November 11 2021 Edition
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In the US the
big news is mostly political with the Democrats losing the Governorship of
Virginia and then Biden passing a huge one trillion dollar infrastructure bill.
Seems like one all at present! The larger spending bill will be harder!
In the UK the COP26 conference is ending, with some hopeful signs.. Hard to be sure just yet how much has actually been achieved. The COVID situation seem to be a little better!
In OZ we have
ScoMo back and working hard to ‘move on’ from his overseas visit and the fall-out
with France! Again how it goes may take years to settle down. There is also
some real concern that Australia operating nuclear subs may be above our
capability. Seems a pretty big leap! ScoMo also seems to have had a miraculous conversion to electric vehicles!
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Major Issues.
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Proposed voter ID laws pose a risk to our democracy
Professor of law
November 1, 2021 — 5.02am
The federal government announced this week that it was considering enacting new voter identification laws, requiring voters to show valid identification before casting a ballot at a federal election.
On its face, the proposal looks eminently reasonable. We require identification for many things in our society, and this is only increasing in a world of vaccine certificates. The law also allows for multiple forms of identification and other mechanisms to prove your identity. But appearances can also be deceiving.
Most Australians have some form of formal identification. But of those who do not, an overwhelming number are Aboriginal and Torres Strait Islander people. Just like US voter identification laws that appear racially neutral, the proposed law therefore has a very real potential to be racially discriminatory in effect.
It also sends a message to Australians that voting is a privilege, rather than a duty. This goes against the spirit of our system of compulsory voting, and the sense of civic duty that helps underpin it.
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Beware of pedlars of supply side solutions to home affordability
Economics Editor
October 31, 2021 — 1.59pm
One thing you can be sure of is that if house prices are soaring, governments will be holding inquiries into it. Unfortunately, the other thing you can be sure of is that nothing will come of those inquiries.
Why? Because their purpose is to express the government’s deep concern about the worsening affordability of homeownership – its heart-felt sympathy for young people struggling to buy their first home – not to tackle the problem.
Why? Because policy decisions made by governments – federal and state – over many years have rigged the housing market in favour of people who already own their homes and against those who’d like to own.
Why? Because the number of voting homeowners far exceeds the number of voting would-be homeowners. The established homeowners – and the industries that benefit from the rigged market, such as property developers and real estate agents – get shirty if they think their privileges are threatened.
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An extraordinary political moment that is dangerous for Morrison
By David Crowe
November 1, 2021 — 11.26am
There is no parallel in recent memory for the moment when French President Emmanuel Macron called Scott Morrison a liar.
Macron was asked a direct question about his talks with the Prime Minister before the sudden termination of a submarine contract worth $90 billion for the French defence industry.
French President says Scott Morrison lied to him over the cancellation of a mammoth submarine contract as tensions between the two leaders escalated further.
“Do you think he lied to you?” asked Bevan Shields of The Sydney Morning Herald and The Age.
“I don’t think, I know,” said Macron.
It is an extraordinary political moment. And extremely dangerous for Morrison.
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Clash with US and France is a politico-diplomatic disaster for Morrison
Political and international editor
November 2, 2021 — 5.30am
When the great strategist Sun Tzu wrote that “all warfare is based on deception”, he meant the deception of the enemy.
Scott Morrison is in the unhappy position of being accused of deceiving Australia’s friends. Not just one but two.
Within two days, the President of France, Emmanuel Macron, and the US President, Joe Biden, separately said or implied that Morrison had misled or deceived them. And they said so publicly.
For the Prime Minister to have a public clash with the leader of one ally over an alleged deception is uncomfortable yet contestable. There are two sides to every dispute, after all.
To have public clashes with two at the same time is a politico-diplomatic disaster. It’s then a three-sided argument, and the other two sides are united against Morrison.
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Why your investment decisions are going to become harder
How to read signals from the bond market, what they mean for your share decisions and how to think about scenarios for your portfolio.
Giselle Roux Contributor
Nov 1, 2021 – 5.00am
In the past month, bond markets have been moving, but the impact across other asset classes is “stirred rather than shaken”.
The signal from bonds is always relevant. Since early 2019, super low rates mean that financial markets could provide cheap capital to the private sector – giving them the capacity to buffer profits and, for a good cohort, make higher sales and margins. Equities partied like no tomorrow.
The current move in bonds may be the first indication that investment decisions will potentially become a little harder. Central banks have retained their mantra on inflation, willing its re-occurrence. Where there is inflation, it has been largely due to supply bottlenecks.
The road to riches is becoming harder for investors to discern.
Inevitably the cause of the supply issues and rise in goods prices is multifaceted – COVID-19, immigration restrictions, commodities, energy problems and, not least of all, elevated demand from stay-at-homers looking for something to buy.
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https://www.afr.com/world/north-america/the-dangerous-power-of-insecure-billionaires-20211103-p595h7
The dangerous power of insecure billionaires
Is there any reason to believe that taxation will cause the rich to go Galt and deprive us of their genius?
Paul Krugman
Nov 3, 2021 – 8.10am
Elon Musk doesn’t think visionaries like him should pay taxes the way little people do. After all, why hand over his money to dull bureaucrats? They’ll just squander it on pedestrian schemes like … bailing out Tesla at a crucial point in its development. Musk has his sights set on more important things, like getting humanity to Mars to “preserve the light of consciousness”.
Billionaires, you see, tend to be surrounded by people who tell them how wonderful they are and would never, ever suggest that they’re making fools of themselves.
But don’t you dare make fun of Musk. Billionaires’ money gives them a lot of political clout — enough to block Democratic plans to pay for much-needed social spending with a tax that would have affected only a few hundred people in a nation of more than 300 million. Who knows what they might do if they think people are snickering at them?
Still, the determined and so far successful opposition of incredibly wealthy Americans to any effort to tax them like normal people raises a couple of questions.
First, is there anything to their insistence that taxing them would deprive society of their unique contributions? Second, why are people who have more money than anyone can truly enjoy so determined to keep every penny?
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BCA warns of supply chain vulnerability
11:00PM November 2, 2021
Australia’s “Dutch disease”, with strong commodity exports discouraging a local manufacturing sector, has made it vulnerable to global supply chain shocks, a new report by the Business Council of Australia and the Australia China Relations Institute (ACRI) has warned.
The report, to be released on Wednesday, says the success of Australia’s commodity exports such as iron ore, coal and LNG, has held up the value of the Australian dollar which has reduced the role of manufacturing in the economy, making it cheaper to import goods than produce them locally.
“Australia’s unusual trade structure, and the changes it has wrought on the industrial structure, predispose the economy to vulnerability from international manufacturing supply chain shocks,” it warns.
The report, Australia’s export mix, industrial base and economic resilience challenge, was commissioned by the Business Council of Australia and is authored by ACRI director Professor James Laurenceson, researchers Thomas Pantle, Dr Philip Toner and former UTS Business School dean Professor Roy Green.
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The biggest bond crashes and what we learnt from them
Jonathan Shapiro Senior reporter
Nov 4, 2021 – 10.01am
After almost fifteen years of covering the bond market, the experience can be distilled into this: years of boredom punctuated by moments of terror.
The world of rates and spreads and curves can seem trivial and uninteresting for long stretches, and then almost without notice, the part of the market upon which all others rest goes haywire.
The past two weeks were one of those. Some benchmark short-term interest rates spiked by magnitudes well above anything seen in decades.
There were a few unusual aspects of this episode. Short-term interest rates don’t tend to be all that volatile, because there’s always a consensus as to how an economy is tracking in the near term and what central banks will do in response.
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SMSF scam alert: how I was offered returns of 18-24pc
An approach to SMSF Association chief John Maroney serves as a warning not only to DIY fund trustees but to all investors.
John Maroney Contributor
Nov 3, 2021 – 12.41pm
The call came one late afternoon. At the other end of the line, boasting a refined English accent, was “Nigel Greenday”, who introduced himself as a senior superannuation planner with ASAL Group, which he described as a specialist in assisting people manage their self-managed super funds.
He had his pitch down perfect; it certainly wasn’t a hard sell. But the claim that ASAL was a fully owned subsidiary of a named major financial institution that had been in the market for 35 years made my ears prick up. I have been in the financial services industry for all that time in various roles with different organisations, yet had never heard of it.
Greenday’s follow-up email, while well written, confirmed my suspicions that this was a potential scam. It read, in part, “our clients, on average, are seeing returns on their investments of between 18 per cent and 24 per cent per year, depending on weighting based on their retirement goals, within a secure and structured environment”. Returns of between 18 per cent and 24 per cent a year! Too good to be true.
In addition, there was this “nice” touch at the end of the email. “Finally, we do normally charge a one-off fee of $1200 to open your trading account which does include a full ASIC/ATO compliant audit as well as your investment strategy. However, during the month of June, we are waiving this fee for all new clients who come through our marketing campaign.” In other words, get in now to save yourself $1200.
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Labor needs to swing into gear as Prime Minister feels the heat
Award-winning political commentator and author
November 4, 2021 — 5.30am
Two key frontbenchers were missing from Labor’s line-up during the last fortnight of Parliament. The shadow treasurer, Jim Chalmers, remained in Queensland and the shadow health minister, Mark Butler, stayed in South Australia.
An assortment of marginal seat holders also stayed in their electorates. There were deliberate tactical reasons for their absence. In the ongoing discussions canvassing the limitless “what if” scenarios that by necessity preoccupy oppositions, Labor worked out a plan in case Scott Morrison had a rush of blood and called an election for later this year.
Prime Minister Scott Morrison has held a press conference in Dubai after leaving COP26 in Glasgow
They did not want Chalmers and Butler, or selected backbench MPs, to be immobilised by the quarantine wars, so the safest course was for them to stay home where they could swing into action immediately if Morrison pulled the rip-cord.
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Markets may be about to face some uncomfortable moments
Senior business columnist
November 3, 2021 — 11.58am
The bond vigilantes are back in business, with the Reserve Bank among their early targets.
The RBA’s decision to abandon its yield curve control policy on Tuesday came after trading in bonds with an April 2024 maturity saw the yield crash through the bank’s 0.10 per cent, spiking to just under 0.8 per cent on Friday.
The bank had targeted that maturity at the onset of the pandemic last year to anchor the yield curve at ultra-low levels through the pandemic and its anticipated low-growth aftermath. The policy was predicated on the RBA’s expectation that the cash rate, also at 0.10 per cent, was unlikely to be increased for three years.
As the RBA’s governor, Philip Lowe, explained on Tuesday, developments within the economy haven’t quite been in line with the bank’s original expectations.
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A sharemarket crash is coming but it’s still the best place to put your money
By Jeremy Warner
November 4, 2021 — 7.35am
Just before the turn of the century, a couple of intellectually faintly suspect US policy wonks, James Glassman and Kevin Hassett, published a book called Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market.
This argued that US share price indices would rise three-fold in three to four years, hence the title Dow 36,000. The book was widely, and rightly, derided as delusional drivel at the time. Well, it’s taken a while, but more than 20 years later, the Dow Jones Industrial Average this week finally got there.
This doesn’t vindicate the book; in between we have had both the dotcom meltdown and the financial crisis. But it does underline a powerful truth about equity investment - that patience is a virtue, and for those who wait long enough, equities will in aggregate almost invariably deliver superior rates of return.
Even stretched over 20 years, the rise in the Dow all the way from less than 12,000 to 36,000 is a sensationally good run. The setbacks, though devastating at the time, today look like just passing aberrations. Buy to hold, don’t buy to trade, is the lesson.
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https://www.afr.com/policy/economy/shipping-limbo-scores-an-own-goal-20211104-p5963r
Already in limbo, shipping scores an own goal
A report into Australia’s stevedoring industry shows the same old problems, but they’ve been heightened by COVID-19 restrictions leading to container shortages and port congestion.
Jennifer Hewett Columnist
Nov 4, 2021 – 7.49pm
As more Australians return to bars and restaurants, see friends and travel, the COVID-19-inspired enthusiasm for buying more goods is expected to steadily reduce.
But that won’t quickly eliminate the problems of empty shelves, delays and increased prices for consumers and retailers as the economy recovers.
The construction industry has been dealing with massive shortages and rapid price escalation of basic materials such as timber and steel. Nor can Australian exporters be confident of any ability to again supply overseas markets on schedule and on budget as they pay surcharges for priority loading without guarantees of on-time delivery.
Supply chain blockages, soaring freight rates and congestion at ports have become the new global standard. But Australia, a country dependent on container shipping, has been particularly hard hit by what Australian Competition and Consumer Commission chairman Rod Sims calls a “logistical nightmare”.
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It’s not just subs: Australians need to fathom our strategic situation
The quick and predictable politicisation of AUKUS shows a gap in public understanding as crucial as the military gap the nuclear submarines are meant to fill.
Elizabeth Buchanan Contributor
Nov 5, 2021 – 11.46am
The new flare up in controversy around the AUKUS agreement, this time starring Emmanuel Macron and Malcolm Turnbull, has once again distracted Australians from what this deal is all about.
When AUKUS was first announced in September, the two public memes that quickly emerged were that Australia was going nuclear, and that Australia would be signing away its sovereign choices over war and peace to Washington.
Completely missed was the real political significance of the story, which is that Australia has shifted its strategic thinking from a largely reactive to a proactive approach, especially in the maritime domain.
The quick politicisation of the debate has obscured the real political potential to bolster Australian security interests. It also shows that there is a real gap in the public’s understanding of our new strategic situation, which is as important to fix as any capability gap in our submarine forces. The Morrison government now needs to bring the quiet Australians along with AUKUS.
Nuclear power is still controversial for many Australians, so the step up to this technology has captured most of the attention. But the national debate should be focusing on the strategic rationale for nuclear-powered submarines – why does Australia require this capability? How is sharpening strategic competition underway in our region affecting Australian stability and economic security?
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Inflation fears grip markets as price hikes intensify
Richard Henderson Reporter
Nov 5, 2021 – 3.40pm
Rising prices across the economy from labour and transport to food and insurance have pressured blue chips to shoulder higher costs, isolating companies with weak pricing power and spooking investors who are beginning to worry about the impact on profits.
Fast food outlets, chicken farmers, insurers and building materials companies are among the businesses to warn of rising prices in September quarter updates over the past fortnight, underscoring one of the biggest challenges facing corporate Australia as the economy rebounds.
On Wednesday, Domino’s Pizza said it faced rising food prices, sending its shares to the worst day in four years in the following session, while Inghams, the poultry group, said rising feed and transport costs meant the company may have to increase the price of chicken nuggets and schnitzel.
And last week, Nick Hawkins, chief executive of general insurer IAG, described “inflationary pressures on claims costs” as a headwind to margins.
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Between national interest and politics, no real contest
The Glasgow trip crystallised two vital issues, climate change and national security. Both were only grist for the political game.
Laura Tingle Columnist
Nov 5, 2021 – 4.14pm
Scott Morrison believes in miracles. This is perhaps why he expected us all to ignore what we had seen with our own eyes this week and instead believe him when he quivered with outrage that French President Emmanuel Macron had questioned “Australia’s integrity”.
It was the Prime Minister, of course, who was in Macron’s sights in Rome this week, not the Australian nation, when he was questioned about the cancellation of a $90 billion submarine contract – the largest in Australia’s history.
Did he think Scott Morrison had lied to him about the future of the deal, Macron was asked by reporters in Rome. “I don’t think, I know,” he had replied.
By the time Morrison got to Glasgow, the PM’s dander was in full dudgeon mode, on a scale that only someone who had once been an amateur musical theatre thespian could muster.
“I must say that I think the statements that were made questioning Australia’s integrity, and the slurs that have been placed on Australia, not me, I’ve got broad shoulders, I can deal with that,” he said. “But those slurs, I’m not going to cop sledging at Australia. I’m not going to cop that on behalf of Australians.”
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Correction, Minister: democracy’s roots are neither Christian nor Western
By Frank Bongiorno
November 6, 2021 — 5.00am
John Podsnap is one of Charles Dickens’ minor characters. Mr Podsnap, we learn in Our Mutual Friend, “was well to do, and stood very high in Mr Podsnap’s opinion”. He “was quite satisfied” and “never could make out why everybody was not quite satisfied”.
“We Englishmen are Very Proud of our Constitution, Sir,” Mr Podsnap tells a “foreign gentleman”. “It Was Bestowed Upon Us By Providence. No Other Country is so Favoured as This Country.”
The federal Education Minister, Alan Tudge, is similarly quite satisfied with his country. But his complaint that the new draft national curriculum in history is too “woke” in not saying enough positive things about Anzac, Christianity and liberal democracy is meeting resistance from Labor state and territory education ministers.
“We should expect young Australians leaving school to understand how our nation is one of the most free, wealthy, tolerant and egalitarian societies in all of human history,” Tudge recently told the Centre for Independent Studies, a right-wing think tank. “Ultimately, students should leave school with a love of country and a sense of optimism and hope that we live in the greatest country on Earth and that the future is bright.”
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Interest rates won’t rise as high as you might think
Ronald Mizen Economics correspondent
Nov 5, 2021 – 4.46pm
The Reserve Bank of Australia’s pivotal cash rate will rise from emergency levels and stabilise between 1.25 per cent and 2 per cent in coming years, economists say, adding $7200 to annual average mortgage repayments.
Despite the RBA’s insistence the current record low 0.1 per cent rate is unlikely to rise until 2024, markets are pricing in increases from next June-July and many economists are tipping a lift-off from November 2022.
So while the forecast peak in interest rates is well below the 20-year high 7.25 per cent recorded in 2008, the additional financial pressure on Australia’s heavily indebted households could come quicker than expected.
House prices surged more than 20 per cent over the past 12 months, which in turn pushed average mortgages to record highs. Between February-September, the average Australian owner-occupier home loan increased 10 per cent, a rise of almost $80,000, to $574,427.
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Time to push the boat out on a bold nuclear submarines plan
By Paul Greenfield and Jon Stanford
11:00PM November 5, 2021
The Morrison government should be congratulated on its bold and far-sighted initiative to acquire nuclear-powered submarines (or SSNs) for the Royal Australian Navy.
Although SSNs are based on a mature technology, only six nations operate them. Of the six, only India is not a permanent member of the UN Security Council. All six countries have stronger defence forces than Australia and, apart from Russia, substantially larger economies with a bigger industrial base. They also all have a nuclear power industry.
As a middle power without civil nuclear power generation, Australia is seeking to step up to a very exclusive club. While substantial, the challenges involved are by no means insuperable, but success in overcoming them will require a clear plan and strong leadership.
Ideally, we need a whole of nation endeavour led by an exceptional individual reporting to the prime minister.
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Coronavirus And Impacts.
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COVID-19’s global death toll tops 5 million in less than 2 years
By Carla K Johnson
November 2, 2021 — 2.36am
The global death toll from COVID-19 has topped 5 million, less than two years into a crisis that has not only devastated poor countries but also humbled wealthy ones with first-rate healthcare systems.
Together, the United States, the European Union, Britain and Brazil – all upper-middle- or high-income countries – account for one-eighth of the world’s population but nearly half of all reported deaths. The US alone has recorded more than 745,000 lives lost, more than any other nation.
“This is a defining moment in our lifetime,” said Dr Albert Ko, an infectious disease specialist at the Yale School of Public Health. “What do we have to do to protect ourselves so we don’t get to another 5 million?”
The death toll, as tallied by Johns Hopkins University,rivals the number of people killed in battles among nations since 1950, according to estimates from the Peace Research Institute Oslo. Globally, COVID-19 is now the third leading cause of death, after heart disease and stroke.
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Aussie breakthrough brings a universal Covid-19 vaccine closer
7:14PM November 2, 2021
Scientists may have uncovered the key to formulating vaccines that will be effective against all future strains of Covid-19 in a research breakthrough that could pave the way for a universal vaccine.
Researchers at the Garvan Institute studied thousands of antibodies in the laboratory to identify those that elicited an immune response targeting parts of the coronavirus’s spike protein that remains unchanged even when the virus mutates.
By identifying these antibodies, the researchers were able to develop a vaccination strategy that would remain effective for future strains of the virus, said Garvan Institute executive director Christopher Goodnow.
“The current vaccines are doing a terrific job at keeping people out of hospital and slowing the spread of the virus,” Professor Goodnow said. “But a lot of the antibodies we make with current vaccines are directed to a part of the virus that can easily … mutate … and lower the efficiency with which antibodies directed against that part of the virus can block it.
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Pfizer says antiviral pill cuts risk of severe COVID-19 by nearly 90 per cent
By Deena Beasley
November 5, 2021 — 10.07pm
A trial of Pfizer Inc’s experimental antiviral pill for COVID-19 was stopped early after the drug was shown to cut by 89 per cent the chances of hospitalisation or death for adults at risk of developing severe disease, the company said on Friday.
The results appear to surpass those seen with Merck & Co Inc’s pill molnupiravir, which was shown last month to halve the likelihood of dying or being hospitalised for COVID-19 patients also at high risk of serious illness.
Full trial data is not yet available from either company.
Pfizer said it plans to submit interim trial results for its pill, which is given in combination with an older antiviral called ritonavir, to the US Food and Drug Administration as part of the emergency use application it opened in October.
The combination treatment, which will have the brand name Paxlovid, consists of three pills given twice daily.
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Climate Change.
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Credible net zero plan takes more than tech
There are practical actions that can be taken right now to bend the emissions curve without new taxes or waiting for innovation.
Tony Wood Contributor
Oct 31, 2021 – 2.47pm
Australia’s emissions are not on track to hit net zero by 2050, despite the latest projections showing we will do better than our existing 2030 target. A suite of policy actions taken today could bend that curve in the right direction and complement the government’s focus on technology development.
The Prime Minister’s commitment to the net zero target is a major step towards a ceasefire in Australia’s protracted climate war. Together with Angus Taylor, the Minister for Industry, Energy and Emissions Reduction, he announced Australia’s Long-term Emissions Reduction Plan. This is also an important step, building on the government’s Technology Investment Roadmap to ensure that we will have the zero-emissions technologies necessary to meet the target.
But a credible Emissions Reduction Plan must be about more than technology.
The first is to implement sector-based policies to reduce emissions now, where the technologies and actions are clear, and the costs are modest (or even negative) and justified by the benefits. These policies include a cap on vehicle emissions; bigger roles for current policies – the Emissions Reduction Fund, the Safeguard Mechanism, and energy efficiency obligations; more investment in the electricity grid; and better integration of state renewable electricity schemes.
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Funding clean technology is the way to avoid climate disaster
We need to turn lab-proven concepts into ubiquitous products that people want and can afford to buy, writes Bill Gates.
Bill Gates
Updated Nov 1, 2021 – 9.43am, first published at 9.39am
Before the last major COP meeting, in Paris in 2015, innovation was barely on the climate agenda. This year in Glasgow it will take centre stage.
Shifting the world’s focus to inventing clean technologies was among the greatest successes of the Paris COP. Continuing that trajectory is, perhaps, its biggest opportunity this year, because innovation is the only way the world can cut net greenhouse gas emissions from roughly 51 billion tonnes per year to zero by 2050.
There is now significantly more money for basic research and development and more venture capital for clean start-ups in hard-to-decarbonise sectors than ever before. As a result, some important clean technologies — like sustainable aeroplane fuel, green steel and extra-powerful batteries — now exist and are ready to scale up.
If the world is really committed to climate innovation, however, then these breakthroughs must be only the beginning of the story, not the end. At COP26 we need to think about how to turn lab-proven concepts into ubiquitous products that people want and can afford to buy.
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https://www.afr.com/wealth/investing/climate-change-is-the-trade-of-the-decade-20211031-p594p0
Climate change is the trade of the decade
Aaron Patrick Senior correspondent
Nov 1, 2021 – 5.00am
Like most professional investors, UniSuper chief investment officer John Pearce prides himself on being the type of guy who won’t compromise his clients’ financial wellbeing for decisions that might make his day job less stressful.
This raises an interesting question. Over the past year, Pearce pared back holdings in coal, oil and gas companies amidst an energetic climate change campaign coordinated by a Friends of the Earth affiliate group, Market Forces.
UniSuper sold out of, or reduced stakes in, energy companies that have had a great twelve months, according to Market Forces: Oil Search (up 69 per cent), Santos (up 50 per cent), Enbridge (up 42 per cent), Woodside (up 34 per cent), TC Energy (up 30 per cent) and Ampol (up 20 per cent).
Was it sensible investing or caving to activist pressure?
According to Pearce, UniSuper, which may have been targeted because many of its investors are academics, took up opportunities elsewhere, including banks. He said it would be simplistic to assume missing out on some stocks’ gains hurt investors.
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Prince Charles tells G20 leaders: Our responsibility now to guarantee future of planet
11:00PM October 31, 2021
I was invited to speak at two important world gatherings this week – the G20 Summit in Rome and the COP26 meeting in Scotland. My message in Glasgow will be the same as the message I delivered in Rome. There is no issue more pressing than the future health of our planet and the people who inhabit it. Its health today will dictate the health, happiness and economic prosperity of generations to come. That surely has to be our focus. I have always felt we have an overwhelming responsibility to those generations yet unborn.
Fortunately, after very nearly 50 years of trying to raise awareness of the growing climate and environmental crisis, I am at last sensing a change in attitudes. It now seems much more widely accepted there is a need for urgent and real action on the ground. I have spent much of those 50 years listening to a great many people. I have learned from the world’s experts, who have dedicated their lives to tackling climate change. I have listened closely to leaders of many countries, particularly Commonwealth nations, whose communities are some of the most climate-vulnerable on Earth, and I have found it impossible not to hear the despairing voices of young people who worry about the world they will inherit from the current generation of stewards of their planet. I have listened to leaders of the private sector, increasingly eager to invest in the innovative projects and new technologies that will help to create the necessary, rapid transition to sustainability and guarantee a cleaner, safer, healthier planet. For me, the private sector holds the key. I am not sure we are, in fact, listening to them enough …
Nearly two years ago I established my Sustainable Markets Initiative, which has now been joined by some 300 of the world’s top CEOs from every sector of the economy. I have discovered just how acutely sensitive they are to the way their customers and their investors are now demanding changes to the way businesses behave. Their customers are a powerful lobby. After all, consumers control more than 60 per cent of global GDP. To take just one example, joining me at the G20 on Monday will be leading members of the fashion industry who will launch a new digital ID for clothes to make clear how products are designed, manufactured and distributed. It is an example of the commitment businesses want to show; the kind of investment only they can provide. They believe, as do I, that their customers have the right to know what they buy has been created sustainably, and will make future choices on that basis.
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COP26: Planet propelled into uncharted climate territory with far-reaching repercussions, meteorological experts warn
4:50AM November 1, 2021
Global leaders will take a deep breath at the “direst of the dire” latest findings on global warming, a director at the World Meteorological Organisation said.
Maxx Dilley, the director of the Climate Prediction and Adaptation branch of the WMO, told The Australian there was a 40 per cent chance that the global temperature would be above 1.5 degrees warming within the next five years.
“Even the old pros, the ones that have been doing this for 15 or 20 years who have been playing along are taking a deep breath and saying ‘you know, we kind of didn’t realise’,” he said.
In a new report released on Sunday at the United Nations Climate Change conference COP26 in Glasgow, the WMO said record atmospheric greenhouse gas concentrations and associated accumulated heat have “propelled the planet into uncharted territory, with far-reaching repercussions for current and future generations”.
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Climate tech experts reject Morrison’s ‘colossal piece of obfuscation’
John Davidson Columnist
Nov 2, 2021 – 5.00am
The country’s leading climate technology experts have warned the Australian government not to expect future technology to solve its climate change problems, saying it must develop a policy-driven approach to let existing technology drive down fossil fuel usage now.
Prime Minister Scott Morrison last week announced a “technology-driven” plan would be taken to the COP26 climate change summit in Glasgow this week, which relied heavily on the idea that new technologies would be invented in coming years to do much of the heavy lifting.
However, experts told The Australian Financial Review that the government should be setting new policies that allowed existing renewable technology to be deployed quickly and on the vast scale required to mitigate the worst effects of climate change.
In its climate change policy paper, The Plan to Deliver Net Zero: The Australian Way, the government said up to 15 per cent of the carbon emission reductions required for Australia to reach net zero by 2050 would come from “further technology breakthroughs”; another 15 per cent would come from “global technology trends”; and 40 per cent would come from following its 2020 technology investment road map.
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COP26: World leaders address UN climate summit in Glasgow
5:05AM November 2, 2021
Chinese president Xi Jinping has told world leaders at the United Nations Climate Conference COP26 to “govern by reality” and provide more support for developing countries - of which China is one.
This comes as US president Joe Biden has declared his country - one of the world’s biggest carbon emitters - was “back at the table” of combating climate change, promising to reduce emissions by 50 to 52 percent below 2005 levels by 2030.
Mr Biden told the COP26 in Glasgow that global warming was not a hypothetical threat. “It is destroying people’s lives and livelihoods, and doing it every single day,” he said.
Mr Xi, who submitted a video message to the conference, acknowledged adverse effects of climate change are increasingly apparent, but did not make any new commitments beyond recent statements of bringing the country’s peak emissions - which makes up more than a quarter of the globe’s total carbon output - before 2030 and then achieving net zero by 2060.
He said countries should take a pragmatic approach “in accordance with national conditions”, adding “developed countries must not only do more themselves, but also provide support for developing countries to do better’’.
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After mocking electric cars, PM now embraces them
Jacob Greber Senior correspondent
Nov 2, 2021 – 9.00pm
Electric vehicle charging infrastructure has been elevated by the Morrison government as a key net zero “enabling technology”, two-and-a-half years after the Prime Minister mocked EVs as incapable of towing trailers, boats or reaching a family’s favourite camping spot.
Stunned by the speed in which global carmakers are racing towards mass EV production, the government now accepts that instead of “ending the weekend” – as Morrison famously claimed during the 2019 election campaign – electric vehicles will reach cost parity with internal combustion engines within a few years.
Ford, GM and a raft of start-ups such as Rivian have already started bringing large ute-style EVs to the market. Some are capable of towing over large distances.
In its second annual “Low Emissions Technology Statement”, released in Glasgow late on Tuesday night, the government also identified the need to develop “digital grids” to manage the surging supply of solar and wind power into the national electricity grid.
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Australia sits out Biden push to cut methane emissions
Hans van Leeuwen Europe correspondent
Nov 3, 2021 – 4.57am
Glasgow | The Morrison government has refused to join US President Joe Biden’s initiative to cut methane emissions by 30 per cent this decade, even as more than 100 other countries backed the plan at the Glasgow COP26 summit on Wednesday (AEDT).
Mr Biden told world leaders who joined him to launch the Global Methane Pledge that “one of the most important things we can do” to prevent global warming exceeding 1.5 degrees Celsius was “to reduce methane emissions as quickly as possible”.
The US and European Union announced the pledge in mid-September, and amassed a flurry of last-minute signatures in recent days. The US said those involved accounted for 70 per cent of global GDP and half of all methane emissions.
Their biggest win was signing up Brazil, the world’s biggest methane emitter. Other backers included Canada, New Zealand, Britain, Argentina, Indonesia, Japan, Korea, Saudi Arabia and the United Arab Emirates. Absentees alongside Australia included Qatar, Brunei, China, Russia and India.
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COP26 summit: Hot air dissipates to reveal the reality: it’s a fix for business
7:08AM November 3, 2021
After all the hoopla, COP26 is over almost before it began. World leaders who did attend are jetting out of Glasgow, leaving the UN climate talkfest to peter out over the next two weeks into a green-tech trade fair cum environmental jamboree.
Tough negotiations are still ahead on finance and global energy before moving on to nature, youth, gender, transport and cities, with Sunday off for respite.
The format of the Glasgow talks means serious progress past this point is unlikely. This is because rather than have world leaders attend for the last few days of COP, as has been the case in the past, the Glasgow talks have put the heavy lifting upfront. As a result, negotiations will be missing the pressure-cooker environment used in other COPs to build agreement.
Any hopes the Glasgow summit would result in a new level of co-operation between developed and developing nations have been dashed. After failing to demonstrate unity at the G20 meeting in Rome at the weekend, leaders did little to raise the bar in Glasgow.
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https://www.afr.com/policy/economy/the-energy-shock-for-cop-hopefuls-20211102-p595d8
The energy shock for COP hopefuls
Unless energy security can be married to climate literacy then the politics of a cleaner planet will continue to be very difficult.
Kenneth Rogoff Columnist
Nov 3, 2021 – 1.38pm
This United Nations Climate Change Conference (COP26) in Glasgow takes place amid tremendous ebullience about the potential of green energy sources. But the hard fact is that fossil fuels still account for 80 per cent of global energy, as they did when governments signed the Paris climate agreement to much fanfare at COP21 six years ago.
And even though many economies have not yet returned to their pre-pandemic GDP level, the world is on track in 2021 to post its second-largest annual increase in carbon dioxide emissions on record.
True, the International Energy Agency’s recent flagship World Energy Outlook report, which remains the gold standard of energy analysis, strikes an optimistic note by placing greater emphasis on what can be done to limit global warming. But at the same time, “keeping the door to 1.5 °C open” seems to involve so many moving parts, innovations, adaptations and, yes, sacrifices, that it is hard to see how it will work without the global carbon price most economists regard as necessary.
In particular, a carbon tax simultaneously incentivises and co-ordinates emissions-reduction efforts, and allocates resources accordingly, in ways that state planners simply cannot achieve.
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It’s a masterpiece: The dizzying spin in Morrison’s plan to reach net zero
Economics Editor
November 5, 2021 — 11.01am
The more our politicians are full of bulldust – known euphemistically as “spin” – the more they rely on our short attention span. They make a grand announcement that doesn’t bear close scrutiny, but the media caravan moves on before it’s had time for a closer look. Well, not this time.
I’ve been looking more closely at the Plan to achieve net zero emissions of greenhouse gases by 2050 that Scott Morrison unveiled last week, shortly before jetting off to Glasgow.
It’s full of . . . hyperbole. A masterpiece of the spin doctor’s art. A document carefully crafted to mislead.
For someone claiming to have a Plan to achieve a difficult objective over the next 29 years, it was surprising to see Morrison claiming the Plan contained no new policy measures. By implication, no additional cost to taxpayers.
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Whether Morrison agrees or not, coal power is now consigned to history
By Ambrose Evans-Pritchard
November 5, 2021 — 10.00pm
The floodgates have broken. Diehard coal nations across the developing world have been lining up in Glasgow to forswear use of the dirtiest of fossil fuels.
Four of the biggest coal emitters in East Asia have signed the pledge, promising to abandon new projects and shut down existing plants far earlier than almost anybody expected.
It hardly matters any more whether or not Australia’s Scott Morrison joins the pact because there will not be much of a global market for his thermal coal exports in a few years. He might as well avoid all the political trouble and espouse virtue now.
“The really big surprises for all of us are Indonesia, Vietnam and the Philippines,” said Dave Jones from the anti-coal group Ember. “These were countries that were planning an aggressive expansion of coal, and now they are on the list. So is South Korea, which is the fifth-biggest coal user in the world. We never thought we’d see this in Glasgow.”
“It’s a massive deal. The whole region is turning around and this really puts the screws on China to do more,” he said.
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We have a climate road map but no engine: the Garnaut verdict
Political and international editor
November 6, 2021 — 5.00am
Should we be relieved or despairing? The governments of the world joined at Glasgow this week to decide whether Earth will continue to be liveable. Or not. If not: “You might as well bomb our islands instead of making us suffer only to witness our slow and fateful demise,” the President of Pacific microstate Palau, Surangel Whipps Jr, told the leaders’ session of the 26th Conference of Parties, or COP26.
By the end of the fourth day, the lead negotiator for the EU, Jacob Werksman said “the early signs seem reasonably good”. But on the same day the celebrity activist Greta Thunberg remarked on “what a failure this COP is”.
We need a guru to make sense of the blizzard of information and blaze of opinions. Luckily, we have one.
Ross Garnaut has proved to be Australia’s leading economic prophet over half a century. He’s not your small-picture type, forecasting the inflation rate in the fourth quarter, but foreseeing big picture stuff. Global policy and macroeconomics, the rise and fall of nations, and climate change. The Melbourne University economics professor wrote Australia’s first blueprint for Australian climate policy, the Garnaut Review, in 2008.
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‘Conservative’ path to preserve society, says Angus Taylor
November 7, 2021
Energy Minister Angus Taylor has told a London think-tank that holding “conservative values’’ are particularly important in his portfolio as a counterpoint to the left-wing views that have traditionally dominated the climate debate.
Mr Taylor attacked the left’s approach to climate change – which he described as demanding revolution not evolution – in a speech to the Policy Exchange in London. He also said Australia and other large developing economies like India, Indonesia and Vietnam were important in finding a regional response. “China alone now accounts for more emissions than the entire OECD,’’ he said.
“Unless we can decarbonise our steel and aluminium supply chains, heavy industry, cement and agriculture, we’ll fail to achieve the Paris goals, let alone limit warming to 1.5 degrees.”
Mr Taylor said the left’s supporters called for a short, sharp shock, often disguised in Orwellian newspeak as “a transition” – when that is anything but what is envisaged.
“It’s an approach that relies on redistribution, taking from one to give to another through ever greater taxation until all that is left is the hollow shell of a once vibrant, thriving society. In its place, is a monolithic modern state,” the minister said.
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Royal Commissions And The Like.
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No entries in this category.
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National Budget Issues.
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https://www.afr.com/policy/economy/the-rba-will-need-to-be-recapitalised-20211031-p594pf
The RBA will need to be recapitalised
The RBA does not have sufficient capital if it is to hike rates any time soon.
Grant Wilson Contributor
Oct 31, 2021 – 3.33pm
The price action at the front end of global yield curves last week was wild and unhinged.
Australia was the epicentre as the RBA is now set to make history as the first central bank to exit the policy referred to as Yield Curve Control (YCC).
The exit was never going to be pretty. Credit to Bill Evans of Westpac, who in October 2020 noted that “fixing both price and quantity (of money) may lead to unexpected difficulties down the track”. Quite.
More capital, please
Beyond the market dislocation, the abrupt repricing poses an additional headache for the RBA.
It is depleting the capital held in the Reserve Bank Reserve Fund (RBRF), and opening up a scenario where the RBA will need to request a recapitalisation from Treasury (ie, from the taxpayer).
There is precedent for this. In 2013 the incoming Treasurer, Joe Hockey, signed off an $8.8 billion grant, requested by the Reserve Bank Board, to increase the RBRF to 15 per cent of assets at risk. He had a pop in the process, attributing the depletion in part to “the determination of the previous government to take extraordinary dividends from the Reserve Bank”.
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RBA to flag end of ultra-loose policy in Cup Day decider
Cecile Lefort Markets reporter
Nov 1, 2021 – 12.34pm
The Reserve Bank's Cup Day meeting on Tuesday will mark its retreat from the extremes of ultra-loose monetary policy in what is shaping up as a historic policy shift necessitated by a recovery in growth and inflation.
Economists expect governor Philip Lowe will officially retire the yield curve control policy tool, after it was crushed by a runaway bond market, and upgrade the RBA's inflation projections. Under forward guidance, the RBA has assumed the conditions needed for a rate rise will not be in place until 2024. But that timeline appears set for the scrap heap in the hotter inflation scenario many advanced economies are now facing.
“We expect the RBA to shift its forward guidance and signal it could start to hike rates in the second half of 2023,” said Richard Yetsenga, ANZ’s chief economist.
Pricing in the rates futures market is even more aggressive indicating the February 2022 meeting is a live one on traders' positioning for around five interest rate rises, to take the cash rate to almost 1.5 per cent by the end of 2022.
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Why rate rises could cost the RBA and government billions
John Kehoe Economics editor
Nov 1, 2021 – 5.00am
Increases in interest rates before the Reserve Bank of Australia’s previous guidance of 2024 would cost the central bank billions of dollars and put pressure on the federal government’s budget.
Higher inflation has financial markets pricing in about five interest rate rises to take the cash rate to almost 1.5 per cent by the end of 2022, although economists believe the RBA will be more patient in waiting for inflation and wages to stir.
The RBA faces substantial losses – because of its unorthodox monetary policies unleashed to fight the pandemic recession – if the jump in inflation reported last week is sustained and causes interest rate to rise over the next two years.
Economists warn that the RBA could be forced to scrap its multibillion-dollar dividend to the government and potentially require a capital injection from the Treasury.
The big commercial banks stand to gain from losses incurred by the RBA or taxpayers.
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RBA should not be pressured to pay dividends: economists
Cecile Lefort Markets reporter
Nov 1, 2021 – 5.09pm
A possible recapitalisation of the Reserve Bank's balance sheet would not stand in the way of its newfound role as a policy tool of last resort, economists say, and it should be willing to deploy its reserves again in future crises.
The RBA finds itself fiscally stretched by the natural course of policy, and may not be in a position to pay dividends to its sole shareholder, the federal government, based on a mark-to-market snapshot of its assets and liabilities – specifically, the duration of low-interest funding provided to the banking sector.
“The Reserve Bank shouldn’t feel pressured to prosecute the policy that [it sees] fit for the economy based on providing the government with a dividend,” said Alex Joiner, chief economist at IFM Investors. “It needs to do what it needs to do. Whether it provides the government dividends or not should be inconsequential to it.”
The Reserve Bank holds its monthly policy meeting on Tuesday and there is growing speculation it will flag sooner than expected interest rate rises. Under forward guidance, the RBA has assumed the conditions needed for a rate rise will not be in place until 2024, but stronger growth and inflation could see the central bank move sooner.
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https://www.rba.gov.au/media-releases/2021/mr-21-24.html
Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2021-24
Date 2 November 2021
At its meeting today, the Board decided to:
· maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent
· continue to purchase government securities at the rate of $4 billion a week until at least mid February 2022
· discontinue the target of 10 basis points for the April 2024 Australian Government bond.
The Australian economy is recovering after the interruption caused by the Delta outbreak. As vaccination rates increase even further and restrictions are eased, the economy is expected to bounce back relatively quickly. The central forecast is for GDP growth of 3 per cent over 2021 and 5½ per cent and 2½ per cent over the following two years. One important source of uncertainty continues to be the possibility of a further setback on the health front.
The Delta outbreak caused hours worked in Australia to fall sharply, but a bounce-back is now underway. The Bank's business liaison and the data on job ads suggest that many firms are now hiring, which will boost employment over coming months. The central forecast is for the unemployment rate to trend lower over the next couple of years, reaching 4¼ per cent at the end of 2022 and 4 per cent at the end of 2023.
Inflation has picked up, but in underlying terms is still low, at 2.1 per cent. The headline CPI inflation rate is 3 per cent and is being affected by higher petrol prices, higher prices for newly constructed homes and the disruptions in global supply chains. A further, but only gradual, pick-up in underlying inflation is expected. The central forecast is for underlying inflation of around 2¼ per cent over 2021 and 2022 and 2½ per cent over 2023. Wages growth is expected to pick up gradually as the labour market tightens, with the Wage Price Index forecast to increase by 2½ per cent over 2022 and 3 per cent over 2023. The main uncertainties relate to the persistence of the current disruptions to global supply chains and the behaviour of wages at the lowest unemployment rate in decades.
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https://www.afr.com/chanticleer/rba-signals-end-of-easy-money-20211102-p595co
RBA signals end of easy money
Interest rates will rise sooner than expected, but that isn’t reflected in equity markets that are yet to include the less bullish scenarios in the bond market.
Nov 2, 2021 – 8.11pm
Reserve Bank of Australia governor Philip Lowe is not the first leading public figure to make a virtue out of the disintegration of a strategy that proved unworkable in the face of market forces.
Lowe says the demise of the second leg of the RBA’s strategy of using both quantitative easing and yield curve control happened because the RBA was achieving its inflation targeting strategy earlier than expected.
He is pleased to see underlying inflation at 2.1 per cent faster than had been forecast.
The RBA targets an inflation rate of 2 to 3 per cent on average over time. It is now forecasting inflation of 2.5 per cent over 2023 and wages growth of 3.5 per cent provided Australia achieves productivity growth of 1 per cent.
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Josh Frydenberg is right to be worried about China
The deepening malaise in China’s $87 trillion real estate market is casting a dark shadow over Australia’s economic recovery.
Karen Maley Columnist
Nov 3, 2021 – 5.00am
Treasurer Josh Frydenberg is right to keep a wary watch as the financial pressure on Chinese property developers continues to ramp up, forcing them to cut back new developments which will sharply reduce demand for Australian commodity exports, particularly iron ore.
In an exclusive interview with The Australian Financial Review’s economics editor, John Kehoe, Frydenberg said he had received a Treasury briefing on the “downside risks” emerging from China.
The Treasurer noted that the Chinese property sector had weakened, with large developers facing increasing financial stress.
“What happens to China’s property sector from here will be key as it impacts the construction and financial sectors and, including indirect effects, is estimated to contribute more than a quarter to China’s GDP,” Frydenberg noted.
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Defence and social spending to blow out budget: Deloitte
Ronald Mizen Economics correspondent
Nov 2, 2021 – 10.30pm
Growing spending pressures in defence and social services will leave an annual $60 billion hole in the federal budget long after the COVID-19 crisis has passed, according to Deloitte Access Economics.
At $116 billion, the budget deficit will come in $9 billion worse than forecast this financial year, Deloitte says, but will be $25 billion and $20 billion lower in 2022-21 and 2023-24 respectively than forecast in the May budget.
Treasurer Josh Frydenberg said the report was a further vote of confidence in the government’s targeted and proportionate economic support that has underpinned our strong economic recovery.
“It’s no surprise our red-hot recovery prior to the delta outbreak saw the deficit shrink,” Deloitte partner Chris Richardson said, but longer term there were plenty of structural issues that needed to be addressed.
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Modern-day Robin Hoods at the RBA still loosing monetary policy arrows
By Shane Wright
November 2, 2021 — 6.57pm
The Reserve Bank’s decision to end one of its stimulus measures is a good sign, although it may not feel that way for someone sitting on a mortgage bigger than Flemington racecourse.
Ditching its 0.1 per cent target for the yield on three-year Australian government bonds – not quite a water-cooler topic for most but certainly a page-turner for central banking types – was simply recognition that the COVID-19 emergency is over.
The combination of the RBA’s actions and those of all levels of government have supported the economy to the point that it now does not need as much assistance as initially feared.
A key part of that success is the health outcomes enjoyed by all Australians. COVID-19 has not overwhelmed our health systems as we have taken up vaccinations (pushed along by the Delta-related lockdowns of NSW, Victoria and the ACT), reducing the impact of infection for those unlucky enough to come in contact with the virus.
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Pre-poll budget ‘will be able to splash cash’
9:30PM November 2, 2021
A rapidly improving economy post-Delta will drive a $45bn boost to the federal bottom line out to 2025, handing the Morrison government the opportunity to announce a big-spending pre-election budget despite the threat of a long tail of massive deficits.
Deloitte Access Economics chief economist Chris Richardson said the lengthy lockdowns in NSW, Victoria and the ACT would drive this year’s commonwealth underlying cash deficit to $116bn, or $9bn worse than Treasury had forecast in May.
Mr Richardson said on top of forgone revenue as a result of the collapse in activity in the September quarter, new policy announcements would add another $27bn to spending in 2021-22, with a further $11bn lost via tax-relief measures.
The “good news”, he said, was that despite the Delta setback and a sharp drop in iron ore prices, “the budget is in much better shape than people realise”.
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Health Issues.
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Australian babies can expect longest lives yet
3:06PM November 4, 2021
Life expectancy in Australia has never been higher, new Australian Bureau of Statistics data reveals.
And male life expectancy is slowly but surely catching up to females, the data shows.
A baby boy born in Australia today can expect to live to 81.2 years and a girl to 85.3 years.
This puts Australia fifth in the world for males and eighth for girls, sixth overall.
“Australians have a higher life expectancy than comparable countries such as New Zealand, the United Kingdom and the USA and lower life expectancy than Japan, Singapore and Switzerland” ABS demography director Beider Cho said.
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International Issues.
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Kishida leads Japan’s ruling coalition to solid election win
Michael Smith North Asia correspondent
Nov 1, 2021 – 10.09am
Tokyo | Japan’s prime minister Fumio Kishida has led the country’s ruling Liberal Democratic Party (LDP) to a solid election victory after picking up more seats than expected to maintain a single-party majority in the lower house of parliament.
Mr Kishida’s LDP secured 261 of 465 seats, according to government broadcaster NHK, which was more than polling suggested but less than the number of seats it had going into the election.
The result gives Mr Kishida, 64, a mandate to rule Japan after he replaced former prime minister Yoshihide Suga just three weeks ago and called a snap election. The LDP’s coalition partner Komeito won 32 seats.
Some exit polls had suggested that while the LDP would retain power it might not win enough seats to retain control as a single party without its coalition partner. Mr Kishida had set the bar low going into the election, saying he was aiming for the 233 seats needed to stay in power.
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Navigating the new strategic world order
By ALLAN BEHM
November 2, 2021
We’re a sentimental lot. We look back to a largely imagined golden age, with Qualcast (British, of course, but manufactured in Footscray, Victoria) lawnmowers, neat picket fences and the Union Jack fluttering over our public buildings. We’re also a romantic lot.
We live in hope that our great and powerful friend can restore its global authority as it staggers away from the wreck that was the Trump presidency, and that the Stars and Stripes can bring us comfort once again.
This is what makes AUKUS so attractive, and so forever.
But between sentiment and romance lies grim reality.
Britain is suffering the self-inflicted wound of Brexit, its former global role long gone. The deployment of HMS Queen Elizabeth and its motley array of escorts to “the Far East” is the triumph of gesture over substance.
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https://www.afr.com/world/asia/us-business-chiefs-warn-of-expat-exodus-from-china-20211102-p595c1
US business chiefs warn of expat exodus from China
Edward White, Primrose Riordan and Demetri Sevastopulo
Nov 2, 2021 – 3.01pm
Seoul/Hong Kong/Washington | The head of a leading American business lobby group in China has warned of an exodus of Western executives from the world’s biggest consumer market as President Xi Jinping tightens coronavirus controls.
Under China’s strategy of eliminating coronavirus, Beijing has enforced more than 18 months of strict border security, including three-week quarantine stays and fewer visas for businesspeople and their families.
The rules have been credited for helping to suppress coronavirus outbreaks and reducing the death toll from the pandemic. But a worsening outbreak of the delta coronavirus variant has prompted a return to local lockdowns and travel bans after spreading to two-thirds of China’s regions.
With no exit strategy articulated, and just as the rest of the world reopens, US business leaders have warned Beijing that it risks accelerating the outflow of foreigners from China.
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Would Russia or China help if there was an alien invasion?
Global cooperation is at a low point and there is no time for a wolf-warrior diplomatic strategy on climate.
Thomas Friedman Contributor
Nov 4, 2021 – 8.00am
In a recent essay on great-power competition and climate change, Rob Litwak, an arms control expert at the Wilson Centre, recalled a question President Ronald Reagan posed to Mikhail Gorbachev, the Soviet leader, after they took a walk during their 1985 Lake Geneva summit.
As Gorbachev put it later: “President Reagan suddenly said to me, ‘What would you do if the United States were suddenly attacked by someone from outer space? Would you help us?’ I said, ‘No doubt about it.’ He said, ‘We too.’”
“So that’s interesting,” Gorbachev concluded.
It sure is. Because it’s not at all clear, given the recent upsurge in raw great-power competition, that Russia, China or America would help one another in the face of an invasion of space aliens threatening us all.
Litwak’s point in retelling that story, of course, is that today we are facing a similar, world-stressing threat – not from space aliens but from a much more familiar and once seemingly benign force: our climate.
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China’s strange isolation and economic strains should worry Australia
Australian exporters gathering at a trade fair in Shanghai this week are facing a more isolated and economically challenged China than they did two years ago.
Michael Smith North Asia correspondent
Nov 4, 2021 – 2.04pm
Tokyo | More than 100 Australian exporters piled into a vast exhibition hall in Shanghai on Thursday to promote their goods to the world’s largest consumer market.
Companies such as Woolworths and others representing agribusiness, food, health and other consumer sectors were present. An Austrade spokesperson said more than 80 companies would also join an online business-matching program to connect them to Chinese buyers.
Still, the massive trade fair has lost the allure and importance of yesteryear. Xi Jinping’s annual China International Import Expo (CIIE) takes place minus the thousands of global executives and government ministers who used to swamp the trade fair in pre-pandemic times.
The only Australians there this year are those already based in China, and even those in the capital, Beijing, are struggling to make it to Shanghai due to coronavirus-related travel restrictions. Top foreign diplomats from Beijing were required to quarantine on arrival in the city. Australia’s ambassador Graham Fletcher is not attending.
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China plans to quadruple nuclear weapons stockpile, Pentagon says
Demetri Sevastopulo
Nov 4, 2021 – 5.48pm
Washington | China plans to quadruple its nuclear stockpile by 2030, according to a Pentagon assessment that points to a shift in Chinese policy with big implications for the balance of military power.
The US defence department said China could have 700 deliverable nuclear warheads by 2027 and would boost its stockpile – currently estimated in the low 200s – to at least 1000 warheads by the end of the decade. The US has 3800 warheads, according to the Nuclear Information Project at the Federation of American Scientists.
The projection marked a dramatic increase from last year’s estimate when the Pentagon said China was on course to double its stockpile.
“If this was an emoji, it would be the ‘eyes popping’ emoji,” said Caitlin Talmadge, an expert on Chinese nuclear weapons at Georgetown University.
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US ‘absolutely’ has ability to defend Taiwan, says top general
AFP
4:35PM November 4, 2021
The US military “absolutely” has the ability to defend Taiwan from an attack by China if called on to do so, US Joint Chiefs chairman Mark Milley said on Wednesday.
But the Pentagon’s top general also warned that China’s military had made stunning technological advances in a short time, signified by its recent globe-circling hypersonic missile test, leaving the world poised to enter an era of increased strategic instability.
General Milley told the Aspen Security Forum he did not expect China would take military action against Taiwan, which Beijing views as a breakaway province, in the next 24 months.
“Having said that, though, the Chinese are clearly and unambiguously building the capability to provide those options to the national leadership if they so choose at some point in the future,” he said.
When asked if the Pentagon would be capable of defending the island, he replied there was no question it could. “We absolutely have the capability to do all kinds of things around the world, to include that if required. We absolutely have the capability. There’s no question about that,” he said.
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https://www.afr.com/world/north-america/democrats-it-s-time-to-get-moving-20211106-p596jh
Democrats, it’s time to get moving
What the public perceives isn’t a party doing too much, but a party doing too little, and Biden and his allies need to end that sense of drift.
Paul Krugman
Nov 6, 2021 – 8.35am
Democrats are engaging in a lot of soul-searching after Tuesday’s elections. Much of that soul-searching involves trying to find a better way to respond to the critical race theory attack; that attack was clearly effective even though it’s a dog whistle wrapped in a scam (public schools are not, in fact, teaching CRT). However, I have nothing interesting to say about how to deal with it.
Where Democrats have a clear path forward is on the closely related issues of COVID-19 and the economy. What’s crucial is that Democrats not take the election setbacks as an indication that they’ve overreached — that President Joe Biden should back down on vaccine mandates, that their economic agenda is too left-wing.
What the public perceives isn’t a party doing too much, but a party doing too little, and Biden and his allies need to end that sense of drift.
There’s no evidence of a significant voter backlash against Biden’s social spending proposals. True, most people have no idea what these proposals are — all they’ve heard are top-line numbers, with even those often reported without context - $US1.75 trillion ($2.4 trillion) would be only 0.6 per cent of gross domestic product over the next decade. Beyond that, however, issue polling suggests that the main components of the proposed spending range from fairly popular to extremely popular.
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Spooked Chinese brace for ominous winter of shortages, high prices and lockdowns
By Eryk Bagshaw
November 6, 2021 — 5.00am
There is a cold wind blowing through China. There are more coronavirus cases than the first outbreak in Wuhan, soybean prices have jumped by 30 per cent and shoppers are stockpiling vegetables and toilet paper.
The signs are ominous ahead of temperatures forecast to fall by up to 16 degrees in some regions as a Siberian gale sweeps through the country.
“In most winters, when La Nina events reach their peak, cold air tends to hit China more frequently and heavily,” said Jia Xiaolong, deputy director of the National Climate Centre.
China, for so long a beacon of strong pandemic management, is suddenly looking vulnerable.
Its economy is slowing, energy and food prices are rising and lockdowns are re-emerging. Beijing has largely been sealed off from the rest of the country after a further 68 cases were recorded on Friday. More than 20 cities stopped selling train tickets to the capital this week, while hundreds of commuters on trains last week were forced into quarantine after an attendant tested positive.
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Stellar jobs data push US stocks to new records
The US economy added a better-than-expected 531,000 jobs last month
AFP
November 6, 2021
Blockbuster job creation helped push US stocks to new records on Friday, with an added boost from news of Pfizer's new Covid-19 treatment.
But the Fed signaled that it is in no hurry to raise interest rates, which also helped boost stocks.
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Joe Biden wins $US1 trillion infrastructure bill in house, saved by Republicans
By Andrew Duehren and Natalie Andrews And Lindsay Wise
6:38PM November 6, 2021
The US House of Representatives has passed a roughly $US1 trillion ($1.34 trillion) public-works bill, sending to President Joe Biden’s desk a generational investment in roads, bridges and rail that had languished for several months as members of his Democratic Party feuded over the terms of its approval.
Negotiated and approved by a bipartisan group of senators earlier this year, the bill reauthorises existing federal infrastructure programs for five years and pours an additional $US550bn into water projects, expanding access to broadband internet and overhauling the electrical grid, among many other measures.
The measure passed 228-206, with 13 Republicans joining most Democrats to support the legislation. Six progressive Democrats voted against it.
A major piece of Mr Biden’s economic agenda and his vision for making the US more competitive internationally, its passage in the house hands him a bipartisan achievement that presidents of both parties have tried, and failed, to achieve for years.
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I look forward to comments on all this!
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David.
