December 02 2021 Edition
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We are now a
little under a week into the Omicron COVID-19 variant outbreak. Hopefully
in a few more weeks we will know where
we are and how worried we should all be. All over border are going up and
travel is closing down.Thus far it really does seem to transmit rather well and most other issues fall into the unknown basket
Otherwise in the US Jay Powell has been re-appointed as Chairman of their Central Bank – hoping for stability as the recovery continues.
In the UK summer is in full swing as is the fight with France over the numbers crossing the English Channel!
In OZ we have
seen ongoing Parliamentary chaos and the political year wraps up. Overall a
huge mess! This week we have lost 3 cabinet ministers so far - Haut, Tudge and Porter! What next?
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Major Issues.
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https://www.afr.com/policy/economy/brainard-would-be-great-fed-chairwoman-mckibbin-20211121-p59anx
Brainard would be ‘great’ Fed chairwoman: McKibbin
Matthew Cranston United States correspondent
Nov 21, 2021 – 3.15pm
Washington | Replacing Federal Reserve chairman Jerome Powell with board member Lael Brainard would move climate change up the central bank’s agenda while guaranteeing a steady interest rates policy, her old friend and former Reserve Bank of Australia board member Warwick McKibbin says.
Professor McKibbin, who has known Ms Brainard since Harvard graduate school in the 1980s and from their time at the Brookings Institution in Washington, said Ms Brainard would ensure continuity of policy if she became only the second woman to hold the top job at the world’s most influential central bank.
“I don’t think she will stray from the Fed’s current mandate,” he said, “I think she would make a great chair.”
Her knowledge on climate challenges also made her a good fit, given mitigation strategies are central to the Biden administration’s “Build Back Better” agenda.
“She takes climate change seriously. She wrote a great speech on climate change and monetary policy in 2019. It’s worth reading,” Professor McKibbin said.
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Morrison turns China ‘threat’ into an election wedge
Borrowing from the Coalition playbook of Menzies and Holt during the Vietnam War, the Prime Minister is putting domestic politics ahead of long-term policy for dealing with Beijing.
James Curran Columnist
Nov 21, 2021 – 12.43pm
Scott Morrison has taken a provocative approach to China that first appeared under Malcolm Turnbull, sharpened its edge and has now grabbed the loudspeaker.
His government makes foreign policy a critical wedge against Labor as the election approaches: tactics drawn from the Coalition playbook of Robert Menzies and Harold Holt during the Vietnam War. Opinion polls appear to confirm support for this recycling of the China “threat”, despite the Prime Minister’s adverse polling on a two-party preferred basis.
Disapprove as one may of this approach, it is unarguably consequential, and Australia may pay the cost for some time.
Some commentators, though, bestow on his foreign policy a framework which, affixed to events since 2019, discerns a pattern: braving Chinese coercion, the Prime Minister has taken the US alliance to new levels of intimacy, driven the Quad’s revitalisation and, via AUKUS, delivered the strategic coup de grace.
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How family offices are playing a return of inflation
Michael Bailey Rich List editor
Nov 22, 2021 – 5.00am
Family offices with sponsors as varied as Seek co-founder Matt Rockman and mining Rich Lister Brian Flannery are positioning for an end to bull markets fuelled by cheap money, although one expert says wealthy families generally aren’t moving fast enough.
“A spray-and-pray strategy has worked for the last five years, everything’s gone up, but the bear drum is beating louder now,” says Rockman, who manages his fortune and those of several others through 1010 Capital, a multi-family office he’s set up with former Myer Family Office executive Dale Sanftl.
“I think central banks will tighten hard and fast and I fear for equities and property under that regime, so we’re firm believers in diversification.”
For Rockman personally, that means a growing share of his portfolio is in gold and cryptocurrencies. 1010 Capital clients more broadly are being introduced to “special situations” private market raisings where banks are slower to see potential than the entrepreneur’s technology network.
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Embrace Japan as most favoured partner to meet the China challenge
In a decarbonising world, the fossil fuel-based energy trade will no longer be enough to sustain the security relationship between Tokyo and Canberra.
Shiro Armstrong Contributor
Nov 22, 2021 – 5.00am
Scott Morrison’s trip to Japan in November 2020 for a historic summit deepened a relationship with Japan that is Australia’s strategic anchor in Asia – his sole official trip overseas in close to 19 months. The most important geopolitical, economic and security fault lines in the world run through Australia’s and Japan’s backyard.
Australia’s relationship with Japan has never been closer, and Japan is of growing importance to Australia. The world’s third largest economy, it is Australia’s second largest source of foreign investment and third largest trading partner – having been second until commodity exports fell last year.
The Special Strategic Partnership between the two countries rests on deep economic complementarities, shared strategic interests and deepening trust and familiarity.
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Tips to understand ethical investing screens
Managed funds and ETFs adopt four basic strategies to create an ESG portfolio.
Tim Mackay Contributor
Nov 22, 2021 – 5.00am
The COVID-19 pandemic and Glasgow COP26 summit have focused attention on the environment and sustainable investing. Seeking to both make profits and do good, investors are pouring money into assets with environmental, social and governance (ESG) credentials.
To capture this booming demand, product providers are furiously launching sustainable investments. While sustainable investing is a trend we can’t ignore, the bewildering array of ESG products can be daunting for self-managed super fund investors.
Those who look under the bonnet of sustainable investments are quickly overwhelmed by the different subjective complexities. They all claim to have the best proprietary methodology designed by the most qualified team of ESG experts.
In truth, there are few, if any, agreed standards in the nascent ESG industry – which is a big problem for SMSF investors. There isn’t even an agreed standard definition of ESG.
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Desperate measures: Morrison in danger of misjudging what Australians think is important
Columnist and former adviser to Labor prime ministers Kevin Rudd and Julia Gillard.
November 22, 2021 — 5.30am
Let’s begin with the sharpest of recent ironies. A little over a week ago, the Prime Minister unveiled a statue of Mahatma Gandhi – who, Morrison reminded his audience, sought “peace over violence”, an idea that transcends “nationality, race, creed, culture and time itself”.
But not, it seems, politics. Asked a short and simple question last week about protesters advocating violence against politicians, Scott Morrison began with a statement of disapproval. Unfortunately, he then went on. Most casual observers will not have realised just how much he went on. He talked about people being frustrated. He talked about freedom. He talked about governments stepping back, and about people taking their lives back. He said he was against mandatory vaccines. The unvaccinated should soon be able to get coffee in Brisbane. His answer to the question about violence took him 80 words. There were 300 words after that.
If there were any doubts this latter part was, for the Prime Minister, the most important part of his answer, the one he wanted his supporters to notice, they were scotched by the decision – quickly pointed out by Anthony Albanese – to post this answer on his official Facebook wall. Guess which 80 words were left out?
Here is a second irony. All this happened in the same week in which Kyle Rittenhouse was acquitted of all charges, after shooting three men – killing two – during a period of sometimes violent demonstrations in America. This is what happens when violence and politics meet. It should remind us of the stakes involved.
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Protests from the disempowered are powered by conspiracies
By Josh Roose
November 22, 2021 — 9.43am
Over the weekend, tens of thousands of people gathered in Melbourne to protest vaccine mandates and the Victorian government’s proposed pandemic bill. While the latest protests were relatively peaceful, they have followed a week of similar gatherings whose language and symbolism were at times violent.
The protesters are a mix of groups, but the movement is riddled with far-right and alt-right extremists who, with their growing reach through social media and in the context of developments in the United States and Europe, pose one of the more significant challenges to Australian democracy in recent memory.
Who are the protesters?
This is not
an easy question to answer because it is a complex gathering of groups.
Some are simply responding to what they see as over-reach by the state on its pandemic bill or
its vaccine mandates.
However, as we’ve seen with the anti-lockdown protests during the course of the pandemic, this is a movement grounded in anger and resentment. These are people who feel a deep sense of powerlessness and frustration: they may have lost their jobs, been cut off from family and friends, and they may be deeply suspicious of, if not outright hostile to, the vaccines. To them, these protests might be empowering at a time when they feel completely disempowered and forgotten.
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ASIC’s warning to crypto investors: you’re on your own
Nov 22, 2021 – 7.50pm
ASIC chairman Joe Longo has urged investors to be careful about investing in crypto assets, admitting the regulator is virtually powerless to intervene and consumers are “on their own”.
Mr Longo, who became chairman of the Australian Securities and Investments Commission in June, said the investor “rush” into crypto was “extraordinary”, but he would not be a “cheerleader” for the nascent industry.
Mr Longo said it was not the regulator’s job to eliminate risk and would not stop investors from purchasing digital tokens. But he cast doubt over whether retail investors properly understood private digital currencies, which have swelled in value to $US2.6 trillion ($3.6 trillion) globally.
“It is almost an article of faith that no-one should invest in something they don’t understand,” Mr Longo said.
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Vanguard ‘confident’ its super fund will be a winner
Michael Read Reporter
Nov 22, 2021 – 5.45pm
Financial services juggernaut Vanguard concedes it will be difficult to crack the $3.3 trillion superannuation market in Australia but says now is the right time to swoop.
“It’s going to be hard,” Vanguard Australia’s head of superannuation, Michael Lovett, said. “We know we’re up against some really strong competitors. But we’re confident that in our history, when Vanguard puts its mind to something we can be competitive.”
The US funds management giant has been drawing up plans to launch a super fund since 2019, it’s second such attempt. The offering will be launched next year.
Observers have speculated that Vanguard’s latest attempt will spell trouble for industry super funds and trading platforms.
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The hidden costs of your super fund’s illiquid assets
Such assets create a valuation swamp that is riddled with uncertainty, imprecision and moral hazard, and puts a chunk of people’s retirement savings at stake.
Richard Holden Contributor
Nov 23, 2021 – 12.00am
I recently raised a concern with the basic architecture of our superannuation system. Are illiquid assets being marked-to-market accurately? This may seem like a rather dry accounting question, but it’s actually central to the fairness of Australia’s retirement-savings system.
Suppose you log in to look at your current super balance. A shiny user interface will promptly tell you your balance based on the assets your private super account holds through your manager. Maybe a certain number of CBA shares, some government bonds, maybe a slice of an overseas index fund that tracks the S&P500. The prices of those liquid assets could be updated in real time because there is essentially a 24 hour, seven days a week market to buy and sell those assets. The market prices might go up and down, but there’s no question what they are.
Now, for illiquid assets – such as infrastructure investments – the market price is not known. When the super fund shows you that part of your balance, it is looking at what slice of their total holdings in the asset you own and what they think that asset is worth.
The problem, of course, is that there aren’t market prices for illiquid assets. They’re not being bought and sold all the time. That’s why they’re called “illiquid.” So every time you put money into such assets, your super fund is determining what price you pay. The same goes for selling. If you retire, or move your assets to another investment or even fund manager, your super fund determines what your investments are worth.
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https://www.afr.com/wealth/personal-finance/six-ways-to-invest-in-healthcare-20211121-p59ang
Six ways to invest in healthcare
With the sector expanding at a faster rate than the broader economy, above-market returns are on offer for savvy investors.
James Wright Contributor
Nov 23, 2021 – 5.00am
While investing in the health sector has always been an important focus for professional investors, COVID-19 has drawn a new cohort of private investors to opportunities in this area.
The diversity in health is staggering – ranging from the most speculative small-cap growth plays researching new drugs to some of the most defensive, large-scale value companies offering stable dividend streams through the sale of pharmaceuticals or hospital services.
Surprisingly, healthcare stocks have underperformed global markets over the year to October 2021 after enjoying above-market returns for many years. The sector lagged as investors positioned for an economic reopening by rotating into more economically sensitive industries and selling down small and mid-cap biotech companies after strong gains in 2020.
Generally, developed market health systems are being challenged by ageing populations and more demands on health services, increasing rates of chronic disease, costs of medical research and innovations, and making the best use of emerging health technologies and health data.
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Health stocks to watch as pandemic eases
Pacific Smiles, NIB and Monash IVF are among the companies favoured by fund managers.
Tony Featherstone Contributor
Nov 24, 2021 – 5.00am
For months travel, entertainment and retail stocks have been touted as top “reopening” plays after COVID-19. Emerging healthcare providers have had less fanfare.
But as lockdown restrictions ease, more people will go to the dentist, having deferred their check-ups during the pandemic. Others will need physiotherapy as elective surgeries return, sport resumes or to treat aching backs.
Some people will use the cash saved during COVID-19 to improve their appearance. Laser eye surgery, cosmetic dentistry and laser hair-removal services will benefit.
The pandemic could also boost fertility treatments. Invitro-fertilisation providers are reporting stronger IVF demand and changing attitudes towards starting or extending families. Rising house and share prices could encourage people to pursue costly IVF.
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Why it will be harder to afford quality financial advice
A ham-fisted regulatory response has left average Australians struggling to pay for financial planning. Industry players warn the problem will get worse.
Karen Maley Columnist
Nov 24, 2021 – 5.00am
Astute players in the financial planning industry have long warned that we are now in a situation where average Australians can’t afford the $5000 or so it costs to prepare a high-quality personalised investment plan for their superannuation savings.
At The Australian Financial Review Super & Wealth Summit on Monday, even the country’s top corporate cop, Joe Longo, acknowledged there was a serious problem.
Longo, who took over as the head of the Australian Securities and Investments Commission at the beginning of June, acknowledged that the regulatory regime surrounding financial advice was “too complicated”.
He added: “What we’ve been trying to do is work with industry to find ways of complying with the regulation in a manner that doesn’t over-engineer the approach to compliance.”
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A retirement algorithm could solve the nastiest problem in finance
A standardised web-based tool can make financial advice affordable and inform retirees about the retirement income products needed to make their superannuation savings last a lifetime.
Pamela Hanrahan and David Bell
Nov 23, 2021 – 2.45pm
Next year, 250,000 Australians with a superannuation account will retire. Most will have no access to meaningful support in the complex exercise of transitioning their superannuation from the savings (accumulation) phase to the spending (de-accumulation) phase.
Those who ask for help are usually offered a self-service tool that is too generic, or directed to seek personal financial advice that feels over-engineered and unaffordable. We think it’s time to disrupt the model with a third option.
In the accumulation phase, MySuper provides a serviceable default option for those who need or prefer one. De-accumulation involves utilising those savings to fund retirement to supplement or replace the means-tested aged pension.
Government policy is to provide no default options for de-accumulation. Instead, each retiree is left with what Nobel laureate William Sharpe described as the “nastiest, hardest problem in finance”: working out how to manage and draw down the accumulated balance (however large or small) without either underspending or falling short at the end.
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China relations: Call it what you like, but don’t call it a new Cold War
By John Blaxland
November 24, 2021 — 8.46am
Opposition foreign spokeswoman Penny Wong has given a blistering critique of the coalition government’s foreign policy and its focus on talk of war over Taiwan, stressing instead competition over conflict. Her speech on Tuesday reflects how it’s become fashionable to focus on talk of great power rivalry and to frame this as being like a “Cold War 2.0”.
But the recent deal done between the US and China at the Glasgow summit suggests this is an inadequate metaphor, a mental model derived from a different era which does not apply to a significantly more complex set of circumstances.
The Cold War emerged from the ashes of World War II in the mid-twentieth century, when three things happened. The explosion of atomic weapons brought about an abrupt end to the Pacific war, and these weapons quickly found their way to the Soviet Union and China.
Secondly, the United Nations was established, setting a framework for avoiding total war. And thirdly, an alliance structure emerged - the 1951 ANZUS treaty was an example - that generated a sharply divided global order. This combination – a kind of balance of mortal terror known as Mutually Assured Destruction – prevented another descent into total war.
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Morrison caught in pincer trap
The Morrison government is being held hostage by its own side. So much for stable, competent and reliable government.
By Paul Kelly
From Commentary
November 23, 2021
Only the populist conservatives could have turned Australia’s belated vaccine triumph, with near world-beating vaccination rates, into a shameful and humiliating fiasco for the Morrison government. The Australian public has responded magnificently on vaccines. High vaccination is the key to economic reopening and Scott Morrison’s re-election strategy. The nation’s two-jab rate is at 85 per cent while NSW has hit 92 per cent coverage.
But ideological conservatives are unhappy; their revolt is senseless, indulgent and irresponsible. In the annals of snatching defeat from the jaws of victory, this week’s effort by conservative rebels warrants a special place. Its significance, however, runs deeper – they are ready to promote their own principles against their government’s policy and threaten a legislative strike of sorts to extract concessions.
The Morrison government is being held hostage by its own side. So much for stable, competent and reliable government. The symbolism is powerful: the rebels have aligned with Pauline Hanson’s bill for the federal government to intervene, confront the premiers, overturn state vaccination mandates and deny funds to a state body or business that requires full vaccination for entry.
This revolt is merely the latest manifestation of the fracture within conservative politics in Australia and across Western democracies as it searches for new meanings and aggressive tactics to combat the tide of progressivism, with Trump populism an element embedded in every centre-right party.
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‘We need some grit’: Eight reasons that China defeatism is misplaced
Australia is not useless. We have the capacity to shape policy and win international support – which is precisely why China wants to punish us for rejecting its 5G technology and calling out Beijing on Covid-19.
From Commentary
November 23, 2021
In The Australian on Monday, Hugh White gave us a picture of democratic defeat in the face of overwhelming Chinese dominance should war break out over Taiwan.
“Going to war with China”, he says, “will more likely destroy” US leadership. The chances of nuclear war “are quite high” and “the chances of America winning such a war are very low”.
White goes on: “America’s dwindling chances of winning” are such that it’s all the “more likely that the Chinese will provoke a crisis to call America’s bluff”.
Faced with such dire prospects of defeat, what should we do? We should, according to White, weigh up whether an “imperative to support democracy against authoritarianism” is worth it. “There is a mortal imperative to avoid war” because “the costs of war would probably be far higher than the costs of living under a new Chinese-led regional order”.
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‘His Master’s Voice’ amplifies how annoyed Xi Jinping is
7:51PM November 23, 2021
The slow, roiling crisis of Australia-China relations reached a distinct new stage with China’s president, Xi Jinping, directly criticising Australia’s new AUKUS agreement for the first time.
Xi is effectively the communist emperor of China, perhaps the most powerful in modern China’s history, and in a speech to ASEAN he took aim at AUKUS for the first time.
He didn’t mention AUKUS by name, but Chinese academics and officials rushed to make sure we understood Xi was talking about AUKUS. You can trust their interpretation here.
China’s foreign ministry spokesman, Zhao Lijian, echoed Xi’s remarks, but went further, saying that AUKUS “deliberately escalates regional tensions, stimulates arms race, threatens regional peace and stability, and undermines international nuclear non-proliferation efforts.”
This all represents a significant escalation of Beijing’s campaign against the Morrison government at two levels. First, anything spoken by Xi himself has a quality of papal infallibility, and imperial prestige, about it in the Chinese system. So-called Xi Jinping Thought has been elevated to a central defining role in the Chinese Communist Party. For Xi to speak about AUKUS personally means it has been elevated across the entire Chinese system.
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Why investors don’t believe the RBA on interest rates
Nursing multibillion-dollar losses after being wrong-footed on bond yields, investors no longer trust the RBA’s interest rate guidance.
John Kehoe Economics editor
Nov 24, 2021 – 12.55pm
The Reserve Bank of Australia insists that interest rates are likely to be anchored near zero until around 2024, but money markets are pricing in about four cash rate increases totalling 1 per cent next year.
There has rarely, if ever, in Australia’s financial history been such a disconnect between the RBA and bond markets.
Why the dichotomy?
A differing view on the outlook for inflation and wages is only part of the reason. Another factor is that sections of the investment community have lost confidence in the RBA’s word.
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Great Resignation may be just around the corner
Nicki Bourlioufas
Nov 25, 2021 – 5.00am
There has been increasing talk of The Great Resignation in Australia, following reports of that trend in the US.
Experts are divided on whether the trend exists in Australia, though it is clear that labour shortages are evident in pockets of the Australian labour market.
The term, The Great Resignation, was coined in late 2020 by Texas A&M University’s Anthony Klotz in response to rising quit rates in the US that followed COVID pandemic. Once people got a taste of working at home, they realised that there was more to life than going to the office every day.
Over much of 2021, Klotz’s predictions have apparently been borne out in the US, with the monthly quit rate jumping to 3 per cent in September 2021, the highest level on record in the US. Total quits, which reflects the number of jobs that workers left voluntarily, hit another record at 4.4 million.
Eric Knudsen, a LinkedIn people science senior researcher, says employees are reconsidering not just how they work, but why they work, and many want greater flexibility and fulfilment. If they aren’t getting it, some are quitting. “Whenever someone starts looking for their next opportunity, a lack of manager support could force an external move. It’s important to frame internal mobility to managers as a moment of growth rather than a moment of loss,” says Knudsen.
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Prayers, plots and paranoia as PM fights to rescue credibility
Award-winning political commentator and author
November 25, 2021 — 5.30am
A few weeks ago one federal MP, a veteran of countless leadership wars, surveyed the wreckage surrounding the Prime Minister then concluded that if it wasn’t for the pandemic, Scott Morrison would no longer be in the job.
It is not an isolated view. After five conservative Coalition senators voted against the government while others threatened to withdraw their vote, several agreed, saying yes, the observation was “accurate”.
Before anyone gets too excited, barring a runaway bus, Morrison will lead the Coalition to the election. However, the dismay over his performance and judgment has intensified and assessments about the government’s election prospects have become more pessimistic.
It prompted one rumour in government ranks that Peter Dutton was “sitting on the numbers”. It is true Dutton has never denied his leadership ambitions and he has been paying more attention lately to party moderates beyond his encouragement months ago for them to push for net zero.
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Time to shine a light on the ‘dark money’ of political funding
Contributor
November 25, 2021 — 8.44am
Furphies abound in discussions with political insiders about political fundraising – one in particular.
We’re told that big donations from big organisations – trade unions, public or private companies, industry associations or even some community groups – are essential for democracy to function. Without that money, we are tearfully told, democracy would wither on the vine.
Bollocks.
The key to reform is all about adopting a “low-value high-volume” fundraising model.
We need to make so insignificant the amount of money that can be lawfully donated that it could never be considered an inducement in the often Byzantine, sometimes nefarious world of politics.
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Religious bill winds back hard fought protections provided by states
By Anna Brown and Arthur Moses
November 25, 2021 — 8.57am
The long-awaited third and final draft of the government’s Religious Discrimination Bill has arrived, and it doesn’t meet the pub test, for anyone.
Our laws should protect all of us, equally, no matter who we are, whom we love or what we believe. But what the bill gives with one hand, it undermines with the other.
Rather than simply protecting people of faith from discrimination like most states and territories have managed to do, the Morrison government’s third attempt at the Religious Discrimination Bill winds back hard fought for protections for LGBTIQ+ people, women, people with disabilities and, ironically, even people of faith.
The final bill removes two of the most contentious provisions, but some of its worst provisions remain and new ones have been added that would undermine everyone’s right to respect and dignity at work, school and whenever they access goods and services like healthcare.
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There are better ways to protect religious freedom
11:00PM November 24, 2021
The federal government’s third attempt at a religious discrimination bill will leave few people happy. Prior bills excited heated debate between those advocating stronger protection for religious freedom, including religious speech by people such as Israel Folau, and those who reject the idea that a person’s faith should permit them to discriminate against others.
Reconciling these positions has proved impossible thus far, and it is clear that this bill again fails to find common ground.
A focal point of debate is the proposal to give special protection to statements of belief. These include a person speaking about the spiritual basis of their faith through to what their doctrine says about other religions or the place of women and same-sex couples in our society. The protection afforded to statements of belief would not extend to other speech unconnected to religion, such as artistic expression, political commentary or matters of conscience.
The latest bill gives significant ground to those who oppose protection for statements of belief. Most obviously, the government has jettisoned the attempt to protect the speech of someone such as Folau. He said in a 2019 social media post: “Warning. Drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists, idolators. Hell awaits you. Repent! Only Jesus saves.” Rugby Australia responded by terminating his contract for breaching the players’ code of conduct.
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Government is running out of lives but it’s not terminal – yet
The point of no return has far from been reached. But the Coalition needs to use the Christmas break to reflect on the messy end to the year.
Phillip Coorey Political editor
Nov 25, 2021 – 8.00pm
Owing to Queensland’s border restrictions, Pauline Hanson wasn’t in Canberra this week, but her presence loomed large.
No more so than on Monday when Hanson, participating virtually from her electorate office, watched as five Coalition senators – three Liberals and two Nationals – crossed the floor to support her bill opposing vaccine mandates imposed by state governments.
The bill was crushed by 44 votes to five, but the point was made. There was a growing insurrection inside the Coalition and Hanson, grinning on the big screen, looked like the one pulling the strings.
The imagery was potent.
When Hanson first appeared on the scene more than two decades ago and posed a threat to the Coalition’s right flank, the challenge was whether to appease her or confront her views.
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Scott Morrison’s problems aren’t going away, they’re multiplying
9:12PM November 25, 2021
Liberal and National rebels are defying Scott Morrison’s warning that disunity is electoral death and creating a chaotic end to the 2021 parliamentary year.
Facing mounting trouble and multiplying threats, the Prime Minister has sought to downplay and deflect the impact of Coalition rebellions against his agenda as Anthony Albanese seeks to amplify every defection and defeat.
On Thursday, Morrison said Labor’s exploitation of the parliamentary defeats and divisions was mere “political games” being played by lifetime politicians.
He went further in his distraction from the government’s embarrassment over the proposed federal integrity commission by launching an extraordinary attack on the NSW corruption watchdog, saying it had behaved shamefully towards former NSW Liberal premier Gladys Berejiklian by “humiliating” her over her boyfriend, used “bad process”, had “abused process”, conducted “a vendetta” and was a “kangaroo court”.
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Another 10 million students under education growth plan
Julie Hare Education editor
Nov 26, 2021 – 9.19am
Australia should shake up its $40 billion international student sector to shift the focus to teaching online and offshore, the government says, arguing that an extra 10 million students could benefit from an Australian education over the next 20 years.
In its new 10-year international education strategy, the government says Australia should look to Britain which in 2019 taught 407,000 students in offshore arrangements, compared to 117,000 – or 22 per cent – by Australian education providers.
Experts, however, say the prospect of living and working in Australia is a strong drawcard for students.
“We know that the vast majority of international students still want to study onshore in Australia for a significant proportion of their studies,” said Jake Foster, chief commercial officer with education consultancy AECC Global.
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The nation is rudderless in the face of growing storm
Political and international editor
November 27, 2021 — 5.30am
Australia has sent a small contingent to help save democracy in the Solomon Islands, but can we save our own? We know from the US that even an entrenched democracy quickly can drive itself to the brink of failure. Australia is not in the same state of decay at the moment, yet it’s subject to some of the same pressures and has some of the same vulnerabilities.
The increasingly extreme fringe protesters brandishing nooses and gallows in Melbourne are one sign. The arrests this week of people – one in NSW and two in Western Australia – for threatening the lives of politicians is another. Extremists are advancing violent radical agendas under cover of anti-vax and anti-lockdown protests. They are taking some others, the plain disgruntled, along with them.
“The movement,” says Deakin University senior research fellow Josh Roose, “is riddled with far-right and alt-right extremists who, with their growing reach through social media and in the context of developments in the US and Europe, pose one of the more significant challenges to Australian democracy in recent memory.”
And some political parties like to flirt with them for support. When One Nation this week published the personal mobile phone number of another senator, Jacqui Lambie, in an invitation to supporters to pester her, some took the cue.
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We’re repeating all the same Collins mistakes
Why we should turn AUKUS into FAUKUS and buy our nuclear-powered submarines from France.
By JON STANFORD
November 26, 2021
The Morrison government’s decision to cancel the French Attack-class project in favour of nuclear-powered submarines (SSNs) was clearly justified, on both strategic and operational grounds. That does not let the government off the hook, however, for the very costly failure of the Attack program.
The acquisition process for SSNs will be highly challenging. We should at least take care not to repeat the mistakes that were made in the Attack program.
Three fundamental problems blighted that project from the outset. First, the process to replace the Collins-class submarines was started far too late and on too long a timeline to avoid a capability gap.
The second mistake was selecting a single contender on the basis of only a concept design and then eliminating further competition. This provided the French with monopoly power over price, delivery, local content and capability.
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Invidious bill is proof of how craven our politics has become
Columnist and senior journalist
November 28, 2021 — 5.00am
It comes down to a straight-forward clash of values, an irreconcilable difference: those who think that no one should be excluded from a school on the grounds of their sexuality, and those who think religious bodies should be able to exclude people because of their sexuality.
It is very difficult, mind you, to get anyone to come out and admit the latter – which is a testament to how much public attitudes have changed on same-sex attracted people. Religious organisations know they cannot openly say: “We want to retain the right to exclude gay teachers” just as they would not publicly declare their right to shut out divorcees, people who have extramarital sex, sinners who eat meat on Fridays, or mothers who have given birth to “illegitimate” children. The religious texts haven’t changed, but social mores have.
But let’s be real: there are still pockets of Christianity and Islam, in particular, that believe same-sex sex is wrong and the debate over the Religious Discrimination Bill comes down to that. And that is what is so invidious about this legislation, which fixes a problem the government’s own religious freedom review found does not exist. It forces us all to take sides, and it brings into the political realm something which is most often worked out peaceably between people at a community level.
And for what? It is tempting to conclude that Prime Minister Scott Morrison, knowing his political stocks are low in Victoria and West Australia, is focusing his re-election efforts on NSW. It is his home state, he used to be Liberal Party director here, and he knows that key constituencies in the culturally diverse seats of western Sydney respond well to a man of faith.
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We will not bow, Peter Dutton warns China
9:00PM November 26, 2021
Defence Minister Peter Dutton says Australia must stand up to China or face the loss of national sovereignty as a “tributary state”, warning that if Beijing took Taiwan it would swiftly become the region’s dominant power.
Mr Dutton said China’s territorial ambitions would not be satisfied by Taiwan’s fall, with Japan’s Senkaku Islands its next target as it sought to transform the regional order in a direct threat to Australia’s security and prosperity.
Against the backdrop of Australia’s new AUKUS partnership with the US and the UK, he said the nation needed to boost its military capabilities and stand with its allies to resist Beijing’s “aggressive behaviour”.
“In the absence of a counter pressure, the Chinese government becomes the sole security and economic partner for Indo-Pacific nations,” Mr Dutton told the National Press Club.
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COVID 19 Information
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Chinese students eager to return, just need a date
Julie Hare Education editor
Nov 21, 2021 – 3.18pm
Chinese students have a largely positive attitude towards Australian education while demonstrating a sophisticated understanding of the state-federal divide and remain mostly impervious to political messaging and trade tensions between the two countries, a massive study of sentiments expressed on social media and other online forums has found.
That should flow through to better than expected enrolments from China in the following year or two, given favourable and migration settings are adopted.
There are strong expectational cues among the Chinese for Australian education, which the study’s authors say is a “promising signal despite the heated political discourse between Canberra and Beijing”.
“[Students] are waiting for borders to open and are ready to act,” said Anna Boucher, a migration expert from the University of Sydney who has worked with data analyst Elisa Choy in interpreting the data.
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Kerry Chant urged ‘consistent’ lockdown restrictions across all of Sydney, email reveals
By Lucy Cormack and Alexandra Smith
November 22, 2021 — 5.00am
The NSW government imposed harsh lockdown restrictions on the poorest areas of Sydney’s west and south-west despite Chief Health Officer Dr Kerry Chant advising that the rules should be implemented consistently across Greater Sydney.
Emails sent between health officials and Health Minister Brad Hazzard in mid-August have revealed Dr Chant recommended that “consistent measures” be implemented across all of Sydney.
Despite the health advice, the extended lockdown left 12 local government areas under restrictions that were far tougher than other parts of Sydney, outraging community leaders who declared the handling of the Delta outbreak had left the city divided.
“Implement consistent measures across greater metropolitan Sydney with outdoor masks, consistent 5km rule and authorised workers only,” Dr Chant wrote in the email of recommendations on August 14.
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Doctors warn of new Covid strain found in Botswana with ‘incredibly high’ number of mutations
Concerned scientists have raised the alarm over a new Covid-19 variant with an “extremely high number” of mutations which could cause fresh chaos.
November 25, 2021 - 11:00AM
Fears are growing after a brand new Covid-19 strain which “could be of real concern” was detected by scientists.
The new variant was first picked up by Imperial College London virologist Dr Tom Peacock, who shared details on a genome-sharing website.
In a chilling warning, Dr Peacock stated that the “incredibly high amount of spike mutations suggest this could be of real concern”, with cases so far found in three countries.
Those 32 spike mutations have virologists on high alert, as it means it could be harder for existing Covid vaccinations to combat the new strain.
The B. 1.1529 variant – which is expected to be dubbed the Nu strain – was first detected in Botswana, Africa, on November 11.
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New coronavirus variant a ‘serious concern’ in South Africa
By Prinesha Naidoo and S'thembile Cele
November 26, 2021 — 6.15am
Scientists in South Africa are studying a recently identified new coronavirus variant of concern, stoking fears the country may face a potentially severe fourth wave that could spread internationally.
The new discovery, called B.1.1529 until a Greek letter is assigned, carries an unusually large number of mutations and is “clearly very different” from previous incarnations, Tulio de Oliveira, a bio-informatics professor who runs gene-sequencing institutions at two South African universities, said at a briefing on Thursday (Friday AEDT).
“Here is a mutation variant of serious concern,” Health Minister Joe Phaahla said at the same media event. “We were hopeful that we might have a longer break in between waves – possibly that it would hold off to late December or even next year January.”
Virologists have detected almost 100 cases linked to the variant in the country to date, said Anne von Gottberg, clinical microbiologist and head of respiratory diseases at the National Institute for Communicable Diseases. World Health Organisation officials have met to discuss the virus, which has also been detected in Botswana, according to a separate statement.
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‘Great concern’: Fears grow as B. 1.1529 Covid variant rips through nation
A new Covid variant “of great concern” is tearing through a struggling nation, sparking fears it could soon spread across the globe.
November 26, 2021 - 9:38AM
Experts have issued a chilling warning to the globe as a “worrisome” new Covid variant – tipped to be even worse than the Delta strain – threatens to cause fresh chaos.
Earlier this month, Dr Tom Peacock, a virologist at Imperial College London, sounded the first alarm over the new B. 1.1529 variant after posting details on a genome-sharing website.
He also revealed in a string of tweets that the strain, first detected in Botswana on November 11, had a “really awful spike mutation profile” and that the “incredibly high amount of spike mutations suggest this could be of real concern”.
Those 32 spike mutations have virologists on edge, as it means it could be harder for existing Covid vaccinations to combat the new strain.
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Australian health authorities investigate new South African COVID strain
By Rachel Clun and Lucy Carroll
November 26, 2021 — 11.50am
Australia won’t hesitate to shut its borders to South Africa over concerns about an emerging strain of COVID-19 as health authorities investigate data around the variant that has been described a “serious concern”.
The UK added South Africa and five other African countries to its travel “red list”, banning all direct commercial and private flights from South Africa, Botswana, Eswatini, Lesotho, Namibia and Zimbabwe.
The new strain, currently called B.1.1529, has been detected in several countries but fewer than 100 cases have been confirmed so far.
Health Minister Greg Hunt said no cases of the strain have been discovered in Australia, but the country would not hesitate to move swiftly if health experts are concerned about the variant.
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https://www.ausdoc.com.au/news/scientists-scramble-track-new-sarscov2-variant
Scientists scramble to track new SARS-CoV-2 variant
Despite concern about the extent of its mutations, it's virulence is not yet known, experts say
26th November 2021
A new SARS-CoV-2 variant has prompted an emergency meeting at the WHO to decide whether it should be declared a variant of concern.
The B.1.1.529 variant — which contains more than 30 mutations on the spike protein — has been identified in South Africa and Botswana, sending scientists scrambling to track its spread.
South African authorities have confirmed 100 cases so far, using genomic sequencing, but the fear is it’s driving a surge in daily cases that have jumped tenfold in the country in the past few weeks.
A case has already appeared in Hong Kong in a traveller returning from South Africa, and the variant has concerned UK authorities enough to ban incoming flights from six African countries.
Australian virologist Professor Stephen Turner noted that the variant had “quite a few more” mutations compared with the Delta or Alpha variants of concern.
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WHO classifies South Africa COVID strain as variant ‘of concern’, names it Omicron
November 27, 2021 — 5.46am
London: The World Health Organisation has declared the new strain of COVID-19 that emerged in South Africa a variant “of concern” and named it Omicron, after the Greek letter.
WHO’s Technical Advisory Group said Omicron had a large number of mutations that made it concerning, and that preliminary evidence suggested “an increased risk of reinfection” compared to the other variants of concern, including Alpha, Beta, Gamma and Delta.
“The number of cases of this variant appears to be increasing in almost all provinces in South Africa,” the group said in a statement.
“This variant has been detected at faster rates than previous surges in infection, suggesting that this variant may have a growth advantage.”
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We’ve turned our backs on the lessons of the pandemic
Lockdowns could have changed ideas about welfare funding and the nature of the economy. That was beyond our political class.
Laura Tingle Columnist
Nov 26, 2021 – 4.48pm
The 2021 Nobel Prize in Economics was awarded last month to three economists for their work on what economists call natural experiments: the real world equivalent in economics of a laboratory experiment.
Economist Andrew Charlton reflected on the great value of such natural experiments when he spoke at the National Press Club in Canberra last week, when he reflected on what we had learnt about economics as the COVID 19 pandemic became a once-in-a-lifetime natural experiment “that taught us a lot about economics in Australia, and particularly about poverty in Australia”.
“We did things in the pandemic that we would never ordinarily do,” Charlton said. “And the consequences of those decisions enabled us to learn things that we would never ordinarily learn.”
At the end of another profoundly depressing week in the theatre of Australian politics – during which our Prime Minister once again demonstrated that he didn’t seem to have learnt the value of just telling the truth upfront and instead got himself into a world of pain of having to repeatedly correct the record in Parliament – it is worth reflecting on some of those real world lessons, and what they should be prompting our political leaders to contemplate.
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Morrison government preparing to tighten quarantine rules as new variant emerges
By James Massola and Latika Bourke
Updated November 27, 2021 — 10.00amfirst published at 9.50am
The federal government will announce a series of measures to protect Australia from the new “Omicron” strain of COVID-19 that has emerged in South Africa a variant of concern.
Europe, Britain and a host of other countries closed their borders to non-residents arriving from countries including South Africa, Botswana, Eswatini, Lesotho, Mozambique, Namibia, South Africa and Zimbabwe on Friday, London time, due to the emergence of the variant.
Sources told the Sydney Morning Herald and The Age that Prime Minister Scott Morrison, Health Minister Greg Hunt, Health department secretary Brendan Murphy and Chief Medical Officer Paul Kelly met on Saturday morning to discuss the variant.
There are no direct flights between South Africa and Australia at present, but a series of other precautionary measures are likely be announced later on Saturday.
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South African Covid-19 variant Omicron ‘very worrying’
November 27, 2021
Scientists have described a new variant of coronavirus as “very worrying” with an “horrific spike profile”.
The World Health Organisation has declared the recently-discovered B.1.1.529 strain, first detected in southern Africa, to be a variant of concern and renamed it Omicron.
The classification puts Omicron into the most-troubling category of Covid-19 variants, along with the globally-dominant Delta, plus its weaker rivals Alpha, Beta and Gamma.
Nations rushed to ban flights to slow the spread of Omicron on Friday, while stock markets and oil prices plunged on fears surrounding the variant, potentially dealing a heavy blow to the global economic recovery.
“Based on the evidence presented indicative of a detrimental change in Covid-19 epidemiology... the WHO has designated B.1.1.529 as a variant of concern (VOC), named Omicron,” the UN health agency said in a statement issued overnight.
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Government introduces bans on Africa travel over new COVID variant
By James Massola, Latika Bourke and Sally Rawsthorne
Updated November 27, 2021 — 1.44pmfirst published at 9.50am
The federal government has announced all flights from the nine southern African countries affected by the new coronavirus strain, Omicron, will be suspended for two weeks.
Federal Health Minister Greg Hunt on Saturday said the travel restrictions also apply to people, such as international students and skilled migrants arriving under travel bubble arrangements who have been in any of the nine countries within the past 14 days.
Health Minister Greg Hunt and Chief Medical Officer Paul Kelly have announced new border restrictions after the emergence of the new Omicron variant of concern.
These countries are South Africa, Namibia, Zimbabwe, Botswana, Lesotho, Eswatini, Seychelles, Malawi and Mozambique.
Anyone who has already arrived in Australia and has been in any of the countries within the past 14 days, must immediately isolate themselves and get tested.
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What’s known and not known about the omicron variant
Maria Cheng
Nov 27, 2021 – 12.54pm
London | South African scientists identified a new version of the coronavirus this week that they say is behind a recent spike in COVID-19 infections in Gauteng, the country’s most populous province. It’s unclear where the new variant first emerged, but scientists in South Africa first alerted the World Health Organisation and it has now been seen in travellers to Belgium, Botswana, Hong Kong and Israel.
Health Minister Joe Phaahla said the variant was linked to an “exponential rise” of cases in the last few days, although experts are still trying to determine if the new variant is actually responsible.
WHO chief Tedros Adhanom Ghebreyesus... the UN health agency has labelled the omicron mutation a variant of concern. AP
From just over 200 new confirmed cases per day in recent weeks, South Africa saw the number of new daily cases rocket to 2,465 on Thursday. Struggling to explain the sudden rise in cases, scientists studied virus samples from the outbreak and discovered the new variant.
In a statement on Friday, the WHO designated it as a “variant of concern,” naming it “omicron” after a letter in the Greek alphabet.
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UK resurrects quarantine, mask mandates after two Omicron cases found
Hans van Leeuwen Europe correspondent
Nov 28, 2021 – 5.12am
London | British Prime Minister Boris Johnson has reintroduced compulsory mask-wearing in shops and on transport, plus COVID-19 tests with self-isolation for all overseas arrivals, after two cases of the Omicron variant were detected in England.
Mr Johnson’s government will also try to get 6 million booster doses into English arms in the next three weeks, as his scientists scramble to work out how likely it is that the new Africa-origin variant, also known as B.1.1.529, can evade vaccine protection.
Britain has now closed its borders to 10 countries in southern Africa, except for British nationals, who will need to do a 10-day hotel quarantine.
And any arrival from anywhere else in the world, regardless of vaccination status, will now need to take a PCR test by day two, and self-isolate until they get a negative result.
Within England, anyone who has had contact with a suspected case of Omicron will now have to self-isolate for 10 days, regardless of vaccination status.
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Climate Change.
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Morrison ‘plan’ is kidding about Australia reaching net zero
Five policy adjustments to reduce emissions faster would put our hand on the side of stronger global climate action in our national interest.
Ross Garnaut Contributor
Nov 21, 2021 – 12.41pm
The most damaging lies are those we tell ourselves. We are kidding ourselves if we believe that it does not matter on which side of the climate scales we place our weight. We matter at least as much now as we did in humanity’s finely balanced great struggles a century ago.
The side of the scales on which we leaned mattered a century ago, at Villers-Bretoneux in 1918, and then at the Paris peace conference. Paris in 1919 was the United States’ first national effort to lead the world to a better place. President Woodrow Wilson wanted a League of Nations to ensure that 1914-18 was the world’s last great war. He promised allies Japan and China that the league charter would include a commitment to racial equality. Australian prime minister Billy Hughes tipped the balance against the racial equality clause.
That intervention had fateful consequences. A young Japanese prince, future wartime Emperor Hirohito, was taught at the time by his international relations tutor that the Paris outcome meant that Japan would never be treated as an equal by the West without victory in war.
Wilson sought to placate Japan by giving it the German colonies in China. This sparked the May 4 Movement in China, bringing a young librarian at Peking University into politics for the first time: Mao Zedong. The Congress blocked US membership of the League of Nations.
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CSIRO study proves climate change driving Australia’s 800% boom in bushfires
By Mike Foley
November 26, 2021 — 9.00pm
Climate change is the dominant factor causing the increased size of bushfires in Australia’s forests, according to a landmark study that found the average annual area burned had grown by 800 per cent in the past 32 years.
The peer-reviewed research by the national science agency, CSIRO — published in the prestigious science journal, Nature — reveals evidence showing changes in weather due to global warming were the driving force behind the boom in Australia’s bushfires.
Lead author and CSIRO chief climate research scientist Pep Canadell said the study established the correlation between the Forest Fire Danger Index – which measures weather-related vegetation dryness, air temperature, wind speed and humidity – and the rise in area of forest burned since the 1930s.
“It’s so tight, it’s so strong that clearly when we have these big fire events, they’re run by the climate and the weather,” Dr Canadell 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/politics/federal/crypto-no-fad-hume-tells-rba-20211121-p59aof
Crypto no fad, Hume tells RBA
Ronald Mizen Economics correspondent
Nov 22, 2021 – 5.00am
Financial Services Minister Jane Hume has hit back at the Reserve Bank of Australia, saying cryptocurrencies are not a fad and that Australia risks losing out on major economic opportunities if governments and regulators are too fearful of embracing new technology.
“As an industry, and as a government, we need to acknowledge this is not a fad,” Senator Hume will tell The Australian Financial Review Super & Wealth Summit on Monday. “We should tread cautiously, but not fearfully.”
Her comments come after the RBA last week warned investors about the potential for a crash in “faddish” cryptocurrencies.
The bank’s head of payments, Tony Richards, said the value of cryptocurrencies, which have surged to $US2.6 trillion ($3.6 trillion), could collapse when central banks decide to assert control over their monetary systems.
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Homeowners will need to dig deep to keep a roof over their head
Economics correspondent
November 22, 2021 — 12.00am
Depending on which economists you are following, the official cash rate could be going up as soon as next year or 2024.
But while there is rampant debate among economists about exactly when the Reserve Bank is likely to make its next moves, and no one knows for certain exactly when a change will happen, there is widespread agreement that the next step is upwards.
Homeowners with a mortgage and those with plans to take one on in the next few years would be wise to take a bit of time to consider what this means for them.
As Reserve Bank governor Philip Lowe said last week, household debt and prices have been growing at double-digit rates while incomes are growing much more slowly. Earlier this year the Australian Prudential Regulation Authority stepped in with some changes to lending rules to limit riskier loans and Dr Lowe said more may be done if this trend continues.
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Health Issues.
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Sharp drop in illness death rates
11:00PM November 23, 2021
Fatality rates from major diseases including heart disease, cancer, infectious disease and injuries have declined markedly in recent years, a new report from the Australian Institute of Health and Welfare has found.
The report found that cancer contributes the biggest disease burden in the country including years of healthy life lost, and heart disease accounts for the biggest proportion of the fatal disease burden.
However, there was a huge 45 per cent decrease in the rates of fatal disease burden from heart disease between 2003 and 2018, while fatality rates from infectious diseases had dropped by 38 per cent. The incidence of infant and congenital conditions declined by 31 per cent and the disease burden from cancer reduced by 22 per cent.
More than 17,500 Australians died of coronary artery disease in 2018.
The disease burden caused by dementia and back pain has increased in recent years.
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https://www.smh.com.au/national/nsw/distressed-doctors-don-t-bend-so-they-break-20211125-p59c5v.html
Distressed doctors don’t bend, so they break
By Anonymous
November 26, 2021 — 5.00am
When news breaks that another doctor has died by suicide, the rest of us are devastated and heartbroken, but we are not surprised. Since 2017, there have been at least seven suicides by doctors-in-training working in NSW hospitals. And doctors talk. We all know which hospitals have had suicides over the past few years, and often know the doctors involved. Medicine is a small field with a dirty secret.
That secret needs to be aired. The medical fraternity needs to host a meaningful discussion about how to fix our training system to provide more support for doctors and improve their wellbeing. Workload is an issue but the crux of the problem is the lack of support from those in authority: the training colleges, the consultants, and the executives who run our hospitals.
The issues of doctors’ wellbeing has been identified but the focus has been on coping with abuse rather than ending abuse. Yoga sessions, meditation, mindfulness sessions, apps released to build your personal resilience - the problem is with you, you are weak, you are defective rather than the system.
Burnout surveys show rising rates of overwork, bullying and distress and these can miss those who simply do not have the time or reserve to complete them. If you survive the baptism of fire that is your first two years of hospital training, you then have to apply for specialty training programs. And so begins the peak time for mental distress and suicide.
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International Issues.
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‘Overheating’ NZ economy sets up currency collision
Vesna Poljak Markets editor
Nov 21, 2021 – 3.22pm
The Australian dollar is heading towards a parity test with New Zealand’s currency as the Reserve Bank of New Zealand readies to raise interest rates for a second time this year, widening the policy gap over the Reserve Bank of Australia.
The RBNZ will become the only advanced economy central bank to have managed to raise interest rates for a second time in 2021 if it proceeds with another rate increase on Wednesday, as markets fully expect it will.
The ASX will open with a 0.61 per cent loss on Monday after Wall Street and European shares were rattled by a fresh push for coronavirus restrictions in Austria which begin on Monday, as parts of central and western Europe stage protests against public health orders mandating vaccination.
Boeing shares fell 5.8 per cent on the Dow, while budget airline Wizz Air dropped 4.6 per cent and Aeroports de Paris 6 per cent on the European bourse in a reversal of the popular reopening trade.
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https://www.afr.com/world/north-america/aukus-causing-xi-heartburn-says-white-house-20211120-p59ajk
AUKUS causing Xi ‘heartburn’, says White House
Matthew Cranston United States correspondent
Updated Nov 21, 2021 – 4.48pm, first published at 11.49am
Washington | Australia’s AUKUS alliance with the US and Britain, amid a broader improvement in Washington’s relationship with its allies, causes “heartburn” for China’s leader Xi Jinping, according to the White House co-ordinator for the Indo-Pacific.
Kurt Campbell, the “Asia tsar” who sat by President Joe Biden’s side during his four-hour meeting on Monday (Tuesday AEDT) with Mr Xi, said the Chinese President was particularly rattled by the idea that the US was building “Cold War-like” alliances.
“I think it would be fair to say at the virtual meeting President Xi made very clear that a number of things that the United States is doing cause China some heartburn,” Mr Campbell told former national security adviser Stephen Hadley at an event organised by the United States Institute of Peace.
He said the creation this year of the AUKUS military capability deal with Australia and the UK, as well as the first in-person summit of the Quadrilateral Security Dialogue (Quad) in Washington, had not gone down well in Beijing.
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Why a border stand-off in the Himalayas is so important to Australia
Senior economics writer
November 17, 2021 — 4.30am
Few nations are more important to Australia than Asia’s twin giants, China and India. So, it’s surprising that a sharp deterioration in relations between the two during the past 18 months has received scant attention here.
Political ties between New Delhi and Beijing have long been plagued by entrenched friction points. The pair fought a short but bloody border war in 1962, which still casts a shadow.
The root cause of current Sino-Indian tensions is their ill-defined, disputed border that runs for thousands of kilometres along the Himalayas. A lack of formal demarcation means both sides have their own hazy interpretations of a de facto national boundary known as the Line of Actual Control or LAC.
For decades relations between the nuclear-armed neighbours have been roiled by confrontations and skirmishes along the LAC. But in June last year, the lingering friction flared into full-blown crisis when an extraordinary brawl erupted between Indian and Chinese troops patrolling at high altitude at the Galwan Valley near the disputed boundary in the western Himalayas.
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Fallout of China’s war over Taiwan ‘unthinkably large’
8:56PM November 21, 2021
Veteran strategist Hugh White has urged Australia’s political leaders to think carefully about their preparedness to join a war against China over Taiwan, warning such a conflict could prompt a nuclear confrontation with “unthinkably large” consequences.
In a new paper, the Emeritus Professor of Strategic Studies at the Australian National University says the US and China are locked in an escalating game of brinkmanship, hoping the other side will back off.
“This is how wars between great powers have often started in the past, when neither side wanted to fight,” he argues.
“So we in Australia would be unwise to join this game unless we are clear in our own minds whether we are bluffing or not.”
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China now likely to call America’s bluff over Taiwan
11:00PM November 21, 2021
The question no longer seems hypothetical. Last year the Prime Minister compared the dangers today to those of the late 1930s. This year Defence Minister Peter Dutton has repeatedly warned of the risk of war with China over Taiwan. Whether war breaks out is now, he has said, “a question for the Chinese”. If China attacks Taiwan, there seems little doubt – at least in Joe Biden’s mind – that America will go to war. If America goes to war, Dutton says he thinks it “inconceivable” that Australia would not follow. So it seems the decision is already made: if China attacks Taiwan, we will follow America to war with China.
One hopes our political leaders are taking this as seriously as they should. We are in an acute strategic crisis. They acknowledge that the risk of war between America and China over Taiwan is quite high, and they seem to understand that the implications for Australia are exceptionally grave. Why aren’t they doing more to try to reduce the risk?
The answer lies in a deeper understanding of the source of the current crisis, which lies much deeper than the Taiwan issue itself. The future of Taiwan, important though that is in itself, has become the focus of something much bigger – the strategic contest between America and China over which of them will be the primary strategic power in East Asia over the decades ahead. Last week’s virtual summit between presidents Xi Jinping and Biden did nothing to resolve this contest. Beijing wants to take control of Taiwan to assert its position as the leading power in East Asia, and America wants to assert its claims to that position by preventing Beijing from doing so. The one that backs down or loses over Taiwan will concede the contest for regional leadership.
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https://www.afr.com/world/north-america/biden-keeps-powell-as-fed-reserve-boss-20211123-p59b7j
Biden keeps Powell as Federal Reserve boss
Matthew Cranston United States correspondent
Updated Nov 23, 2021 – 3.57am, first published at 1.54am
Washington | President Joe Biden nominated Jerome Powell for a second four-year term as US Federal Reserve chairman and elevated governor Lael Brainard to vice chair, in a politically expedient move that also maintains continuity at the central bank as it deals with a 31-year high in inflation.
In announcing the nominations on Monday (Tuesday AEDT) President Biden said both Mr Powell and Dr Brainard had helped achieve a successful economic recovery from the pandemic and that he was confident they would control inflation.
Financial markets rose on the news; investors expect the Fed to raise its key interest rate target from near zero in June, according to pricing in futures markets. The 10-year bond yield jumped 5 basis points to 1.60 per cent near 11.30am in New York. Two-year bonds which give a better indicator of near term interest rates - jumped as much 8 basis points.
“I’m confident that chairman Powell and Dr Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before,” Mr Biden said.
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Wall Street billionaire warns US that trying to control China will backfire
By Andrew Ross Sorkin
November 23, 2021 — 6.52am
Ray Dalio made his name by predicting the financial crisis of 2008. He has built the world’s largest hedge fund, Bridgewater Associates, with some $US223 billion ($308 billion) under management. He has also become something of a public intellectual and life coach, advocating a particular style of management he describes as “radical transparency.”
In two weeks, his third book in five years, The Changing World Order, will be published. It is an attempt to better understand the current economic environment and the challenges that it presents by delving into centuries of economic ups and downs.
The book is a provocative read for those of us questioning where in the arc of history the American empire resides and what may happen to the economy next. There are few tomes that coherently map such broad economic histories as well as Dalio’s. Perhaps more unusually, Dalio has managed to identify metrics from that history that can be applied to understand today. He examined four empires: the Dutch, British, American and Chinese.
He writes that each followed almost the exact same path:
“Rising education leads to increased innovation and technology, which leads to an increased share of world trade and military strength, stronger economic output, the building of the world’s leading financial centre, and, with a lag, the establishment of the currency as a reserve currency. And you can see how for an extended period most of these factors stayed strong together and then declined in a similar order. The common reserve currency, just like the world’s common language, tends to stick around after an empire has begun its decline because the habit of usage lasts longer than the strengths that made it so commonly used.”
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US distracted while Moscow and Beijing cosy up
11:00PM November 22, 2021
The tense situation in US relations with Russia over the massing of Russian troops on the Ukrainian border and with China over an increasingly militarily threatened Taiwan confronts a domestically distracted America with the prospect of conflicts on two separate fronts.
Throughout most of the Cold War Washington had to cope with one serious threat, from the Soviet Union. Today, Washington is opposed by an increasingly aggressive China as well as a Russia that has rebuilt its military and is seeking to reclaim territory of the former Soviet Union.
The military relationship between China and Russia is effectively a de facto alliance. Moscow and Beijing increasingly are co-ordinating their respective positions: both conduct joint military exercises, test long-range flights with military aircraft and conduct maritime operations together.
This strategic partnership has deepened to provide for advanced Russian military equipment sales to China, including sophisticated jet fighters, relatively quiet conventional submarines, advanced air defence systems and construction in China of ballistic missile attack early-warning radars.
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Germany’s Olaf Scholz unveils coalition, calling time on Merkel era
Andrew McCathie
Updated Nov 25, 2021 – 3.27am, first published at Nov 24, 2021 – 10.24pm
Berlin | Germany’s new government has unveiled its agenda for the next four years, as a surge in coronavirus cases posed the first major test of the cohesion of the Social Democrat-led three-party coalition and its political authority.
The coalition deal announced on Wednesday (Thursday AEDT), adheres to Germany’s tradition of strict fiscal discipline and pushed climate protection to the Berlin political centre stage.
It paves the way for Finance Minister Olaf Scholz to be sworn in next month as the nation’s fourth Social Democratic Party (SPD) chancellor since the Second World War, ending Angela Merkel’s conservative 16-year rule of Europe’s biggest economy.
The new government was promising “the greatest modernisation” in the nation’s history and a “decade of investment”, said Mr Scholz, a political pragmatist and trained lawyer. “We want to dare to make more progress.”
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https://www.smh.com.au/business/the-economy/monetary-doves-rule-the-fed-roost-20211124-p59bk5.html
The Fed is being ruled by doves as Biden looks to avoid repeating past mistakes
By Paul Krugman
November 25, 2021 — 12.01am
Who should lead the Federal Reserve? President Joe Biden faced a difficult choice.
Should he reappoint Jay Powell, a monetary dove who believes that the current inflation spike is probably temporary but might revise his views in the light of evidence? Or should he nominate Lael Brainard, a monetary dove who believes that the current inflation spike is probably temporary but might revise her views in the light of evidence?
In the end, he went with the monetary dove.
OK, Powell and Brainard aren’t identical. Powell is or was a Republican, Brainard is a Democrat; Brainard took a harder line on financial regulation after the 2008 crisis, which is why progressives like Elizabeth Warren opposed Powell’s reappointment.
But when it comes to the Fed’s core responsibility, setting monetary policy, there was never any doubt that the next chair would be someone reluctant to raise interest rates and eager to keep job growth high.
How did that happen? Traditionally, central bankers — people who run institutions like the Fed that control national money supplies — pride themselves on their sternness, their willingness to impose economic hardship. William McChesney Martin, who headed the Fed in the 1950s, famously described its job as being to take away the punch bowl just as the party really gets going — that is, to raise interest rates as soon as there was any indication of rising inflation.
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The bad oil: Biden’s panicky move is a failure
By Ambrose Evans-Pritchard
November 25, 2021 — 11.02am
It is hard to keep giving Joe Biden the benefit of the doubt. The emergency release of oil stocks from the US strategic petroleum reserve this week violates every rule of statecraft and market management.
To borrow from Napoleon, if you say you are going to take Vienna, take Vienna. The White House has just succeeded in driving up the price of crude oil in a bungled attempt to do the opposite. A release of 50 million barrels - with double-counting - is barely 12 hours of global consumption and too small to swing a giant complex market.
Washington now has a bigger problem on its hands. Oil market bulls are stirring because they have seen Biden play and waste a useful card. The deterrent value of the petroleum reserve has been reduced.
Ole Hansen, from Saxo Bank, said the reserve is nearing the 90-day floor needed to cover severe supply shocks. “The US has been selling decent chunks for weeks. The market knows they’ll struggle to repeat this and they now look naked,” he said.
The petroleum reserve was created in 1975 after the OPEC oil embargo to cope with “disruptions of supply” but there is no such disruption today. The US Energy Information Agency itself says the market is in healthy balance.
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Forget the King Canute view of inflation. It’s time for a better approach.
By Mervyn King
November 25, 2021 — 10.57am
Central banks have been caught out by the sudden upturn in inflation. In the United States, CPI inflation is now 6.2 per cent. The Federal Reserve’s preferred measure of inflation, core personal consumption expenditures, has risen to its highest level in 30 years. And inflation is well above target in many industrialised countries.
We are told that this burst of inflation is transitory. And for several years, central banks have been giving “forward guidance” that interest rates will remain close to or below zero for the indefinite future. This policy stance relies heavily on the assumptions that expectations drive inflation, and central banks drive expectations. In other words, longer-term inflation is determined by the official inflation target.
I recall that in the early days of the Bank of England’s Monetary Policy Committee, we pored over forecasts for inflation. No matter the path of interest rates that we simulated, inflation always returned to target. Why? Because in the models used to produce the forecasts, the only determinant of inflation in the medium term was the official target.
This is the King Canute theory of inflation. A thousand years ago, according to legend, King Canute of England set his throne on the shore and commanded the incoming tide to halt. The tide paid no attention. It continued to rise and dashed over his feet and legs, driven by the laws of nature.
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The US and China are already at war. But which kind?
The fact that war can be fought in so many ways in the 21st century might reduce the need for actual military conflict.
Gillian Tett Contributor
Nov 25, 2021 – 1.20pm
Early in November, the esteemed Harvard professor Graham Allison went down to Washington’s Senate to deliver a Greek history lesson. The topic was the Athenian historian Thucydides who, of course, penned the account of war between Sparta and Athens in the fifth century BC.
This kind of conflict used to only excite students of the classics. But in 2017 Allison wrote a tome called Destined for War: Can America and China escape Thucydides’s Trap?, and it became a surprise bestseller.
Allison argued, as Thucydides himself first noted, that whenever a ruling power is challenged by a fast-rising rival, it traps them in a pattern that can easily spark war. The dynamic between Sparta and Athens was one example of that.
Now US senators are wondering whether history is about to be repeated.
Will sabre-rattling around Taiwan or recent revelations in the Financial Times about hypersonic Chinese missile tests help create the “trap” again?
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https://www.afr.com/policy/foreign-affairs/the-us-and-china-are-already-at-war-but-which-kind-20211125-p59bzm
The US and China are already at war. But which kind?
The fact that war can be fought in so many ways in the 21st century might reduce the need for actual military conflict.
Gillian Tett Contributor
Nov 25, 2021 – 1.20pm
Early in November, the esteemed Harvard professor Graham Allison went down to Washington’s Senate to deliver a Greek history lesson. The topic was the Athenian historian Thucydides who, of course, penned the account of war between Sparta and Athens in the fifth century BC.
This kind of conflict used to only excite students of the classics. But in 2017 Allison wrote a tome called Destined for War: Can America and China escape Thucydides’s Trap?, and it became a surprise bestseller.
Allison argued, as Thucydides himself first noted, that whenever a ruling power is challenged by a fast-rising rival, it traps them in a pattern that can easily spark war. The dynamic between Sparta and Athens was one example of that.
Now US senators are wondering whether history is about to be repeated.
Will sabre-rattling around Taiwan or recent revelations in the Financial Times about hypersonic Chinese missile tests help create the “trap” again?
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Solomon Islands PM blames ‘foreign powers’ for unrest after Australia sends troops
By Rod McGuirk
November 26, 2021 — 8.55am
The prime minister of the Solomon Islands blamed foreign powers after rioting in the Pacific nation prompted Australia to send security assistance.
PM Manasseh Sogavare, in comments to the ABC, rejected criticism of the Pacific nation’s 2019 decision to end diplomatic relations with Taiwan in favour of Beijing, a move seen contributing to the national crisis.
The crisis “is influenced and encouraged by other powers,” he said.
“These very countries that are now influencing Malaita [the main island of the nation] are the countries that don’t want ties with the People’s Republic of China,” Sogavare told the ABC.
“And they are discouraging Solomon Islands to enter into diplomatic relations and to comply with international law...”
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The inflation miscalculation making life difficult for Joe Biden
By Jim Tankersley
November 26, 2021 — 8.26am
President Joe Biden’s top economists have worried from the beginning of his administration that rising inflation could hamstring the US economy’s recovery from recession, along with his presidency.
Early this year, Biden’s advisers made a forecasting error that helped turn their fears into reality.
US administration officials overestimated how quickly Americans would start spending money in restaurants and theme parks, and they underestimated how many people wanted to order new cars and couches.
Biden’s advisers, along with economists and some scientists, believed that widespread availability of coronavirus vaccinations would speed the return to pre-pandemic life, one in which people dined out and filled hotel rooms for conferences, weddings and other in-person events.
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Why the world is short on computer chips - and why it matters
By Debby Wu, Sohee Kim and Ian King
November 26, 2021 — 5.00am
Carmakers slashed production. PlayStations got harder to find in stores. Broadband providers faced months-long delays for internet routers. All of these phenomena and more had a similar cause: an abrupt and cascading shortage of semiconductors.
Also known as integrated circuits or more commonly just chips, they may be the tiniest yet most exacting product ever manufactured on a global scale.
The combination of cost and difficulty in producing them has fostered a worldwide reliance on two Asian powerhouses — Taiwan Semiconductor Manufacturing Co. (TSMC) and South Korea’s Samsung Electronics.
That dependence was brought into stark relief when the COVID-19 pandemic and rising US-China tensions made chips scarce. Hundreds of billions of dollars will be spent in the coming years in a global race to expand production, with geopolitical as well as economic implications.
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‘I feel very dark’: All is not well in Normal America
Gratitude is in short supply this Thanksgiving. Instead, the overwhelming sentiments are grumpiness and pessimism.
November 26, 2021
Normal, Illinois: Illinois cheesemaker Ken Ropp has a lot to be grateful for this Thanksgiving holiday.
When the coronavirus swept across the United States last March, Ropp’s orders collapsed as restaurants and wineries shut their doors. He feared his family dairy farm, which has passed through six generations, may not survive the downturn.
“I remember telling Dad as we were milking cows, ‘I don’t think we’re going to be able to make it through this’,” Ropp says.
A few weeks later he received a call from one of the state’s largest food supply companies.
The federal Department of Agriculture had just announced a plan to buy produce from local farmers and distribute it to needy Americans in emergency food hampers. Ropp was invited to supply 40,000 blocks of cheese each fortnight, and he leapt at the offer.
Instead of going under, Ropp was now churning out cheese at an unprecedented rate. Orders soared threefold and he hired extra staff to keep up with demand.
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I look forward to comments on all this!
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David.
