January 20 2022 Edition
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In the US President Biden has reached one year in office and I think it would be fair to say has agenda is unravelling badly. This is increasing the risks posed by Russia and China and of failure of many needed domestic activities like fighting COVID19 effectively.
In the UK Borins seems to be in considerable trouble and in Europe we have COVID running amok!
In OZ it
looks much like the PM has lost the public’s confidence in managing COVID as
per the most recent poll. It seems to me to be pretty messy right now in terms
of hospitalisations and deaths sadly and the impact on the economy is starting
to look very real and large.Late in the week we have some early signs that we might be seeing the Omicron peak in NSW.
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Major Issues.
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https://www.afr.com/property/residential/housing-crash-will-last-for-years-20220107-p59mjt
Housing crash, when it comes, will last for years
Nila Sweeney Reporter
Jan 9, 2022 – 12.48pm
After notching the fastest annual price growth in decades last year, Australia’s biggest housing markets now face the prospect of falling prices that could last for years, if past downturns are any indication.
With many economists and property experts predicting house prices to peak later this year, there are worries the downturn could be more severe and longer this time around.
“Once a market peaks, the typical trend is that values will experience a period of decline. But it’s impossible to know the timing, duration or magnitude of the housing downturn as it depends on so many factors, especially at the moment with so much uncertainty,” said Tim Lawless, CoreLogic research director.
“It’s likely that interest rates will normalise over several years rather than a rapid return to average levels which should help to cushion the size of any housing downturn, but if credit policies become overly restrictive, it could amplify the downside.
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Australia commits to $3.5 billion tank purchase from the US
January 10, 2022 — 5.00am
Australia has locked in its purchase of more than 120 tanks and other armoured vehicles from the United States, at a cost of $3.5 billion, as part of a major upgrade of the army’s fleet.
The commitment to buy 75 M1A2 main battle tanks indicates the government is committed to an advanced fleet of armoured vehicles despite the focus in recent years being on other major acquisitions such as submarines, jet fighters and long-range missiles amid the rise of China.
Defence Minister Peter Dutton will confirm the upgrade on Monday after the US government approved the potential purchase last year.
The tanks will replace the army’s 59 abrams M1A1s, which were bought in 2007 but have not seen combat.
Australia will also commit to 29 assault breacher vehicles, which are used to clear mines and explosives, as well as 17 joint assault bridge vehicles and an additional six armoured recovery vehicles.
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Deflation is dead, but inflation is very much alive
Leaving interest rates at ultra-low levels risks guarding against the wrong danger as global labour dynamics begin to shift.
Warren Hogan Columnist
Jan 10, 2022 – 6.20pm
Sam Wylie wrote on these pages on Monday that the Reserve Bank should resolve to keep the cash rate on hold at 0.10 per cent right through 2022.
Wylie’s argument is based on two propositions: that inflation expectations need to “re-anchor well above their pre-COVID-19 levels”, and that the long-standing fight against debt deflation will be lost if we raise rates too early.
The RBA’s 2 per cent to 3 per cent inflation target attempts to anchor inflation expectations so that when inflation inevitably moves away from the target, the expectations only drift a little and readily come back again once the tide turns.
The whole point of an anchor is that it operates over the medium term; it is not a target.
There is little evidence to suggest that inflation expectations “de-anchored” at any stage in the past decade. Sure, inflation expectations fell in line with actual inflation ahead of the pandemic. But that doesn’t mean they de-anchored.
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Markets have made a turbulent start to 2022 - there may be worse to come
Senior business columnist
It has been an inauspicious start to 2022 for financial markets, with a sharp sell-off in sharemarkets and an equally abrupt spike in bond yields creating an ominous tone for markets that have generally had a very, very good pandemic.
The explanation for last week’s sudden turbulence is straightforward and lies, as it often does, within the US Federal Reserve Board.
It was the release last week of the minutes of the Fed’s December Open Market Committee meeting that shook the markets, sending equities tumbling and bond yields surging to pre-pandemic highs.
It wasn’t so much the confirmation that most of the members of the committee (which sets monetary policy for the world’s most powerful and influential central bank) anticipate three 25 basis point rate rises in the federal funds rate this year. That’s in line with market expectations.
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We must make more of renewed UK alliance
11:00PM January 12, 2022
It is a truth universally acknowledged that two nations in possession of shared values and convergent interests must be in want of closer security co-operation. Australia and the United Kingdom are renewing their partnership for a competitive era, especially the authoritarian assault by China and Russia on a liberal international order.
It is easy to caricature this engagement as a passing fiction of Anglosphere nostalgia and the political closeness of current leaders in Canberra and London.
So the challenge for both governments, as they prepare for high-level talks anticipated next week, is to affirm their seriousness by plotting for the long term. This means setting a practical agenda that balances ambition and realism, following through on September’s announcement of the AUKUS technology agreement, which also crucially involved the US.
Early work is needed on an infrastructure to future-proof Australia-UK relations – across government agencies and parliamentary aisles – against shifting political fancies on either side. It will take decades for geopolitical threats and capability responses to fully play out, notably Australia’s nuclear-powered submarines to be built under AUKUS.
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Macquarie Group knocks off Westpac to be Australia’s third largest bank
6:30PM January 12, 2022
Macquarie Group has taken the mantle as the nation’s third-largest bank, after its market capitalisation surpassed that of embattled Westpac.
Shares in the asset management giant and investment bank, dubbed the Millionaires’ Factory, have rallied 1.5 per cent to $208.39 so far this year. In 2021, its performance was underpinned by a more than doubling in first-half profit, and Macquarie also raised $2.8bn to fund acquisitions and other growth opportunities.
Macquarie’s market capitalisation – which now stands just shy of $80bn – overtook that of ANZ in November and more recently it has pipped Westpac.
At Wednesday’s closing price, ANZ’s market valuation was $78.9bn, while Westpac’s stood at $79.5bn. National Australia Bank has a market capitalisation of $95.4bn, while market leader Commonwealth Bank is well out in front at $173.3bn.
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ETFs industry set to offer new ‘theme’ based products in the year ahead
10:00PM January 13, 2022
The flourishing exchange traded fund sector – beloved by conservative investors and their advisers – is going to change in 2022 with inflows based on copying major indices now regularly flanked by riskier themed products designed to deliver strong growth.
Analysts at investment bank Citi have done a deep dive on the global ETF market – where funds either follow existing indices such as the S&P 500 or increasingly create products off the back of ‘themes’ such as electric cars or crypto activity. And, as the bank’s 2022 outlook report explains, “most widely-followed indices have been replicated by ETFs with the implications that issuers have been motivated to expand towards more novel product approaches”.
The Australian market has clearly reflected the overseas experience as a range of new thematic ETFs join traditional products based on established indices such as the ASX 200. Among the most successful of newer style theme products last year were ETFs linked with environmental investing.
In contrast some of the early ETF experiments in crypto-themed investments have lost money in tandem with the recent drop in cryptocurrency values.
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https://www.afr.com/world/asia/china-imports-a-danger-sign-for-australian-exporters-20220114-p59oc0
China’s trade data a danger sign for Australian exporters
Michael Smith North Asia correspondent
Jan 14, 2022 – 4.06pm
Tokyo/Beijing | China’s imports from Australia jumped 40 per cent last year to $US164.8 billion ($226.4 billion) because of rising commodity prices, but are expected to slow this year.
The increasing value of Australia’s exports to China was largely driven by rising commodity prices, offsetting Beijing’s restrictions on wine, beef, barley, coal, seafood and other products as part of an unofficial campaign of economic coercion.
The China trade data released on Friday also showed sharp increases in its imports from other countries, including the United States and Canada.
It shows exports and imports grew more slowly in December as the world’s second-largest economy showed signs of slowing, although exports were just above expectations.
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Nothing off limits: Scott Morrison on his bruising years as Prime Minister
By Deborah Snow
January 15, 2022
On a Friday afternoon eight days before Christmas, I’m ushered into Scott Morrison’s private office at Kirribilli House, the official Sydney residence, to talk about the three tumultuous years of his prime ministership.
Morrison is seated behind a large desk, suit jacket off. He’s winding down after a hot and humid morning on the hustings in western Sydney where every vote will count come the looming election.
Through the window, across rolling lawns, sunlight glints off a shimmering harbour.
The interview opportunity has come with a promise: nothing will be off-limits.
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https://www.smh.com.au/money/borrowing/four-financial-priorities-for-2022-20220113-p59o0l.html
Four financial priorities for 2022
Money contributor
January 15, 2022 — 10.01pm
As we feel our way through the beginning of what’s shaping up as another difficult coronavirus year, there are some things you can do to make it a little safer… at least financially.
Here are some top priorities to consider when you divide up your take-home pay to help you to get ahead in 2022. Defensive money moves are now, more than ever, crucial.
Build an emergency fund
If there is one thing we have learned through the pandemic is that in life, anything can happen.
An emergency cash stash helps put you out of financial harm’s way. Ideally, it should be equal to six months’ salary, to give you half a year to recover if the income on which you live dries up through job loss, accident or illness. That’s a lot of money to accumulate, so just focus on building your cash buffer slowly over time.
If you have a home loan, park your emergency cash pile in a mortgage offset account, so that it saves you significant loan interest too.
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COVID 19 Information
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Cases to escalate as worker isolation rules relaxed
Tess Bennett Work & Careers reporter
Jan 9, 2022 – 3.55pm
The decision to allow asymptomatic close contacts to leave isolation and return to work in critical sectors such as food, logistics and manufacturing will likely increase case numbers, health experts said.
The NSW and Queensland governments scrapped mandatory isolation rules on Sunday that previously required close contacts of a positive case to stay home for seven days.
The new rules, effective immediately, are designed to ease the critical workforce shortages which have been particularly acute for food and grocery manufacturers, warehouses and truck drivers.
“We want to ensure our hospitals are staffed, food continues to be delivered to our supermarkets, and we can still fill our cars at the petrol station,” Queensland Premier Annastacia Palaszczuk said.
Leading epidemiologist Professor Tony Blakely said the changes in rules made sense at a time when social disruption was severe and the aim of public policy was not to eliminate or suppress the virus, but to mitigate its impact on the healthcare system.
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https://www.afr.com/world/africa/south-africa-offers-clues-to-life-after-omicron-20220109-p59mui
South Africa offers clues to life after omicron
Joseph Cotterill
Jan 9, 2022 – 9.16am
Just weeks ago, South Africa was the focus of the world’s anxieties over omicron as infections rocketed in one of the first countries to detect the highly contagious coronavirus variant.
But with the variant now prevalent worldwide, South Africa is providing clues to life after omicron. President Cyril Ramaphosa’s government has said the country’s fourth COVID-19 wave has peaked. The total excess deaths attributed to omicron are about 10,000, compared with about 110,000 excess deaths during the previous, delta-driven wave.
Even though three-quarters of all South Africans are still not double jabbed, vaccinations, immunity after previous infections and signs that omicron is a milder disease appear to have kept the pressure off hospitals.
“The most important issue is that there was a clear decoupling between community spread, which has been very rapid, and the level of hospital admissions,” said Richard Friedland, chief executive of Netcare, South Africa’s biggest provider of private healthcare. “We have not suspended elective surgeries, and there is no pressure on beds ... We have had no capacity constraints at all in the fourth wave.”
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Welcome to the wild west, where COVID chaos reigns
Columnist
January 10, 2022 — 5.00am
A few days ago a friend sent me a tweet dividing the world into two camps: those who respond to every bit of news about the latest variant of COVID with a shrug of the shoulders – “we’ll all get it, so we can’t worry about it” – and those who react with caution, determined to avoid illness.
The chart featured in the tweet, my friend suggested, was not quite right. For him, it was less a matter of two camps and more the daily cycle of his own views.
Increasingly, I find this is the position of most people. In the morning, say, when the stats come out and our hospitals seem threatened, we believe in doing everything that can be done to slow the virus. By late afternoon when pleasant memories of drinks with friends call out to us, we begin to wonder out loud what choice there is, other than getting on with our lives?
This, it seems to me, is the dominant fact of this particular period of the pandemic: widespread confusion. Society feels a little like the wild west. We come up with our own rules. Those rules chop and change depending not just on circumstances, but also on more fickle factors, like what mood we happen to be in.
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Coronavirus: Staff crisis crashes nation’s food supply
11:57PM January 9, 2022
Major retailers including Coles and Woolworths are reporting staff shortages of up to 35 per cent at their distribution centres due to state-imposed Covid-19 isolation requirements forcing the nation into a deepening supply chain crisis for essential goods including food and pharmaceuticals.
The Australian understands several of the nation’s top retail chief executives have reported to Treasury that their furloughed workforces had reached critical levels, with more than a third of workers off sick with Covid-19 or classified as close contacts.
Retailers and the shop workers’ union on Sunday called on workers to be allowed out of isolation the moment they test negative for the virus, as the nation’s ports warn the economy must sort out the supply chain crisis in days instead of weeks.
It comes as Scott Morrison on Sunday called a meeting of cabinet’s national security committee to address the crisis, as supermarket and retail outlets moved to apologise to customers for shortages on shelves.
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Lessons on how to live with COVID-19 are still to be learnt
Countries with unchecked spread risk storing up uncertain future health burdens, including long COVID-19, nurturing new variants and being red-listed as no-go areas.
Anjana Ahuja
Jan 10, 2022 – 4.00pm
Saturday marks exactly two years since I first wrote about an unexplained viral pneumonia affecting 59 people in a Chinese city I had never heard of.
The apparent link to a live animal market, echoing the origins of SARS-1, gave me a vague sense of foreboding but no idea of what was to come. The World Health Organisation has since recorded 300 million infections and 5.46 million deaths.
Two years on, the beginning of this year is redolent of winters past: UK hospitals are filled with COVID-19 patients; coronavirus briefings, in which advisers Patrick Vallance and Chris Whitty play stony-faced Cassandras to Boris Johnson’s Pangloss, are back on British screens; the reopening of schools amid rampant spread feels as much on a knife-edge this year as it did last January.
Still, this is 2022, not 2020 or 2021. Vaccines and antiviral medicines have changed the pandemic game in high-income countries. It is now largely the unvaccinated occupying intensive care beds. Science has delivered what has been asked of it.
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Sadly, the unjabbed have become the new deplorables
There are dangers in creating a stigmatised minority out of vaccine refusers in the name of medical virtue signalling.
Tanveer Ahmed Contributor
Jan 10, 2022 – 2.43pm
From French President Emmanuel Macron announcing that he wished to “annoy” those unvaccinated against COVID-19 to local doctors wanting to exclude them from the public health system, the war against the unvaxxed is most pronounced on the Left.
This is despite them being disproportionately from low socio-economic groups, including newly arrived immigrants.
When revered figures of the Australian Labor Party such as Bob Carr suggest that the unvaccinated should be excluded from receiving public healthcare, he shows a lack of compassion for the same people progressives have traditionally hoped to represent.
As a student of American history, if Carr applied his analysis of the unvaccinated being “simpletons who believe rubbish on the web” to America, he shouldn’t be surprised to see that this disproportionately targets some ethnic minorities with lower educational achievements.
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Europe’s healthcare systems creak under omicron’s rapid spread
Clara-Laeila Laudette and Alistair Smout
Jan 10, 2022 – 6.16pm
Madrid/London | Europe’s healthcare systems are being strained once again by the rapid spread of the omicron variant of the coronavirus over the holiday period, with large numbers of key staff ill or self-isolating and experts predicting the peak of infections is yet to come.
Despite early studies showing a lower risk of severe disease or hospitalisation from omicron compared to the previously dominant delta variant, healthcare networks across Spain, Britain, Italy and beyond have found themselves in increasingly desperate circumstances.
On Friday, Britain began deploying military personnel to support hospitals experiencing staff shortages and extreme pressures due to record COVID-19 cases in the country.
“Omicron means more patients to treat and fewer staff to treat them,” National Health Service (NHS) Medical Director Professor Stephen Powis said in a statement.
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Top doctors, academics living in an ‘alternative reality’
Prominent medical experts are taking an unnecessarily fearful approach to the omicron virus, the former health adviser Nick Coatsworth says.
Aaron Patrick Senior correspondent
Jan 12, 2022 – 5.00am
A year ago, when he was Australia’s deputy chief medical officer, Nick Coatsworth told colleagues to watch out for a group of doctors and academics who, he felt, were so concerned by SARS-CoV-2 they would advocate for excessive measures against the virus.
Coatsworth, an infectious diseases physician, is still critical of the group. But on long-term leave from the ACT health system, he has no direct influence over policy any more, while his opponents have formed OzSage, a lobby group that pushes politicians and health bureaucrats towards the strongest actions against the COVID-19 pandemic.
On January 1, in a newspaper opinion article, Coatsworth predicted the group would advocate for control of the disease “above all else” during the federal election campaign to tilt health policy.
The following day, former Australian Medical Association president Kerryn Phelps emailed fellow OzSage members.
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KFC is running out of chicken as omicron hits Inghams
Lucas Baird Reporter
Updated Jan 11, 2022 – 6.03pm, first published at 9.49am
Shoppers are facing shortages of pre-breaded schnitzel slices, chicken nuggets and Kievs on store shelves and KFC restaurant trays thanks to supply bottlenecks at major poultry supplier Inghams Group, sparked by the latest wave of COVID-19 cases.
Inghams said on Tuesday it had suspended deliveries of these poultry products amid critical staff shortages and supply chain disruptions caused by the soaring rate of COVID-19 cases and enforced isolations on the east coast.
The suspensions will affect fast food outlets that depend on Inghams supplies. Collins Foods, which operates 240 franchised KFC outlets nationwide, is understood to be considering whether it needs to update the market as Inghams is a major supplier of its chicken products.
“KFC is currently experiencing intermittent supply chain disruptions nationally due to COVID-19 related absenteeism at our chicken suppliers,” a spokesman for the chain said.
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Half of Europe on track to catch Omicron, world economy at risk
AFP
January 12, 2022
More than half of people in Europe will likely catch Omicron by March, the World Health Organization said Tuesday, as the World Bank warned the contagious variant could hamper global economic recovery.
Millions in China were locked down again, exactly two years after Beijing reported the first death from what was later confirmed to be coronavirus.
But the WHO on Tuesday warned that repeating booster doses of the original Covid jabs was not a viable strategy against emerging variants.
"A vaccination strategy based on repeated booster doses of the original vaccine composition is unlikely to be appropriate or sustainable," a WHO vaccine advisory group said.
Europe is at the epicentre of alarming new outbreaks and the WHO said Tuesday Omicron could infect half of all people in the region at current rates.
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Coronavirus: Losing RAT race was totally avoidable, physician Ian Norton says
January 12, 2022
The fallout from the catastrophic shortage of rapid antigen tests reaches far beyond frustrated consumers trawling empty pharmacy shelves to find out whether that scratchy throat is Covid-19.
In the space of a few days, the nation has pivoted from the “gold standard” PCR to the “good enough” RAT – before any viable system was put in place to record results or act on them.
And before there were remotely enough RAT kits available to become the national testing workhorse.
And it was all entirely preventable.
For one of the emergency health chiefs now working to help the industries most affected – the distribution centres and supply chains, where desperate workers struggle to prove they have tested negative so they can return to their jobs – it didn’t have to be this way.
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Emergency departments are the overwhelmed frontline of the pandemic
By Anonymous
January 13, 2022 — 5.00am
NSW emergency departments are struggling to cope with surging patient numbers and staff shortages and they need assistance now. I am a NSW doctor, close to those who work in emergency, and over the past three weeks messages from friends have captured the deteriorating situation in NSW hospitals.
On December 22, a hurried text from one friend was emblematic of the pressure on staffing levels: “One nurse, one doctor infected, several staff in isolation, four to five positive patients in ED ... Only one available space to see patients. All just trying to stay safe ... worried about being sent into iso more than getting COVID.”
By January 10, patient numbers were clearly soaring: “Horrific today. It’s all COVID-19. Too many patients to manage. Some are very ill. Most are SOB [short of breath] &/or [have] chest pain.”
In just three weeks, in one suburban emergency department, presentations have increased by 10 to 20 per cent on weekdays and by 40-plus per cent on holidays and weekends. There were 2242 people in NSW hospitals with COVID-19 on Wednesday, but that number does not count the people who were assessed and discharged without admission, so it does not give a true picture of the workload in emergency.
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Emojis not good enough: We need a real inquiry into COVID policies
By Shane Wright
January 14, 2022 — 11.30am
February 1 marks two years since Scott Morrison announced the Australian border was effectively being closed to Chinese nationals or non-citizens who happened to have spent time in China.
Promising this “temporary measure” would be reviewed in a fortnight’s time, the PM also revealed Australia’s official travel advice for China had changed to “do not travel”.
While there were fears over the spread of coronavirus, Morrison was keen to assure all that everything was under control. “There is no basis for alarm,” he said.
It feels a lifetime ago. For those who have lost family or friends either to the pandemic or to the mental toll of lockdowns, it must be even worse.
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https://www.smh.com.au/national/how-scott-morrison-lost-the-rat-race-20220113-p59nwh.html
How Scott Morrison lost the RAT race
Chief political correspondent
January 14, 2022 — 5.00am
The warning to Scott Morrison about a crisis in virus testing was made very clear last year after the Prime Minister told Australians to prepare for a world where they would emerge from lockdowns and live with the coronavirus.
The warning was so loud it was almost impossible to ignore. Almost. Now, only a few months later, voters can see the way Morrison has lost the race to bring in huge supplies of rapid antigen tests when people needed them most.
The government’s twin talents, arrogance and complacency, have been at work again in an astonishing repeat of the slow supply of vaccines last year.
Yet Morrison is not the only one who bears responsibility for the RAT shortage. There was nothing to stop premiers and chief ministers ordering more kits sooner to ease the load on state and territory testing centres.
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Long COVID: Hit to immune system lingers for months after infection
By Lucy Carroll
January 14, 2022 — 3.00am
Unvaccinated people are at much higher risk of experiencing the debilitating effects of long COVID, with a major study revealing the hit to the immune system lingers months after infection even with mild illness.
Researchers from St Vincent’s Hospital and University of NSW’s Kirby Institute have for the first time found elevated inflammation levels in unvaccinated people who caught the virus during the state’s first wave, indicating abnormalities in the immune system persist at least eight months after recovery.
“Symptoms of long COVID, from fatigue to headache, are a real phenomenon,” Professor Gail Matthews said, the head of infectious diseases at St Vincent’s and one of the study’s senior authors. “What has really been lacking - until now - is hard biological evidence of something being wrong.”
“Many long COVID sufferers have felt disbelieved. And, so far, there has been a lack of good evidence to dispute that.”
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know more about Omicron’s impact on long in COVID in the next three months.”
We’re witnessing one of the worst public policy failures in Australia's history
Dr Stanford is an economist and director at Australia Institute and an honorary professor of political economy at the University of Sydney
14th January 2022
Australians are getting a stark reminder about how value is actually created in an economy, and how supply chains truly work.
Ask chief executives where value comes from and they will credit their own smart decisions that inflate shareholder wealth. Ask logistics experts how supply chains work and they will wax eloquent about ports, terminals and trucks.
Politicians, meanwhile, highlight nebulous intangibles like “investor confidence” – enhanced, presumably, by their own steady hands on the tiller.
The reality of value-added production and supply is much more human than all of this. It is people who are the driving force behind production, distribution and supply.
Labour – human beings getting out of bed and going to work, using their brains and brawn to produce actual goods and services – is the only thing that adds value to the “free gifts” we harvest from nature.
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https://www.ausdoc.com.au/opinion/scott-morrisons-response-omicron-spectacular-stuffup
Scott Morrison's response to Omicron is a spectacular stuff-up
He's taken Australia on a bus tour from hell
Ms Grattan is a Professorial Fellow at the University of Canberra and has been a member of the Canberra press gallery for more than 40 years.
14th January 2022
Australia’s journey through Omicron is like the bus tour from hell. Steering awry, seat belts forgotten or not working, and the driver’s patter wearing thin with stressed passengers.
Eventually, we’ll see the back of the boggy ground on this outback track — but in worse shape and at higher cost than the Morrison Government was suggesting only weeks ago.
“Omicron is a gear change, and we have to push through,” Prime Minister Scott Morrison said on Monday.
“You have two choices here: you can push through or you can lock down. We’re for pushing through.”
Surveying the present shambles, you’d have to conclude the gearbox is shot.
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https://www.afr.com/politics/federal/rapid-antigen-tests-finally-begin-to-arrive-20220114-p59oa7
Rapid antigen tests finally begin to arrive
Hannah Wootton Reporter
Jan 14, 2022 – 5.14pm
Rapid antigen tests will be delivered to Victoria on Saturday and are due to land in NSW on Sunday as government supplier AM Diagnostics unloads flights packed with tests daily.
Free RATs were also offered at a state testing site in the Australian Capital Territory for the first time on Friday and South Australia is opening three RAT collection sites in the state’s regions within days.
Queensland Premier Annastacia Palaszczuk is holding a doorstop and providing a COVID-19 update.
The positive news comes as a crippling lack of rapid tests stymies business’ efforts to keep running through the omicron wave, with causes including hold-ups to their importation by Chinese customs officials, a shortage of the membranes needed to produce the tests, and staff shortages in the logistics sector hampering their distribution.
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https://www.afr.com/policy/economy/government-caught-in-a-rat-trap-of-its-own-making-20220113-p59o0y
Government caught in a RAT trap of its own making
Scott Morrison’s promise to ‘get government out of people’s faces’ seems to mean nobody was around to ensure the essential tests were available.
Laura Tingle Columnist
Jan 14, 2022 – 4.33pm
The announcement came over the plane PA system as the flight from London – carrying a friend returning from a funeral –taxied to the terminal at Sydney Airport. In line with current NSW rules, passengers were told to do a rapid antigen test within 24 hours, and to isolate until they got a result.
But – as is the case almost everywhere in Australia – there were no RATs available at the airport.
She had brought some tests with her, “but there must be people coming in who don’t have them”, my friend messaged. “Seems pretty crazy. I thought they would be handing them out to everyone disembarking.”
Welcome to Straya.
There are plenty of stories of the seeming idiocy of the conflicts created by unravelling public health policies just now – pronouncements of obligations to meet various testing requirements, or rules that just don’t make sense any more – but we’ll start with this one, because it has strands that go in to so many other shambles just now.
Consider this: if my friend had landed in Queensland, she would have had to go into home quarantine for 14 days. In Western Australia, into 14 days of hotel quarantine at her own expense. Every state and territory now has its own rules.
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Climate Change.
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https://www.afr.com/companies/energy/aemo-told-to-reassess-death-of-coal-power-20220109-p59mvd
AEMO told to reassess death of coal power
Kanika Sood Reporter
Jan 10, 2022 – 5.00am
The energy regulator has challenged the Australian Energy Market Operator’s prediction of the rapid retirement of coal power plants, asking AEMO if it had considered whether plants could be operated more flexibly, which may extend their life span.
A strongly worded Australian Energy Regulator (AER) statement reviewed AEMO’s draft energy markets road map, released on December 10, which projects that nearly two-thirds of Australia’s coal generation capacity is likely to be gone by 2030, with the last such plants to close by 2043.
While the AER’s review did not specifically question the AEMO’s coal power retirement timeline, it is requiring the market operator to clarify the inputs and assumptions that it used in assessing the viable lifetimes of existing coal plants.
A key point of contention was why the AEMO had assumed that thermal coal plants cannot operate flexibly enough to ramp their generation up and down in the course of a day as the balance of demand and renewable energy supply varies.
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Toxic seas wiped out most life on earth
7:14PM January 11, 2022
Two Western Australia-based researchers have shed new light on the mass extinction event that wiped out much of the life on earth more than 200 million years ago, identifying how oceans turned to poison as massive volcanoes opened up through the middle of the Atlantic Ocean.
Calum Peter Fox and Kliti Grace studied microscopic fossils from England’s southwest to show how ocean acidification and a rise in hydrogen sulphide levels combined to wipe out most marine life.
Professor Grace, from Curtin University’s School of Earth and Planetary Sciences in Perth, and Dr Fox were able to identify the molecular fossil of a bacteria that thrived in hydrogen sulphide, which in turn showed how acidification and hydrogen sulphide levels rose during that period as the spread of the Atlantic opened up enormous undersea volcanoes.
“It tells us that 200 million years ago we had this really toxic hydrogen sulphide, which would kill me or you, extending through a lot more of the water column than we had originally thought,” Dr Fox 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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No entries in this category.
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Health Issues.
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'Historic': US surgeons successfully implant pig heart in human
AFP
January 11, 2022
The "historic" procedure took place Friday, the University of Maryland Medical School said in a statement on Monday. While the patient's prognosis is far from certain, it represents a major milestone for animal to human transplantation.
He is now recovering and being carefully monitored to determine how the new organ performs.
Bennett, who has spent the last several months bedridden on a heart-lung bypass machine, added: "I look forward to getting out of bed after I recover."
"This was a breakthrough surgery and brings us one step closer to solving the organ shortage crisis," said Bartley Griffith, who surgically transplanted the pig heart.
Muhammad Mohiuddin, who co-founded the university's cardiac xenotransplantation program, added the surgery was the culmination of years or research, involving pig-to-baboon transplants, with survival times that exceeded nine months.
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Health funds’ windfall spurs cashback call: $1.8bn gain from elective surgery ban
8:30PM January 10, 2022
The nation’s private hospital body has resuscitated its long-running feud with health insurers after recent bans on elective surgery sent their shares soaring, demanding the federal government formalise a mechanism to return a profit windfall to policyholders.
A jump in margins for the largest private health insurers – including the ASX-listed Medibank and NIB – has already left the sector with a 212 per cent rise in profit compared to 2021, and prompted the competition regulator to put the industry on notice.
The Australian Competition & Consumer Commission, in late December, told private health insurers not to underestimate savings made from the cancellation of elective procedures due to the pandemic – and therefore cut the amount of cash they had to refund to their policyholders.
Suspending elective surgery in Australia’s two biggest states is expected to bolster the profitability of health funds, given the amount of benefits paid is expected to fall as Omicron rages.
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Rapid tests were talked down until the system was overwhelmed
Jill Margo Health editor
Jan 11, 2022 – 6.02pm
For more than a year, the peak body that oversees the quality of diagnostic testing for Australia advocated strongly against the widespread use of rapid antigen tests for COVID-19.
Between October 1, 2020, and December 29, 2021, the Royal College of Pathologists of Australasia released five media statements to caution the public about RATs.
Now, with PCR testing in crisis, thousands of Australians are searching for RAT kits, which are in short supply.
By being energetic in its promotion of PCR testing, the college was doing what was scientifically correct to control the virus in a country with a low prevalence of cases.
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Medical establishment must learn lessons from RAT shortage
The risk-aversion of the medical establishment that has led to the shortage of rapid tests is now making it riskier to live with the virus and keep society functioning.
Jan 12, 2022 – 5.17pm
Australia’s ability to ride out the omicron wave is being challenged by the lack of availability of rapid antigen tests. This is preventing businesses from alleviating essential worker shortages and critical supply chain bottlenecks, despite the easing of close contact isolation rules.
What’s become a de facto lockdown raises obvious questions about the failure by federal and state governments to pre-order and stockpile RAT kits ahead of the nation’s reopening. Yes, policymakers have been caught out again by the great uncertainty of the global pandemic, as the arrival of a more transmissible but milder strain has collided with the vaccination-led move to living with the virus.
Yet, while recognising the overall success of Australia’s response to the virus, an open debate about what’s gone right and wrong is essential to learn the lessons for next time. But that shouldn’t default to a superficial and simplistic partisan blame game targeting the Prime Minister or premiers for the RAT shortage.
A deeper dive requires looking at the advice given to policymakers by the medical establishment. As health editor Jill Margo reported on Wednesday, the Royal College of Pathologists of Australasia has consistently advised against the widespread use of rapid tests for COVID-19 detection.
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It’s time to make our own supply of lifesaving drugs
The country has already done the hard yards on life sciences R&D. We just need the policies to create a manufacturing powerhouse too.
Chris Nave
Jan 12, 2022 – 3.21pm
COVID-19 has exposed a sovereign vulnerability that Australia must urgently fix. We don’t have the manufacturing capability to make lifesaving drugs relied upon by millions of Australians every day, including the mass production of vaccines.
The recent announcement of a partnership between Moderna and the Australian and Victorian governments, is an important step in ensuring sovereign capability in manufacturing a COVID-19 vaccine in Australia. It will also create mRNA vaccine facilities that can be applied to other health challenges. The total cost of the new facility is rumoured to be around $2 billion.
While there has been a growing consensus, and moves towards, boosting our national biotech manufacturing capability in recent years, movement to date has been slow. Building capability is not an immediate fix, but in a decade from now, with the right focus, it can be achieved.
It needs a co-ordinated approach, led by the federal government in close consultation and collaboration with pharmaceutical companies, research and clinical organisations, and the biotech industry overall.
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International Issues.
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Risk bubbles are deflating everywhere, some market watchers say
Emily Graffeo
Jan 9, 2022 – 12.01pm
For those concerned that the decade-long super-easy monetary policy has created asset bubbles around the world, the first signs of trouble may be in the making for inflated markets.
To Bank of America strategists including Michael Hartnett, a bubble is “simultaneously popping” in assets including cryptocurrencies, palladium, long-duration technology stocks, and other historically risky areas of the market. The winding down in speculative areas comes as investors brace for the US Federal Reserve to pick up the pace of policy tightening.
“The reduction in liquidity from the Fed will cause both the equity risk premium and interest rates to rise, which will continue to disproportionately impact the riskiest assets in the market including momentum-driven investments in money-losing technology stocks, meme stocks, and particularly cryptocurrencies, which have no intrinsic value,” according to Jay Hatfield, portfolio manager at Infrastructure Capital Advisors.
Ark Investment Management’s flagship Innovation ETF has fallen roughly 46 per cent from its record high in February 2021. The hawkish signal from the Fed has hit expensively valued technology names hard, and many of those, including Tesla and Roku, dominate Ark’s funds.
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https://www.afr.com/world/europe/is-there-an-end-in-sight-to-supply-chain-disruption-20220110-p59n0z
Is there an end in sight to supply chain disruption?
The spread of the Omicron coronavirus variant has the shipping industry on edge, waiting for the next hitch that could derail operations.
Harry Dempsey
Jan 10, 2022 – 9.46am
Bob Biesterfeld knows the depths of the global supply chain crisis first hand - he has hauliers still unloading Halloween costumes from containers at the Los Angeles and Long Beach port complex.
For the boss of CH Robinson, North America’s largest freight broker, the delayed shipments of vampire, ghost and witch outfits provides the perfect illustration of the turmoil in ocean shipping for the past 18 months. About 90 per cent of world trade moves by sea, and these logistical woes have tormented businesses across the globe from Argentine winemakers to Sri Lankan clothing producers.
Record vessel delays have clogged ports and crammed warehouses, adding to the supply ruptures caused by the semiconductor crunch and petrochemical shortages. Smaller companies have had to fight tooth and nail to secure space on container ships to keep production and sales moving while facing cash flow pressure as they soak up rocketing freight rates - up seven times on average pre-pandemic levels - and mounting stockpiles. Consumers have experienced it via empty shelves, limited product availability and rising prices.
Jens Bjorn Andersen, chief executive of DSV, one of the world’s largest logistics groups currently squeezed between frustrated shipping lines and angry customers, describes the situation as “the worst I’ve seen” after more than three decades in the industry.
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IMF must stop playing Santa to emerging markets on the brink
By morphing into an aid agency during the pandemic, the IMF’s no strings loans have created a financial mess that needs cleaning up.
Kenneth Rogoff Columnist
Jan 9, 2022 – 12.30pm
Who is going to clean up the inevitable financial mess in emerging markets if persistent inflation forces the US Federal Reserve to start raising interest rates significantly? The International Monetary Fund, normally tasked with pulling countries back from the brink, seems disenchanted with the job. Rather than embracing its traditional role of helping troubled debtor countries help themselves, the IMF has been attempting to morph into an aid agency.
Of course, it is more fun to be Santa than Scrooge, and rich countries give far too little in foreign aid. I have long advocated establishing a world carbon bank to channel grants and technology. Likewise, the case for funding a restructured World Health Organisation to fight pandemics is compelling. But in a world where private capital flows far outweigh official lending, traditional IMF programs still have a critical role to play in mitigating and managing financial crises.
That role has been abandoned during the pandemic, and re-establishing it will be difficult. Handing out funding with few strings attached made sense in the initial phase of the COVID-19 crisis. But because the IMF is still very much structured as a lending agency, it eventually will have to be repaid or go bankrupt itself. To get a sense of what that might look like, consider the tensions with Argentina, which received a massive $US57 billion loan in 2018 with uncharacteristically weak IMF conditions attached and is now baulking at repaying.
The lack of conditionality in some recent cases has been appalling. Should the IMF really furnish virtually unconditional loans to a government that restricts food imports to an under-nourished population, thereby exacerbating the problems caused by the government’s own exchange rate controls? It has done so in Nigeria in 2020. In other cases, the fund has been extraordinarily generous in its normally cautious surveillance assessments, giving its gold seal of approval to countries with exploding debt-to-GDP ratios that stabilise only under very optimistic assumptions.
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Security, not economics, likely to drive US trade engagement in Asia
Perhaps after the November 2022 midterm elections, Joe Biden will take a fresh look at his languishing trade agenda. Or he may decide that the Indo-Pacific initiative is really about confronting China in the security domain.
Gary Clyde Hufbauer and Megan Hogan
Jan 10, 2022 – 2.21pm
US President Joe Biden last year found himself consumed by the congressional challenge of enacting his domestic agenda and the military challenge of withdrawing from Afghanistan.
As a result, leadership of Asian trade policy, traditionally under the Office of the United States Trade Representative (USTR), was shared with the State Department and the Commerce Department.
The consequence of presidential neglect was that rather than push a single framework, Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, and Trade Representative Katherine Tai each supported different and somewhat competing angles on Indo-Pacific engagement.
Competition between the Blinken, Raimondo and Tai agendas may result in lots of talk and little action, requiring presidential resolution. As Tai is expected to co-lead development of the Indo-Pacific economic framework with Raimondo, differences over the proper focal points of digital trade could be the first issue needing reconciliation.
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Russia dials down Ukraine invasion threats as US talks begin
January 11, 2022 — 7.47am
Russia has told the US it has no intention of invading Ukraine, as the two nations met for high-stakes talks designed to de-escalate military action against the Eastern European nation.
After a day-long meeting Geneva, Russian deputy foreign minister Sergei Ryabkov insisted that the US had nothing to fear, despite his country deploying more than 100,000 troops near the Ukraine border - a move than many in Washington view as a precursor to war.
“There is no reason to fear some kind of escalatory scenario,” he told reporters after the meeting with US Deputy Secretary of State Wendy Sherman on Monday (AEDT).
However, Sherman remained sceptical, saying in a separate news conference that while the discussion was “frank and forthright” it was too soon to know whether Russia was genuine about scaling back.
Fed forced to run triple option with time running out
The US central bank’s persistence with a gross mischaracterisation of inflation means that it has fallen significantly behind developments on the ground.
Mohamed A. El-Erian
Jan 11, 2022 – 9.29am
The final weekend of the regular National Football League season was full of close games, including some with memorable comebacks involving the so-called two-minute drill — that is, the necessity for teams to pivot to a hurry-up offence that holds the promise of winning the game but comes with heightened risk of loss.
A similar pivot is in the future of the Federal Reserve — a view that is consistent with what has been a sharp move in analysts’ forecasts of central bank policy actions.
In the last few days, a number of widely followed Wall Street analysts have revised their 2022 expectations for US monetary policy to include the end of large-scale asset purchases, four rate increases and the beginning of balance-sheet contraction.
This revised outlook — which, notably, still means policy would probably remain accommodative overall — is consistent not only with high and persistent inflation but also a labour market that is near maximum employment as measured by Friday’s jobs report — that is, an unemployment rate below 4 per cent, a 0.6 per cent monthly increase in wages and an unchanged labor force participation rate at 61.9 per cent.
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US needs to step up more for Pacific allies: Kurt Campbell
Matthew Cranston United States correspondent
Jan 11, 2022 – 3.29pm
Washington | Time is running out in the Indo-Pacific to strengthen Western alliances and reinforce military legacies, particularly between Australia and the United States, according to a top White House official.
Kurt Campbell, the “Asia tsar” who sat with President Joe Biden during the four-hour virtual meeting with Chinese President Xi Jinping in November, said he was looking to Australia for leadership, and admitted that the US had probably not done enough in what is a strategic region for both countries.
His comments came at the launch of the inaugural Australia chair at the Washington-based Centre for Strategic and International Studies.
The chair, the first of its kind by any Washington-based think tank according to the CSIS, is sponsored by packaging magnate Anthony Pratt with a $US1.5 million ($2 million) donation.
“If you look at the arena on the planet where we have enormous moral, strategic, historical interests, where we have not done enough, [but] where Australia and New Zealand have done plenty, but [where] we’ve got to substantially step up our game, it is in the Pacific,” Mr Campbell said.
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‘Severe threat’: high Inflation could lead to recession, Powell says
Matthew Cranston United States correspondent
Jan 12, 2022 – 10.02am
Washington| A recession is possible in the US if the Federal Reserve has to lift interest rates, while the path of government debt is already at unsustainable levels and needs to be reined in, the central bank’s boss has told Congress.
In what many will see as Fed chair Jerome Powell overstepping the line, the world’s most powerful central banker ventured into commenting on fiscal policy actions on debt – a key debate in the Biden Administration’s Build Back Better agenda.
Mr Powell stunned politicians at his confirmation hearing in front of Congress on Tuesday (Wednesday AEDT) by stating that a recession was something people should prepare for if inflation continued to stay high.
Headline inflation rate is expected to reach 7 per cent when official figures are released on Wednesday, the highest annual recording since 1982.
“If these high levels of inflation get entrenched in our economy and people’s thinking, then inevitably, that will lead to much tighter monetary policy from us, and it could lead to a recession,” Mr Powell said.
Richest in for bumpy ride as US Fed unwinds easy money
Earlier quantitative easing programs were an inflation-free bonus for the wealthiest Americans, but that’s about to end.
Adrian Blundell-Wignall Columnist
Jan 12, 2022 – 5.00am
According to The New York Times, some Federal Reserve officials bought market securities just before the announcement of the huge COVID-19 quantitative easing monetary expansion.
It has always been clear which way markets run when QE is announced after a period of market stress. United States QE has always been about rescuing markets. While the direction of markets following the COVID-19 QE announcement was no surprise to Fed officials, the recent inflation outcome certainly was.
The source of their surprise was that earlier QE policies had little impact on nominal demand and inflation, so why not this one too? The market-friendly focus of the Fed, and a sort of global crisis mentality after the events of 2008, seem to have influenced Fed judgment unduly, culminating in unexpected inflation.
Once the 2008 liquidity crisis was averted, it was surprising that QE1 was not unwound, forcing the interbank market to get on with their normal job. If that were not surprising enough, the subsequent QE policies (to 2014) doubled down on the approach, and later they were forced to give up on raising interest rates and “tapering”.
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https://www.smh.com.au/world/asia/china-s-year-of-living-less-dangerously-20220112-p59nl5.html
China’s year of living less dangerously
Senior business columnist
January 12, 2022 — 11.34am
Last year, amid a period of frenetic and dislocating policy changes, China’s authorities were determined to deleverage an over-leveraged economy. As this year gets under way, they are now responding to the unintended consequences of those policies with some urgency.
With a property crisis, energy crisis, food shortages and a significant slowdown in economic growth, Beijing is seeking to stabilise and consolidate in what is, with the twice-a-decade Communist Party’s national congress looming later this year, a sensitive year for Xi Jinping as he seeks an unprecedented third term as the party’s leader.
In December the People’s Bank of China reduced the reserves China’s banks are required to hold by 50 basis points and its benchmark one-year lending rate by 5 basis points for the first time since the onset of the pandemic.
There is now a widespread expectation, supported by reports in China’s state media, that the PBOC will loosen monetary policy further, with more reductions in the reserve requirements to pump more liquidity in the financial system and more cuts to lending rates.
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Libor, long the most important number in finance, dies at 52
The London Interbank Offered Rate was once “on top of the world” but became a “disreputable, tottering old geezer at the end”.
Lananh Nguyen and Jeanna Smialek
Jan 13, 2022 – 10.17am
The London Interbank Offered Rate, a number that spent decades as a central force of international finance and was used in setting interest rates on everything from mortgages to student loans, has died after a long battle with regulators. It was 52.
Known as Libor, the interest rate benchmark once underpinned more than $US300 trillion ($417 trillion) in financial contracts but was undone after a years-long market-rigging scandal came to light in 2008. It turned out that bankers had been co-ordinating with one another to manipulate the rate by skewing the number higher or lower for their banks’ gain.
Libor could no longer be used to calculate new deals as of December 31 – more than six years after a former UBS trader was jailed for his efforts to manipulate it and others were fired, charged or acquitted. Global banks including Barclays, UBS and Royal Bank of Scotland ultimately paid more than $US9 billion in fines for fixing the rate for their own profit.
Randal Quarles, then the Federal Reserve’s vice chairman for supervision, offered a scathing early eulogy in October, saying Libor “was not what it purported to be”.
“It claimed to be a measure of the cost of bank funding in the London money markets, but over time it became more of an arbitrary and sometimes self-interested announcement of what banks simply wished to charge,” Quarles said.
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US inflation surged to 7pc, sets stage for March rate increase
Matthew Cranston United States correspondent
Jan 13, 2022 – 2.38am
Washington | US inflation has hit a 40-year high and is expected to continue to stay well above the Federal Reserve target this year leading to interest-rate hikes as soon as March.
The consumer price index climbed 0.5 per cent in December, ahead of forecasts, leaving the annual rate of inflation at 7 per cent, the largest 12-month gain since June 1982, according to Labor Department data released on Wednesday (Thursday AEDT).
While the cost of energy dipped in December, overall higher prices were driven by rent, used vehicles, food and apparel.
President Joe Biden issued a two paragraph statement on what is now the highest rate of inflation in a generation.
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https://www.afr.com/policy/foreign-affairs/it-s-about-much-more-than-ukraine-20220111-p59nhz
It’s about much more than Ukraine
Vladimir Putin’s pressure on Ukraine is a test of the West in the broadest possible sense. Australia must draw lessons from it too.
Elizabeth Buchanan Contributor
Jan 12, 2022 – 1.51pm
Russia’s strategy right now has very little to do with Ukraine itself. Sure, keeping its neighbour destabilised maintains Ukraine’s value to Moscow as a buffer zone. But Moscow could have conducted a full military invasion of Ukraine long ago had it wanted to; if it hasn’t, it’s probably because Russia’s economy would not stand the strains of occupying a nation of 43 million people.
Instead, Ukraine has been an important test-site for Russia for other reasons. It is Moscow’s laboratory for what the liberal rules-based order (read: the West) deems permissible. And apparently, we can stomach quite a bit.
Eight years of annexation in Crimea, the fanning of civil conflict in eastern Ukraine, and the downing of innocent passenger flight MH17 seem to have only resulted in sanctions and press releases. For now, current efforts to manage tensions between Russia and NATO via diplomatic summits are geared at halting further conflict spilling over between Russia and the West.
An imperfect international system
At least both sides are showing up to talk. They will involve political theatrics and playing for the domestic audience. And both sides have demands of each other that will probably never be resolved. But the bottom line is that Russia and the West both exist in an imperfect international system which creates discomfort and demands trade-offs and, ultimately, dialogue.
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Monetary policy widens the gulf between poor and rich economies
Tighter US monetary policy is likely to exacerbate an already difficult outlook for emerging and developing economies.
Chris Giles
Jan 12, 2022 – 12.39pm
The start of this year is an eerie echo of 2021. A new variant of coronavirus has sent infections rocketing in all parts of the world, threatening economic prospects for the year ahead.
But rather than a rerun of the severe downturns we saw in 2020, the outlook is one of high global inflation and rising interest rates, with severe risks for the more vulnerable emerging and developing economies.
Last year showed that advanced economies were more resilient to COVID-19 waves than expected, even without effective vaccines. The alpha wave was appalling for people’s health, but hardly dented the global recovery. With more monetary and fiscal stimulus than proved necessary, the result was excess demand and inflation.
Getting through omicron should be easier. Global case numbers are at record levels, but numbers of deaths are still subdued. Vaccines have proved effective at preventing serious disease, and the community also has greater immunity from prior infection, so advanced economies should be better able to adapt.
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NATO chief warns of ‘real risk of armed conflict’ over Ukraine
Hans van Leeuwen Europe correspondent
Jan 13, 2022 – 6.15am
London | NATO boss Jens Stoltenberg has warned of “a real risk for new armed conflict in Europe”, after four hours of talks on Ukraine between the 30-member Western alliance and Russian ministers broke up without progress.
But he welcomed the prospect of further dialogue with Russia, and US deputy secretary of state Wendy Sherman said it was now “on Russia to de-escalate tensions and give diplomacy the chance to succeed”.
By contrast, Russian deputy foreign minister Alexander Grushko sounded downbeat: he told the press it was hard to see how progress could be made, and the situation remained “very dangerous”.
Russia has amassed more than 100,000 troops on the Ukrainian border in recent months, and Ms Sherman said the Russians conducted live-fire exercises on Wednesday morning.
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https://www.afr.com/policy/foreign-affairs/putin-wants-to-break-nato-s-spine-20220112-p59nq0
Putin wants to break NATO’s spine
The White House should break off talks with Russia now: No country ought to expect diplomatic rewards from Washington while it threatens the destruction of friends.
Bret Stephens
Jan 13, 2022 – 1.49pm
Grave may have been the mistakes of Donald Rumsfeld, but George W. Bush’s first defence secretary did have a gift for memorable phrases. One of them — “weakness is provocative” — explains the predicament the US finds itself in with Russia’s belligerence against Ukraine and NATO.
Let’s recap how it came to this point.
— In August 2008, Russia invaded Georgia and took control of two of its provinces. The Bush administration protested but did almost nothing. After Barack Obama won the White House that year, he pursued a “reset” with Russia. In 2012, he cut US military numbers in Europe to their lowest level in post-war history, and mocked Mitt Romney for calling out Russia as America’s principal geopolitical threat.
— In September 2013, Obama famously retreated from his red line against Bashar Assad’s use of nerve gas in Syria, accepting instead a Russian offer of mediation that was supposed to have eliminated Assad’s chemical arsenal. That arsenal was never fully destroyed, but Vladimir Putin took note of Obama’s palpable reluctance to get involved.
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Russian gains in Ukraine would be ominous for Australia
Letting Vladimir Putin’s giant gambit on restoring the pre-1991 European borders would hollow out Western solidarity and embolden Xi Jinping’s China.
Jan 13, 2022 – 7.31pm
With the most threatening display of hard power seen in Europe since the Cold War, Vladimir Putin has opened a giant gambit on restoring the pre-1991 order on his European borders.
Russia’s President believes that Washington is now wholly focused on an existential contest with its great economic, technological and military rival in China, and that the US has no appetite for confrontations in Europe. But Mr Putin is now overplaying his hand, trying to reverse major outcomes of the Cold War.
Vladimir Putin is overplaying his hand by trying to reverse major outcomes of the Cold War.
Ahead of this week’s inconclusive summits with the US, NATO, and the Organisation for Security and Co-operation in Europe, he set out a string of fantasy demands that NATO forces leave eastern European countries that have been members of the alliance for decades. And he is backing that up with very real military brinkmanship against non-NATO member Ukraine, holding a gun at the head of a third-party hostage.
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‘Drumbeat of war’ louder as Russia talks on Ukraine stall
Anton Troianovski
Jan 14, 2022 – 8.57am
Vienna | Russian officials signalled they could abandon diplomatic efforts to resolve the security crisis in Ukraine, bringing a whirlwind week of European diplomacy to an ominous end and deflating hopes negotiators could forge a path toward easing tensions in eastern Europe.
One senior Russian diplomat said that talks with the West were approaching a “dead end”, while another said the Kremlin would wait until it receives written responses next week to its demands from Washington and from NATO before deciding how to proceed.
It was clear that Russia’s next move would be up to President Vladimir Putin.
“The United States and its allies are actually saying ‘no’ to key elements of these texts,” Russia’s deputy foreign minister, Sergei Ryabkov, said, referring to the draft agreements with NATO and Washington that Russia published last month. “This is what we call a dead end or a different approach.”
The United States representative to Thursday’s meeting (Friday AEDT), Michael Carpenter, also depicted the two sides as engaged in a standoff with no clear resolution.
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Seditious conspiracy: 11 Oath Keepers charged over January 6 riot
Michael Balsamo, Collen Long and Alanna Durkin Richer
Jan 14, 2022 – 8.03am
Washington | Stewart Rhodes, the founder and leader of the far-right Oath Keepers militia group, and 10 other members or associates have been charged with seditious conspiracy in the violent attack on the US Capitol, authorities said on Thursday (Friday AEDT).
Despite hundreds of charges already brought in the year since pro-Trump rioters stormed the Capitol in an effort to stop the certification of President Joe Biden’s 2020 election victory, these were the first seditious conspiracy charges levied in connection with the attack on January 6, 2021.
It marked a serious escalation in the largest investigation in the Justice Department’s history – more than 700 people have been arrested and charged with federal crimes – and highlighted the work that has gone into piecing together the most complicated cases.
The charges rebut, in part, the growing chorus of Republican lawmakers who have publicly challenged the seriousness of the insurrection, arguing that since no one had been charged yet with sedition or treason, it could not have been so violent.
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Vladimir Putin is running rings around the west
1:51PM January 13, 2022
Nobody knows whether Vladimir Putin will invade Ukraine, but it is increasingly clear that a divided and confused Western alliance doesn’t know how to deal with the challenge he poses.
Lost in a narcissistic fog of grandiose pomposity, Western diplomats spent the past decade dismissing the Russian president as the knuckle-dragging relic of a discarded past. As then-Secretary of State John Kerry sniffed during Mr. Putin’s 2014 invasion of Ukraine, “You just don’t in the 21st century behave in 19th century fashion by invading another country on a completely trumped up pretext.”
Neville Chamberlain learned more from failure at Munich than the current generation of Western leaders learned from failure in Crimea. Convinced that the old rules of power politics don’t apply in our enlightened posthistorical century, Europeans nattered on about soft power only to find themselves locked out of key U.S.-Russia talks over Ukraine. As China and Russia grew more powerful and assertive, Americans enthusiastically embraced the politics of mean-spirited polarisation and domestic culture wars. Now the Biden administration is simultaneously proclaiming overseas that America is back, in all its order-building awesomeness, and maintaining at home that democracy is one voting-rights bill away from collapse.
Pathetic throwback that he is, Mr. Putin used his time differently, rebuilding the Soviet Union under the nose of a feckless and distracted West. Because Russia hasn’t annexed breakaway republics, many observers underestimate how successful Mr. Putin’s reassembly of the U.S.S.R. has been. But it is hegemony, not uniformity, that he wants. Stalin insisted on enrolling Ukraine and Belarus as founding members of the United Nations while they were part of the Soviet Union; Mr. Putin might be happy to keep them nominally independent under Russian control. In many Soviet republics, Moscow ruled through local strongmen. When the Soviet Union collapsed, leaders like Azerbaijan’s Ayaz Mutalibov, Turkmenistan’s Saparmurat Niyazov and Kazakhstan’s Nursultan Nazarbayev made a seamless transition to running the republics as personal fiefs. Mr. Putin’s goal is to re-establish ultimate control while leaving subordinate rulers in place.
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Does the West have the guts to stare down the East?
4:15PM January 13, 2022
Fidel Castro once revealed to the former US defence secretary Robert McNamara that he had recommended the use of Soviet nuclear missiles against the US during the Cuban crisis. This floored the unflappable McNamara. He realised as smart as the Kennedy administration thought it was, in the end they lucked out. The world came within a whisker of nuclear war.
We assume our leaders will be rational and that freedom is cheap. Now Russia and China are seeking to advance their strategic position through military intimidation for control of Ukraine and Taiwan respectively. Yet as the rhetoric increases is the West, including Australia, really prepared to go all out to defend these two independent nations against foes who will show no constraint?
For the last 20 years our frame of reference for war has been Afghanistan; a low-intensity, counterinsurgency campaign. This does not represent the scale of war against the People’s Liberation Army. And it does not reflect the reality of fighting the Russian military in their backyard. US war-gaming exercises last year demonstrated its chances against the PLA are dismal. Again, in a November exercise between the US Marine Corps and British Royal Marines, the US side were forced to surrender halfway through. The team with the best and the most military hardware on the planet lost, twice. The US exit from Afghanistan revealed its military leadership is distracted.
Russian President Vladimir Putin believes Ukraine needs to be controlled by the motherland as a buffer against NATO expansion. Arguably Putin is continuing the Brezhnev Doctrine.
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The fixed income survival guide to US rates lift-off
Unlike last year, when the issuance of government bonds was absorbed by central banks keeping a lid on yields, 2022 will be the opposite.
Chris Dickman
Jan 16, 2022 – 5.00am
The US Federal Reserve has put the world on notice that tighter financial conditions are coming. The reality is, if that’s true, the bond market has a lot more heavy lifting to do as the task of financing governments gets much harder, here and in the US, without central banks buying.
What to make of the pain in the bond market? US 10-year Treasuries have sold-off 0.45 per cent since mid-December, generating a loss of 4 per cent. US real yields have weakened 0.22 per cent, implying half of the weakness in nominal bonds is related to rising inflation. Australian 10-year yields, only since December 29, have sold-off 0.38 per cent to 1.91 per cent.
Australian real yields, however, have risen a little more, implying that our sell-off is more to do with expectation of central bank action, and less about inflation expectations.
Four interest-rate rises are factored into the US market over 2022, yet the implied inflation rates in both markets point to the current inflation pulse passing. Longer-dated breakeven inflation yields in Australia are 2.15 per cent, barely above the lower bound target of the RBA.
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The experts are finally grasping the real reason for inflation
Demand is high because Americans have more money to spend than ever before because of excessive pandemic relief spending.
Henry Olsen
Jan 13, 2022 – 11.33am
Data released on Wednesday show that inflation for December rose 7 per cent, the highest rate since 1982. The bad news is that this is likely to continue for some time.
The good news is that at least some experts are finally grasping why inflation is so high: excessive pandemic relief spending.
Prices have spiked over the past year in virtually every major category of consumer spending. News reports have focused on large items such as gasoline (up 50 per cent) and used vehicles (up 38 per cent).
But the recent price report shows inflation is pervasive: food is up 6.3 per cent, topped by a 12.5 per cent hike in meat and poultry prices. Furniture and bedding is up 13.8 per cent while clothing has increased by 5.8 per cent.
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The Putin puzzle: why Ukraine and why now?
Kathryn Stoner
The Wall Street Journal
10:58PM January 15, 2022
For the last several months, Russia has been amassing troops, now numbering an estimated 100,000, along its extensive border with Ukraine.
Moscow’s hostile intentions toward its neighbour have been clear since the winter of 2014, when Ukraine’s “Revolution of Dignity” ousted the country’s corrupt Kremlin-backed president and turned Kiev resolutely toward democracy and the European Union. Russia’s response then was to seize and annex Ukraine’s Crimean peninsula and to invade the eastern Ukrainian region of Donbas. Today’s mobilisation has all the markings of an encore.
In talks with President Joe Biden and in a draft treaty, Russian President Vladimir Putin has issued an extraordinary list of demands as conditions for drawing down his forces. Among these are guarantees that NATO will never expand to include Ukraine and Georgia. Mr Putin has also called for “security guarantees” from NATO and for the US to declare that it will never put missiles on or near Russian borders. This past week, Russian officials met with counterparts from the US, NATO and Ukraine in discussions aimed at averting an armed conflict.
Mr Putin knows full well that his demands are excessive. They are also unnecessary to guarantee Russian security, since there is no threat to Russia in Ukraine from the US or NATO. NATO is not currently offering membership to Ukraine and hasn’t come close to doing so since 2008. The number of NATO troops in rapid reaction forces in Eastern Europe and the Baltics — deployed at the request of those countries’ leaders after Russia seized Crimea in 2014 — is so small that the Russian military could easily overwhelm them; they are largely a symbolic deterrent. As for armaments, the only country to have installed missile systems of any sort in Ukraine in the last decade is Russia, in Crimea.
All of this, to say nothing of the formidable risks involved in his brinkmanship, must be obvious to Mr Putin. So then why, over the last few months, has he manufactured an international crisis by continuing to gather troops and equipment on the border with Ukraine? What could he possibly be thinking?
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I look forward to comments on all this!
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David.
