July 21, 2022 Edition
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President Biden has visited Saudi Arabia and shown himself to have pretty few principles on human rights. Pretty sad!
In the UK the choosing the next PM is off and running as the country and Europe are cooking in a heatwave (for them) of biblical proportions!
In OZ only a week or two till Parliament meets when the rubber will really hit the road as a new virus wave funs out of control!
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Major Issues.
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In reality, NATO hasn’t got Australia’s back against China
The Madrid summit prompted excitement in Canberra about a ‘single theatre’ of operations in world politics. But Europe’s commitments fall a long way from substantive military integration in Asia.
James Curran Historian
Jul 10, 2022 – 12.50pm
A new zeitgeist now grips the minds of some policymakers and analysts in Canberra and around the world.
It declares there is a “single theatre” of operations in world politics, comprising the Russian threat in Europe and China’s assertion in Asia. The result is global ideological conflict against what one Australian journalist has called the “old enemies”.
The term derives momentum primarily from the “no limits” partnership announced by Beijing and Moscow in February. Its manifestation has come with the brutal Russian invasion of Ukraine and China’s damaging refusal to condemn it. Its “lessons” are those which an aroused West hopes China will take from the European crisis for its intentions on Taiwan.
And its historical inspiration is sourced from the deep memory wells of the Second World War period. “This is our 1937 moment,” said Britain’s army chief Sir Patrick Sanders.
The “single theatre” thesis is an extension, and escalation, of the embrace of the term the “new Cold War” to describe US/China strategic competition and President Biden’s consistently stark binary of a global split between autocracies and democracies.
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China offers a first step, but hostilities remain on both sides
the Labor government will largely continue the approach of the Morrison government towards China - minus the more excitable rhetoric.
Jennifer Hewett Columnist
Jul 10, 2022 – 5.01pm
The government’s talk of “first steps” in stabilising the relationship with China suggests second and third steps are to come. There is little indication and no timetable for this to occur.
“Concrete” actions such as the lifting of China’s trade sanctions against Australian exports are highly unlikely without an even more unlikely switch in rhetoric and actions by the Albanese government.
At best, the temperature of China’s diplomatic deep freeze may slightly moderate with the potential resumption of occasional contact between ministers and officials along with an unofficial retirement of China’s list of 14 demands for restoration of relations.
That’s worthwhile in itself. Less febrile rhetoric from both sides does reduce risks of miscommunication leading to possible military confrontations.
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Australia the ‘root cause’ of breakdown with China, Wang Yi told Penny Wong
July 10, 2022
China’s Foreign Minister told Penny Wong the Coalition government was the “root cause” of Canberra and Beijing’s spectacular bilateral breakdown and said four things need to change to get the relationship “back on the right track”.
Foreign Minister Wang Yi told his Australian counterpart that China was willing to “re-examine and re-calibrate” the bilateral relationship “based on mutual respect” at their meeting in Bali on Friday.
President Xi Jinping’s second most senior diplomat — after politburo member Yang Jiechi — blamed the Coalition government’s “irresponsible” words and deeds for the rupture in the relationship.
“The root cause of the difficulties in bilateral relations over the past few years was the former Australian government’s insisting on regarding China as a rival or even a threat, allowing its words and deeds being irresponsible against China,” Mr Wang said, according to China’s official newsagency Xinhua.
He expressed hope that the Australian side would “seize the current opportunity and take actions to improve bilateral relations”.
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China slams Coalition as the ‘root cause’ of bad blood
Andrew Tillett Political correspondent
Jul 10, 2022 – 8.00pm
China’s foreign minister has blamed the former Coalition government as the “root cause” for the disintegration of relations with Australia during his icebreaking meeting with Penny Wong, in a fresh sign of Beijing’s desire to use the election of the Albanese government for a reset.
Wang Yi denounced the former government for its “irresponsible words and deeds” and for treating China as a threat.
Foreign Minister Penny Wong has met with her China counterpart Wang Yi in a crucial development in the tattered relationship between the two countries.
“The root cause of the difficulties in China-Australia relations in the past few years is that the former Australian government insisted on treating China as an ‘adversary’ or even a ‘threat’, and adopted a series of irresponsible words and deeds against China,” Mr Wang is reported to have said in a Chinese Foreign Ministry summary of the meeting.
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We must defend Australia’s ancient history from further desecration
By Raelene Cooper and Josie Alec
July 12, 2022 — 5.00am
We are Mardudhunera and Kuruma Marduthunera traditional custodians of Murujuga, also known as the Burrup Peninsula, in Western Australia.
This week, we travelled to the United Nations in Switzerland to bring awareness of the destruction and desecration that industry has already, and is intending to, inflict on Murujuga and the sacred rock art there. We use the word “inflict” as it best describes the way we feel about the impact of industry on the area – it is an attack on our culture, the plants, animals, water and air of Ngurra (Mother Earth).
On the Burrup Peninsula in the country's north-west on Sunday, Traditional Owners and community members marched as one to oppose Woodside's Scarborough gas expansion.
Murujuga is home to over a million petroglyphs and rock art engravings, tens of thousands of years old. It is currently nominated to become a UNESCO World Heritage Site, but this Country and world heritage have not been protected. Government and industry have acquired land under duress, creating division and chaos. Industry has removed and destroyed our rock art in another form of cultural genocide.
This has caused loss of our traditional livelihoods, traditional Indigenous knowledge and our spiritual relationship with the land. There has been displacement and ecological degradation.
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Albanese wants to borrow a page from Hawke’s playbook
By Shane Wright
July 11, 2022 — 4.38pm
Bob Hawke often said his 1983 national economic summit set the platform for his years of electoral and economic success.
Anthony Albanese is hoping for the same type of success from his own job summit even though its ambitions are much more modest.
The 1983 meeting of businessmen (they were almost all men), unionists, welfare groups, churches and state premiers was held just weeks after Labor swept the Fraser government from office.
Dismissed by its Coalition critics as nothing more than a talkfest, it was held at a time of immense economic turmoil.
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Here’s the real reason the Liberals lost the election
The lesson of the Morrison government’s election defeat is that caving to leftist positions might have changed the subject, but it didn’t win votes.
Amanda Stoker Columnist
Jul 12, 2022 – 12.40pm
There is a real risk that the wrong lessons will be learnt by the Liberal Party about the reasons for the federal election loss, and the path back to government.
Two months after the defeat, much of the commentary to date has suggested that because it was largely urban, left-leaning Liberals who lost their seats to the so-called “teal independents”, the party was being punished for being insufficiently progressive. If that becomes the basis of the party’s rebuild strategy, it will also need to become comfortable in the wilderness, Bear Grylls style, for a long time.
It was a lack of differentiation that cost the Liberal’s seats – both in urban areas and in the Senate, on the notional left and right.
For a conservative voter, on the surface there appeared to be little difference between Labor and the Liberals on climate and energy policy, on spending volumes, on attitudes to family or meaningfully protecting religious freedom.
Note: The AFR standards are slipping – we can do without right wing zealots! No Amanda you lost because of ScoMo and extremism.
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Richard Marles warns of submarine ‘capability gap’
7:23AM July 13, 2022
Defence Minister Richard Marles has cast doubt on the chance the nation’s first nuclear powered submarine — which he said could be UK-designed — would arrive much before the 2040s, fearing a “capability gap” will emerge as the current Collins class submarines become obsolete during the 2020s.
Suggesting the previous government had left the submarine program in a “mess”, the deputy prime minister said he was investigating what the government could do to accelerate the delivery of the eight nuclear-powered submarines promised under the AUKUS security pact because the 2040s were “a long way away”.
“I think truth is where the former government left us when they left office six weeks ago, is a time frame of not getting the first submarine until the 2040s … that’s what we’ve inherited,” he said, speaking to The Australian in Washington on Tuesday (Wednesday AEST).
“We need to be announcing which sub we’re going with first part of next year to provide a solution to that mess, not just which sub but when, the capability gap, and how we’re going to fill it and a critical component of that is going to be cost,” he added, pointing out the government had inherited “a trillion dollars of debt”.
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https://thenewdaily.com.au/finance/finance-news/2022/07/14/jobs-summit-labor-alan-kohler/
6:00am, Jul 14, 2022 Updated: 6:05pm, Jul 13
Alan Kohler: Labor’s love affair with summits continues
New Labor governments love having summits. Hawke had two, Rudd had one and now Albanese is having one.
The new government’s planned get-together in September will be called the Jobs and Skills Summit and will kickstart a 12-month Treasury jobs white paper process that will “engage the wider community”, but the agenda is wide enough that it could also be called an economic summit like the ones in 1983 and 2007.
Hawke’s National Economic Summit in April 1983 was followed two years later by a tax summit in 1985, as promised at the 1984 election.
The second one is often regarded as a failure but it produced capital gains tax, fringe benefits tax and dividend imputation. It only failed on GST, called “Option C”, because inaugural Business Council head Bob White declared that “we’re not in the tax cart” (they talked a lot about “carts” in those days and it’s telling that Treasurer Jim Chalmers has started talking about carts again this week, reliving the 1980s).
So why do new Labor governments always have summits, while Coalition governments don’t?
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https://www.afr.com/property/residential/rents-jumped-a-record-12pc-last-year-20220712-p5b14w
Rents jumped a record 12pc last year
Michael Bleby Senior reporter
Jul 14, 2022 – 5.00am
Rental affordability has taken another hit with asking rents of houses in every capital city bar Darwin rising at their fastest annual rate on record and the apartment rents accelerating further as demand among tenants shifts to lower-priced rental units.
The median asking rent of houses across all state and territory capitals jumped 12 per cent over the year to June – a new record – and the equivalent figure for unit rents leaped 12.2 per cent, Domain’s quarterly rent report shows.
Asking house rents in Brisbane posted the biggest year-on-year gain, surging 16.9 per cent, followed by Sydney (12.7 per cent) and Adelaide (11.6 per cent). The Queensland capital also led in unit rent increases, with a 12.5 per cent annual rise, also followed by Sydney (11.7 per cent) and Hobart (11.1 per cent).
The figures, a month after separate Domain numbers showed record-low vacancy rates across the country’s capital cities, reveal the latest prices in an increasingly unaffordable private rental market that charity Anglicare says puts rental housing out of reach for most people reliant on social security to support themselves.
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Record rents are further squeezing Australian households
Economist
July 14, 2022 — 5.00am
Cost-of-living pressures have been rising for every household around Australia, with the last read from the Australian Bureau of Statistics showing prices rising by 5.1 per cent across our major capital cities. With wages only growing at 2.4 per cent over the same period, many Australians are struggling to make ends meet.
Now, according to the latest Domain Rent Report, released on Thursday, house rents in Melbourne have risen 2.2 per cent in three months to hit a record high of $460 per week, while unit rents rose by 5.1 per cent to $410 a week.
That means those seeking cheaper accommodation in units saw their rents rise more than double the rate of those paying more to rent houses. These rises send even those with stable full-time work into rental stress.
Regional rents had already been soaring, driving even greater cost of living pressures for thousands of Australian households. And now as we see rents that have been relatively flat in major capital cities of Melbourne and Sydney also start to soar these pressures are impacting even more Australians.
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Lowest since 1974: Australia’s unemployment rate drops to 3.5pc
July 14, 2022
The unemployment rate plunged to 3.5 per cent last month, as the economy added 88,000 jobs, the Australian Bureau of Statistics reported on Thursday.
It was the eighth consecutive monthly increase in employment following the easing of restrictions after the Delta lockdowns in late 2021.
Economists were expecting a rise of around 20,000 jobs and the unemployment rate easing to 3.8 per cent from 3.9 per cent in May.
ABS head of labour statistics Bjorn Jarvis, said it was the lowest unemployment rate since August 1974, when it was 2.7 per cent and the survey was quarterly.
The unemployment rate continued to fall for men and women, with both measures down 0.4 percentage points.
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Sydney house prices on track for 20pc fall
The RBA’s likely large interest rate rise next month will completely knock out the Aussie housing market.
Christopher Joye Columnist
Jul 15, 2022 – 9.57am
Thanks to the Reserve Bank of Australia’s extraordinary decision to hammer unsuspecting households with 125 basis points of mortgage rate increases in just two months (from May 4 to July 6), which will likely be upsized to 175 basis points of rises at its next meeting, Sydney house prices are falling at a 20 per cent-plus annualised pace.
Using the daily hedonic index data published by CoreLogic, which is the RBA’s preferred housing benchmark, this column finds that the rolling 30-day change in Sydney home values has dropped precipitously from 2.83 per cent in August 2021 to minus 2.21 per cent as at July 11. That means that residential real estate in Sydney is declining at an annualised rate comfortably north of 20 per cent.
While this housing crash appears to have shocked many analysts and economists – and the millions of unwitting families relentlessly advised by the RBA in 2020 and 2021 to borrow and spend as much as possible because Martin Place had committed not to lift interest rates until 2024 at the earliest – it is, regrettably, smack bang in line with the central case that this column outlined late last year.
In June, Sydney home values plunged 1.6 per cent. They have fallen at an even more rapid rate over the first 11 days of July, slumping by another 0.7 per cent. Melbourne dwelling values are closely tracking Sydney prices, albeit with a lag. In June, Melbourne home values fell 1.1 per cent, and they have lost another 0.4 per cent in the first few weeks of July.
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https://www.afr.com/policy/economy/white-hot-jobs-market-risks-bigger-rba-rate-rises-20220714-p5b1mb
White-hot jobs market risks bigger RBA rate rises
The most aggressive tightening cycle in almost 30 years will be a daunting prospect for many mortgage holders.
Ronald Mizen Economics correspondent
Jul 14, 2022 – 3.05pm
The jobs market is running white-hot.
Unemployment in June hit a fresh 48-year low 3.5 per cent; just under 13.6 million people were employed; almost 55,000 fewer people were out of work than in May; and workforce participation hit a record 66.8 per cent.
Except for a slight uptick in underemployment, the latest labour force data from the Australian Bureau of Statistics is nothing short of stunning.
But success is a double-edged sword.
Unemployment is now 0.3 percentage points below where the Reserve Bank of Australia had forecast it to be just nine weeks ago in early May, and 0.1 percentage points below where it was forecast to be in June 2023.
This will undoubtedly help fuel the sharp rise in inflation to almost 7 per cent (and possibly even more) in the third or fourth quarter of this year.
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operators – at relatively better valuations – to choose from.
Why you’ll make more by focusing on a portfolio’s total return
Modelling shows investors are better off buying for dividends and growth and selling where necessary to boost income.
James Weir Contributor
Jul 15, 2022 – 5.00am
Australians love their dividends. And what’s not to love? Those semi-annual dividend deposits are one of the great benefits of investing in a capitalist society. John D. Rockefeller famously said: “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”
One of the most popular strategies for investors, especially retirees, is to buy high-dividend-paying shares with the aim of generating sufficient income to live on while hopefully leaving the portfolio principal intact.
While this holds obvious appeal – particularly for investors who are anxious about outliving their money, and because benefits from dividends typically are more predictable than earnings – it is a very constricting approach and carries some risks.
High-dividend-paying companies tend to offer lower growth. Clearly, if a company is paying generous dividends, it leaves less income to reinvest into the company’s operations. While it’s by no means a universal rule, if a company can generate a high return on the equity invested into the business, it makes more sense for management to do that rather than pay it out as dividends.
That means a portfolio full of high-dividend-paying companies is less likely to provide as much capital growth as a more diversified portfolio. If the strategy is to maintain the portfolio’s capital value, that may not be reason to lose sleep. But over time, it does mean the portfolio won’t benefit as much as it may from the share market’s long history of growth. This is especially true during a period such as 2009-2021, when growth-oriented companies outperformed strongly.
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Life moves pretty fast - as do interest rate increases
By Shane Wright
July 14, 2022 — 6.35pm
Ferris Bueller said life moves pretty fast. The latest jobs figures show economic fundamentals can move even faster – with serious repercussions for the Reserve Bank of Australia.
According to the Bureau of Statistics, unemployment tumbled another 0.4 percentage points in June to reach 3.5 per cent.
Life is moving pretty fast for all central banks including the RBA.
Almost 300,000 jobs have been added across the country since December. More than 375,000 full-time jobs have been created over the same period.
In Victoria, the unemployment rate among men is just 2.9 per cent. In October, it was 5.1 per cent.
But the RBA’s latest forecasts (released 9 weeks ago) had the jobless rate hitting 3.8 per cent around now and only inching down to 3.6 per cent in two years’ time. After the bureau released its figures, some economists reckon unemployment could be at 3 per cent within a few months.
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The soaring US dollar raises the prospect of an unusual currency war
Senior business columnist
July 14, 2022 — 12.04pm
The ugly US inflation numbers will exacerbate the plight of countries confronted by the cross currents of weakening currencies and surging inflation rates of their own, and cause uncomfortable dilemmas for their central banks.
The 9.1 per cent headline inflation print in the US was significantly worse than anticipated and will force the US Federal Reserve Board to consider a drastic response at the next meeting of its Open Market Committee late this month. There’s already speculation of a 100 basis point move.
The rates differential between the US and the other major economies – the eurozone, Japan and China – has already caused the greenback to strengthen significantly, weakening the other currencies.
The euro hit parity with the US dollar for the first time since 2002 after the release of the inflation data. It has depreciated about 12 per cent against the dollar since the start of the year. The yen has fallen about 16 per cent against the dollar this year to its lowest exchange rate in nearly quarter of a century while China’s yuan - whose value is managed, albeit pegged to the dollar - has fallen nearly 6 per cent.
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Brace for two more back-to-back 0.5pc rate rises: CBA
Ronald Mizen Economics correspondent
Jul 15, 2022 – 5.35pm
Australia’s largest lender, Commonwealth Bank, is tipping the Reserve Bank will push through two more 0.5 percentage point interest rate rises in August and September, with a final push to 2.6 per cent in November.
CBA head of Australian economics Gareth Aird said that would take the cash rate into restrictive territory as the RBA moves swiftly to quell rising inflation with the fastest monetary policy tightening in almost 30 years.
For a typical $500,000 mortgage with 25 years left to run, the RBA’s push from a record low 0.1 per cent cash rate to 2.6 per cent will add about $687 to monthly repayments, and $1030 a month for a mortgage of $750,000.
For someone with a $1 million mortgage, repayments could rise by a total of $1373, according to interest rate comparison website RateCity.
Mr Aird said higher rates would begin to bite as the huge numbers of fixed-rate loans come to an end in the next 12 months. About 40 per cent of the value of CBA and Westpac’s mortgage book is locked in, RateCity said.
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While Albanese scores in footy diplomacy, that other state of origin – China – has an end game
Political and international editor
July 16, 2022 — 5.00am
It was a tale of two cities. In Fiji’s capital of Suva it was footy and friendship. Anthony Albanese took over the bar in the Grand Pacific Hotel and shouted drinks for any of the other Pacific leaders who wanted to watch the State of Origin game with him on Wednesday night.
The Australian delegation had installed a big screen and had NSW and Queensland jerseys ready for any of the leaders who wanted to take sides. Some did, pulling on Blues and Moroons jumpers. Even though the hour was late and the game ran till midnight Suva time, half a dozen joined.
Papua New Guinea’s James Marape took this summit of the Pacific Islands Forum seriously enough to leave his country for a day even as it voted on whether to return him as prime minister and he still found time to watch the footy.
Palau’s new president, supermarket owner Surangel Whipps, took office this year promising to stand up to the Chinese government’s trade sanctions on his micro-state and demanding “stealing and offering bribes, that’s just got to stop, illegal fishing has to stop”. He put on a NSW Blues shirt and forgot grand strategy for footy tactics.
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From ‘magic’ grass to roads and schools, China is everywhere in Fiji
By Eryk Bagshaw and Tim Vula
July 15, 2022 — 2.01pm
Nadi: Opposite the $100 million Australian-built Blackrock Peacekeeping Camp in Fiji, a farm is using grass funded by Chinese President Xi Jinping to grow its fortune.
The Juncao grass towers over Fijian farmers Vinit Lal and Chaya Kumar in Nadi. Its thick, green stalk is hardy enough to withstand the cyclones that buffet this tropical island. When it breaks down it fertilises the soil and helps stop the erosion that has come to define Fiji’s landscape and its struggle to contain the threat of climate change.
The grass – a genetically modified combination of 30 plants - has come a long way from Fujian in south-eastern China, where Xi, describing it as “magic”, funded its development while local governor in the 1990s.
It now has a second purpose on Lal and Kumar’s farm: it is used to replace wood as the dominant base for cultivating Bula mushrooms. Farmers once had to cut down trees to grow mushrooms out of wood on a commercial scale, now they just fill shipping containers with Juncao grass and mushroom seeds. The margins are high, the costs relatively low, and Fiji has its sights set on becoming a major mushroom exporter to China.
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Why the world looks kindly on Albanese – and why that’s a gift and a burden
Columnist
July 16, 2022 — 5.00am
Anthony Albanese is the beneficiary of a unique diplomatic honeymoon that has the potential to place Australia on the shortlist of nations that are seen as moral middle powers.
From Asia to Europe and now the Pacific, Australia’s 31st prime minister has been greeted with public displays of affection that his more charismatic Labor predecessors would have killed for. Three images in particular come to mind.
Last month, Indonesian President Joko Widodo took Albanese for a bike ride around Bogor Palace – a greeting no other foreign leader has received – to emphasise their shared humble origins. On Wednesday, Solomon Islands Prime Minister Manasseh Sogavare hugged Albanese, echoing the theatrical embrace that French President Emmanuel Macron gave the Australian leader a fortnight earlier.
Albanese would appreciate that these gestures are not really about him as an individual. In fact, his peers would have a double-take if they realised the man they are cheering onto the international stage ran a tongue-tied election campaign and that Labor squeaked into office with its lowest primary vote since the Great Depression.
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Mortgages in retirement triple, outright ownership halves for most age groups
By Rachel Clun
July 17, 2022 — 5.00am
The proportion of Australians who own their home outright has halved over two decades for most age groups while the proportion of people with mortgages in retirement years has tripled.
Data from the Australian Bureau of Statistics shows that outright home ownership has more than halved for 25 to 54-year-olds between 2001 and 2021. At the same time, the number of mortgage holders and renters across all age groups has ballooned.
Housing and Homelessness Minister Julie Collins said more people have come to her with stories of housing stress in the last 12 months than ever before in her time in parliament.
Collins, who first held the portfolio in the Gillard government in 2013, said Australia’s housing challenges have worsened over the intervening years.
“What’s changed significantly is that far too many Australians don’t have a place to call home,” she said.
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Jim Chalmers says Russia’s invasion of Ukraine to blame for global food and fuel crisis
8:07PM July 15, 2022
Jim Chalmers has issued a piercing condemnation of Russia’s illegal war against Ukraine at a meeting of G20 finance ministers in Indonesia, claiming its actions had sparked a global energy and food security crisis.
The Treasurer, who sounded warnings about the flow-on effects for Australia’s economy, was backed up by US Treasury Secretary Janet Yellen, who accused Russian officials at the meeting of being responsible for the new global economic crisis.
The showdown with the Russian delegation at the summit was a harbinger for a leaders’ meeting later in the year, which Anthony Albanese is due to attend but which some Western countries have vowed to boycott in protest if Vladimir Putin remains invited as a member.
In an address to the Bali summit on Friday, which was attended by Russian officials, Mr Chalmers accused the Kremlin of inflicting not only a “terrible” human toll but being singularly responsible for slowing global economic growth and sparking an inflation crisis in the West.
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COVID-19 Information.
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Millions of COVID-19 infections expected before spring: Butler
Tom McIlroy Political reporter
Jul 13, 2022 – 10.45am
Millions of new COVID-19 infections are expected around Australian in the last six weeks of winter, Health Minister Mark Butler says, as he urged the community to follow strong advice to wear masks and work from home where possible.
Mr Butler warned there was little appetite for strict mandates but that common-sense interpretation of advice from chief health officers was sufficient to limit transmission of the BA.4 and BA.5 omicron subvariants that are driving a “very substantial” third wave of cases.
His comments came after Prime Minister Anthony Albanese earlier blamed the former Morrison government for the end of a free rapid test program for concession cardholders.
There were at least 57 COVID-19 deaths reported around the country on Wednesday, including 20 in Victoria. More than 4400 people are in hospital and 126 are in intensive care.
Mr Butler said a further ramp up in new cases is expected, including growing reinfections among Australians who have already recovered. He left open the possibility of Defence Force teams returning to aged care homes amid severe and growing staffing shortages, and urged Australians to get a fourth vaccine shot as soon as possible.
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Cuts to RATs, leave pay ‘will be catastrophic’: Australian Medical Association
5:30AM July 14, 2022
The Albanese government is being warned of “catastrophic outcomes” for patients if it does not reverse decisions to end free RATs for concession card holders and pandemic leave payments, with doctors saying the spread of Covid must be slowed to give the healthcare system breathing space.
Anthony Albanese is staring down mounting demands from across the political divide to extend Covid support amid predictions from Health Minister Mark Butler that “millions” more Australians will contract the disease within weeks.
Despite concerns about rising cases, NSW on Wednesday moved to relax Covid-19 restrictions in aged care homes and visitors will no longer require vaccinations to see elderly residents.
When asked whether stopping free rapid antigen tests for pensioners at the end of this month, coupled with the discontinuation of pandemic leave payments, represented a permanent halt of Covid-19 welfare measures, Mr Butler indicated that was indeed the case.
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Anthony Albanese says sick casuals should just work from home
Anthony Albanese has doubled down on his claim that sick casuals don’t need leave payments as he faces his first major test as Prime Minister.
July 15, 2022 - 11:28AM
Anthony Albanese says workers don’t need pandemic leave because employers are already allowing them to work from home while sick.
The Prime Minister on Friday doubled down on his insistence that the government could not reinstate a $750 payment to casuals without sick leave.
“The idea that no one is getting any sick leave at the moment, it’s just not the case,” he told reporters in Fiji.
“Good employers are recognising that people are continuing to work from home while they have Covid and are receiving, therefore, payments through that.”
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Our attempt at living with COVID is a crisis, it’s time for clear messaging
Professorial Fellow, University of Canberra
July 15, 2022 — 9.20am
Anthony Albanese received his fourth COVID jab this week. A commendable example to the community, now that eligibility for the “winter shot” has been widened.
Well, commendable up to a point. Noticeably, neither Albanese nor the health worker wielding the needle was wearing a mask, and the prime minister quickly came in for some flak.
Masks are currently a frontline topic in the debate about how we deal with the new COVID wave that is seeing an average of 45 deaths a day, taking deaths this year alone north of 8000.
Earlier this week Victoria’s acting chief health officer recommended mandating masks in a number of settings, only to be rebuffed by state Health Minister Mary-Anne Thomas. She said it “was not the most effective way to get the message out about the importance of mask-wearing”.
Masks have been a political and ideological football throughout the pandemic.
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‘This is going to be a tough few weeks for Australia’
With about 4500 Australians in hospital with COVID-19 and the country on track for 10,000 deaths, politicians and health experts are asking: where to from here?
Tom McIlroy Political reporter
Jul 15, 2022 – 11.45am
abor backbencher Mike Freelander isn’t one of the federal parliament’s best known personalities, but in his electorate of Macarthur, set around Sydney’s Campbelltown, the paediatrician-turned-politician is something of a celebrity.
Said to have delivered tens of thousands of babies in his more than 40-year career, Freelander is respected for his medical expertise on all sides of politics.
The current COVID peak looks set to puncture Labor’s post-election honeymoon and deliver all the public perception challenges faced by Scott Morrison to Anthony Albanese’s desk.
So, when the three-term MP spoke out against Anthony Albanese’s decision to end the free supply of at-home rapid antigen tests for concession cardholders and the wind up of disaster assistance payments this week, his colleagues paid attention.
“I think we need to reconsider it,” Freelander said. “We need to be careful with the budget, but we need to be rethinking both the pandemic leave and the RAT testing.
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Australia’s current approach to COVID embodies a simple contradiction
July 15, 2022 — 5.00am
At the risk of stating the obvious, Australia’s current approach to COVID is a bit of a mess. Mainly that’s because it embodies one very simple contradiction: just as numbers are set to explode into the biggest wave we’ve ever faced, compounded by a wicked flu season, governments are steadfastly refusing to introduce restrictions, and are instead ending some important COVID measures.
That doesn’t mean governments are doing nothing. Here, I must acknowledge the federal government’s approval of a fourth vaccination shot for most, and its listing of hitherto ignored antiviral drugs on the Pharmaceutical Benefits Scheme. Some states have also significantly reduced the official “reinfection period” during which recently infected people can live more or less assuming they are immune from COVID.
Prime Minister Anthony Albanese speaks to Today about Australia's diplomatic push in the Pacific, and the worsening COVID-19 crisis at home.
But no state government seems to have the appetite for something so simple as expanded mask mandates, even though this puts them at odds with health advice. And the federal government is taking away low-income earners’ free access to RATs and scrapping disaster payments for those without sick leave who are forced to isolate at home. It’s also reducing access to telehealth.
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Climate Change.
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Why is it raining so much (and is there more to come)?
Sydney has posted its wettest year on record, and it’s only halfway through. So what is causing the downpour, and why is Sydney prone to flooding, particularly now?
Mark Ludlow Queensland bureau chief
Jul 6, 2022 – 3.20pm
Residents of Australia’s eastern states probably thought they had experienced enough wet weather for the entire year after the “rain bomb” that hit the region in late February and early March.
More than 600mm of rain in three days hit parts of south-east Queensland, northern NSW and Sydney, causing widespread flooding and devastation, especially in parts of Brisbane and Lismore.
But now there is more unprecedented rain as Sydney, which has flooded for the fourth time in two years, posts its wettest year on record – and the year is only halfway through.
What is causing so much rain in 2022?
After two wet summers caused by the La Niña weather system, the Bureau of Meteorology last month declared La Niña was “over”, much to the relief of residents of Sydney, Melbourne and Brisbane who were looking forward to a few drier months.
But in the past week, a low-pressure system has parked itself off the east coast of Australia and dumped hundreds of millimetres of rain over Sydney.
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https://www.afr.com/companies/energy/power-prices-smash-all-records-20220708-p5b07k
Wholesale power prices smash all records
Angela Macdonald-Smith Senior resources writer
Jul 10, 2022 – 11.09am
Eye-watering increases in wholesale electricity prices in the June quarter of up to four times the level of the March quarter have underscored the huge price pressures in the sector that have left the market in turmoil and will hit consumers hard.
Prices for wholesale power more than doubled to an unheard-of average of $323 a megawatt-hour in Queensland in the June quarter, easily the highest of any state in the past two decades, according to adviser Energy Edge.
The price in Queensland was 86 per cent higher than any other quarter in the state since at least 2001, said Energy Edge managing director Josh Stabler.
“And the quarter was so high that it nearly lifted the average price for the entire financial year above the previous highest quarter in Q1 2017,” Mr Stabler said.
Price increases were even higher in other states, rising 293 per cent from the March quarter to $$224/MWh, of 247 per cent in NSW to $302/MWh; and of 260.5 per cent in South Australia to $256/MWh, according to the Energy Edge data.
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https://thenewdaily.com.au/finance/2022/07/11/alan-kohhler-end-of-coal/?breaking_live_scroll=1
6:00am, Jul 11, 2022 Updated: 2h ago
Alan Kohler: Look to the west to find out how to get the end of coal right
Our heart breaks for the people in the coal towns of the Hunter Valley, devastated – again – by floods and aware that climate change will eventually end their livelihoods as well.
The people of Singleton can see nothing but water and hard work ahead of them at the moment, but they know that even after they clean up, the coal mines that have supported them and their forebears for 150 years, have no future.
They, and the state governments of New South Wales, Queensland and Victoria, should look to Collie in Western Australia for guidance: The town is a model for how to make the transition away from coal.
But no one has made the trip west, or picked up the phone, to learn the lessons from a town and a state doing it well.
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IEA’s Fatih Birol tells Energy Forum in Sydney to prepare for difficult months ahead
July 12, 2022
The global energy crisis will get worse with the upcoming European winter to be “very, very difficult” following Russia’s invasion of Ukraine, the International Energy Agency has warned.
“We are in the middle of the first global energy crisis,” International Energy Agency executive director Fatih Birol told the Sydney Energy Forum on Tuesday.
“The world has never witnessed a major energy crisis in terms of its depth and its complexity. It is interwoven by many factors including geopolitics and I believe we may not have seen the worst of it yet.”
“This is affecting the entire world. This winter in Europe will be very, very difficult.
“Energy security, gas security, oil security will be immensely important for the world.
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https://www.afr.com/politics/federal/heatwave-adds-to-britain-s-summer-of-chaos-20220717-p5b25m
Heatwave adds to chaos in Britain
Bloomberg 17 July, 2022
After strikes, transport disruption, soaring inflation, a jump in COVID-19 infections and even the resignation of its prime minister, now the sweltering summer is about to add to the havoc in the UK.
The Met Office issued its most severe warning for next week, with temperatures set to rise above 35 degrees in parts of England, including London, and might hit national records exceeding 40 degrees. The red alert, with potential power outages, cancelled flights and a danger to life, was triggered for the first time and is in place for Monday and Tuesday.
The government held an emergency Cobra meeting on Saturday, chaired by Chancellor of the Duchy of Lancaster Kit Malthouse rather than Prime Minister Boris Johnson, to work out contingency plans for the nation’s schools, emergency services and transport networks. Ministers will meet again on Monday. It all adds to the chaos in a nation that’s grappling with messy politics and a wilting economy. While supermarkets expect ice cream sales to reach records and coastal resorts to welcome throngs of people, the custodians of the UK’s infrastructure are flagging the worst-case scenarios.
The electricity network is straining under the heat and as cooling systems ramp up, a lack of wind is reducing supplies. The railway network, which in the past has seen cables snap and tracks buckle, is reducing speed on services. The National Health Service is concerned hospitals that are already overwhelmed will see a spike in patients suffering from the heat.
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Forest fires rage in scorching southwest Europe
AFP
1:02AM July 17, 2022
Southwest Europe entered a sixth day of a summer heatwave on Saturday that has triggered devastating forest fires as parts of the continent braced for new temperature records early next week.
Firefighters in France, Portugal and Spain, as well as Greece, battled forest blazes that have ravaged thousands of hectares of land and killed several firefighters since the start of the week.
“The fire is still not under control,” said Ronan Leaustic, an official in Arcachon in southwest France’s Gironde region where firefighters battled to put out two forest blazes that have devoured 9000 hectares since Tuesday.
Meteo France said temperatures would range between 35 degrees Celsius and 40C in the south of France on Saturday, with new heat records expected on Monday.
Further north, people were also bracing for more unusually warm weather.
In the United Kingdom, a crisis committee of government ministers was meeting later Saturday after the state meteorological agency issued a first-ever “red” warning for extreme heat, cautioning there is a “risk to life”.
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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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Reserve Bank charts path to higher interest rates, but there may be potholes ahead
July 11, 2022 — 5.00am
The Reserve Bank doesn’t want to send Australians broke as it hikes rates, but it would like us to feel a little less well off.
It thinks we’ll largely be able to cope as it traverses the “narrow road” - as governor Philip Lowe said recently - back to a normal cash rate and lower inflation.
That narrow road is the path to returning the official cash rate to a more normal level of about 2.5 per cent fairly quickly and getting inflation back under control (ideally between 2-3 per cent), all without grinding the economy to a halt. It’s tricky, and that’s not counting what we can’t see coming around the bend.
One of the things the Reserve Bank is happy to see is a fall in house prices. While the bank isn’t targeting house prices directly, higher interest rates tend to mean home buyers aren’t as willing to pay top dollar, so those markets start to ease.
As prices fall, fewer homes go on the market. That market slowdown has already taken effect in Sydney and Melbourne, with fewer properties going up for auction and homes spending a bit more time on the market before being purchased.
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‘Total disbelief’: Unnecessary medical test killed Carmel Haynes
July 12, 2022 — 5.00am
Carmel Haynes gave her son a peck on the cheek and promised she’d see him soon before she vanished down a corridor at Orange Hospital.
Thirty minutes later she was dead. And nearly 18 months since that day, Carmel’s horrifying final moments still play out in her son Matthew Haynes’ nightmares after he discovered that the procedure that killed his mother should never have taken place.
Carmel Haynes (right) with her twin sister, Rose Carroll, with whom she was inseparable. Carmel died during an unnecessary procedure at Orange Hospital in 2021.
Carmel attended the hospital’s medical imaging department for a CT-guided biopsy on February 8, 2021. The relatively quick procedure didn’t require admission and could be performed under local anaesthetic.
“The doctor explained to her that she’ll be conscious the whole time,” Matthew recalled. “And to signal with her hand if she felt uncomfortable.”
As a slender needle was passed into Carmel’s lungs to retrieve a sliver of tissue, the procedure went catastrophically wrong.
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World population to peak and decline sooner than previously thought
Abul Rizvi
Former deputy secretary of the Department of Immigration
July 12, 2022 — 5.00am
The latest update of the UN’s World Population Prospects confirms we are now in sight of a time when the human population will cease to grow and be in ongoing decline.
In its 2017 update, the UN projected the world’s population would reach 11.2 billion in 2100 and still be growing. The 2019 revision indicated the world’s population may peak at 10.9 billion by 2100. The latest revision indicates the world’s population may peak at 10.4 billion by 2080.
In other words, the UN has reduced its projected peak world population by about 800 million and brought forward the date for this peak by 20 years.
The UN’s projections are now much closer to those by researchers at the University of Washington, who suggested two years ago that the human population would peak at significantly less than 10 billion by 2065, decline to less than 9 billion by 2100 and keep declining – the current world population is about 8 billion.
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Health Issues.
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How to pick the right healthcare investments
Longer life expectancy together with the ageing of the global population presents investors with mouth-watering opportunities, but there are plenty of traps.
Mark Draper Contributor
Jul 11, 2022 – 5.00am
Investors seeking safety from volatility could be tempted to insulate their portfolio by seeking the defensive qualities of the healthcare sector.
But healthcare is a very broad industry that includes companies ranging from CSL which turns a litre of plasma into life-saving treatments to pathology providers, dentists, private hospitals, pharmaceutical companies and biotechs. The diversity and complexity of the sector makes it one of the most challenging for investors to assess.
There are 50 healthcare companies listed on the ASX, but only around 20 that are profitable and pay dividends. This point would be a good place to start for investors to narrow their search.
Matt Williams, a portfolio manager at Airlie Funds Management, likes the sector for its stable demand with growth that is typically driven by population increases and an ageing population. Healthcare spending is generally non-discretionary which means profits are not usually tied to economic cycles.
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Editorial
Not enough scrutiny of mistakes in regional hospitals
July 12, 2022 — 5.30pm
Everyone who has watched a medical drama on television has seen doctors and nurses make mistakes, even life-threatening ones.
Unfortunately, such mistakes also occur in real life. And when hospitals are overworked and short on staff and appropriately trained professionals, as they too often are in regional NSW, mistakes are more likely. They have a devastating and long-lasting impact on the families of those affected.
The Herald is now reporting on five deaths in regional hospitals that could, potentially, have been prevented.
The purpose is not to heap blame on the medical teams involved. They are no doubt doing their best in difficult circumstances.
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This Aussie giant delivered life-saving tech during COVID, but can it keep soaring?
By Emma Koehn
July 13, 2022 — 5.10am
The past two years for sleep treatments maker ResMed reads more like a movie script than a report from an Australian Securities Exchange-listed company.
A global pandemic hits, disrupting its sleep treatments business. Then, staff find themselves at the centre of a major coronavirus crisis response, as ResMed ventilators are shipped to desperate hospitals around the world, generating hundreds of millions of dollars in new revenue.
As those COVID-19 tailwinds fade, a major recall of a competitor’s technology positions ResMed once again in a period of extraordinary demand for its products.
The company has spent the past two years showing how valuable Australian-developed intellectual property can be. Even so, the company’s shares are down 12.3 per cent for the year.
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International Issues.
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https://samf.substack.com/p/can-ukraine-win
Can Ukraine Win?
Jul 3 2022
‘Despise the enemy strategically, but respect him tactically’
- Mao Zedong
In my first post after the start of the Russo-Ukraine war I argued that Vladimir Putin had made a huge blunder and that Russia could not win. I reached this judgement only in part because Moscow had apparently not achieved its immediate objectives when they enjoyed the advantage of surprise on 24 February. I was cautious on how the clash of arms would play out as I assumed that the Russians would soon learn to adjust to Ukrainian tactics and capabilities. (By my second post, on 27 February I was more impressed by Russian military incompetence and sought to explain why this would continue to affect its operational performance.)
I believed that Putin would fail because this enterprise was launched on the basis of a deluded view of Ukraine as a country lacking both a legitimate government and a national identity and so apt to crumble quickly. On this first day he expected to take down the Ukrainian government and replace it with a puppet. Even is this plan had succeeded, the Ukrainians would probably have continued to fight against a Russian occupation. But we can imagine how, if Zelensky had been killed or abducted, the Russians would have told a compliant government to invite their forces in to remove ‘Nazi’ usurpers in Kyiv, though of course the invitation would have been retrospective. This is what happened in Afghanistan, in December 1979, when the Soviet Union removed one leader and inserted another in Kabul which then requested the military intervention that was already underway.
The survival of Zelensky and his government was the first major setback to Russian plans. Their narrative was further undermined when those supposedly being liberated showed their lack of enthusiasm for the occupation. This sent a vital message to Ukraine’s supporters in the West that Russians would face serious resistance. Zelensky soon developed his own powerful narrative about the need for more weapons to defeat the Russians (‘I don’t need a ride, I need ammunition’). The need for more and better weapons, and the ammunition to go with them, has been his clear and consistent message for the past four months.
The Meaning of Victory
I also noted in that first post that ‘victory’ is more of a political concept than a military one. By 25 March when the Russian Ministry of Defence declared it was withdrawing from northern Ukraine to concentrate on the Donbas region this required a new definition of Russian victory, one that would unavoidably be less ambitious than the original definition but also more ambiguous. The ambiguity has not been dispelled. The objective most consistent with recent operations is to conquer Luhansk, Donetsk, and Kherson, with a view to their eventual annexation and Russification. But not only are they some way from achieving that (with much of Donetsk still in Ukrainian hands and the Russia position in Kherson highly contested) it would also require an explicit Ukrainian surrender for it to serve as the basis for a declaration of victory. That will not be forthcoming.
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https://www.afr.com/world/europe/how-britain-giggled-its-way-into-crisis-20220710-p5b0gi
How Britain giggled its way into crisis
Boris Johnson has exposed the costs of Britain’s addiction to humour.
Janan Ganesh Contributor
Jul 10, 2022 – 9.56am
To the silk looms and chamber pots of Dennis Severs’ House in Spitalfields. Severs was a Californian whose gripes with the 20th century drove him to turn a London address into a portal to the 18th and 19th. A fictitious Huguenot family, drummed out of Catholic France, are heard but not seen as you tour their “home” in all its period detail. One room is given over to Queen Victoria portraits and union flags: to the patriotism of refugees.
These are layers of unsmiling reverence: the Huguenots’ for British freedom, Severs’ for the British past. These are outsiders who take the country more seriously than it takes itself.
But then, as we are seeing, how hard is that? What Britain will be living down for years is not that Boris Johnson won a landslide in December 2019. (By then, the alternative was worse.) It was the rise of such an obvious polecat over the previous three decades.
Had this been luck, we could move on. In fact, it was the natural outcome of the humour that is the nation’s favourite thing about itself. A democracy giggled its way into crisis. A man who once agreed to abet what he thought was going to be the assault of a journalist was allowed to banter his way to the top. It happened on panel shows. It happened in print. Politics is always downstream of culture, and British culture’s biggest liability is its nihilistic unseriousness.
A comic nation is not such a bad thing. A tragicomic one is. Martin Amis said that embracing frivolity was Britain’s way of dealing with post-imperial decline. If we can’t run the world – we decided, unconsciously – let’s treat it as a joke. And so resentment of the American usurpers became mockery of their humourlessness.
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Britain is falling apart, and it could finish the Tories
By Zoe Strimpel
July 10, 2022 — 3.49pm
London: Beyond the chaos in Westminster, Britain is falling apart. Eventually, possibly sooner rather than later, order will be restored. But whoever takes over is going to have a big mess to clean up.
Anyone who has been in Britain over the past few months can feel it: that sense of deadness, randomness, flyblown disrepair and a new mediocrity. We have a cost of living crisis, a fuel crisis, a materials and food supply crisis – only some of which can be blamed on the aftershocks of COVID and the war in Ukraine. People and things aren’t working – at home as well as abroad.
Tube stations close at random due to “staff shortages”. Airports are in total chaos and flights are being cancelled by the thousands. There are few visible police on the streets. Crime is soaring. Those who can afford private health care have – reluctantly – given up on the torturous public health system.
Unions are stronger than ever and threatening widespread and crippling strikes; there are fears of the first general strike since 1926. These were meant to be the Roaring Twenties. Instead, they’re shaping up to be the Rubbish Twenties.
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Eight lessons from Ukraine being studied by Xi
There is no question that the Chinese president is creating the option for the PRC to attack Taiwan, using Ukraine as a test case on how — and how not — to attack a neighbour.
The China Daily’s sharply worded editorial criticising Anthony Albanese at the time of the NATO summit was sparked by the Prime Minister comparing Ukraine and Taiwan. Russia had become a “global pariah” because of its “strategic failure” in Ukraine. Asked if China should take heed of that, Albanese said “attempts to impose change by force on a sovereign country meet resistance”.
“Taiwan is not a sovereign country,” was the curt response from the Ministry of Foreign Affairs in Beijing. How could Albanese have such a “poor grasp of political realities”, the China Daily wondered, “a parallel cannot be drawn between Ukraine and the Chinese island”.
In fact, no country is watching the Ukraine war more closely than China. The country’s huge intelligence system, the People’s Liberation Army, a vast number of think tanks and university departments and the Chinese Communist Party itself are studying the war, looking to extract strategic lessons about the role of the West, about Russia’s resilience and the conduct of the war, and about how Ukraine is mounting such tough resistance.
Beijing’s obsession with the “lessons” from Ukraine is to help better position the PRC in its strategic competition for dominance with the United States. Will China have to fight the US to take control of Taiwan? If so, does the Ukraine experience offer insights on how to prepare for, and fight, that conflict?
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Solomon Islands blocks Australian aid workers
10:49PM July 10, 2022
Solomon Islands has blocked Australian aid workers from entering the country as it opens its doors to Chinese advisers and praises Beijing as a “worthy partner” in supporting its development.
As Anthony Albanese prepares to attend the Pacific Islands Forum in Fiji this week, five Australian advisers are being denied visas by Honiara.
At the same time, Solomon Islands has granted entry to at least six Chinese advisers under its security agreement with Beijing.
“We will deal with such issues diplomatically,” the Prime Minister told The Australian.
Mr Albanese, who will have his first face-to-face meeting with Solomon Islands Prime Minister Manasseh Sogavare at the forum leaders’ summit, said he would tell Pacific counterparts that Australian aid “comes with no strings attached”.
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Dangerously polarised US is starting to resemble an emerging market
When it comes to issues of political risk and volatility terms, the US is starting to look more like a developing rather than a developed economy.
Rana Foroohar Contributor
Jul 11, 2022 – 3.43pm
I used to scoff at colleagues who, following the election of Donald Trump, predicted that the US would someday splinter into separate states. I am not laughing any more.
Supreme Court rulings over the past few weeks have deepened the fissures that have been opening up in America for years. These are rooted not just in Trump’s election and the progressive backlash to it, but can be traced right back to the 2008 financial crisis.
Policy decisions made by both Republicans and Democrats since then (including the bailout of banks rather than homeowners, and big corporate tax cuts) have eroded trust in American institutions, which is now at a record low, according to Gallup.
The court judgments, in particular the overturning of Roe vs Wade, and the new curbs put on the ability of federal agencies to act at a national level, will weaken and divide the country further. Taken to their natural limits, they would make it impossible for the federal government to guarantee a single rule of law across America on basic issues that matter not only to citizens but to investors.
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The cost of war goes well beyond rebuilding infrastructure
Wars cripple foreign trade, consumption and investment. They destroy wealth and economic output. Costs mount on the back of security and defence, alongside displaced citizens who need food, medicine and shelter.
The Lex Column
Jul 11, 2022 – 3.58pm
Funding national recovery of war-torn Ukraine will cost $US750 billion ($1.01 trillion), reckons the country’s prime minister, Denys Shmyhal. If history is any guide, early estimates are likely to be wide of the mark.
Costs tend to escalate. Corruption can mean that funds, largely international aid, are liable to seepage.
Loss of life, the biggest tragedy in war, is irreplaceable. Homes, schools and waterworks can be rebuilt. Mr Shmyhal is banking on $US100 billion for infrastructure.
Mending shattered economies is more difficult. Wars cripple foreign trade, consumption and investment. They destroy wealth and economic output. Costs mount on the back of security and defence, alongside displaced citizens who need food, medicine and shelter.
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Why the threat of a new global crisis can’t stop energy’s bear market
The world may be waiting to see if Russia will strangle gas supply to Europe, but energy stocks are in a bear market as investors weigh up recession fears.
Jul 11, 2022 – 4.10pm
Ten of the most nerve-racking days in Germany’s recent history are about to begin.
As maintenance on the Nord Stream pipeline that transports gas from Russia to Germany’s industrial heartland begins on Monday night, politicians and business leaders are nervously wondering whether gas flows will be restored after the usual 10-day shutdown, or whether Russia will play its key bargaining chip and refuse to turn the gas back on at all.
With parts of Germany already facing energy rationing, government ministers are preparing citizens for the worst.
The emergency that would hit Germany and Europe more broadly if Russian gas stops flowing is ugly. But as JP Morgan chief executive Jamie Dimon told this column last month, the impact of gas shortages during the northern hemisphere winter could threaten the European Union itself, as energy rationing leads to an every-country-for-themselves scenario.
The impact of a Russian gas blockade would also be felt in other parts of the world, including gas-hungry Asia, where Japanese new agency Nikkei says Japan is preparing a framework that will allow it to curb gas use. The country is already asking citizens to cut their energy consumption.
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Has the sharemarket selloff of 2022 hit a bottom? Some market bulls think so
July 11, 2022 — 3.47pm
All of a sudden, there’s a sense of balance emerging in sharemarkets. Against the negative and fearful alarm prevailing over the past six months that the rout in equities will continue, some leading market experts are now predicting that the worst is over.
Trying to predict the future of markets is a hazardous pastime - trying to call the bottom is a kamikaze move. But market bulls have received a bit more oxygen over the past 10 days since the start of the new financial year as the all important US S&P 500 has gained 3 per cent since the start of July.
That puts the benchmark 6.3 per cent above its year to date low in June - and could suggest a line is being drawn under one of the worst six-month periods in sharemarket history.
Of course, it would be foolish to extrapolate too much from a three-week reprieve from falling share prices. There have been a few false dawns this year alone - most notably in March where prices recovered more than 11 per cent over the space of a fortnight only to continue a downward trajectory for the following three months.
The nascent optimism in sections of the market doesn’t mean there won’t be more pain ahead for investors. But it is important to note that traditionally equities markets are a lead indicator or a predictor of what is in store six or nine months later.
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Climate change a bigger threat to Pacific than China
Matthew Cranston United States correspondent
Updated Jul 12, 2022 – 10.23am, first published at 8.17am
Washington| Climate change is a greater threat to the Pacific than Chinese military aggression, said Defence Minister Richard Marles, although engagement with island nations in the region was central to deterring Chinese expansion.
Speaking at the Washington-based Centre for Strategic and International Studies think tank, the deputy prime minister said both the US and Australia needed to lift their game in the Pacific or risk “catastrophic failure”.
He said Australia had “dropped the ball in the Pacific”, but there were opportunities to lift the game by partnering with island nations, especially on climate change.
“Climate change is absolutely the biggest issue which faces the peoples of the Pacific. It’s an existential issue, and it is felt viscerally within the Pacific,” Mr Marles said.
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Johnson, Trump and how to get rid of a strongman leader
Both Johnson and Trump live in a world of alternative facts, where inconvenient truths are ignored or dismissed as ‘fake news’. Both men are monstrous egotists, willing to trash the system in favour of their own interests.
Gideon Rachman Columnist
Jul 12, 2022 – 8.49am
“Britain Trump” was the semi-literate label that Donald Trump, the former US president, attached to Boris Johnson, the outgoing UK prime minister.
Many in Britain have long resisted that comparison between Johnson and Trump. After all, “dear old Boris” has an ability to laugh at himself, a classical education and can write fluently — all very unlike Trump. I wrestled with the comparison when writing my recent book, Age of the Strongman.
Was it really fair to include a chapter on Johnson, alongside Trump – let alone Vladimir Putin and Xi Jinping?
My doubts were quelled by the spectacle of Johnson’s doomed effort to cling to power. A parallel that once seemed stretched is now commonplace.
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UK’s political circus is a sideshow to its economic woes
Whoever succeeds Boris Johnson must be serious about tackling Britain’s profound productivity problem.
Martin Wolf Columnist
Jul 12, 2022 – 4.13pm
In the end, the survival instincts of his political party trumped Boris Johnson’s determination to survive. This is good news. Yet, he has still been an immensely significant political leader, albeit a disastrous one.
He has shifted the debate on core issues from solutions to symbols. This is true, above all, of Brexit, his enduring legacy. Johnson’s insistence on the trappings of sovereignty delivered almost the hardest possible Brexit.
If the threat to break the Northern Ireland protocol survives him, as it might, yet worse could ensue.
Brexit is not the most important challenge confronting British policymakers. What is most important is simple to describe and hard to solve. This is the longer-term stagnation in productivity and real incomes.
If the country cannot solve this, it is unlikely to solve much that matters. Even the current cost of living crisis is so bad because of the dreadful longer-term performance.
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https://www.afr.com/policy/foreign-affairs/ukraine-braces-for-fresh-russian-assault-20220712-p5b14b
Ukraine braces for fresh Russian assault
Michael Perry
Jul 12, 2022 – 6.12pm
Kyiv |Ukraine expects a fresh assault by Russian ground forces, following widespread shelling which killed more than 30 people, as Kyiv’s Western allies brace for a worsening of the global energy crisis if Russia cuts its supply of oil and gas.
Ukraine’s general staff said the shelling across the country amounted to preparations for an intensification of hostilities as Russia seeks to seize Donetsk province, and control the whole of Ukraine’s Donbas industrial heartland.
Ukrainian President Volodymyr Zelensky said Russia had carried out 34 air strikes since Saturday, one hit a five-storey apartment killing 31 people and trapping dozens.
Moscow denies targeting civilians but many Ukrainian cities, towns and villages have been left in ruins. And the human cost of Russia’s invasion, Europe’s biggest conflict since World War Two and now in its fifth month, mounts.
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Why HIMARS may shift the battlefield balance in Ukraine
Mick Ryan
Military leader and strategist
July 12, 2022 — 7.45pm
Over the past few days, the Twittersphere has been expounding on the impact that several HIMARS rocket artillery systems are having in Ukraine. These systems have provided the Ukrainian armed forces with a new “long hand” with which to attack the Russian invaders. However, some perspective is required before expectations for their impact get too overblown. There is no such thing as a silver bullet solution in war.
HIMARS, short for High Mobility Artillery Rocket System, is an American truck mounted rocket launch platform. It is a lighter, more deployable version of an older tracked launcher that used the same rockets. HIMARS fires rockets in either six round configurations, with a range of 80 kilometres, or a longer-range single missile that can hit targets out to 300 km. And because it is mobile, it can shoot and move quickly, making it a very survivable platform in an era of short times between detection and destruction.
The HIMARS, because of its range and accuracy, is a weapon that is designed to attack targets deep in the enemy’s rear. Unlike artillery howitzers, which are used in a tactical role to attack troops and other targets close to the front line, HIMARS is used to destroy critical communications nodes, command posts, airfields, and important logistics facilities.
Of note, the Ukrainians so far have only been provided with the shorter-range 80 km rockets. But they have been quick to use them in the war since their provision by the Americans just a few weeks ago.
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Ukraine war: Why Vladimir Putin fears his star generals
By Marc Bennetts
The Times
July 13, 2022
Russian state media have been ordered not to focus on the identities of the country’s generals over fears that battlefield success in Ukraine could make them into a rival to President Putin.
Although pro-Kremlin media often praises officers and soldiers, it prefers to gloss over the accomplishments of commanders.
A source close to the Kremlin told Meduza, an opposition website: “If there were a general who often appeared in the news, he would inevitably become popular. He would get credit for victory. Who knows what that popularity could turn into among supporters of the war?”
Hardliners in Russia are increasingly angry at Putin over his refusal to order a nationwide mobilisation or launch missile strikes on key government buildings in Kyiv.
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Putin’s best chance for an energy knockout blow is right now
A full-blown oil shock on top of the gas squeeze risks pushing the cost of living crisis to breaking point
Ambrose Evans-Pritchard
Jul 13, 2022 – 9.32am
Vladimir Putin has prepared the ground for a drastic cut in supplies of both oil and gas at any moment, giving him the means to strike a psychological hammer blow against the Western democracies before a global recession erodes his energy leverage.
The coming weeks may be his best chance to try to force the West to the table on Russian strategic terms, locking in territorial gains on Ukraine’s Black Sea coast and in the Donbas before the delivery of heavy weapons from Nato raises the military cost for Russia to excruciating levels.
Mr Putin spelt out his operating premise at the St Petersburg International Economic Forum in late June, calling the EU’s sanctions policy a double-edged sword that would cause Europe to lose its footing in the global economy and lead to a “system-wide decline” for years to come. He left no doubt that generating inflation in the West is a primary goal.
“This will aggravate the deep-seated problems of European societies. There will be a further growth of inequality, which will split their societies still more. Such a disconnect from reality will inevitably lead to a surge in populism and extremist and radical movements,” he said.
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Why the Ukraine war is entering a dangerous new phase
Putin hopes to break Europe’s resolve to back Kyiv. The Ukrainians hope to bog Russia down on the battlefield. But can Putin really walk away from this fight?
Thomas Friedman Contributor
Jul 13, 2022 – 1.30pm
When trying to explain the recent improvements in the Russian army’s operations in Ukraine, some Ukrainian officials have taken to saying, “All the dumb Russians are dead.” It’s a backhanded compliment, meaning that the Russians have finally figured out a more effective way to fight this war since their incompetent early performance that got thousands of them killed.
Precisely because the Ukraine war seems to have settled into a grinding war of attrition – with Russia largely standing back and just shelling and rocketing Ukrainian cities in the east, turning them to rubble and then inching forward – you might think the worst of this conflict is over.
You would be wrong.
I believe the Ukraine war is about to enter a new phase, based on this fact: Many Russian soldiers and generals may be dead, but Ukraine’s steadfast NATO allies are tired. This war has already contributed to a huge spike in natural gas, fuel and food prices in Europe – and if it drags into the winter, many families in the European Union may have to choose between heating and eating.
As a result, I think the war’s new phase is what I call Vladimir Putin’s “winter strategy” versus NATO’s “summer strategy.”
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https://www.afr.com/chanticleer/what-the-us-inflation-shock-means-for-investors-20220714-p5b1hv
What the US inflation shock means for investors
More aggressive Fed rate increases are coming, lifting the chances of a US recession. Investors should be cautious about believing the worst is priced into stocks.
Jul 14, 2022 – 9.14am
Don’t be fooled by the relatively mild reaction on financial markets to news that headline inflation in the United States has surged to 9.1 per cent, the highest since 1981. While this is clearly an awful number for central banks, it should also concern investors, who must now confront two key questions.
First, how bad is the likely US recession going to be? And second, is that likely recession fully priced into markets?
The 9.1 per cent inflation print is effectively a double shock.
The first shock is that inflation hasn’t actually peaked as predicted a few months ago, when the consensus was for headline inflation to top out at around 8.3 per cent. Almost everything about Wednesday night’s data was worse than expected, from headline inflation (economists had predicted 8.8 per cent) to the core inflation number of 5.9 per cent (5.7 per cent was expected) to the sheer breadth of price increases.
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US inflation hits a new 41-year record to reach 9.1pc
Matthew Cranston United States correspondent
Jul 13, 2022 – 10.51pm
Washington | Inflation in the US has jumped to a new 41-year-high driven by broad-based price increases in gas, food and rent, placing further pressure on the Biden administration and ensuring another large interest rate rise by the Federal Reserve later this month.
Annual consumer prices rose 9.1 per cent in June from a year ago, up from an 8.6 per cent jump in May, ahead of economists’ expectations of a 8.8 per cent pace. During the month they rose 1.3 per cent after having risen 1 per cent in May.
President Joe Biden, whose approval ratings have tumbled, immediately said inflation was “unacceptably high”, but that the latest report was already “out-of-date” with gas prices having fallen for the last month.
“Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June,” Mr Biden said.
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Rishi Sunak wins first round of Tory contest to succeed Boris Johnson
Joe Mayes
Jul 14, 2022 – 2.43am
London | Rishi Sunak, whose resignation helped trigger the downfall of Boris Johnson last week, took an early lead in the race to succeed him as leader of the ruling Conservative Party leader and Britain’s prime minister.
In the first ballot of Conservative MPs on Wednesday, the former chancellor won 88 votes – ahead of the second-placed Penny Mordaunt with 67 votes. Foreign Secretary Liz Truss was third with 50.
Current chancellor Nadhim Zahawi was knocked out along with Jeremy Hunt, under rules that remove the candidate with the lowest support, as well as anyone with fewer than 30 votes. The next ballot is scheduled for Thursday.
Despite the early show of support for Mr Sunak, the latest YouGov poll of Tory grassroots members – who make the final decision, via a month-long postal vote, once Conservative MPs have narrowed the field down to two – suggested he would be beaten in a run-off against either Ms Mordaunt or Ms Truss.
The contest remains wide open.
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Fix the budget and push up rates: IMF presses for inflation control
By Shane Wright
July 13, 2022 — 11.00pm
The International Monetary Fund is urging the federal government to quickly repair the budget and the Reserve Bank to keep lifting interest rates, warning there are growing risks inflation will become entrenched and devastate the living standards of ordinary people.
Ahead of a meeting of G20 finance ministers in Bali that will include Treasurer Jim Chalmers, the head of the IMF, one of the world’s key economic advisory organisations, said global economic growth is slowing due to the problems posed by rampant inflation and the war in Ukraine.
Kristalina Georgieva on Wednesday night told the meeting of the treasurers of the world’s 20 largest economies that they and their central banks had to make tough decisions now, otherwise next year could be worse than 2022.
“It is going to be a tough 2022 – and possibly an even tougher 2023, with increased risk of recession,” she said.
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https://www.afr.com/world/north-america/us-inflation-surge-signals-tough-times-ahead-20220714-p5b1ls
US inflation surge signals tough times ahead
Have no doubt: the latest inflation numbers are indicative of rough seas ahead, particularly for the most vulnerable segments of society in the US and around the globe.
Mohamed El-Erian Contributor
Jul 14, 2022 – 12.57pm
June’s awful US inflation numbers are a reminder of tough days ahead for many in America and around the world, and especially the most vulnerable segments of the population and the most fragile developing countries.
This is not because inflation will record yet another four-decade high over the next three months. It won’t. Rather, it is because of the damage already unleashed and that which is to come.
At 9.1 per cent for June, the headline number for the US consumer price index (CPI) inflation came in well above the median forecast of 8.8 per cent, registering its highest level since 1981. The core measure was also higher than expected, and the compositional details added to concerns.
This level of inflation will come as a shock to many, especially those who have been falsely comforted by a US Federal Reserve narrative that, from day one of this inflation episode, has failed to understand the dynamics in play, grasp the seriousness of what’s ahead, and act promptly and decisively to avoid undue harm to so many.
The stunning number, which will be splashed across the front pages of newspapers and dominate news shows and websites, will further erode the already-damaged policy credibility of the Fed and undermine the effectiveness of its all-important, forward-guidance tool.
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Back to the future: the classic Cold War conundrum is back
It is impossible to forget Russia’s violent and repressive actions in Ukraine, but it is necessary to deal with them to avoid escalation.
Mary Elise Sarotte
Jul 14, 2022 – 8.00am
Early in the blockbuster film Back to the Future, Dr Emmett Brown, a wacky but lovable scientist who goes by “Doc”, slumps to his death after an attacker pumps multiple bullets into his chest at close range. This surprisingly violent moment disrupts what was, until then, an upbeat teen comedy released to entertain Americans during the Fourth of July holiday in 1985.
Doc’s young protege Marty McFly escapes the same gruesome death only by fleeing in the scientist’s newly built time machine. As a result, Marty unexpectedly finds himself stuck in a frightening past – without a way to get back to a future that had seemed so full of promise only moments before the murder.
Sudden feelings of profound disruption, of panic at finding oneself in the throes of struggles seemingly past, of despair at being robbed of a promising future: these feelings have again dawned – not in comic Cold War-era fiction but tragic post-Cold War reality.
In the short time since February 24, Russian President Vladimir Putin has catapulted the world backwards into a dangerous past, one characterised by localised bloodshed under the shadow of potential global nuclear confrontation. This dizzying dislocation induces many questions: Why now? What’s coming next? And is there a way back?
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https://www.afr.com/policy/economy/china-s-economic-growth-slows-sharply-20220715-p5b1wz
China’s economic growth slows sharply
Updated Jul 15, 2022 – 12.44pm, first published at 12.11pm
Hong Kong | China’s economy grew at the slowest pace since the initial coronavirus outbreak in Wuhan, a reflection of the damage the nation’s -zero-COVID approach has had on growth and the challenge Beijing faces in meeting its full-year target.
Gross domestic product increased 0.4 per cent from a year earlier, the worst performance since the first quarter of 2020, the National Bureau of Statistics said on Friday. Growth was far weaker than the 1.2 per cent gain in a Bloomberg survey of economists. On a quarterly basis, the economy contracted 2.6 per cent.
China’s economy is paying the price for Beijing’s attempt to stamp out COVID-19 cases, a strategy that’s becoming ever-more difficult as more infectious virus variants emerge.
On top of that, the property market remains in a deep slump. Economists say the government’s ambitious growth goal of around 5.5 per cent is out of reach, with GDP forecast to expand just over 4 per cent this year.
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A Crisis Historian Has Some Bad News for Us
Adam Tooze, a historian of economic disaster, sees a combination of worrisome signs.
By Annie Lowrey
July 5, 2022
America and the world are living through what Adam Tooze, the internet’s foremost historian of money and disaster, describes as a “polycrisis.” As he sips a beer at a bar near Columbia University, where he is the director of the European Institute, Tooze talks through a long list of challenges: War, raising the specter of nuclear conflict. Climate change, threatening famine, flood, and fire. Inflation, forcing central banks to crush consumer demand. The pandemic, closing factories and overloading hospitals. Each crisis is hard enough to parse by itself; the interconnected mess of them is infinitely more so. And he feels “the whole is even more dangerous than the sum of the parts.”
Not too long ago, Tooze was an obscure academic. Now he’s among the world’s most influential financial commentators, with loyal readerships in Washington, London, Paris, and Brussels, as well as on Wall Street. Tooze’s readers turn to him for his uncanny ability to know which numbers on a spreadsheet matter, or when a trend has hit the point at which it has started to shape history. He looks at trade, currency, equities, wage, employment, debt, and commodities data and somehow makes sense of it—not just in the moment but in the sweep of time. “Economic events have had such a huge influence on politics this century,” Robert Skidelsky, the John Maynard Keynes biographer, told me. Tooze “illustrates the interpenetration of economic policy and political events. It’s as simple as that.”
He does so in books, opinion pieces, and a podcast. But his greatest reach might come through his Substack newsletter, Chartbook, which comes across as a bloggy, ivory-tower version of the research notes that investment-bank analysts send to clients. Tooze describes it as his “incomplete and somewhat raw” thoughts, a “mélange of different styles and materials.” Recent dispatches have analyzed the Allies’ resources at the Battle of Normandy, the financing of the War on Terror, contemporary siege warfare in Mariupol, and West Virginia as a roadblock to climate policy.
Bottom of Form
His kind of analysis—nerdy and highbrow and often a little inscrutable—is not for everyone. He writes for people who like reading material that “hits a bit heavier”: more technical than what you might read in the Financial Times, more intellectual than reports put out by Goldman Sachs. But it’s revelatory for many, including young lefties (described memorably in New York magazine as “Tooze Boys”), denizens of #econtwitter, history buffs, and money managers, many of whom trade on the data he digs up.
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People power has brought down Sri Lanka’s ruling dynasty. What now?
By Ruth Pollard
Updated July 14, 2022 — 1.40pmfirst published at 5.00am
Delhi: Protest movements produce powerful symbols. Images of the citizens of Sri Lanka storming the presidential residence of the man who steered their country into financial ruin and then refused to step down sent a pointed message. When they started swimming in Gotabaya’s pool, cooking in his kitchen and working out in the official gym, he had to know it was over for his family’s reign of economic destruction.
For the first time since demonstrations began in March in the capital, Colombo, soldiers were seen joining the protests. So too were the Buddhist monks who had previously helped propel the Rajapaksas to government.
When the military starts to turn against the strongman who was once defence secretary, it’s clear the power has finally shifted – though they are still out in force on the streets and there’ve been reports of violence against protesters and journalists that’s put some in hospital.
That the weekend was dominated by reports the Rajapaksas were planning to flee the country was not surprising given the renewed ferocity of the protesters now driven not just by anger but desperation. The president left his residence before it was seized and his whereabouts were, for a while, unknown. He said he was preparing to resign on Wednesday. His citizens said that was not soon enough.
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Why this expert says everyone is wrong about a US recession
Michael P. Regan and Vildana Hajric
Jul 17, 2022 – 9.00am
Mark Zandi, who has been an economist for more than three decades, says he’s never seen so many people convinced that a recession is imminent.
And while he believes the US economy can still avoid such an economic downturn, sentiment is so poor that it poses its own risk – a sort of self-fulfilling recession prophecy. Zandi, the chief economist at Moody’s Analytics, joined the “What Goes Up” podcast to discuss his outlook after government data this week showed the highest level of inflation in almost 41 years.
Below are condensed and lightly edited highlights of the conversation.
Q: You have downgraded your GDP outlook for this year and next year. (Zandi now expects real growth of 1 per cent this year and 2 per cent in 2023, versus previous forecasts of 2 per cent and 2.5 per cent respectively.) What is going to happen over the next 18 to 24 months?
A: I still have no recession (in his forecasts). Obviously, recession risks are high – I mean, clearly, when inflation is so high and the Fed is on DEFCON 1 and rightfully focused on getting that inflation down by jacking up interest rates, and sentiment is miserable, right?
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I look forward to comments on all this!
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David.
