together global genomic data on COVID-19 through the platform Nextstrain.
University of Sydney Professor Edward Holmes - one of the world’s leading experts on the virus - said the evidence showed the mutation increased infectivity when tested on cell cultures under laboratory conditions.
-----
Backbenchers, businesses urge governments to ease state borders
By David Crowe
August 24, 2020 — 6.48pm
State premiers are being blamed for splitting communities with border closures that put jobs at risk, prompting federal Coalition MPs to ramp up calls for intervention to ease the controls.
The backbench demands add to pressure for national principles to fix the problem, as the Business Council of Australia and other industry groups slam the "patchwork" of different rules across the country.
Prime Minister Scott Morrison urged state and territory leaders to avoid border controls unless they were essential for health, in another sign of federal concern at the damage to the economy.
But Mr Morrison has been unable to convince the states and territories to scale back their restrictions despite discussions about how to define coronavirus "hotspots" in the cities and regions.
-----
Researchers announce 'world's first' confirmed case of coronavirus reinfection
August 25, 2020 — 3.06am
London: Researchers claim to have confirmed the world's first case of a coronavirus reinfection, in a discovery with far-reaching consequences for the fight against the pandemic.
The 33-year-old IT worker was struck down by the disease in Hong Kong during the first wave of the pandemic, but recovered and was discharged in mid-April. However, he tested positive again in mid-August — some 142 days later — after travelling through Spain and the United Kingdom.
Researchers analysed the genome sequence to confirm that the man had been infected by two different strains, effectively ruling out the possibility that his illness in August was related to the earlier bout in April.
The discovery is important because it adds to growing concerns that antibodies in some patients may only last as little as four months.
-----
It’s not too early to consider inflation protection
Although COVID-19 has crushed it for now, there are risks of a moderate pick-up through next year. Here's why.
Scott Haslem Contributor
Aug 25, 2020 – 11.03am
COVID-19 has crushed the near-term inflation outlook. Sure, the next couple of months may see a short-term bounce in global inflation as energy prices pick up and some activities get back to normal following the severe mobility restrictions that dominated April and May. But most big economies have delivered history-making declines in second-quarter growth, confirming much of the world was in a deep recession in the first half of this year.
Australia will be no different when it releases second-quarter growth data in the first week of September.
It’s hard to see how inflation is going to average anywhere near most central banks’ inflation targets of 2 per cent for at least a year.
-----
'Crippling loss': Scientists warn of damage to uni research
Robert Bolton Education editor
Aug 25, 2020 – 3.31pm
Scientists are pushing back against university funding cuts, saying the government's Job-ready Graduates Package will make Australian STEM degrees "of secondary quality" compared with their global counterparts.
The Australian Institute of Physics says science funding will fall by 16 per cent per student, which will lead to lower enrolments, despite the government wanting students to enter growth sectors of the economy.
On Tuesday, the government ensured its legislation met the needs of its Coalition partners by lowering student fees for psychology and social work degrees.
But it still faces a test getting the legislation past the upper house, where some senators have doubts about the overall benefits.
-----
Coronavirus: Deficient practices blamed for surge
Poor infection control, staff interacting on tea breaks and the practice of grouping coronavirus-infected patients in the same room have been blamed for a dramatic surge in the proportion of Victoria’s health sector employees acquiring the illness at work.
More than 69 per cent of healthcare workers diagnosed with COVID-19 in July and August were infected in the workplace, compared with 22 per cent during the first wave of the pandemic, a new report has revealed.
On average, about 34 health workers have been diagnosed every day throughout August, with aged and disability carers the hardest hit.
Detailed analysis of infections, released by the Victorian Department of Health and Human Services on Tuesday, has forced the government to unveil a raft of measures to stem the spread in healthcare settings.
Among them is an expansion of guidance on N95 respirators, which would increase their usage significantly from 50,000 to 800,000 a week as they are made available in emergency departments, intensive care units, COVID-19 wards and aged-care homes.
-----
'Seismic': The politics of the pandemic are shifting
Australians have become more attuned to the economic damage and less intimidated by the odds of dying.
Aaron Patrick Senior correspondent
Aug 27, 2020 – 7.45am
In May, academics from Sydney University's US Studies Centre, La Trobe University and the University of Melbourne published a survey that found Australians wanted the country locked down.
As the daily number of diagnosed COVID-19 cases ranged between half and two dozen, support for restrictions of movement and gatherings was at 79 per cent.
With little difference in attitude based on party allegiance, Labor and Coalition states cracked down hard, confident voters would back them.
Today, with daily diagnoses in the hundreds and uncertainty about when, if ever, a vaccine will be developed, the political consensus in favour of go-tough-or-go-home is fracturing.
-----
Why being reinfected with COVID-19 gives researchers hope
News reports of a man being reinfected with COVID-19 have caused concern and also raised hopes of the immune system remembering the virus.
Jill Margo Health editor
Aug 27, 2020 – 7.17am
While first news reports of a man being reinfected with COVID-19 caused concern, paradoxically they have also raised hopes of the immune system remembering the virus.
The concern centres on what this could mean for herd immunity if the virus circulates for a long time. Does it mean a vaccine won’t protect for long too?
The hope comes from the fact that the first time around the man, from Hong Kong, became ill, but the second time he had no symptoms.
This suggests that after the first infection, he may have developed partial immunity that didn’t protect him from reinfection, but did protect him from becoming ill.
-----
What's a life worth? Counting the cost of lockdowns
As policymakers consider how long to keep borders closed and Melbourne under curfew, evidence is emerging of other ways to restrain the virus.
Aaron Patrick Senior correspondent
Aug 29, 2020 – 12.00am
How much is life worth? Most would say incalculable. Not Gigi Foster, an economist who values a year's worth of existence at $100,000.
The University of NSW professor uses the figure in the only detailed cost-benefit analysis of the Australian lockdowns. Her modelling – which calculates that lockdowns cost twice as much life as they save – is part of a growing body of evidence that an approach that has cost an estimated 400 million jobs worldwide is unnecessarily blunt.
As policymakers consider how long to keep borders closed and Melbourne under curfew, evidence is emerging of other ways to restrain the virus that might not have as drastic an economic effect.
In Australia, the original strategy was to "flatten the curve", or slow but not necessarily eliminate infections, to ensure hospitals were not overwhelmed. When the virus turned out not to be as lethal as feared, policymakers switched to an approach described as "ending community transmission".
-----
Victorians are proving more resilient than the rest of Australia may realise
George Megalogenis
Columnist
August 29, 2020 — 12.10am
It is time to praise Victorians; the people, of course, not the politicians who represent them at the national and state level. Victorians are proving more resilient, and cohesive, in the second wave of the pandemic than the rest of the country may appreciate. Community support for the second lockdown remains at remarkably high levels despite the blame-shifting between Scott Morrison and Daniel Andrews and the bomb-throwing from the state opposition.
Nine out of 10 Victorians support the wearing of masks, and seven in 10 support the restrictions of movement, and even the nightly curfew, according to research from Roy Morgan released this week. The only restriction that divides opinion at the margin is the ban on visiting family members in another house (with the exception of delivering care or essential services), but even on this question almost six in 10 (57 per cent) are still in favour.
The survey coincided with an encouraging report from the Victorian Coroners Court showing the number of suicides has not surged in lockdown. Every life lost remains a tragedy. But the state total in the year to August 26 – 466 – happens to be the lowest since 2017. This figure echoes the trend in New Zealand, where the national suicide rate is also at its lowest level in three years, according to New Zealand’s chief coroner Judge Deborah Marshall.
-----
Coronavirus cash spared 2.2 million from poverty
The government’s extraordinary income support measures have virtually eliminated poverty in Australia, according to new research from the ANU’s Centre for Social Research — which also sets out the devastating societal impact had JobKeeper and JobSeeker not been implemented.
The paper finds that without intervention, COVID-19 would have thrown 2.2 million Australians into poverty, lifting the number from 1.6 million before the crisis to 3.8 million — or about 15 per cent of the population.
Alarmingly, the blow from shutting down large parts of the economy without counterbalancing support would have left more than one in 10 middle-class households below the poverty line, which is defined as a weekly disposable income of $416.
The research highlights what little choice the Morrison government had but to spend at an unprecedented scale through the crisis.
-----
Stranded Aussies ordered to pay $10,000 to return
Australian business class travellers are now being routinely bumped off flights back to Australia, forcing those who can afford it to pay more than $10,000 for a one-way first class seat.
In a rapid escalation of the flight chaos brought about by the Australian government’s current 4000 a week cap on incoming arrivals, families and business people who have had longstanding expensive bookings in business class to return to Australia are now joining tens of thousands of economy class passengers left stranded on the other side of the world.
Since July, airlines flying into Australian cities have restricted passenger numbers to 30 a flight, and had been routinely bumping economy and premium economy passengers – sometimes more than 10 times – to give priority to the more expensive paying passengers.
But The Australian can reveal the cancellations are now filtering through to business class because of the huge backlog being built up.
-----
Royal Commissions And The Like.
-----
Coronavirus: Newmarch House inquiry reveals no clear authority
Confusion about which government body was in charge was a key factor in the Newmarch House COVID-19 outbreak that cost 19 elderly residents their lives.
An independent review of the outbreak in the Sydney nursing home in April and May also found shortcomings in infection control at the facility in the early period of the outbreak, and that the plan to treat COVID-positive patients in the home was compromised by inadequate staffing.
The review, undertaken by infectious disease physician Professor Lyn Gilbert, lays bare the difficulties faced at the Anglicare facility as it tried to contain the coronavirus outbreak, and offers a raft of “key learnings” for government and providers.
“(There was) a lack of clarity in the relationships and hierarchy among government health agencies, including Nepean Blue Mountains Local Health District, NSW Health, the Commonwealth Department of Health and the Aged Care Quality and Safety Commission,” it said.
-----
Aged care can't compete with rent-seekers and vested interests
In a political zero-sum game where the squeakiest wheels get the fiscal grease, aged care consistently misses out.
Terry Barnes Contributor
Aug 24, 2020 – 2.17pm
The fragility of Australia's aged care services is being starkly exposed. COVID-19 has made its deadly presence felt and, for reasons including staff working at multiple sites and poor infection control in the worst-hit facilities, the mounting toll of nursing home residents has shocked and saddened the nation.
At a Senate committee hearing on Friday, Labor Party senator Katy Gallagher all but accused Aged Care Minister Richard Colbeck of having responsibility for those deaths, as if he, like King Canute, could have stopped the tide of community transmission at nursing home doors.
Victorian Premier Daniel Andrews, desperately fighting to save his own reputation as Melbourne suffers under a stage four lockdown, declared he wouldn’t send his mum to a nursing home, as he sought to blame the federal authorities for residential care outbreaks.
Yet, as so often is the case, aged care is hot news only because there is shame, scandal, and the prospect of a class action lawyers' picnic.
-----
'Generally invisible': Newmarch leadership vacuum exposed
Tom McIlroy and Finbar O'Mallon
Aug 24, 2020 – 11.56am
One of the nation's worst COVID-19 clusters was dogged by poor communication, "generally invisible" leadership, lax infection control and a depleted workforce.
An independent report into the coronavirus outbreak at Sydney's Newmarch House aged care facility – where 71 people were infected and 19 elderly residents died – has found routine infection prevention failed to stop the spread of the virus and there was inadequate staffing and support.
Aged Care Minister Richard Colbeck released the report by infectious disease expert Lyn Gilbert and nurse and health executive Alan Lilly on Monday, describing the outbreak as "incredibly challenging".
One medical specialist quoted in the report said they thought preparations were in place.
-----
https://www.ausdoc.com.au/news/hospital-nursing-home-failed-covid-outbreak-inquiry
Hospital in the nursing home failed in COVID outbreak: inquiry
The review into the Newmarch House outbreak said the program was compromised by lack of staff
24th August 2020
Inadequate PPE for staff, poor infection control and confusion over clinical management contributed to the Newmarch House COVID-19 outbreak that killed 17 elderly residents, a report has found.
Overall some 37 residents and 34 staff tested positive for the virus at the Sydney nursing home during the largest outbreak then seen in Australia.
An independent review published on Monday said it was “often unclear who was in charge” as the virus began sweeping through the facility in April — growing from one case to more than 50 within two weeks.
State health officials pushed for a 'hospital in the home' approach, where most of the infected residents were treated in the home itself, rather than being transferred to hospital.
-----
Albanese hits out at ‘rich list’ aged care operators
Tom McIlroy Political reporter
Aug 27, 2020 – 4.49pm
Opposition Leader Anthony Albanese says he is open to significant structural reform of Australia's aged care sector, and has lashed "rich list" operators for putting profits before residents.
As Labor continues to criticise the Morrison government over failures and more than 350 deaths during the COVID-19 pandemic, Mr Albanese said structural changes should stem from the royal commission.
Offering an eight-point plan of improvements to help elderly and vulnerable people during COVID-19 outbreaks, he said there was an urgent need for better training on infection control and adequate personal protective equipment.
"At the same time as you have these massive problems, some of the very companies that are failing accreditation are doing very well, doing very well," he told Canberra's National Press Club.
-----
National Budget Issues.
-----
Treasury data gives Frydenberg 'cause for optimism'
By David Crowe
August 23, 2020 — 10.30pm
State border closures and Victorian lockdowns threaten to wipe away a jobs recovery that has seen 689,000 people regain work since April, escalating a political fight over whether to scale back billions of dollars in household assistance.
The Morrison government will assure Australians of the “cause for optimism” in an economic recovery by revealing a sharp improvement in the effective unemployment rate from 14.9 per cent in April to 9.9 per cent in July.
The Treasury analysis finds that more than half the 1.3 million workers who lost their jobs or had their hours reduced to zero in the first stage of the pandemic have since regained work.
But Treasury warns most of the gains could be reversed by the business closures in Victoria and the border checks across the country, pushing the national effective unemployment rate above 13 per cent in the coming months.
-----
The Wile E. Coyote economy: Australia too has sped off the precipice
By Matt Wade
August 24, 2020 — 12.04am
The coronavirus has delivered the biggest economic shock in nearly a century. And yet spending across most of the country is holding up. Several measures show the level of weekly purchasing by households is similar to before the pandemic.
Consumers are emulating the cartoon character Wile E. Coyote who routinely finds himself suspended in mid-air after running off a cliff in pursuit of his nemesis, the Road Runner.
Australia too has sped off the economic precipice. But household spending is being sustained by JobKeeper, the JobSeeker supplement, one-off stimulus payments, early superannuation withdrawals and the deferral of mortgage payments, rents and utility bills.
Analysis of household cashflow by analytics firm AlphaBeta, a part of Accenture, shows the slump in wages suffered by households due to the pandemic (plus and the fall in unincorporated business income flowing to households) was more than offset by government payments, superannuation withdrawals and private sector hardship support between April and June. It reveals a net increase in household cashflow of nearly $24 billion over that period.
-----
'Utterly derailed': Noni B, Rivers owner to close up to 500 stores as pandemic savages retail
By Dominic Powell
August 25, 2020 — 10.09am
Fashion retailer Mosaic Brands has swung to a massive $212 million loss and will close as many as 500 stores across the country after the retailer was ravaged by the COVID-19 pandemic.
At its full-year results announced on Tuesday, Mosaic's chief executive Scott Evans, who operates brands such as Noni B, Rivers, Millers and Katies, told shareholders the company had been "utterly derailed" by the coronavirus pandemic.
Mosaic reported a statutory loss before tax of $212.1 million, a 1900 per cent decline on the prior year's statutory profit of $11 million. The huge fall was partially due to $113.5 million in impairments of the company's brand names and other goodwill.
Revenue fell 16.5 per cent to $736.7 million. The retailer did not declare a dividend.
-----
Debt not a threat to Aussie households - but could slow the economy
By Shane Wright
August 25, 2020 — 3.13pm
Australians have used three decades of low interest rates and wages growth to go on a house-fuelled debt binge which special research for the Reserve Bank suggests is manageable but could ultimately undermine the economy's expansion.
A discussion paper from three of the bank's economists released on Tuesday found that although Australian households carried far more debt than most of their international counterparts, that debt was relatively safe because it was tied directly to the property market and held by higher income earners.
Ratings agencies and international economists have warned for several years that Australian household debt, which is around 200 per cent of household income, is one of the nation's biggest economic risks.
Household debt in Australia increased in the wake of the global financial crisis, while across the rest of the world it has either been flat or fallen.
-----
New govt bond sale attracts $44bn of bids, record under threat
Jonathan Shapiro Senior reporter
Aug 25, 2020 – 5.00pm
A new Australian government bond offer attracted $44 billion of bids within hours of the order book opening, leading analysts to speculate another record-breaking raising could be on the cards.
On Tuesday, banks appointed by the Australian Office of Financial Management officially began marketing a new November 2031 bond as part of its 2020-21 funding task.
The syndicated offer - which was flagged last week - is being pitched at a yield of between eight and 11 basis points over the rate implied by the 10-year futures contract. That suggests the bonds could yield between 0.995 per cent and 1.015 per cent.
The enthusiastic response means it could become the largest ever government debt sale when pricing is set on Wednesday.
-----
Results reveal September quarter rebound intact
William McInnes Reporter
Aug 27, 2020 – 4.55pm
A rebound in the domestic economy appears firmly under way as Woolworths became the latest company to report an increase in sales and activity during the first quarter of the 2021 financial year.
While the lockdown in Melbourne remains a drag on the economy, representing almost 20 per cent of national gross domestic product, and companies have been reluctant to provide substantive guidance, the September quarter is delivering impressive growth.
"No one would have picked the buoyancy in the economy at the moment," said Cyan Investment Management portfolio manager Dean Fergie. "Clearly government support is just swirling through the whole financial system and artificially improving the economy for the moment, certainly in terms of retail and discretionary."
A large number of retailers experienced strong numbers continuing through the first few weeks of the new financial year, from Super Retail to 4WD and vehicle accessories maker ARB, which reported its highest ever monthly sales in July.
-----
Drained super forecasts overblown, Link figures show
By Charlotte Grieve
August 27, 2020 — 6.31pm
Just 4 per cent of Australians accessing the government's early super release scheme have completely drained their accounts, contradicting industry warnings the pandemic program would wipe out the nation's retirement savings.
ASX-listed Link Administration provides back-end services for large nonprofit industry super funds including AustralianSuper, Rest and Cbus. It has processed roughly 60 per cent of the 4.2 million applications for the federal government's scheme that allows out-of-work Australians to cash in on their retirement savings.
Link managing director John McMurtie said the firm's own records showed around 83,000 applications had resulted in account closures. This contradicts modelling by Industry Super Australia from July that said around 480,000 Australians across all age groups could have "wiped out" their super before the second tranche of the scheme begins.
"Some of the industry bodies just want to be a little dramatic," Mr McMurtie told The Age and Sydney Morning Herald. "Most members who have tapped into early release have quite deliberately wanted to leave money in there."
-----
In a profit season like no other, companies are forced to adapt
Conserving capital, writing down assets, and putting growth plans on hold is the name of the game after earnings season, with months of uncertainty looming.
James Fernyhough, Jenny Wiggins and Simon Evans
Aug 29, 2020 – 12.00am
This week capped a painful and often unpredictable earnings season, as the coronavirus effect began to show up on companies' bottom lines. Coal, gas and media companies were some of the worst hit, with many pushed into the red by major write-downs.
Retailers such as Woolworths and Harvey Norman were the big winners, as a housebound nation yet to feel the real economic effects of the crisis spent up on groceries, furniture, consumer electronics and other stay-at-home lifestyle goods.
Iron ore miners, meanwhile, capitalised on booming demand in China, while in the background, the banks steered a steady course as they waited for the longer term economic fallout, post-JobKeeper, to materialise.
For the companies hardest hit, conserving capital, scrapping dividends, writing down assets, and putting growth plans on hold are the most common responses to the immense uncertainty of the coming months. Those with a little more wiggle room, such as insurers, have raised capital, while some sectors - iron ore miners and renewable energy - have ramped up capital expenditure.
-----
The four trends that shaped profit season
Despite all the bad news in the world, investors decided to look on the bright side during earnings season. But while winners are still grinning, dark clouds remain.
James Thomson Columnist
Aug 28, 2020 – 11.38am
Australian investors have seemingly emerged from the August reporting season with a decidedly upbeat message – winners are grinners.
Although COVID-19 weighed heavily on profit results for the 12 months ended June 30 and few companies provided guidance about the year ahead, the market remained cautiously optimistic.
UBS equity strategist Pieter Stoltz says the median stock has delivered a gain of 0.4 per cent when compared with the broader market, the best result in five years. Even where we have seen earnings misses, punishing sell-offs have been surprisingly rare.
The winners have taken various shapes.
Some are the tried and true names that investors know have the balance-sheet resilience and dominant market position to withstand virtually any economic conditions – think CSL, BHP and Wesfarmers.
-----
Stranded Australians told access super to buy business class seats
Jessica Sier
Aug 28, 2020 – 7.03pm
Government agencies have told Australians stranded overseas to draw down on their superannuation so they can afford business class flights home as inbound passenger caps cause ticket prices to soar and people to be repeatedly bumped off overbooked flights.
On a day when Qatar Airways stopped accepting new bookings into Australian cities, some expats stranded abroad urged the government to open quarantine facilities anywhere in order to increase the number of seats airlines can sell.
Claire Burles, who is stranded with her family in Vancouver without a lease or income after her husband lost his job during the pandemic, said a representative at the government-run Smart Traveller hotline "informed me that we should ‘get on any flight and take money out of our super’.”
“But it’s not as simple as just jumping on a plane, and the airlines are prioritising business class passengers. We are scrambling to try and find accommodation and money for essentials.”
-----
Health Issues.
-----
NIB profit plunges as COVID boost fails to materialise
James Fernyhough Reporter
Aug 24, 2020 – 9.18am
Health insurer NIB has reported a 40 per cent fall in full year profit as the expected boost from a halt to elective surgery during the first round of COVID-19 lockdowns failed to materialise.
While the health fund managed to grow its customer numbers by 1.9 per cent in its core insurance business, its claims bill continued to run far ahead of its revenue, growing at 6.7 per cent compared to total revenue growth of 3.4 per cent.
That dynamic saw gross profit margin squeezed to $506.2, from $529.4 million in fiscal 2019.
Net profit after tax of $89.2 million was down 40 per cent on the previous year, while underlying profit was down 25 per cent to $150.1 million. Shareholders will receive a fully franked final dividend of 4¢ per share, down from 13¢ last year.
-----
Use of anti-depressants in the young is under review
Jill Margo Health editor
Aug 25, 2020 – 9.11am
As more Australians turn to anti-depressants to see them through the pandemic, the national drug regulator has begun reviewing the worrying association between antidepressant use and suicide in younger people.
The Therapeutic Goods Administration is aiming to complete this review and provide independent expert advice on the issue, before the end of 2020.
Earlier this year, researchers published a study challenging the veracity of advice of prominent Australian suicide prevention experts and mental health organisations.
Their study, published in the journal, Frontiers in Psychiatry, estimated between 2009 and 2018 there was a 66 per cent rise in per capita antidepressant prescribing among Australians under 28.
It also showed this was associated with a 49 per cent increase in the per capita suicide rate of Australians under 25.
-----
CSL powers forward with plasma treatment research
By Emma Koehn
August 26, 2020 — 12.15am
Biotechnology giant CSL and its global colleagues are powering forward with the development of a coronavirus-fighting product that researchers hope could have advantages over the plasma transfusion treatment President Donald Trump announced approvals for this week.
The US Food and Drug Administration announced on Monday it had granted emergency use authorisation for convalescent plasma as a treatment for coronavirus. The treatment involves taking plasma, the yellow liquid in blood, from recovered coronavirus patients and transfusing this into those fighting COVID-19.
The approval sparked controversy in research communities, with President Trump championing the strength of the treatment while a group of top US health officials including Dr Anthony Fauci said more evidence was needed to show the plasma worked.
There has been a global race to collect plasma from recovered coronavirus patients to study how it can be used to treat the disease. Earlier this year CSL joined a group of multinational biotechnology companies called the CoVIg-19 Plasma Alliance, to work on developing a plasma-based treatment for COVID-19.
-----
International Issues.
-----
Swapping Biden for Trump wouldn't make much difference to Australia
On most issues, a Biden administration wouldn't affect the lives of average Australians. Except for COVID-19 policies that delay the economic recovery - which would cost us a lot.
Alexander Downer Columnist
Aug 23, 2020 – 12.48pm
So the polls all suggest Joe Biden will be the next president of the United States. It’s hard to know, and any prediction now is just a guess. There are still about 70 days to go and anything could happen in that time.
What is extraordinary is how little attention is paid by the Biden campaign as well as Donald Trump’s team to policy issues. Make no mistake. The messages are all poll-driven and their lack of focus on policy reflects the lack of interest there is in the US in policy issues. That is a sad reflection on the state of American democracy.
This election campaign is all about personality. The Biden people have spent their virtual convention focusing on their perceptions of the flaws in Trump’s personality. Trump himself never stops the ad hominem attacks on Sleepy Joe.
The personality of the president may be interesting but it’s his policies which matter to you and me. And to Australia. So is it really going to make a great difference to us if Biden becomes the next US president?
-----
https://www.afr.com/world/asia/australia-us-unprepared-for-china-upheaval-20200822-p55oar
Australia, US 'unprepared for China upheaval'
Michael Smith China correspondent
Aug 24, 2020 – 12.05am
Shanghai | The United States and its Western allies, including Australia, are unprepared for strategic and economic changes in China over the next 15 years and need to plan for major upheavals in the Indo Pacific, an analysis by an independent Washington-based think tank warns.
Ross Babbage, a former senior Australian government official, was one of the authors of the report by the Centre for Strategic and Budgetary Assessments, which lays out several different scenarios for China's political, economic and military future.
The report, Which Way the Dragon?, says the strategic assessment systems that the US, Australia and other allies inherited from the 20th century are "inadequate" to deal with an increasingly unpredictable China. China is also unlikely to maintain the rapid rate of economic growth it has enjoyed over the past three decades.
"While it is possible that China will continue on its current trajectory towards 2035, it is more likely that there will be significant departures," the report, to be released on Monday, says.
-----
Democrats cannot rule out a repeat of Trump's 2016 victory
By focusing on the danger of a stolen vote, the Democrats are in danger of underplaying a more conventional risk — that Mr Trump could win without cheating.
Gideon Rachman Columnist
Aug 25, 2020 – 9.50am
There was an undercurrent of fear at last week’s Democratic convention. But the anxiety gnawing at the party was not focused on worries that Republican incumbent Donald Trump would actually win the US presidential election. It was that the President would steal it — by sabotaging the vote or refusing to concede defeat.
The comedian, Sarah Cooper, summed up the prevailing view when she said “Donald Trump knows he can’t win fair and square.”
The President has, after all, refused to commit to accepting the results of the election. But, by focusing on the danger of a stolen vote, the Democrats are in danger of underplaying a more conventional risk — that Mr Trump could win without cheating.
It is true that polls show Joe Biden, the Democratic nominee, well ahead of Mr Trump and have done for months. Those who point out that the polls also predicted victory for Hillary Clinton in 2016 are reminded that Mr Biden’s current average lead of around 9 percentage points is much larger than that held by Mrs Clinton.
-----
To anyone familiar with Thailand, what's happening is breathtaking
Peter Hartcher
Political and international editor for The Sydney Morning Herald and The Age
August 25, 2020 — 12.10am
It's a recurring scene in politics through the last century and into the 21st – masses of demonstrators turning out to tear down a president or a prime minister. But mass protests against a king or queen seemed to be a relic, a very 20th-century thing.
Until now. Growing numbers of Thais last month started taking to the streets to protest against not only their prime minister but also against their king. The case against a prime minister who seized power in a military coup seems pretty conventional. But a king?
Why are tens of thousands of Thais, in protests that have now spread across most of the country's provinces, risking jail to demand that the Australian-educated King Vajiralongkorn, also styled Rama X, be deprived of his powers and privileges? Especially when we have long heard of the godlike reverence in which the Thai people hold their king.
But the old king is dead. Reverence for the quarter-millennium reign of the Chakri dynasty appears largely to have gone with him. Apart from the Thais on the streets, more than 1 million have joined a Facebook group, Royalist Marketplace, to debate the future of the monarchy.
-----
The risk of China-US military conflict is worryingly high
Washington suspects that an increasingly coercive China wants to drive the US out of the Indo-Pacific.
Zhou Bo
Aug 26, 2020 – 8.04am
The relationship between China and the US is in freefall. That is dangerous. US defence secretary Mark Esper has said he wants to visit China this year, which shows the Pentagon is worried.
That Wei Fenghe, China’s defence minister, spoke at length with Mr Esper in August shows that Beijing is worried too. Both men have agreed to keep communications open and to work to reduce risks as they arise.
The crucial question is: how?
In July, US secretary of state Mike Pompeo inverted a famous line of Ronald Reagan’s about the Soviet Union and applied it to China: “trust but verify” became “distrust but verify”. Washington suspects that an increasingly coercive China wants to drive the US out of the Indo-Pacific.
Beijing meanwhile believes that the US, worried about its global primacy, has fully abandoned its supposed neutrality on the South China Sea. Haunted by economic recession and the pandemic, and desperate for re-election, President Donald Trump has also made confronting China his last-straw strategy to beat his opponent, Joe Biden.
-----
Trump the 'bodyguard of Western civilisation', convention told
Jacob Greber United States correspondent
Aug 25, 2020 – 4.15pm
Washington | Opening night of the Republican National Convention delivered the muscular, patriotic spectacle you've come to expect from Donald Trump's party, to the delight of his base.
Portraying an America on a collision course with radical socialism, rampant street violence and high taxes if Joe Biden wins in November, Republicans left no doubt about what they say is at stake in 2020.
"They'll disarm you, empty the prisons, lock you in your home and invite MS-13 [Latino gang members] to live next door," said Matt Gaetz, one of Mr Trump's most loyal congressional supporters, in an early speech.
Adding to the bleak warnings, Mr Trump's son, Donald Trump jnr, took to the virtual stage in Washington's Mellon Auditorium on Monday (Tuesday AEST) to slam Mr Biden and the Democrats for supporting the looting that continues across some cities following George Floyd's death at the hands of police. He also took aim at opposition to religious gatherings and the resumption of school on public health grounds.
"It's almost like this election is shaping up to be church, work and school versus rioting, looting and vandalism," he said.
-----
QAnon could be Trump’s best re-election strategy
Expect stories about terrible events that aren't actually happening and evil conspiracies that don't exist with Donald Trump cast as hero.
Paul Krugman
Aug 26, 2020 – 6.37am
Last week's Democratic National Convention was mainly about decency – about portraying Joe Biden and his party as good people who will do their best to heal a nation afflicted by a pandemic and a depression. There were plenty of dire warnings about the threat of Trumpism; there was frank acknowledgment of the toll taken by disease and unemployment; but on the whole the message was surprisingly upbeat.
This week's Republican National Convention, by contrast, however positive its official theme, is QAnon all the way.
I don't mean there will be featured speeches claiming Donald Trump is protecting us from an imaginary cabal of liberal paedophiles, although anything is possible. But it's safe to predict the convention will be filled with QAnon-type warnings about terrible events that aren't actually happening and evil conspiracies that don't actually exist.
That has, after all, been Trump's style since the first day of his presidency.
New presidents traditionally use their inaugural addresses to deliver a message of hope and unity, even in dark times: "The only thing we have to fear is fear itself."
-----
https://www.afr.com/world/north-america/donald-trump-s-orwellian-jamboree-20200827-p55ppw
Donald Trump’s Orwellian jamboree
The man is the only plan for a Republican party that is post-ideas. Whether Mr Trump wins or loses in November, the Republicans are now prisoners of the Frankenstein they helped to create.
Edward Luce Columnist
Aug 27, 2020 – 8.27am
If you want a picture of the future, imagine Donald Trump jnr, yelling about America’s bright and beautiful tomorrow — forever.
The image of the US President’s eldest son may differ in the details from that of Big Brother’s boot stamping on the human face. But the message of this week’s Republican National Convention is Orwellian.
There is no perceptible platform or even ghost of a second term agenda for Donald Trump’s party. There is thus no possibility of dissent. His chief surrogates are his own family members. The message is Mr Trump, the whole Mr Trump and nothing but Mr Trump.
Those questioning the future of American democracy are behind the curve. Half of it has already packed up. Parties are what animate a democracy. There is no longer a Republican one distinct from the cult of personality it has become.
-----
https://www.afr.com/policy/economy/we-are-all-keynesians-again-20200826-p55phs
We are all Keynesians again
An extra $15 trillion has been spent in response to the health crisis but how sustainable is the government's role as insurer of last resort?
Andrés Velasco
Aug 27, 2020 – 8.00am
Among the pieties repeated at every online COVID-19 conference, one is universally acknowledged: the pandemic has ushered in an era of larger, more robust state intervention in the economy. But what does this mean for the future? In what areas of economic life should and can the state do more?
Many believe that governments should address inequities and redistribute more income, or that they should fight climate change more aggressively. Those are two urgent priorities. But, given that COVID-19 is a shock that caught almost every country unprepared, the natural starting point is to prod governments to provide more and better social insurance against shocks.
Walter Bagehot, one of the earliest editors of The Economist, called on governments and central banks to be lenders of last resort. The current crisis has confirmed that when confronted with a shock this large, governments are also to be insurers of last resort. No private entity could simultaneously provide and finance the indispensable public health response, pay furloughed workers’ wages, save jobs by lending to cash-strapped firms and make emergency transfers to vulnerable families. Only states can do that.
Statisticians and economists distinguish between idiosyncratic shocks (affecting some people some of the time) and aggregate shocks (affecting everyone simultaneously). This helps fix priorities for what government should do in the future.
-----
https://www.afr.com/companies/agriculture/china-slaps-new-ban-on-aussie-beef-20200828-p55q5x
China slaps new ban on Aussie beef
Brad Thompson and Michael Smith
Aug 28, 2020 – 10.05am
China has banned imports from another major Australian meatworks as relations between the two countries continue to deteriorate.
The Australian beef industry was notified of the latest ban on Thursday night.
It came within 24 hours of the Morrison government moving to scrap and veto agreements between China and Australian states.
Chinese authorities have banned imports from the family-owned John Dee abattoir based in the Queensland electorate of agriculture minister David Littleproud.
It follows earlier bans on four abattoirs over alleged labelling issues and trade sanctions on Australian barley and wine.
-----
https://www.afr.com/world/north-america/powell-unveils-major-shift-in-fed-policy-20200828-p55q2u
Powell reveals big shift in Fed policy
Jacob Greber United States correspondent
Aug 28, 2020 – 1.58am
Washington | The Federal Reserve has dumped its policy of deploying monetary policy to maintain 2 per cent inflation and will now turn a blind eye to greater price pressures in an effort to stoke spending, employment and investment.
Inflation will now be allowed to run "modestly" above the Fed's goal for "some time" if it has persistently fallen short, Fed chairman Jay Powell told this year's Jackson Hole symposium on Thursday (Friday AEST). This year's event has been turned into a virtual format because of COVID-19.
"In seeking to achieve inflation that averages 2 per cent over time, we are not tying ourselves to a particular mathematical formula that defines the average," Mr Powell said.
"Thus, our approach could be viewed as a flexible form of average inflation targeting."
Simultaneously, the Fed expanded its definition of maximum employment in order to allow any future rise in hiring to run for longer before it taps the interest rate brakes to prevent a wage-driven inflation outbreak.
-----
https://www.afr.com/world/north-america/the-fed-buries-its-dead-20200828-p55q2z
The Fed buries its dead
Why Jerome Powell's historic shift to let America's economy 'run hotter' reprises former Fed chairman Arthur Burns' 1970s warning about the 'anguish of central banking'.
Jacob Greber United States correspondent
Aug 28, 2020 – 4.46am
Washington | The Fed’s great 1980s inflation slayer Paul Volcker died last December, aged 92.
But it took the central bank's current chairman Jay Powell another nine months to bury Volcker's legacy once and for all.
The historic shift, formalised on Friday (AEST) after a near two-year review into how the world’s most important central bank conducts monetary policy has again exposed both the limits of its powers and its desperate attempt to avoid sucumbing to chronic “Japanification”.
On one level, Powell has no choice. The challenges he faces are the polar opposite of what Volcker confronted when he became chairman in late 1979, just months before inflation peaked at a devastating 14.8 per cent.
-----
South China Sea: China test fires ‘carrier killers’ in US warning as tensions mount
· The Times
Beijing is believed to have fired a nuclear-capable “carrier killer” anti-ship ballistic missile into the South China Sea the day after the United States sent a surveillance aircraft to spy on Chinese military exercises.
The show of strength came as Mark Esper, the US defence secretary, denounced Beijing for its “aggression” and promised that his government would not give “an inch of ground” in its rejection of Chinese sovereignty over the strategic sea.
“Particularly in the South China Sea area, China seems to be flexing its muscles the most and conducting some of its worst behaviour,” Mr Esper said after a speech in Hawaii before leaving for Palau, a tiny Pacific island nation, and a US ally in a region where China’s influence is increasing.
“The United States has a responsibility to lead … We’re not going to cede this region, an inch of ground if you will, to another country, any other country that thinks their form of government [is] better than what many of us share.”
-----
Why the American public has tuned out of politics
The American political class are fighting their private culture wars that have sidelined the concerns that ordinary citizens have.
Sam Roggeveen Contributor
Aug 28, 2020 – 2.14pm
Tony Abbott once said that ‘‘few Australians would regard America as a foreign country’’. That was always a stretch, but it looks especially naïve as we observe from afar the bizarre spectacle of the Republican National Convention.
Speaker after speaker has warned that the Democratic Party is under the control of the radical left, and that America is at risk of becoming a socialist country. Americans will be disarmed and enslaved, they say, police forces defunded and prisons emptied. Traditional values will give way to ‘‘wokeism’’ and cancel culture.
There was nothing comparable at the Democratic Convention that nominated Joe Biden as its presidential candidate. Ideologically, the Democrats have not moved as far to the left as the GOP has moved to the right. But what has marked Democrat rhetoric in the Trump era is an undercurrent that Donald Trump himself is illegitimate because he so radically breaks with the norms of the presidency.
House Speaker Nancy Pelosi’s suggestion that Biden should not even debate Trump because he will behave in a way that is “beneath the dignity of the presidency” is typical of the mentality. It was a gift to Trump. Pelosi was essentially saying that the President is not worthy of the election debates because he doesn't behave like a “normal” politician, thus reminding Americans exactly why they voted for him.
-----
Why the Fed's existing framework was perfectly fine
Central banks increasingly want to control the price of everything from the goods and services you consume to the stocks and bonds in your portfolio and the value of your home.
Christopher Joye Columnist
Aug 28, 2020 – 11.32am
On Thursday night the world’s most powerful central bank – the US Federal Reserve – ushered in a revolutionary change to its monetary policy framework because it believes it has consistently missed its core consumer price inflation target.
This new regime, which will allow the Fed to keep borrowing rates lower for longer, and tolerate periods of what would have been unacceptably high inflation, could have profound consequences for the price of pretty much everything.
It also reveals the central bankers’ essential conceit: that they don’t want markets to clear, or asset prices to gravitate to their natural levels, in the absence of extreme policymaking interference.
-----
https://www.afr.com/world/north-america/the-us-election-dogfight-has-only-just-begun-20200828-p55q4z
The US election dogfight has only just begun
Donald Trump’s resurgence in recent days has eaten away at Joe Biden's lead in the polls and brought with it a sense of deja vu.
Jacob Greber United States correspondent
Aug 29, 2020 – 12.00am
Despite the pandemic, economic upheaval, streets on fire over race and four years of executive mayhem, Donald Trump remains the world’s most potent political force.
As America and the rest of us accelerate towards a date with destiny on November 3 – the most consequential election in decades – Trump’s resurgence in recent days has banished the recently widespread notion that his Democratic Party rival, Joe Biden, is ultimately destined to win.
The political ground is shifting so fast and in such unpredictable ways that anyone who believes they know the outcome in a little over nine weeks isn’t paying attention.
Even though the traditional Labor Day weekend starting-siren to mark the real political contest is still a week away, voters are already being slammed by a barrage of toxic political advertising and rampantly partisan media coverage.
-----
https://www.afr.com/world/asia/japanese-pm-abe-resigns-markets-shaken-20200828-p55qcm
Japanese PM Abe resigns, markets shaken
Angus Grigg National affairs correspondent
Updated Aug 28, 2020 – 6.50pm, first published at 3.56pm
Shinzo Abe, Japan's longest-serving Prime Minister and the scion of a political dynasty, abruptly resigned on Friday due to ill health, panicking markets and leaving a long list of contenders jockeying for power.
Mr Abe's decision, announced at a media conference in Tokyo, came after two visits to hospital in recent weeks and reports he had been coughing up blood. The 65-year-old has battled ulcerative colitis, or chronic inflammation of the bowel, for most of his adult life.
"I need to fight against the disease and be treated," he told the media conference. "I made a judgment that I should not continue my job as Prime Minister."
Polls suggest former defence minister Shigeru Ishiba is the most popular choice to replace Mr Abe, but he will face tough competition within the ruling Liberal Democrat Party from chief cabinet secretary Yoshihide Suga, who was part of Mr Abe's inner circle.
-----
https://www.afr.com/world/north-america/trump-lays-out-his-claim-to-a-second-term-20200828-p55q8k
Trump is back in the race
Jacob Greber United States correspondent
Aug 28, 2020 – 3.52pm
Washington | Donald Trump has roared back into US presidential election race, narrowing the gap with rival Joe Biden in key battleground states.
In a stunning turnaround, the President has emerged from the Republican National Convention as a convincing candidate for re-election, sure of his record and confident his appeal has not waned among a solid base of Republican voters.
Even as Mr Trump formally accepted his party's nomination as candidate for the November 3 election, protesters were challenging police a few blocks from the White House.
His opponents are betting widespread civil unrest will dampen his appeal, but Mr Trump seized on it as an opportunity to undermine the opposition while demonstrating his strength.
-----
I look forward to comments on all this!
-----
David.
