July 07, 2022 Edition
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Frankly, the Western world seems to be going ‘to hell in a handbasket’ with recession seemingly coming everywhere, China being more assertive and the Russian war just grinding on as inflation is eroding living standards everywhere. What a shambles!
In the UK we
are seeing Boris hanging on as a recession looms and inflation also roars. As of today he still hangs on!
In OZ we have the PM all over except Australia as we send dud patrol boats to the South Pacific nations as we also look to be heading to recession. I hope the rain has eased off in Eastern OZ by the time you read this!
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Major Issues.
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Albanese’s trip to Europe no distraction from Asia-Pacific focus
Mindful of the chatter that he is already abroad too much, the prime minister will be at pains to extract the relevance of his European trip to Australia’s interests in Asia.
James Curran Historian
Jun 26, 2022 – 2.19pm
In the past half century, few Australian prime ministers, with the exception of Gough Whitlam and Paul Keating, have had so busy a start in foreign affairs.
As Anthony Albanese heads to Madrid for a NATO summit, to Paris to meet President Emmanuel Macron, and possibly to Kyiv, his travel since the election captures the central dynamic in Australia’s foreign policy tradition: the permanence of its geopolitical moorings in Asia and the ongoing pull of historical ties to Britain, Europe and North America.
Since Labor’s election win, Albanese, Foreign Minister Penny Wong and Defence Minister Richard Marles have visited major regional and Pacific capitals – from Tokyo to Jakarta, Suva to Singapore, Honiara to New Delhi, and Wellington.
At each landfall they stress a new diplomatic tone. Its clearest articulation came in Wong’s remarks in Fiji. Australia would project its “full identity” overseas.
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https://thenewdaily.com.au/opinion/2022/06/27/bitcoin-capitalisms-failure-kohler/
6:00am, Jun 27, 2022 Updated: 10:47pm, Jun 26
Alan Kohler: Bitcoin is not a Ponzi scheme, it’s an outcome of capitalism’s failure
Bitcoin may be many bad things – speculative bubble, consumer of energy, vehicle for scams – but it is not a Ponzi scheme.
Charles Ponzi’s particular scam involved financing the returns for his investment fund with new money rather than actual investments; all Ponzi schemes come unstuck when asset values fall and new money dries up.
Bitcoin offers no returns, so it’s not a Ponzi scheme. But what it is, exactly, is more difficult to name. It’s both nothing and everything.
What I mean is that Bitcoin has no substance and is not inherently useful, unlike the objects of previous bubbles, such as Dutch tulips in 1636, the South Sea Company in 1711, Japanese real estate in 1989, or internet stocks in 2000.
Those other bubbles involved the frenzied over-pricing of an existing item that had some inherent utility, and continued to exist after the price crashed and the late speculators went bust.
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https://www.afr.com/politics/federal/liberals-look-for-love-in-all-the-wrong-places-20220625-p5awkp
Liberals look for love in all the wrong places
The Liberal Party’s disastrous financial and political decline in Western Australia is just the most extreme example of its state-by-state fall from political grace.
Jennifer Hewett Columnist
Jun 26, 2022 – 6.00pm
Mathias Cormann has an excellent sense of timing.
Australia’s former finance minister is living happily in Paris as head of the Organisation for Economic Co-operation and Development (OECD) after successfully lobbying for the job in a national effort that included strong support from the Morrison government.
His domestic political legacy for the Liberal Party in Western Australia is considerably less successful. It would be more accurately called an electoral and financial disaster.
A state branch in which Cormann was such a dominant influence for so many years is now in ruins. It’s true much of the dismal result for the Liberals at both the federal election and the last state election is due to extremely popular Labor Premier Mark McGowan, boosted by his handling of COVID-19.
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The power behind the PM – who are Labor’s powerbrokers in government?
June 26, 2022 — 5.00am
Since Anthony Albanese became prime minister and Labor has taken government, the make-up of Labor’s caucus has changed.
Twelve MPs won new seats – 11 in the House, one in the Senate – and another seven people replaced MPs who have retired. The net result was an expanded caucus that has grown from 94 to 103 people.
And that expansion has flow on impacts on who wields power overtly, through the holding of senior ministries, and covertly, through wielding power behind the scenes.
Sixteen months ago, The Sun-Herald and The Sunday Age explored the influence and role that Labor’s Left and Right factions have in the modern federal parliamentary Labor Party.
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Albanese and NATO: History has taught our leaders security begins at home
12:00AM June 27, 2022
Prime Minister Anthony Albanese is attending the NATO summit in Madrid on June 28, along with the leaders of Japan and South Korea and representatives from Sweden and Finland. President Volodymyr Zelensky has also invited him to visit Ukraine after the NATO leaders summit. There will clearly be expectations in both meetings of additional Australian support.
Australia should, of course, strongly support Ukraine diplomatically and promise to do more in terms of supplying appropriate military equipment. However, there are limits to what we can do in Ukraine and how we can respond to NATO expectations.
No doubt, there will be discussion at this NATO summit about whether Russia will extend its military aggression to include the targeting of the supply of military equipment by the US and its allies to Ukraine through Poland.
There is the further complication of whether NATO will discuss its planning for military contingencies involving Russian military attacks on one or more of the Baltic countries, all three of which are vibrant democracies. A Russian attack would raise serious moral questions for us, including our vital interests in seeing a democratic Taiwan not being attacked by China. As Japan’s Prime Minister, Fumio Kishida, has observed: there are clear implications for East Asia of the war now being waged in Europe.
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https://www.afr.com/politics/federal/spanish-press-albanese-to-buy-more-destroyers-20220627-p5awsq
Spanish press Albanese to buy more destroyers
Phillip Coorey and Andrew Tillett
Jun 27, 2022 – 10.30pm
Dubai/Canberra | Prime Minister Anthony Albanese will be sounded out over buying another three Air Warfare Destroyers when he meets his Spanish counterpart Pedro Sanchez in Madrid, but is unlikely to give any commitment.
In what officials say will be the first bilateral meeting between Spanish and Australian prime ministers, Mr Sanchez is expected to press the case for Spanish shipbuilder Navantia when they meet on Tuesday ahead of the NATO summit being hosted by Spain.
In the lead-up to the May 21 election, Navantia raised with both the Coalition and Labor building up to three extra Air Warfare Destroyers, known as the Hobart class, for the navy at a cost of $2 billion per warship and delivered before 2030.
Navantia argues the proven design would boost Australia’s maritime strike capability in the short term, as well as avoid a capability gap until the delivery of the troubled Hunter class frigates. A Spanish acquisition would also create shipbuilding jobs, amid questions over whether nuclear-powered submarines will be built locally.
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Census 2021: Australia becomes a majority migrant nation
Tom McIlroy Political reporter
Jun 28, 2022 – 12.00am
Australia has become a majority migrant nation, as newly released census data shows for the first time more than 50 per cent of residents were born overseas or have an immigrant parent.
The country has doubled in size in the past 50 years and added more than 1 million new residents since 2017, as India moved past China and New Zealand to become one of the top three countries of birth for Australian residents, behind England.
Results of the 2021 census, taken on August 10, were made public for the first time on Tuesday, revealing the changing face of multicultural Australia.
About 220,000 people born in India became Australian residents between the 2016 census and the 2021 census, with people from Nepal accounting for the second-largest increase.
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Census 2021: Australia is usually a bit like a supertanker, but this Census shows we’re changing course
June 28, 2022
This Census is evidence of a nation that is determined to change direction. At a national level Australia is a bit like a supertanker: a change of course takes time and is done in increments. Figures reflecting core beliefs — like belief in a god of some sort — do not as a rule leap forward from one census to the next.
It isn’t so much the numbers that make the 2021 Census results riveting — yes, riveting — it’s the stories behind the numbers. I learnt early in my career that aggregate numbers measuring social change move at a glacial pace between censuses.
But two five-year leaps of eight and nine percentage points over a single decade shows something different, something purposeful; these figures tell the story of a nation that is actively making different choices.
The real action, the most powerful stories, are found deep within the census’s data vaults; these numbers have to be mined, cut, polished and paired with other data to reveal a beautiful, meaningful, insight.
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ABC staying put in Ultimo as Rowland eyes broadcasting review
By Zoe Samios
Updated June 27, 2022 — 9.59amfirst published at 5.00am
Communications minister Michelle Rowland has dismissed calls for the ABC to relocate from its Ultimo offices and opened the door to a sweeping review of the nation’s broadcasting sector.
In a wide-ranging interview with The Sydney Morning Herald and The Age, Rowland ruled out any move of the public broadcaster from its inner city offices in Sydney and Melbourne and revealed she is considering a thorough review of the 30-year-old legislation that governs the broadcasting sector in a concerted effort to make federal policy apply to an era where social media and streaming is prevalent.
“The key issue here is that we still have an analog environment for the digital age,” Rowland said. “We’ve got a Broadcasting Services Act that’s dated 1992. I even said in 2017 that we hadn’t had a proper review of the media landscape since the Productivity Commission in 2000. The government at the time said all the facts were known. They were not known. There is a very strong argument for review.”
The Broadcasting Services Act is a 30-year-old piece of legislation lays out the regulatory environment for legacy television and radio industries and contains provisions for parts of the internet. It was updated in 2017 under former communications minister Mitch Fifield, who passed a bill to relax media ownership laws, change local programming obligations and remove television and radio licence fees.
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Abandoning God: Christianity plummets as ‘non-religious’ surges in census
By Matthew Knott and Angus Thomson
June 28, 2022 — 12.05am
Key points
· Forty-four per cent of Australians identify as Christian, down from 61 per cent a decade ago.
· The share of people ticking the “no religion” box grew from 22 per cent in 2011 to 39 per cent in 2021.
· The number of people in Australia who identify as Hindu surged by 55 per cent over the past five years.
Australia has become strikingly more godless over the past decade, with the latest census data showing the proportion of self-identified Christians dropping below 50 per cent for the first time and a soaring number of people describing themselves as “non-religious”.
The first tranche of data from the 2021 census, released by the Australian Bureau of Statistics on Tuesday, shows that just 44 per cent of Australians now identify as Christian, down from 52 per cent five years earlier and 61 per cent in 2011.
When the first census was conducted in 1911, 96 per cent of Australians listed a form of Christianity as their religion.
The proportion of Australians identifying as Catholic declined from 23 to 20 per cent over the past five years while self-identified Anglicans dropped from 13 to 10 per cent.
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Lowy poll: China’s still a worry, but Russia more so
12:00AM June 29, 2022
While fear of the Covid-19 pandemic has subsided for many Australians this year, the threat of Russia, China and military conflict in our region looms large.
The 2022 Lowy Institute Poll, released on Wednesday, finds that Australians are feeling unsafe and shaken by the brutal invasion of Ukraine by its nuclear-armed neighbour Russia.
As Anthony Albanese heads to Europe, almost all Australians – a remarkable 92 per cent – are very or somewhat concerned about Russia’s invasion of Ukraine. The number of Australians who trust Russia to act responsibly or have confidence in President Vladimir Putin to do the right thing are in the single digits.
Most Australians also support a strong response to Russia’s overreach. Nine in 10 Australians support strict sanctions on Russia, and the same number would welcome Ukrainian refugees to Australia. Australians do not see the war in Ukraine as a crisis far from home. Rather, 68 per cent say Russia’s foreign policy poses a critical threat to Australia’s vital interests, a dramatic 36-point jump since 2017. This marks Russia displacing cyber, climate and Covid-19 as the top threat for Australians.
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https://thenewdaily.com.au/opinion/2022/06/30/alan-kohler-recession-coming-rba/
6:00am, Jun 30, 2022 Updated: 8:54pm, Jun 29
Alan Kohler: A recession we don’t have to have is coming, and it will be the RBA’s fault
As we end one financial year and start another, it looks impossible to avoid a recession.
The global economy is experiencing its sharpest slowdown in 80 years and inflation is surging. Stagflation is at hand.
Central banks must fight either the “stag” or the “flation”. They have decided, as one – attack inflation with rapid hikes in interest rates to slow the economy more than it’s already slowing, even though we were led to think they weren’t going to do that.
And recession must surely follow.
What’s more, the central bankers’ bankers and advisers at the Swiss-based Bank for International Settlements are egging them on.
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https://www.afr.com/markets/equity-markets/the-year-that-broke-the-60-40-portfolio-20220628-p5axbo
The year that broke the 60/40 portfolio
Jonathan Shapiro Senior reporter
Jun 30, 2022 – 1.34pm
For nearly 40 years, the traditional 60/40 portfolio of stocks and bonds has weathered all market conditions to deliver reliable returns to investors – rewarding those that kept it simple.
But not this year. The 60/40 has had a shocker as stocks are down but bonds – which are meant to provide a buffer in down markets by doing the opposite to stocks – are down even more.
“The big challenge of the last 12 months is it’s been the first time bonds and equities have gone down at the same time – there’s no place to hide,” Morningstar’s director of manager research Tim Murphy says.
The source of much of 60/40’s pain has been bonds. This has been both a “historic and horrific year” says Mutual Limited’s Scott Rundell, who crunched the numbers and calculated that the drawdown in the Australian bond index of 13.6 per cent is twice as bad as the 1994 crash’s fall of 7.6 per cent, which haunted a generation of fixed-income traders.
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https://www.afr.com/markets/equity-markets/shares-slump-to-rare-losing-year-20220627-p5awxz
Shares slump to rare losing year
Jonathan Shapiro Senior reporter
Jun 30, 2022 – 5.10pm
A global war on inflation and the race to increase interest rates pushed Australia’s sharemarket to a financial year loss for only the third time this decade, as the benchmark S&P/ASX 200 Index finished 10.2 per cent lower in 2021-22.
But it was speculators who maintained their faith in unprofitable technology stocks and buy now pay later players, and more cautious investors who sought to diversify into bond funds, that are hurting the most.
The blue-chip end of the market was a mixed bag with a wide dispersion of outcomes inside the top 20. Woodside, Macquarie Group and Coles delivered double-digit returns, while James Hardie, Wesfarmers and Westpac lost more than 20 per cent over the last 12 months.
The carbon intensive energy index posted a 25 per cent gain, helped largely by the doubling in value of coal companies and a 50 per cent rally by Woodside Petroleum, in the year that ESG (environmental, social and governance) investing forgot.
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https://www.afr.com/wealth/personal-finance/the-aussie-housing-crash-is-accelerating-20220630-p5axxi
The Aussie housing crash is accelerating
There is also clear evidence that what is destined to become the largest draw-down in Aussie housing market history is gradually extending to Brisbane and Perth.
Christopher Joye Columnist
Updated Jul 1, 2022 – 10.10am, first published at 9.19am
In what should come as no surprise to regular readers of this column, Australian house prices declined for the second month in a row in June – and the pace of losses is accelerating sharply.
According to CoreLogic’s market-leading daily hedonic index, dwelling values in the five largest cities fell by more than 0.8 per cent in June, following a 0.4 per cent loss in May.
Once again, the steepest losses were in Sydney, where dwelling values dropped by a chunky 1.5 per cent in June (versus -1.0 per cent in May), and Melbourne, where home values fell by 1.0 per cent (versus -0.7 per cent in May).
House prices in Australia’s two largest conurbations are therefore declining at a double-digit annualised pace.
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House price gains could be wiped out by July next year
Nila Sweeney Reporter
Jul 1, 2022 – 5.00am
Housing boom gains in Sydney and Melbourne, made through the pandemic, could be wiped out by July next year, as higher interest rate rises trigger a sharper decline in prices, experts say.
The CoreLogic home value index for June shows Sydney house prices have dropped by 1.6 per cent in June, faster than monthly declines seen during the 1980s recession and close to the price falls recorded during the 2018 to 2019 downturn, said Shane Oliver, AMP Capital chief economist.
A 20 per cent decline in Sydney house prices would take values back to March 2017 levels according to CoreLogic.
“By the way prices are going, I think Sydney, Melbourne, Canberra and nationally could fall by 15 per cent to 20 per cent, while Brisbane and Adelaide could drop by 15 per cent,” said Dr Oliver.
“At this rate, Sydney’s recent boom will be wiped out by around July or August – but that will mean a 21 per cent fall which is slightly more than the 20 per cent we are expecting.
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How we passed from the war on terror to a terrifying war
Phillip Coorey Political editor
Jun 30, 2022 – 8.00pm
En route to Madrid this week, Anthony Albanese dropped in to visit the remaining Australian troops stationed at the Al Minhad airbase in the United Arab Emirates desert, about 25 kilometres outside Dubai.
For the best part of the past two decades, the base has been central to allied operations in the Middle East, predominantly Iraq and Afghanistan, the latter being a NATO-sanctioned conflict.
Every Australian Prime Minister since John Howard has been there at least once, either to thank the troops stationed there for their service, or to get fitted with a helmet and bullet-proof vest before boarding a military plane to Iraq or Afghanistan.
At the peak of these conflicts, Al Minhad was teeming with thousands of military personnel from Australia, the United States, the United Kingdom and Canada, as well as the UAE.
The massive concrete airstrip was carpeted with helicopters, fighter jets and transports, a cacophony laced with dust and that industrial excitement that cloaks war.
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NATO globalises Australia’s China challenge in the Indo-Pacific
Dovish China-watchers used to complain that Australia had been stranded “out in front” against Beijing. Not any longer.
Jun 30, 2022 – 5.35pm
Anthony Albanese’s trip to the NATO summit has prompted another outburst by Beijing’s mouthpiece the China Daily, which warns that jumping on the US containment bandwagon will scotch the chance to reset bilateral ties with the new Labor government.
In his address in Madrid, Mr Albanese underlined how Australia’s security is now a global issue by linking Australia’s support for Ukraine and restoring Europe’s shattered peace to upholding the rule of law in a free, open, and prosperous Indo-Pacific.
That underscored the purpose of NATO inviting the leaders of Australia, Japan, South Korea and New Zealand to the summit, which was to signal the alliance’s expanded focus on China’s global challenge. That has been made explicit in the revised NATO Strategic Concept agreed to in Madrid.
For the first time since its formation in 1949, NATO has identified China as a global threat to the interests, security and values of the now 32-country alliance. This marks the next stage in the globalising of Australia’s China challenge in the Indo-Pacific region.
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Fury after Australia gifted Pacific nations faulty boats
Andrew Tillett Political correspondent
Jul 1, 2022 – 5.00am
Several major design flaws have been identified among a fleet of patrol boats gifted to Pacific nations by Australia, including poisonous carbon monoxide being pumped into the ship, forcing limits on their operation.
The faults have triggered an urgent dash to Pacific nations by Defence Department officials and engineers from shipbuilder Austal to assess the boats and come up with repairs.
The $2.1 billion program to gift 22 Guardian class patrol boats to Pacific nations was a key plank of the Coalition government’s Pacific Step Up initiative to build security ties with the region and counter China’s efforts to grow influence.
The Albanese government is furious over what it sees as neglect by the Coalition, with Defence Industry and Pacific Minister Pat Conroy only learning about the issues a week and a half ago. Austal and Defence had been working on repairs before that.
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China says chances of a reset with Australia are fading
Michael Smith and Phillip Coorey
Updated Jun 30, 2022 – 6.53pm, first published at 12.00pm
Tokyo/Madrid | China has accused Anthony Albanese of undermining the prospects of a reset in Sino-Australian diplomatic relations by linking Russia’s invasion of Ukraine with Taiwan and backing NATO’s accusation it is colluding with Moscow.
In the strongest criticism of the prime minister since Labor won the election, Beijing used an editorial in the China Daily newspaper to say Mr Albanese was being misled by NATO and called him “ill-informed” and “ignorant”.
The editorial, published online, referred to Mr Albanese’s interview with The Australian Financial Review while en route to Spain for the NATO summit, where he said China should take note of Russia’s strategic failure in Ukraine when considering its ambitions for Taiwan.
Hours later in Madrid in its communique, NATO formally classified China’s “stated ambitions and coercive policies” as a challenge to “our interests, security and values”.
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The ‘double whammy’ that’s derailed your super
Superannuation funds have reported rare losses amid inflation-fuelled market turmoil. But investors are being urged to resist fleeing to cash.
Duncan Hughes Reporter
Jul 1, 2022 – 5.00am
Superannuation members will in coming weeks be confronted by letters from their fund that plainly tell of the dilemma facing investors around the world.
Traditional safe-haven strategies used to protect the value of portfolios during volatile markets are performing as badly as higher-risk equities as interest rates rise to curb inflation as the economy slows.
“This is a train wreck,” says Alex Dunnin, executive director of research house Rainmaker Group. “When a traditionally conservative strategy is getting the worst returns then all bets are off. It doesn’t matter where you go, almost everyone will be in pain.”
Analysis being finalised by superannuation research house Chant West shows that popular growth strategies, with up to 80 per cent of assets in equities, and conservative funds, with up to 60 per cent in cash and fixed interest, are both posting losses of between 2.5 per cent and 3.5 per cent for the past 12 months.
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How investors survived the deepest market downturns
Duncan Hughes Reporter
Jul 1, 2022 – 5.00am
Investors who held their nerve through the worst bear markets of the past 50 years and remained in equities rather than switching to cash would have gained around 11 per cent as the markets recovered, according to analysis by Vanguard.
Duncan Burns, Vanguard Asia-Pacific chief investment officer, says: “While every investor would like to “buy low and sell high”, it is nearly impossible to achieve that every single time. But the worst-case scenario data of investing at the peak right before a dip highlights the positive outcomes of staying the course.”
There’s been a bear market each decade since the 1970s, with each crisis having different causes, impacts and lasting between 12 years to 14 months from peak to peak, according to Vanguard, which manages about $10.5 trillion on behalf of investors around the world.
The average recovery has been about 4.5 years.
Issues that rocked global markets range from runaway inflation in the 1970s; program trading and illiquidity in the 1980s; wars in the 1990s and the collapse of large financial institutions, such as Wall Street giant Lehman Brothers, and COVID-19 this century.
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Super funds behind the ball on their new duty to retirees
If done well, the so-called Retirement Income Covenant could improve the lives of millions of Australians. But the troubled business of financial advice is a traditional weak spot.
Aleks Vickovich Wealth editor
Jul 1, 2022 – 1.11pm
For many retirees, it is a familiar and frightening dilemma. Having watched their superannuation balance slowly but steadily increase over the decades of hard work, they suddenly face a huge and difficult decision about what to do with the money.
Should they take it as a lump sum, an account-based pension or a combination of the two? Should they deploy their life savings to a complex and scary product like a lifetime annuity? How can they make this nest egg last for the rest of their lives (however long that might be)?
Friday marked the 30-year anniversary of the compulsory superannuation system hard-won by Paul Keating and the trade union movement. So it is an appropriate occasion to reflect on what has been decent track record of investment performance.
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Albanese not to blame for subs debacle, says Macron
Phillip Coorey Political editor
Updated Jul 1, 2022 – 9.55pm, first published at 5.23pm
Paris | Anthony Albanese and Emmanuel Macron have pledged to return trust, respect and honesty to the relationship between Australia and France, and move on from the damage caused by the Morrison government’s cancellation of the $90 billion submarine contract with Naval Group.
Standing side by side outside the Élysée Palace in Paris, Mr Macron said Mr Albanese did not need to apologise on behalf of Australia for the way Scott Morrison handled the submarine contract.
“We will speak about the future, not the past,” he said. “He’s not responsible for what happened.”
Mr Macron spoke of Australia and France exploring new horizons together in space, the Antarctic and the oceans, on top of their shared commitments on fighting climate change, and maintaining law and order in the Indo-Pacific and Europe.
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Auction rates in free-fall as house prices drop
Duncan Hughes Reporter
Jul 1, 2022 – 3.47pm
Vendors are pulling their properties from auction at the fastest rate since the onset of COVID-19 amid growing concerns about rising interest rates, falling prices and a slowing economy.
Most of the properties being withdrawn are in Melbourne and Sydney, where one in four homes going to auction last weekend were cancelled, according to CoreLogic analysis.
If you like the look of Noosa Sound, you’ll have to keep waiting – only two houses in the picturesque suburb are up for sale.
This weekend’s sales across combined capital cities are down about 18 per cent from the previous week and more than 10 per cent from the same week last year, CoreLogic says.
But luxury beachside postcodes in Queensland, such as Noosa, have a two-year backlog. Demand is outpacing supply from cashed-up retirees and a new generation of overseas buyers, according to local agents.
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https://www.smh.com.au/national/we-must-not-sleepwalk-into-mass-surveillance-20220630-p5ay0q.html
We must not sleepwalk into mass surveillance
Lawyer and human rights expert
June 30, 2022 — 3.30pm
You’re minding your own business in a big store – let’s say Bunnings or Kmart – and a couple of burly security guards tap you on the shoulder. You are marched back towards the exit, with strangers and a family you know staring at the spectacle. You’re then turfed out and told not to come back.
When you ask why, one of the guards says your face has been matched against a list of known shoplifters. Though you’ve never been accused, much less convicted, of stealing so much as a paperclip in your life, there’s little you can do. You’re already in the carpark.
The security guards shrug. There’s nothing they can do either. The company’s computer matched your face against a database of people they don’t want in the store. As soon as your face was matched, the security guards were instructed to remove you.
Consumer advocacy group Choice’s recent investigation revealed how several big-brand companies use facial recognition on their customers. Electronics retailer the Good Guys this week responded to the consumer backlash by pausing its facial recognition program, pending clarification from the privacy regulator.
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Foreign policy team is literally front and centre of this government
Scott Morrison shone the spotlight on China’s bullying. But Albanese, Wong and Marles have the temperament to build the response to it.
Andrew Tillett Political correspondent
Jul 1, 2022 – 3.54pm
It’s a little thing that speaks volumes.
At meetings of the Coalition cabinet’s National Security Committee, then foreign minister Marise Payne used to sit one seat away from prime minister Scott Morrison.
But it hasn’t gone unnoticed that under Labor, Foreign Minister Penny Wong is seated next to Anthony Albanese, giving her prime position to whisper her views on matters during discussions.
After years where it felt the Department of Foreign Affairs and Trading had been sidelined, diplomacy is back at the centre of power.
Prime ministers sometimes invite criticism of being their own defence or foreign minister. What is unusual about Albanese’s government is how the key outward facing and geostrategic portfolios are all held by members of his leadership team.
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Albo’s success on fiscal test will decide his government’s future
12:00AM July 2, 2022
When parliament returns at the end of this month for the first time since the federal election we will get a clearer sense of what sort of government Anthony Albanese will lead.
The challenges are enormous: rising inflation, rising debt, rising interest rates. These are the known knowns. Throw in energy supply and cost pressures as well as uncertainty on rents and house prices, and winning the election almost presents as a poisoned chalice. Of course, politicians want power and they know that residing on the wrong side of the treasury benches is a worse fate.
The structure of the national economy is no longer fit for purpose. The Coalition sat on its reforming hands through three terms in office. Tax and federation reforms are desperately needed to ensure we can cover the costs of what people expect from government, and that’s before we even get serious about balancing the budget and paying down debt.
Neither side of the major party divide has credibility when it comes to fiscal conservatism. Liberals refer back to the Howard era to brandish their economic credentials, but after nearly nine years in office the current generation of Liberals tripled the debt. Labor can be proud of the all-important micro-economic reforms from the Hawke and Keating era, but it had nothing to do with the current crop of MPs. They’ll need to build their own legacy.
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COVID-19 Information.
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‘Shocking and perplexing’: Census reveals COVID toll on mental health
By Melissa Cunningham and Meghan Dansie
June 28, 2022 — 7.51pm
Key points
· Young Australians have reported far higher levels of psychological distress than any other age group with the census capturing the upheaval and mental toll of living through a pandemic.
· One in five Australians aged 16 to 34 years reported “high or very high levels of psychological distress” more than twice the rate of those aged 65 to 85 years.
· Experts warn the true extent of chronic disease was far higher in Australia than reflected in the census, which only collected self reported and diagnosed conditions.
Young Australians have reported far higher levels of psychological distress than any other age group, with the census capturing the upheaval and mental toll of living through a pandemic.
The first tranche of census data released on Tuesday provides a snapshot of the state of health in Australia, revealing that one in five Australians aged 16 to 34 years reported “high or very high levels of psychological distress”. That’s more than twice the rate of those aged 65 to 85 at 9 per cent.
Jane Fisher, a professor of global health at Monash University, said the data, which showed more than 2.2 million Australians now had a diagnosed mental illness, was “shocking and perplexing.”
“It raises some really important questions, one being: just how much of this is a reflection of our COVID situation?” she said. “It is almost impossible to answer this directly because we have never asked this question before in a census.”
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Health minister says a third wave of Omicron infections is on the way
By Ashleigh McMillan – 01 July 2022
Australia’s health minister says the country is still in a “very serious” phase of the pandemic, after he announced a major review of COVID-19 vaccine purchasing over the 18 months.
Mark Butler announced a snap inquiry into Australia’s COVID-19 vaccine supplies on Thursday, to be led by respected former Health Department chief Jane Halton.
He said the review would ensure the current vaccine arrangements are “fit for purpose”.
“There are a range of new sub-variants as you say, sweeping through the Northern Hemisphere, and they’re already taking hold here in Australia as well,” he told ABC RN Breakfast.
“Over the coming months, all of the health authorities do expect there to be a third wave of Omicron.
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Double virus dose: Covid-19, flu squeezes economy
11:30PM July 1, 2022
A winter wave of Covid-19 and influenza threatens to force hundreds of thousands of workers to stay home over the next month, exacerbating staffing shortages and sparking warnings of disruptions to transport, freight services and supermarkets that could act as a handbrake on the economy.
Medical experts on Friday sounded the alarm on elevated Covid and flu numbers remaining for “at least another month”, with a further 200,000 Australians testing positive for coronavirus in the past week and Health Minister Mark Butler warning of a “third wave” of the virus in coming months.
The Health Department has revealed the weekly number of confirmed influenza cases had already exceeded the five-year average and reached more than 147,000 in this season alone.
But experts have argued the official numbers for both illnesses are a vast undercount, likely representing fewer than 40 per cent of the true caseload across the community.
The rise of new Omicron sub-variants BA4 and 5 in Australia is risking a repeat round of infections for people who have already had Covid, with the added concern that BA5 has evolved to attack the lungs.
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Climate Change.
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Joe Biden’s climate change agenda in tatters
5:04AM July 1, 2022
Joe Biden’s climate change agenda is in tatters after the Supreme Court ruled the federal government couldn’t unilaterally force power plants to cut their carbon dioxide emissions, the last significant lever available to the Biden administration after Congress failed to pass a Green New Deal.
The latest in a series of controversial decisions, the Supreme Court sided with West Virginia, other states and small coal producers on Thursday (Friday AEST), defanging the powerful Environmental Protection Agency, which was drawing up rules to compel fossil fuel power plants to decarbonise and boost solar and wind power.
“A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body,” Chief Justice John Roberts wrote as part of a 6 – 3 ruling that reflected the court’s new conservative majority.
“The EPA claimed to discover an unheralded power representing a transformative expansion of its regulatory authority in the vague language of a long-extant, but rarely used, statute.”
The decision came as Mr Biden took the unusual step of slamming the Supreme Court in public remarks in Madrid, where he’s attending at NATO summit, bringing relations between federal government and the nation’s highest court to the lowest point in generations.
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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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A wage-price spiral is a ticket to revisiting the 1970s
Without price stability or productivity improvements, generous wage, fiscal, or monetary policies will represent nothing but false promises.
Jim O'Neill Columnist
Jun 26, 2022 – 3.34pm
There has been much talk lately of a return to 1970s economic conditions. In Britain, year-on-year inflation reached 9.1 per cent in May, and disruptive labour strikes are dominating the headlines.
But is a 1970s-style economy really in the offing? Much will depend on what happens with wage settlements and monetary and fiscal policy. And there are, of course, several global forces to consider, including COVID-19, China’s uncertain economic outlook, Russia’s war in Ukraine, and the parlous state of global economic and political governance generally.
With workers demanding higher wages, long-term inflation expectations have become a central issue. In early June, the University of Michigan’s closely watched inflation-expectations survey showed that respondents’ expectations of inflation over the next five years had risen sharply from 3 per cent to 3.3 per cent.
This is worrisome, and it is a blow to those (like me) who have been arguing that the evidence for the medium- to long-term picture is still rather mixed. Other surveys (outside of financial markets) had suggested that the recent spikes in energy, food, and consumer prices were one-off events, rather than signs of genuine inflation.
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Inflation to be ‘significantly higher’ than expected: Chalmers
By Shane Wright
June 26, 2022 — 10.53am
Inflation will be “significantly higher” than forecast in the most recent budget, Treasurer Jim Chalmers has revealed while also warning the cost of servicing government debt is rapidly increasing.
But Chalmers believes by next year, some of the inflationary pressures now delivering cost of living pressures to ordinary Australians will have started to abate.
The new treasurer will deliver an economic and fiscal update to the Parliament in the last week of July. He is due to hand down a new 2022-23 budget in October.
Former treasurer Josh Frydenberg handed down an early 2022-23 budget on March 29. That forecast inflation at 4.25 per cent for 2021-22 before edging down to 3 per cent through the upcoming financial year.
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A bold plan to revive Australia’s dismal productivity growth
Does the new Labor government have the Hawke-Keating courage to disrupt and do what is needed for a successful transition towards higher-value-added enterprises and greater self-sufficiency?
Adrian Blundell-Wignall Economist
Jun 28, 2022 – 12.01am
It’s difficult to look at Australia without asking how successive governments managed to achieve dismal productivity growth while always asking voters to support their great plans. Resources (9 per cent of GDP but 20 per cent of the sharemarket) and finance (7.5 per cent of GDP but 40 per cent of the sharemarket) have both been the darlings of policymakers.
Yet these two sectors are at the very forefront of poor productivity growth.
The truth is, we have never had a long-term plan. Bob Hawke understood the need for one when he set up the Economic Planning Advisory Council in 1984. It didn’t last long. The Treasury set about to destroy it from day one.
As it turned out, the ministers didn’t really want a plan either. Hawke and Paul Keating made a great start with floating the dollar and other disruptive changes, but they didn’t follow through with a long-term overarching plan. It was just not in the culture.
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https://www.afr.com/policy/economy/government-debt-agency-braces-for-market-stress-20220628-p5ax78
Government debt agency braces for ‘market stress’
Jonathan Shapiro and John Kehoe
Jun 28, 2022 – 3.49pm
The head of the federal government’s debt agency says it is preparing for a more volatile world of rising inflation and unwinding of central bank bond buying that could reduce the appeal of Australian bonds and push up borrowing costs.
Rob Nicholl, the chief executive of the Australian Office of Financial Management, said demand for Australian government bonds was “solid”, but there were risks on the horizon as the AOFM prepared to sell a further $125 billion of debt to domestic and international investors at materially higher interest rates than in 2021.
“We can’t ignore the possibility that with an outlook for continuing material adjustments across financial markets further periods of heightened volatility and market stress are likely to emerge,” he told economists at lunch in Sydney on Tuesday.
The comments come after one of the biggest sell-offs ever experienced in the bond market as Australian 10-year rates have quadrupled from 1 per cent to 4 per cent, materially increasing borrowing costs for new debt.
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Health Issues.
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https://www.afr.com/politics/federal/long-term-health-conditions-add-to-budget-pain-20220628-p5ax4o
Long-term health conditions add to budget pain
Tom McIlroy Political reporter
Jun 28, 2022 – 6.24pm
Spending on healthcare and disease prevention will add pressure to the federal budget in coming years, but a leading economist says it will also assist more than 8 million people work later into their lives, helping lift productivity and participation.
Tuesday’s census data revealed for the first time the extent of long-term health conditions, showing about 2.2 million people live with mental health challenges, 2.1 million with arthritis and more than 2 million with asthma.
Nearly 1.5 million people have at least two of the 10 long-term health conditions listed on the census form, while about 5.7 per cent of the national population have a disability and require assistance for everyday activities.
About 750,000 people reported having been diagnosed with three or more long-term health conditions.
Economist Chris Richardson said federal Labor’s election pledge to improve the quality of government spending was badly needed in health, including around improved mental health spending, which could help boost the economy and provide social benefits.
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Australian Medical Association prescribes new regulator to save private health system
6:00AM June 30, 2022
The Australian Medical Association is calling for a new regulator to oversee the private health system, control premium rises and drive reforms in the sector, warning that the industry is on the brink of becoming unsustainable.
The private health insurance industry has been described as being in a “death spiral” as younger people abandon their policies and older people, who draw down heavily in benefits, take out policies in greater numbers.
Private health insurers, private hospital CEOs and medical devices industry chiefs will come together in Canberra on Thursday with the AMA for a summit that will discuss reform of the sector and the proposed new independent body. Health Minister Mark Butler will address the summit.
An independent private health system authority proposed by the AMA would regulate the behaviour of all players in the private health sector, have the power to review and approve health insurance premium rises and be responsible for the prudential regulation of insurers, perform continuous review of policy settings including government rebates in collaboration with the sector, and implement system-wide reforms.
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International Issues.
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Ukraine war underscores need for permanent Nato eastern defences
Estonia, Latvia and Lithuania want extra troops on the ground because Ukraine has shown the first fight is the most important one.
Henry Foy
Jun 26, 2022 – 3.16pm
Britain’s defence secretary Ben Wallace put it bluntly: “You don’t have 60 days to get your tanks to Estonia. Because by that stage there will be no Estonia, given what the Russians have done in Ukraine.”
Speaking on
the sideline of a Nato meeting in Brussels last week, Wallace was not being
glib. The Baltic states of Estonia, Latvia and Lithuania – the north-eastern
flank of the transatlantic alliance – had long warned of a potential Russian
attack before Moscow’s onslaught against Ukraine began
in February.
Now, as Russia steps up its threats against the Baltic states – including over access to its Kaliningrad exclave – and days before the organisation’s annual summit in Madrid, the debate over the type of support Nato allies should provide them has intensified.
Germany announced last week that it would commit 3500 extra troops to defend Lithuania, but that it would keep the majority of them stationed at home.
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https://www.afr.com/policy/economy/wage-inflation-flashing-red-bis-warns-20220626-p5awo5
Wage inflation ‘flashing red’, says Bank for International Settlements
John Kehoe and Hans van Leeuwen
Jun 26, 2022 – 7.00pm
The international club of central banks responsible for controlling inflation has backed Reserve Bank of Australia governor Philip Lowe by warning that wage-price spiral risks are “flashing red” and calling for “front-loaded” interest rate hikes to avoid 1970s-style stagflation.
If central banks failed to tame inflation and wage claims, interest rates would need to rise sharply, risking “large drops in asset prices [that] could trigger a sharp recession and financial stresses”, the Bank for International Settlements said.
The BIS also said rising interest rates meant governments could not rely on economic growth to reduce their debt burdens, following a similar U-turn by Treasury from its more relaxed position about budget deficits under the Coalition government.
Treasurer Jim Chalmers warned on Sunday that getting spending under control would be necessary in the October 25 budget. He said inflation would be “significantly higher” than the previous government forecast and public debt repayment costs would rise.
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Russia defaults on foreign debt for first time in 100 years
Giulia Morpurgo and Libby Cherry
Jun 27, 2022 – 9.43am
Russia defaulted on its foreign-currency sovereign debt for the first time in a century, the culmination of ever-tougher Western sanctions that shut down payment routes to overseas creditors.
For months, the country found paths around the penalties imposed after the Kremlin’s invasion of Ukraine. But at the end of the day on Sunday, the grace period on about $US100 million ($144 million) of snared interest payments due May 27 expired, a deadline considered an event of default if missed.
It’s a grim marker in the country’s rapid transformation into an economic, financial and political outcast. The nation’s eurobonds have traded at distressed levels since the start of March, the central bank’s foreign reserves remain frozen, and the biggest banks are severed from the global financial system.
But given the damage already done to the economy and markets, the default is also mostly symbolic for now, and matters little to Russians dealing with double-digit inflation and the worst economic contraction in years.
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United States, no more. It is a failed state
The Weekend Australian Magazine
12:00AM June 25, 2022
Once upon a time there was a magic kingdom. No, that’s Disneyland. A magic republic. Proud of its constitution and believing in manifest destiny. Then something went wrong and it lived unhappily ever after. To be more accurate, a lot of things went wrong, and like many an imperial power before it – from the Romans to the British and the Soviets – it fell. The United States no more. It is a failed state.
A departing president, once a warrior, warned the people in 1961 that their nation was in the grip of what he called “the military-industrial complex” – an unholy alliance of the most vested of interests that has kept the US at war for most of its history; wars mostly on the wrong side of history. But it had been at war with itself even earlier: the so-called American Civil War that cost more than 600,000 deaths. A war fought largely over slavery, the great atrocity perpetrated on four million Africans – at a time when the total population was about the same as Australia’s. It’s a war that rages to this day, as judged by the ongoing destruction of black lives and mass incarceration.
And there are ongoing mass shootings – 246 of them in the first 22 weeks of this year alone, all too often involving schoolchildren – as a direct consequence of a wilful misreading of the sacred US Constitution orchestrated by an all-powerful terrorist organisation called the National Rifle Association, which turns politicians into puppets. America’s citizens own 400 million guns, and not even presidential assassinations or Sandy Hooks or Uvaldes will lead to significant disarming.
While living children remain targets, unborn children will be “protected”. Thanks to a Supreme Court stacked by Republicans, abortion will be re-criminalised. Already red states are passing legislation that will charge doctors and pregnant women as murderers. It won’t stop desperate women seeking abortions. It will simply make these procedures far, far more dangerous. In many senses of the word.
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NATO ramps up high-alert forces, Russia pummels Ukrainian cities
Hans van Leeuwen Europe correspondent
Jun 28, 2022 – 5.56am
London | NATO leaders will use their summit this week to ramp up the number of troops on high alert to more than 300,000 and G7 countries have vowed to stiffen their sanctions on Russia, but a defiant Moscow responded with brutal air strikes.
Revealing a sevenfold increase in the number of troops ready to respond rapidly to Russian aggression on NATO territory, the alliance’s secretary general Jens Stoltenberg told reporters the shift was “transformative for our deterrence and defence”.
He expressed confidence that Russia understood the alliance’s “credible deterrence” to aggression against any of its 30 members.
“We are ready to protect and defend every inch of NATO territory,” he said.
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‘He’s dead’: Expert reveals brutal prediction about Vladimir Putin’s future
Rumours continue to swirl about Vladimir Putin’s future – and according to one expert, the Russian President’s time is running out.
June 28, 2022 - 9:52AM
Rumours continue to swirl about Vladimir Putin’s future – and according to one expert, the Russian President’s time is running out.
Russian President Vladimir Putin’s days might just be numbered – and when his time is finally up, it’s “not going to be pretty”.
That’s according to former CIA Moscow chief of station Daniel Hoffman, who told the Daily Beast in an explosive new interview that he was convinced the 69-year-old would be assassinated.
He told the publication his advisers would brutally turn on him the minute they grew unhappy with either their personal positions, or the progress of the war in Ukraine.
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Russia shells Ukraine shopping mall with 1000 inside
4:46AM June 28, 2022
Russia has bombed a busy shopping mall in eastern Ukraine, with outraged president Volodomyr Zelensky warning: “It is impossible to even imagine the number of victims.”
The Kremenchuk mall in the Poltava region was struck by missiles on Monday afternoon local time (early Tuesday AEST), when around 1000 people were inside shopping, with early reports identifying at least ten dead and scores of injured.
Poltava leader Dmytro Lunin, said: “Missile strike on a shopping mall with people in Kremenchuk is yet another military crime by the Russians. A crime against humanity. This is an obvious, cynical act of terror against peaceful civilians. Russia is a terrorist state.
‘Rescuers and policemen are working at the site. The number of victims is impossible to count as of now.”
The centre, a popular venue for the city’s 200,000 population, was engulfed in a huge fireball at 3.20pm local time with video showing shocked bystanders and then firefighters attempting to put out the blaze as internal walls collapse.
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Ukrainian’s Shaman force wreaks havoc in Putin’s backyard
By Maxim Tucker
The Times
8:31PM June 27, 2022
Rotor blades whirled across the night sky as the helicopters streaked low over the Russian border. On board, the men of the Shaman battalion, an elite Ukrainian special forces unit, prepared to disembark deep behind enemy lines. Their mission: to destroy infrastructure vital to the Kremlin’s war effort.
Ukrainian special forces have been running covert raids inside Russia, according to two soldiers who took part and an intelligence officer. It is the first time Ukrainian forces have acknowledged taking the fight to Russian territory. The targets are classified, but the forays help to explain why Russian oil refineries, arms depots and communications networks have been destroyed.
Two of the soldiers, 25-year-old sergeants known only as “Handsome” and “22”, have been fighting President Vladimir Putin’s forces since his invasion of Crimea and eastern Ukraine in 2014. “The most interesting missions are working behind enemy lines, planting explosives behind the frontlines, beyond the border,” 22 said.
“The Russians don’t know what happened, they often can’t believe we were there,” Handsome added.
The selection process for the battalion includes a 20km march with wet sand in their backpacks and stopping to cut wood, dig trenches and build camouflaged positions at a moment’s notice. The unit specialises in diving, parachuting and mountaineering. “We send them to take on the most difficult tasks because they’re the best and the bravest,” an intelligence officer said.
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Putin is strong now, but US can win the energy wars
Russia can squeeze the West in the short term on oil and gas, but it is losing its position as an energy superpower.
Gideon Rachman Columnist
Jun 28, 2022 – 9.51am
The great oil shocks of the 1970s taught Western politicians a sobering lesson about the might of the world’s energy superpowers. Fifty years later, that lesson is being learnt all over again.
Russia is fighting back against Western sanctions by restricting the supply of gas to Europe. The prospect of a total cut-off of Russian gas is causing near panic in Europe as Germany and other major economies contemplate energy rationing this winter.
Meanwhile, Joe Biden – worried by soaring petrol prices ahead of the midterm elections – has had to forget his campaign rhetoric about treating Saudi Arabia as a pariah. The US President is off to Riyadh next month to appeal to the Saudis to pump more oil.
The lesson seems to be simple and dispiriting. In 2022 – as in 1973 – the world’s major oil producers can still make the world’s biggest political powers dance to their tune.
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https://www.afr.com/policy/economy/who-would-want-to-be-a-central-banker-right-now-20220627-p5awy4
Who would want to be a central banker right now?
Central banks became enormously powerful after the global financial crisis. But now there are questions on whether they can do what is needed of them.
Howard Davies Columnist
Jun 28, 2022 – 1.08pm
Who would want to be responsible for monetary policy in 2022? To judge from the fierce economic and political debates under way around the world, it is as though open season has been declared on central bank governors: They are being shot at from all sides.
US Federal Reserve chairman Jerome Powell and his colleagues are accused of failing to spot the early signs of an inflationary threat last year. As late as last northern autumn, they were arguing that price rises were “transitory”.
With annual US inflation today approaching double figures, that looks to have been a poor judgment. But now that the Fed has acknowledged its mistake and is raising interest rates, many accuse it of choking off the post-pandemic recovery, collapsing both equity and bond markets, and precipitating a recession.
The European Central Bank has still not begun to raise rates, though it is expected to do so in July. The ECB is charged both with indecision and with sowing the seeds of a new eurozone crisis by suggesting a potential reversal of quantitative easing.
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NATO steps up against China, prepares for war in Europe
Phillip Coorey Political editor
Jun 29, 2022 – 8.09am
Madrid | NATO is poised to formally classify China as a challenge to the organisation’s interests, security and values at the same time it moves towards a war footing in Europe to combat the threat to its east led by Russia.
As Prime Minister Anthony Albanese echoed calls by some European leaders for Western countries to hold their nerve against Russia, despite the spiralling cost of living caused by the invasion of Ukraine, NATO was set to bolster its membership with Turkey backing away from its threat to veto Sweden and Finland joining.
US President Joe Biden has also pledged to increase his country’s military presence in Europe for the long term, including increasing the number of destroyers based in Spain from four to six.
In recognition of the global threat posed by China, which is backing the Russian invasion of Ukraine, NATO members in Madrid for a two-day summit will reportedly agree to label China “a challenge to our interests, our security and our values” in a new 10-year doctrine to be formulated this week.
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Why Revlon’s slide into bankruptcy spells trouble ahead
Revlon, the 90-year-old cosmetics giant, filed for bankruptcy a fortnight ago. Analysts believe that other debt-laden US retail brands will follow suit.
Karen Maley Columnist
Jun 29, 2022 – 5.00am
When the US cosmetics giant Revlon filed for bankruptcy a fortnight ago, commentators were unanimous that it represented a sign of the times.
They differed, however, on precisely what it signified.
Some saw it as highlighting the huge transformation in the cosmetics industry, with the emergence of a new breed of entrepreneurs relying heavily on digital market to promote their indie brands.
Revlon, they argued, had failed to keep up with this new world where celebrity superstars, such as Rihanna and Kylie Jenner, can market their cosmetic lines to their millions of Instagram and TikTok followers.
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Turkey gives Finland, Sweden the green light to join NATO
Hans van Leeuwen Europe correspondent
Jun 29, 2022 – 9.10am
London | Turkey has dropped its opposition to Finland and Sweden joining NATO, paving the way for the trans-Atlantic military alliance to embrace the pair of formerly neutral states on Russia’s border.
The three sides reached an 11th-hour deal in Madrid on Tuesday night (Wednesday AEST), right before a two-day leaders’ summit that will redefine NATO’s strategy and purpose in the aftermath of Russia’s invasion of Ukraine.
US President Joe Biden welcomed the trilateral deal as he arrived in Madrid on Tuesday, saying he wanted to get the new members through the ratification process as quickly as possible.
“Finland and Sweden are strong democracies with highly capable militaries. Their membership will strengthen NATO’s collective security and benefit the entire trans-Atlantic alliance,” he said.
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‘Disaster just around the corner’: Australia must not misread China’s deadly strategy
Former diplomat
June 28, 2022 — 5.00am
“Tactics without strategy is noise before defeat.” Chinese general, military strategist and philosopher Sun Tzu is too often quoted but can occasionally illuminate a real problem.
This week, when China sent a near record number of warplanes into Taiwan’s air defence identification zone, it was more serious than previous incursions. A week earlier, China officially claimed the Taiwan Strait to be China’s sovereign territory. The West responded by reiterating legal arguments against the claim. But that misses the point. It is not a legal claim. Instead, China has declared its intent to act as if the Taiwan Strait is part of sovereign China. The difference has enormous implications, and we misread it at our peril.
Relatedly, a Chinese J-16 fighter intercepted an Australian P-8 surveillance aircraft near the Paracel Islands on May 26, 2022, and then damaged it with flares and chaff. Australia responded firmly. Minister for Defence Richard Marles declared Australia’s surveillance flights will continue because they are allowed under international law and are “fundamentally important to Australia’s security interests”. He may be right on both accounts, but the strength of Australia’s commitment will be severely tested.
Also on May 26, 2022, one of Canada’s surveillance aircraft was harassed by Chinese aircraft in another part of the Pacific. Canada also protested to the Chinese government. But rather than being apologetic, Chinese leaders robustly defended China’s actions and attacked Australia and Canada for violating China’s sovereignty.
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Russia will regenerate into even bigger danger, warns British army chief
By Larissa Brown
The Times
June 29, 2022
Russia will most likely emerge from the war in Ukraine as an “even greater threat” to European security, the new head of the British Army has said.
General Sir Patrick Sanders, who has been in post less than two weeks, said Russia’s resilience meant it could suffer the loss of any number of campaigns, battles and engagements but then “regenerate and still ultimately prevail”.
He said that given President Putin’s ambition to restore the lands of “historic Russia”, any respite would be “temporary and the threat would become even more acute” after Russia replenishes its capabilities after defeats in Ukraine.
Analysts believe Russia is learning from its mistakes, enabling it to make slow but steady progress in the eastern Donbas region. Speaking as leaders gathered in Madrid for the NATO summit, General Sanders said that Russian wars often started badly. “History has also shown us that armies that have tasted defeat learn more quickly,” he said in his first public speech as chief of the general staff, at the Royal United Services Institute think tank in London.
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It’s time we took the war into Russia
The Times
June 29, 2022
When a precision missile hits a large shopping centre in the middle of a city, you know it’s not a misfire or a dud shot but rather a calling card from Vladimir Putin. This week’s war crime in Kremenchuk’s busy mall was a further sign that Russia’s sustained attack on Ukraine has turned into total war.
Sanctions pile up against Russia – there are well over 10,000 on individuals and entities, more than the overall number imposed on the pariah states of Iran, Syria and North Korea – and yet Putin shows no sign of easing the slaughter. By November, he calculates, President Biden will have been turned into a lame duck at midterm elections. In the same month the Russian leader plans to attend the G20 summit in Indonesia as a peacemaker rather than a warmonger, ready perhaps to lift the blockade on Ukraine’s grain crop to feed the world’s hungry.
Russian gas will be gobbled up by Europeans just before winter. Putin foresees a golden autumn: Ukraine will have lost land and lives and, crucially, Ukraine’s backer NATO will have lost face.
The western sanctions regime and the sluggish supply of modern weaponry were never likely to deter Putin or quash his fundamental interest in subjugating Ukraine. There has been no coup attempt against him, there is no mass Stop the War campaign, Russian ambassadors are not queuing up to defect to the West.
Sanctions can work, can change political behaviour and are often seen as an offensive weapon, but they function cumulatively, over time, and there are always unintended consequences. Although Putin’s war made a stumbling start it is now moving at pace: in Donbas Russians are outgunning Ukrainians ten to one. Facts on the battlefield are changing faster than it takes for sanctions to bite against Moscow’s decision-makers.
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https://www.afr.com/world/europe/western-liberals-must-learn-from-the-merkel-years-20220629-p5axof
Western liberals must learn from the Merkel years
The gas dependence on Russia, the turn against nuclear power, the inadequate defence spending: parts of her record as German chancellor have aged as well as milk.
Janan Ganesh Contributor
Jun 29, 2022 – 11.45am
George W Bush has never issued a mea maxima culpa for his botched war in Iraq. The central bankers who oversaw the credit bubble of the early 21st century have not abased themselves and begged for their reputations. Why, then, should Angela Merkel?
The gas dependence on Russia, the turn against nuclear power, the inadequate defence spending: parts of her record as German chancellor have aged as well as milk. But it doesn’t matter whether someone who will never hold office again learns from or even admits their errors.
That is not so true of those who cheered her on. Western liberals still have votes and, through preponderance in the media, opinion-forming clout. It matters that they are skirting around their lionisation of the “Queen of Europe” (a title she didn’t court or like) for much of the past decade. It implies that they will not learn the lessons of her tainted legacy. Here are just three.
Consensus and compromise are not ends in themselves. Merkel’s style of leadership was what endeared her to liberals, not just her (nominally centre-right, remember) beliefs. In a piece of silly guesswork that was never applied to Margaret Thatcher BSc, her scientific training was even hailed as the basis of her pragmatism.
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https://www.afr.com/policy/foreign-affairs/nato-s-globalised-strategy-20220628-p5axf0
NATO shares in Australia’s China risk
The historic character of the Madrid summit extends to the Indo-Pacific as the alliance identifies authoritarian China as a clear challenge to Europe’s interests.
Rory Medcalf Geopolitical analyst
Jun 29, 2022 – 12.31pm
Amid the carnage Russia is inflicting on Ukraine, what is surprising is not how little attention Europe is paying to the security problems of Australia’s region – but how much.
Thus, in attending this week’s NATO summit in Madrid, Prime Minister Anthony Albanese has joined a deepening international response to the convergence of strategic risks across the Euro-Atlantic and Indo-Pacific.
It may not yet be quite a united front against the authoritarian challenge from Russia and China, but the trend is in that direction.
Not all European governments want to agree with the Biden Administration’s assessment that the world is now a single theatre of strategic and ideological competition.
And of course there are differences between Russia’s murderous recolonisation and China’s many shades of coercion, though the threat to take Taiwan is less warlike only by degree.
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If the US Supreme Court can reverse Roe, it can reverse anything
No one should get used to their rights in America. Predicting with certainty which ones, if any, will go, or when, is impossible.
Mary Ziegler
Jun 30, 2022 – 10.00am
I have seen this coming for months and even years, and yet the reality of the Supreme Court’s decision is still a shock.
How can it be that people had a constitutional right for nearly half a century, and now no more? How can it not matter that Americans consistently signalled that they did not want this to happen, and even so this has happened?
The court’s answer is that Roe is different. Roe, the court suggests, was uniquely, egregiously wrong from the beginning – a badly reasoned decision criticised by even the most ardent supporters of abortion rights, including the late Justice Ruth Bader Ginsburg. The majority suggests that the best comparison to Roe (and Planned Parenthood v Casey, the decision that saved abortion rights in 1992) is Plessy v Ferguson, the 19th-century decision that held racial segregation to be constitutional.
If this decision signals anything bigger than its direct consequences, it is this: no one should get used to their rights. Predicting with certainty which ones, if any, will go, or when, is impossible.
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Russia, China collude to subvert the global order: NATO
Phillip Coorey Political editor
Jun 30, 2022 – 8.21am
NATO has accused Beijing of conspiring with Moscow to subvert the international rules-based order, as part of a new 10-year blueprint that identifies China for the first time as a global threat, and brands Russia the most significant and direct threat to security, peace and stability in Europe.
Beijing reacted angrily to the new NATO Strategic Concept, agreed to at its summit in Madrid, accusing the 32-member alliance of trying to launch a new cold war.
“What they should do is give up their Cold War mindset, zero-sum games, and stop doing things that create enemies. Stop trying to mess up Asia and the world after messing up Europe,” a Chinese Foreign Ministry spokesman said.
NATO’s classification of China’s “stated ambitions and coercive policies” as a challenge to “our interests, security and values” came against the backdrop of Russia’s invasion of Ukraine, which China both supports and has indirectly facilitated.
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https://www.afr.com/policy/economy/the-risk-of-a-flip-flopping-fed-20220630-p5axwg
The risk of a flip-flopping Fed
There is a danger of the classic ‘stop-go’ trap that haunted many Western central banks in the 1970s and 1980s.
Mohamed El-Erian Contributor
Jun 30, 2022 – 9.44am
The markets are evolving their minds about US economic prospects just as the Federal Reserve has been scrambling again to catch up to developments on the ground.
This risks yet another round of undue economic damage, financial volatility and greater inequality. It also increases the probability of a return to the “stop-go” policymaking of the 1970s and 1980s that exacerbates growth and inflation challenges rather than addressing them.
Good central bank policymaking calls for the Fed to lead markets rather than lag behind them, and for good reasons. A well-informed Fed with a credible vision for the future minimises the risk of disruptive financial market overshoots, strengthens the potency of forward guidance on policy and provides an anchor of stability that facilitates productive physical investment and improves the functioning of the real economy.
Coming into the second half of June, the Fed had already lagged behind markets twice in the past 12 months and in a consequential manner. First it stubbornly held on to its “transitory” mischaracterisation of inflation until the end of November, thereby enabling the drivers of inflation to broaden and become more embedded.
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The dismal truth is that Putin is winning the economic war
By Jeremy Warner
June 30, 2022 — 8.25am
There is bad policy, and then there is really bad policy. I was wondering when the idea of imposing price controls as a means of countering resurgent inflation was going to make a reappearance, and then sure enough, up it pops at the latest summit of G7 political leaders in the Bavarian mountain resort of Schloss Elmau.
It sounds so simple, doesn’t it? Confronted with out-of-control inflation, all you have to do is limit the prices that producers are allowed to charge, and the problem goes away.
Only it doesn’t. Price and wage controls were extensively tried in both Britain and the US during the 1970s; they didn’t work then, and they won’t work now.
Here’s the US economist Milton Friedman explaining why: “We economists don’t know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can’t sell tomatoes for more than two cents per pound. Instantly you’ll have a tomato shortage. It’s the same with oil or gas.”
There is not much point in making high prices illegal if the end result is closed petrol forecourts and empty supermarket shelves.
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US Fed Reserve must accept higher recession risk to curb inflation: Powell
By Nick Timiraos And Tom Fairless
The Wall Street Journal
7:59AM June 30, 2022
Federal Reserve Chairman Jerome Powell is more concerned about the risk of failing to stamp out high inflation than about the possibility of raising interest rates too high and pushing the economy into a recession.
“Is there a risk we would go too far? Certainly there’s a risk,” Mr Powell said during a moderated discussion at the European Central Bank’s annual economic policy conference in Portugal.
“The bigger mistake to make – let’s put it that way – would be to fail to restore price stability.”
Fed officials are raising rates at the most aggressive pace since the 1980s in part because of concerns that higher prices could change consumer psychology in ways that sustain high inflation.
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US to ramp up military presence in Europe to counter Russia
By Alex Leary, Tarini Parti and Gordon Lubold
Dow Jones
June 30, 2022
The US will make its biggest military expansion in Europe since the Cold War, including its first permanent troop presence in Poland, as NATO prepares for two more members to join the alliance in response to Russia’s invasion of Ukraine.
The announcement, which follows a NATO pledge this week to increase its high-readiness forces sevenfold, comes despite Washington’s efforts to shift US attention toward China and offers fresh evidence how Russia’s war is upending international security.
“We’re stepping up. We’re proving that NATO is more needed now than it ever has been,” President Biden said Wednesday at the opening of the North Atlantic Treaty Organization summit.
The shift to China was evident in the release of NATO’s updated “Strategic Concept,” a mission statement for the decade ahead. China wasn’t mentioned in the last version, from 2010, but its economic and military might have caused a global reordering.
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Markets just had the worst start in 50 years. Some see more pain ahead
Isabella Simonetti
Jul 1, 2022 – 5.41am
Wall Street set records in the first half of the year, none of them good.
The economy is on the cusp of a recession, battered by high inflation and rising interest rates, which eats into paychecks, dents consumer confidence and leads to corporate cutbacks. As it has teetered, markets have tanked.
The stock market is on track for its worst first six months of the year since at least 1970. The S&P 500 index, the cornerstone of many stock portfolios and retirement accounts, peaked in early January and has fallen 19.9 per cent over the past six months.
The sell-off has been remarkably broad, with every sector except energy down this year. Bellwethers including Apple, Disney, JPMorgan Chase and Target have all fallen more than the overall market.
And that is only part of the horror story for investors and companies this year.
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Worst start in history: Recession panic wipes $19 trillion off markets
By James Warrington and Tom Rees
July 1, 2022 — 8.24am
The global market rout has wiped $13 trillion ($18.9 trillion) off world stocks in the worst start to any year on record as business and consumer confidence collapses amid surging inflation.
The MSCI World Equity Index has shed more than 20 per cent so far this year in the steepest first-half decline since its creation, led by a plunge in loss-making tech companies as investors panic over the end of ultra-low interest rates.
In the UK, the FTSE 100 fell 2 per cent to close out its worst month since the early days of the COVID pandemic. All but 10 stocks closed in the red, reducing the value of blue-chip companies by £50 billion ($88 billion), amid fears the country will suffer the steepest recession in Europe.
It came after official figures revealed that British families have suffered the longest fall in disposable income ever, with a decline of 1.3 per cent in the year to March 2022.
Paul Dales, chief UK economist at Capital Economics, said: “Although GDP and consumer spending won’t fall as far as real incomes, it’s pretty clear the economy is going to be very weak for a while. A recession is a real risk.”
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Ukraine takes back Snake Island from fleeing Russians
By Larisa Brown
The Times
July 1, 2022
Ukrainian forces were celebrating yesterday as Russian troops retreated from the strategic Black Sea outpost of Snake Island after being bombarded for days with long-range weaponry donated by western allies.
An image posted online by Ukraine’s military command showed columns of smoke billowing from the outcrop, about 90 miles south of Odesa, after the last Russians were forced to flee in two boats. Andriy Yermak, head of the office of the Ukrainian president, wrote on Twitter: “Kaboom! No Russian troops on the Snake Island any more. Our armed forces did a great job.” Ukrainian soldiers are expected to return soon to take control of the island.
The Russian retreat will bolster Ukraine’s morale after a torrid week in the east of the country, where its troops have been forced to abandon the town of Severodonetsk and face mounting pressure around nearby Lysychansk as President Putin’s soldiers push to occupy the entire Donbas region.
The Kremlin called the retreat from Snake Island a “goodwill gesture” and claimed that the move was intended to show that Russia would not impede UN efforts to organise a humanitarian corridor through the Black Sea to export agricultural products out of Ukraine.
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Hong Kong rising from the ashes: Xi Jinping
By Richard Lloyd Parry
The Times
July 1, 2022
President Xi declared that Hong Kong had been “reborn from the ashes” under Chinese rule after he arrived in the territory yesterday for his first outing from the mainland in almost two and a half years.
His visit was marked by high tension, extravagant pandemic precautions and intense security, with all those who went near him, including journalists and flag-waving children, having to quarantine first. The local military garrison was on high alert, a no-fly zone was imposed, and he was expected to sleep in the neighbouring city of Shenzhen before returning to the territory.
Today he will celebrate the 25th anniversary of the handover of the territory by Britain after a century and a half of colonial rule. He will also witness the swearing in of Hong Kong’s new chief executive, John Lee, a former security chief and loyal servant of the mainland appointed at the behest of Beijing. Lee replaces Carrie Lam, who oversaw a steady erosion of freedoms and the stifling of free speech.
In a thinly veiled reference to British rule, Xi said the territory had overcome many challenges over the years. “My heart, the heart of the central government, has always been with Hong Kong compatriots,” he said as he arrived at the high-speed train station in West Kowloon. “For a period of time Hong Kong had endured stiff trials one after another, and it had overcome risks and challenges one after another. After the ordeals, Hong Kong has been reborn in fire and is showing signs of vibrancy.” He added: “As long as we stick to the ‘one country, two systems’ framework, Hong Kong will certainly have a brighter future.”
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Truth is, China can already control most of our region
NATO’s game-changing commitment to boost military spending and high-readiness forces will transform the European balance of power in favour of democracies. But the opposite is occurring here.
By Alan Dupont
From Inquirer
July 1, 2022
NATO’s game-changing commitment to boost military spending and bolster its high-readiness forces from 40,000 to “well over 300,000” will transform the European balance of power in favour of democracies. But the opposite is occurring in our strategic neighbourhood, where maritime power will be decisive.
Slowly, but surely, the balance of naval forces in the Pacific is shifting against the democracies, presaging an end to a long period of Western dominance of an ocean which is the maritime gateway to northern Australia and carries most of our trade.
Last month, China launched its third aircraft carrier. The Fujian is an 80,000-tonne behemoth three times the size of our navy’s largest ship and the Asian power’s most advanced so far. Three more are on the way along with a suite of locally built, highly capable aircraft designed to fly from its decks. The next carrier is expected to be nuclear-powered. Soon, China’s rapidly expanding navy will be able to emulate the carrier groups Washington sends around the world to project power and buttress America’s influence.
At the turn of the century, China possessed an ageing and under-resourced green-water navy barely able to patrol the country’s coastal waters. It was dwarfed in size and strike power by the multi-ocean blue-water fleets of the US navy. All that has changed. Beijing has ramped up defence spending to produce an armada of modern ships in the biggest ever military build-up in peacetime. In the four years from 2014 to 2018, the country built and deployed more warships than the combined navies of India, Germany, the UK and Spain.
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https://www.afr.com/world/asia/game-over-for-hong-kong-s-democracy-dreams-20220629-p5axs9
Game over for Hong Kong’s democracy dreams
Xi Jinping’s arrival in Hong Kong for the 25th handover anniversary cements Beijing’s control over the former British colony. Big business wants stability, but many residents are quietly fuming.
Michael Smith North Asia correspondent
Jul 1, 2022 – 12.32pm
Tokyo | Xi Jinping was greeted by flag-waving school children, lion dancers and fawning public servants as he stepped off a high-speed train connecting mainland China to Hong Kong.
Inside the West Kowloon station, which had been closed since the early days of the pandemic, China’s leader and his wife Peng Liyuan smiled and waved as they were led along a red carpet while a police band played on. Security barricades and hundreds of police surrounded the site.
“Hong Kong has withstood severe tests again and again, overcoming challenges one by one, After the wind and rain, Hong Kong has risen from the ashes,” Xi said in a speech shortly after his arrival on Thursday afternoon.
It was a historic moment for Hong Kong, which symbolises the end of three years of political upheaval as the city transitioned from a liberal international finance hub into a police state firmly under Beijing’s control.
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‘America is more divided than during the Vietnam War’
Putin’s war, culture wars, cold wars... former secretary of state Henry Kissinger, now 99, discusses present perils and the quality of leadership with historian Niall Ferguson.
From The Weekend Australian Magazine
July 2, 2022
Henry Kissinger turned 99 on May 27. Born in Germany at the height of the Weimar hyperinflation, he was not yet 10 years old when Hitler came to power and was just 15 when he and his family landed as refugees in New York. It is somehow almost as astonishing that this former US secretary of state and giant of geopolitics left office 45 years ago.
As he heads towards his century, Kissinger has lost none of the intellectual firepower that set him apart from other foreign policy professors and practitioners of his and subsequent generations. In the time I have spent writing the second volume of his biography, Kissinger has published not one but two books – the first, co-authored with former Google CEO Eric Schmidt and computer scientist Daniel Huttenlocher, on artificial intelligence; the second a collection of six biographical case studies in leadership.
We meet at his rural retreat, deep in the woods of Connecticut, where he and his wife, Nancy, have spent most of their time since the onset of the pandemic – the first time in 48 years of marriage that the peripatetic Kissinger has come to an enforced halt. Cut off from the temptations of Manhattan restaurants and Beijing banquets, he has shed kilos. Though he walks with a stick, depends on a hearing aid and speaks more slowly than of old in that unmistakable bullfrog baritone, his mind is as keen as ever. Nor has Kissinger lost his knack for infuriating the liberal professors and “woke” students who dominate Harvard, the university where he built his reputation as a scholar and public intellectual in the 1950s and 1960s.
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The worst stock selloff in half a century might not be done yet
Sagarika Jaisinghani, Jessica Menton and Jan-Patrick Barnert
Jul 3, 2022 – 7.56am
London | It’s been a chaotic, and costly, time for many investors. But this year is only half over and the stocks tale will probably have more twists and turns before the year is up.
Coming off the worst first-half since 1970, US equities now face a triple whammy of sticky inflation, recession risks and the threat to corporate profits from sinking consumer confidence. After just about everyone on Wall Street got their 2022 predictions wrong, investors are now focused on a toxic mix that spells stagflation, as well as more damage to valuations.
“The next 10 per cent will probably be down from here, not up,” said Scott Ladner, chief investment officer at Horizon Investments. “A quick market bottom will need a turn in central bank policy, and we don’t think that’s a possibility in the next few months.”
Indeed, the Federal Reserve is expected to go on hiking rates as it tries to tame inflation, rather than flush the market with cash like it did in 2008 and 2020 – pretty much the rocket fuel for the powerful bull market that has now come to a halt.
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https://www.afr.com/markets/currencies/if-this-looks-like-an-inflation-panic-it-is-20220701-p5aygm
If this looks like an inflation panic, it is
The cat’s out of the bag. A worst-case scenario has unfolded, and central bankers are scrambling for policy reversals that will forever taint their credibility.
Vimal Gor
Jul 3, 2022 – 8.14am
Since the early 1980s, the US and global economies have experienced a goldilocks period, globalisation opened up new cheap labour supply, technology advances resulted in high productivity, and a debt super cycle kept the consumer happy.
All these developments, along with deteriorating demographics helped pressure inflation down, and central banks and governments claimed their amazing economic management had tamed the cycle.
As inflation was trending structurally lower, every time the economy slowed, central banks were able to pivot and ease rates quickly to support growth. This resulted in low volatility in inflation, interest rates and growth, and hence the period was called “The Great Moderation”.
This all changed during the 2008 financial crisis. The previous 30-year build up in debt, especially in US housing, reached a tipping point and caused a massive drawdown in global growth. Inflation cratered and allowed central banks to turbocharge monetary policy, cut rates to negative levels and pump unlimited money into the system.
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Supreme Court marches US back in time
Environment and Climate Editor
July 2, 2022 — 5.00am
In a ruling that came down on Thursday night Australian time, the United States Supreme Court hobbled the Biden government’s authority to regulate carbon emissions.
By then, an ugly black security fence blocking its grand old marble forecourt from First Street and The Capitol building beyond, was already in place.
The fence had been there earlier in the week, when the court overturned Roe v Wade, stripping millions of American women of the right to basic bodily autonomy recognised by the same court half a century earlier.
The fence had been there last week, too, when the court stripped the state of New York of the authority to ban people from carrying concealed weapons without a permit.
It was there on Tuesday when the court reinstated a Republican-drawn electoral map of Louisiana’s six US House of Representatives districts that had been blocked by a judge who found that it likely discriminated against Black voters.
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Rising inflation tips US into recession
July 3, 2022
Rising inflation has sapped the buying power of American consumers and tipped the US economy into recession, according to the latest forecast from the Atlanta Federal Reserve, which estimates the economy shrank 2.1 per cent in the second quarter of 2022.
The growing possibility the world’s biggest economy is already in recession, following the biggest sell off in shares and bonds in decades, makes the toxic combination of rising unemployment and high inflation more likely at a time central banks are battling the highest inflation in 40 years.
“The risks of a 2022 recession are significantly higher than I would have judged six or nine weeks ago,” said former Treasury secretary Larry Summers, who throughout last year correctly anticipated a rapid increase in inflation, on Friday (Saturday AEST).
A second consecutive quarter of economic contraction would tip the US economy, which shrank unexpectedly in the first three months of the year by 1.6 per cent at an annual rate, into recession on a widely used definition, complicating efforts to reduce inflation and lifting recession risks throughout the developed world.
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Angry, divided and mistrustful – is this how America ends?
The Times
7:32PM July 2, 2022
As America celebrates another Independence Day this weekend it seems a good time to ask: is the country unravelling?
Last week the Supreme Court overturned a near 50-year-old precedent guaranteeing the right to abortion across the country, a decision jubilantly welcomed by one of the two main political parties and its supporters as a long-overdue restoration of constitutional law, and furiously denounced by the other party and its followers as an assault on the fundamental rights of women by an illegitimately constituted, reactionary group of judges.
This week congressional investigators heard more details of how the last president encouraged his supporters ahead of a violent attempt to forestall the peaceful transfer of power to his successor. They listened as a former White House aide alleged that, when informed the mob was calling for the murder of his own vice-president for refusing to join the effort, President Trump supposedly said: “He deserves it”.
Last month a man with a gun was arrested near the home of a Supreme Court justice and charged with his attempted assassination, motivated, it is alleged, by his disapproval of the way the justice was going to rule on the abortion case. This followed the leak of a draft of that ruling, the first time in the modern history that proceedings of the court had been improperly disclosed, imposing incalculable damage on the trust that facilitates civilised proceedings in the US’s most important judicial institution.
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https://www.afr.com/policy/economy/a-soft-landing-is-becoming-a-distant-dream-20220703-p5aymg
A soft landing is becoming a distant dream
Aeroplane metaphors do little to disguise the fact that central bankers are struggling with the inflationary overshoot.
Katie Martin Contributor
Jul 3, 2022 – 9.02am
Major moments in markets tend to come with some sort of gimmick to explain them. In 2020, it was letters of the alphabet. After the initial COVID-19 crash in markets and in the economy, investors focused on what shape the recovery would take.
Would it be V-shaped, with a rapid pick-up from the depths? Or W-shaped, with a succession of setbacks? Or would it take an L-shape, with us all getting knocked down, unable to get up again?
Economists and central bankers spent considerable time using letters to help the public understand what might lie ahead. In the end, the V prevailed. Now, a historic overshoot in inflation is causing concern - the invisible hand drawing the upward flick in the winning letter just won’t put the pen down.
Central bankers are fighting back, but the letters have been discarded. Instead, the framework to help us all understand the task for Fed chair Jay Powell and fellow policymakers, has been focused on landings: hard landings, soft landings, and bumpy landings in between.
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I look forward to comments on all this!
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David.
