September 9, 2021 Edition
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There really is now just one story globally as the delta variant roils the globe with worsening issues in the US, UK, Europe and Asia as well as OZ.
Otherwise in the US they are picking up the pieces after Hurricane Ida which killed more than 60.
In the UK Summer is in full swing but COVID is lurking.
In OZ we are
having a six week break from Parliament with ongoing lockdowns meaning the
economy is really starting to pile up some damage with more business failures
etc. The real worry now is just how well or badly the NSW Plai - announced Thursday - will actually work! These are scary times!
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Major Issues.
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At 70, most see US alliance as foundation of our security
Yet Australian attitudes to the relationship are also tinged with a desire for self-reliance and realism about the limits of American power.
Simon Jackman Contributor
Aug 30, 2021 – 5.00am
As ANZUS turns 70 – and as the focus of the Australia-US alliance turns to challenges in the Indo-Pacific – Australians see the American alliance as a vital and dependable foundation of Australia’s security.
Yet our views about its relationship are tinged by wariness about Australia’s independence and realism about the nature and limits of US power.
The US Studies Centre regularly measures Australian sentiment towards the United States and the alliance. Our most recent polling (1004 respondents, July 2021) finds some of the most positive evaluations of the alliance we’ve seen: 85 per cent of Australians think it is “very” or “somewhat” likely that the US would “substantially assist” Australia if we faced a military threat.
Asked if the US alliance decreases or increases the risk of an attack on Australia, “decrease” outpolled “increase” by 38 per cent to 23 per cent.
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ANZUS anchors modern Australia’s security and prosperity
The Financial Review’s take on the principles at stake in major domestic and global stories.
Aug 29, 2021 – 7.46pm
When the ANZUS Treaty was signed in San Francisco 70 years ago on Wednesday this week, there was little understanding of the importance of what would become a crucial foundation of Australia’s modern security.
But nor was it widely understood that the Treaty of Peace with Japan, signed in San Francisco a week later – on September 8, 1951 – by nations including Australia, would form the second foundation of Australia’s modern prosperity, built around supplying raw materials to the industrial revolutions of north-east Asia.
With a rules-based global trading system, industrialising nations could gain access to needed raw materials without military conquest. Together, the American defence umbrella and the markets of Japan, South Korea, Taiwan and China became the bedrock of Australia’s prosperity and security over the following seven decades.
Amid the debacle in Afghanistan and the 20-year look back at September 11, Australia now confronts questions about the American capacity and commitment to manage the destabilising rise of China as a challenging superpower.
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Geopolitical risk a growing danger in portfolios
As a key US ally, Australia remains vulnerable to being caught in the crosshairs should geopolitical manoeuvring prove destabilising.
Scott Haslem Contributor
Aug 30, 2021 – 5.00am
The withdrawal from Afghanistan by the United States and the unexpectedly swift takeover by the Taliban have huge implications for the Middle East and assessments on the risks of global terrorism.
There are also significant human rights issues, no matter what the Taliban has said about a “softer regime” and greater freedoms for women. The IMF’s decision to withhold $US500 million ($690 million) of aid will weigh on an already struggling economy.
Some time should also be reserved for contemplating just how a nation that received decades of support (and periods of occupation) sustained its new democracy for such a brief whisper in time. There will be many viewpoints.
The investment implications may not be immediately obvious. But gone are the days when investors can ignore geopolitical risks, discarding them as “too hard” to factor in.
Just like the interconnectedness of social media and the ability of a TikTok “here” to drive a demand surge “there” or a Tweet to collapse a cryptocurrency, many geopolitical developments are linked. The planned cancellation of the Iran nuclear deal by the United States and 2017-2018 heightened belligerence of North Korea are in many cases two sides of the same coin.
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University sector in the black in 2020 but true downturn about to hit
By Adam Carey
August 30, 2021 — 10.54am
Victoria’s universities have taken a bigger financial hit than those in any other state since Australia’s borders were closed to international students early last year, losing a combined $742 million in revenue in 2020.
New analysis of the financial performance of Australian universities also predicts that 2022 and 2023 will be the worst years of the pandemic for Australia’s universities, as fee-paying international students who are currently enrolled move on and the number of new enrolments from overseas nosedives.
The analysis, by Victoria University’s Mitchell Institute, finds international student revenue for Australian universities fell by 8.6 per cent last year, “which is smaller than originally forecast”.
But it notes that the rate of decline in enrolments has accelerated to 20 per cent to 24 per cent in the first six months of 2021, suggesting the true downturn in the overseas student export market has only just begun.
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Australia’s trade fortunes rely less on China than you think
The stress test created by China’s 2020 trade bans has revealed some important realities about the make-up and nature of our trade with China and the world.
Catherine de Fontenay and Jonathan Coppel
Aug 30, 2021 – 4.30pm
Much has been written about Australia’s vulnerability to supply chain disruptions in essential and critical imports and our preparedness as a nation to respond to blockages in a manner that limits harm. But what about our vulnerability to major disruptions in our exports?
The question became more than an academic one in May 2020 when China hit Australia with punitive trade restrictions.
First, there were tariffs on barley. Then imports from four beef abattoirs were suspended. By October, the sight of Australian coal ships moored outside Chinese ports, unable to unload, prompted questions about the impacts on the wider Australian economy and more generally about our exposure to major disruptions.
The trade bans are harming Australia and China, with those businesses and employees producing (and consuming) the targeted products bearing the brunt of the cost.
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Australia must prepare for the return of anarchy to world affairs
Political and international editor
August 31, 2021 — 5.30am
The US-led retreat from Afghanistan is a reminder of the underlying condition of world affairs. Anarchy.
Afghanistan was part of the anarchy, classified as “ungoverned territory”, until the US-led invasion imposed some sort of limited order. But the moment the coalition lost its will to support that order, anarchy rushed back.
The Taliban are making an effort to appear to be a responsible governing force. They’re angling for recognition as the legitimate government of Afghanistan so that they can qualify for the cash that would come with it.
If recognised widely, they could collect $US9 billion ($12 billion) in central bank reserves, $US4 billion in IMF special drawing rights, the $US12 billion in foreign aid over four years that was pledged at an international donor conference last year. This is an untold bounty in Taliban terms.
Last year the Taliban raised total revenues of $US1.6 billion according to a leaked report written by Mullah Yaqoob, son of the late Taliban spiritual leader Mullah Mohammad Omar, mainly through trafficking opium and heroin.
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University students will be trained to spot foreign interference
August 31, 2021 — 5.00am
University students will be trained to spot foreign interference threats on campus and report them to authorities under proposed new rules aimed at significantly beefing up universities’ responsibilities for countering Chinese government influence on campuses.
Academics and students involved in research collaborations with overseas institutions will also get specific training on how to “recognise, mitigate and handle concerns of foreign interference”, following security agencies’ concerns about critical research being stolen.
The measures are contained in new draft foreign interference guidelines for universities, which are being furiously debated among university leaders and government officials. The federal government has already been forced to review a key element of the guidelines, which would have required all academics to disclose their membership of foreign political parties over the past decade, following a fierce backlash from university chiefs.
Following growing concerns from Australia’s security agencies about the risk of research theft by China and other foreign actors, the guidelines state that students and staff are to “receive training on, and have access to information about how foreign interference can manifest on campus and how to raise concerns in the university or with appropriate authorities”.
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Four times more university students cheat than we thought
Students can be driven to cheating by desperation. Picture: supplied.
9:13PM August 27, 2021
Up to four times as many university students use commercial contract cheating services than previously estimated, according to a new study, and researchers say the most likely users are those with a non-English first language.
The study of 4098 students at Australian tertiary institutions, surveyed at the end of last year, estimates 7.9 per cent of students pay commercial sites to ghost write assignments for them and 11.4 per cent use file-sharing sites where they can access other students’ work. Both practices are regarded as cheating.
Led by University of Western Australia applied psychologist Guy Curtis and published in Studies in Higher Education, the study updates previous research that estimated between 2 and 3.5 per cent of students submit assignments written by other people.
Of those surveyed, 3910 were at universities and 3284 were domestic students.
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The Great Purge comes for super funds
Before midday, both LUCRF and Maritime Super had been vaporised from the Industry Super website.
Michael Roddan Senior companies reporter
Updated Aug 31, 2021 – 4.12pm, first published at 3.36pm
Shortly after Soviet Union Central committee member Avel Enukidze was deemed an enemy of the state and executed by firing squad, he began to disappear from photographs where he had previously been snapped standing next to Joseph Stalin.
Another Great Purge occurred on Tuesday, when the Australian Prudential Regulation Authority’s long-awaited superannuation performance tests were published.
Of the 13 MySuper products identified as underperforming, two were members of the union-and-employer-backed Industry Super Australia lobby group: the Labour Union Co-Operative Retirement Fund, and Maritime Super.
Over the last five years, LUCRF paid ISA $3.7 million. Maritime paid $350,000 a year to be a member of the lobby group, which runs on a budget of almost $30 million a year.
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https://www.afr.com/policy/economy/it-s-the-accc-that-s-flawed-not-the-merger-laws-20210830-p58nau
It’s the ACCC that’s flawed, not the merger laws
The regulator wants to shift the burden of proof because it is losing too many cases. It should put its own house in order first.
Graeme Samuel Contributor
Sep 1, 2021 – 5.00am
The Australian Competition and Consumer Commission has started a debate on reform to Australia’s merger laws. But the suggested reforms miss the real issues and risk sending the ACCC and businesses into a regulatory quagmire.
Anti-competitive mergers, that will or are likely to substantially lessen competition, are illegal under Section 50 of the Competition and Consumer Act. For nearly three decades, this law has served us well. It is underpinned by a flexible “informal” clearance process that benefits the regulator and businesses. It empowers the ACCC – as it largely sets the “informal” rules.
The current law stops anti-competitive mergers. The ACCC reports that each year, about 300 informal merger clearances are sought and more than 95 per cent of these are cleared.
However, these numbers obscure the many other merger proposals that are never the subject of an application for clearance from the regulator, either because lawyers and economists have advised their clients that a merger would breach Section 50 or because an initial discussion with the ACCC officers has led to the same conclusion.
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Universities push back on plan to require academics to declare foreign political links
September 1, 2021 — 5.00am
Universities are pushing to limit the number of academics required to disclose their membership of overseas political parties under proposed new foreign interference measures as the government refuses to abandon the requirement entirely.
The move to force academics to reveal their overseas political affiliations is the most controversial element of draft foreign interference guidelines for the sector, with the federal government agreeing last week to redraft the proposal following a fierce backlash from university chiefs.
But university sources, who spoke on the condition of anonymity about the confidential discussions, said it was expected the political disclosure requirements would be retained in some form in the final document.
“There is no way government is letting this go,” one source close to the consultation process said.
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Morrison and Frydenberg are odd housemates, but they’re tied together now
Award-winning political commentator and author
September 2, 2021 — 5.00am
Disturbing as it is to imagine, Wayne Swan had a sleepover with Kevin Rudd when they were in government. It happened one night towards the end of July 2008.
A series of meetings at the prime minister’s Sydney residence Kirribilli House to ponder the early tremors of the global financial crisis ended too late for Swan to get home. As they were appearing together in Nambour the next day for the 90th anniversary celebrations of the local RSL where both their fathers had been involved, Swan had no choice but to bunk down harbour-side.
The relationship was rocky even then. Still, they got on well enough for Rudd to give Swan some clean undies for the next day. It broke down completely less than two years later when Julia Gillard toppled Rudd and Swan became her deputy.
That is how prime ministers usually finish up with their treasurers. They begin well enough, then jealousy, ambition or policy differences trigger irreconcilable differences.
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The five biggest market bubbles that could burst
From stocks to copper to houses, the prices of many assets have been soaring since COVID-19 struck. But a lot can go wrong.
Tim Wallace
Sep 3, 2021 – 7.44am
If you own your home, you may have noticed that the roof above your head has been growing more valuable at a startling rate.
Almost every part of the property market – some London flats excepted – is booming. Prices in June were up more than 13 per cent on the year, the fastest pace since 2004.
It is not only homes that are getting more expensive. The prices of stocks, bonds, commodities and more have moved sharply since COVID-19 struck.
Heady rises in assets certainly make investors feel good and raise hopes the economy is on the right track, often in a self-reinforcing cycle.
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The Morrison government is provoking China to please America
The Coalition government is ignoring Australia’s interests by pushing us towards a confrontation with Beijing, mainly to be seen in Washington as America’s fawning acolyte.
Paul Keating Former prime minister of Australia
Sep 3, 2021 – 5.00am
The Morrison government is wantonly leading Australia into a strategic dead end by its needless provocations against China.
China is not the old Soviet Union.
It is not attacking or forcibly incorporating countries into a grand union, nor is it exporting some kind of universal ideology.
And it does not threaten nuclear Armageddon on a daily basis, as the Soviet Union did.
Save for its front porch, the South China Sea, it broadly keeps to itself.
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Sydney’s top universities slip in rankings as Asia’s institutions rise
By Jordan Baker
September 2, 2021 — 11.41am
Sydney’s top universities slid slightly, but other Australian sandstone institutions climbed in the latest world rankings, as Asian universities - particularly those from China - continued their climb, driven by heavy public investment in higher education.
Sydney University slipped seven places to 58th on the Times Higher Education rankings, released on Thursday, and the University of NSW slipped three places to 70th, while the University of Technology Sydney continued its rise by 17 places to 143rd.
Melbourne University remained Australia’s top institution at 33rd, a fall of two places, while the University of Queensland climbed five places to 54th and Monash climbed to 57th. Sydney was the fifth-placed Australian university and UNSW was sixth.
For the sixth straight year, Oxford University is the world’s premier institution, followed by four American universities. China’s Peking and Tsinghua Universities both climbed significantly to joint 16th from 23rd and 20th respectively, which analysts said was due in part to their work on coronavirus.
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Australia’s defences stronger after 20 years of the war on terror: Howard
By David Crowe
September 4, 2021
Australia has a stronger defence against extremist threats after 20 years of the war on terror, former prime minister John Howard has declared amid a warning from his successor Kevin Rudd about the growing danger from the Taliban’s victory in Afghanistan.
Mr Howard said Australians were safer from two decades of conflict after the terror attacks in New York and Washington on September 11, 2001, but he acknowledged a series of US strategic mistakes including the rushed retreat from Kabul in recent weeks.
“I think because of what’s been done, it’s probably less likely that something like September 11 will happen again, but that’s very hard to answer,” Mr Howard said on whether the threat of Islamist terror was any smaller today.
“I can’t say other than that we are better prepared, we’re more alive, we have better mechanisms, our intelligence gathering arrangements, which are extremely valuable, are probably superior to what they were 20 years ago.”
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Size matters when it comes to recession talk
Economics Editor
September 3, 2021 — 11.42am
With the publication this week of the latest “national accounts”, our situation is now clear: we’re not in recession, yet we are – but, in a sense, not really.
Confused? It’s simple when you know. One thing we do know is that the economy – as measured by real gross domestic product – will have contracted significantly in the present quarter, covering the three months to the end of September.
At this stage, the smart money is predicting a contraction – a fall in the production and purchase of goods and services – of “two-point-something” per cent, although there are business economists who think the fall could be as much as 4 per cent.
Recessions are periods when people cut their spending sharply, causing businesses to cut their production of goods and services and lay off workers. It’s mainly because so many people lose their jobs that recessions are something to be feared. But also, a lot of businesses go broke.
This means no one should need economists to tell them if we are or aren’t in recession. If you can’t tell it from all the newly closed shops as you walk down the main street, you should know from what’s happening to the employment of yourself, your family and friends. Failing that, you should know it from all the gloomy stories you see and hear on the media.
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Fraying relations with China are about to hit the Australian economy
By Bloomberg News
September 3, 2021 — 1.02pm
Australia’s economic resilience in the wake of China’s efforts to punish it for diplomatic slights has some on our shores declaring victory. They might be speaking too soon.
Former Prime Minister Malcolm Turnbull said last month that China’s campaign to “make us more compliant” has “completely backfired.” Beijing’s pressure, he added, “has demonstrated to China that they can pull all these levers, and it doesn’t actually work.”
Exports continue to scale record heights even as China has blocked or limited a growing number of imports from Australia since May 2020. Still, the dispute -- China accuses Australia of taking a hostile approach on issues ranging from a clampdown on foreign investment to questions on the origins of COVID-19 -- is casting a shadow over the future.
Even as Beijing has left the immensely profitable iron ore sector untouched until recently, it’s focusing on Australian products that would form the backbone of future trade, such as lobsters and wine, and warning its students against studying there.
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https://www.afr.com/wealth/personal-finance/how-to-ride-the-dividend-wave-20210830-p58n6b
How to ride the dividend wave
Investors will soon receive tens of billions of dollars, but how long can the good times last?
Tony Featherstone Contributor
Updated Sep 4, 2021 – 9.17am, first published at 5.00am
Is this as good as it gets for dividends? An army of investors needs to know if the income bonanza will last as low rates crush returns on cash and fixed interest.
Companies showered investors with almost $40 billion in ordinary and special dividends in the latest profit reporting season, Ausbil Investment Management estimates. Such has been the earnings recovery, that’s almost double the dividends paid in a typical reporting period.
Another $15 billion in share buybacks and $34 billion in cash from takeover offers will add to the income tsunami, data compiled by equity strategist Richard Coppleson indicates.
“The sharemarket is still the place to be for yield,” John Abernethy, chairman of Clime Investment Management, says. “A franked dividend yield of 5-6 per cent from Australian shares in 2021-22 is far superior to that from cash, term deposits, bank bills or bonds.”
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Coronavirus And Impacts.
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Australian public fed nonsense as country heads to “irreversible” decision.
Matt Barrie
The “Doherty Report” is being sold as an economic & health model “created by experts” to move Australia from suppression to opening up and “living with Covid”.
On the 19th of August, Premier Gladys Berejiklian said in the NSW daily update “as the Doherty Report says once you get to 80% double doses and you have to open up”. (9 mins 40 seconds).
On the 23rd of August Prime Minister Morrison said in Parliament “The plan as we set out very clearly about…that when we reach 70%, and we reach 80%, we can move through to phase B of that plan, those marks have been set by the Doherty analysis that was undertaken Mr Speaker”.
I spent a late evening reading it.
Neither of these statements are true and the report is being misrepresented.
The report is neither an economic model nor does it set any targets.
It is a report commissioned by the National Cabinet to model health scenarios going from Phase A (where we are now- suppressing Covid) to Phase B (reducing lockdowns, ramping up flights into the country and reducing quarantine) of the National Plan with various levels of vaccination targets. Note that there is also Phase C and Phase D of opening up. The Doherty Report doesn’t look at these phases.
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Governments must include children in reopening plan: Grattan
There is no coherent national guidance on managing inevitable COVID-19 outbreaks in schools and childcare settings.
Stephen Duckett and Anika Stobart
Updated Aug 29, 2021 – 12.53pm, first published at 12.49pm
National cabinet has now accepted advice to vaccinate children 12 and over, but this will take time to roll out and still leaves younger children in limbo.
Meanwhile, there remains no coherent national guidance on managing inevitable COVID-19 outbreaks in schools and childcare settings.
While NSW’s COVID-19 plan to return students to the classroom in Greater Sydney from October 25 leaves many questions unanswered, at least it is a start.
Elsewhere, planning for the effects of the next phase of the pandemic on children seems to be trailing a long way behind.
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The serious shortfalls in our COVID response give me no confidence our hospitals will cope
By A western Sydney doctor
August 30, 2021 — 5.00am
When the world first paid attention to COVID-19 last year, World Health Organisation executive director Dr Michael Ryan was asked what he had learned from the African Ebola outbreak. His answer was clear and chilling. “Be fast,” he said. “Have no regrets. You must be the first mover.” If you failed to move decisively, “the virus will always get you”.
So, how is NSW going eight weeks into its third wave? Our system of test, trace and quarantine has been partially successful. But did we move fast enough? The answer is an emphatic no. Active cases have almost doubled in 12 days and continue to rise. Data indicates that about 5 per cent of infections requires hospitalisation and 15 to 20 per cent of this group need ICU admission. The number of patients on ventilators has nearly doubled in the last week.
We have been repeatedly reassured the health system will cope. As an experienced respiratory doctor at a major western Sydney hospital, I disagree, and so do many of my colleagues. We believe it likely that projected patient numbers will soon be overwhelming. Tragically, their ranks will include many frontline health workers such as paramedics and nurses. From Westmead to Liverpool and Blacktown, ambulances now routinely line up in hospital carparks, unable to discharge their patients. What exactly is going on?
At any hospital, the priority must be keeping COVID contained. Already, we have seen multi-fatality clusters where it is not. But only the newest hospitals are equipped with a handful of negative pressure rooms, engineered to stop spread of airborne infection. Some wards have been transformed into safe zones, using glass or tight-fitting plastic doors, along with best-practice air filters. However, these modifications are barely keeping up with new cases as they present.
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https://www.afr.com/policy/economy/why-the-pandemic-has-been-good-for-productivity-20210830-p58n39
Why the pandemic has been good for productivity
Higher productivity is about doing more with less, and there are two obvious ways in which high-income economies have been doing so since last year.
Martin Sandbu
Aug 30, 2021 – 11.14am
The pandemic devastated rich countries’ economies. But there are signs that a productivity boom could be emerging from the wasteland.
Economists at The Conference Board, a US think-tank, suggest this is the case. Ataman Ozyildirim and Klaas de Vries forecast that after the downturn in 2020, the US economy will rack up total factor productivity growth of more than 2 per cent in 2021. TFP is measured by growth in output over and above that which can be attributed simply to putting more labour and capital to work in the post-lockdown recovery.
A 2 per cent rate, if realised, would more than make up for a slight loss of TFP in 2020 – a natural consequence of leaving capital such as machinery idle – and constitute a vast improvement on the roughly zero rate of yearly US TFP growth in the pre-pandemic decade.
The US is not alone in showing signs of healthy productivity performance. According to OECD forecasts, the pandemic has accelerated labour productivity growth in most high-income countries.
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https://www.news.com.au/lifestyle/health/health-problems/researcher-predicts-nsws-coronavirus-cases-will-peak-at-more-than-3100-a-day/news-story/2208b8c7956765f6fc83af074e3fd39e
Researcher predicts NSW’s coronavirus cases will peak at more than 3100 a day
A researcher studying NSW’s highly infectious Delta outbreak has predicted when the vaccination rate will finally start to bring cases down.
August 30, 2021 - 3:32PM
It’s the big question that has haunted Sydneysiders in lockdown for months: when will NSW finally flatten the curve of rising Covid-19 infections?
Experts believe they can now answer that question. But the bad news is that the situation will get worse before it gets better.
According to modelling prepared by Melbourne University’s Chris Billington, the outbreak is on track to hit a peak around September 22.
“We can expect the cases to peak at between 2200 and 4500 cases per day,” he told news.com.au.
“And the median there is about 3100.”
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‘Sustained’ demand: Government asks ICU doctors about pressure on system
By David Crowe and Lucy Carroll
Updated August 30, 2021 — 7.59pmfirst published at 5.02pm
The federal government is seeking urgent advice from intensive care doctors about the pressure on hospital wards from “sustained” demand that will last for months, shaping advice for national cabinet this Friday on whether the health system can cope when lockdowns are eased.
The call for new guidance is part of a federal request to all states and territories to assess the looming burden on intensive care units as rising coronavirus cases put hospitals under severe pressure in western Sydney.
Prime Minister Scott Morrison promised on Monday to make sure the health system would have the “resilience” to deal with the growing load, declaring the country should start easing lockdown rules when vaccination rates reach 70 per cent of people aged 16 and over.
But the message from Health Department Secretary Brendan Murphy, sent to intensive care experts in recent days, highlights the urgent work behind the scenes to model the likely increase in case numbers, hospitalisations and intensive care admissions when the restrictions are eased.
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Blood clot risk much higher from COVID-19 than vaccines
By Grace Gitau
Updated August 30, 2021 — 12.35pmfirst published at 12.33pm
London: COVID-19 patients face a much higher risk of developing blood clots than those vaccinated with the AstraZeneca or Pfizer shots, according to a large British study.
For every 10 million people who receive the first dose of AstraZeneca, about 66 more will suffer from a blood-clotting syndrome than during normal circumstances, according to the study published in the British Medical Journal. This figure compares with 12,614 more incidences recorded in 10 million people who have tested positive for COVID-19.
The study followed 29 million people who received their first doses of either AstraZeneca or Pfizer between December 2020 and April 2021 and also tracked about 1.7 million COVID-19 patients.
The findings appear to bolster the decision to continue using AstraZeneca’s vaccine, which has been dogged by safety concerns, to protect people from hospitalisation and death. Many developed countries have, though, limited its use to older adults because of concerns about an elevated risk of blood clots affecting the younger population.
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From overseas, Australia’s pandemic strategy looks desperate
After the freedoms of the rest of the world, being marched from the airport baggage carousel to a quarantine hotel for an enforced two-week stay, for which I have to pay, is simply not something I will do.
Ian Cross
Updated Aug 31, 2021 – 6.44am, first published at 5.00am
In January this year, my mother died in Canberra. She had lived in the same house for almost 60 years but spent the last few years in a nursing home suffering from dementia.
I have lived in London for 30 years and throughout that time, returned home two or three times a year to visit her.
But as the COVID-19 pandemic unfolded at the same time as my mother entered palliative care, and then received an end-of-life diagnosis, I investigated in the second half of last year the prospect of returning one last time.
After my sister experienced the quarantine restrictions associated with a visit in those final weeks from just over the border in Melbourne, we as a family determined it was just too difficult and restricting to return.
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Mutated coronavirus variant sparks concerns over vaccine efficacy
7:51PM August 31, 2021
Australian scientists are monitoring a new coronavirus variant with a high rate of mutations that recently emerged in South Africa and has now been detected in a host of other countries.
The variant, dubbed C.1.2, has a high number of mutations in common with the Delta and Alpha variants, but virologists say it is too early to tell whether it will prove to be even more infectious.
South Africa’s National Institute for Communicable Diseases first described the variant in a scientific paper that reported C.1.2 had an “unusually high” mutation rate of 41.8 mutations per year, more than any variant of SARS-CoV-2 that has emerged so far.
The new variant accounts for only about 2 per cent of cases so far in South Africa, but has also been detected in China, the Democratic Republic of the Congo, Mauritius, England, New Zealand, Portugal and Switzerland.
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https://www.afr.com/politics/federal/if-it-wasn-t-a-race-then-it-is-now-20210901-p58npf
A profound moment in the pandemic
Once upon a time, the vaccine rollout may not have been a race, but it sure is now. It’s all that matters.
Phillip Coorey Political editor
Updated Sep 1, 2021 – 7.02pm, first published at 6.08pm
Daniel Andrews’ acknowledgement that his state could not defeat its latest outbreak and, at best, hopes to limit its spread, was a profound moment in the coronavirus pandemic.
Victorians have endured more outbreaks than any other jurisdiction and Melbourne is second only to Buenos Aires as the world’s most locked down city. But the latest outbreak, number six, has proven all too hard.
“The experts are very clear with us. We will not see these case numbers go down. They are going to go up. The question is by how many and how fast?” Andrews said.
Like Gladys Berejiklian, who learned the hard way several weeks earlier in NSW, Andrews – who made a much more serious initial attempt at elimination than Berejiklian – is now of the same view that the only way out of this nightmare on any sustainable basis is vaccination.
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WHO designates Mu as new Covid-19 variant of interest
By Josh Nathan-Kazis
The Wall Street Journal
September 2, 2021
The World Health Organization said that a variant of the virus that causes Covid-19 that is now responsible for a growing proportion of cases in Colombia, and which has been detected in 39 countries around the world, is now a “variant of interest.” Designating the variant with the Greek letter Mu, the agency said that early data indicates that the immunity provided by vaccines or through prior infection “may not be as strong against this variant,” though more studies are needed.
In a statement, the WHO said that Mu, also known as B.1.621, “has been designated as a Variant of Interest as it has some mutations that need to be studied for their potential impact on the body’s immune response.” The WHO tracks variants of interest, which have the potential to be more dangerous than other forms of the virus, and variants of concern, which are already posing a more serious threat. Mu is one of five current variants of interest; there are four variants of concern, including Delta.
Mu was first identified in Colombia in January, and is now responsible for 39 per cent of cases in that country, the WHO says. Global prevalence of the variant is low, and falling, the agency says, but in recent weeks it has grown sharply in both Colombia and in Ecuador, where it now represents 13 per cent of sequenced cases.
In a weekly epidemiological update on Covid-19 published on Tuesday, the agency said that there have been some larger outbreaks of Mu in South America and Europe.
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September 2, 202110:20 AM AEST
Australian doctors warn health system may 'capsize' when COVID-19 curbs ease
Reuters
A nurse immuniser administers the AstraZeneca vaccine to a patient at a coronavirus disease (COVID-19) vaccination clinic at the Bankstown Sports Club during a lockdown to curb an outbreak of cases in Sydney, Australia, August 25, 2021. REUTERS/Loren Elliott
SYDNEY, Sept 2 (Reuters) - Australian doctors on Thursday warned the country's hospitals are not ready to cope with the government's reopening plans, even with higher vaccination rates, as some states prepare to move from a virus suppression strategy to living with COVID-19.
The Australian Medical Association (AMA) said the health system was in danger of being locked into a "permanent cycle of crisis" and has called for new modelling to check if staffing levels in hospitals can withstand an expected surge in cases when lockdown rules ease.
"If you have opened up and you haven't looked at the safety nets or the life rafts that we've got, we might end up actually trying to push more people on the life rafts and capsizing them," AMA Vice President Chris Moy told broadcaster ABC.
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Infections up but hospitalisations down: Britain’s post-vax hopes
September 3, 2021 — 8.53am
London: Once maligned in Australia as the horror show of the West’s mismanagement of the coronavirus pandemic, Britain is now providing vital clues about what life post-vaccinations can look like.
Britain enjoys one of the world’s highest vaccination rates, with 88 per cent of the population aged over 16 given their first dose and almost 79 per cent fully jabbed. As a percentage of the whole population this constitutes around 63 per cent.
While debate in Britain is now focussed on whether to vaccinate younger teens and children, as well as to whom any boosters should be administered, Britain’s current vaccination success is one Australia is hoping to emulate, according to Australia’s Chief Medical Officer Professor Paul Kelly.
“About a month ago, they started to really increase those numbers of cases but ... in contrast to previous waves their death rate has remained extremely low,” Professor Kelly told a news conference in Canberra last month.
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https://www.afr.com/world/europe/has-britain-learned-to-live-with-the-coronavirus-20210902-p58o77
Has Britain learned to live with the coronavirus?
Boris Johnson’s experiment with leaving lockdown is not taxing the healthcare system to breaking point – but winter is coming and worries are growing.
Hans van Leeuwen Europe correspondent
Sep 3, 2021 – 12.41pm
London | Unless you actually live in the British coastal city of Plymouth, you’d probably never give its hospitals a moment’s thought. But Derriford Hospital made national news in Britain this week, when its management declared a “critical incident”.
A bed shortage caused by the delta wave of Britain’s COVID-19 pandemic reportedly forced the operator to cancel routine surgery and rejig bed capacity as it deals with its highest-ever level of coronavirus sufferers. It has also curbed visitor access to its inpatients.
“We’d just like to inform patients that we’re currently experiencing high levels of attendance in our emergency department and in association with that, quite long waits,” University Hospitals Plymouth deputy medical director Paul McArdle said in a video message.
“This is a pattern that we’re seeing right across the country, and it has been compounded by a spread in COVID prevalence in our community.”
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Ghost of Christmas yet to come piles pressure on Scott Morrison
Getting families around the table in time for the festive season will become an inexorable deadline for vaccinations and reopening, even as cases persist.
Laura Tingle Columnist
Sep 3, 2021 – 5.05pm
If you’re feeling the daily outpouring of information about COVID-19 outbreaks, Doherty modelling and timetables for reopening has descended into a wall of incomprehensible epidemiological figures and political sidesteps, you would not be alone.
Perhaps never has so much information that doesn’t really help anyone, misleads many, and fails to answer basic questions been thrown around with such gay abandon by our political leaders.
Let’s reduce it to a few different timelines to see if that helps.
The first one is the next eight weeks: September and October. It seems one of the few things that our federal, state and territory leaders agree on (though some more explicitly than others) is that things are going to get really, really bad in this period.
“Bad”, however, has lots of different meanings. In NSW, and to a lesser degree in Victoria, it’s going to mean not just case numbers but hospitalisation rates and deaths reaching daily levels that we have not seen in Australia so far in this pandemic.
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The pandemic lays bare our confederacy of dunces
Political and international editor
September 4, 2021 — 5.00am
From 1898 to 1900, the six separate British colonies on the land known as Australia each held referendums on whether to federate. Most voters in each state voted “yes”. The result was the creation of the entity we now think of as Australia. It was a historic first. It was the first nation to vote itself into existence.
If those referenda were held today, would we get the same outcome? Would most voters in each state vote “yes” to unification as the Commonwealth of Australia?
With pandemic parochialism and political hucksterism running amok, it’s not too hard to imagine that federation referendums would fail.
Just now, the Australian federation is looking like a confederacy of dunces. Attempts at the intelligent management of the pandemic have devolved into a political trench war.
Both sides are delivering some real health benefits. But, at the same time, both sides are campaigning to extract political benefit from a national crisis. And both are peddling unrealities to their people.
First, the hucksters. The Morrison government belatedly is delivering adequate vaccine supplies to a country where most of the population is suffering under stay-at-home orders. And, while an unabashed Prime Minister waits to be congratulated by a grateful people, he’s taken on a huckster’s hubris.
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Counting the costs of Covid: How the pandemic became stagflationary
By The Economist
12:05AM September 4, 2021
It has been a summer of unpleasant surprises for the world economy. The US, Europe and China are growing more slowly than investors had hoped. Consumer prices are rising uncomfortably fast, especially in America.
Even in the euro area, used to tepid inflation, prices in August were 3 per cent higher than a year earlier, the most in a decade. Economies are troubled by shortages of parts and labour, slow and expensive shipping and the bewildering variation of lockdown measures.
The spread of the Delta variant is to blame, but the way the pandemic is affecting the economy is shifting. The world had become accustomed to the virus battering growth, as waves of infection caused a sudden stop in activity, and prices moderated or even fell. Delta, by contrast, looks like a stagflationary force that is sapping growth less dramatically but firing up inflation.
Delta is weighing on consumer spending in the rich world but not causing a collapse. In countries with lots of vaccine, cases are no longer doing as much to stop consumers from moving around. Europe’s service sector has reopened amid its Delta wave.
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Climate Change.
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Greenhouse gas emissions ‘at historically lowest levels’
10:30PM August 30, 2021
Australia’s greenhouse gas emissions have hit their lowest levels on record, falling by 5.3 per cent in the year to March and putting the country on track to meet its Paris Agreement target.
Energy Minister Angus Taylor said emissions were 20.8 per cent below 2005 levels, the baseline year for Australia’s Paris commitments to reduce emissions by 26-28 per cent by 2030.
The fall in pollution was fuelled by major reductions across the energy and transport sectors, with emissions in the National Electricity Market dropping 4.6 per cent in the year to June.
Mr Taylor said when exports were excluded from the national greenhouse gas inventory data, domestic emissions were 38.3 per cent lower than 2005 levels.
“Emissions have continued to fall over the last year even as the Australian economy recovers from the global pandemic. The economy was 1.1 per cent larger in the March quarter 2021 relative to the March quarter 2020. On the same basis, emissions were 3.2 per cent lower than a year earlier,” he said. “In the year to March 2021, emissions were 494.2 million tonnes – 5.3 per cent or 27.8 million tonnes lower than in 2020.”
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Climate change ‘biggest investment opportunity since the internet’
An estimated $41 trillion is required to decarbonise the planet, giving investors the chance to profit from a growing mega-trend.
Alex Gluyas Markets Reporter
Sep 1, 2021 – 5.00am
A growing chorus in the investment community is warning that investors need to climate-proof their portfolios or risk missing out on potentially overlooked returns offered by the global transition to a zero-carbon economy.
This comes amid an accelerating urgency by many overseas governments to implement measures aimed at achieving net zero emissions by 2050. This is to avoid reaching the critical 1.5-degree tipping point which the United Nations Intergovernmental Panel on Climate Change (IPCC) says at current rates could occur as early as next decade.
Australia remains with the same commitment made in 2015 under then prime minister Tony Abbott – to be 26 to 28 per cent below 2005 levels by 2030.
The investment required to decarbonise the planet is estimated to be more than $US30 trillion ($41 trillion), presenting people with a rare opportunity to invest in companies that will be involved in the race to net zero.
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Royal Commissions And The Like.
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National Budget Issues.
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Markets face recession risk as June quarter growth in doubt
Richard Henderson Markets reporter
Aug 29, 2021 – 3.48pm
Investors could receive early confirmation that Australia will slide into its second recession in two years when June-quarter growth data is released on Wednesday, as COVID-19 lockdowns in Melbourne and Sydney all but ensure a September-quarter contraction.
The market consensus pegs second-quarter growth at 0.3 per cent, but a handful of influential economists predict a small contraction, placing the country on course for the two consecutive quarters of shrinking growth that defines a recession.
Economists at Citi anticipate a lull in net exports to overshadow robust household consumption and business investment, dragging the economy to a 0.1 per cent contraction.
“The optics of such a result would be poor, given we expect a large negative GDP growth rate for Q3, probably in the order of -2 per cent, that will send Australia back into a technical recession,” the Citi economists said.
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Personal advice fees cut to help finance sector
By Shane Wright
August 30, 2021 — 12.01am
Levies on financial advisers to cover Australian Securities and Investments Commission costs will be slashed by almost $2000 under a federal government plan to take pressure off the sector due to the coronavirus pandemic.
Treasurer Josh Frydenberg on Monday said ASIC levies charged for personal advice to retail clients will be reduced to $1142 per adviser for the 2020-21 and 2021-22 financial years in what he described as “targeted” relief.
Advisers were facing a levy of $3138 for 2020-21 alone.
Mr Frydenberg said the move would reduce levies by $46 million for 2020-21 with a larger saving for this financial year.
“Through our efforts, the Morrison government is easing cost pressures on financial advisers at a time when they need it most, while ensuring Australians have access to more affordable system,” he said.
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Smaller Government push explains much of our fumbling of the pandemic
Economics Editor
August 29, 2021 — 9.00pm
It’s right for our elected leaders to be held responsible for the failures that have led to the loss of lives and livelihoods in our struggle against the coronavirus. But let’s not fail to see the systemic failures that have led our governments – federal and state; Liberal and Labor – to fall short.
If you’re not looking for it – or don’t want to find it – it’s easy to overlook the inconvenient truth that decades of pursuit of Smaller Government have contributed greatly to the difficulty we’ve had controlling the spread of the virus and hastening the rollout of the vaccine.
Earlier this month, two economics professors, Steven Hamilton and Richard Holden, used two articles in the Australian Financial Review to lay much of the blame for delay in the rollout and in rapid COVID testing at the feet of the “medical regulatory complex”.
They criticised our TGA - Therapeutic Goods Administration – for being “persistently behind the curve – lagging months behind foreign regulators” in approving the various vaccines. The medicos should hardly need economists to remind them of the point they themselves dinned to the rest of us: the spread of pandemics is exponential, so a delay of just six weeks really matters.
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Spoiler alert: we’re in a recession, even if it’s not ‘official’
Senior economics writer
August 31, 2021 — 5.30am
One of the sillier games played by the Australian media is our frenzied – if strangely reverent – discussion about whether or not we can officially declare our economy to be “in recession”.
The rule of thumb journos have applied since I joined the game in 2005 is that we only get to use the dreaded “R” word if our Bureau of Statistics releases figures showing “two consecutive quarters of negative GDP growth”.
Let’s unpack that.
What is “GDP”? It’s “gross domestic product”, or the total value of all goods and services produced by Australians with a period.
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https://www.afr.com/policy/economy/the-recession-that-won-t-feel-like-one-20210831-p58nmh
The recession that won’t feel like one
A small drop in economic activity in the June quarter will point to a technical recession. But few Australians will notice because of the current lived experience of low unemployment.
Jo Masters Contributor
Sep 1, 2021 – 9.39am
I find myself uncomfortably complacent about the prospect of a recession emerging today. As you’d imagine, for an economist forecasting a recession, this is a new and unexpected feeling.
While we’ll have to wait until the September quarter figures, if we see a small contraction in the June quarter, there’s no doubt that we are headed into a recession. Normally, a near certain drop in economic activity queues a steady procession of dire warnings, calls for government stimulus and measures designed to get economic activity pumping again.
But this isn’t like the recession we had to have – the decline driven by inventory cycles and net exports in the June quarter masks a healthy unemployment rate and private domestic demand. This means that while the technical framework will point to a recession, the lived experience of most Australians will not.
People do not experience recessions through gross domestic product or any other economic statistics. Typically, recessions hit households through jobs – losing a job, fear of losing a job, relying on someone who loses a job. Jobs are literally the lifeblood of the economy and while that lifeblood has been infected with COVID-19, government measures have largely vaccinated this lifeblood against the disease.
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Recession dodged as economy grows surprise 0.7pc
Ronald Mizen Economics correspondent
Sep 1, 2021 – 11.51am
Several short lockdowns in the three months to June 30 did little to dampen household spending and investment, which helped push economic growth to a surprise 0.7 per cent for the quarter.
The solid outcome means Australia will avoid a technical double-dip recession, which was possible because gross domestic product is expected to contract between 2 per cent and 4.5 per cent this quarter.
It also reinforces an underlying strength in the economy, which is now 1.6 per cent larger than before the coronavirus pandemic started, and suggests growth is only being constrained by stay at home orders.
The data, however, reflect what happened more than three months ago, when lockdowns were rarer and shorter, Deloitte Access Economics partner Stephen Smith said. “The situation today looks very different.”
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Home loan borrowers scrambling for better deals, ABS refinancing figures show
11:02PM September 2, 2021
Australians refinanced a record $17.2bn in home loans in July, 60 per cent more than a year earlier, as borrowers shopped en masse for better deals and lower rates amid a hot property market.
Refinancing activity jumped 6 per cent in the month alone, the seasonally adjusted figures from the Australian Bureau of Statistics data show.
ABS head of finance and wealth Katherine Keenan said the spike in refinancing activity “reflected borrowers seeking out lower interest rates, particularly for fixed-rate loans, and cashback deals across a large number of major and non-major lenders”.
Close to half of all new home finance commitments were on a fixed rate – versus just 16 per cent two years earlier.
Total new lending commitments, excluding refinancing, peaked at $32.6bn in May, and have since stalled, totalling $32.1bn in July. That was still 68 per cent higher than a year earlier and than the levels immediately preceding the pandemic.
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Westpac slashes growth outlook for economy as Covid lockdowns bite
9:35PM September 3, 2021
Influential economist Bill Evans has slashed his growth forecasts amid extending Covid lockdowns, bolstering his view that the Reserve Bank will decide to increase its policy stimulus.
The Westpac chief economist now sees a 4 per cent contraction in national growth for the September quarter versus the June quarter, with Victoria expected to stay in lockdown through until the end of October amid “stubbornly high” case numbers.
The state recorded 208 new cases of locally acquired Covid on Friday and NSW 1431.
NSW Premier Gladys Berejiklian said “the next fortnight is likely to be our worst”.
Reserve Bank forecasts last month assumed a faster vaccine rollout would reduce the frequency and severity of lockdowns and allow the international border to be reopened from mid-2022.
They assumed the Greater Sydney lockdown would extend through the September quarter, with brief and or less severe restrictions in parts of Australia in the December quarter.
Mr Evans also cut his December quarter growth forecast to 2.6 per cent. He saw zero growth for 2021 compared to 2020, down from 2.4 per cent previously forecast. His 2022 growth forecast was revised up to 7.4 per cent from 5 per cent forecast in mid-August.
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Health Issues.
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No entries in this category.
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International Issues.
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https://www.afr.com/policy/foreign-affairs/inside-xi-jinping-s-war-on-the-wealthy-20210826-p58m3c
Inside Xi Jinping’s war on the wealthy
Making oligarchs pay their fair share will be popular. But tax reform with Chinese characteristics is not so straightforward.
Richard McGregor Columnist
Aug 30, 2021 – 4.00pm
In Xi Jinping’s early days in office, commentators hunting for a reassuring spin on his authoritarian rule often cited a local political idiom: that the Chinese leader was signalling left, only to turn right.
As far as politics goes, it’s a tactic as familiar in democracies as in communist party-led states, as leaders throw red meat to their bases to shore up support before shifting back to the centre.
After nearly a decade in office, nobody says that about Xi any more. The Chinese leader turned left from the start and stayed there.
Beijing’s label for its economic system – “socialism with Chinese characteristics” – has long prompted sniggers, with the phrase seen as little more than a rhetorical fig leaf allowing a communist party to preside over unbridled capitalism.
Xi’s pronouncement in recent weeks of the need to “encourage high-income people and enterprises to give back to society more”, all in service of building “socialism”, is making many think again.
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The Fed’s post-pandemic world is built on a rocky foundation
Senior business columnist
August 30, 2021 — 11.58am
Most of the focus on Jerome Powell’s Jackson Hole speech last Friday has been on what it said about the prospect of a tapering of the US Federal Reserve Board’s asset purchases this year. There were, however, sections of the speech that canvassed more interesting questions.
In his address, the Fed’s chairman said that he has now joined the ranks of the members of the Open Market Committee who favour reducing, or “tapering” the rate of its $US120 billion ($164 billion) a month of bond and mortgages purchases – if the US economic recovery evolved “broadly as anticipated.”
That’s a “maybe” rather than a commitment and one built, it was apparent from other elements of the speech, on an assumption that, post-recovery, the economy and its macro settings will look reasonably similar to those which pre-dated the emergence of COVID-19.
The pandemic ravaged the US (and other) economies, briefly.
Powell said it had displaced 30 million workers in the US and that the decline in economic output in the second quarter of last year was twice the full decline experienced during the “Great Recession” of 2007-09 that followed the global financial crisis.
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After 20 years, last US troops leave Afghanistan
August 31, 2021 — 6.50am
Washington: The United States has completed the frantic and deadly withdrawal of its forces from Kabul, marking the official end of the 20-year war in Afghanistan.
General Kenneth McKenzie, who leads the US Central Command, announced on Tuesday (AEST) that the last C-17 American military aircraft had departed the international airport in Kabul.
McKenzie said that more than 122,000 people have been airlifted out of Kabul since August 14, making the effort the biggest non-combatant evacuation in US history.
Some Taliban soldiers set off celebratory gunfire shots after the last US military plane left the tarmac in Kabul.
The evacuation effort began in chaos and become more dangerous over time, culminating in a suicide bomb attack by the IS-K terror group that killed 13 US soldiers and at least 169 Afghans at the airport gate.
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https://www.afr.com/world/asia/investors-in-xi-s-china-face-a-rude-awakening-20210831-p58ne1
Investors in Xi’s China face a rude awakening
Xi Jinping’s crackdown on private enterprise shows he does not understand the market economy.
George Soros
Updated Aug 31, 2021 – 1.23pm, first published at 9.40am
China’s leader, Xi Jinping, has collided with economic reality.
His crackdown on private enterprise has been a significant drag on the economy. The most vulnerable sector is real estate, particularly housing.
China has enjoyed an extended property boom over the past two decades, but that is now coming to an end. Evergrande, the largest real estate company, is over-indebted and in danger of default. This could cause a crash.
The underlying cause is that China’s birth rate is much lower than the statistics indicate. The officially reported figure overstates the population by a significant amount.
Xi inherited these demographics, but his attempts to change them have made matters worse.
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Red October fears: Sharemarkets are overdue for a big correction
By Jeremy Warner
September 1, 2021 — 8.29am
For stock market investors of a superstitious nature, October is the most feared month in the financial calendar. If we include September, the two autumnal months have encompassed some of the most notorious stock market sell-offs of the modern age - the Bank Panic of 1907, the Great Crash of 1929, Black Monday 1987, the 9/11 atrocities of 2001 and, of course, the Lehman Brothers collapse that triggered the global financial crisis in 2008.
The superstition is to some extent justified by the record; using the Dow Jones Industrial Average as the measure, October claims the highest number of severe stock market downturns in the last 130 years. However, it is quite closely followed by March, when the last really big one, the COVID-19 crash, happened. January and May are also relatively common months for stock market corrections.
The high level of October crashes can therefore be dismissed as little more than coincidence. Anticipation can on the other hand be an incredibly powerful influence and, if enough investors believe in the “October effect”, then in an overbought market it stands some chance of self-fulfilment. Whether acting rationally or not, the crowd determines the outcome.
Stock market crashes nevertheless generally require some kind of a spark, or external shock, to set them off. The crash of 1929 and Black Monday in 1987, the latter of which turned out to be no more than a brief aberration, were unusual in that there was no obvious catalyst, beyond a hike in interest rates.
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‘World is changing’: Biden defends Afghanistan pullout as US refocuses on China, Russia
Updated September 1, 2021 — 6.48amfirst published at 5.36am
President Joe Biden on Tuesday called the evacuation from Afghanistan an extraordinary success in his first public remarks since the United States withdrew its military from the country on Monday, ending a 20-year war.
In a speech at times defiant, Biden said the choice in Afghanistan was between leaving or escalating the conflict. Biden pointedly stressed that exiting the war-torn nation will allow the US to focus on future security challenges such as China.
Biden said the US succeeded in what it set out to do in Afghanistan over a decade ago, adding that he was the fourth president to have to decide on whether to stay the course or leave the war-torn country.
Biden rejected criticism of his decision to stick to a deadline to pull out of Afghanistan this week, a move that left 100 to 200 Americans in the country along with thousands of US-aligned Afghan citizens.
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China spins as economy wobbles
6:26AM September 1, 2021
Beijing’s propaganda machine has lauded Xi Jinping’s “profound revolution” as new data shows a recent Delta outbreak has knocked China’s economy off course.
Official data released on Tuesday revealed sentiment in China’s economy in August slumped to the second-lowest level since the global financial crisis.
Willy Wo-Lap Lam, an expert on Chinese politics at the Chinese University of Hong Kong, said the slowing economy was a rising concern for Beijing.
“The government is afraid that if the economy doesn’t pick up quickly enough then those unemployed people and people who can’t afford to pay their mortgages, or have seen their standard of living going down, might pose political problems,” Dr Lam told The Australian.
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https://www.afr.com/world/europe/joe-biden-and-europe-are-going-different-ways-20210901-p58nqo
Joe Biden and Europe are going different ways
Europeans are starting to see continuities between the US president and his predecessor Donald Trump.
Edward Luce Columnist
Sep 1, 2021 – 9.57am
US President Joe Biden will lose no votes over the EU’s decision on Monday (Tuesday AEST) to restore travel restrictions on Americans. But it is a bad sign.
The move was as much about Biden’s unwillingness to match Europe’s opening to US travellers this northern summer as it is about America’s high delta variant infection rate. It would not have taken much to respond to Angela Merkel, the German chancellor, and others who pleaded with him to lift the ban. But it would have meant another battle with US anti-vaxxers. The fact that he refused to lift a finger says a lot about the EU’s lack of clout.
All of which is beginning to remind them of Donald Trump. At a stylistic level, the difference between Biden and Trump could hardly be greater. Biden is engaging, he jokes with counterparts and usually says the right things. It is as hard to picture Biden shoving a foreign leader aside in a group photo-op as it is to imagine him launching a family-branded hotel chain. But being likeable is not the same as being a good ally. On that count, Europeans are starting to see continuities between Biden and Trump.
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China is grappling with a ‘devil’s bargain’
Senior business columnist
September 1, 2021 — 11.58am
The debt-riddled underbelly of some of China’s bigger companies perhaps provides another layer of insight into Xi Jinping’s abrupt imposition of a new and aggressive approach to “common prosperity” on the country’s biggest enterprises.
For decades it was the entrepreneurs who helped turbocharge China’s growth rate, particularly during the ultra-high growth in the decade after the financial crisis where Chinese companies gorged on the torrents of liquidity, the access to cheap debt and the stimulus China poured into its domestic system and economy.
For a variety of reasons, not the least of which was the flaunting of wealth and perceived power and independence from the state of tech entrepreneurs like Alibaba’s Jack Ma, China’s authorities launched an assault on the big tech companies this year and pressured their billionaire founders to “donate” towards its goal of common prosperity.
That heralded a radical shift, the biggest in 40 years, from an emphasis on creating wealth towards redistributing it.
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China an ‘existential threat’ to US and allies: general
Matthew Cranston United States correspondent
Sep 2, 2021 – 10.18am
Washington | China’s increased coercion is a far greater threat to the US and its allies than another September 11-style attack, says a recently retired four-star general who was in the Pentagon when terrorists crashed into it almost 20 years ago.
General James “Mike” Holmes, who until late last year was Commander of the Air Combat Command with responsibility for rapid deployment of air, space, cyber and intelligence forces, said China’s power and motivations were a much greater threat than ever before.
“September 11 was not an existential event for the United States. It was a terrible tragedy, but as a people we continued along our path,” General Holmes said.
“The threat posed by the People’s Republic of China is a much bigger threat than that and does pose, literally, an existential threat to the United States,” he told The Australian Financial Review.
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https://www.afr.com/world/north-america/how-the-bourgeois-bohemians-broke-america-20210824-p58lch
How the ‘bourgeois bohemians’ broke America
The creative class was supposed to foster progressive values and economic growth. Instead we got resentment, alienation, and endless political dysfunction.
David Brooks Contributor
Sep 3, 2021 – 5.00am
The dispossessed set out early in the mornings. They were the outsiders, the scorned, the voiceless. But weekend after weekend – unbowed and undeterred – they rallied together. They didn’t have much going for them in their great battle against the privileged elite, but they did have one thing – their yachts.
During the summer and fall of 2020, a series of boat parades – Trumptillas – cruised American waters in support of Donald Trump. The participants gathered rowdily in great clusters. They festooned their boats with flags – American flags, but also message flags: don’t tread on me, no more bullshit, images of Trump as Rambo.
The women stood on the foredecks in their red, white, and blue bikinis, raising their Pabst Blue Ribbon tallboys to salute the patriots in nearby boats. The men stood on the control decks projecting the sort of manly toughness you associate with steelworkers, even though these men were more likely to be real-estate agents. They represent a new social phenomenon: the populist regatta. They are doing pretty well but see themselves as the common people, the regular Joes, the overlooked. They didn’t go to fancy colleges, and they detest the mainstream media. “It’s so encouraging to see so many people just coming together in a spontaneous parade of patriotism,” Bobi Kreumberg, who attended a Trumptilla in Palm Beach, Florida, told a reporter from WPTV.
You can see this phenomenon outside the United States, too. In France, the anthropologist Nicolas Chemla calls this social type the “boubours”, the boorish bourgeoisie. If the elite bourgeois bohemians – the bobos – tend to have progressive values and metropolitan tastes, the boubours go out of their way to shock them with nativism, nationalism, and a willful lack of tact. Boubour leaders span the Western world: Trump in the US, Boris Johnson in the United Kingdom, Marine Le Pen in France, Viktor Orbán in Hungary, Matteo Salvini in Italy.
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China is deliberately breaking the back of the world’s biggest financial bubble
By Ambrose Evans-Pritchard
September 3, 2021 — 7.30am
The elephant in the global room is China’s ferocious property squeeze. Xi Jinping is deliberately breaking the back of the world’s biggest financial bubble.
The Chinese economy already has one foot in recession - by its own cyclical standards - and is heading for a hard-landing over the next few months as construction is starved of credit.
“Markets should be prepared for what could be a much worse-than-expected growth slowdown, and potential stock market turmoil,” said Ting Lu, Nomura’s chief China economist. The scale of China’s cement addiction is eye-watering. “Half the world’s cranes are in China. We’re talking about 50 per cent of the global construction business,” he said.
Home building and property make up 17 per cent of Chinese GDP, including furniture and appliances. The sector also generates 44 per cent of local government revenues through land sales and fees, injecting $US1.3 trillion ($1.8 trillion) a year into the economy as quasi-fiscal spending. All told, property makes up a quarter of the Chinese economy, three times the relative weighting of America’s extreme bubble in 2007.
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Little did we know, but 9/11 was the start of the West’s economic crisis
By Jeremy Warner
September 3, 2021 — 6.30am
There is a strong sense of deja vu about Joe Biden’s pledge to hunt down the perpetrators of the Kabul airport attacks; it’s exactly what George W Bush said about those behind the World Trade Centre atrocities 20 years ago next month.
The difference is that for Biden the promise of a posse is part of America’s bungled retreat from the war on terror. For Bush it marked the very beginning. Things have turned full circle; it is as if 20 years of effort - and, according to some estimates, $US5 trillion ($6.8 trillion) of costs, taking into account both the Iraqi and Afghan campaigns - was all for nothing.
As in TS Elliot’s Little Gidding, America’s fate after all that interventionism is “to arrive where we started, And know the place for the first time”. For the US and her allies, it has been a truly shattering experience.
It is hard to think of any geopolitical event of the 21st century quite as impactful as 9/11, tragically exposing as it did the complacency of the post-Cold War period, when US-led globalisation seemed destined to sweep all before it.
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Some say low interest rates cause inequality. What if it’s the reverse?
By Neil Irwin
September 3, 2021 — 5.00am
It’s an article of faith among many in the financial world: The Federal Reserve’s low interest rate policies and other steps meant to boost the economy are driving the value of stocks and other assets to the moon and thus are a major cause of high wealth inequality.
That idea can be heard in documentaries, newspaper opinion articles and many segments on cable financial news. It may also be backward.
New evidence suggests high inequality is the cause, not the result, of the low interest rates and high asset prices evident in recent years. That is a provocative implication of new research presented on Friday at the Federal Reserve Bank of Kansas City’s annual Jackson Hole economic symposium (which was conducted virtually because of the pandemic).
Seeing how the new notion connects with the boom in markets — and the risks to financial stability whenever it ends — means grappling with just why interest rates are so low, financial asset prices are so high and what the Fed has to do with it.
Advanced economies have experienced low interest rates for more than a decade. These can be viewed as less a result of central bankers’ decisions and more as a consequence of powerful global forces pushing them downward — creating a corresponding surge in asset prices.
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https://www.afr.com/policy/economy/a-perfect-inflationary-storm-like-the-1970s-20210901-p58ny9
A perfect inflationary storm – like the 1970s
Humiliating defeat, fading productivity and supply side shocks – half a century later, all the signs of inflationary boil over are there.
Kenneth Rogoff Columnist
Sep 3, 2021 – 11.37am
With the United States’ disastrous exit from Afghanistan, the parallels between the 2020s and the 1970s just keep growing.
Has a sustained period of high inflation just become much more likely? Until recently, I would have said the odds were clearly against it. Now, I am not so sure, especially looking ahead a few years.
Many economists seem to view inflation as a purely technocratic problem, and most central bankers would like to believe that. In fact, the roots of sustained inflation mainly stem from political economy problems, and here the long list of similarities between the 1970s and today is unsettling.
At home, following a period in which the US president challenges institutional norms (Richard Nixon was the 1970s version), a thoroughly decent person takes office (back then, Jimmy Carter). Abroad, the US suffers a humiliating defeat at the hands of a much weaker, but much more determined adversary (North Vietnam in the 1970s, the Taliban today).
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US posts lacklustre 235,000 jobs in August amid virus surge
Eli Rosenberg
Sep 3, 2021 – 11.42pm
The US economy added just 235,000 jobs in August, a disappointing month of hiring as the delta variant caused coronavirus caseloads around the country to spike.
The number fell well below economists’ forecasts and makes for a steep drop off from June’s 962,000 jobs added and July’s number, which was revised upward to 1.1 million.
Overall, the country is still down more than 5 million jobs from before the pandemic. The unemployment rate edged down slightly to 5.2 per cent.
After several straight months of strong growth, the economy faced new headwinds in August, fuelled by the rapid spread of the coronavirus’s delta variant among large pockets of unvaccinated people. More than two dozen states have also ended jobless aid early, which has caused economic strain in a number of areas.
Some economists have begun openly wondering whether the economy will in fact be able to achieve a full recovery in the near term, as large sectors of the economy, such as the leisure and hospitality sectors, remain well below pre-pandemic numbers.
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https://www.afr.com/world/asia/why-china-is-cracking-down-on-everything-20210831-p58nlh
Why China is cracking down on everything
Billionaires, movie stars, “sissy boys” and teenagers playing video games have been caught up in Xi Jinping’s Soviet-style campaign to rid China of decadent Western influences and tighten his grip on power ahead of a key political test next year.
Michael Smith China correspondent
Sep 3, 2021 – 1.21pm
First he came for the billionaires, then the celebrities, then this week it was hundreds of millions of young online gamers who found themselves in Xi Jinping’s crosshairs.
China, like Australia and many other countries, has a social problem when it comes to addictive video games. Teachers and parents have been struggling for years to stop young gamers turning up for school bleary-eyed from a night glued to a screen.
That was until this week when the Chinese government imposed radical restrictions on one of the country’s most popular pastimes.
Gamers under 18 are now banned from playing on school nights. Activity is restricted to one hour a night on Fridays, Saturdays, Sundays and on public holidays. The rules are strictly enforced through a registration process, technology such as facial recognition, and the threat of heavy penalties,
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US jobs report likely derails case for September Fed stimulus taper
By Nick Timiraos
Dow Jones
1:37PM September 4, 2021
A slowdown in US job growth in August is likely to spoil the case for the Federal Reserve to start reversing its easy-money policies at its next policy meeting, but steady hiring could still lead officials to begin reducing their bond purchases later this year.
US stock benchmarks wobbled lower early on Friday US time after the Labour Department’s employment report for August showed that a weaker-than-expected 235,000 jobs were created, even as the unemployment rate fell to 5.2 per cent from 5.4 per cent in the prior month.
The Dow Jones Industrial Average was trading 0.3 per cent lower at 35,340, the S&P 500 index was down 0.3 per cent at 4,523, while the Nasdaq Composite Index was trading 0.3 per cent lower at 15,285 early in the session.
Economists surveyed by the Wall Street Journal had forecast on average that 720,000 jobs would be created in August.
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What you thought you knew about investing in China is wrong
Mark Tinker
Sep 5, 2021 – 8.54am
The summer months in the Northern Hemisphere generally see lower levels of trading and liquidity, as most of the key decision makers head to the beaches and the juniors manning the desk understandably tend to be more risk-averse than the boss who actually gets paid to take the risk.
As such, books are flat, or rapidly flattened, and we often see jumpy and volatile markets. This year was no exception, except that the two main events – the hit to the Chinese education stocks at the end of July and the chaotic US withdrawal from Afghanistan in the middle of August – are more than the usual noise in thin markets.
Both have profound medium and long-term implications for markets, that the key decision makers will now be pondering as they return to the office. COVID-19 permitting, naturally.
They used to say under the previous regime of Hu Jintao and Wen Jiabao that while we knew the who and the when of investing in China, we still needed to work out the where, the how and the why.
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I look forward to comments on all this!
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David.
