November 17, 2022 Edition
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In the US we
are seeing the washup from the Mid-Term elections with a much more even outcome
than expected which is good news for the world – especially that the US democracy
seems to still be working. Wonderfully Trump seems to be a spent force - how good!
In the UK and Europe we see recession bearing down, The only questions are how long and how deep.
In OZ the PM is visiting multiple summits while all our data is hacked by the Russians. We have to dramatically lift our game on cyber – that is very clear.
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Major Issues.
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Auction clearances hit six-month high as sellers accept reality
Larry Schlesinger Reporter
Nov 6, 2022 – 11.44am
National auction clearance rates hit a five-month high this week and Sydney hit a six-month-high as sellers met the market amid still sharply falling house prices, and rising interest rates as the Reserve Bank tries to rein in rampant inflation.
CoreLogic recorded a 63.7 per cent preliminary clearance rate across the combined capital cities, a healthy 3.8 percentage points up on the previous week and the best result since late May. However, auction numbers totalled less than 1500, just over half what they were the same time last year (3292).
In Sydney, where house prices are down 8.6 per cent on an annual basis and still falling, 69.7 per cent of homes sold under the hammer over the past week, the highest preliminary clearance rate since mid-April.
Highlighting the willingness of vendors to meet the market, homes sold just 1.6 per cent over the reserve price on average, according to the country’s biggest real estate firm Ray White.
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Eight reasons Australia is stuck with these low productivity rates
Politicians like to bemoan low productivity but the causes are complex and baked into the economy
Mon 7 Nov 2022 03.30 AEDTLast modified on Mon 7 Nov 2022 03.32 AEDT
In difficult economic times, politicians of all stripes love to bemoan the nation’s “low productivity”. Productivity is the value of the economy’s total output divided by the hours worked and capital deployed. In theory, it is related to investment, innovation, skills, enterprise and competition. In practice, it is poorly understood and difficult to measure – the late economist Moses Abramovitz called it a “measure of our ignorance”.
There are complex reasons as to why it is difficult to improve productivity in Australia, an economy that is increasingly focused around the caring and services industries. But these factors go some way to explaining our flagging productivity growth.
Machines are replacing labour
It may seem obvious but the ongoing shift from manufacturing to services affects our productivity.
Industrial processes lend themselves to automated mass production. They allow production, of whole items or components, to be outsourced to low-cost suppliers.
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Profit from the bear market by buying cheap overseas
Between 2010 and 2020, the Australian market returned 7.2 per cent per year, compared to the US market’s 15.9 per cent. Franking won’t double your returns.
James Weir Contributor
Nov 7, 2022 – 5.00am
Winston Churchill’s admonition never to waste a good crisis is something all smart investors should keep in mind as financial markets wrestle with the potential for a recovery from the bear market.
One opportunity not to waste is revisiting your weighting to Australian shares in an investment portfolio.
There is a well-recognised home country bias among investors all over the world, meaning most investors tend to be heavily overweight their own backyard, which is easy to understand given increased familiarity and ease of access.
For Australian investors, two other factors have been important contributors to what Vanguard has estimated as an average 73 per cent allocation to domestic equities: the franking system which boosts dividend returns; and Australia’s economic record of avoiding recession for almost 30 years contributing to a perception of safety.
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https://www.afr.com/politics/labor-sets-sights-on-rich-lister-super-tax-breaks-20221107-p5bw2p
Labor sets sights on Rich Lister super tax breaks
Michael Read and Aleks Vickovich
Nov 8, 2022 – 5.00am
The Albanese government will consider scaling back superannuation tax concessions for wealthy Australians as it seeks to repair the cash-strapped federal budget and crack down on loopholes.
Financial Services Minister Stephen Jones will tell The Australian Financial Review Super & Wealth Summit in Sydney on Tuesday that Labor is gearing up for a debate on tax concessions once the government outlines its definition of the purpose of superannuation and puts it into legislation.
“We have 32 self-managed super funds with more than $100 million in assets – the largest self-managed super fund has over $400 million in assets,” Mr Jones will tell the Summit.
“I celebrate success, but the concessional taxation of funds like these has a real cost to the budget which needs to be considered.”
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https://www.afr.com/politics/federal/germans-circle-navy-s-corvette-warship-plan-20221107-p5bw4u
Germans circle navy’s corvette warship plan
Andrew Tillett Political correspondent
Nov 8, 2022 – 5.00am
Germany’s biggest shipbuilder has signalled its interest in mooted plans to build a fleet of corvettes, as the Australian navy looks to rapidly boost the strike capability of its warships in response to China’s military build up.
The Australian Financial Review understands executives from shipbuilder TKMS – a subsidiary of German industrial powerhouse ThyssenKrupp – are seeking meetings with navy officials this week to discuss the potential project.
The TKMS staff are in Canberra, alongside representatives from a raft of international defence companies, to attend the Submarine Institute of Australia’s annual conference which gets underway on Tuesday.
No formal corvette project exists, although it has emerged as one option being considered by the Albanese government’s defence strategic review. Sources said the corvettes are also gaining support within the navy, amid concerns over the navy’s patrol boat program.
Corvettes are a small but fast class of warships, typically armed with medium-sized guns and capable of carrying missiles.
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I’ve never seen Aussies so anxious about the future
Journalist and author
November 7, 2022 — 11.58am
Covering Australia for the BBC almost a decade ago, I made two attempts at coming up with country-defining coinage. The first was to describe Canberra as the coup capital of the democratic world, a title now obviously claimed by Westminster. The second was to argue that Australia was the lifestyle superpower of the world, a status that is now also under threat.
Unlike Donald Horne’s never-to-be-beaten The Lucky Country, I intended this tagline to be taken at face value. It seemed especially apropos during the global financial crisis, an economic meltdown that the rest of the world described, more gravely, as the Great Recession. I realised, of course, that millions of Australians never got to benefit from the “wonder from Down Under” economy, not least many First Nations people. However, at a time of global turmoil, the combination of sun, sea and soaring property prices seemed like a world-beating trifecta.
Those global rankings – which I never fully trust – continue to regard Australia as a lifestyle powerhouse. Fourth is where it currently ranks, behind Switzerland, Denmark and the Netherlands, according to Numbeo, an index that takes into account healthcare quality, housing, transportation and crime rates. Australian cities also do well in the liveability leagues, although recently locked-down Melbourne was the only one to make The Economist’s 2022 top 10 (offering proof of its unreliability). Australians, when asked to rank their general satisfaction with life, give it on average a 7.1 grade, which is higher than the OECD average of 6.7.
Yet, I wonder whether these indices paint too rosy a picture. For in all the time that I have lived in Australia, I have never known it to be so anxious about the present or so fretful about the future. In a country where property values are a barometer of the national vibe, few things obviously have quite the same buzz-kill effect as interest rates hitting a 10-year high and house prices falling.
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Superannuation reforms needed for the over-60s
5:44AM November 8, 2022
Thanks to aggressive rationalisation in the super sector the accumulation phase for Australian savers is at last looking fitter for purpose.
But what happens after 60? The retirement income phase is all over the place.
This is not good. Baby boomers, the first cohort to benefit from Australia’s compulsory super system, have hit the golden years.
At 60 the accumulated savings of Australians can move across to retirement income accounts with a tax-free status. So why do some funds not advise their members to make the shift to a pension income account until years later, if at all?
There are difficult calls to be made on how retirement funds should be invested to see a person out (the longevity risk) and what sort of investments should be considered.
And the super industry is nervous about jumping in with advice after the blast from the Hayne royal commission and recent case law. Meanwhile, time is ticking on.
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Military needs firepower to keep enemies far from mainland: Marles
Andrew Tillett Political correspondent
Nov 8, 2022 – 1.57pm
Defence Minister Richard Marles has signalled a new doctrine for the Defence Force of “impactful projection”, with the army, navy and air force packing enough firepower to keep an enemy at bay well beyond the mainland.
Addressing the Submarine Institute’s conference on Tuesday morning, Mr Marles said the upcoming defence strategic review would reshape the Australian Defence Force for decades to come, with the acquisition of nuclear-powered submarines underpinning the enhanced strike power.
He revealed he planned to meet US and UK counterparts before the end of the year in the first meeting of AUKUS defence ministers, to thrash out the final details for the nuclear submarine project.
Speaking at the same conference, Chief of Navy Mark Hammond rebuffed suggestions that neighbouring countries were uncomfortable with Australia attaining nuclear-powered submarines and that it would undermine diplomatic and defence ties.
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https://www.afr.com/politics/culture-wars-to-the-libs-are-like-class-wars-to-labor-20221107-p5bw8x
Culture wars are over. But the news hasn’t reached Liberal HQ
Anthony Albanese was a left-wing warrior who realised it was a dead-end. Peter Dutton should follow suit on right-wing cultural issues.
Michael Buckland Contributor
Nov 8, 2022 – 1.46pm
The Australian culture wars are over. It’s tough to say who won. But they’re over.
Sure, there are culture flare-ups, culture scuffles – even the odd culture melee. Get on Twitter right now and you’ll find a dozen. But a party of government theatrically throwing a dead cat on the table and knowing that’s all anyone will talk about for the foreseeable? Those days are over.
Just ask Scott Morrison. Raising the question of whether trans women should be allowed to play women’s sport was a classic culture war play. Take a hot-button issue for the far left and the far right (trans rights), jam it hard into a monolith of Australian identity (sport), sprinkle it with a bit of kindling (religious rights and cancel culture) and ignite it in an election campaign crucible. It was genius. And it was a fizzer.
Sure, there were some headlines, some opeds, some panel show segments. Talkback radio banked a respectable number of calls for a few days. But even the most excitable commentator would struggle to describe it as a “war”. In fact, by the time the votes were counted, no one even acknowledged it as minor factor in the election result.
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https://www.afr.com/politics/labor-urged-to-cut-super-tax-breaks-for-higher-earners-20221108-p5bwe8
Big super backs tax crackdown on ‘ludicrous’ $5m accounts
Michael Read and Aleks Vickovich
Nov 8, 2022 – 10.53am
Superannuation fund chiefs have rallied around calls to scale back tax concessions for $5 million-plus retirement savings accounts, but the Albanese government is under pressure to curb benefits for an additional 70,000 high-income earners by imposing an even lower limit of $2 million.
With Labor gearing up for a debate on curtailing super tax concessions for wealthy Australians, Financial Services Minister Stephen Jones said on Tuesday the government had not settled on how much superannuation was too much.
“I’d start from the proposition that you’re really going to struggle to convince the government that a retirement savings balance of $100 million is all about retirement savings,” he told The Australian Financial Review Super & Wealth Summit.
The government will consider curtailing tax concessions once it has legislated an objective for the superannuation system.
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The key to improving workers’ mental health (it’s not free yoga)
Euan Black Work and Careers Reporter
Nov 9, 2022 – 12.01am
Employers must train managers on how to solve mental health issues and give employees more say over how they do their jobs if Australia is to avoid a doubling in the number of workers’ mental health compensation claims by 2030.
The warnings come from a new report released on Wednesday by the Committee for Economic Development of Australia, which urged employers to prioritise mental health to the same degree as physical health and said popular measures such as free yoga sessions and fruit boxes did little to improve employee wellbeing.
Based on the historical rate of growth in claims and other mental health-related statistics, the report offered three scenarios for the future trajectory of the number of mental health compensation claims in Australia.
Claims double by 2030 under the moderate-growth scenario and almost triple by 2030 under the high-growth scenario.
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‘No support’ for cap on super balances: SMSF Association
Michael Read Reporter
Nov 9, 2022 – 10.06am
A crackdown on tax concessions for retirement savings would be in direct conflict with Labor’s election promises and erode confidence in the superannuation system, the boss of the peak group for self-managed savers says.
Financial Services Minister Stephen Jones revealed at The Australian Financial Review Super & Wealth Summit on Tuesday that Labor will consider curtailing tax concessions once it has legislated an objective for the superannuation system.
Some of the super sector’s influential lobby groups have lent support to the idea of limiting balances to $5 million – a move that would affect at least 11,000 Australians, who receive about $70,000 annually in earnings tax concessions. The policy would save the federal budget about $1.5 billion per year.
Other organisations like the Grattan Institute are urging Labor to go even further, limiting balances at $2 million.
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Marles orders ADF review following reports China asked former pilots for intel
By Broede Carmody
9 Nov, 2022
Defence Minister Richard Marles has just announced that his department is investigating reports that former Australian Defence Force personnel have been approached to provide military training to Chinese officials.
Speaking to reporters from Parliament House in Canberra, the deputy prime minister said he was alerted to those reports last month and that the information provided to him so far warrants a detailed investigation.
Marles declined to say how many former ADF personnel may have been approached.
Here’s what the Labor frontbencher did say, though:
I want to make this point. For those who do come into possession of our nation’s secrets, either through service in the Australian Defence Force, or, indeed, service in any other part of the Commonwealth, there is an enduring obligation to maintain those secrets for as long as they are secrets, which persists well after their engagement with the Commonwealth. And to breach that obligation is a very serious crime. That is clear and unambiguous.
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JPMorgan lists first ETFs on Aussie sharemarket
Aleks Vickovich Wealth editor
Nov 10, 2022 – 5.00am
JPMorgan Asset Management will list two global equities funds on the Australian Securities Exchange as the Wall Street giant seeks to counter the surging flow of money to passive index funds Down Under.
The JPMorgan Equity Premium Income Active ETF (JEPI) and JPMorgan Global Research Enhanced Index Equity Active ETF (JREG) products are expected to begin trading on the local market on Thursday.
Andrew Creber, the $US2.3 trillion ($3.5 trillion) investment manager’s chief executive in Australia and New Zealand, said the debut of the two funds reflected parent company’s JPMorgan Chase & Co’s bullishness on the Australian market.
“We really want to position ourselves as the leading global active asset manager in Australia,” Mr Creber told The Australian Financial Review. “They (head office) definitely see this as a key growth market for them and they want to invest back into the Australian business.”
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Why super tax breaks for retirees can’t go on like this
The generous tax concessions for super put more tax pressure on overburdened wage earners to pay for spending on pensions, aged care and health.
John Kehoe Economics editor
Nov 9, 2022 – 2.45pm
--Younger and older Australians all have an interest in the debate about the superannuation tax concessions worth $48 billion that the Albanese government is scrutinising.
The generous tax concessions for superannuation put more tax pressure on overburdened wage earners, both through explicit tax increases and stealth bracket creep. The overhyped debate about the stage three income tax cuts is a classic example, when the tax cuts merely return bracket creep.
With a federal budget in structural deficit, the very generous super tax breaks for retirees are unsustainable when the working-age population is shrinking relative to the number of retirees. The ratio of working-age people to those over 65 has fallen from 7.3 in 1975 to about four today.
It is projected to fall to 2.7 over the next 40 years due to rising life expectancy and lower fertility, according to Treasury’s Intergenerational Report. A smaller share of working taxpayers will be forced to pay for a larger share of retirees.
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Renters on frontline of financial stress, says RBA
7:05PM November 9, 2022
Runaway rental costs risk pushing poorer renters into “financial stress” in coming months, Reserve Bank deputy governor Michele Bullock says, as flooding drives food prices higher and adds to a cost-of-living burden.
Speaking at the Australian Business Economists annual dinner on Wednesday night, Ms Bullock said there were “good reasons to think we are approaching the peak of inflation this cycle”, even as “the outlook for domestic energy prices and rents are two areas we are monitoring closely”.
The RBA last week said it now expected inflation to reach 8 per cent by the end of the year, before easing to 4.7 per cent through 2023.
Electricity and gas bills have increased by 10-15 per cent since the middle of this year, Ms Bullock said, with the bulk of these gains to be reflected in the December quarter consumer price index. She said the large increases in retail power prices predicted for 2023 would add one percentage point to inflation over the coming 12 months, but even that could prove too conservative.
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How to buy bonds on the ASX (and why you might want to)
Jonathan Shapiro Senior reporter
Nov 10, 2022 – 5.00am
Bonds are probably Australia’s most intimidating asset class, which likely explains why they’re so unpopular with everyday investors.
Many of us are experts when it comes to stocks, cash and property, but few of us know exactly what bonds are, and once we do, it’s still not obvious how to start investing in them.
But bonds are making an unexpected comeback thanks to this year’s dramatic rise in interest rates, which has made investing in government debt a viable investment option.
Here is everything you need to know about bonds, and how to invest in them.
What are the different types of bonds (and how do they work)?
A bond is a loan that exists in the form of a tradeable security. The buyer of the bond – an investor – effectively lends money (by “purchasing” the bond) at terms that are set at the time of issue, but they can then transfer or trade the security at any time for an agreed market price. The issuer of the bond, which can be a government or a bank or a company, must pay interest and the principal back upon maturity, or it is in default.
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https://www.afr.com/politics/federal/the-government-wants-to-fix-low-pay-and-quickly-20221109-p5bwxx
The government wants to fix low pay, and quickly
The Albanese government is not playing crash-through on its IR bill for lack of a good case, but because it thinks the low-paid can’t wait.
Laura Tingle Columnist
Nov 11, 2022 – 4.59pm
If you pause to consider a bit of history, the debate about wages in Australia has never been conducted in quite the mix of economic circumstances, power imbalances and obvious flaws in the industrial relations system that forms the backdrop to the current tussle in federal parliament over the Albanese government’s industrial relations reform.
Let’s register the economics first: wage growth is running at 2.6 per cent; inflation is at 7.3 per cent and heading to 8 per cent. Yet the Reserve Bank agrees there isn’t a wage-price spiral in evidence.
No one is really, seriously arguing that lifting real wages poses an existential threat to the economy right now. In fact, most economists argue the very opposite: that we have to lift wages to improve growth.
Then there are the structural issues. Three decades of deregulation of the labour markets – designed to deconstruct a centralised wage-setting system that aimed to spread around potential wage gains to all, but which constrained business and exacerbated wage-price spirals – has not produced satisfactory outcomes for many involved in the labour market.
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National corruption watchdog unanimously endorsed by parliamentary inquiry
By Lisa Visentin and David Crowe
Updated November 10, 2022 — 6.41pmfirst published at 3.07pm
A defining dispute over public hearings will decide the final votes on the creation of a federal corruption watchdog after the Greens, crossbenchers and legal experts made a last-ditch call to modify the reform to ensure greater transparency.
Debate on the issue flared again after a parliamentary committee cleared the way for the formation of the National Anti-Corruption Commission by issuing a unanimous report to back the government’s draft law to set up the authority while recommending a handful of technical amendments.
But crossbenchers in both houses of parliament are holding out for changes to a crucial section of the bill that limits public hearings to “exceptional circumstances” and encourages most proceedings to be held in private.
Dr Helen Haines, Independent MP for Indi and deputy chair of the inquiry, described the government plan as a “very good bill” but said she would move amendments to remove the “exceptional circumstances” test and replace it with a revised “public interest” test for public hearings.
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Going for woke: Companies treading a fine line on social licence
November 12, 2022 — 5.00am
“Have you ever heard the phrase GO WOKE GO BROKE,” read the email.
“Who, in their right mind, would think it would be a good idea to celebrate the drag queen community and think it will paint your organisation in a favourable light … just think of your everyday staff who are going to suffer because of your irrational decisions.”
The furious message, signed off by a “disgusted former passenger” and directed at Virgin Australia’s public affairs team, was a response to an ad campaign promoting the airline’s “pride flight”. Towards the end of October, Virgin shared a screenshot of the email on Twitter, accompanied by the caption: “Thank you for the feedback, Karen. ICYMI, Pride Flight is on sale now.”
Condemnation was swift. People questioned why Virgin had shared the homophobic message, querying whether it was appropriate to use in an effort to sell flights. Some were convinced the email was fake. Before long, Virgin ripped it from online, apologised, and described the move as an “error of judgement”.
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Should you switch your super to Vanguard’s new 0.58% fee fund?
Senior economics writer
November 12, 2022 — 11.30am
As exciting development’s in Australia’s behemoth $3.5 trillion superannuation sector go, they don’t get much more exciting than Friday’s unveiling by the world’s second-biggest asset manager, Vanguard, of its new Australian super fund offerings.
Three years in the making, market watchers have been keenly anticipating the announcement of the fee structure of the low-cost investing pioneer.
And on Friday we got the answer: Vanguard will charge fees of 0.58 per cent of a member’s balance in its default MySuper offering, which will also be a ‘lifestyle’ product, meaning it starts out with a high proportion (about 90 per cent) of funds invested in ‘growth’ assets, like shares, and then, from the age of 47, starts to automatically switch you to a higher proportion of more ‘defensive’ assets, like fixed interest and cash. Vanguard is also offering more traditionally structured products too, some with fees as low as 0.56 per cent.
For someone with $50,000 of super sitting in Vanguard’s new default offering, that works out to a cost of $290 a year.
On Vanguard’s reckoning, backed by a survey commissioned from consulting firm Deloitte and conducted in May this year, that makes it the lowest fee super fund for Australians with balances under $50,000 and aged under 47.
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Is this crypto’s Lehman Brothers moment?
By Kevin Roose
November 12, 2022 — 12.30am
The crypto industry is known for dramatic twists, rollercoaster prices and fortunes that appear and disappear overnight.
But even by crypto standards, what happened this week was bonkers.
To non-crypto watchers, the news the collapse of FTX, one of the world’s largest cryptocurrency exchanges might sound boring or esoteric, the kind of story you’d happily scroll past on your way to reading about Elon Musk’s latest Twitter tempest.
But within the crypto world, it is already being referred to as the industry’s “Lehman moment” a reference to the 2008 collapse of Lehman Brothers, which set off a global financial panic and made it clear to laypeople just how much trouble Wall Street was in.
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Older asset-rich Australians in the firing line for taxing challenge
12:00AM November 12, 2022
There’s a lot going on in policy land, especially with the vogue for intervention. In case you missed it, the fuse has been lit on tax. As a nation, we’re going to pay more – it’s simply a matter of how much more, by whom, and when.
This year’s election recklessly skirted the fundamental issue of how to pay for Canberra’s bipartisan compact: to succour an ageing population, deal with a geostrategic miasma, service debt after a pandemic binge, make more things here, pull off decarbonisation and keep a life-changing disability scheme from imploding.
The campaign’s policy void betrayed a homegrown cargo cult: in the misty out years, superior growth and productivity would be dispensed from above the clouds to make evil deficits disappear.
There’s been some truth-telling since May. People who claim growth and spending cuts, as necessary as they will be, are sufficient to fixing the budget are likely to be spectators in the main arena. We need to talk about tax.
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COVID-19 Information.
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NSW records 40 per cent surge in COVID-19 cases, hospitalisations rise
November 10, 2022 — 5.30pm
Key points
· There were 14,089 people diagnosed with COVID-19 in the week ending November 5.
· Twenty-four people died with COVID-19 over the week.
· A mix of Omicron subvariants is driving this wave of transmissions.
NSW has entered a new COVID-19 wave as health authorities record a 40 per cent rise in cases and an increase in hospital admissions across the state.
There were 14,089 people diagnosed with COVID-19 in the week ending November 5, a 39.3 per cent rise since the previous week, the state’s latest COVID surveillance report found.
Updated Moderna COVID-19 vaccine approved in UK targets both the original and Omicron variants.
The report published on Thursday showed 310 COVID-19 cases were admitted to hospital and 25 to intensive care in the same week.
The seven-day rolling average of daily hospitalisations rose to 44 admissions by November 5 compared to 38 admissions at the end of the previous week.
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‘It’s becoming a contortionist’: New COVID-19 subvariants drive wave of infections
A swarm of new subvariants is driving the latest COVID-19 wave in NSW as the virus comes under increasing pressure to find new ways of evading the population’s immunity.
One of the new variants – BR.2.1 – has established a base in NSW, with the state home to the vast majority of cases globally.
Since the BR.2.1 subvariant was first detected in September, there have been 162 cases detected worldwide, of which 161 were from Australia and 144 were from NSW, the majority of whom had not recently travelled overseas, NSW Chief Health Officer Dr Kerry Chant said.
Chant said a mix of subvariants – XBB.1, BQ.1.1 as well as BR.2.1 – were gaining a foothold in the state by evolving in strikingly similar ways that gave them a “competitive advantage” over the COVID-fighting antibodies.
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Climate Change.
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https://thenewdaily.com.au/finance/2022/11/07/climate-cop27-energy-kohler/
6:00am, Nov 7, 2022 Updated: 7:59pm, Nov 6
Alan Kohler: COP27 – we’ll do it this year, for sure, you just wait
World leaders, apart from Anthony Albanese, Xi Jinping and Vladimir Putin, are gathering in the Egyptian Red Sea resort of Sharm El-Sheikh for the 27th conference of parties (COP27) to deal with climate change.
COP1 was held in Berlin in 1995, three years after the United Nations Framework Convention on Climate Change was first established, and it was agreed then that “the parties should protect the climate system for the benefit of present and future generations of humankind”.
Since then, global carbon emissions have risen 61 per cent, increasing every year apart from during recessions and the pandemic, and after each of those inadvertent reductions, emissions from the burning of fossil fuels bounced back and continued marching upwards.
So COP that – 30 years of fine words have achieved nothing. But, hey – this year will be the one for sure!
It’s not as if anyone can still plead ignorance or even scepticism about the impact of global warming: Just since COP26 in Glasgow a year ago, parts of China, Iran and the United States have endured their most intense ever heatwaves, temperatures in the UK went above 40 degrees for the first time, Pakistan was hit by floods that killed thousands and made 30 million homeless, millions are starving in the east African drought, record rainfall in South Africa killed thousands and, of course, eastern Australia has had virtually continuous floods for 12 months.
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Last eight years were the warmest in modern times, UN body says
By Eric Niiler
Dow Jones
7:53PM November 7, 2022
The last eight years have each been warmer than all years before that period on record, according to a report by the World Meteorological Organisation that was released on Sunday as the United Nations opened two weeks of climate talks.
The WMO, which is a branch of the UN, combined multiple scientific studies to compare temperatures since record-keeping began in the late 19th century. The group also reported that the rate of sea-level rise has doubled since satellite measurements began in 1993. European glaciers are expected to suffer a record melt in 2022. Greenland experienced rainfall, rather than snow, for the first time in September.
Melting glaciers and warming water, which expands in volume, have combined to push sea levels higher by 1cm since 2020, according to the organisation. Higher seas are causing coastal flooding and greater storm surges and forcing some residents of low-lying islands to relocate, the WMO said in the report.
The report was released to coincide with the annual UN climate summit. Representatives of more than 190 nations are gathering in the Egyptian resort town of Sharm el-Sheikh for two weeks of talks that have been reshaped by the war in Ukraine and Europe’s energy crisis. Russia’s decision to cut the flow of natural gas to Europe has forced many countries to burn more coal, boosting their emissions.
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Vulnerable need immediate relief from energy stress
11:00PM November 8, 2022
Australia, like much of the world, is facing an energy price crisis, with households and businesses bracing for price increases of more than 50 per cent across the next two years.
Some people feel the impact of these price spikes more than others. People such as Natalie, who lived in an old and energy-inefficient rental property and received a $2000 winter gas bill as there were holes in the heater vents and the walls and floors weren’t properly sealed.
Research conducted by the Brotherhood of St Laurence and published in the Power Pain report found one in five households was already in some form of energy stress back in 2020. These households, like Natalie’s, either couldn’t afford to pay their bills on time, couldn’t afford to heat their home or had energy expenditure greater than 7 per cent of after-housing income or 6 per cent of before-housing income.
More than one in four households with someone with a disability or chronic health condition were in energy stress in 2020. For households in the lowest quintile of incomes, it was two in five. More than a third of households in public and community housing experienced at least one form of energy stress.
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Royal Commissions And The Like.
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No entries in this category
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National Budget Issues.
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https://www.afr.com/markets/debt-markets/the-reserve-bank-can-never-go-broke-20221104-p5bvp8
The Reserve Bank can never go broke
Tim Hext
Nov 6, 2022 – 5.00am
The pandemic forced the rewriting of conventional economics to fit the real world. For central banks this was a world best described by Modern Monetary Theory – the great economic buzzword of the COVID-19 era, which told us not to always worry about printing money.
This worked for central banks in countries that controlled and created their own money, the value of which was not tied to any commodity or foreign currency. The Reserve Bank of Australia clearly falls into this category.
The main idea behind MMT is a central bank like the RBA can create as much of its own currency as it wants. This means the federal government’s budget is merely an accounting entry. The government can spend more than it drains via taxes, without needing to borrow from the private sector.
There are two ways it can do this.
The simplest and cheapest is for the RBA to give money to the federal government. After all, it can create whatever it wants. This is a step too far for some, including the RBA governor.
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The cost of living isn’t as high as we’ve been told
Economics Editor
November 7, 2022 — 5.00am
So, as we learnt the day after the budget, the cost of living leapt by 7.3 per cent over the past year, right? Wrong. Last week we were told it’s gone up no more than 6.7 per cent for employees, and 6.4 for pensioners and others on benefits.
The 7.3 per cent came from the Australian Bureau of Statistics, and was the rise in the consumer price index over the year to the end of September. The other figures also came from the bureau, and were for the rise in the “living cost index” over the same period for certain types of households.
Why weren’t you told about the second lot? Because the media wanted to avoid confusing you – and because they were better news rather than worse.
Huh? What’s going on? We’re used to using the consumer price index (CPI) as a measure of the cost of living. But the bureau knows it’s not. So, a week later, it always issues its living-cost indexes for key household types – which the media always ignore.
Usually, the differences from the CPI aren’t big enough to worry about. But now they are. Why? Because mortgage interest rates are increasing rapidly. And mortgage interest charges are the main difference between the two measures.
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Vanguard to undercut bloated super sector on $30b in fees
Aleks Vickovich Wealth editor
Nov 7, 2022 – 5.00am
The world’s second-largest asset manager, Vanguard, has pledged to return profits to members as it enters Australia’s $3.3 trillion compulsory super system and targets its $30 billion in annual fees.
The local arm of the $11.3 trillion investor is expected to start onboarding customers to its new super product within weeks, after the corporate regulator allowed it to take in an initial cohort of about 50 employees and family members in September.
Vanguard Australia managing director Daniel Shrimski – who will speak at The Australian Financial Review Super & Wealth Summit on Tuesday and returned from the firm’s Pennsylvania base to head the local business late last year – declined to release the much-anticipated rate card ahead of the public launch. But he indicated that it would lowball the industry on fees.
“We’re going to go to market with a compelling offer – we’re certainly going to give Australians something to think about,” Mr Shrimski told the Financial Review.
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Confidence hits recession levels as 40pc plan Christmas cutbacks
Ronald Mizen Economics correspondent
Nov 8, 2022 – 2.16pm
Consumer sentiment plunged to recession levels and inflation expectations soared after the Reserve Bank last week lifted the official interest rate for a seventh straight month and indicated more increases were on the way.
About 40 per cent of people plan to cut Christmas spending, the highest proportion since Westpac starting asking the question in its monthly consumer sentiment survey back in 2009.
And after holding firm lately, business confidence finally took a hit in October, reflecting a softening in forward orders and the increasingly negative global outlook, according to the NAB business survey.
Consumer sentiment dropped 1.5 per cent last week to be down 10.4 per cent over the past six weeks, according to the ANZ-Roy Morgan survey. The Westpac-Melbourne Institute survey, which is taken monthly, tumbled almost 7 per cent since it was last published for September.
“Sentiment continues to plumb historic lows,” said Westpac chief economist Bill Evans, who noted the confidence level was below that during the global financial crisis and only slightly above the depths of the pandemic.
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Strip RBA board of rate-setting power: review
By Shane Wright
November 9, 2022 — 5.00am
The Reserve Bank board would be stripped of its power to set interest rates and forced to explain why it fails to hit its inflation target, while senior staff would be barred from holding shares or government bonds under sweeping proposals put to the inquiry examining the institution.
Former RBA economist Zac Gross, whose research into the bank’s pre-COVID interest rates settings found up to 270,000 jobs failed to be created due to overly tight monetary policy, said a committee of experts should set interest rates rather than a board of “corporate leaders” with little economics experience.
Gross also has called for the Reserve Bank to take macroprudential powers back from the Australian Prudential Regulation Authority (APRA), so it can target issues such as soaring house prices without having to resort to interest rates.
The review, the first of the RBA in more than 40 years, is being led by a three-member panel that includes international monetary policy expert Carolyn Wilkins, who sits on the Bank of England’s financial policy committee; the interim director of the Crawford School at the Australian National University, Renee Fry-McKibbin; and the secretary for public sector reform Gordon de Brouwer.
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https://thenewdaily.com.au/finance/2022/11/10/tax-budget-alan-kohler/
Alan Kohler: How to fix the budget – turn back time
The personal income tax scales have been fiddled with 18 times since 1983, seven of them big changes and 11 fairly small ones.
If income tax rates had not been changed in the past 40 years, and the wages at which they cut in had simply been increased with inflation, personal income tax revenue would be $170 billion more than it is now, there would be no budget deficit, structural or otherwise, and tons of money for government services.
Almost all of those changes were designed to gain political points by giving back bracket creep with a flag-draped flourish at a press conference, but they did much more than that.
Bracket creep happens when you get a pay rise that takes you into a higher tax bracket, so your tax increases more than your income.
There was a brief attempt by Malcolm Fraser in the 1970s to index the income tax scales so that CPI wage rises would not result in an increase in anyone’s marginal tax rate.
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From Nazis to bankruptcy – the new questions facing a challenged RBA
By Shane Wright
November 11, 2022 — 4.45am
For two hours in a parliamentary committee room, the Reserve Bank on Thursday came face to face with the reality created by the economic and political turmoil of the past two years.
The RBA is central to the economic turmoil – soaring prices, interest rates climbing at their fastest rate in a generation, falling house values – that is vexing central banks around the world.
But the political turmoil, driven in part by the nation’s economic backdrop, is a little alien to the monetary policy mandarins of Martin Place.
It became even more alien as RBA deputy governor Michele Bullock faced questions that ranged from the melting down of Nazi gold, whether higher interest rates are inflationary and if the Reserve itself is bankrupt.
The bank is the focus of an independent review, the first in 40 years, which follows concerns about how the RBA was handling monetary policy ahead of the COVID pandemic. Attention more recently has come due to the bank’s 2021 statements that official interest rates were likely to be held at 0.1 per cent until 2024.
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https://www.afr.com/policy/economy/home-loan-rates-to-peak-at-6-6pc-next-year-20221111-p5bxei
Home loan rates to peak at 6.6pc next year
Ronald Mizen Economics correspondent
Nov 11, 2022 – 5.25pm
The average interest rate on an outstanding variable rate loan looks set to peak at about 6.6 per cent next year, as expectations firm on the Reserve Bank of Australia’s cash rate hitting 3.6-3.85 per cent.
At 3.85 per cent, monthly repayments on a 25-year, $500,000 mortgage will have increased by $1058 since May, $1587 for a $750,000 mortgage, and $2117 for a $1 million loan, according to comparison website RateCity.
Financial market pricing for the local cash rate fell on Friday following softer than expected United States inflation data that also sparked a major rally in global sharemarkets.
Investors expect a peak of around 3.8 per cent next year, down from above 4 per cent earlier in the week. The shift lower means a gulf between market and economist expectations has narrowed markedly.
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Health Issues.
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Fears of late diagnoses as worker shortages blow out medical scan waitlists
November 6, 2022 — 4.45pm
Key points
· Some Victorians are now facing waits of almost six months for MRI scans as delays in securing appointments for crucial medical imaging soar across the state.
· Waitlists for a CT scans, used to help diagnose conditions such as cancer, are hovering at a four to eight weeks.
· Workforce shortages are fuelling the delays as well as a backlog of thousands of people who postponed care during consecutive lockdowns.
Victorians face waits of up to six months for MRI scans as delays in securing appointments for crucial medical imaging, used to diagnose potentially life-threatening diseases, worsen well after lockdowns.
Professor Gerard Goh, of the Royal Australian and New Zealand College of Radiologists, said record demand and workforce shortages had combined to blow out wait times for almost every scan — including MRI and CT scans, often used to help detect diseases such as cancer.
“We are seeing an increase in waitlist times for most imaging modalities,” the Monash University dean of faculty of clinical radiology said.
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Mental illness doubles as hospital beds vanish
11:00PM November 6, 2022
The number of Australians presenting at hospital with mental illness has almost doubled in the past 15 years but the number of beds available has plummeted, with emergency departments struggling to care for those in acute crisis waiting an average 20 hours to be admitted to wards.
Doctors are raising the alarm at the increasing numbers of patients presenting to emergency by ambulance in acute crisis, with thousands of people unable to access specialist mental health care in the community whatsoever.
The Australian Medical Association has issued a special edition of its yearly public hospitals report card to highlight what it says is the failure of Australia’s healthcare system and hospitals to provide acceptable care for the mentally ill.
AMA president Steve Robson said those with mental illness were receiving the worst care of any other patient with the overloaded hospital system, despite being highly vulnerable and acutely unwell. The problem was linked to underfunding by state governments of community mental health services and primary care, as well as subsidisation schemes for psychiatric and psychological care that favoured the rich.
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https://medicalrepublic.com.au/butler-bins-8bn-rorting-claims-declares-review/80773
7 November 2022
Butler bins $8bn rorting claims, declares review
Rejecting media claims that Medicare is leaking $8 billion due to fraud, inappropriate billing or overservicing, Health Minister Mark Butler has commissioned an independent review of MBS compliance.
The review will be led by health economist Dr Pradeep Philip, a former secretary of the Victorian health department and now lead partner at Deloitte Access Economics.
Dr Philip’s review will examine the “integrity of Medicare and its compliance mechanisms”. An interim report will be submitted by 31 January 2023, with the final report to be handed down by 28 February 2023.
Following reports by Nine newspapers and the ABC’s 7.30 program, Mr Butler called for an internal review of compliance.
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https://www.miragenews.com/government-confirms-no-evidence-for-medicare-890942/
Government confirms no evidence for Medicare fraud claims
Media release
Published 8 November 2022
The Australian Medical Association (AMA) has welcomed today’s announcement that a departmental review found no evidence to support media reports that 30 per cent of the Medicare budget is being defrauded by doctors and other health professionals.
Federal Health Minister Mark Butler has confirmed that a departmental review found there was nothing to support claims made in some media reports that 30 per cent of the Medicare budget was being “rorted” by doctors and other health professionals and stressed that the overwhelming bulk of Australia’s doctors and health professionals are honest, hardworking and comply with Medicare rules.
AMA President Professor Stephen Robson said the announcement was a welcome one for doctors across the country who had reported mental distress following the media reports.
“The AMA analysed the documentation these media reports relied on and like the department found nothing — not a skerrick of evidence — to support the claims made in headlines splashed across some news organisations,” Professor Robson said.
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https://www.afr.com/technology/alleged-medibank-hackers-demanded-us10m-ransom-20221110-p5bx0q
Abortions, $15.6m ransom demand exposed in new Medibank data dump
Max Mason, Ayesha de Kretser and John Davidson
Updated Nov 10, 2022 – 9.46am, first published at 7.04am
Criminals who claim to have stolen the personal information of almost 10 million Australians from Medibank, including sensitive health data, allege they offered a ransom of $US10 million ($15.6 million) to not leak the data.
The hackers have also uploaded the next tranche of data which they have labelled “abortions.csv”.
The document contains details of 303 customers, including names, dates of birth, Medicare numbers and addresses, and billing codes that indicate abortions, which may include terminations of non-viable pregnancies. That takes the number of Medibank customers who have had their details exposed to more than 500.
Medibank responded saying it is “aware that the criminal has released an additional file on a dark web forum containing customer data that is believed to have been stolen from Medibank’s systems”.
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Suicide and self-harm taking a huge toll
8:00PM November 9, 2022
Suicide and self-harm is costing the Australian economy a conservative $32bn a year, with the emotional ripple effects among family, friends and those left behind likely to make the figure much higher, an international expert says.
But much can be done to reduce the bill, such as offering mental health first aid programs to people such as taxi drivers and hairdressers to help them recognise those at risk of harm and offer support, London School of Economics academic David McDaid says.
Associate Professor McDaid, a specialist in the economics of mental health and self harm, said the tragedy of self-harm and suicide was the extent of the emotional and economic fallout given it is largely preventable.
“Based on updating Productivity Commission data to 2022 dollars, the economic cost of suicide and self-harm in Australia is estimated to be $31.8bn,” Associate Professor McDaid said.
“Most is for lost life expectancy for the more than 3000 people who suicide each year, and the lost opportunity to be economically productive for an average of 40 years.
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Paracetamol purchase limits ‘overkill’
November 12, 2022
The medicines regulator is using its powers like a “sledgehammer” in proposing to restrict access to paracetamol in a move that would disproportionately affect the poor, those in rural areas and the young.
National peak body Pain Australia has set out a series of objections to the Therapeutic Goods Administration proposals on paracetamol in a submission to the Advisory Committee on Medicine Scheduling which is examining the issue, ahead of a meeting of the committee next week.
The TGA has proposed limiting supermarket purchases of the painkillers to two packs per person, reducing pack sizes, making modified-released paracetamol prescription-only, and restricting over-the-counter sales to over-18s.
The push to restrict paracetamol follows the recommendations of an independent expert report that examined rising rates of intentional paracetamol overdose, especially in young women.
But Pain Australia CEO Giulia Jones said it was not the role of the TGA to respond to what was a mental health issue.
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David Nutt, psychedelic drug researcher, 71: Q&A
By Ross Bilton
12:00AM November 12, 2022
Do people do a double-take when they see “Professor of Neuropsychopharmacology” on your business card? [Laughs] Yes, but it’s simply the science of how drugs affect the brain, and how we can use them to improve brain health.
You grew up in England’s West Country, studied at Cambridge, and now work at Imperial College London doing pioneering research into psychedelics. How do these drugs affect the brain? When we first started imaging the brains of people tripping on psilocybin [magic mushrooms] we found, to our surprise, that it turned off a key part of the brain called the default mode network – this is the brain network that drives your sense of self, your sense of worth, the attitudes you have to your present, your past and your future.
And when that’s turned off, what happens? You get increased connectivity between other parts of the brain. Here’s an analogy: think of the brain as an orchestra and the default mode network as the conductor, dictating the music that’s played. Take away the conductor and the musicians can do their own thing – they’ll start playing jazz. Psychedelics allow you to innovate in all different aspects of your thinking, in a way that you can’t when the default mode network is running.
Why is there a therapeutic potential in that? Because disorders such as depression and addiction are driven by malignant, repetitive thinking processes – negative thought-loops – originating in the default mode network. Psychedelics radically disrupt the mental processes that underpin these disorders; during the space of the trip, people are freed from those inexorable thought-loops. They often experience powerful insights, and powerful changes in their attitudes to themselves, as a result. And it’s important to note that psychedelics only target the part of the brain involved in these high-level thinking processes - they don’t target the core brain, the part that controls your breathing, your heart, things like that. Which is why psychedelics have a very high safety margin.
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International Issues.
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What the return of the Republicans means for big business
Joe Nocera
Nov 6, 2022 – 1.38pm
Last month, with the midterm elections fast approaching, Marjorie Taylor Greene, the flame-throwing, far-right Republican congresswoman from Georgia, was a guest on Steve Bannon’s podcast.
With the Republicans favoured to take control of the House of Representatives, Bannon popped the question that has been much on the minds of corporate executives:
“Do corporations have anything to fear from a populist House, ma’am?” he asked.
Greene cracked a steely smile. After January 6, 2021, she said, “all the big corporations stopped donating to a whole bunch of my Republican colleagues”.
She continued, “I want you to know – and I want them to know – that that’s not going to be forgotten.” She added, “There is [sic] going to be investigations.” Payback time, in other words.
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Goldman cuts S&P 500 earnings growth forecast to 0pc
Timothy Moore Before the Bell editor
Nov 5, 2022 – 9.03am
Anticipating a larger contraction in US corporate profit margins has led Goldman Sachs’ equity strategist David Kostin to slash his 2023 S&P 500 earnings-per-share growth forecast to 0 per cent from 3 per cent.
“Following a weak third-quarter earnings season in which S&P 500 net margins declined year/year for the first time since the pandemic, we lower our EPS forecasts for 2022 (to $US224 from $US226), 2023 (to $US224 from $US234) and 2024 (to $US237 from $US243),” Kostin said in his weekly kickstart note.
“The revised estimates reflect annual growth of 7 per cent, 0 per cent, and 5 per cent, respectively. Our top-down estimates are below bottom-up consensus forecasts for 2023 and 2024. We maintain our year-end 2022 and 2023 index targets of 3600 and 4000.”
The S&P 500 closed at 3770 on Friday (Saturday AEDT).
Kostin said the $US10 EPS cut in is 2023 estimate reflects reductions across eight sectors, though the key reason for the revision is slowing economic growth.
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What to expect in the 2022 midterms
The Wall Street Journal
10:22AM November 4, 2022
Here’s what I’ll be looking for Tuesday as I watch election returns at Fox News in New York.
When polls close on Tuesday at 6pm (9am Wednesday, AEDT) parts of Indiana and Kentucky (both states are split between time zones), I’ll compare what each Democrat and Republican hopeful receives to what their parties’ presidential candidate got in 2020. That’s something to watch across the board. In districts or states where Joe Biden’s margin is smaller than this year’s Democratic candidates’, that indicates it could be a bad night for their party.
At 7pm, polls close in four states as well as the rest of Indiana and Kentucky and part of Florida. I’ll focus on Georgia to see by how much Governor Brian Kemp is beating Stacey Abrams. The bigger Mr Kemp’s margin, the better Herschel Walker’s chances to win the Senate seat. If neither he nor Senator Raphael Warnock gets more than 50 per cent of the vote, the election goes to a December 6 runoff.
Virginia also closes at that time, with three high-profile House races. If the GOP takes one seat, it’ll point to a good night nationally, two seats to a great night, and three to a blowout. I’ll also start matching the final polls with outcomes to see if surveys under-polled Republicans.
At 7.30pm, North Carolina and Ohio polls close. Republicans must win both Senate races. I’ll compare Tuesday’s returns with 2020’s totals.
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Biden warns of Trump’s threat to democracy as midterm rout looms
Trevor Hunnicutt
Nov 7, 2022 – 2.05pm
Yonkers, New York | President Joe Biden warned that a Republican win in this week’s midterm elections could weaken US democracy, while former president Donald Trump again hinted at another White House bid, days before votes in which Republicans could gain control of both chambers of Congress.
The comments, made at competing rallies held in New York and Florida, highlighted the grim prospects that Mr Biden’s Democrats face, despite fulfilling his promises to boost clean-energy incentives and rebuild crumbling roads and bridges.
Republicans have hammered Mr Biden for high inflation and increased crime following the COVID-19 pandemic, and forecasters favour them to win control of the House of Representatives – and possibly the Senate as well. Democrats’ early leads in a handful of critical Senate races in Pennsylvania, Georgia and Nevada have evaporated.
Control of even one chamber would allow Republicans to stymie Mr Biden’s legislative agenda, launch potentially politically damaging investigations and scupper Democrat-led existing ones.
Mr Biden warned that many Republican candidates are threatening democratic norms by echoing Mr Trump’s false claims about a stolen election in 2020.
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The first global summit of the second Cold War
Joe Biden and Xi Jinping may meet at the G20 in Indonesia, but Vladimir Putin’s presence is unlikely.
Gideon Rachman Columnist
Nov 8, 2022 – 8.10am
“We refuse to be a pawn in a new cold war,” says Joko Widodo, the president of Indonesia. Jokowi, as he is known, is speaking in an interview at the presidential palace in Jakarta. It is a surprisingly tough message from a leader known for his conciliatory style.
Next week the Indonesian president will host what feels like the first global summit of a second Cold War – the G20 leaders’ meeting in Bali. This will be the first G20 summit to take place since Russia’s invasion of Ukraine in February. It is also the first since the surge in US-China tensions that followed the visit by Nancy Pelosi, the speaker of the US House of Representatives, to Taiwan in August.
Widodo has been president of Indonesia, the world’s fourth most populous nation, since 2014. But he presents a stark contrast to strongman leaders such as Xi Jinping or Vladimir Putin.
Dressed simply in a white shirt, black trousers and Indonesian-made trainers, he says his main aim at the G20 is to encourage dialogue. “We’re very worried about escalating tensions between the major powers.”
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‘He needs the war to continue’: Why Putin can’t negotiate his way out of Ukraine
November 8, 2022 — 5.00am
It is in Russian President Vladimir Putin’s interests to prolong the Ukraine conflict as long as possible to stave off a reckoning by his citizens over the invasion, one of the world’s leading war experts says.
Sir Lawrence Freedman, emeritus professor of war studies at King’s College London, said the eight-month campaign had shown Putin was far from the master strategist many assumed.
Freedman said Chinese President Xi Jinping was clearly unimpressed with Putin and that Russia’s failure to subdue Ukraine offered China important lessons about the potential difficulty of invading Taiwan.
He said he did not believe Putin could negotiate his way out of the war, even though the Russian military had suffered heavy casualties and recently lost control of vast swaths of territory.
“To stay in power, he needs the war to continue because as soon as it ends there is a reckoning,” Freedman told this masthead during a visit to Australia for a series of lectures organised by the Lowy Institute think tank.
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Toxic cocktail: The global financial system is on shaky ground
Senior business columnist
November 7, 2022 — 11.55am
As the major central banks have continued to tighten monetary conditions, raising interest rates and withdrawing liquidity from their financial systems, the risk of shocks to those systems has been rising.
Bond traders are complaining of a lack of liquidity that could lead to a seizure in the system akin to that which occurred at the onset of the pandemic. There is a lot of hidden leverage in the non-bank segments of the global financial system. The surge in the value of the US dollar is exporting stress and inflation to other economies and financial systems. Housing markets are cracking as interest rates rise.
As was seen recently in the UK, when a misconceived spending spree announced by a (short-lived) UK prime minister and her chancellor almost triggered the collapse of the UK pension fund sector, there are unforseen risks within a financial system rendered brittle and risky by the rapid shifts in monetary policies.
The US Federal Reserve Board has identified some of those risks in its semi-annual financial stability report, released last Friday.
In a foreword to the report, the Fed’s vice chair, Lael Brainard, said the current environment of global monetary tightening, high inflation rates, the uncertainties still flowing from the pandemic and the Russian invasion of Ukraine as raising the risk “that a shock could lead to the amplification of vulnerabilities, for instance due to strained liquidity in core financial markets or hidden leverage.”
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‘Situation is terrible’: Republicans sue to disqualify thousands of mail ballots in swing states
By Amy Gardner and Emma Brown
November 8, 2022 — 8.52am
Republican officials and candidates in at least three battleground states are pushing to disqualify thousands of mail ballots after urging their own supporters to vote on Election Day, in what critics are calling a concerted attempt at partisan voter suppression.
In Pennsylvania, the state Supreme Court has agreed with the Republican National Committee that election officials should not count ballots on which the voter neglected to put a date on the outer envelope - even in cases when the ballots arrive before Election Day. Thousands of ballots have been set aside as a result, enough to swing a close race.
In Michigan, Kristina Karamo, the Republican nominee for secretary of state, sued the top election official in Detroit last month, seeking to toss absentee ballots not cast in person with an ID, even though that runs contrary to state requirements. When asked in a recent court hearing, Karamo’s lawyer declined to say why the suit targets Detroit, a heavily Democratic, majority-black city, and not the entire state.
And in Wisconsin, Republicans won a court ruling that will prevent some mail ballots from being counted when the required witness address is not complete.
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Democrats have alienated the persuadable centrists they need most
The party has settled on a catastrophising, fundamentalist narrative that delights its true believers and repels the ordinary voter.
Clive Crook
Nov 8, 2022 – 11.36am
Whatever the outcome of this week’s midterm elections – whether it’s a red wave or a red ripple – one thing is already clear: Democrats have fought a pitifully poor campaign.
They face a Republican Party that has no platform, an array of conspicuously flawed candidates and a patently unfit leader. Democrats should be looking forward to sweeping victories. As things stand, their best hope is to limit their losses.
Not only have they failed to connect with the persuadable centre of the electorate, they haven’t actually tried. The party has settled on a catastrophising, fundamentalist narrative that delights its true believers and repels the ordinary voter.
President Joe Biden’s most important job was to detach his party from this alienating conception of the country’s challenges. Instead, he became its leading spokesman. This compounded the party’s difficulties by merging the president’s defects as a politician with an implausibly alarmist worldview. His feeble and meandering speech last week summed things up: Vote for Democrats – not for better government but to save democracy.
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https://www.afr.com/world/north-america/a-maga-america-would-be-ugly-20221109-p5bwnd
A MAGA America would be ugly
Ten or 20 years ago, those of us who warned that the Republican Party was becoming increasingly extremist and anti-democracy were often dismissed as alarmists.
Paul Krugman
Nov 9, 2022 – 4.35am
If you aren’t feeling a sense of dread about the midterm elections, you haven’t been paying attention.
We can talk about the conventional stakes of these elections — their implications for economic policy, major social programs, environmental policy, civil liberties and reproductive rights. And it’s not wrong to have these discussions: Life will go on whatever happens on the political scene, and government policies will continue to have a big impact on people’s lives.
But I, at least, always feel at least a bit guilty when writing about inflation or the fate of Medicare. Yes, these are my specialties. Focusing on them, however, feels a bit like denial, or at least evasion, when the fundamental stakes right now are so existential.
Ten or 20 years ago, those of us who warned that the Republican Party was becoming increasingly extremist and anti-democracy were often dismissed as alarmists. But the alarmists have been vindicated every step of the way, from the selling of the Iraq War on false pretenses to the January 6 insurrection.
Indeed, these days it’s almost conventional wisdom that the GOP will, if it can, turn America into something like Viktor Orban’s Hungary: a democracy on paper but an ethnonationalist, authoritarian one-party state in practice. After all, US conservatives have made no secret about viewing Hungary as a -role model; they have feted Orban and featured him at their conferences.
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Discovery of bronzes rewrites Italy’s Etruscan-Roman history
By Nicole Winfield
November 9, 2022 — 4.58am
Rome: Italian authorities have announced the extraordinary discovery of 2000-year-old bronze statues in an ancient Tuscan thermal spring and said the find will “rewrite history” about the transition from the Etruscan civilisation to the Roman Empire.
The discovery, in the sacred baths of the San Casciano dei Bagni archaeological dig near Siena, is one of the most significant ever in the Mediterranean and certainly the most important since the 1972 underwater discovery of the famed Riace bronze warriors, said Massimo Osanna, the Culture Ministry’s director of museums.
Thanks to the mud that protected them, the two-dozen figurines and other bronze objects were found in a perfect state of conservation, bearing delicate facial features, inscriptions and rippled tunics. Alongside the figures were 5000 coins in gold, silver and bronze, the ministry said.
As evidence of the importance of the find, the ministry announced on Tuesday (Rome time) the construction of a new museum in the area to house the antiquities.
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For Biden, Trump is the gift that keeps on giving
The fact that the red wave became a red ripple suggests the anger of America’s voters does not equate to recklessness.
Ed Luce
Nov 10, 2022 – 6.59am
Tuesday night could have been the beginning of the end for Joe Biden. Forecasters said the US midterm election would deliver a red wave – a “tsunami” even.
In the event, it was an average ripple by the standards of past midterms. Whatever the final tally, which could take days to verify, Biden has avoided the shellacking that befell both Barack Obama and Bill Clinton, his two Democratic predecessors. In today’s bleakly polarised America, that qualifies as a win.
What is good for Biden is bad for Donald Trump, whose continued grip on the Republican Party explains its failure to close the sale with voters.
By all other measures – Biden’s low approval ratings and voter angst about galloping inflation and rising crime – Republicans should have swept both chambers of Congress and many more state governorships.
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US allies brace for a disruptive Republican House
The Afghan exit will become a flashpoint, and support for Ukraine may be challenged. But the two parties’ view of China is complex and not always reassuring for allies.
James Curran Historian
Nov 9, 2022 – 6.05pm
US allies should strap themselves in for another wild ride over the next two years. America’s age of disruption and distraction continues.
Republicans appear to have captured a majority in the US House of Representatives, though they will not have undermined President Joe Biden’s authority on foreign policy by as much as they hoped.
But the tone of the Republican campaign is not encouraging for allies, especially as Donald Trump will draw strength from some of his successful supporters. And Republicans will need no invitation to commence their vendetta against the Biden administration.
Nothing will be off limits: Hunter Biden’s business connections abroad, “woke” culture in large corporations, and immigration.
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There’s a big Republican winner, and his name is not Trump
Senior fellow at the United States Studies Centre and former political staffer
November 10, 2022 — 8.31am
It was not the midterm election the Republicans expected, and certainly not the result they wanted. Republicans are poised to take the House of Representatives, but far short of the gains they sought.
Sensing that the economy, crime, immigration and an unpopular president had caused the bottom to fall out for Democrats, Republicans went all out to snatch a big majority. Too many voters, however, were not sold on the message of their candidates – especially on abortion rights.
Before the polls closed, House Speaker Nancy Pelosi was asked if she thought the Democrats would “hold on” to the House. “I do,” she said. ”And just because a pundit in Washington says history says you can’t win is no deterrent for the enthusiasm we have out there. So, I think you will be surprised this evening.”
Many in the political class were surprised she was right. Republicans wanted to sweep, but they have fallen short, for now, in taking the Senate.
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https://www.afr.com/politics/federal/us-voters-said-nup-to-trump-20221109-p5bwxt
US voters said nup to Trump
There was no red wave because enough Americans still preferred boring Democrats over disruptive MAGA Republicans.
Alex Tureman Corporate strategist
Nov 10, 2022 – 1.13pm
Over the past month, many of us in the Democratic Party were concerned that this week’s result would be far worse for Democrats. That uneasiness was for good reason.
Traditionally, in midterm elections the president’s party gets shellacked. Only once this century did a president’s party evade significant losses in the House of Representatives during a midterm election. That was in 2002, under George W. Bush, and was largely attributable to 9/11 and a rally-around-the-flag effect.
Otherwise, House losses in modern times have equated to the opposition party flipping, on average, 27 of the president’s party’s House seats.
While Republicans are still poised to win a majority in the House, the margin looks to be much less significant than previously expected. Just a few weeks ago, the likely next speaker of the House, Kevin McCarthy, predicted that the GOP could pick up upwards of 63 seats in the House. They’re ultimately going to have a 10- to 15-seat majority, which can make life difficult for the speaker as he tries to corral his caucus.
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https://www.afr.com/world/north-america/us-inflation-slower-than-expected-at-7-7pc-20221111-p5bxc7
US inflation slows more than expected to 7.7pc annual rate
Matthew Cranston United States correspondent
Nov 11, 2022 – 12.42am
Washington | Annual inflation in the United States slowed to 7.7 per cent last month, the lowest since January, giving the Federal Reserve some room to ease the pace of interest rate rises.
October’s increase marks the first time the consumer price index has risen at an annual rate of less than 8 per cent since February. Annual CPI peaked at 9.1 per cent in June.
While headline inflation increased 0.4 per cent in October, the same as in September, the annual rate fell because a higher inflation reading from the same month last year dropped out of the numbers.
The pace of rising food costs is starting to unwind; they increased 0.6 per cent in October, down from a 0.8 per cent increase in September. The pace of rent rises also eased.
US financial markets surged on the data. At 10.45am in New York, the Dow Jones Industrial Average was more than 800 points higher, for a 2.5 per cent gain. That paled in comparison with the S&P 500’s 4.2 per cent leap and the Nasdaq Composite’s more than 5.3 per cent advance.
The yield on the US 10-year note collapsed 24 basis points to 3.85 per cent at 10.44am in New York.
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Trump has peaked as normality returns to US politics
The disruptive political rise of Donald Trump may now have peaked and even gone into decline, as the Republicans’ unexpectedly modest gains in the US midterm elections suggest.
Nov 10, 2022 – 7.50pm
The disruptive political rise of Donald Trump, from his shock democratic storming of the White House in 2016 to his followers’ outrageous assault on Capitol Hill in 2022, may now have peaked and even gone into decline, as the Republicans’ unexpectedly modest gains in the American midterm elections suggest.
The political huckster’s attempts to turn them into a referendum on his supposedly stolen presidency have failed, along with most of his hand-picked candidates, running the same outlandish claims and refusing to concede to democratic ground rules.
The issues that swung the elections for Congress and state governors were the stuff of normal political debate – inflation, crime, immigration, even abortion rights. Democrats would have done better had they heeded middle Americans more, particularly on inflation: the No. 1 issue in exit polls.
But the former president’s populist grip on the Republican Party has been exposed by Florida Governor Ron DeSantis’ re-election on a spectacular 20 per cent margin. Providing a guide to post-Trump American politics, Mr DeSantis is still an arch conservative and warrior against the race and gender identity politics that increasingly define the Democrats.
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Kherson retreat: Why Putin needs a story that may even include some facts
Military leader and strategist
November 11, 2022 — 8.30am
After American midterm elections that Trumpians – and President Vladimir Putin – will prefer to forget, Russian Defence Minister Sergei Shoigu announced that Russian forces would withdraw from the West Bank of the Dnieper River in Ukraine.
This was hardly a surprise. It had been apparent for some time to intelligence agencies and those watching the war closely that Ukraine’s strategy to slowly corrode and choke the Russians in this region was working. With bridges destroyed, logistic support waning and morale crumbling, the Russians were in a very tenuous situation.
The Russian President had been hoping for a much better result (for him) from the US elections. With some on the far right of the Republican Party calling for a redirection of American aid from Ukraine to domestic priorities, Putin must have felt the mood was shifting and there was the possibility of a reduction in the aid that is so central to Ukraine’s prospects in this war. With that hope probably dashed (for now), the Russians moved forward with their plan to evacuate from Kherson.
A first-order issue is whether this Russian withdrawal is real or possibly part of a deception campaign to draw the Ukrainians into a fight the Russians have prepared for. The Ukrainians, in their commentary since the Russian announcement, are sceptical. They know their enemy well. Despite that, the Russian situation in Kherson is, as the meme goes, “not good”. It was retreat or potentially have the force in this region surrounded and destroyed by the Ukrainians. That would be a domestic and strategic catastrophe for Putin. Withdrawal is the lesser of two evils.
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With no red wave, Trump is out at sea
The Wall Street Journal
5:53PM November 10, 2022
The red wave never came. What happened in Tuesday’s mid-terms was closer to a trickle.
As of this writing, we still don’t know definitively which party controls the House. It’s likely to be the Republicans but not by much. Before Tuesday, the House had 222 Democrats (that includes two vacant Democratic seats) and 213 Republicans (including one vacant Republican seat).
As of 4pm. Eastern Time Wednesday, the Associated Press had called 206 seats for the GOP and Republicans were poised to win 18 other contests. That would leave the GOP with 224 seats to the Democrats’ 211. It will take days — maybe a week — to finalise the results as mail-in ballots postmarked by election day come in.
In the Senate, if Adam Laxalt hangs on in Nevada and Blake Masters fails to stage a dramatic comeback in Arizona, the GOP will be at 50 seats. Control of the Senate will then again come down to a December 6 run-off in Georgia.
Then there are governorships. Before Tuesday, there were 28 Republican and 22 Democratic governors. The Republican in Arizona appears on the verge of taking the lead. If she does and the GOP stays ahead in Nevada but doesn’t close a narrow gap in Oregon, the split will remain 28-22 given other losses. Republicans failed to offset incumbents’ departures in Maryland and Massachusetts.
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Sleeper issues turned red wave to trickle
11:00PM November 10, 2022
Let us begin with a fable. In 1974, as Richard Nixon struggled with the continuing fallout from the Watergate scandal, accompanied by plunging poll support, the White House looked at how best to recover. The south was usually generous to Nixon, so a remedy was sought in that geography.
The Nixon camp decided the president would pay a visit to the Grand Ole Opry in Nashville, Tennessee, the home of American country and western music, with a touch of gospel and blues. It attracted and continues to attract a massive audience on television and radio, particularly across the south.
The night Nixon visited the Opry coincided with the birthday of his wife, Pat. Nixon played Happy Birthday on the piano as the cast came on to the stage at the end of the evening, and everyone sang along. This touched Pat Nixon deeply. When the president finished playing, he strode across the stage to the cheers of all. The first lady walked towards her husband with arms outstretched. Nixon went straight past his wife to his travelling presidential party, declaring: “That wraps up Tennessee. Let’s get out of here.”
The tale may be apocryphal, but Nixon was characterised as a tough campaigner, which is virtually acknowledged by the Nixon Presidential Library in Yorba Linda, California. The story cannot be dismissed.
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https://www.afr.com/world/north-america/how-republicans-turned-the-tables-on-trump-20221101-p5buqc
How Republicans turned the tables on Trump
The very system Donald Trump sought to undermine is now pushing the former president’s dreams of another term in office to the brink.
Matthew Cranston United States correspondent
Nov 11, 2022 – 12.37pm
US midterm elections are usually a referendum on the performance of the sitting president, but on Tuesday Americans decided, in record numbers, to include a former leader in their deliberations – Donald Trump.
Outside a polling booth at Langley High School, a few kilometres from the Central Intelligence Agency in Virginia, resident Huey Tsao took her daughter Natalie to vote for the first time.
Both pro-lifers, they wanted to vote Republican, but say Trump and the candidates he endorsed stopped them from voting for the party.
“I’m usually a Republican, but I didn’t vote this time,” Huey says, “The biggest issue is Donald Trump. His personality is too antagonistic. We couldn’t vote for them with him there, so we are feeling a bit homeless now.”
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East Timor set to join ASEAN as the bloc’s 11th member
4:07PM November 11, 2022
East Timor will become the 11th member of ASEAN by next year after leaders of the Southeast Asian bloc finally agreed to admit the former Portuguese colony at a meeting in Cambodia on Friday.
The decision, a rare piece of good news amidst global divisions and concern about a widespread economic downturn, was expected to be formally announced late on Friday following a leaders’ summit in Phnom Penh.
A leaked announcement of the decision, seen by The Australian, said ASEAN leaders agreed “in-principle to admit Timor Leste to be the 11th member of ASEAN” and to grant observer status to the island nation while it formalised a “roadmap” for the country’s full membership by 2023.
ASEAN has kept East Timor waiting for more than a decade as it has deliberated over whether to include it amid scepticism over the country’s ability to fulfil its obligations and responsibilities as a bloc member.
There was also concern that the tiny nation lacked the human resources and capacity to attend hundreds of ASEAN meetings held every year.
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https://www.afr.com/world/europe/ukrainian-special-military-units-enter-kherson-20221112-p5bxnz
Ukrainian special military units enter Kherson
Hanna Arhirova and John Leicester
Nov 12, 2022 – 8.36am
Mykolaiv, Ukraine | Ukraine’s President Volodymyr Zelensky said that the country’s special military units have entered the city of Kherson.
In a video address hours after Russia said it had completed withdrawing troops from the strategically key city, President Zelensky said: “As of now, our defenders are approaching the city. In quite a bit, we are going to enter. But special units are already in the city.”
Russia relinquished its final foothold in the major city, one of the first to be captured in the invasion that began February 24. The withdrawal could act as a springboard for further advances into occupied territory.
Russia’s Defence Ministry said its troops finished withdrawing from the western bank of the river that divides Ukraine’s Kherson region at 5am. The area they left included the city of Kherson, the only provincial capital Russia had captured during its nearly nine-month invasion of Ukraine.
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FTX possibly hacked, $895m drained from customer wallets
Jessica Sier Journalist
Nov 12, 2022 – 6.02pm
Troubled crypto exchange FTX appears to have been hacked, with $US600 million ($895 million) drained from a series of FTX-linked wallets following a week when founder Sam Bankman-Fried filed for bankruptcy and resigned as chief executive officer.
Users have been instructed not to install any new upgrades and to delete all FTX apps, according to a statement on the company’s official Telegram channel.
“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans,” reads a post by an account administrator in the FTX Support Telegram chat.
FTX General Counsel Ryne Miller has pinned the message, after tweeting earlier that he was “investigating abnormalities with wallet movements related to consolidation of ftx balances across exchanges”.
According to on-chain analysts, around $US600 million has been withdrawn through tokens like Ethereum, Solana, BNB LINK, AVAX and MATIC.
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Sensible America finally spoke, but ‘Trumpty Dumpty’ won’t shut up
Journalist and author
November 12, 2022 — 5.00am
For all its divisiveness and mutual loathing, the midterm elections suggest America has a sensible majority which still believes in democracy. Many of the crazier Republican candidates who had the imprimatur of Donald Trump received a brush-off from the electorate. Many of the “Big Lie” true believers, those pushers of the fiction that Joe Biden is a fraudulent president, failed to get their hands on the machinery of US democracy.
A nationwide red wave, which Trump believed he could surf all the way back to the Oval Office, was more like a gentle ripple. Though the Republicans look like taking back the House of Representatives, the only shoreline that a crimson tide hit with any power was in Florida, which delivered a singular victory for Trump’s main GOP rival, Governor Ron DeSantis. Midterm elections ordinarily end up repudiating the sitting president. In this case, they can be interpreted more as a rejection of the previous incumbent of the White House.
Donald Trump is reported to be livid and, as usual, lashing out at others. Even his wife, Melania, who evidently urged him to endorse Dr Mehmet Oz, the daytime TV celebrity who lost his Senate bid in Pennsylvania, is in the Mar-a-Lago doghouse. How it must pain such a megalomaniacal narcissist to watch DeSantis basking in the spotlight. How it must wound him to see a culture war warrior, dubbed “Trump with a brain”, become the new darling of Fox News. How it must irk him that the front page of Rupert Murdoch’s Big Apple tabloid, the New York Post, mocked him as “Trumpty Dumpty.”
The midterm elections have robbed the former president of his fear factor. No longer can he present himself as the sole Republican capable of winning back the White House. No longer will he be able to hold so many senior Republicans hostage. No longer will the compulsion be quite so strong to defend Trump to the hilt if the Justice Department decides to bring an indictment. Prior to the midterms, Politico reported that just five of the GOP’s 50 Senators wanted Trump to run again. The Republicans’ worse-than-expected showing might give them the Dutch courage to speak out.
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I look forward to comments on all this!
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David.