November 25 2021 Edition
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In the US we have seen the Biden – Xi summit by Zoom that seems to have reduced tensions a little while internally a vigilante murderer has been found innocent of all charges despite having killed 2 people by shooting – having travelled 20 miles to get to another State where he could ‘protect local citizens’ from protesters. This story has just begun.
In Europe we have Putin stirring up rouble with migrant flows and gas deprivation as winter arrives. This may not end well. COVID is also running riot again in an ugly 4th wave.
In OZ ScoMo
is also stirring up trouble as we watch the first of two weeks of Parliament. A
faux election campaign is clearly underway! The week has been totally chaos for the PM and it is hard to know how it will play from here.
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Major Issues.
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Sharemarkets shrug off mounting inflation scare
Richard Henderson Reporter
Nov 14, 2021 – 3.00pm
A jump in widely watched inflation measures over the past week has failed to jolt financial markets, as investors cling to the idea that easing supply chain pressures will temper sharp consumer price increases.
The US equity market ended the week flat after data showed consumer prices rose 6.2 per cent in October from the previous year, the biggest leap in three decades.
The increase squeezed a market gauge of inflation known as the break-even rate, which forecasts annual consumer price increases over the next decade, to the highest level since 2006 on Friday.
The spectre of sharp consumer price increases has failed to knock the S&P 500 benchmark of US blue chips, which touched a record on Monday and then closed just 0.4 per cent shy of the high on Friday.
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https://www.afr.com/policy/foreign-affairs/reset-relations-with-chinese-australians-20211111-p59850
Reset relations with Chinese Australians
Australia’s diverse Chinese community, caught in the crossfire of a policy transition as China changes under Xi Jinping, should not be treated as a monolith with suspect loyalties.
Richard McGregor Columnist
Nov 14, 2021 – 3.02pm
Australia has dramatically reset China policy in recent years, with an overhaul of its national security settings and the passage of new laws to combat foreign interference at home.
Now might a good time for a different kind of reset, this time for the Chinese Australians who’ve been caught in the crossfire of an often brutal policy transition.
With a 1.4 billion population, China is hardly a monolith, but it is easy to see why it is depicted that way in political debate. After all, the Chinese Communist Party under Xi Jinping makes a fetish out of the party-state’s singularity.
But while it may suit Xi to collapse the categories of China, the Chinese people and the party into one indivisible, untouchable whole at home, Australians have no reason to copy him here.
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‘Political interference designed to intimidate’: ABC’s Ita Buttrose lashes government inquiry
By Zoe Samios and Nick Bonyhady
November 14, 2021 — 1.12pm
ABC chair Ita Buttrose has accused the government of political interference over a decision to launch a Senate inquiry into the way it and SBS handle complaints from the public.
Ms Buttrose will ask the government to suspend or terminate the inquiry, which was announced by Liberal senator Andrew Bragg, chair of the Senate standing committee on environment and communications, last Thursday night. She said the review of the ABC’s processes undermined the public broadcaster and was a clear example of interference by the government.
“This is an act of political interference designed to intimidate the ABC and mute its role as this country’s most trusted source of public interest journalism. If politicians determine the operation of the national broadcaster’s complaints system, they can influence what is reported by the ABC,” Ms Buttrose said.
“Once again, an elected representative has chosen to threaten the ABC’s independence at the expense of the integrity of this irreplaceable public service. Any incursion of this kind into the ABC’s independence should be seen by Australians for what it is: an attempt to weaken the community’s trust in the public broadcaster."
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Morrison’s new tactic? A pledge to return things to the way they were
Columnist and former adviser to Labor prime ministers Kevin Rudd and Julia Gillard.
November 15, 2021 — 5.00am
I was struck, last week, by a column in The New York Times about the benefits of paternity leave. Fathers who took leave were likely to be closer to their child later, and to stay married. The mental health of mothers was also likely to be better. And there were fascinating suggestions, from recent studies, that men’s brains changed after they became fathers, responding more to images of young children. This response was stronger if they worked fewer hours.
This is important and interesting in itself. But it is also an important reminder of something it is easy to forget in this period in which so many governments around the world seem stuck: the enormous power that governments have to change lives for the better. This is not just at some broad, statistical level, where we learn of incremental improvements to GDP (which can have important impacts too): change this policy and you bring parents and children closer together.
Remember the beginning of the pandemic? It was a strange, bleak time – but it was also oddly hopeful. The government began, almost immediately, to talk about a “snap back”, but there were many who hoped that the virus, awful as it was, might also provide an opportunity to question assumptions about the way our society had come to work.
As the virus spread, times became bleaker, but this hope increased, because of the brutal way the virus pointed to problems: the uncertain lives of insecure workers; cuts to public health; the dramatic inequities of class, race, geography – and that most basic of facts – the flats or houses we all live in.
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More housing intervention is being considered: APRA
James Eyers Senior Reporter
Nov 15, 2021 – 2.39pm
APRA chairman Wayne Byres said a request for banks to make sure they can measure loans being made to high-risk borrowers points to additional tools the regulator could deploy if it grows more concerned about rising mortgage debt.
The Australian Prudential Regulation Authority set out different “macroprudential” responses to limit bank lending for housing in an information paper published last Thursday.
“We think it is important to have a wide range of options at our disposal because that is helping to ensure we can address emerging risks in a targeted manner, limiting spillovers effects and unintended consequences,” Mr Byres told the UBS Australasia Conference on Monday.
As it published its paper on the macroprudential policy framework, APRA also asked banks to ensure they have “the ability to limit” lending to borrowers with a debt-to-income (DTI) ratio greater than four times, or six times; and to borrowers with loan-to-valuation (LVR) ratios greater than 80 per cent or 90 per cent.
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If only security were as simple as in Keating’s world
The former PM’s National Press Club talk was not the rich debate on foreign policy the country needs. It more resembled theology than our strategic reality.
Rory Medcalf Contributor
Nov 15, 2021 – 5.03pm
For those who respect his achievements, Paul Keating’s latest sermon on the supposed error of Australia’s strategic ways was more saddening than maddening.
Do we need a standard of national conversation on strategic choices to match the danger and disorder of our worsening international security environment?
Absolutely. But this wasn’t it.
The former prime minister’s question-and-very-long-answer session last week with National Press Club journalists has been exalted by some as a withering attack on government and opposition alike, a taste of the rich foreign policy debate the nation needs.
Rich indeed it was – but more in distortion and omission than in contemporary and open-minded analysis.
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Dutton raises stakes over Taiwan with talk of war
Political and international editor
November 16, 2021 — 4.30am
Has Peter Dutton just committed Australia to a future war against China? His latest comments seem to suggest so.
The contingency that the world increasingly worries about is Taiwan. The Economist magazine calls it “the world’s most dangerous place”. Why? It’s the most likely point of armed clash between China and the US.
Beijing is increasingly bellicose in word and deed in its stated intent to take control of Taiwan; Washington is increasingly inclined to protect Taiwan from any attack.
Three days after Paul Keating said that Australia should stand aloof from any such war, Defence Minister Peter Dutton on Saturday said: “It would be inconceivable that we wouldn’t support the US in an action if the US chose to take that action,” he told The Australian.
“I think we should be very frank and honest about that, look at all of the facts and circumstances without pre-committing, and maybe there are circumstances where we wouldn’t take up that option, (but) I can’t conceive of those circumstances.”
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Newspoll: Scott Morrison loses his advantage over Anthony Albanese on trust and likeability
8:30PM November 15, 2021
Scott Morrison has lost his critical personal advantage over Anthony Albanese across a range of leadership attributes as the Prime Minister declares himself the underdog at the next election.
An exclusive Newspoll commissioned by The Australian shows Mr Morrison still retains a lead over his rival as the more experienced and decisive leader and one with a vision for Australia. However, the margins have been dramatically reduced.
For the first time, Mr Morrison trails the Opposition Leader on trust, likeability, caring and understanding the major issues of concern for most Australians.
The Prime Minister is now also considered more arrogant and not in touch with voters. Campaigning in western Sydney on Monday, Mr Morrison described himself as the underdog in next year’s election race.
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Nine critical technologies where the government wants to counter China
Andrew Tillett Political correspondent
Nov 16, 2021 – 10.30pm
The Morrison government has identified a list of nine critical technologies, including quantum computing, artificial intelligence, medicines and critical minerals, to protect their supply chains from disruption and stop China from dominating their development.
Scott Morrison will release the government’s Critical Technologies Blueprint on Wednesday.
In a thinly veiled swipe at China, Mr Morrison will tell the Australian Strategic Policy Institute’s Sydney Dialogue that technology “reflects the values of the society that creates and uses it”.
“We want technology to protect our citizens’ autonomy, privacy and data,” he will say.
“But you know, not all governments see technology the same way. In this era of technological transformation and strategic competition, there are great challenges before us all.
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https://www.afr.com/politics/john-roskam-exits-ipa-amid-losing-cultural-battle-20211116-p599fd
John Roskam exits IPA amid losing cultural battle
Patrick Durkin BOSS Deputy editor
Nov 17, 2021 – 5.00am
The executive director of the Institute of Public Affairs, John Roskam, is standing down after 17 years, and warns that freedom of speech and the country’s cultural institutions are under threat while CEOs stand by and virtue signal on social media.
Mr Roskam said he would stay on as an IPA senior fellow after standing down in June next year and was leaving the organisation in good shape, with 8000 members and after launching the careers of a host of conservative politicians including federal MPs James Paterson and Tim Wilson and Victorian MP Louise Staley.
But Mr Roskam, 54, bemoaned a lack of voices on the conservative side of politics to defend free speech and traditional values against the growing influence of cancel culture and progressive politics. He said 80 per cent of the IPA’s funding came from big business when he started, but that has shrunk to less than 5 per cent.
“The voices on the left are growing while the voices on the right are shrinking,” he told The Australian Financial Review. “It’s more important than ever that we have voices talking about freedom and our way of life. Australians are losing a sense of optimism and there is a growing sense of a potential long-term decline in an economic and cultural sense.
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The one word that will stop war over Taiwan
Industry Professor of Climate and Business at the University of Technology Sydney
November 17, 2021 — 5.00am
“Restraint.” This should be the one-word diplomatic mantra for Australia about Taiwan. It should be the opening and closing of every statement an Australian prime minister utters because a descent into war between the world’s superpowers over a neuralgic issue that diplomacy has constrained for 70 years – this is the last thing our battered and bruised planet wants.
And it should be the last thing Australia should appear to be talking up. The prospect of such a clash producing a nuclear exchange is spookily high. By installing American facilities on our continent we have made Australia a target. That’s reason enough to plant us in the peace camp.
Another reason is that, on China, America can always leave us stranded. Suddenly, the White House is talking a new relationship with Xi Jinping based on negotiations. All the more reason for us to work hard at diplomacy between the two superpowers.
We’re left a bit exposed because alone of America’s allies we have said we will join America if there’s a showdown, presumably within the first week. It’s almost as if in the corridors of the Australian Strategic Policy Institute and the Defence department the hawks are humming the World War I recruiting song, Australia Will Be There.
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Australia stagnates in index ranking world’s most prosperous countries
November 17, 2021 — 12.01pm
London: If you asked yourself lately, ‘Do I feel more prosperous compared to this time a decade ago?’ and answered ‘no’, your response could be accurate.
In fact, according to a global index that has been measuring the material health of countries, including wealth, quality of life and life satisfaction for 15 years, Australia’s ranking has slipped from number one in 2008, to just making the top 10 in 2011, to the 16th position where it has stagnated for the last two years.
Australia’s experience is a reflection of the globe’s declining prosperity, which has also stagnated for the last two years, a phenomenon exacerbated, although not caused, by the COVID-19 pandemic.
The Global Prosperity Index is collated by the pro-Brexit think thank Legatum Institute whose goal is to create a global movement to take people “from poverty to prosperity and the transformation of society”.
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Hi-tech race to combat China
9:30PM November 16, 2021
Australia’s future weapons and cyber defence technologies – ranging from underwater drones to advanced explosives and swarming robots – will be accelerated under the AUKUS and Quad strategic partnerships to combat China’s massive investment in quantum technology and artificial intelligence.
Under a plan to bring forward the development of critical technologies, Scott Morrison on Wednesday will ask governments, universities and industry to target nine priority technologies including quantum, drones, genetic engineering, cyber security, AI, critical minerals and advanced 5G and 6G communications.
Speaking at the inaugural Sydney Dialogue on Wednesday, the Prime Minister will say quantum technologies would enhance Australia’s defences by “enabling navigation in GPS-denied environments and helping to protect us from advanced cyber attacks”.
Mr Morrison will say the government’s $100m investment in a quantum and new critical technologies blueprint, which includes 63 technologies, would help Australia “take it to the next level”.
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As the older get richer, young people pay the price
Julie Hare Education editor
Nov 17, 2021 – 5.00pm
Something startling sets workers aged 35 years or younger apart from older generations: most have never had a pay rise.
“While weak wages growth has bitten all age groups, for younger people it has been particularly pronounced,” Grattan Institute chief executive Danielle Wood said.
“Workers aged 20-34 experienced close to zero growth in real wage rates from 2008 to 2018.”
Delivering the John Button Oration at the Melbourne Writers Festival on Wednesday night, Ms Wood said it was possible to identify somebody’s age by asking if they had ever had a pay rise.
“For most of us, it seems a silly question. But for many under-35s, the answer – at least in terms of a pay rise that improved their real living standards – would be no,” she said.
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‘Can-do capitalism’ looks an awful lot like socialism
The perverse reality is the Morrison government’s command-and-control climate and energy policies are encouraging a rent-seeking culture.
John Kehoe Economics editor
Nov 17, 2021 – 12.50pm
Scott Morrison is championing “can-do capitalism” and says he wants corporates to stop “rent-seeking” climate change subsidies from the federal government.
The Prime Minister is right to point out the growing green brigade queuing up for taxpayer funds.
Electric vehicle makers demand tax breaks and special regulations to help the world’s richest person, Elon Musk, sell more Teslas.
Mining billionaire Andrew Forrest wants subsidies for his green hydrogen bet.
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https://www.afr.com/politics/federal/academics-need-cash-for-critical-tech-research-20211117-p599n7
Academics need cash for critical tech research
Andrew Tillett Political correspondent
Nov 17, 2021 – 5.56pm
Academics are warning that universities and researchers need an injection of funding if the Morrison government hopes to secure control of emerging critical technologies and meet its climate change goals, highlighting a disconnect between the government’s rhetoric and reality.
While research funding has recovered much of the financial ground lost in cuts in Tony Abbott’s 2014 budget, tens of thousands of jobs have been axed across universities and the Commonwealth Scientific and Industrial Research Organisation.
Prime Minister Scott Morrison on Wednesday released the government’s critical technology blueprint, which identified nine emerging fields for priority for research and investment, in part to counter China from gaining an edge.
The technologies are quantum research, critical minerals, advanced communications, artificial intelligence, cybersecurity, genetic engineering, medicines, low-emission fuels and autonomous systems.
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PM employs risky strategy to win the votes of disaffected Australians
Award-winning political commentator and author
November 18, 2021 — 5.00am
It is possible Scott Morrison’s subliminal pitch to fatigued voters – elect me and I will do nothing – will help him secure another term in office.
Searching for slogans to resolve issues like climate or the economy more broadly, the Prime Minister struck on the clunky: “Can-do capitalism”, not “don’t-do governments”. It sounded good on the day, except a few people thought they heard him say we need “do nothing” governments.
Regardless, his new narrative skates over the fact that the number of lives and livelihoods saved in Australia, for which he constantly claims credit, resulted from the actions and interventions of governments – including his – but mainly the states and territories. Details, details.
“We’ve got a bit used to governments telling us what to do over the last couple of years, I think we have to break that habit,” he said last week in Melbourne. His words may have resonated with angry, lockdown-weary Victorians.
People like them pose as much of a threat to the fate of the Morrison government as the progressive Liberals worried about climate change or integrity who threaten to desert him.
Morrison’s plan – now being undermined by the Deputy Prime Minister Barnaby Joyce pretending he is not part of the government – was to do enough on climate change to placate the progressives then quickly change tack to scoop up disaffected conservative voters who have drifted to Pauline Hanson or Clive Palmer.
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Desert fig, the ancient plant species living in hiding on the slopes of Uluru
8:27AM November 18, 2021
A new plant species, the desert fig, has been discovered hiding in plain sight on the slopes of Uluru, at the heart of Australia’s Red Centre.
The new fig variety, Ficus desertorum, has proven to be a distinct species, previously confused with its close relative, the Ficus brachypoda.
As a vital food source for Indigenous people, a single tree can produce tens of thousands of fruit, and it can have fruit on it all year around. “They’ve adapted to handling dry periods, they get their roots really deep into the rock and tap into the little water that is available, deep down in the water table,” he said.
“It’s a really important food source, both fresh and dried.
“Historically, it could be punishable by death if anyone damaged one of these trees, as they’re very important for families who relied on it for a food source.”
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https://www.afr.com/markets/equity-markets/zebit-bagholders-taught-a-harsh-lesson-20211117-p599mi
Zebit bagholders taught a harsh lesson
There’s a new contender for the worst float in memory, as Zebit’s implosion offers a stark warning for retail investors armed with cheap brokerage accounts.
Tom Richardson Markets reporter and commentator
Nov 17, 2021 – 4.19pm
A slew of dud initial public offerings at the end of 2020 highlights the pitfalls lurking for inexperienced retail investors flooding into the local sharemarket at record rates.
Headlining the flops is the horror tale of California-based subprime lender Zebit, which raised $35 million from IPO investors in October 2020, before plunging 75 per cent over the next 12 months.
A loss-making subprime lender in the US seeking to list in Australia was never going to attract much interest from professional investors. However, plenty of retail investors overlooked the fact that a business model of lending to “credit-impaired” consumers in the US means a massive bad debt problem.
At the time of its IPO, Zebit had accumulated losses of $US63 million ($88 million), with a bad debt expense that equalled 68 per cent of gross profit in financial 2019.
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RBA warns of ‘faddish’ crypto crash
James Eyers Senior Reporter
Updated Nov 18, 2021 – 7.13pm, first published at 1.49pm
The Reserve Bank of Australia has warned users and investors in fad-fuelled cryptocurrencies such as bitcoin they risk holding speculative assets with “niche” uses that could lose most of their value.
The RBA’s head of payments, Tony Richards, said the value of many cryptocurrencies, which have surged to $US2.6 trillion, could crash when central banks decide to assert control over their monetary systems.
“I think there are plausible scenarios where a range of factors could come together to significantly challenge the current fervour for cryptocurrencies, so that the current speculative demand could begin to reverse, and much of the price increases of recent years could be unwound,” he told the Australian Corporate Treasury Association.
Dr Richards warned about excessive hype around crypto on Thursday, in the bluntest assessment of concerns delivered by any central bank leader. He flagged a regulatory crackdown against thousands of private currencies that have emerged on the back of the soaring bitcoin price.
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A gallows and words of menace imported from the (dis)United States
Associate editor and special writer
November 19, 2021 — 8.55am
It is easy to dismiss as mere clowns those gathering around a gallows in the streets of Melbourne. Too easy.
Who, for pity’s sake, has a ready-built gallows to tow to a protest outside the Victorian state parliament? And where does the modern idea of nooses dangling in the breeze come from?
We need only look to the Trumpist mob who stormed the US Capitol in Washington DC on January 6. The most potent symbol of what was on the minds of the most extreme of Trump’s storm troopers was a gallows, erected for the occasion.
The noose suspended from its frame and hoisted high in the hours before that mob broke down the doors of the Capitol was initially treated by media outlets as a photogenic symbol of a mood, rather than of serious intent. A throwback to the days of the Ku Klux Klan, after all, was barely out of place at a Trump rally.
The amusement stopped when hundreds of insurrectionists broke into the US legislature, hunting for vice-president Mike Pence, House Speaker Nancy Pelosi and others they considered to be traitors. Four people were killed and a fifth - a police officer - died only a day later of a stroke.
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Fads and FOMO: RBA predicts the surge in cryptocurrencies will end
By Shane Wright
November 18, 2021 — 1.09pm
The Reserve Bank has attempted to pour cold water on cryptocurrencies and promoters’ claims they are the future of finance, saying current “speculative demand” and their surge in value is likely to reverse.
In a speech to the Australian Corporate Treasury Association, the RBA’s head of payments policy, Tony Richards, said households were likely to start heeding concerns from regulators about the “fad” that surrounds many cryptocurrencies.
He also took aim at surveys purporting to show high rates of ownership of crypto assets among Australians, labelling them “implausible”.
Money has flooded into a range of cryptocurrencies over recent years, aided by ultra-easy monetary policy that has made high-yielding investments very attractive. A single Bitcoin is today worth $US60,000, down from $US67,000 two months ago.
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The plan to kill Australian coal’s last growth market
Asian nations that were supposed to provide decades of demand growth for Australian thermal coal are being offered a fortune to shut their power stations early.
Peter Ker Resources reporter
Nov 20, 2021 – 5.00am
On the turbulent, tropical island of Mindanao, a plan to drive a stake through the heart of the Australian coal industry is being hatched.
The Filipino island has been selected as the starting point for a cashed-up coalition that plans to buy and retire coal-fired power stations in the south-east Asian nations that are supposed to provide the final decades of demand growth for Australian thermal coal.
Led by the Asian Development Bank (ADB), multinational lender HSBC and the philanthropic foundations of Amazon founder Jeff Bezos and the late John D. Rockefeller, the coalition is courting governments in south-east Asia with a plan to shut their relatively young coal-fired plants and replace them with low-emission alternatives.
The coalition has found an enthusiastic audience for its “Energy Transition Mechanism” (ETM) in the Filipino government, which gets 54 per cent of its power from coal but fears its archipelago of more than 7000 equatorial islands will be worse affected by climate change than almost any other nation on earth.
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With Morrison in an unworkable position, Labor sees a chance
With all his backflips, the PM has destroyed his own credibility and his government’s capacity to find any credible policy positions.
Laura Tingle Columnist
Nov 19, 2021 – 4.20pm
It’s been 10 days since it was reported that a Victorian state crossbench MP, Andy Meddick, had been threatened with being shot and his children kidnapped because he had “consulted” with the Andrews government on its controversial pandemic laws.
And it’s a week since gallows and angry protesters, often spouting QAnon conspiracy theories, started turning up outside the Victorian Parliament.
At least two state premiers – Dan Andrews and Western Australia’s Mark McGowan – have received death threats.
On Thursday, Meddick’s daughter was attacked on the street and admitted to hospital.
On any measure, it’s been an ugly escalation in the violence of the language, the extremes of views and the dysfunctions of our politics.
It’s the sort of moment when you would expect leaders to emerge to try to settle things down, reset the debate. But it took until Thursday for Scott Morrison to make any serious contribution, and he only then did so in response to journalists’ questions, and only then without being able to resist the temptation to put in a political kicker.
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‘You just cannot stop’: Quantum computing becomes a reality
For the past 20 years, Michelle Simmons has been at the forefront of research in quantum computing. But now the rubber is finally starting to hit the road – or rather, the silicon is
Nov 20, 2021 – 5.00am
We might be talking on Zoom, but you can still see the excitement in Michelle Simmons’ eyes.
For the past 20 years, Simmons, a Scientia Professor at the University of NSW and director of Silicon Quantum Computing (SQC), has been at the forefront of research in quantum computing. But now the rubber is finally starting to hit the road – or rather, the silicon is.
ASX-listed Silex Systems is about to start work building a pilot plant that will produce a highly specialised form of silicon that is a key ingredient in the specialist computer chips Simmons needs to put her quantum algorithms into action.
In the week that saw the federal government announce $100 million for quantum technologies, Simmons says the collaboration between SQC, Silex, academia and the government is an example of how quantum computing can boost not just the local technology sector but also the manufacturing industry.
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Morrison may lie, but his real test is not honesty - it’s about trust
Political and international editor
November 20, 2021 — 5.00am
It’s happening again. A Liberal Party Prime Minister is asking Australia to re-elect him on trust. When John Howard launched the 2004 election with the words “who do you trust?“, there were incredulous guffaws around the country. His reputation for truthfulness was not strong.
But when Scott “I don’t believe I’ve ever told a lie” Morrison tested his lines for the forthcoming election by saying “who do you trust?“, the only people laughing were the ones with short memories.
Because it worked brilliantly for Howard. Even though a majority or plurality of voters thought Howard was untruthful on some of the biggest controversies of the time – the “children overboard” affair, the 2003 Iraq War and the Australian Wheat Board bribery scandal, for instance.
There was a whole book devoted to the subject. The cover of John Howard’s Little Book of Truth was decorated with the prime minister drawn as a very long-nosed Pinocchio. Yet Howard didn’t just win the 2004 election. He won with an increased margin and even won control of the Senate. He became the first prime minister in a generation to control both Houses of Parliament.
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Morrison’s split personas risk a can’t-do answer from voters
Columnist
November 20, 2021 — 5.00am
The new political suit that Scott Morrison has chosen to wear since his return from the climate change conference in Glasgow is shamelessly anti-government. It has been borrowed from the United States, but tailored to fit his pressing need to find an incumbent to campaign against.
He can’t run against his own regime, of course, because that would highlight the absence of policy purpose on the Coalition side. The enemy of the people, to borrow a bullet point from Donald Trump, is not the federal government, but state government. Not all state governments, though; just the Labor ones.
This much has been clear from the moment the Prime Minister road-tested the slogan “Can-Do Capitalism” as an antidote to “Don’t-Do Government” at an address to the Victorian Chamber of Commerce and Industry on November 10. He wants to translate voter fatigue with the pandemic into a mandate for a fourth term on cruise control.
No post-war prime minister has asked the Australian people to trust the market without moderation, while sending a second, more complicated message to some states, but not others, to get out of the way.
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Kielan Meddick attacked ‘over MP’s support for Labor law’
7:58PM November 19, 2021
The daughter of a crossbencher supporting the Andrews Labor government’s controversial pandemic legislation suffered a gash to her head during an altercation she believes is connected to her father’s politics.
Animal Justice Party leader Andy Meddick said his daughter Kielan, 25, was spray painting over an anti-vaccination poster on Smith St in Fitzroy in Melbourne’s inner north on Thursday night when she was approached by a man.
“This person unknown to them [Kielan] has approached them from behind aggressively and abusively and made statements along the lines of something to do with politics,” he told the ABC. “Kielan took that to mean that that was about me and their relationship.”
The man threw the can at Ms Meddick as she ran away, causing a 3cm gash to the back of her head that required stitches.
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A liquidity drought is rattling the bond market
A swift draining of liquidity is happening globally and has hit home. But if the future is transitory inflation, it doesn’t look so bad.
Chris Dickman
Nov 21, 2021 – 5.00am
Now that the pandemic shock is in the rearview mirror, markets have brought forward expectations for lift-off in official cash rates.
Before we get too far ahead of ourselves, let’s consider the swift draining of liquidity that is happening globally and causing some frightening moves.
This is partly because central banks are suddenly reducing bond-buying programs, known as quantitative easing (QE), that were used successfully to suppress interest rates.
Liquidity is a global phenomenon but it’s clear Australia has been acutely affected. A study by Sweden’s Riksbank showed that initially QE enhanced liquidity, but once the percentage of stock held by a central bank reached a tipping point of about 40 per cent, liquidity deteriorated significantly.
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It’s a deep-state stoner’s dilemma: Morrison, the leader of a big government, laments big government
Columnist and senior journalist
November 21, 2021 — 5.30am
For someone who wants government to get out of our lives, Scott Morrison (the head of the government) is around an awful lot.
He seems to pop up everywhere these days – in breweries and factories, on morning television and radio.
It’s almost as if his visibility is growing in direct proportion to the shrinkage of his policy agenda.
The louder the messaging, the less the material matters.
This week Morrison caused consternation in some circles, and approving nods in others, when he said that it was time for “Australians to take their lives back” and for governments to wind back their pandemic management.
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COVID 19 Information
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Pandemic triggers ‘mass exodus’ of critical care nurses
November 17, 2021 — 11.54am
Australian hospitals are experiencing a mass exodus of experienced critical care nurses as the COVID-19 pandemic stretches healthcare workers unlike ever before, prompting medical colleges to warn of a workforce crisis.
Australian College of Critical Care Nurses chief executive Rand Butcher said in the last year, critical care nurses were “leaving in droves”. He said those nurses had undergone specialised postgraduate training to work in high-pressure intensive care units and were essential in caring for COVID-19 patients.
“There has been a mass exodus,” Mr Butcher said.
“They are not taking sick leave or annual leave, they are working extra hours, and at the end of all this we are seeing lots of senior people, who have worked in intensive care for years, leaving intensive care units at a time when they are so valued, and we need them so much.”
Australian College of Nursing chief executive Kylie Ward said roughly 20,000 nurses had given up their registration this year, a number that had shocked her during a global pandemic.
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https://www.afr.com/world/europe/covid-19-fourth-wave-overwhelms-europe-20211119-p59a9a
COVID-19 ‘fourth wave’ overwhelms Europe
Hans van Leeuwen Europe correspondent
Nov 19, 2021 – 5.24am
London | European countries are reimposing curfews and lockdowns, and bolstering the use of vaccine passports, as a fourth wave of COVID-19 surges across the continent, putting healthcare systems under strain.
Germany posted a record daily caseload of 65,371 on Thursday, prompting the director of the country’s disease control agency to warn Germans they were “heading towards a serious emergency”.
“We are going to have a really terrible Christmas if we don’t take countermeasures now,” said Lothar Wieler, director of the Robert Koch Institute.
Germany has a state-based health system, like Australia, but on Thursday a meeting of national and regional governments agreed that wherever and whenever hospitalisation rates exceed an agreed threshold, authorities will curtail public events and prevent unvaccinated people from using restaurants and bars.
Germany, with just 68 per cent of people double-jabbed, is one of a number of countries with low vaccination rates - including Austria, Slovakia and the Czech Republic - that are being forced to consider new restrictions.
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https://www.afr.com/policy/health-and-education/european-virus-lessons-for-australia-20211118-p59a2g
European virus lessons for Australia
A fourth wave of COVID-19 is swamping Europe as winter approaches. Will Australia follow the same path in six months?
Jill Margo Health editor
Nov 19, 2021 – 1.09pm
Summer has a way of making us think the pandemic is almost over. That’s what Europe thought a few months ago, and now it’s in trouble again. A fourth wave has sent some countries scrambling to reassert control before Christmas.
Two months ago, Denmark, with its highly sophisticated health system, relaxed all mitigation measures, saying COVID-19 no longer posed “a critical threat to society”. It has changed its tune. So has Germany, which recorded more than 65,000 daily cases on Thursday. Officials in Britain have warned of “stumbling into a winter crisis” and, after a summer of optimism, there’s rising anxiety about a winter surge in the US.
Come winter, will Australia go the same way? In pockets, but probably not overall because it has baked-in advantages. It’s also been watching as Europe fails to master delta with vaccines alone.
From the start of the pandemic, Australia has had a seasonal advantage. When the virus emerged in 2020, it was high summer here and deep winter in Europe. While parts of Europe were soon overwhelmed, Australia was hardly affected.
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Climate Change.
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The net zero modelling that only the Nationals could love
The government’s modelling tells us nothing meaningful about its climate “plan” because the real purpose was to convince wavering Nationals to back the net zero target.
Steven Hamilton Contributor
Nov 14, 2021 – 12.48pm
I’ve now twice read the government’s 100-page net zero modelling document, which it put out with the trash at 3pm on Friday. Lying behind the document is no doubt some good work by hard-working public servants relying on open-source modelling frameworks. But as with any such exercise, you get out what you put in. And they had a job to do.
On the first reading, I was puzzled by the framing. It made no sense. But on the second reading, I finally figured it out. The thing is, this exercise wasn’t for me. Nor for you. It doesn’t really assess the impacts of the government’s climate policies, nor indeed any alternative policies. It doesn’t compare technology and taxes, as the government says.
It seems clear to me now that this was a modelling exercise commissioned by the government for the simple purpose of convincing wavering Nationals that a Glasgow commitment to net zero by 2050 wouldn’t wreck the economy. Barnaby Joyce said to them over and over, “tell us what it costs”. This is Scott Morrison’s answer.
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Morrison won’t budge on 2030 targets
John Kehoe, Hans van Leeuwen and Jacob Greber
Updated Nov 14, 2021 – 7.38pm, first published at 6.06pm
Australia signed an international request for countries to strengthen 2030 emissions reduction goals by next year but within hours of agreeing to the Glasgow climate pact, the Morrison government, facing a 2022 election, told voters it had no intention of changing its “fixed” target.
At the conclusion of the United Nations Climate Change Conference on the weekend, 197 countries accepted a last-minute push by India and China to dilute a pledge to “phase-out” coal to “phase-down” the fossil fuel – in a boost for Australian coal exporters but a blow to climate change action campaigners.
Nations also signed on to “revisit and strengthen” next year their 2030 emissions-cut targets, which oil producer Saudi Arabia successfully watered down from an “urging” to a “request”.
Business and investors demanded the government and Labor outline more ambitious emissions cut targets beyond the government’s official goal of 26-28 per cent and its projection that Australia is on track to achieve actual cuts of 30-35 per cent on 2005 levels.
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Australia’s missed energy opportunity in Glasgow
By standing with China, Brazil and Russia at COP26, the country failed to support the global progress critical to its future as a low-carbon superpower.
Ross Garnaut Contributor
Nov 15, 2021 – 5.00am
Australian renewable energy, land and human resources make it naturally the superpower of the zero emissions world economy.
Grasp the superpower opportunity, and Australia can enjoy a period of exceptional economic expansion after being at the bottom of the developed country league table for average growth in output and incomes per person over the past nine years.
This is the first of three reasons why we have a stronger interest than any other developed country in the world reaching the goal agreed in Paris in 2015: to hold temperature increases below 2 degrees and as close as possible to 1.5 degrees.
The second reason is that we happen to be the developed country that would be damaged more than any other by climate change itself.
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https://www.afr.com/companies/energy/lng-exports-risk-going-from-hero-to-zero-20211115-p598xk
LNG exports risk going ‘from hero to zero’
Angela Macdonald-Smith Senior resources writer
Nov 15, 2021 – 9.58am
Government forecasts of continuing LNG exports from Australia through to 2050 despite the net zero goal are too optimistic given the gas reserves underpinning exports will be exhausted by then.
The sobering analysis by EnergyQuest finds that estimates by the International Energy Agency and Morgan Stanley are also too bullish based on existing reserves, the consultancy said in its monthly LNG report that also found exports from Australia hit a record in October.
“In the absence of new fields and new projects, Australian LNG exports in 2050 are likely to be zero in 2050,” EnergyQuest said.
“This is not because of net zero or potential lack of demand but because of insufficient developed natural gas reserves.”
The Woodside-managed North West Shelf venture, the country’s oldest LNG exporter, could run out of reserves by 2028, followed by Chevron’s Wheatstone by 2033, Shell’s Prelude and Santos’ Darwin LNG by 2044, and Inpex’s Ichthys, Chevron’s Gorgon and Woodside’s Pluto and Scarborough by 2049, the firm said.
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COP26 climate deal sounds ‘death knell’ for coal: Boris Johnson
By Paul Sandle
November 15, 2021 — 6.34am
London: British Prime Minister Boris Johnson hailed the UN climate summit as a “game-changing agreement” that sounded the “death knell for coal power” on Sunday (Monday AEDT) -- although he added that his delight at the progress on fighting climate change was “tinged with disappointment”.
Johnson said it was “beyond question” that the deal coming out of the Glasgow conference marks an important moment in the use of coal because most of western Europe and North America have agreed to pull the plug on financial support for all overseas fossil fuel projects by this time next year.
But in a major shift demanded by coal-dependent India and China, the Glasgow Climate pact used watered-down language about “phasing down” the use of coal instead of “phasing out” coal.
Johnson, however, said the compromise did not make “that much of a difference”.
Ending coal is seen as the key to reducing greenhouse gas emissions, which cause the Earth to warm up and produce rising seas and more extreme weather including droughts, storms and wildfires.
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The UN climate process is designed to fail
The world leaders at COP26 all endorsed the need for radical action. But the political pressures they are under are actually a recipe for inaction. There is a radical alternative.
Gideon Rachman Columnist
Nov 16, 2021 – 9.49am
In a way, Boris Johnson was the perfect host for COP26. The British prime minister specialises in groundless optimism and empty pledges. The Glasgow climate summit produced plenty of both.
Ahead of the meeting, the informal slogan was “keep 1.5 alive”. But to have a good chance of limiting global warming to 1.5C, global production of coal, oil and gas must start declining immediately and steeply. Nothing that came out of Glasgow suggests this will happen.
Even some of the agreements signed at COP26 — about restoring forests and cutting back methane emissions — are little more than aspirations. As António Guterres, secretary-general of the UN, observes: “Signing the declaration is the easy part.”
It should not be a surprise that Glasgow was a disappointment. The UN climate process has been running for almost 30 years and over that time, carbon-dioxide emissions have continued to rise. There was no real reason to expect that COP26 would succeed where the previous 25 COPs had failed.
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Carbon taxes, real or false, are not going to get the job done
The idea is to cut the cost of clean energy, not make everything else more expensive. There are global breakthroughs when the challenge of unique national circumstances is acknowledged.
Angus Taylor Contributor
Nov 18, 2021 – 5.08pm
COP26 ended like so many before it. There were largely unexpected and powerful achievements, like a common emissions-reporting framework, a coherent framework for crediting and trading offsets, and a vastly increased emphasis on technology.
At the same time, the parties couldn’t fit the unique circumstances of 196 countries – developed and developing – within a single template for ambition.
By now, this should be a familiar insight. When the challenge of unique national circumstances is acknowledged, we see breakthroughs such as the 2015 Paris Agreement innovation in nationally determined contributions.
In the days after COP26, the European Commission lauded a reference to “phase down” coal, even as mothballed coal power stations in Portugal, Spain and the UK fired up for the first time in years amid a gas supply crunch, and China finished building a 100 million tonne stockpile ahead of the northern winter.
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Royal Commissions And The Like.
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Seniors’ groups question government commitment to aged care reform
9:00PM November 14, 2021
Leading advocates for older Australians are growing increasingly worried the Morrison government is looking to water down its promise to fully implement the first recommendation of the aged-care royal commission – a new aged-care act.
They say while the government committed in March to begin work on a new act to commence in mid-2023, it has been coy about whether those laws would include a key element of Recommendation 1 – “to provide a system of aged care based on a universal right to high quality, safe and timely support and care.”
The coalition of 25 peak bodies including the Older Persons Advocacy Network, Council on the Ageing, Dementia Australia, National Seniors, Carers Australia and the Australian Nursing and Midwifery Association want a clear commitment this rights-based approach, recommended by the commission to usher in a new era of care for older people in Australia, is delivered.
OPAN chief executive Craig Gear, speaking on the coalition’s behalf, said there was concern about the lack of discussion with the government on how to enshrine rights for older people in the new act. “The government has committed to a new aged-care act but the wording of its commitment is for a values-based system,” Mr Gear said.
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National Budget Issues.
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Australian businesses warn of supply chain crunch, stoking inflation fears
By Clancy Yeates and Zoe Samios
November 15, 2021 — 5.00am
Australian businesses have warned the bottlenecks choking global supply chains are unlikely to be resolved soon, amid predictions soaring shipping costs will add to inflation by lifting the price of imports.
With global markets fixated on the risk that higher inflation could raise interest rates from record lows, companies including telecommunications giant Optus, explosives maker Orica, and Boost Juice owner Retail Zoo have underlined the severe disruption to supply lines.
The supply chain problems, which are leading to widespread shortages and delays in the delivery of goods, come as many companies are also facing wage pressure as they scramble to find staff.
Optus chief executive Kelly Bayer Rosmarin said there had been shortages of iPads, Google’s new phone, and radio and networking equipment.
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https://www.afr.com/policy/economy/outlook-for-inflation-very-uncertain-rba-governor-20211116-p599d7
Outlook for inflation highly uncertain: RBA governor
Ronald Mizen Economics correspondent
Nov 16, 2021 – 1.59pm
The inflation outlook is more uncertain than it has been for a long time, Reserve Bank of Australia governor Philip Lowe says, but while upward pressure on prices could force interest rate hikes earlier than 2024, that outcome is unlikely.
Dr Lowe welcomed underlying inflation lifting more strongly than expected in the September quarter but said inflation pressures sweeping the globe had been more “muted” in Australia.
“We are making better-than-expected progress towards our inflation objective. This is welcome news. But we still have a way to go,” Dr Lowe said in a speech to business economists in Sydney on Tuesday.
“It is important to remember that at 2.1 per cent, underlying inflation is only just above the bottom of the 2 to 3 per cent target band and remains lower than the average for the past three decades.”
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White-collar salaries surge 3.4pc
Inflation: White-collar salaries surge 3.4pc
Ronald Mizen Economics correspondent
Nov 17, 2021 – 12.14pm
White-collar jobs are leading the charge on wages growth, with salaries rising 3.4 per cent in the year ended September 30, followed by jobs in the construction and hospitality industries now suffering major skills shortages.
Overall wages rose 0.6 per cent in the September quarter and 2.2 per cent over the year, bang on market consensus but still well below the 3 per cent-plus growth sought by the Reserve Bank of Australia.
“Wage and salary reviews around the end of the financial year, scheduled enterprise agreements and annual award rises all contributed to growth,” said Michelle Marquardt, head of prices statistics at the Australian Bureau of Statistics (ABS).
The wage price index (WPI) is now back to pre-pandemic levels but with unions demanding wage prices in line with the 3 per cent consumer price index, further increases may only be a matter of time.
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Wages jump 2.2 per cent in the year to September
By Shane Wright and Jennifer Duke
November 17, 2021 — 12.22pm
Wages increased 2.2 per cent in the year to September with the private sector driving the majority of the rise in pay despite lockdowns in major capital cities.
Australian Bureau of Statistics data released on Wednesday morning shows private sector wages increased 2.4 per cent over the year, with the public sector trailing behind at 1.7 per cent. The overall increase was in line with market expectations and measured wage rises during coronavirus-induced lockdowns across NSW, Victoria and the ACT.
Over the September quarter, wages increased 0.6 per cent in the private sector and 0.5 per cent in the public sector. Public sector wage freezes introduced during the pandemic ended over the last three months.
Tasmania and the ACT both recorded a 1 per cent increase over the quarter, the highest across the country. Tasmania is now at its highest annual rate of growth in eight years.
Wage growth in NSW was up 2.2 per cent for the private sector over the year and 1.6 per cent in the public service. In Victoria this was 2.7 per cent and 2.1 per cent respectively.
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Turning the HMAS Wages around will take time
By Shane Wright
November 17, 2021 — 6.13pm
You cannot stop an oil tanker on a dime. It takes up to 4 kilometres before a tanker carrying 2 million barrels of oil comes to standstill.
Australian wages growth could be just like one of those tankers. The debate is whether it’s starting to turn or on course for disaster.
The Reserve Bank has made clear its view about the importance of wages growth, as part of the broader narrative of inflation and the future pace of interest rate rises.
It believes wages have to be growing at better than 3 per cent annually so that inflation stays within its target band, which would then enable it to start normalising interest rates.
RBA governor Phil Lowe says there’s no chance of a rate rise next year with 2024 still the most likely outcome. But financial markets are betting he’s wrong, tipping higher borrowing costs for millions of mortgage holders by mid-2022.
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Why Australia’s missing out on surging wage growth
Banking reporter
November 19, 2021 — 5.00am
It’s the question that’s been hanging over Australia’s economy for the best part of a decade: when will the miserable pace of wage growth recover to healthier levels?
Decent pay rises obviously matter to anyone with a job, but they also benefit society as a whole because solid wage rises go hand in hand with employment growth. Financial markets also have a fixation on wages because they are a critical influence on inflation, and therefore on interest rates.
This week, some important lessons emerged in the long-running discussion about when wage growth may finally take hold.
One is that we’re making progress in lifting wages, but it’s a slow grind. Yes, there have been eye-grabbing headlines about lawyers pocketing 10 per cent pay rises, or dishwashing workers demanding $50 an hour - but these examples don’t reflect the experience of most workers.
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https://www.afr.com/policy/economy/why-australia-s-inflation-is-different-20211115-p59900
Why Australia’s inflation is ‘different’
RBA governor Philip Lowe insists that when it comes to the wave of inflation sweeping the globe, Australia differs from other countries. But expectations may challenge that view.
Ronald Mizen Economics correspondent
Nov 19, 2021 – 12.52pm
US inflation hit a 30-year high this week while UK price growth lifted to levels not seen since 2011, driven by Europe’s energy crisis. But Reserve Bank of Australia governor Philip Lowe insists when it comes to the wave of inflation sweeping the globe, Australia is “different”.
The Bank of England is widely expected to begin lifting interest rates from next month, while the US Federal Reserve is tipped to rein in its $US120 billion ($164 billion)-a-month bond-buying with rate hikes slated for mid next year. New Zealand’s central bank has already started its lifting cycle.
At home, Lowe concedes there is now a “plausible” pathway for rate rises in 2023, but the most likely outcome is for the record low 0.1 per cent cash rate to remain on hold until 2024.
The RBA wants to see wages growth at “three-point-something per cent” before it is confident inflation is sustainably within its 2 per cent to 3 per cent target band. With the wage price index showing annual growth at just 2.2 per cent, Lowe says that is “very unlikely” in the next six months.
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Health Issues.
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Junior doctors sue over wage theft, exploitation
Julie Hare Education editor
Nov 14, 2021 – 5.07pm
More than 26,500 junior doctors have signed up for class actions against public health services in NSW and Victoria, arguing they are overworked, underpaid and being forced to put their patients’, and their own, health at risk.
Doctors in South Australia and the ACT are also considering similar action.
In a case due to be heard by the NSW Supreme Court, junior doctor Amireh Fakouri has brought a class action on behalf of about 24,000 colleagues against the NSW Health Department. It will cover a six-year period.
In Victoria, about 1500 doctors have signed on to one of four class actions against individual health services. The first, against Peninsula Health, is due to be heard in the Federal Court next June.
Hayden Stephens, a partner with Hayden Stephens & Associates, is working with Maurice Blackburn on the NSW case and Gordon Legal with the Victorian cases. He said there were multiple surveys from the Australian Medical Association (AMA) and other groups which revealed that unrostered overtime was pervasive.
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If you’ve taken a DNA saliva test, you could be part of a bigger plan
Anne Wojcicki, CEO of 23andMe, wants to take on Big Pharma with the reams of personal genomic data her company has amassed.
Kristen Brown
Nov 19, 2021 – 9.55am
A few months ago, on the morning 23andMe was about to go public, chief executive Anne Wojcicki received a framed sheet of paper she hadn’t seen in 15 years.
As she was preparing to ring in the Nasdaq bell remotely from the courtyard of her company’s Silicon Valley headquarters, Patrick Chung, one of its earliest investors, presented her with the pitch document she’d shown him when she was first asking for money. The one-sheeter outlined a radical transformation in the field of DNA testing.
Wojcicki’s plan back then was to turn genetics from the rarefied work of high-end labs into mainstream health and quasi-entertainment products. First she’d sell tastemakers on her mail-in spit kits to learn sort-of-interesting things about their DNA make-up, such as its likely ancestral origins and the chance it would lead to certain health conditions.
Eventually, she’d be able to lower prices enough to make the kits broadly accessible, allowing 23andMe to build a database big enough to identify new links between diseases and particular genes. Later, this research would fuel the creation of drugs the company could tailor to different genetic profiles. 23andMe would become a new kind of healthcare business, sitting somewhere between a Big Pharma lab, a Big Tech company and a trusted neighbourhood doctor.
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International Issues.
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Central banks weigh trade-offs between inflation and tightening
A cautious approach to curtailing ultra-loose monetary policy will take longer to temper inflation, and an aggressive move will threaten the recovery.
Tamar Hamlyn
Nov 14, 2021 – 10.05am
Financial markets have kept investors on their toes in recent weeks. A sharp rise in short-term bond yields has been accompanied by yet another barrage of uncomfortably high inflation releases.
The latest salvos, in the form of Australian inflation for the September quarter and US inflation for October, served only to elevate these concerns.
The challenge this poses for investors is very real: should we be concerned about the impact of persistently high inflation outcomes eroding after-inflation rates of return? Or should we be more concerned that central banks might be forced to the table to tighten aggressively, perhaps sowing the seeds of a future downturn, which would also be detrimental for returns?
The implications of this choice matter enormously for returns across asset classes, and the performance of bonds, equities, and other assets is heavily influenced by inflation outcomes and by the level of interest rates.
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Time is running out for Beijing to fix China’s property crisis
By Shuli Ren
November 15, 2021 — 11.10am
There are two types of scary borrowers in China. The first kind has good-looking assets but it isn’t quite clear how much debt they have hidden away. That’s at the heart of the China Evergrande Group crisis. The second has a lot of debt but no assets to shore up their ability to repay — but they have the political connections some hope will help bail out the first kind.
To avoid hurting the broader economy, China is considering easing rules to let its distressed real estate developers sell off assets to avoid defaults. The so-called “three red lines” on leverage ratios — formulated in August 2000 — were so tight that there were no buyers for developers’ property holdings even if the likes of Evergrande were willing to offload projects at fire sale prices.
Going forward, as the Wall Street Journal reported, regulators might allow white knight developers to take over assets without having the projects’ associated debt affect their own leverage ratios and risk crossing the three red lines.
That would be a relief. But will anyone take the bait? Even the richest real estate magnates might have second thoughts because of the many hazards beneath the surface.
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UBS chief Axel Weber warns of growing risk of sustained global inflation
6:37PM November 15, 2021
Axel Weber, global chairman of Swiss giant UBS and former head of Germany’s central bank, believes investors should be concerned about the risk of a sustained rise in inflation.
On Tuesday, he shares his views at the annual UBS Australasia conference. This will be Dr Weber’s first live appearance at the conference and comes at a pivotal time for monetary policy as central bankers and markets contemplate rising inflation.
Dr Weber has been chair of UBS for more than a decade and was president of the Deutsche Bundesbank between 2004 and 2011, right through the global financial crisis. In recent months he says inflation risk is what investors want to talk to him about.
Last week – at the UBS European conference – Dr Weber said that uncertainty may be lower than 12 months ago, but there was still a lot of new risk to manage.
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The next inflation wave is here (and it’s not a supply chain squeeze)
Veteran US investors Larry Jeddeloh says the speed to the energy transition will lift prices across economies, ushering in a new inflationary cycle.
Nov 16, 2021 – 11.59am
If you want to know where inflation is going next, don’t look at port bottlenecks or used car prices or computer chip shortages. Instead, look at the resolutions that came out of COP26, which has effectively baked in an energy transition that is as expensive as it is urgent.
That’s the message from veteran US investor Larry Jeddeloh, founder of The Institutional Strategist, and economist Julien Garran, partner at British group MacroStrategy Partnership, who argue that the desire of governments to tackle climate change and inequality has ushered in the start of a new, inflationary cycle that will last long after the current supply chain squeeze eases.
A more progressive Federal Reserve that works much more closely with the US government, a potential food crisis and rising costs across the economies that chase environmental and social goals hardest are likely outcomes of this big shift.
For both Jeddeloh and Garran, who spoke at the UBS Australasia conference on Tuesday, the shift away from fossil fuels as the world’s core energy source – a key plank of the COP26 negotiations – is the starting point of the next wave of inflation.
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https://www.afr.com/policy/foreign-affairs/china-s-alarming-new-nuclear-capabilities-20211116-p599bz
China’s alarming new nuclear capabilities
The rapid build-up has the potential to alter the power balance in Asia and raises hard questions over US nuclear policy.
Demetri Sevastopulo
Nov 16, 2021 – 2.38pm
On July 27, China became the first nation to fly a hypersonic glide vehicle – a manoeuvrable craft that travels at more than five times the speed of sound – around the earth.
The vehicle was propelled by a rocket that can fly over the South Pole, evading US missile defences that are focused on the North Pole, and giving the Chinese another way to hit targets in America.
This test was the latest in a series of revelations about China’s growing nuclear capabilities that have set off multiple alarm bells in Washington. Earlier this month, the Pentagon said it believes China has accelerated its nuclear plans and will quadruple its arsenal to at least 1000 warheads by 2030.
Over the past two decades, China has stunned Washington with the relentless pace of its conventional military build-up, ranging from fighter jets and bombers to submarines and warships. Its navy is now by far the largest in the world.
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https://www.afr.com/policy/economy/investors-lulled-into-dreamland-by-central-banks-20211117-p599nd
Investors lulled into ‘dreamland’ by central banks
Robin Wigglesworth
Nov 17, 2021 – 10.52am
Investors are living in a “dreamland” brought on by global central banks’ decision to continue pumping up the world economy even as it has rebounded sharply from the pandemic, Bill Gross has said.
Historically low-interest rates and mammoth bond-buying programs, which are only now being cautiously scaled back, have nurtured a widespread bout of financial euphoria in everything from stocks to digital assets such as “non-fungible tokens”, the founder of bond investment group Pimco told the Financial Times in an interview.
“It’s dangerous,” Mr Gross warned of accommodative central bank policy. “It’s all dreamland that’s been supported by interest rates that aren’t where they should be.”
The US
inflation rate, which was already running hotter than the Federal
Reserve had been expecting,
accelerated to a three-decade high of 6.2 per
cent in October.
Price growth is also running well ahead of target in other global economies, including the UK. That has exacerbated concerns that central banks will need to act sooner and more aggressively than previously indicated.
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Biden, Xi de-escalate threat of military conflict over Taiwan
By Matthew Knott and Eryk Bagshaw
Updated November 16, 2021 — 6.30pmfirst published at 3.28pm
Talking points
- China’s President Xi Jinping and US President Joe Biden confirmed their commitment to the status quo that has protected Taiwan for decades, in their first summit since Biden became President.
- This comes after months of hawkish rhetoric, international disputes and military exercises ratcheted up fears of military clashes.
- Biden said the US recognises the “one China” policy and opposes any “unilateral changes to the status quo” in Taiwan.
- Xi said of China’s aims for Taiwan: “We are patient and willing to do our utmost to strive for the prospect of peaceful reunification with the utmost sincerity.”
Washington: US President Joe Biden and China’s President Xi Jinping have sought to protect Taiwan’s uneasy peace by de-escalating the risk of a military conflict over the democratic island.
In the most direct conversation between the leaders of the two superpowers since Biden took office, Xi and Biden reaffirmed their commitment to the status quo after months of rising rhetoric, international disputes and harassment of the Taiwan Strait by China’s warplanes.
During the more than three-hour teleconference summit on Tuesday, Xi said that China posed no immediate threat to its neighbour.
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The Fed needs to move on inflation before it’s too late
Current policy would make sense in a depression. But we no longer risk a depression. A faster shift towards monetary sobriety now could prevent having to go cold turkey later.
Martin Wolf Columnist
Updated Nov 17, 2021 – 12.02pm, first published at 11.15am
It starts with the occasional rock as the policymakers row over the sea of denial. Then many more rocks appear. Finally, they see that they are sailing towards an inflationary cliff. Only with great effort do they turn the ship around and row to safety.
This is how the world is beginning to feel to someone whose life as an economist began in the 1970s. Few wanted to believe Milton Friedman’s warnings. But he was right.
The process began to be visible with jumps in prices in what the late John Hicks called “flexprice” markets, such as those for food. Some jumps in prices could be explained away by supply restrictions, such as the oil embargo of 1973-74.
In what Hicks called “fixprice” markets we saw excess demand and shortages. But, as price rises became more general and real wages were being eroded, workers became increasingly militant. Finally, a general wage-price spiral became all too visible.
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Canada inflation accelerates to 4.7pc annual pace, highest since 2003
Shelly Hagan
Nov 18, 2021 – 6.57am
Ottawa | Canadian inflation climbed to the highest in two decades, adding pressure on the Bank of Canada to raise interest rates.
The consumer price index rose 4.7 per cent in October from a year earlier, compared with 4.4 per cent in September, Statistics Canada said Wednesday (Thursday AEDT) in Ottawa.
The October number is the highest since 2003, when it last hit 4.7 per cent. Inflation hasn’t exceeded that level in the three decades since the Bank of Canada first started targeting inflation in 1991.
The 4.7 per cent figure for October was in line with the median estimate of economists in a Bloomberg survey. On a monthly basis, prices rose 0.7 per cent, on par with estimates.
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US overdose deaths topped 100,000 in one year
Mike Stobbe
Nov 18, 2021 – 3.53am
An estimated 100,000 Americans died of drug overdoses in one year, a never-before-seen milestone that health officials say is tied to the COVID-19 pandemic and a more dangerous drug supply.
Overdose deaths have been rising for more than two decades, accelerated in the past two years and, according to new data posted on Wednesday, jumped nearly 30 per cent in the latest year.
President Joe Biden called it “a tragic milestone” in a statement, as administration officials pressed Congress to devote billions of dollars more to address the problem.
“This is unacceptable and it requites an unprecedented response,” said Dr Rahul Gupta, director of National Drug Control Policy.
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‘The past is the past’: News Corp’s Rupert Murdoch urges Trump to move on from 2020 defeat
By Zoe Samios
November 18, 2021 — 11.26am
Media mogul Rupert Murdoch has urged former United States president Donald Trump to move on from his loss at the 2020 US general election as he took a swing at tech platforms Google and Facebook for censoring conservative voices.
The billionaire executive chairman of News Corp told shareholders in the media giant in the US on Wednesday (EST) that Mr Trump was not helping conservatives focus on the future and contribute to public debate.
“The current American political debate is profound, whether about education or welfare or economic opportunity,” Mr Murdoch said. “It is crucial that conservatives play an active, forceful role in that debate, but that will not happen if President Trump stays focused on the past.”
News Corp owns a controlling stake in Australian pay TV platform Foxtel, as well as local newspapers such as The Australian, Sydney’s Daily Telegraph, Melbourne’s Herald Sun, New York based The Wall Street Journal and London based The Times.
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Kissinger: US and China must realise there can be no victor without destroying humanity
By Eryk Bagshaw
November 17, 2021 — 4.05pm
Singapore: Henry Kissinger, the Secretary of State who helped lead America through the Cold War, said the landmark virtual meeting between Joe Biden and Xi Jinping was the first step towards reducing conflict between the US and China after years of escalating tension.
“We are through the mountain pass, but there is a precipice through which you can look in both directions,” Kissinger said on Wednesday.
“The necessity for both sides is to see whether from that position they can move to a pattern in which disputes are mitigated and in which they realise a victor is not possible without a risk of destroying humanity.”
Speaking at the Bloomberg New Economy Forum in Singapore on Wednesday, Kissinger, 98, said the conversation between the two Presidents had the promise of a détente where coexistence becomes “not only possible but essential”.
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One gobsmacking chart shows how Biden’s economy is beating all others
Ben Winck
Nov 19, 2021 – 8.55am
Americans are not too happy about the country’s economic recovery. They should see the other guys.
For the most part, the US is rebounding well. Hiring picked up last month after slowing during the Delta wave, and consumer spending leapt to record highs last month.
Yet the average American thinks the economy is in the can. Consumer sentiment plunged to decade lows this month and some even said the current situation is worse than the depths of the Great Recession. Inflation is probably to blame. Prices rose last month at the fastest pace since 1990. Although the country is healing, people are not liking the higher prices that have come with it.
Compared with other advanced economies, however, the US is in a league of its own. Preliminary gross-domestic-product readings for the third quarter show the US as the only G7 nation to surpass its pre-pandemic health, the Organisation for Economic Co-operation and Development said in a report on Thursday.
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A winter energy crisis looms for Europe as Putin tightens his grip
By Ambrose Evans-Pritchard
November 19, 2021 — 7.00am
Europe’s energy crunch has returned with a winter vengeance. We are back to warnings of power rationing and industrial stoppage, a looming disaster for the European Commission and the British government alike.
Vladimir Putin has tightened his stranglehold on gas, driving up futures contracts for January by 40 per cent in barely a week. Prices are nearing the levels of September’s panic. The difference this time is that the underlying geopolitical crisis is an order of magnitude more serious.
Russia has mobilised 100,000 troops near Ukraine’s border in what Nato calls a “large and unusual build-up” with hostile intent. American and British intelligence officials last week showed Ukraine’s top brass satellite images and electronic intercepts indicating a “high probability” of military attack this winter, led by the sorts of Spetsnaz special forces deployed in Crimea.
Putin has already prepared the ground for the perfect energy squeeze. He took advantage of the world’s post-pandemic gas shortage over to withhold the top-up flows needed to replenish Europe’s depleted storage.
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‘Woke’ is a bad word for a real threat to American democracy
Garry Kasparov
The Wall Street Journal
November 19, 2021
The search is on for new words for old ideas. “Cancel culture” and “woke” have become overused and abused, part of a struggle to define one’s political opponents in the harshest possible way, to dismiss ideas as not only wrong or harmful, but intolerable.
As a non-native English speaker, I am content to avoid rhetorical fashion and use older phrases. Call it the mob mentality, groupthink, or punitive neo-Puritan orthodoxy. It is the abuse of power — mostly social, not yet governmental — to silence debate and paralyze the spread of any ideas that challenge the prevailing ideological dogma. It is the co-ordinated, coercive attempt to win a debate by ending debate — to punish, not to educate.
The leading practitioners of these tactics have two contradictory responses to criticism. First, they say it isn’t happening, that it doesn’t exist, that drawing attention to it is a rhetorical whine to silence critics of the establishment and shield the privileged from accountability. Second, they blame the victims, calling them bad people with bad ideas who should be banished to make room for more diverse voices. Claiming you are fighting fire with fire can be used to justify any excess; the only way to fight back is to take freedom away from someone else.
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https://www.afr.com/policy/foreign-affairs/don-t-underestimate-xi-s-ambitions-20211119-p59abe
Don’t underestimate Xi’s ambitions
China’s foreign policy was for decades patient and unthreatening. But Xi Jinping is already a very different kind of Chinese leader.
Henry Olsen
Nov 19, 2021 – 11.17am
For anyone who thought that fears of China invading Taiwan are overblown, think again. Chinese President Xi Jinping’s rise as the paramount figure within the Communist pantheon suggests he has greater ambitions than his recent predecessors.
Communist China has a relatively consistent pattern with respect to military activity. It has fought other nations to prevent the United States from establishing a presence on its border (the Korean War) or to exercise its influence with neighbours, such as with its short conflicts with India and Vietnam.
It has yet to risk conflict with a power far from its borders or in a region that another nation considers essential to its national security. This suggests an invasion of Taiwan is highly unlikely despite China’s military build-up and increasingly provocative action.
But this analysis presumes that China’s traditional governing structure and principles remain largely unchanged. It presumes that the Communist Party will act as it has for decades – slowly, steadily and with its predominant concern being the collective whole rather than individual glory.
This patient, nonthreatening style was the party’s leitmotif after the death of Mao Zedong. The internal purges, turmoil and famine his personalist rule created caused subsequent Chinese communists to make alliances to prevent a second Mao coming to power.
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https://www.afr.com/world/asia/japan-wants-in-on-aukus-20211119-p59aha
Japan wants in on AUKUS
Michael Smith North Asia correspondent
Nov 19, 2021 – 5.18pm
Tokyo | Former Japanese prime minister Shinzo Abe has called for greater defence co-operation with Australia and says Tokyo should work with the AUKUS security partnership in areas such as cybersecurity, artificial intelligence and quantum technology.
Mr Abe, who still wields significant influence in Japan’s ruling coalition, made the comments as new Prime Minister Fumio Kishida unveiled a multi-trillion yen stimulus package which included ¥770 billion ($9.25 billion) in defence spending.
“I welcome the creation of AUKUS. It is extremely important to promote multilayered efforts for peace and stability of the Indo-Pacific region,” Mr Abe said in an online forum where he was interviewed by former Australian prime minister John Howard.
“I think that Japan should engage in the co-operation under the AUKUS in such areas as cyber capabilities, artificial intelligence, and quantum technologies.”
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Murdoch has the power if he really wants Trump to move on
By Timothy L. O'Brien
November 20, 2021 — 5.00am
Rupert Murdoch told News Corp’s shareholders that former President Donald Trump needs to get over himself.
“The current American political debate is profound, whether about education or welfare or economic opportunity,” he said at Wednesday’s annual meeting. “It is crucial that conservatives play an active, forceful role in that debate, but that will not happen if President Trump stays focused on the past. The past is the past, and the country is now in a contest to define the future.”
Murdoch is the founder and executive chairman of News Corp, and its primary US holdings are Dow Jones & Company, which publishes the Wall Street Journal; the New York Post; and book publisher HarperCollins. Murdoch also met with shareholders of another one of his companies, Fox, last week. Fox, of course, owns lots of things named Fox, including Fox News. Murdoch didn’t mention Trump at the Fox gathering.
It might have been healthy, and a public service, for Murdoch as Fox’s chairman to share his thoughts about Trump with institutional investors such as Vanguard, Blackrock and Dodge & Cox that fund Fox’s operations. Fox News has spent years amplifying the dangerous and damaging garbage Trump continues to peddle, and it’s the single most influential media platform supporting him. But such is life.
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I look forward to comments on all this!
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David.
