Easter Links 2015

easter

Bit of a slow start to the Easter break.. I’ll be adding more links over the break.

From the team at MB to you and yours , Happy Easter ! We hope the short break treats you well.

It would appear now that the rest of Australia is finally waking up to what MB has been warning about for a number of years, so it will be very interesting to see just how different the media,political and economic landscape looks by this time next year.

In the meantime … the links.

Global Macro / Markets / Investing:

North America:

Europe:

Asia:

Local:

Other:

 

Comments

    • Of course, if the average Australian thought high house prices were bad, and not good, and we had spent the last 20 years enacting policy along those lines, then we wouldn’t even be having this discussion. We’d be treating the idea the same as including their fridge and washing machine in the means test.

      But that didn’t happen. So here we are.

    • Good luck with that, neither party has the moral courage to tackle the issue. One way might be to re-introduce death taxes on property, say 20% to the Commonwealth and 20% to the State Government on properties more than $750k as a means of clawing back pension costs for the Commonwealth and State pensioner subsides and health costs. As it stands, the kids and grand kids are waiting for granny to kick on so they can sell the $1.5m terrace house in inner Sydney and split the coin while the tax payer is left paying granny’s pension and other associated costs. Totally agree with the good LordDudley but it is what it is and it needs to be looked at.

      • If they stay high it’ll be changed in about thirty years or forty years when most people retire without owning a home.

    • Neat! I’m surprised they didn’t mention another promising field, which is fungi that increase (substantially) the ability of plants to uptake phosphorus.

      The world is running out of phosphate. These kinds of applications are what we will need to feed the world’s population in a sustainable fashion…

      … and yet we spend orders of magnitude more R&D on things that are essentially toys, when we could be accelerating the agricultural revolution (I say accelerate, because things are already changing, but they could be changing faster and better if we actually spent real resources on this stuff).

      • yes, that is an interesting angle.
        I’ve been involved in the truffle industry here in Australia. The symbiosis between the truffle fungi extracting nutrients, particularly phosphorus, from the soil and exchanging that with carbohydrate from the host plant.

    • interested party

      Stamets work has been ground breaking on a few fronts. His work with fungi links with bees is good, as well as the medical side of things.

    • That was a good piece. Did you read the comparative piece about America’s highest security prison?

      This section highlights the fundamental difference in attitude between Norway and America.

      ““You have to be aware — there’s a logical type of error which is common in debating these things,” he said. “That is, you shouldn’t mix two kinds of principles. The one is about: How do you fight crimes? How do you reduce recidivism? And the other is: What are the principles of humanity that you want to build your system on? They are two different questions.”

      He leaned back in his chair and went on. “We like to think that treating inmates nicely, humanely, is good for the rehabilitation. And I’m not arguing against it. I’m saying two things. There are poor evidence saying that treating people nicely will keep them from committing new crimes. Very poor evidence.”

      He paused. “But then again, my second point would be,” he said, “if you treat people badly, it’s a reflection on yourself.” In officer-­training school, he explained, guards are taught that treating inmates humanely is something they should do not for the inmates but for themselves. The theory is that if officers are taught to be harsh, domineering and suspicious, it will ripple outward in their lives, affecting their self-­image, their families, even Norway as a whole. Kristoffersen cited a line that is usually attributed to Dostoyevsky: “The degree of civilization in a society can be judged by entering its prisons.”

      I heard the same quotation from Are Hoidal, Halden’s warden, not long before I left Halden. He told me proudly that people wanted to work at the prison, and officers and teachers told me that they hoped to spend their whole careers at Halden, that they were proud of making a difference.”

      • Indeed. It’s the second question (What are the principles of humanity that you want to build your system on?) that often gets overlooked.

      • Disagree. 2b2f. We have answered the second question in favour of treating people poorly regardless of its effect on crime rates.

      • 2big2fail & footsore

        are you really serious??????? Norway = relatively – even now – racially and culturally homogenous society, small = geographically homogenous, wealthy = we are enjoying a brief interlude in history where we can afford to be so compassionate/understanding/’we are really better than others”

        vs the actual realities of sub-groups within a population who don’t give the proverbial about anything other than their instant self gratification regardless of the consequences for others, the endlessly venal indulgences of smug upper/middle class complacency………

        bugger it – I’m going to have another drink. Enjoy your break everybody……….

      • davidjwalsh,

        I’m not sure if you read the article but they covered what you are talking about.
        The diversity of the prison is broad, with English being the official language because a lot of the prisoners can not speak fluent Norwegian.

        And your point about now being different to past points in history fails to note that we made those gains, and keep making gains. Of course there are pockets of barbarity and selfishness, but should that stop pushing for further humanity?

    • This is particularly fitting after a visit to the Fremantle Prison museum we just did today. Hard to believe Australia still treated people like that (crapping in buckets etc) in 1990…

  1. Interesting that the worm has turned in the media. There’s lots of fear in my fellow bogans. Much talk of redundancy.

    So, one of the few bosses I have any respect for popped in yesterday. Not very popular because he’s got no agenda and just tells it as it is. People hate that. Someone asked him where things were going. He says don’t know, but anyone invested in mining companies, RE and banks should get out now.

    That’s how to get attention.

    • Mining B

      Does he have a good track record?

      How do you reconcile him saying he didn’t know and him telling you to get out of banks, RE and mining.

      • He didn’t know what the company was going to do, but he can see bad times a’coming. He’s an old hand. Been through all this before.

        He’s the type I listen to.

      • It’s good when one of the overlords comes clean. It does scare the children, usually all of them from higher up and below have so much committed to the “project” they refuse to acknowledge any issues that might undermine it.

    • That would go down as well as ritualistically sacrificing some oxen at a vegan restaurant.

    • I tell people that now. Sure, I lack your bosses gravitas, but its good to put the vibe out.
      Call me ‘Captain Crashnik’ for all I care.

  2. Hello All,

    Off topic…. does anyone know about ETF’s? In particular Vanguard and ishares?

    I’m thinking of investing in 5 ETF’s. Aus & Int’l shares, fixed interest, property and cash.

    My questions are.

    How long have these been around?

    What is their charter? Ie how do they ensure that they maximise returns? Do they act like normal companies with shareholders (supposedly) in control?

    Thanks in advance

    • I’d also be interested in hearing about this.

      In fact, if I can pry, what do people do with their money?
      I’m not very good at these things.
      And I’m not a very monetary person in general.
      (We are living off 60k between us, renting, no debt.)
      We are fine for now but in 30 years we will need something.

      Where does one start, or who should I give what we have left over to so that it grows?

      • I have no expertise but I’ve invested in them via the ASX. They’re great because you can get in and out easily and they are very low fee compared to the underlying fund. You can also get exposure to all kinds of assets including oil, gold, wheat. There’s a compete etf list on the ASX somewhere. There’s about 60 odd last time I looked. I just heard global etf’s amount to $trillions.

        For me it’s been a big disadvantage being able to get in and out, it’s been my worst investment strategy through life. I cannot pick the market. It’s just not possible without super skill.

        One last thing. I reckon stay away from the big fund funds/etf’s. They just don’t perform in my experience. Far better are boutique funds/etf’s that charge massive performance fees. In my opinion, one of the biggest investment crocks in the media is chase low fees. They’re low fees for a very good reason. Just my opinion.

        Try these.

        http://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm

        http://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm

      • Rich 42

        I won’t trade. Start with 60% or so in fixed interest, 20% Aust shares and 20% Int’l shares.

        Maybe put a little in Aust Property.

        After the crash in Sept (Lol) ill load weightings to have more in property and more in shares with fixed interest down to 20% or so.

        I realise that we can’t time our exists or entries and financial planners will tear shreads off me.

        But I have to admit were closer to a collapse or major correction than not.

        If we weren’t close to a correction I’d be more aggressive with my allocation.

      • With a warning that I’m strictly an index hugger unlike many around here…

        @Escobar – I’ve used Vanguard’s ETFs and managed funds before and highly recommend them. They’re intensely focused on reducing costs and their founder John Bogle is a man well worth listening too. https://en.wikipedia.org/wiki/John_C._Bogle

        @footsore – Most of my non-super money is now in a mortgage offset account but was previously in a range of Vanguard funds. The managed funds have the benefit that they will automatically rebalance to keep your asset allocation in balance as asset prices change. (e.g. ratio of cash/fixed interest/shares/etc) but they do cost more than the ETFs.

        I invest my super through DFA (https://au.dimensional.com/) who are similar to Vanguard in terms of being largely low-cost index trackers but they also claim to have a few advantages. http://www.basonasset.com/vanguard-or-dimensional-funds/ I’m very happy with them as well but they don’t deal directly with retail investors and you need to go through a financial advisor.

        Although I’m happy with my own investment nous, I’m happy to use a fee-for-service advisor to access DFA as I’ve saved more than the cost just on the insurance commission rebates that my advisor gives straight back to me.

        Edit: The key to all this is of course deciding what asset allocation you’re going to use. That’s a massive topic on its own but I’d recommend starting at http://www.bogleheads.org/wiki/Asset_allocation

        My allocation is 50% growth (shares/property) and 50% fixed income/cash. Roughly half is off-shore (unhedged) and half is Australian.

      • Hmmm, sounds to me like you have a relatively secure income and live a frugal life. If I were in your shoes I’d probably look at investing in a business where I can grow the business incrementally as and when I have excess capital available.
        The businesses that come to mind are:
        – Pay laundry facilities within appartment complexes. Choose the right location (such as around universities) and you’ll have a gold mine that requires a little upkeep and generages fantastic returns especially if your mechanially inclined and can fix minor problems yourself. I know several retired friends that run just this sort of business, the cash flow is great AND successful locations are easy to sell onto others. The big technology change that makes this attractive is that it’s no longer a Coin operated business beause most clients will use some form of smart-card, no cash = no break-ins and no jammed coins

        I’d also consider vending machines especially in secured office environments, no risk and great return in exchange for a little work, develop this business and you can easiy employ someone to do the actual machine filling. There are always new buildings that need new vending machines….one word of caution…from what I’ve heard…is that many building management companies will try to “rent” this space for absurd amounts, this distroys the whole business case so just move one find another location.

    • Guys I’ve traded in Etfs before , but I’m no expert. I’ll ping Mr Becker and see if I can get a response from the expert .. In the meantime I’m sure there are plenty of members who have some expertise in this area.

      • I have no expertise in this area, but they’ve worked for me, so I’ll state my experience.

        I sold my house in Oz in 2014. I only have a US income, and so received zero tax advantages for my Oz property. We called it ‘the money pit’. I have put the proceeds of the sale into ASX:VTS ; Vanguard’s full US stock market ETF.

        My knowledge of this ETF is that it’s simply an instrument backed by Vanguard’s MASSIVE index fund (we’re talking hundreds of billions of dollars). The non-ETF version of the index fund comprises some folks buying into the index fund, and Vanguard buys the index for them. Same for the ETF, except it’s Vanguard creating a tradable instrument backed by their index fund.

        The only real reason to choose ETFs over investing in the underlying index fund is if you transact infrequently; in that case, the ETF has lower overheads. If you want to sock some dosh away every few months, the index funds are a better choice.

    • Thanks DE

      Some ETF’s show 17% returns. I don’t necessarily want to trade, other than reviewing circumstances every 6 months or so.

      It looks like the ETFs’ (obviously) trade to get these sort of returns.

      However I’ve only seen YTD, 6 month, 1yr and 3 yr returns.

      I’m guessing they’ve been around longer. But I’ve just started my search. My T DEPOSITS and UBank savings accounts return minuscule amounts.

      I have a commsec trading account which I haven’t used for ages. And for a small transaction fee I can invest in all major asset classes if I want to be diversified.

      Beats paying a financial planner for upfront fees and then incurring the annual fees.

      • I started into them a couple of years ago. Using them makes it easier to keep portfolio percentages up to date. I’m that big a fan I rarely buy individual shares.

        Currencies, foreign markets, fixed interest…it’s how I’ve decided to spread the risk around because I’ve no idea what is going to happen next.

      • Agreed Mining Bogan

        I have no clue what’s going to happen, but I have been saying all along governments (central banks) will try to keep the charade going.

        I wish I was in it 3 years ago like you.

        And I wish I chose the best performing vanguard and ishares funds.

        Hindsight! !!

        I should have put my money where my big mouth was.

    • Consider this escobar. Magellan etf.

      http://www.magellangroup.com.au/funds/magellan-global-equities-fund/

      I’m invested in the hedged global fund (another mistake as the non hedged has made massive gains recently because of the AUD falling). The global fund has returned 12.39%pa since 2007 so includes the GFC.

      I edited these in above too…

      http://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm

      http://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm

    • I would start with this:
      http://guides.wsj.com/personal-finance/investing/how-to-choose-an-exchange-traded-fund-etf/

      One particular ETF that I like is Vanguard mid-cap ETF (NYSEARCA:VO) (for reasons stated in the link below). Also, the author talks about an interesting passive retirement strategy which is worth looking into.
      http://seekingalpha.com/article/2287813-the-best-passive-retirement-strategy-in-the-world

      I prefer US based ETFs because I can also get the advantage of exchange rate depreciation (assuming that the AUD is heading south which many of us believe is the case). You can do that with various platforms (Commsec, Macquarie, etc..). International ETFs have became popular recently with Australian investors.
      http://www.morningstar.com.au/etfs/article/investors-offshore-assets/6816

      You can use Morningstar to compare ETFs (or other funds). Things to look for (besides the average annual return for past 5-10 years) are fees, fund category (and rank within category), and how much risk the fund is taking for the return it’s generating (this last one is captured by Morningstar star rating). You need to understand the taxation as well.

      • 2B2F

        Thanks. Looks like I’m in the right place, as I’ve seen the returns on morningstar. Referred to Rich42.

        I just haven’t been able to locate the star rating. I’ll keep searching.

    • Escobar, I’ve recently been looking at Vanguard ETFs, I bought ASX:VGS which is unhedged so you get the benefit of a falling AUD. One thing to note is that ETFs like ASX:VTS are ‘US domiciled’ so you need to complete a W8-BEN US tax form – this may or may not be an issue for you.

      The ETFs have cheaper management costs than the underlying fund but if you want to use the underlying fund you can take advantage of ‘dollar cost averaging’ by depositing a similar amount each month into the fund.

      The funds have been in Australia since about 1998, but the ETFs are fairly recent. Vanguard has been operating in the US for longer.

      The bogleheads site has lots of good info on maintaining a balanced portfolio with index funds/bonds – https://www.bogleheads.org/ – named after John Bogle founder of Vanguard.

    • Vanguard are the original index fund. They’ve been around since the seventies and are not for profit. The generally safe and boring thing to do is get a “life cycle fund” which decreases your risk profile over time. In my super I do 10% Aussie shares 30% int’l 20% property 10% Aussie bonds 30% int’l. That’s what I’d recommend to most people.

      With my own money I’m 90% equities that I researched and bought individually. Unless you have a lot of time and interest do not do this.

      Keep cost low whenever possible and fight the desire to do anything.

      • That was also a reply to footsore, apparently.
        FD: I have exactly zero money in any ETFs.

    • innocent bystander

      some good replies above.
      2 things not mentioned I think:
      1) make sure you know the difference between synthetic and non synthetic etfs. Synthetics don’t have the underlying assets and are built more like derivatives. Think the asx site linked above has info on this.
      2) the smaller etfs can be low liquidity, especially when tshtf – so hard to get out. the bigger etfs have more volume so easier to make a trade

    • Wonderful news!! No interest rate rises on the horizon and more 0% cash to juice assets with!! What could possibly go wrong?

  3. thanks fellas……

    Energy company’s $11 billion transfer to Singapore rings tax avoidance alarm bells

    http://www.theage.com.au/federal-politics/political-news/energy-companys-11-billion-transfer-to-singapore-rings-tax-avoidance-alarm-bells-20150403-1me7ij.html

    An energy company operating in Australia transferred more than $11 billion to the low-tax jurisdiction of Singapore in a single year, heightening concerns that Australia is being duped by tax-minimising multinationals.

    The extraordinary scale of funds being moved out of the country by individual companies is revealed in an internal Australian Tax Office memo, obtained under Freedom of Information.

    It lists 10 companies that channelled a combined $31.4 billion from Australia to Singapore in the 2011-2012 financial year.

    An estimated $60 billion in so-called “related parties” transactions went from Australia to tax havens in the same year.

    • This is going to be a political test for both sides. The Libs will actually have to do something, not launch an inquiry, not wait for white papers, not wait for the IPA to issues a directive and Labor will have to step out into the open on this issue. Both sides are going to have to work on this issue sooner rather than later lest they’re hung out to dry by the voters who are sick of being shafted by multinationals while being told that a rise in GST is good for us. Time to act Shorten and Abbott.

      • Ha ha ha! Nope! It’ll be more gay marriage arguments, more asylum seeker hysteria, more climate change obfustication, and more national security hooplah.

        Pay no attention to the single company shifting literally $500 per person out of the country in 1 year; don’t think about how many other companies are doing this that you don’t know about.

        The punters will continue to be distracted. The wholesale wealth stripping will continue. The major parties have perfected the technique. Nothing will change except average real income, which will continue falling.

  4. HONG KONG MUST LOWER IT’S COST OF LIVING … PAUL YIP … SOUTH CHINA MORNING POST

    Raising Hong Kong’s quality of living, step by step … Paul Yip … South China Morning Post

    http://www.scmp.com/comment/insight-opinion/article/1755318/raising-hong-kongs-quality-living-step-step

    The world’s most liveable city, Melbourne, is known as the capital of latte. The consumption of the drink is high and you can find it everywhere. How much does it cost? A regular-sized latte costs around A$4 and the hourly minimum wage in Australia is about A$17.

    In Hong Kong, a latte costs around HK$30 and the corresponding minimum hourly wage is HK$32. If we create a “latte index” that measures how many lattes can be bought by an hour of minimum wage work, we’d find Australians get four cups to Hong Kong’s one.

    What does this tell us? The purchasing power of the ordinary Australian worker is much higher than that of their Hong Kong counterpart.

  5. (John Mauldin – 3/4/15) “We live in a time of unprecedented financial repression. As I have continued writing about this, I have become increasingly angry about the fact that central banks almost everywhere have decided to address the economic woes of the world by driving down the returns on the savings of those who can least afford it. …. low-interest-rate and massive QE environment are also destructive of other parts of the economy. Counterintuitively, the policies pursued by central banks are actually driving the deflationary environment rather than fighting it. ….. the cost of funds for US banks has dropped over $100 billion since the financial crisis, but their net interest income is almost exactly the same. What changed? Banks are now paying you and me and businesses $100 billion less. … It is of the highest irony that Keynesians wanted to launch a QE policy that would increase the value of financial assets, which they claimed would produce a wealth effect…. Subsequent research has verified that there is no wealth effect from QE….(but) it did make our (speculative assets) go up, on the backs of savers. We’ve transferred interest income from savers into the (those assets). We’ve made retirement far riskier for our older pensioners than it should be..(they) are moving out the risk curve at precisely the wrong time in their….lives.”

    • Just had a ‘duh’ moment!!!
      Despite my earnest opposition to repression on a whole lot of grounds I thought those who were saying that lowering interest rates can reduce money supply and consumption were not correct (while sympatising with their ideals)
      However, if the printed/created money goes into speculative assets, and you are at the same time reducing the money supply to your consumer, then you are going to get less demand and possible a shrinking money supply (M1) and perhaps M2.
      It’s not a constant obviously but obviously you can reach a point where this occurs. I doubt we’ve quite reached it in Aus but maybe Europe and the US have?
      (Apologies to anyone beating that drum that i haven’t listened to sufficiently)

      • Also Michael Pettis has much cogent to say on this matter. In a nutshell, financial repression reduces the income of savers (think boomers in western counties) causing them to spend less. It is a net transfer to corporations and the state as the cost of capital is artificially reduced and the productivity of capital is impacted (share buybacks anyone?) He believes that the effect is more pronounced in countries without good social supports, but one could speculate that in the right conditions it would still have a negative consumption effect in the west.

    • Minor gripe… when will people stop misrepresenting Keynes? He argued for fiscal stimulus in recessions, and the reverse in booms.

      What we’re seeing here is not Keynes’ policies at all. It’s a new beast that didn’t exist in Keynes’ time.

      • Was going to say.

        This isn’t Keynesian, this is about preserving the inflated values of assets so bond holders don’t get (their deserved) clipped.

        Keynesians belief is promoting aggregate demand through increasing the means to acquire.

    • Cheers for that Janet. Agree with LDs reservation above but, it is an interesting and very relevant insight.

  6. Disapointing job figures raise fears about U.S. recovery … UK Telegraph

    http://www.telegraph.co.uk/finance/economics/11514610/Disappointing-US-job-figures-raise-fears-about-recovery.html

    American employers hired the fewest number of staff since 2013 in March, suggesting the recovery in the world’s biggest economy may be slowing.

    Non-farm payrolls increased 126,000 last month, the smallest gain since December 2013. The manufacturing sector, which has been impacted by the strong dollar, shed 13,000 jobs, the largest drop since July 2013. … read more via hyperlink above …

  7. This 2005 speech by the wonderful Professor Freeman Dyson (now 91) back in 2005 is great viewing …

    Freeman Dyson: Heretical Thoughts About Science and Society – YouTube

    https://www.youtube.com/watch?v=8xFLjUt2leM

    … and these comments on his Wikipedia entry as well …

    http://en.wikipedia.org/wiki/Freeman_Dyson

    On English academics[edit]

    My view of the prevalence of doom-and-gloom in Cambridge is that it is a result of the English class system. In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status. As a child of the academic middle class, I learned to look on the commercial middle class with loathing and contempt. Then came the triumph of Margaret Thatcher, which was also the revenge of the commercial middle class. The academics lost their power and prestige and the business people took over. The academics never forgave Thatcher and have been gloomy ever since.[68]

  8. Hi MB, off topic – As a non-economist but someone who’s been reading MB for years now, I still struggle to understand our banking system. I got about halfway through the ‘Iceland Monetary Reform’ posted by Pfh007 recently which was enlightening. I found it odd that there’s debate about the ‘Money Multiplier Model’ vs the ‘Credit Creation Model’ – surely there is consensus on this?

    There has often been discussion around overseas borrowing by banks. My question is, if banks use CCM and just create a deposit out of thin air for a loan, then why do banks need to borrow money from overseas? Is it to meet the reserve ratio in Fractional Reserve Banking? i.e. does the bank create the deposit and then go searching for 10% (or 2% or whatever the ratio is) from overseas lenders and Australian lenders/savers?

    Also, why doesn’t creating money out of thin air cause massive inflation? Is it because it just gets sucked into home loans and not the ‘real economy’? What is the impact on the economy when this massive amount of credit created out of thin air begins to contract when everyone is repaying debt? Also the impact of repaying interest that supposedly comes from the ‘real economy’ and not ‘thin air’ bank money?

    There’s lot of information on the internet about how money is created via CCM, however I can’t find solid answers to the other questions I have. Perhaps I have it all wrong too 🙂

    I wonder if MB would consider doing a post aimed at the ‘average Aussie’ to help understand our system? I think most Australians would be surprised to know that banks are lending money they don’t have! Cheers.

    • I think the monetary theory guys would tell you that the money raised offshore is for capital. You can create loans and deposits out of thin air but you still need to maintain a capital ratio.

      • logan
        Bzanks can create loans if their capital ratio is OK. However once that money hits the economy it starts disappearing in the Current Account deficit. The marginal propensity to import, I’m thinking, is in the region of 40%. Some would go to the government in taxes which, if they are intent on running a high deficit would be likely to be just put back into the economy. If there were no CAD the money would just go round and round in the economy – no harm done except for possible inflation. However with the economy already running a chronic and severe CAD as the money created circulates it will pretty well ALL end up in purchases of imported goods. Marring a small increase in the monetary base all the created money results in foreign debt and that foreign debt is mostly in USD.

        We don’t get inflation because in an economy that is running a currency valuation at about 40% above what it ought to be, in an environment where Asia has been supplying us with cheap goods for 60 years, imported goods are very cheap. So the created money goes into cheap imports and the Current Account Deficit. Virtually the more money you print the lower your inflation gets.

        “I think the monetary theory guys would tell you that the money raised offshore is for capital.”
        What complete and utter demonstrable bullshit! As HnH says the money raised offshore is to maintain their required capital ratio in the face of spending on imports. So, in practice, in REALITY, not in fairy tales, the money raised offshore is to pay for imports.

      • Capital is an after thought, its requirement can be sought from other banks or the CB with in the required time frame E.g. you don’t need the capital on the day to create credit, and the capital is just a buffer for runs.

      • Additionally this might help to flesh out the commenters question from a broader historical perspective.

        Essays in Monetary Theory and Policy: On the Nature of Banking

        “Hyman P. Minsky said he thought there were as many forms of capitalism as Heinz had pickles. The same can be said about the different types of banking within the financial system. The system has undergone a dramatic transformation over the development of the capitalist economy, and Minsky spent a large amount of time studying this transformation. Many economists feel the same way as Minsky did, that the results achieved by a capitalist economy can be viewed from two fundamentally different perspectives: the Smithian way and the Keynes way. The Smithian way assumes the presence of an “invisible hand”, and therefore “intervention or regulation can only do mischief.” (Minsky 1991, 5) In contrast, the Keynes way assumes that the economy is naturally unstable, and “… regulation and intervention can be beneficial.” (Minsky 1991, 5) When designing economic policies, government leaders must choose between these two perspectives. This is exactly what policy makers have done over the evolution of the capitalist economy, and their decisions have transformed the banking system in many ways.

        What follows is an analysis of the evolution and nature of banking through Minsky’s four distinct stages of capitalism – “commercial”, “industrial”, “paternalistic”, and “money-manager.” We will begin by analyzing the capitalist economy and banking system from the orthodox perspective and the influence it has had on policymaking decisions. Minsky’s perspective will then be introduced, followed by an analysis of banking through his stages approach to capitalism. Finally, we will examine alternative policy prescriptions for the banking system based on the recommendations of Minsky and other scholars regarding what banks should do.
        Contrasting Views of the Economy and its Participants

        The orthodox model of a capitalist economy is possible only in a fictional, perfect world. The problem, however, is that many economists, business professionals, and policy makers were (and still are) subscribers to orthodox theory and the assumption that capitalist market economies contain a set of inherent characteristics. These characteristics are as follows: [i]

        all economic agents (households and firms) are rational and driven to maximize profits;
        all markets are perfectly competitive, with agents basing their decisions to buy or sell on a given set of perfectly flexible prices;
        prior to buying or selling in the market, all agents obtain perfect information regarding both prices and market conditions;
        buying and selling takes place only after a fictional Walrasian auctioneer establishes market-clearing prices; and
        rational agents have stable expectations.

        The orthodox model, therefore, is assumed to be an inherently equilibrium seeking system with an “invisible hand” ensuring continuous market clearing. This translates to the belief that financial systems and markets function efficiently because both they and the systems’ participants possess perfect information regarding prices and market conditions.” – snip

        http://neweconomicperspectives.org/2013/12/essays-monetary-theory-policy-nature-banking.html

      • kinetic ritual

        Actually, skippy, capital is supposed to be a buffer against bad loans. Liquidity requirements, however, are supposed to buffer against a run on deposits. Never mind that neither will actually save you in the event of a fully fledged depositor panic or asset collapse. Which is why banks are fundamentally always underwritten by the public balance sheet. A point that executives of private banks and their shareholders conveniently forget while chasing return on equity of 15% + and chowing down on their fully franked dividends. Hopefully during the next banking crisis they will ALL be nationalised, re-regulated, and sold back onto the market as boring, highly regulated utility-like businesses. Of course, the finance/banking lobby work around the clock and in every minister’s office to ensure they remain the most privileged and protected sector on the planet, championing generation after generation of applied finance worshipping phony capitalist suckholes.

      • @kinetic ritual,

        Thanks for the correction, I miss spoke wrt liquidity runs.

        Skippy… agree wrt to functioning as a boring Utility, other wise we could privatize strategic nuclear arsenals for a grand finale end game… maybe that would put that – bedtime story – to rest once and for all… only shame would be starting back at the stone age again….

    • logan-5,

      All good questions. I will try to be as brief as possible.

      I don’t think there is any real debate about CCM but most people – even economists – don’t understand it – I only found out about a few years ago as a result of discussions on MB.

      While Australian banks don’t need to ‘borrow’ from anyone to make loans they do care about the location of the resulting deposits in the banking system for a number of reasons (including as HnH notes capital adequacey requirements – we have a zero reserve system so it is not for fractional reserving). That is why they offer interest if you shift a deposit to them. They ‘borrow’ from off shore parties (which effectively means an off shore party gains control of $AUS deposits and directs them to the ‘borrowing’ bank) because those off shore parties are happy with lower interest rates than locals and thus our banks can get the ‘deposits’ they want for a lower price.

      And yes if CCM expands the money supply, repaying a loan shrinks it as it is the reverse of CCM.

      As you can imagine a shrinking money supply is likely to result in deflation and that is why the RBA is desperately trying to keep the Debt Machine (CCM) running by driving down the cost of debt.

      The stop gap solution when the private sector is losing its appetite for CMM (debt) is for the government to start running up debt and that is what is happening now.

      As you can see a debt based money supply has more than a few problems and that is what Iceland are trying to address.

      Keep plugging away at that Iceland paper – my concentration span is shot and it took me a while to chip away at it.

      • Blimey Gunna – presented by whom??? Likely to be modern academically generated BS where stuff like the significance of the Current Account does not even get to be water boy let alone get a guernsey.
        Especially note it is presented by US academics who are the Reserve currency and who believe that, no matter how much they abuse that privilege, no matter how much they print and scatter around the world, that the USD will always and forever remain the world’s only truly reserve currency. To the US the WORLD is their economy and there is no such thing as an external account.
        (Excuse my scepticism but I read a lot of stuff and I NEVER see even a passing reference to the CA.)

        It looks to me likely that if you do this course you would come out the other end stupider than when you went into it.

      • flawse,

        Its called monetary theory for a reason, now if you want to pick a preferred payment system architecture out of history’s past as it conforms with your ideological biases, knock yourself out. Yet don’t even think of tying to lay the claim of empirical status upon it.

        Skippy…. to suggest people don’t go out and gain knowlage about such a varied topic, which spans thousands of years, is akin to self inflicted ignorance.

      • flawse the guy presenting the thing is Perry Mehrling and he is a definite critic of the way it has generally been taught. He isnt trying to sell anything and I would suggest people can definitely pick up a framework for understanding how monetary theory supposedly works and its flaws (he goes into the theories)

        http://en.wikipedia.org/wiki/Perry_Mehrling

      • Skippy
        “Its called monetary theory for a reason, now if you want to pick a preferred payment system architecture out of history’s past as it conforms with your ideological biases, knock yourself out.”

        1. Demonsrate I have ideological bias in here. Pretty much all I’ve ever done is try to bring two things
        – Experience – I have a very wide education; have lived longer than most here; have a much wider divergence of life and business in Australia than most here. Doesn’t mean I’m smarter – just lived longer and more diversely in this country.

        – Facts Yes I call out the Magic Pudding people because it is fundamentally fraud.

        Now much of what is now taught as Monetary Theory IS taught with ideological bias – we pretend we can print to infinity forever just so the particular ideology can be justified. That applies to both endsof the main political spectrum. As near as I can tell from my reading and my son’s education Monetery Theory is taught without reference to the external account and certainly without reference to the effects of policy on the currency value.

        So don’t hand me your stupid insulting university limited academic bullshit.

      • Thanks Gunna
        I must admit my comment waqs made on the basis of what I see written re macro these days and dating back to my own time at Uni – the situation was terrible then and I can only conclude that it has become more from logic and reality ever since.
        I could not watch the video at the time of posting. Sometimes, particularly at peak holiday times, my internet access is very limited and does not run to downloading clips!.. The bloke sounds good – and it’s FREE! What’s to lose for most people I guess!

      • flawse,

        Your ideological and cogitative bias is based on believing a physical object, which is just a mental anchoring point – is – a store of value. This is in full recognition, that at the end of the day, its still only quantified by numerical expression E.g. at the end of the day its still only subjective numbers. This is highlighted by fact, that in any case, government gives those numbers validity through law.

        1. “we pretend we can print to infinity forever just so the particular ideology can be justified.”

        No we can’t – “print” – [misnomer – most of the moeny is electronic in nature, only a small fraction is in physical form – hangover from the mining gold days] the money supply is restricted by resources and inflation. MMT and Post – Keynesian concur with this observation, Perry Mehrling BTW is a heterodox economist with a lot in common with the Post-Keynesian views of the world imo. As such making the claim that monies can be “PRINTED” too infinity is erroneous, as noone has made such claims. Contrarily – this supposition is a pejorative projection used as a rhetorical device to evoke a negative emotive connotation. That’s not to forget that anyone can create money – private credit, bar tabs, rewards points, coupons, future settlements in exchange for transfers of goods or services et al. HPM tho is another thing all together, caveat is a mix of old {bimetallism hangover] and new, which gets into politics and subsidies to powerful vested interests.

        2. Actually an autonomous momentary sovereign only needs to fund enough productivity to satisfy its own internal needs, anything above that is just to facilitate trade with other country’s, and in doing so necessitates seeking foreign currency exchange [yet no physical exchange of monies take place].

        3. At the end of the day politics define the use of any system, and currently as one can plainly see, corporatist have government almost completely ring fenced by think tanks and lobbyists. A condition which has taken near 50ish years to accomplish. Its all “pay to pay now”, see ICAC.

        Sorry flawse… but its like watching older sorts holding the footy out at arms length whilst the U-7 and below widely grab for it, all whilst the older sorts run circles around them. When all they have to do is put their body’s on them in a proper tackle. Fixate on the object and not whom is using -operating the object.

        As far as burden of proof goes, wellie, anecdotal observations refracted through a passel of collected environmental biases is a mugs game. That you tautologically denote the term Fraud and Magic Pudding to monetary theory outside your preferred world view or group think – is – irrespective of reality. To even get a grasp on this topic requires thousands of hours of reading and study w/ constant revision and correlation as new data is introduced. At the minimum starting w/ Sumerian culture and moving forward [they gave us accounting and the written language as we know it today].

        What you might not acknowledge is the sociopolitical ideology [neoliberalism] some saw fit to forward in academia and Bernaying the public with, over the aforementioned 50ish years, contrary to intellectual honesty a la banning Marx et al from debate. Largely a concocted narrative cobbled together by the ridged and neo Kantian groups to fight ev’bal communism, socialism and even non compliant ethnic religious denominations outside its quantification.

        Skippy… http://www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf

      • DE,

        On reading the RBA explanation it appears to me that it works partly on goodwill/gentleman’s agreement, if so, is it possible for the RBA to lose control of the cash rate and if so under what circumstances could this happen?

    • Hmmm interesting question Logan. From my perspective the question goes well beyond what we consider Banking because banking is just one form of money creation.

      For example, When I build a small growth company it has a monetary value “term sheet value” as it is called in the VC industry. This value is the price that the company is worth as an Acquisition or IPO, it has this value even before the IPO or acquisition.

      For high tech companies you might have a really successful company that achieves 30% growth yoy and 30% net margin. If you plug these numbers into a stock value calculator, this company would have a valuation of something like 7 times gross revenue. i.e. sales=$1B marketcap=$7B. If the company took ten years to grow then the team has created “value” of $7B over that period. But where does the money come from if you want to cash out? Typically it comes from Bonds issued by larger fortune 500 companies that want to expand their product offering and do this by acquiring growth companies.

      What I’m trying to point out is that traditional retail banking / mortgage lending is not the only way that “money” is created. In my case the start-up team that created this growth business are rewarded with a high IPO (initial public offering) valuation. In the acquisition case this money is created (wished into existence) by the Bond market and leverages the existing stable cash flow of proven well established businesses, the only real asset underlying this whole deal are the assets of the acquiring company. They can bid as much or as they want for my start-up, there is no limit except their ability to source the loan, and hence no limit to the money created.

      In the case of an IPO the “money” comes from issuing a percentage of the stock to the general public usually through their Super Funds or pension funds. If I create and publicly trade say 20% of the stock and receive $1B for this 20%, the Market Cap is $5B (this extra $4B in value was created out of thin air) there is no backing for this at all, apart from the cash flow and growth of your business and the desire others have to acquire a percentage of your company.

      Again there is no real limit to the IPO valuation and hence no limit to the money you create. its all a matter of maximising the value of your product/stock, from there on your stock is like any other product, there is a certain demand at a certain price point, so maximising market-cap is about releasing just as much stock as the market will accept at any point in time, This Value has piratically nothing to do with any monies created by any central banks anywhere. If a connection between Marketcap and CB money exists at-all it is through the Net Present Value of the company which is related to the risk free return on capital offered by Treasury bonds.

      • China-Bob while those are examples of people creating value it does not involve creating money in the sense that licensed banks create money. The ability to create fiat or something that is treated as fiat is reserved to banks (and the RBA).

      • Pf I disagree, because within business your stock valuation is the currency that you use in the market. typically if you want to borrow (for expansion) or try to do an acquisition your stock is your currency if you do not wish to take on debt then then you can simply issue more stock through this process you transfer wealth from stock holders to the company’s balance sheet (as in they accept equity dilution so that the company has increased working capital). Look at most commercial bond T&C’s and you’ll see a clause about maximum Debt-To-Equity ratios. So maintaining your Marketcap is essential to maintaining your borrowing capacity.
        Most acquisitions involve some newly issued stock in my company for all of your company, cash buy-out’s are not unheard of, it’s usually part of the mix, but 100% cash takeovers are unusual for acquiring growth companies. There are a number of reasons for this not the least of which is that the acquiring company normally wants the acquired team to still have some skin in the game post deal.

  9. AUSTRALIA TAKES A 75% PAY CUT …… RAMPS UP DEBT…. INVESTS IN NON PRODUCTIVE ASSETS!

    This is an article that I haven’t read because I don’t think it has as yet been written. I want to read what ‘able’ economic commentators think about this, reality.

    I believe, or perhaps put more precisely, it is my opinion, that MACRO economics is largely the aggregation of MICRO economics. I know what flawse will say, ‘we sell the assets of farms, water and minerals (etc). I agree entirely. How long until a reset based in this ToT shock kicks in?

    • Tony I’ve been waiting 50 years …so far!!!!!!!!! Opinions will be good because i really don’t have an opinion non timing – I’m always out! It looks imminent but it always does. If the Chinese are really seriously trying to get rid of their USD$2.4T paper in exchange for real assets Glenn/Ken/Joe and the other morons could keep it going a few years yet.

  10. An Auckland Ratepayers Alliance cant come soon enough … Jordon Williams … NZ National Business Review

    http://www.nbr.co.nz/opinion/auckland-ratepayers-alliance-cant-come-soon-enough?utm_source=newsletter&utm_medium=email&utm_campaign=NBR%2520Last%2520Call%2520-%2520Holiday%2520Review%2520Edition

    Broken promises, eye watering rate hikes, 8500 staff, 130 spin doctors, diplomats in London, $200,000 penis art, $100,000 silk curtains, fashion consultants for finance staff, cut library hours and no berm mowing. Is this is SuperCity we hoped for? … read more via hyperlink above …

      • Probably with everyone moving to Texas. If they get rid of their government’s enthusiasm for interfering with family planning, and manage to supress the culture of assuming everyone is Christian, they will absolutely conquer the world…

        .. however, I don’t see those two things going away any time soon.

    • I had dinner with a researcher snd her engineer partner during the week, they have given up. The only ones I know that are buying, or thinking of, are in finance, marketing, law and specialising in medicine. Everyone else only seems able to due to the family getting involved.

      • Yup, when you’re in the situation where the 80 – 90th percentiles of income can’t afford to buy anymore, you know a major market collapse isn’t far off.

  11. “It would appear now that the rest of Australia is finally waking up to what MB has been warning about for a number of years….”

    And some of us have been saying the same things and posting on the craziness since the late 90s.

  12. Any thoughts on what would happen to a non hedged international fund if the US dollar collapsed? There’s so many mine fields because of the BS governments are doing.

    • What will stop this madness?

      I reckon GenY need to get political in the cities. After all, most properties are rentals yeah?

      Presently the idiots vote Green.

      Green don’t give a fuck about GenY. They voted against opening more land which makes housing more expensive.

      The Greens are evil liars you can only see with maturity and wisdom.

      • I reckon GenY need to get political in the cities. After all, most properties are rentals yeah?
        Presently the idiots vote Green.

        and the award for segway of the year goes to …..
        In actual fact about one in four do.

        Green don’t give a fuck about GenY. They voted against opening more land which makes housing more expensive.
        Yes they did and so did the vast majority of Liberal and Labor members. You can thank both those parties for creating the mess to begin with.

      • @AlexD. “You can thank both those parties for creating the mess to begin with”. Definitely, but GenY need to recognise, they haven’t done a single thing (in terms of who they vote for) to help themselves.

        “and the award for segway of the year goes to”. Not a segway at all. Just saying it as it is. Greens care about themselves only just like all other politicians. Stop kidding yourself.

      • ” On any given night 105,000 Australians are homeless”

        0.45% of the population.

        I’ve continually traveled all over the world and I’m astounded how few homeless are in Sydney given the great weather. It’s a global phenomenon and pretty much all in Sydney is attributed to mental illness. There are hostels, there are charities that feed them, there is an adequate welfare system in Australia. Anyone thinking differently really should have a look overseas. Is anyone telling me you can’t share-rent something in a country town on the dole? FFS.

        I’m talking about people that work not being able to afford a house. It is unprecedented globally. Why should anyone vote Green when their agenda doesn’t include them? It’s astounding people locked out of buying would consider voting for these idiots.

        “survey – a short survey where people can share their experience as a renter in today’s housing crisis climate”. WTF? Is this a joke?

        At best, their housing policies (which they only talk about anyway) are socialist BS that helps no one that works and wants to buy.

        Greens need to be destroyed so another party can take it’s place and start reform.

      • Homelessness/living rough is a growing problem. I’m sure you can find countries around the world where the problem is worse but, given where much of the world is heading and where it has come from that’s hardly an argument bud. The reality is these problems have been getting worse for some time.
        It’s astounding people locked out of buying would consider voting for these idiots…….At best, their housing policies (which they only talk about anyway) are socialist BS that helps no one that works and wants to buy
        Any policy/policies (I note there are multiple policies in this instance) that helps provide affordable rental living at the lower end of the market helps keep rents down. It is not unlike the social housing programs we had in the good old days when housing and rents were affordable. While they may not be a solution in itself to affordable housing, lower rents = a greater capacity to save for a home deposit and getting into the home market. I might add for some renting is probably all they should do at this time given the growing amount of underemployed in poorly paid work. The point is housing policy needs to accommodate a variety of needs, not just the narrowly confined culture bound paradigm some are stuck in. That’s not a minor issue in an economy that struggles to create quality jobs and has a growing underemployment problem.
        Adoption of the Henry Tax Review recommendation to reduce Capital Gains concession on investments (including property) by 10% as a costed revenue initiative. This would save $3.4 billion over the forward estimates, and was announced as a broad and sustainable package to raise revenue.
        I also find it interesting you missed this given the Libs have only just started talking about CGT concessions. To refresh your memory on how CGT interacts with NG-
        http://www.macrobusiness.com.au/2015/04/howard-expanded-negative-gearing-tax-shelter/
        It amazes me that you spend so much time attacking the only party that wants to do something in this policy space and has done for some time.

      • “not just the narrowly confined culture bound paradigm some are stuck in”. Exactly. What I said about renting in a country town completely nullifies any need for any more to be done about it. Buying them a train ticket to a country town would be ten times more useful than any of the absolute garbage these clowns bang on about.

        Is it the homeless putting the Greens in the cities? No. It’s mindless hipster renters, that haven’t given it ten seconds thought.

        I attack the Greens because they are dirty liars. They have no policies that help the majority of their constituents. LNP and Labor are too but they’re slaves to big business and people cheer them on like football teams. Though I try, that fight is too big for me.

        Step 1. Destroy the Greens.

        Step 2. The Greens replacement can intelligently take on LNP and Labor.

      • What I said about renting in a country town completely nullifies any need for any more to be done about it. Buying them a train ticket to a country town would be ten times more useful than any of the absolute garbage these clowns bang on about.
        I’m sure if you gave it more than a moment’s thought you could find some problems with this idea.
        I attack the Greens because they are dirty liars. They have no policies that help the majority of their constituents.
        Actually, I am going to go out on a limb and say many of their constituents aren’t preoccupied about what the Greens will do for them. Many that vote Green do so because they care about our planet, the disadvantaged and future generations. They are arguably among the most selfless voting blocs there is. The fact you can’t see that suggests you are not a Green and have no place lecturing those that do.

      • I am the most selfless person you’ll ever encounter. I’d gladly give away privilege to a FINITE number of people. To ask me to give away everything so more and more and more and more people can survive. Sorry, I’m not Jesus, and I say no.

        I just don’t fall for the filthy lies of the Greens. That might be too harsh. How about, so ideological, they don’t achieve a single fucking thing.

        “Many that vote Green do so because they care about our planet”. BS. If they cared about the environment they’d address number 1, through to number 1000 environmental issues. Too many people.

        The Greens are hopelessly out of their depth fueled by well meaning but dumb voters.

      • Greens care about themselves only just like all other politicians.

        Greens care about the environment, consequently do not favour the kind of free-for-all land development that Bob Day would promote.

      • Step 1. Destroy the Greens.

        Step 2. The Greens replacement can intelligently take on LNP and Labor.

        In reality:

        Step 2: The party that replaces the Greens also doesn’t share your exact views on population and you want to destroy them, too.

        Step 3: Liberals and Labor gain even more power.

      • I just don’t fall for the filthy lies of the Greens. That might be too harsh. How about, so ideological, they don’t achieve a single fucking thing.

        As has been pointed out numerous times before, nobody can achieve anything in our system without the consent of one of the two main parties.

        So if your “ideology” is in conflict with either of those two main parties – as, say, most of yours are (like the Greens) – then pretty much by definition you “don’t achieve a single fucking thing”.

      • @dr smithy. “Step 2: The party that replaces the Greens also doesn’t share your exact views on population and you want to destroy them, too.”. If they don’t address population then how can they call themselves either environmental or responsible?

        “Step 3: Liberals and Labor gain even more power.”. What and end up with insane policies like we presently are. For example; No land releases. These people are beyond juvenile.

        But, hey. They’re all for gay marriage, so they’ve got the micro issue selfish vote. You keep convincing yourselves you’re doing the right thing.

      • If they don’t address population then how can they call themselves either environmental or responsible?

        The Greens do address population, they just don’t do it in the kill-em-all fashion you’d prefer.

        Neither, it’s fairly likely, will anyone else.

        What and end up with insane policies like we presently are. For example; No land releases.

        Not Greens policy. You’re making shit up again.

      • “The Greens do address population”. Other than their rhetoric on the web site. When?

        “they just don’t do it in the kill-em-all fashion you’d prefer”. I’ve never said that. I say no more population growth in western countries and encourage the third world to have family planning. If some people are persuaded to make good choices they might not have otherwise made, then it’s for the greater good.

        “Neither, it’s fairly likely, will anyone else”. What BS. We tell politicians what we want but there’s not enough intelligent selfless people to make the numbers. It’s FW’s like the Greens that should be educating the public about the worlds biggest problem (not gay marriage or David Hicks).

        Look it’s fine if the Greens want to be a socialist party but stop lying to the public and stealing the environmental vote. Tell the truth. “We only care about inner city micro issues”. What’s happening is you get 18 year olds leaving school and voting for Greens because they think Greens will do something. Then most grow up and understand what the Greens are.

        “Not Greens policy.”. Semantics. They voted against it. Fucking scum Greens, massive fingers in the pie just like the other two parties. Destroy the filthy liar Greens.

        Yep, gay marriage. Far more important than the horrific consequences population growth will bring to the entire world, probably in our grand kids life time.

      • Other than their rhetoric on the web site.

        As has been pointed out numerous times, Greens cannot enact any policy without the consent of at least one other major party.

        I’ve never said that. I say no more population growth in western countries and encourage the third world to have family planning. If some people are persuaded to make good choices they might not have otherwise made, then it’s for the greater good.

        So, as usual, you agree with the people you call scum.

        You should stop trying to dress this up as a population problem as well, since what you really care about is immigration (eg: the ongoing whinging about refugees).

        Without immigration Australia – along with most of the western world – would be declining in population.

        Look it’s fine if the Greens want to be a socialist party but stop lying to the public and stealing the environmental vote. Tell the truth. “We only care about inner city micro issues”. What’s happening is you get 18 year olds leaving school and voting for Greens because they think Greens will do something. Then most grow up and understand what the Greens are.

        Wrong again, as usual.

        Semantics. They voted against it. Fucking scum Greens, massive fingers in the pie just like the other two parties. Destroy the filthy liar Greens.

        Yep, gay marriage. Far more important than the horrific consequences population growth will bring to the entire world, probably in our grand kids life time.

        When you’re simultaenously arguing in favour of policy that would encourage greater population (land release), yet railing against increasing population as the only problem we need to worry about, it’s pretty obvious where your real complaint lies, and it’s not policies.

      • “You should stop trying to dress this up as a population problem as well, since what you really care about is immigration” Not true. The entire world needs to address population and it should be the west that starts that.

        “would be declining in population”. Red herring. We’re growing by 400k a year. Declining is not an issue. I’ve always maintained we need to stop growth. That will soon change to we need to reduce. That will mean Australians will need to make decisions on who can and can’t have kids. It’s inevitable even if it doesn’t fit your vision of fairness. We both know it will be poor people that will not be allowed to have kids (well done Greens). Population growth, micro issue. Flannery says we can sustain 9 to 12 million. We already have double his high end number and will double again by 2035. Farm yields decline 2.3% a year, halving what we presently yield in 30 years. Population growth. Micro issue that will affect every Australian in a devastating way within a generation. Go, gay rights.

      • Not true.

        Yes, it is.

        Australian population is only growing due to immigration.

        The entire world needs to address population and it should be the west that starts that.

        The west’s population by birth has been declining for a couple of decades now.

        Red herring. We’re growing by 400k a year.

        Because of immigration.

        That will mean Australians will need to make decisions on who can and can’t have kids. It’s inevitable even if it doesn’t fit your vision of fairness. We both know it will be poor people that will not be allowed to have kids (well done Greens).

        For a guy who insists he’s not advocating oppressive population control, you get onto it pretty fucking quickly.

        Wealthy people, by far, have fewer children than the poor. It would be a massive change for this situation to be reversed, that would only come from significant Government incentives (ie: huge baby bonuses) or regulation. Why you think this is something the Greens would do – outside of your projection of them onto any idea you don’t like – is rather beyond me.

      • “Australian population is only growing due to immigration”. I know that and you know I know that. All I’m saying is reduce immigration to stable, not growing.

        “For a guy who insists he’s not advocating oppressive population control, you get onto it pretty fucking quickly”. That IS WHAT WILL eventually happen. Right now there’s a chance to stop it happening this way, but the nutters such as the Greens won’t address it.

        “Wealthy people, by far, have fewer children than the poor. It would be a massive change for this situation to be reversed”. It will be legislated is what I’m saying.

        “Why you think this is something the Greens would do”. because it’s the responsible thing to do to prevent a lot of pain down the track. The reason you can’t comprehend what I’m saying is you don’t consider Australia over populated. You are wrong.

      • @The Lorax. I’m not a nutter. What I’m saying is just beyond your intellect. That’s all you fucking moron.

      • Malcolm Fraser understood the problem much better than you Lorax – do yourself a favour and find his quote on Pauline Hanson, and you can just add yourself to the Caspar list.

  13. Anyone dumb enough to vote Green doesn’t deserve representation and that’s exactly what The Greens give you.

  14. A new low from the Spruikers Morning Handjob:
    * Spruiking pictures of caravans to turn into homes.
    * Property is now above State/National/World News, Politics, Business and Money related news.

    • V, I nearly fell for your second point a couple of weeks ago. It is the case on w/ends, I guess because most people are at home and it’s when most who are considering buying RE are out looking. For the rest of the week Property isn’t quite where it belongs, but it is below those you mentioned.

    • “Fitch ratings has identified a problem with mortgage delinquencies while an RP data report showed nearly 38 per cent of houses sold in the last quarter reported a financial loss for the vendor.”

      Provisions for BDD in the banks next set of reports are going to be interesting.

      • It’s a bit early to see this sort of thing turning up on banks balance sheets yet, but the ones to watch will be bendigo and BoQ , they have both had issues before.

        But mackay is just the head of the pack as it is nearly entirely dependent on mining , it’s creeping into place like Townsville and obviously Perth is one to watch.

        It’s very early days in the downturn but the panic is already setting in a number that of places , I expect contagion to pick up as the year rolls on

      • I agree on the actual delinquency figures being further down the path – but they should start moving on the ‘economic overlay’ part of the provisioning.

        If they don’t – they are kidding themselves.

      • I was gargling the other night with some RE types around Geelong who had been informed to clear what they could while they could because ‘the word’ had gone out that the second half of the year was looking problematic……………as has been said ad infinitum there is the mining capex downturn, the flow on from the closure of the car industry and retail margins about to get a knee in the nuts from a falling AUD measured against stagnant wages growth….

        But one can still hear ‘never been a better time to buy’ advertising vis RE on radio.

      • I’m a little bit further north and am crapping myself that the guy who just signed the contract to buy my place actually does some research and pulls out. The contagion hasn’t spread that far yet but it’s close. I really don’t think I’ll get another bunny like this one now.

      • 5/8ths, DE, et al, plenty of commercial rents available in Townsville but the place is being supported to a large military presence but such a presence won’t grow the place. For Townsville, standing still is going backwards. Not good.

      • Wing nut, I grew up there, I’m well aware of the economy. Defence, Uni , state govt hub etc. So yes, it’s not as directly exposed as Mackay and some of the other areas to the downturn but my feeling at this stage is that is just about timing.

      • Spent alot of time in Townsville and parents live there. Reckon Towsville is staring down a 1990’s style stagnation in it’s economy and housing. Stagnation is deflation.

      • @Wing nut Yep. Can’t argue with that. The place has gone nowhere for years, I left 8 years ago, RE is going backwards and I think the Capex cliff is going to finally kill the place. As I stated above it’s just timing now.

      • I’m in Townsville visiting family now. It does seem like it’s in a holding pattern, the exuberance of the past now not obvious.

        I do get the sense though that it will not be as badly affected as others such as Mackay; as noted, Townsville is much more stable. But things will decline for sure. Mining services and fifo are done or declining, 3 RAR transfer from Holdsworthy done, there is nothing left to ‘justify’ the insanity of exorbitant land prices.

        This place could be used as an example of how it all went wrong – the abundant land, infertile and unsuitable for agriculture, artificially restricted and priced as if it is Godzone.

      • Rage, DE. The kicker will be debt levels. Pre-GFC there were some hell expensive properties and there are now in areas such as Bushlands Beach. Need a big mining income to support those mortgage payments. It’s back to the future for Townsville.

      • Wing Nut, true, monster debt serviced by declining income is the killer.
        I’ve been trying for years to convince my sister to sell her investment property here, still working on it! One method was for her (and me) to write down how much money she has made. Mine had a big fat zero – she is still coming to terms with that.
        Also, have spent a couple of days helping a mate clean up his second place after his wife left him for a younger woman. He went from one home $150 000 debt to two homes $600 000 debt in the blink of an eye. Farq me.
        On Moranbah- apropos of nothing this morning, my mum, a former teacher, read this out at the table. From yesterday’s Courier Mail: ‘Soprano Xenia Puskarz Thomas recounts the story of her humiliation on tour for Queensland Youth Orchestra. We went to his school in Moranbah and when I introduced myself and said I sing opera all the kids started booing. Some were standing on their seats and yelling ‘get off the stage!’ I couldn’t believe it”. I can.

    • “… the once-prosperous ….town faced challenges as thousands looked elsewhere for jobs.”. Sounds like Christchurch right after the ‘quake. And look what happened! Those thousands went to Auckland looking for a job, and the property market went from heated to crazy! The same is likely to occur now in Brisbane, or more likely Sydney, as those thousands of displaced , desperate workers head south and look for a job and a roof over their ever more indebted heads…..

      • ““A typical house was worth $580,000 in December 2012 and has since declined in value to $237,500 over the next two years (a decline of 36 per cent per annum),’’ he said.” (sounds better than its down 60%)
        “On sheer numbers alone, one could argue a very good case that now is a good time to buy in Moranbah,’’ he said.”

        These fools just can’t help themselves. I love how he is quoting yields like an authority but forgetting rates and insurance and agent fees – let alone risk of owning ‘assets’ in a ghost town.

        Also, do these people not understand depreciation?

      • Check out some of the comments.

        Some people don’t deserve to have money.

        Edit: I think Matthew may be a RE troll. Just saying…

      • Yes the comments should prefaced with – “get a strong drink, you may as well enjoy losing some IQ points from reading this”

        The ‘denial’ is still strong – certainly stronger than Matthew’s credit is going to be in 18 months time.

      • @ 8 x 5
        Your emphasis on Moranbah being a ghost town is not an embellishment, I visited the town recently and that is pretty much how I would describe it. Having grown up there and seeing it now (15 yrs later) the town has grown substantially in relation to accomodation with a couple of medium density apartment blocks and a lot of newer residential developments. The shopping center and “town square” have vacant shops or pop up shops not selling much. The local sporting clubs are rotting on the vine.
        The rise and rise of FIFO has taken a significant toll on what little community did exist there. Talking to some people there during my visit, there is some feeling that things will pick up in the short term but this was not qualified with anything. I thought about voicing my opinion but felt it more prudent to bite my tongue.

        Lots more pain to come.

      • If only Australia had a culture of build for the future and not tomorrow where the future is not tomorrow.

      • “If only Australia had a culture of build for the future and not tomorrow where the future is not tomorrow.”

        It is a rarity globally now.

        Smart people used to apply the Gretsky Theory – now it is all about “what’s working now” until it blows up and sometimes they get a bailout.

        Financial repression has forced anyone using their brain to the sideline to watch the Central Bank puppet masters cause one clusterfck after the next.

        Sydney meltdown is going to be a doozy.

      • Wow, that article gives me a hard on. Finally some sanity coming to those of us that have mocked for all these years.

      • Pretty obvious MB, he contradicted himself at every turn. He couldn’t lie straight in bed.

      • Ha ha ha! That article is epic! One of the places they cite has had an over 80% cut in rents. Meanwhile the RE spruiker is saying now is a great time to buy because yields are good; that is of course for the hpuses where the price has fallen faster than the rents, and assumes future rents are the same as current ones.

        Good luck to anyone who buys an ‘investment’ where both price AND yield is collapsing. The stupid, it burns!

      • LordDudley, the real estate parasites are shitting themselves in the NT.

        “Home ownership looking dim for first home buyers in Northern Territory”

        “A DRAMATIC drop-off in the NT property market since the first home buyers’ grant was canned has experts calling for it to be reinstated. The first home buyers grant, that provided financial assistance to first home buyers, was cancelled after January 1 this year, and is now only applicable to first homeowners wanting to build their home.”

        Good show I reckon, FHBG’s should only be available for new builds but apparently the REINT parasites reckon it’s their god given right to help themselves to your $26k.

        Be interested to hear from Bubbley about the situation in Darwin.

        http://www.ntnews.com.au/realestate/home-ownership-looking-dim-for-first-home-buyers-in-northern-territory/story-fnk4wt05-1227291299918

    • Noticed the member is George Christensen, maybe the town just wasn’t christian enough and this is God’s payback!

      • Already here I would say. Can’t find the article now but say one earlier about how ~6% of houses in Perth sold for below what they last sold for in the last quarter. Something of a record and it is a growing trend…

  15. “We’ve boundless plains to share, unless you’re seeking asylum”……

    https://www.youtube.com/watch?v=YfrWb3tkAio&list=LLExNRjztVKtVu1CNzPpIFCQ

    How is this consistent with their “apparent” population policy?

    The Greens. Simply retarded.

    Destroy them for the good of Australia and its’ ENVIRONMENT. What an absolute joke, that an environmental party says “We’ve boundless plains to share”.

    The Greens, the party for 10 year olds.

    Please urgently help to fix the world. Just take a moment of your time to fill in the survey on the Greens web site.

    “survey – a short survey where people can share their experience as a renter in today’s housing crisis climate”

    The Greens. Fixing the world, with nonsensical methods.

    • Predictably, you have completely missed the point (or misrepresented – can’t be sure which) of the speech Rich. I hope you’ve hit your quota for Greens bashing for the week. 😉

      • I didn’t watch it. I couldn’t function after reading ““We’ve boundless plains to share”. My brain went into defibrillation. The Greens have done more damage to refugees than good. Opening the door the way they did (via Rudd) has done irreparable damage to the electorates tolerance. That simply cannot be denied. Labor will not govern for a decade because of it, so of course, that gives us LNP.

        Their policies encouraged refugees to leave safe shores and get on unsafe boats. Their refugee policy, or strategy has been a monumental failure and disaster. I cannot comprehend how someone like yourself can possibly be an advocate of them.

      • For a guy that reckons he hates the LNP, you do a brilliant job of parroting their party line/misinformation sometimes. Strange shenanigans indeed.

      • I don’t parrot anyone’s party line. They’re all liars.

        I call it as I see it. That’s what happened.

      • I see. It’s just pure coincidence that you see it the same way LNP spin doctors want us to see it.

      • Depends on how you define “safe”. Not much of a life there for refugees mate. Why don’t you consult Doctor Google and find out for yourself.

      • There’s not much of a life for 90% of people on the planet. If these people had $10k to get on a boat the they’re not in that 90%.

        Greens missing the real problem because they have the maturity of school kids.

      • Do you deny most left safe shores in Indonesia?

        Clearly they thought it was less safe than a fairly decent chance of drowning at sea after their boat sank.

        There’s not much of a life for 90% of people on the planet. If these people had $10k to get on a boat the they’re not in that 90%.

        Right. Because how much money you have determines how persecuted you are.

        That theory worked real well for rich Jews in WW2, right ?

      • @dr smithy. “Right. Because how much money you have determines how persecuted you are.”

        Refugees had already fled from where they were persecuted and then left safe shores for Australia. Stop making things up.

      • @AlexD. “It’s just pure coincidence that you see it the same way LNP spin doctors want us to see it”.

        No, I don’t listen to those liars either. I weigh the information and make a likely intelligent scenario.

      • Refugees had already fled from where they were persecuted and then left safe shores for Australia.

        Indonesia isn’t safe shores.

        Stop making things up.

        I’m not making anything up. People would rather risk drowning in the middle of the ocean, or ending up in some (ostensibly) Australian refuge facility, than staying in Indonesia. That rather strongly suggests they don’t feel “safe”.

        It’s like this Iranian bloke who’s refusing food at the moment. To the casual observer, he’d rather starve himself to death rather than go back to Iran. But I’m sure insightful folk like you would argue he’s just not hungry.

        But, hey, keep telling yourself those boat people are just economic immigrants, like your LNP mates say.

      • No, I don’t listen to those liars either. I weigh the information and make a likely intelligent scenario.

        Okay Rich – so the “likely intelligent scenario” as you put it, involves people with lots of money coming here in an unsafe way and risking their lives and the lives of their children etc when there are perfectly safe alternatives. Are you for real mate? It may serve you better not to take on the holier than thou tone re lying politicians if you’re going to peddle LNP lies with such an obvious disregard for the outward signs it is yet another misrepresentation.

        The reality is some are economic refugees (the evidence suggests the vast majority of economic refugees arrive by plane) and there are certainly a few that we wouldn’t want to let in. The ring leaders of the riotous mob at Christmas Island some time ago were actually pretty dodgy sorts – ex Iranian Revolutionary Guards with a pretty chequered past. I know this as I had friends working there for DIMIA. Most however are just desperate refugees; people that needed to leave their homes quickly and no longer have a home they can call safe. That’s a far more accurate account than the one you provide.

        So I say again, if you want to hold politicians to account for their lies, my advice would be to start by not peddling their lies for them (knowingly or otherwise).

      • @AlexD. My argument isn’t about refugees. It’s about the lack of other debate that get’s drowned out by debate about refugees. Australians have agreed to take 20k refugees a year. They were never ever going to allow idiot Labor to lose control of our borders like they did. FFS it’s time Greens got a bit more pragmatic. “Greater good” is a phrase they should learn about.

        I’ve met many people from Vietnam that were genuine refugees. They were fleeing likely death.

        The current round of refugees have $10k. $10k would buy you citizenship in a hundred safe countries around the world. Sure they fled unsafe places, but chose to come to wealthy Australia instead of countless other safe places on the way. Most of them flew to other countries first. They are all economic refugees. Leaving all the horribly poor refugees in camps with no options to get out. The position of the Greens condoning this is beyond ludicrous and only a ten year old could rationalise it.

        When I travel, I hate seeing the way people have to live, mostly because of under resourced large populations. Continue going like this with depleting resources and farm yields and the entire world will be living in appalling conditions. Is that what Greens want? They need to start thinking or step aside and let smart people take over.

      • My argument isn’t about refugees.
        Yes it is. You brought it up. Follow this thread above. You’ve been squawking about it and population growth for months. You either can’t even be honest about your argument, or you can’t even remember what your argument was/is. You said Their policies encouraged refugees to leave safe shores and get on unsafe boats. Their refugee policy, or strategy has been a monumental failure and disaster. right here http://www.macrobusiness.com.au/2015/04/easter-links-2015/#comment-1217292 .
        It’s about the lack of other debate that get’s drowned out by debate about refugees.
        So why bring it up without any prompting from me?
        Australians have agreed to take 20k refugees a year. They were never ever going to allow idiot Labor to lose control of our borders like they did.
        …and here we go again, right back on message with the LNP propaganda. You’ve completely ignored the points I made and just gone off on one of your rants again – yes most are refugees. I can see you ignore all evidence that doesn’t suit your largely baseless opinion. You wanna make shit up, you’ll get called for it. Just like politicians get called for it. The great irony is that you put yourself above them when in reality you are no better at all.

  16. Diogenes the Cynic

    rich42 the Greens hating thing is getting old. You have your view, fine, but don’t endlessly bang on about it – you look like a paid astroturfer for the LNP.

    • Sorry if it’s old. I’ve never heard a valid reason I’m wrong.

      I assure you I’m not paid. I hate them all.

      LNP are pro population. I’m not.

      • Sorry if it’s old. I’ve never heard a valid reason I’m wrong.

        That’s because your position is based on the premise that you’re not wrong.

        That you are wrong in fact or intent has been demonstrated (and ignored) on multiple occasions.

    • You’ll have to let it go Rich. Yes they are as bad as the other two, in many ways worse because of hypocrisy of purpose. Their policies of land constraint have had almost no effect on the ecological and urban blight of sprawl other than to be the useful idiots that have facilitated a drip-fed release making things even worse.

      In the end they are a party of the system, they have no meaningful policies to recover housing from the rentseekers/speculators – it’s not really on their agenda. They have no real policies to transform our urban amenity away from cramped treeless suburbs with poorly built dogs boxes.

      Your frustration seems to lie in just the link between the marketing and the reality. Remember this is a party that always preferences the ALP. They were just demerged from Labor because they’re a bit embarrassing to the mainstream hacks trying to cream off the business/development lobby.

      The answer is with strong intellectual independents – you can already see this in the queensland parliament. Also can be seen is that the parties will pretty much add anyone to their candidates if they think they can market them and control their vote.

      • I really do struggle with why people feel the need to make shit up to justify their personal prejudices.

        Though…

        The answer is with strong intellectual independents […]

        On this we can agree. Actually, I’d settle for just strong independents.

      • @aj. “Your frustration seems to lie in just the link between the marketing and the reality”. Absolutely, and really struggle to see how anyone views them with any integrity or ethics. Therefore the harsh words such as liars, idiots and scammers. Their logic processes are like primary school kids.

        “The answer is with strong intellectual independents”. That’s what I think. Vote these juvenile clowns the Greens out and get independents to counter the business puppets LNP and Labor.

      • @aj. “You’ll have to let it go Rich”

        I don’t want to let it go. Often it just takes someone to point out such folly for it all to fall into place for people. The destructive deceptive liars the Greens have to be destroyed and I think it should take little more than people like me planting the seed so people realise the Greens have zero interest in anything but themselves, just like the other two parties.

        VOTE INDEPENDENT.

      • @aj
        because of hypocrisy of purpose
        That hypocrisy being no open slather development? Their roots are in the environmental movement – correct? Not sure how this constitutes hypocrisy.

        The answer is with strong intellectual independents…
        While I agree with the sentiment, who will vote for them? I’m pretty sure even the strongest leaders will falter in the current environment. If we had a government that demonstrated how to compromise and work with “strong” independents, do you think it would last or be loved by voters? It’s late and after answering countless emails I’m out of puff aj but, you probably won’t see much happen until circumstances become sufficiently dire for people to start thinking about the things that really matter. I don’t buy the “evil greens lie” line, I just think representative democracy in AUS requires compromise (particularly when you’re a minor party) and things are not going to change while most voters are essentially happy with the status quo (ie: inflated property values etc). In short, we probably do need a severe recession for things to change substantially.

      • “Their roots are in the environmental movement – correct?”

        That’s what I would have thought, too. Also, I often wonder how many people that complain about constraints on urban sprawl actually have the “pleasure” of living out here with its inferior services, poor planning, dangerous roads, and no jobs. The worst part is the housing isn’t even that cheap!

      • I also didn’t understand sprawl once either, until instead of just being caught in an ideological view i actually opened my thinking. Why is it that these vast open spaces (mostly once grassland and mono-crop farmland) are not now (post development) a mix of beautiful treed suburbs big houses nice gardens, shady boulevards etc.

        It really is not until you can understand this and understand the bootleg and Baptist paradox that you will understand the great betrayal of the poor by the Greens, and the total failure to achieve their goals – the hypocrisy of purpose.

        Yes the sprawl is awful, really really awful and it is awful because it is development in small blocks with poorly built houses with no eves and no trees etc. We still have the human spread, but now we have deserts of vast treeless tiny box suburbs. Any you can still see it play out, you can still see the developer friendly local councils declare proudly that some area will be off limits to development (for now) for long enough to keep the demand high in the most absurd circumstances.

        Once you see it you can’t unsee it. The Greens haven’t just failed environmentally, they have catastrophically failed the most vulnerable in our society that they have herded into fringe ghettos where they don’t have to look at them while their inner-city mythology can roam untouched with visions of utopian virgin forest being protected from the awful developers.

        No. The Greens have failed and they have failed catastrophically. We have the most horrendous sprawl over all the beautiful parts of the country, there is barely a beach that is left untouched, and by feeding into the property boom with supply constraints they have helped create a bubble that has destroyed and despoiled nearly the entire country.

        They have failed, they have failed horrifically.

      • I also didn’t understand sprawl once either, until instead of just being caught in an ideological view i actually opened my thinking. Why is it that these vast open spaces (mostly once grassland and mono-crop farmland) are not now (post development) a mix of beautiful treed suburbs big houses nice gardens, shady boulevards etc.

        Because developers drip-feed land releases to maximise their profits as they have no incentive not to.

        To blame this situation on the Greens, a party which has zero ability to implement policy without the consent of Liberals or Labor, and zero ability to prevent policy that both agree on, is utterly absurd.

        There are many solutions to this problem that have been discussed on MB. Free-for-all land development is but one of them, and comes with its own problems.

        They have failed, they have failed horrifically.

        Yes, of course. Because they haven’t satisfied your single-issue desires in the exact way you want, they’re a failure in all things. ::rolleyes::

        Maybe if they were a political party whose sole policy was to facilitate cheap housing by completely deregulating land, you might be able to say they’ve “catastrophically failed”.

      • Also, I often wonder how many people that complain about constraints on urban sprawl actually have the “pleasure” of living out here with its inferior services, poor planning, dangerous roads, and no jobs. The worst part is the housing isn’t even that cheap!

        The tradeoff for living in the boonies is *supposed* to be low costs and space. In that context I haven’t got a problem with “sprawl” at all – I hate high density living.

        But as you note it’s not what we have here.

      • “To blame this situation on the Greens, a party which has zero ability to implement policy without the consent of Liberals or Labor, and zero ability to prevent policy that both agree on, is utterly absurd.”

        No it’s not. You can apologies for your beloved Greens all you want but they put the Baptist in the game. You love to play the micro-pedant, but i’m not seeing any point where the Greens are soley to blame, but they were an integral piece in the puzzle and their support for drip-feed land was essential to the business of supply constraint.

        Add to that their total ineptitude in understanding financialisation and demand – they have just as many apologies to make. And given they held their miasma of beliefs out at mainly environmental they can certainly add a massive failure to that one.

        Keep on believing the ideology doc – can’t be guys like you that helped make the mess – can it??

        “Yes, of course. Because they haven’t satisfied your single-issue desires in the exact way you want, they’re a failure in all things. ::roll eyes::” No they are failures because they totally and completely failed at what they set out to achieve, and not only did they fail, it is clear they were a key part of the problem.

        You are cherry picking micro-points until you lose all context…again (rolls eyes) but not even you can flog this dead horse anymore Smit.

      • To clarify, there is no sympathy for the zombie brands of liberal and labor (laberal) party on my part. But the greens and their followers seem to have no real understanding of the major role they have played in not just the impoverishment of the most vulnerable and the transformation of our suburbs to small box squalor, but to the destruction of the environment through misallocated capital as the housing boom pestilence destroys all in its path.

      • I’m not sure why you bother drsmithy. Pointless engaging the fruitloops. Nothing you say will change their minds.

      • See comment on Malcolm Fraser and understanding Pauline Hanson. Lorax, you are a patsy of the major parties they need dopes like you as much as they need the Caspars of the world.

        Go ahead and throw your p*ss balloon and put more votes in Liberal pockets – talk about shooting fish in a barrel.

      • You can apologies for your beloved Greens all you want but they put the Baptist in the game.

        Don’t project the flipside of your prejudice onto me.

        You love to play the micro-pedant, but i’m not seeing any point where the Greens are soley to blame, but they were an integral piece in the puzzle and their support for drip-feed land was essential to the business of supply constraint.

        Where is their support for drip-feeding land ?

        Keep on believing the ideology doc – can’t be guys like you that helped make the mess – can it??

        Given I’ve been attacked here on more than one occasion for advocating greater supply of land will help house prices, I’m inclined to think not.

        No they are failures because they totally and completely failed at what they set out to achieve, and not only did they fail, it is clear they were a key part of the problem.

        And what did they “set out to do” ?

        You are cherry picking micro-points until you lose all context…again (rolls eyes) but not even you can flog this dead horse anymore Smit.

        Am I mistaken in interpreting your “macro” argument is that the Greens are either completely to blame, or at the very least the primary villains in, Australia’s property bubble ?

      • “Their policies of land constraint have had almost no effect on the ecological and urban blight of sprawl other than to be the useful idiots that have facilitated a drip-fed release making things even worse.”

        The greens have their place in the problem, and it’s a big one. They were not minor players, there were the big pushers of the anti-sprawl myths and they say they had almost no concept of the unfolding finanicalisation.

        They were a big part of the problem. They didn’t control the policy but their urban land use myths were critical to the game. Juiced population, juiced speculation, crushed supply – they all fit in the answer and the first and last were ones that the Greens were happy to work with. And really there is a pretty strong smell that their primary inner-city backers didn’t want them to touch the middle one.

      • The greens have their place in the problem, and it’s a big one.
        I am curious, how were the Greens responsible for the largest period of housing price appreciation which ran from the late nineties to mid naughties? Did they hold the balance of power during this period? It seems odd to me that some spend so much time bashing a party that at no time has had power in their own right, did not have the balance of power in the Senate until relatively recently and at best has only been able to haggle for a few policy concessions/measures here and there when it did. It’s also pretty obvious to me that the ideological foundation of the Greens doesn’t lend itself to a considered view of financial markets and debt as tools of domination and control. The issues in the carbon price mechanism that ultimately contributed to its demise was an obvious outward sign of these flaws.

        I would like to see the supply of land freed up aj but, as has been pointed out here before, that won’t solve much if there’s no investment in infrastructure etc. There are also many avenues open on the supply side to crank up costs and bring us back to where we started. So, there’s a whole lot of things that need to change mate, not just the availability of land. You are also ignoring a picture that’s a bit more complicated than your vision. There are national parks on the fringe in a number of capital cities (Sydney included), so it was always going to be touch and go getting the Greens support for looser land supply without some pretty strong caveats to protect this natural heritage. Given the environment is their core issue, no surprises there.

        inner-city backers didn’t want them to touch the middle one. Given the bulk of their core voter support comes from young voters, many yet to enter the housing market, can you see a hole in this argument? You’ve made some points here I don’t disagree with aj but, I don’t think your assessment is balanced at all.

      • What mystifies me is why the desire to defend another party that clearly has a big role in the mess. I’ve consistently acknowledged the answer lies between speculation, population and land availability, and consistently had a crack at the laberal duopoly.

        It’s not about balance of power its about the urban sprawl myth. The Greens have been the primary pushers of this myth over my life-time, they have been the critical Baptists for the bootleggers land prohibition. Do you think they have achieved anything in this space – can you look at any of our new developments and say wow in a country of so few people we have actually made some beautiful environmental spaces?

        I’d dispute that their power-base is young voters. The power base comes from the funders of the party.

        As to infrastructure, this is meaningless, and part of the green myth. There is no infrastructure now, but instead of living in beautiful leafy suburbs with trees, parks and shade, we have herded the poor into new urban deserts. You would be much better off asking why there is no infrastructure rather than using this as an excuse for this behaviour.

        The Greens have had some very clever marketing to link a range of social goals with environmentalism, but they have made and been responsible for perpetuating some really horrible environmental outcomes, I don’t see what’s wrong with asking them to own up to that?

      • I guess much depends on how you view the environment aj. The Greens are still trying to placate a very active part of their core that does see value in “locking things away”. I know this from firsthand experience as I am a keen fisherman. In spite of being very conservation minded, I’ve been banging my head against a brick wall re policy matters with the Greens for some time. I’m not a member but, a good part of their active base see me as the enemy.
        Not sure if you’ll every change that part of their base but, I know chances of working with them are probably going to be diminished if we start conflating issues like asylum seekers etc in the whole debate. Peddling LNP lies does more harm than good to the cause so the best thing to do is come down on it hard. Deal with the issues and leave the superfluous rubbish and lies out of it. You’re more likely to get traction in the main stream that way and probably more likely to be able to work with parties like the Greens

      • They were a big part of the problem. They didn’t control the policy but their urban land use myths were critical to the game. Juiced population, juiced speculation, crushed supply – they all fit in the answer and the first and last were ones that the Greens were happy to work with. And really there is a pretty strong smell that their primary inner-city backers didn’t want them to touch the middle one.

        Bullshit. This is just naked and irrational hatred.

        The property bubble has been a problem decades in the making, and the Greens have only had meaningful political power for maybe 10 years. Its primary protagonist is first and foremost land developers, followed by Governments requiring full up-front investment in infrastructure, not penalising land banking and encouraging property-based tax rorts, wrapped up by irresponsible bank lending.

        To suggest the Greens were advocates of “juiced population or “juiced speculation” is absurd (particularly the former).

        You could maybe make an argument they played a part in limiting supply, but to ascribe nefarious motive to this when a far simpler one (environmental impact) is obvious is just another example of prejudice.

        You would be much better off asking why there is no infrastructure rather than using this as an excuse for this behaviour.

        Would the increasing allergy towards public spending and investment in public infrastructure over the last few decades by Government have anything to do with it, do you think ?

        The Greens have had some very clever marketing to link a range of social goals with environmentalism, but they have made and been responsible for perpetuating some really horrible environmental outcomes, I don’t see what’s wrong with asking them to own up to that?

        It would be helpful if you could clarify what you’re referring to.

      • What’s interesting here is that we bag out the Libs or Lab – silence. Bag out the useless Greens and in come the rabid supporters to the rescue.

        The Greens helped set the myths that crushed supply – what is so hard to understand about that?
        The Greens haven’t said boo about the financialisation of housing (or everything) – I smell a rat.
        The Greens have an inherent conflict with population growth and have been generally compromised on speaking out against population.

        The only irrational ones here are the rusted on Greens voters that can’t believe they were part of the problem too – like the rest of us. Get it, get over it – you might actually help fix the problem.

      • What’s interesting here is that we bag out the Libs or Lab – silence. Bag out the useless Greens and in come the rabid supporters to the rescue.

        What redeeming policies do Liberals and Labor have ? What factually wrong statements are made about them ?

        You have a single issue that you’re complaining about, and are vastly overstating their influence even on that, yet that alone is reason enough for you to apparently dismiss everything else in their policy platform.

        The Greens helped set the myths that crushed supply – what is so hard to understand about that?

        Because analysis of same doesn’t lead to the conclusion being argued that they’re the main – or even a significant – contributor to “crushed supply”.

        The Greens haven’t said boo about the financialisation of housing (or everything) – I smell a rat.

        Who has ? What benchmark are you using here ? Where aren’t there any rats ? Why should everyone’s rats be considered equivalent ?

        How should they (or anyone else) approach the issue when advocating anything more than a raised eyebrow of regulation or oversight of “the market” earns the label of “socialist” (or “communist”) and massive, co-ordinated media smears ?

        The Greens have an inherent conflict with population growth and have been generally compromised on speaking out against population.

        What conflict is that ? When have they been compromised on speaking out against population ? Do you mean population or immigration ?

        The only irrational ones here are the rusted on Greens voters that can’t believe they were part of the problem too – like the rest of us. Get it, get over it – you might actually help fix the problem.

        Stop projecting the reverse of your prejudice onto others. I can count the number of times I’ve put ‘1’ next to a Greens candidate in my entire life on one hand, and still have a few fingers left over.

        The point is not that they are problem-free – nobody is arguing that, except in your mind. The point is that they are a vastly smaller part of the problems and actually appear to have some interest in trying to address them.

      • They were simply not a small part of the problem. The crushing of supply has had echoes through social justice, environmental carnage and equality.

        Many left commentators have talked about the financialisation of everything for a long time, the Greens didn’t want to address this issue – when they were more than happy to raise every other social justice issue no matter how unpalatable to the majority of the population – the question is why. Ignorance, stupidity or just not really in their interests to do so?

      • They were simply not a small part of the problem. The crushing of supply has had echoes through social justice, environmental carnage and equality.

        You have failed to show how.

        Many left commentators have talked about the financialisation of everything for a long time, […]

        Who ? What political parties ?

        […] the Greens didn’t want to address this issue – when they were more than happy to raise every other social justice issue no matter how unpalatable to the majority of the population – the question is why. Ignorance, stupidity or just not really in their interests to do so?

        As I have pointed out – repeatedly – the Greens are, first and foremost, an environmental party. Their expansion into covering general, centre-left social democratic issues is a relatively recent development and still almost always overruled by the environmental arm.

    • @dr smithy. “That’s because your position is based on the premise that you’re not wrong”.

      That’s because I’m not wrong.

      The Greens are a successful party because of selfish people that put huge importance on micro issues and then convince themselves their other policies are sound. Any worthy ecologist will tell you, do nothing about population and you may as well do nothing.

      • That’s because I’m not wrong.

        Pretty much everything you write here is wrong everywhere except in your mind.

        The Greens are a successful party because of selfish people that put huge importance on micro issues and then convince themselves their other policies are sound.

        I know for a single-issue person like you, you think things like legal equality before the law is a “micro issue”, because there’s only one “macro issue”, the resolution of which will gift us utopia, but the real world’s a bit more complex than that.

        Any worthy ecologist will tell you, do nothing about population and you may as well do nothing.

        Your lie is that the Greens wish to do nothing about population.

      • “but the real world’s a bit more complex than that”.

        Yes it is because everyone’s so selfish. If everyone voted for what’s important to us all, everything would work out.

        Yep, gay marriage trumps the apocalyptic catastrophe of population growth that will harm EVERYONE. I can’t believe you defend what you’re saying. The Greens are in the way of good policy. Destroy them and replace them with independent adults.

      • @RIch42

        Lets take a actual look at how your philosophy plays out in reality…. eh.

        ” It was a good idea, in theory anyway. The plan was to form a sustainable community made up of people who believed in capitalism, limited government, and self-reliance. The site was already picked out: 11,000 acres of fertile land nestled in the valleys of the Chilean Andes, just an hour’s drive away from the capital of Santiago, to the east, and the Pacific Ocean, to the west. Residents could make money growing and exporting organic produce while enjoying Chile’s low taxes and temperate climate. This was no crackpot scheme to establish a micronation on a platform floating in the middle of the ocean (a common libertarian dream)—this was a serious attempt to build a refuge where free marketers and anarcho-capitalists could hole up and wait for the world’s fiat currencies to collapse. They called it “Galt’s Gulch Chile” (GGC), naming it for the fictional place where the world’s competent capitalists flee to in Ayn Rand’s Atlas Shrugged.

        The project was conceived in 2012 by four men: John Cobin, an American expat living in Chile who once ran unsuccessfully for Congress in South Carolina; Jeff Berwick, the globe-trotting founder of the Dollar Vigilante, a financial newsletter that preaches the coming end of the current monetary system; Cobin’s Chilean partner; and Ken Johnson, a roving entrepreneur whose previous investment projects included real estate, wind turbines, and “water ionizers,” pseudoscientific gizmos that are advertised as being able to slow aging.

        That initial group quickly fell apart, though today the principals disagree on why. Now, two years after its founding, the would-be paradise is ensnared in a set of personal conflicts, mainly centered on Johnson. Instead of living in a picturesque valley selling Galt’s Gulch–branded juice, the libertarian founders are accusing one another of being drunks, liars, and sociopaths. GGC’s would-be inhabitants have called Johnson a “weirdo,” a “pathological liar,” “insane,” a “scammer,” and other, similar things. Some shareholders are pursuing legal action in an effort to remove him from the project, a drastic measure for antigovernment types to take. Johnson, who remains the manager of the trust that controls the land, claims all the allegations against him are false. So what happened?” – snip

        http://www.vice.com/read/atlas-mugged-922-v21n10

        Skippy…. as always… paradise envisioned by bolting together a bunch of biased linear ex nihilo reasoning exercises…. never actually works out in reality.

      • “Skippy…. as always… paradise envisioned by bolting together a bunch of biased linear ex nihilo reasoning exercises…. never actually works out in reality”

        Not 100% sure what the connection is to what I’m saying.

        So limiting population growth is not a solution to the massive population problem the world has?

        An environmental party should not achieve one single environmental issue? Should never tell the electorate about the problem population growth is? Should spend all it’s time promoting gay rights and people that have left safe shores to come to Australia? Should not vote yes to a housing solution to, I guess many of their constituents, that they HELPED CAUSE BY NOT DISCUSSING POPULATION GROWTH WITH THE ELECTORATE?

      • @rich42,

        Your constant referral to independent political operatives is a bit of a tell, it just groans atomized – atomistic individualism in the libertarian sense. This is highlighted by the observation that both the LNP – ALP are not monolithic political party as they both have a left – center and far right components, at the moment the far right in both party’s hold the reigns, largely the result of a few decades of geopolitics emanating out of America.

        As far a population goes, meta studies have shown a high correlation with good median income and lower population growth in developed country’s. Which far less extreme than your clarion call for an abrupt cull of some sort. A message some libertarian sorts of late have been trotting around imo, seemingly to do with securing the life styles of the upper quintile from the ravages of the incessant poor.

        Skippy… Housing is actually a secondary concern when employment w/ security and living wages proceed the formation of housing stock.

      • Yes it is because everyone’s so selfish. If everyone voted for what’s important to us all, everything would work out.

        You seem have misspelt “if everyone voted for what’s important to me, everything would work out”.

        Yep, gay marriage trumps the apocalyptic catastrophe of population growth that will harm EVERYONE.

        This is an even more absurd fallacy than usual.

        I can’t believe you defend what you’re saying.

        That’s because you’re a textbook zealot. You care only about a single issue and think anyone who disagrees with your single ideal in the slightest is completely wrong about everything and see no room in the world for any opinion except yours.

    • @AlexD

      “people to start thinking about the things that really matter”. That’s exactly what I’m saying and the Greens categorically fail to deliver that message..

      “I don’t buy the “evil greens lie”. It’s what they talk about that matters and I never hear them talk about anything that matetrs to most people. They are a micro issue party that represent few p[eople while PRETENDING to represent everyone. They are liars.

      “while most voters are essentially happy with the status quo”. People are not happy. Everywhere I go I hear people whinging about Australia’s woeful representation. The electorate is screaming for change, absolutely desperate for good leadership. In my opinion a great start would be replace the Greens with independents that look after Australians. The best way to look after Australians is to limit our population.

      • It’s what they talk about that matters and I never hear them talk about anything that matetrs to most people.

        That’s probably because what you think matters to most people quite clearly doesn’t REALLY matter to most people.

        They are a micro issue party that represent few p[eople while PRETENDING to represent everyone. They are liars.

        You calling someone else a “micro issue party” is the height of hypocrisy.

        The Greens have a comprehensive – arguably more comprehensive than either Liberals or Labor – policy platform covering just about everything you can think of, and the promote and advocate policy across the board consistently with that platform. When they have policies from refugees to personal rights to foreign trade to social services, to argue the Greens are a “micro issue party” is beyond absurd.

        Your issue with them is not that they are a “micro issue party”, it is that they are not your “micro issue party”.

        People are not happy. Everywhere I go I hear people whinging about Australia’s woeful representation. The electorate is screaming for change, absolutely desperate for good leadership.

        When <50% of the population is casting a primary vote for someone other than Liberals or Labor, I’ll start to believe that might be true.

        When it hits <40% I might even begin to think people are serious about change.

        Right now, ca. 75% of the population votes, first and foremost, to maintain the status quo. They quite clearly do not think the issues you think are important, are as important as you think they are.

      • “That’s probably because what you think matters to most people quite clearly doesn’t REALLY matter to most people”. BS. Population growth affects every single one of us but because it’s happening like frogs in boiling water most people aren’t smart enough to put the two together. I cannot tell you how many people I’ve spoken to, that had never considered population growth as the reason we’ve got high house prices, high rents, falling wages, $6 tomatoes, job competition, traffic jams, $500 AFL tickets, crowded beaches, parking meters. I could go on all day. In other countries it’s no fucking food, putrid water, no living space, smog that takes decades off your life, a completely dead environment. Yep, gay marriage macro issue. Population growth micro issue.

        “The Greens have a comprehensive….. policy platform” Listen to what they say, not how many words has been typed on their web site.

        “When <50% of the population is casting a primary vote for someone other than Liberals or Labor, I’ll start to believe that might be true.". People are dumb; they are not happy. They don't know how to vote differently. They think a donkey vote hurts politicians. Incidentally doesn’t a donkey vote go to the incumbent party?

        The government has the electorate exactly where they need them. Uninformed and dumb and the Greens form part of that.

      • BS. Population growth affects every single one of us but because it’s happening like frogs in boiling water most people aren’t smart enough to put the two together. I cannot tell you how many people I’ve spoken to, that had never considered population growth as the reason we’ve got high house prices, high rents, falling wages, $6 tomatoes, job competition, traffic jams, $500 AFL tickets, crowded beaches, parking meters.

        Probably because they look at other countries without those things that have much higher populations (like, say America).

        To say those things are solely the result of population is absurdly oversimplifying complex issues.

        Yep, gay marriage macro issue. Population growth micro issue.

        You have an unhealthy obsession with gay marriage.

        Listen to what they say, not how many words has been typed on their web site.

        I do.

        People are dumb; they are not happy. They don’t know how to vote differently.

        Bullshit.

        Every couple of years they get a piece of paper in front of them with dozens, if not hundreds, of alternatives to the status quo.

        If half the population just voted for any of the second-tier party like Greens, SPP, PUP, Sex Party as a first preference – not even going looking for independents or the fringe – the landscape would change.

        They don’t.

        They think a donkey vote hurts politicians. Incidentally doesn’t a donkey vote go to the incumbent party?

        It would depend on how the candidate at the top of the card was distributing preferences.

      • “Probably because they look at other countries without those things that have much higher populations (like, say America)”. Have you been to both central Australia and central America? Two extremes.

        You have an unhealthy obsession with gay marriage. No, I’m trying to highlight yours.

        “Every couple of years they get a piece of paper in front of them with dozens, if not hundreds, of alternatives to the status quo. If half the population just voted for any of the second-tier party like Greens, SPP, PUP, Sex Party as a first preference – not even going looking for independents or the fringe – the landscape would change”. That’s not what happens. They walk to the booth and some parasite from Green, Labor or LNP hand the dumb fuckers a card of how the dumb fuckers have to put down numbers. NEVER BELOW THE LINE. What’s the point if there’s the three complete failure parties and 30 others whose preferences end up with the 3 failure parties? Without an educated electorate it’s impossible to change and get away from these three horrendous parties.

      • No, I’m trying to highlight yours.

        I’m not the person who keeps bringing up gay marriage and refugees. You are.

        That’s not what happens. They walk to the booth and some parasite from Green, Labor or LNP hand the dumb fuckers a card of how the dumb fuckers have to put down numbers. NEVER BELOW THE LINE.

        And until that stops, it’s quite clear that people aren’t all that bothered by the status quo.

        Why you think adding yet another party for people to not vote for is beyond me.

        Without an educated electorate it’s impossible to change and get away from these three horrendous parties.

        And by “educated” you mean “agrees with me”, right ?

      • The question is really back to you Smit, why are you taking so much glee in arguing and winning fine points against what is in substance a frustration based inequality argument. Why are you beating your 6 year-old at chess and gloating?

        Why not take the time to look at where the inequality comes from and why does it land with such force in this spot? Why not take some time to understand if there is any blame attributable to the minor parties? Is it possible that the clever environmentally linked marketing of the greens has actually squeezed out other players that may have been less inclined to take a passive roll, or had the capacity to actually understand, some of the larger issues of fracture and stress and get them on the table?

        The liberal, labor and green parties feasted on Pauline Hanson, she was everything they wanted in an opposition to the duopoly. Ignorant, incoherent and silly and completely distracting. The more she writhed and thrashed and the more the left could jump up on the high-horse, the more clever John could romance away the little bits of fear and hide the fact that it was the duopoly creating the mess.

      • The question is really back to you Smit, why are you taking so much glee in arguing and winning fine points against what is in substance a frustration based inequality argument.

        It’s not glee, it’s anger and frustration.

        Childish morons like rich42 who hate the Greens for no rational reason other than they’re the Greens, while agreeing completely with probably 90% of their platform and mostly with another 9%, are why most of the population are still voting for Liberals or Labor and why we have buckley’s of ever seeing political or electoral reform. Because that same immaturity and irrationality prevents them from considering the merits of any position different from their own, or contemplating some possible position of compromise in the middle.

        “Wahhh. You only intend to reduce immigration by 30%, including most skilled immigrants, rather than stopping it completely like I want ? YOU’RE CORRUPT SCUM AND I HOPE YOU DIE OF CANCER.”

        That’s about the maturity level on display here on this topic.

        The words “cutting off your nose to spite your face” rarely ring truer.

        Why not take the time to look at where the inequality comes from and why does it land with such force in this spot?

        You mean other than a few decades of systemic wage suppression, reducing workers rights, reducing job security, undermining of public services, privatisation of public assets and services, etc, etc ?

        Yes, property prices play a part. But to essentially argue they’re the only problem of significance is ridiculous. It’s as stupid as arguing the world wouldn’t have any problems if it only had, say, 1/10th its current population like rich42 does. It completely ignores the capture of Government by the wealthy and powerful, or implicitly asserts that such a thing couldn’t happen without high property prices.

        The liberal, labor and green parties feasted on Pauline Hanson, she was everything they wanted in an opposition to the duopoly.

        The Greens are not part of the “duopoly”. The “they’re all just as bad as each other” doesn’t stand up to any sort of analysis. Two of the more recent and obvious examples are the responses to metadata and the TPP.

        There is more to the world than cheap property.

      • And there you go – stupidly feeding the corporatist duopoly (that includes the greens and nats).

        The inequality is not about property, it’s about the financialisation of everything with property as collateral for the debt. Understand it, understand why people are frustrated by it, understand why the misallocation of capital is devastating the natural environment, understand that not everybody gets it and the anger is untargeted, and then you can get off your educated gloating high horse and think about solutions that might actually help.

      • “understand that not everybody gets it and the anger is untargeted”.

        I don’t see drsmithy as the genius you do and I’m certainly not uneducated myself. WTF is going on here? I understand exactly what’s going on and I’m saddened I can’t make comments that are on the fringe without being somehow labeled an idiot. drsmithy’s enjoying toying with a 6yo in chess? WTF.

        My opinion differs. It doesn’t mean I’m stupid or I don’t understand.

        The Greens, Labor and LNP are all in it for themselves. There’s not much more to understand. They gain the support of dumb weak humans to operate. That’s where I’m unique to most people. I’m not dumb or weak. In fact I’ve consistently gotten 135 IQ scores throughout my working life.

        All three parties are taking Australia to very bad places. drsmithy is apparently a smart guy but can’t vote beyond the gay thing. Good luck Australia. This place is full to the brim of fucking imbeciles.

      • Understand it, understand why people are frustrated by it, understand why the misallocation of capital is devastating the natural environment, understand that not everybody gets it and the anger is untargeted, and then you can get off your educated gloating high horse and think about solutions that might actually help.

        Now there’s some irony.

        Do you think things like electoral reform, tighter bank regulation, reducing the influence of money in politics, not signing up to things like the TPP, more transparency in Government, etc, might “help” at all ? Or do we just need free-for-all land releases and the rest will take care of itself ? Because that certainly seems to be the position you are taking in writing off everything about the Greens because you think they’re the villains of “crushed land supply”.

      • Out of idle curiosity, when did supply become crushed? What was the legislative action that crushed it?

      • @aj
        This sort of wild speculation about motive is generally dangerous and counterproductive – a wise person knows when they don’t have the information necessary to arrive at a considered judgment. The kind of inferential leaps I’m seeing from you are testimony to how intelligence can be misused and will not help your cause at all.

        @StatSailor
        Fair question although I can’t put my finger on any particular act/s (bit short of time at the moment). From what I’ve read here, it has been a gradual process. The adoption of UGBs, the curtailing of social housing programs and cheap federal government finance of broad acre residential development (via a dedicated government department), the adoption of upfront infrastructure charges and a whole host of local and state govt regs. Perhaps others can assist with the specifics

      • In fact I’ve consistently gotten 135 IQ scores throughout my working life.
        Anyone that needs to quote their IQ in an argument has probably lost the argument. There’s also a big difference between intelligence and wisdom rich, and sometimes I suspect any correlation between the two is very weak indeed.

      • @AlexD. I agree. It’s pathetic. I just got infuriated some are assuming higher ground and that I don’t know what I’m talking about. My opinion doesn’t matter. I’m wrong because they are more intelligent. Well, guess what? They’re fucking not.

        It’s not the first time it’s happened. It happens a fucking lot on this site. It’s BS.

      • It happens a fucking lot on this site. It’s BS.
        LOL. Yes, those damn keyboard warriors butting heads over the web. I think it’s pretty self evident this thread needs to be put to bed.
        Goodnight 🙂

      • I’m satisfied you’re a very smart guy rich, and also suggest you don’t really give two sh*ts about a party working for social issues like gay marriage, immigration etc. you’re frustration is with a party that was patently part of the problem on a whole range of major issues while waving it’s hands about on the ones that didn’t go to the structural heart of the problem.

        But it is untargeted frustration.

        What Smit and Alex are doing is taking the high moral ground because it’s easy and makes them feel good. The same way the Greens and the left threw p*ss balloons at Hanson and became, once again, the useful idiots of the liberal party.

        People frustrated with a situation haven’t always spent 10 years becoming experts at winning undergraduate debates with cute language like ‘projecting’ blah blah. Sometimes the frustrations are rational, sometimes they are not. In the case of Hanson, the frustration was embedded in deeper fears it lacked substance and structure and unfortunately through the actions of the left Hanson become a voice, a voice tinged with darker racist undertones. Hanson was a nobody and would have stayed that way if rational debate was used against her sillier notions.

        As this mess unwinds, voices of frustration are going to be coming thick and fast. The question for the Greens is do they accept their role in this frustration and move forward as a useful voice or do they leap for the high ground and allow some nut-job to come in and be the voice and push all these votes back to the Laberal party like every time before, and once again take us back to where we started.

      • @Smit You want to link its just about land supply because its easy, but did the Greens support a price on carbon? rather than just a simple tax? The Greens are embedded with the existing financial system, they might be trying to take the edge off the nuttier corporatist policies but really they’re not at the table in this stuff.
        @Alex. Your really just want to defend the greens and my comment was just frustration at this absurd undergrad debate on non-issues – as you well know. I dropped my left because i’m tired in the fight, that sort of gloating p*ss balloon smugness is all about why the Greens are the useful idiots of Australian politics.

        You’re right this thread is dead. You like the Greens, that’s nice. Many like the Libs and the Labs with the same passion you have. Meh so few are prepared to be humble before the power of the marketers and the brands – they’re smarter, they’re not manipulated, they get it… of course they do. It just so happened they really wanted a VW Golf, cause they’re cool…

      • People frustrated with a situation haven’t always spent 10 years becoming experts at winning undergraduate debates with cute language like ‘projecting’ blah blah.

        I hate debates (well, except the funny ones run by people like Andrew Denton). They’re not about finding the right answer, they’re about who can construct the best argument. It’s just the nerd equivalent of ‘roided-up musclebound fuckwits walking around the gym flexing.

        A properly constructed, logically sound position based on evidence and consistent reasoning is critical to reaching a productive conclusion, but it is the means, not the end.

        However, I can use more pedestrian language if you’d prefer.

        “You’re making shit up about how you think other people are motivated because that’s how you’re motivated.”

        Hanson was a nobody and would have stayed that way if rational debate was used against her sillier notions.

        Yeah. Those people who were “experts at winning undergraduate debates” should have used some “cute language” in a “rational debate”. That way people like you could have written them off as “taking the high moral ground because it’s easy and makes them feel good” rather than actually engaging with the issues they raise.

        You have the same problem as rich. All the blame aimed at sideline participants with little real influence, hardly any blame aimed at actual perpetrators. After a bank robbery you’d tell the customers in the bank it was their fault the money was gone because they prevent the theft, rather than blaming the guys in masks with guns who actually took it.

        The question for the Greens is do they accept their role in this frustration and move forward as a useful voice or do they leap for the high ground and allow some nut-job to come in and be the voice and push all these votes back to the Laberal party like every time before, and once again take us back to where we started.

        The question is how will their actual policies and beliefs be represented by others. Given historical media experience and on-the-ground commentary from people like you and rich, I’m going to say “dishonestly and with great speculative bias”.

      • (Posted in parts due to stupid spam protection)

        You want to link its just about land supply because its easy, […]

        No, I talk about that because that’s what you’re talking about.

        […] but did the Greens support a price on carbon? rather than just a simple tax?

        Actually, IIRC their initial proposals were for a straight tax. (Posted in parts due to stupid spam protection)

        Though I can’t find anything in Hansard in the five minutes I’m prepared to spend on this, most of the references to a carbon tax or emissions tax from early 2000s press releases or mailing list posts on greens.org.au are for a “carbon tax” or “emissions tax”.

        The Greens are embedded with the existing financial system, they might be trying to take the edge off the nuttier corporatist policies but really they’re not at the table in this stuff.

        You have your cause and effect arse-about-face.

        The political reality today is that if you’re suggesting anything that has even the slightest whiff of a “non-market solution” you’ll get crucified in pretty much every piece of remotely mainstream media, from Crikey to the Telegraph.

        That is how far the Overton Window has shifted.

        Given the representation of “nutty” they already get, how productive do you think going what would be presented as full-retard socialism or communism is going to be ?

        It wouldn’t have been just the media hatchet job that the proposed “carbon tax” got, it would have been a chainsaw massacre.

    • 2 million people chose to work in ‘the worst place on earth’?

      The author obviously hasn’t travelled too far before making that call

      1st world guilt at full noise

      • 1st world guilt at full noise
        Bit of a throw away line. The world we’ve created does isolate us from the consequences of our choices. The fact other places in the world are like this doesn’t diminish the point. Quite the opposite actually.

    • Smithy. there are places like that not 10k from where your wife works at Mt Isa. WW

      • ….and. So there are other places in the world like this. What does that say WW?

        Edit: I’m pretty confident environmental regs are a lot more relaxed in China WW.

  17. H/T 2big2fail – from the Saul Eslake thread.
    Your link spells it out so well!
    ” For recovery to begin again, there needs to be a steep rise in the “real,” or inflation-adjusted, interest rate(s) ….. High interest rates do not stifle the recovery but are the sure sign that the readjustment of relative prices required to realign the production structure with economic reality is proceeding apace. (An initial bought Deflation is necessary for this to happen) Any….attempt to arrest or reverse the decline in…….asset prices through monetary manipulations or fiscal stimulus programs will retard or derail the recession-adjustment process.”

  18. A good analysis of how central banks can wreak havoc in economies. Our RBA is following in the footsteps of the Fed:

    Closer examination of the 2008 crisis reveals a vivid example of misguided Fed monetary policies. During the period of time leading up to the start of the 2008 crisis, between early 2001 and mid-2004, the Fed drastically dropped interest rates, coinciding with a raise in real estate activity that reached unsustainable levels, creating a crisis that followed a typical boom and bust business cycle. Had the Fed been following the NRI rule (the free market interest rate), instead of artificially bringing the interest rate down to such extremely low levels, real estate would not have boomed so dramatically and a crisis as severe as the one that occurred in 2008 would have been avoided.

    It is worth noting that the figure also shows that the Fed started to drop rates at the end of 2000, but it was not until late 2002 that the effect was fully reflected in the real estate market; on the downswing of the cycle, the real estate boom continued into the third quarter of 2005, more than a year after the Fed started to raise rates in mid-2004. Such lags typically occur between the onset of an economic problem and the full impact of a monetary policy

    If the above repeats (all indications point that it would), then we might not get a crash until the RBA starts to raise interest rates again. Means the current cycle will continue for a while. Curious to know what others think?

    The Natural Rate of Interest Rule
    http://mises.org/library/natural-rate-interest-rule

  19. Just on the 0.05% bank tax on deposits that has been mooted.

    What about the RMBS that the banks sell to offshore investors that essentially provide a ring-fenced pool of mortagage assets that in the event of bank failure essentially mean this class of ‘investor’ outranks the bank depositor.

    Do I have that correct? And if so surely if depositors are going to pay for insurance protection they should be top of the food chain in terms of the capital structure of a bank?

  20. ROFLMMAO~~~~

    Behavioural economists expose the illusion of control

    “Pssst … have you heard about this great new investment product called hybrid securities? They’re terrific. Rather than having to choose between high-reward, high-risk shares and low-risk, low-reward bonds and other debt securities, hybrids give you the best of both worlds: high reward, low risk.

    At least, that’s what I think. And it’s probably what the outfit that sold me the hybrids wanted me to think. But it’s certainly not what the Australian Securities and Investments Commission wants people to think.

    It regards hybrid securities as highly complex, tricky investments. They often promise high yields and are issued by well-known companies with trusted brands, but “investors need to very carefully consider the features and risks before investing”.

    Why do people turn to economists for forecasts, even though they are hopeless forecasters?

    So keen is the commission to make sure it’s getting the message through to potential investors that it did something unusual: it resorted to the behavioural economists – those who, rather than assuming everyone always acts rationally, use psychology to discover how real people make decisions – to help it understand what it is that attracts people to hybrids.

    It commissioned the Queensland behavioural economics group at the Queensland University of Technology Business School to conduct some experiments. The group assembled a lot of business-school uni students and gave each of them 100 units to be notional invested in a portfolio of bonds, hybrids and shares, getting them to take it seriously by promising to let them keep any profit they made.

    First, however, it asked each student a bunch of questions designed to establish whether their decision-making was influenced any of a range of “cognitive biases” rather than solely rational consideration of the options.

    Investors are known to be commonly affected by such “heuristics” (mental shortcuts) as the availability bias, representativeness bias, framing bias, recency bias, overconfidence, illusion of control, competence bias, ambiguity aversion and mental accounting.

    So now, gentle reader, it’s time for me to ask you some strange questions on this long weekend”

    http://www.smh.com.au/business/the-economy/behavioural-economists-expose-the-illusion-of-control-20150404-1mdk7b.html

    Skip here…. Reminds me of an old Hollywood jump I did back in the days out of a CH-47 @ 9k+ ft.. Wind Dummy went out at first pass, after pathfinders established flight path perimeters to adjust for atmospheric conditions, said Wind Dummy was visually lost by both ground and air crews.

    Due to constraints such as fuel and time the decision was made to jump anyway. So 11 individuals in the chalk exited the CH-47 via the tail gate and enjoyed the rotor down wind elevator effect until static line was fully deployed and detached.

    Now… after running through the post detachment parachute checklist, to ensure all equipment was functioning properly, it was time to reconnoiter the operational environment – check space [noone dancing on top of your parachute – collision courses – anticipate maneuvers to need to land in at specific DZ spot. Well to our collective surprise the DZ was damn near the horizon, seems wind speeds were fluctuating and near the high end of the boundary 13+ knots. w/ periods of calm 1 – 3 knots, we jumped at the lower bound.

    As such the DZ was completely out of the question, as I watched everyone else in the chalk rapidly descend to a fine set of choices, swamp, dirt road with power lines just off to the side, dense Georgia pines [Loblolly Pine (Pinus taeda) 90-110 feet], or a concrete emergency runway w/ aforementioned pines just 10 – 15m each side.

    Myself and the jumper in front of me chose the latter, with me tracking him upon approach, so it was almost a case of seeing the future unfold just moments before my reality – event horizon manifested its self. As his altitude descended to a few hundred feet across the tops of the pines he endeavored to sail into the heads winds [crosswind on runway] and then turn sharply to land on the grass median between the concrete runway and the pines. Sadly he over shot with both speed and altitude which necessitated him to over correct, pulling hard on right toggle over the runway. This action produces two effects, massive pendulum effect [body 45+ Degrees to the horizon] and a massive air brake effect. As I watched my nascent probability unfold, before my very own eyes, he hit the concrete runway like a 80Kg fish hitting the deck of a trawler and settle in for a good Sunday arvo cricket kip [K.O.’ed]. Good thing the pines blocked the now upper bound winds return and dragged his inanimate body all over the place.

    Fortunately I used this observation to to adjust my flight path by just tip toeing above the pines before making a much less acute turn, landing on the grass with a nice little PLF [perfected landing fall {aka controlled crash}]. After which I rendered EMT aid until the recovery truck finally found us, seems the chalk was spread over more than a grid square, we being the last found.

    Whats the point of all this…

    Wellie… the wind dummy is a safety protocol, that if extingent probability – circumstances occur – is that they are reported, this is a loss mitigation tool. This was blatantly disregard due to a number of extraneous factors which did not supersede the authority of the safety protocol. In fact the wind dummy did a tree landing where he almost went straight through the canopy, only to get hung up 40ft off the ground, inducing a swing, which then precipitated w/ him smashing into the trunk, and then fell free to the ground, in an unconscious state. As the wind dummy carries a field radio, its their responsibility to radio back and confirm the fight perimeters set by the pathfinders upon landing, this was arbitrarily disregard, even with all precursors and to thereby characterized the probability of a worst-case scenario. Just so some could get jumps in to fill out their log books, in order to meet jump hazard pay requirements [3 jumps per month {pay period}] and work for higher jump certification [senior – jump master blaster wings].

    Skippy…. Well informed Rules are a loss mitigation tool…. tho if they are not binding and applied it can be even worst than none at all… as it effects the information used to make sound decisions in society by its members. – en fin.

  21. The Fed and the Filthy Rich: An Interview with Mark Thornton:
    http://mises.org/library/fed-and-filthy-rich-interview-mark-thornton

    Key message: Worst crisis than 2008 crisis coming in the intermediate future. Possible catalysts: junk bond market (US oil & gas fracking defaults) facilitated by further pressure on oil prices (with Iran’s coming back into the world oil market), against the backdrop of an overvaluated stock market (especially social media stocks).

    This time, our banks and our friends at the RBA will be like a deer caught in the headlights..

    • FYI the AET school was pivotal in establishing the economic foundations which preceded our currant economic predicament. That Thornton now tries to burnish this stripes image by ???-predicting-??? an obvious economic drama…. has to be the latter case of “first as a farce then as a tragedy”.

      Skippy… coming from the “Boom and Bust” school of intellectual capacity… it has to be the height of self fulfilling prophecies… quasi religious platitudes have been known to have such deleterious cognitive effects…

      • @skippy
        Putting ideologies aside, do you have specific issues with the points he’s making in the interview?

      • Yeah… his shtick is reminiscent of some tent revivals I experienced as a kid in the mid west.

        Now if you want to crack a fat about the Fed one might consider its operational biases – e.g. quasi monetarist [neoclassical, AET only issue with this – is – its not fully monetarist {AET}]. Yet the staffing of the Fed has changed over time to be completely staffed by Economists, Economists which are beholden to a ridged ideological position via their narrow economic tutelage under influences from AET to neo classical [you would have a hard time getting a tally-ho between the two in order to find any delineation – mostly government attitudes].

        Its just a typical AET libertarian anti government rant rapped around a reductive reasoning excessive where all things are momentary in nature, in the first order of events. This is in complete denial of more expansive and granular observations of sociopolitical – economic events.

        Skippy…. gezz… his tautological repetitive use of the term “Free Markets” is akin to a Bernays subliminal advertising campaign.

      • Here’s a more cogent framing of the fundamental issues at hand.

        “Here’s what’s at stake for me: if you imagine currency deriving from barter, money as a neutral mediator between private hard-working equals, it positions state spending as an external supplement to the economy. This external status is then used to justify unemployment, deregulation, and public spending limits. Conversely, if we begin with government and conceive of all money as a public utility that the private sector variously uses, it allows us to argue that government can and should spend to sustain full employment, living wages, and the public good.” – Scott Ferguson

        Now for something completely different…

        Here’s a super reflexive and ironic episode of Teen Titans Go! designed to teach children something about money. It couldn’t be more neoclassical in its orientation.

        https://www.youtube.com/watch?v=UqdXvRNdRbI

        Please refer to the comments section for further deliberations.

        https://www.facebook.com/groups/MMTDeficitOwlCommittee/847248542014965/?notif_t=group_activity

        Skippy…. its hard to take groups seriously which lack a modicum of introspection, yet pathologically externalize every single problem, veritably to the same narrow set of perimeters.

      • skippy,

        Only thing is money did not derive from barter. There is no historical evidence that people went around going “Ill give you 20 chickens for that cow”. What happened was people would borrow from their neighbours who would then ‘owe them one’. Hence a credit system evolved.

        The only evidence for barter is when there was already money existing, and it goes away owing to hyperinflation of societal breakdown etc

        for more:
        https://www.youtube.com/watch?v=SnOqanbHZi4

      • @V,

        Well aware that money is not a result of barter and so is Scott.

        Scott is just fleshing out the perspective some hold as Truism contrary to historical evidence and as such proved a countervailing perspective, which is informed by history. You will note his pointing out the barter theory used as an apologia to justify unemployment, deregulation, and public spending limits.

        It basically boils down to how you couch the topic, per say how some lose the plot over Americas near 20T Debt but conveniently forget to its off set by near 200T in Government assets, yet the largest transfer of wealth in its history occurred post GFC.

        BTW it was my pleasure to be one of the first at Naked Capitalism to introduce David Graeber to the commentariat. Graeber, Philip Clarke [Pilkington] and myself thoroughly enjoyed many a conversation with some of the AET and neoclassical gang over at NC back in the day. Good times…

        Skippy…. BTW highly recommend – The Encyclopedia of Central Banking
        Hardback

        By (author) Louis-Philippe Rochon, By (author) Sergio Rossi

        “The Encyclopedia of Central Banking provides definitive and comprehensive encylopedic coverage on central banking and monetary theory and policy. Containing close to 200 entries from specially commissioned experts in their fields, elements of past and current monetary policies are described and a critical assessment of central bank practices is presented. Since the financial crisis of 2007, all major central banks have intervened to avert the collapse of the global economy, bringing monetary policy to the forefront. Rochon and Rossi give an up to date, critical understanding of central banking, at both theoretical and policy-oriented levels. This Encyclopedia explains the complexity of monetary-policy interventions, their conceptual and institutional frameworks, and their own limits and drawbacks. The reader is provided with the body of knowledge necessary to understand central banks’ decisions in the aftermath of the global financial crisis and controversial explanations of the crisis are illuminated from a historical perspective. Academics and students of economics will find this an indispensible reference tool, offering current and necessary insight into central banking and monetary policy. Practitioners in the financial sector will also benefit from this refreshed insight into this fundamental topic.”

        http://www.bookdepository.com/book/9781782547433?redirected=true&v=A75X6&selectCurrency=AUD&gclid=CNe9sJmz4MQCFdd5vQodaSAA7A

      • Skippy, thanks for your taking the time with your missives and links – very enlightening for me.

        You’ve previously extolled the virtues of real assets, including precious metals, in an individual’s asset portfolio. I’m trying to reconcile this with your comment on the ’20T Debt off set by near 200T in Government assets’. Are these tangible or financial assets? There seems to be a difference for the individual but not the State.

      • @rage,

        I’ve never extolled the virtues of any asset, as none are capable of moral or ethical acts.

        To hold any physical metals or precious stones [which value is a factor of bottlenecks and cartels] in physical form has more to do about psychology that it does about financial security. The only time it might be of use is in extreme cases and only if you can find someone to take it in exchange E.g. its a mental hedge as much as a financial one. Most of the people that make money with these assets are on the sell side or via exchanges. Per my missives… in dire circumstances I rather carry food, water and medical supplies, the aforementioned stuff in like putting rocks in your ruck sack.

        Tangible and financial assets are about at par with domestic debt [asset] a third of ether, tho if you want a more precise view you’ll have to dig through the Z.1 Financial Accounts of the United States Report..

        Skippy… Of course their is a difference between the individual and the state.

      • Thanks Skippy,
        yes, I now recall your point about cartels.

        My question was really about the state’s tangible v intangible assets i.e. intangible and financial assets comprise the majority of that 200T – what is the real value compared with the 20T debt?
        You’ve answered it: ‘Tangible and financial assets are about at par with domestic debt [asset] a third of ether’

      • @Rage… Sorry that was a typo, amends…. Tangible and Financial are near par, —- domestic debt [asset] is one third of ether. So domestic debt is separately one third of tangible or financial assets. When making these distinctions it should be noted that all are subject to moving valuations, Tangible is just as suspect as financial to underwriting standards, bottlenecks and cartel behavior as reflected by price.

        Skippy… one has to wonder what the price of once prime central Calif Ag land is after a few years of extreme to extraordinary drought as well as bonds issued by fracking concerns.

  22. Looks like a readjustment to NewsPoll numbers that appear to be more in line with Morgans etc.

    “Nationally, Labor leads the Coalition 55-45 two-party preferred.”

    Not good news for the Libs in the mining boom state either:

    “Labor leads 54-46 on a two-party preferred basis in WA, overtaking the Coalition during the March quarter.

    Now the scary part:

    “Opposition Leader Bill Shorten leads Mr Abbott 44-34 as preferred prime minister.
    He is now ranked as better prime minister in all states for the first time.”

    Wanna be a bloody good budget Tony or you’ll be consigned to the history books as Australia’s worst PM, it’s most unpopular and probably least effective.

    “Newspoll shows Coalition support dips to 14-year low in West Australian stronghold; Bill Shorten ranked as better PM in all states”

    http://www.abc.net.au/news/2015-04-06/newpoll-shows-coalition-support-dips-west-australian-stronghold/6372240

    • Just spotted that myself.

      It would almost seem that someone in power here has decided there is a national strategic interest (hence policy) to have media players to run local operations as loss making (one way or another)

      Australia allowing its national media to be used as loss generators by 3 national TV broadcasters and 2 national print media plays.

    • Well, that just makes pirating everything that I’d normally need a Foxtel subscription for all the more satisfying.

      • I’m a Latter-Day Luddite, but this sort of sell-out to the Big End and multi-nationals makes me want to get into pirating full time, just for the hell of it.

        ‘Rage’ was partly a nod to the late-night weekend ABC (is it still on? I haven’t watched tv in 12 years) but the other, more general, meaning is now dominant. If I ever watch tv again it will only be pirated.

      • This makes the meta-data case – which is really all about pandering to lobbyist copyright aspirations all the more hilarious.

  23. Here’s a couple of good reasons why Hockey won’t do a thing about multinational tax avoidance.

    Firstly, the boss is making a killing of it:

    “Rupert Murdoch’s US empire siphons $4.5b from Australian business virtually tax-free”

    http://www.canberratimes.com.au/business/rupert-murdochs-us-empire-siphons-45b-from-australian-business-virtually-taxfree-20150405-1meu0l.html

    …and Hockey won’t shit in his own bed. The boss is screwing Australians blind, with the blessing of Government, while the FIRE sector are making sure the rules are never changed;

    “Of the $4.8 million banking and finance companies declared as donations in 2013-14, nearly 75 per cent went to the Coalition.”

    “Political donations: Mining hits back at Labor”

    http://www.canberratimes.com.au/federal-politics/political-news/political-donations-mining-hits-back-at-labor-20150405-1372gf.html

  24. The links to MW’s latest on tax rorts is why I’ll never vote for an increase in the GST or the hit on low income earners etc.

    We don’t have a spending issue (in most respects), it’s a taxing issue, or lack of it! We have a problem of gov (of both political persuasions) not having the balls or being ideologically driven not to take on those who have the most to lose.

    If these companies paid anywhere near the corporate rate of 30% Treasury would be rolling in it.

    • Exactly, what budget problems we have are revenue side, not outlay side.

      But it is disturbing when the main medium of communication between governing and governed is so spectacularly compromised.

  25. Assume this paranoid level of security and protection will be rolled out to all Federal government agencies and shopfronts? I think it mealy reflects the siege mentality of government and politicians in general knowing full well the only love they get is a bukkaki session from their donors.

    “Armed federal police to patrol press gallery in Parliament security crackdown”

    http://www.canberratimes.com.au/federal-politics/political-news/armed-federal-police-to-patrol-press-gallery-in-parliament-security-crackdown-20150406-1mf4k2.html

    • No, I think it points to a mentality of relevance deprivation. The pollies (as well as the media) and I think a large majority of Australians have a need to feel we’re part of the BIG world. That isn’t the case unless we’re a target for terrorist and have all the trappings of the like you see in the US (bs security EVERYWHERE).
      We have to be “punching” above our weight (and I’ll punch the next pollie I hear say that) etc, whereas the reality is unless there’s a humungous bushfire/shark or fauna attacking tourist we just don’t really rate and it seems to prick at peoples egos.

      • “mentality of relevance deprivation”, spot on.You coined the right word(s) here, and it’s applicable not just in the security area..

      • Maybe our Tony can place armed AFP officers at every bank in the country to provide reassurance.

        Nothing speaks calmness like the muzzle of a glock.

      • MB, this is where data retention will also come in handy. If the plebs try to withdraw via online funds transfer, they can be potentially treated as suspicious transactions intended to fund terrorists and therefore blocked for an indefinite period !! 🙂

    • I am moving my money out of AU banks.

      When asked to put a description in the online funds transfer page on the UBank website, I put “FUBank” .. short for F@#k U Bank 🙂

    • Stupid! We don’t need no stupid savers! We can just print everything we need! FFS get with the damned programne here!

      • Fl, just to be a bit contrarian, why should savers be rewarded with interest in a deflationary world? Doesn’t that just put them in the queue of rent seekers?

  26. SMH:
    Sydney investors: Why settle for one unit when you can have the whole block?
    http://news.domain.com.au/domain/real-estate-news/sydney-investors-why-settle-for-one-unit-when-you-can-have-the-whole-block-20150406-1mdor8.html?rand=1428299272193

    From article: (quoting a director of Ray While Double Bay):
    “We’ve got low interest rates, record investment coming in from China, it’s so easy to borrow money and there’s talk of rates dropping again,” he said.

    “What’s going to stop it?”

    hhhmm… What’s going to stop it? Time to bring again Nassim Taleb’s turkey story: “Let’s Not Be Turkeys”
    (http://www.riskmanagementmonitor.com/lets-not-be-turkeys/)

    In today’s keynote luncheon at RIMS 2010, Nassim Nicholas Taleb, best-selling author of The Black Swan, told the story of a turkey who is fed by the farmer every morning for 1,000 days. Eventually the turkey comes to expect that every visit from the farmer means more good food. After all, that’s all that has ever happened so the turkey figures that’s all that can and will ever happen. But then Day 1,001 arrives. It’s two days before Thanksgiving and when the farmer shows up, he is not bearing food, but an ax. The turkey learns very quickly that its expectations were catastrophically off the mark. And now Mr. Turkey is dinner.

    Taleb’s advice: “Let’s not be turkeys.”

    The lesson of our doomed turkey illustrates the central problem of unexpected, “black swan” events (or in this case “black turkey,” I guess). We simply do not have enough data to reach empirical conclusions about how a risk will manifest itself and to what degree. “Just because you never died before, doesn’t make you immortal,” said Taleb.

    Part of the issue is in the semantics of how we talk about risk. We have created what Taleb called “an illusion of measurement.” By saying, we can “measure” the risk in a particular situation, we are implying that there is a definitive answer. “We should not be using the word ‘measuring,’” he said. “We should be using the word ‘estimating.’” It’s a psychological difference that allows us to gauge “riskiness” more appropriately.

    Taleb pointed out that the issue is magnified by the increased complexities and interdependencies of today’s society. There is a greater potential for the unexpected in a society characterized by extreme randomness and connected in ways that it never has been before. You would only have to compare how a theoretical run on a bank would happen today as opposed to 50 years ago. Once upon a time, if you wanted to pull your money out of your bank after learning of its imminent failure, you would have to physically go to the bank, likely stand on line, and possibly even change your mind after being forced to wait half the day. Now you can get the news on your Blackberry, log into your bank and automatically withdraw the cash in seconds. And so can everyone other bank customer around the world. Voila. Instant crisis.

    The situation may not be encouraging, but Taleb put his faith in good risk management. “Unfortunately, we live in a world that doesn’t understand risks,” he said. “Hopefully, risk managers would run society and not bankers.”

    They certainly couldn’t do any worse.

    • There are trillions of foreign dollars (and billions of people) looking for a home.
      There is a completely captured polity that knows house price declines are fatal.
      There is a population addicted to the housing ponzi at almost any cost.

      I’d say the dir at Ray White has pretty good odds on winning this bet.

      • Not so sure.. China’s “miracle” story has a very good chance of unwinding (in a not so orderly way). Interest rate manipulation by central banks (here and elsewhere) has created significant distortions in the market and added more fragility to the system. Wouldn’t be wise for me to comment (precisely) on how and when things could unwind (that’s the essence of Taleb’s theory, no one can). But the key question one can ask: Is the system more fragile (and susceptible to shocks) now than before?. The answer is a resounding yes. So called “investors” are treating “property investment” as risk free investment, now that’s not very reassuring..

      • I wouldn’t disagree. I’m just reminding myself how easy it was for the status quo to manipulate the outcome after the GFC.

        I’m less inclined to belief in black swans and more inclined to believe that power and wealth win in the end regardless.