Weekend Links – September 8

Global Macro:

  • Xstrata to fight Glencore’s new bid – Telegraph UK and a slightly cynical look at who else might win from the new bid, Bloomberg
  • If I didn’t have to spread sheet I don’t think I’d have a PC or laptop anymore. Intel uts sales outlook on weak PC demand – Reuters
  • Macro Morning will be back Monday and we have some really interesting price moves to talk about but in the mean time here is Bloomberg’s wrap.

United States:

  • QE 3 coming next week – WSJ Blog
  • Bill Gross agrees – Bloomberg
  • Forbes wondering if it was QE 3 bad – here
  • US Stocks wobble after weak jobs report – Sky
  • Wall Street closes at multi year highs – Reuters The different takes are interesting aren’t they?
  • Ritholtz making the point that this is the most hated rally in history – Big Picture
  • This is one of the most compelling battles out there I think – Amazon v Apple. Fortune

US Jobs Report:

  • 96,000 jobs disappoints – BBC and Bloomberg 
  • Jobs were weak but unemployment rate dropped – here’s why. WSJ
  • Chances of QE just rose after jobs report – WSJ blog


  • Super Mario reaches German politics – FT
  • Merkel defends the ECB in Germany – Reuters. Proof Draghi is winning?????
  • Nationalist backlash in Italy and Spain over Draghi plan – Telegraph UK
  • Here’s why, “Asmussen says hard reforms a condition for ECB bond buying” – Reuters
  • A big September for Europe – CME Group 
  • Spain to discuss bailout next week – Reuters
  • Morgan Stanley reckons Draghi is going to deepen the European recession – BI


  • APEC CEO’s downbeat – Sky
  • China approves $157 Billion in infrastructure – Reuters
  • China’s big infrastructure projects in one slide – Business Insider
  • Chinese steelmakers lost money in July – WantChinaTimes


  • MSM goes all MB – Peter Martin on how the China slowdown is going to impact revenues – Business Day
  • Alan Mitchell channelling us as well in the AFR on falling back to earth – here
  • It was always going to happen – “labor goes after super tax breaks” – AFR Watch what happens to the big pool of super over the next 20 years. Government intervention and direction of investment funds anyone?
  • BHP sells RBM stake to Rio – Sky
  • Qantas rating lowered – Sky
  • Mirvac is pushing Tinkler – AFR free version at Business Day here.


  • Couple of surfing Pictures, roll on Summer – here and here
  • This is something I’m not sure I would cope with – Swimmer circled by at least 10 sharks. Yahoo
  • This is amazing – Bionic Eyes. Bloomberg
Latest posts by Deus Forex Machina (see all)


  1. “the “outright monetary transactions” (OMT) … will be remembered as another terrible idea conceived by the European institutions tasked with quelling the euro crisis.” Well put!

    • Janet, you might enjoy Doug Noland (Prudent Bear) “Diverging like its 1929”.


      Noland was way ahead of the pack (Roubini et al) when it comes to issuing warning.

      And this is where it gets complicated, even for those that deplore the can kicking – austerity, facing the wrecking ball, whatever, is just so f*ing unpalatable and painful. Recent Paul Krugman article advocated dramatic and unconventional QE measures, ECB, China will follow suit – “whatever it takes” to borrow a few words from Noland.

  2. “This is something I’m not sure I would cope with – Swimmer circled by at least 10 sharks.”

    De, I think you’d be fine isn’t investing just like it but with at least 20 sharks ?

  3. An observation from The States, “..People are selling any and everything to raise some cash: birds, snakes, used iPhones, laptop computers, clothing, furniture, you name it.”

    • Deus Forex Machina

      Yes – writing every day or every week makes it hard to come up with something interesting unless you are one of my colleagues here at MB it seems.

      But forgetting what one wrote as if you never did is disengenuous in the extreme.

      It’s like those who are still saying the RBA got it wrong in cutting rates because they can’t admit it was themselves who cant understand what is going on in the Australian population or micro structure of the economy.

      • DFM I recommend you read the debates we have here on MB about even more negative interest rates than we already have. If you’re arguing against those who have a bullish view that is one thing. However please don’t lump the rest of us in with that view and say we don’t understand.
        “It’s like those who are still saying the RBA got it wrong in cutting rates because they can’t admit it was themselves who cant understand what is going on in the Australian population or micro structure of the economy.”

        On the contrary some of us understand very well what is wrong with the Australian economy and, as argued here this week, lowering interest rates is NOT the answer.

        • What IS the answer? Don’t tell me it lies back in time – why should my generation take the fall for someone else’s mistakes?

          (I am not being flippant. Genuinely interested in alternative solutions)

          • Deus Forex Machina

            The answer I think is to stop writing didactic commentary and start asking questions…

            For me the big question is how I can look at the same data that say Adam Carr looks at yet get a completely different version of what is going on…not slagging AC off, he’s just the one that is top of mind.

            That is the big question – how can the RBA have got it wrong on what is happening in the economy which caused them to cut so aggressively

            what is it we as an industry are not doing correctly in either measuring the growth in the economy or understanding the drivers of growth that are causing the disconnect in what the main stream of australian households think is happening and thus impacting their consumption and what the aggregate numbers are saying

            more questions is the answer for mine

          • Yeah, always amazes me how two economists can look at the same data and make completely different interpretations. I mean, in Adam Carr’s universe the world economy is booming, there’s virtually zero risk of a Eurozone breakup, the US is recovering strongly, Asia is just beginning a 100-year boom, and Australia is going gangbusters.

            The problem is, in recent years the data has been inconclusive and both the optimists and pessimists can rightly claim to be correct about half of the time. You’d have to think it will break one way or the other soon though.

          • Well (this isnt an answer but more questions) I find myself asking this all the time too.

            I think (when I think about it) that this is probably the wrong way to think about it because I keep thinking I should try and make reasing practicable (and not pure).

            So I keep coming back to the basic questions of

            Which direction is the economy most likely to move?

            What are the drivers of that directional move?

            How do the drivers change?

            and after I flesh out general thoughts about that sort of stuff (without ever coming up with clear answers) I tend to start wondering how I can trade/invest to get structural gain.

            I suppose I tend to be (when not working) an each way punter as I often default (including on posts here) to a sort of ‘this is wrong’ way of seeing things – particularly currently (in no particular order) Mining boom, RE bubble, gross asset misallocation at a societal level, and what I tend to see as a generational issue in terms of access to wealth.

            So from that sort of point I suppose (as I sit here an mull it all again) that involves having a conceptual framework (knowledge of economics/finance etc) which will have a certain conceptual purity to it, then understanding that that purity will be lost in the national decisionmaking processes (politics – of which I – like most – am an infinitessimally small player)

            so without ever coming up with an answer I would observe that at some level the pure conceptual answer needs to be cultivated in the national decisonmaking processes.

            I will cogitate more over lunch.

          • The other thing I wanted to note was that I strongly agree with Mav’s point about ‘why should my generation take the fall for someone elses mistakes’ and tend to see the status quo as leading to precisely that.

          • The answer I think is to stop writing didactic commentary and start asking questions…

            Amen to that but I won’t hold my breath for the MSM to do that in a hurry. Malcolm Turnbull was spot on with his criticisms of the MSM and political system and nailed it when he said the Opposition (well Abbott) spends an excessive amount of time and energy on just two populist issues. The other issue is that admission of getting it wrong, especially politicians who now steadfastly believe they have done no wrong – cognitive dissonance.

          • Yeah, always amazes me how two economists can look at the same data and make completely different interpretations.

            I thought all economists could look at one set of data and give at least two completely different interpretations “One the one hand … on the other hand …”. Hence Reagan’s (I think it was him) quip about wanting a one handed economist.

          • why should my generation take the fall for someone else’s mistakes?

            Dumb luck.

            Life isn’t fair.

          • What IS the answer?

            Need to encourage saving and production, discourage borrowing and consumption.

            Specific measures: double GST immediately. Lower income and company tax. Incentives for R&D (make sure that they are benefiting only real R&D, even if that means substantial bureaucracy). Incentives for import replacement and export companies. Stop wasting money on green boondoggles, that should cover the cost. Land tax to replace stamp duty.

            That is just off the top of my head, but it should do for a start.

          • Alex,

            Looks like the greatest Treasurer in the world doesn’t agree with you. As a matter of fact he is doing his level best to scare business into limiting new investments ( and thereby limit new employment opportunities). What a smart formula;


            “”The government is threatening to take away the investment incentives that helped create the current strength of the Australian economy,” said one executive.

            Those outside the mining industry suspected the government would cut the concessions without honouring the tax-cut promise. “This is an unbelievably cynical exercise,” said one.”

          • Mav,

            On the evils of debt fuelled consumption we agree. The problem is , consumption fuelled by Debt goes back a long way in our modern economy. All the way to fractional reserve banking, The Fed and before that , the BoE.

            When money is issued into an economy essentially as Debt, how could it be possible for consumption to NOT be fuelled by credit/debt? Excessive consumption fuelled by excessive debt are just extensions of that root flaw.

            Simply put, debt becomes slavery. So, who exactly is issueing the debt? Who are the Masters?

        • Deus Forex Machina

          No Flawse not bashing anyone here

          I have a few particular commentators in mind who I think if people put money on their calls would have been blown to bits yet that is never taken into account.

          I guilty though of getting to bearish on the Aussie a little while back so we all do it – its just next time i write an Aussie piece I’ll be saying I got it wrong up front


        • “why should my generation take the fall for someone else’s mistakes? ”

          Sliming a whole generation is not being flippant?

          One Answer: Harden up, princess. The solutions you ( we all) are looking for are with you/us as individuals somewhere. And the salve of bile will likely make their discovery more difficult.

          • “why should my generation take the fall for someone else’s mistakes? ”

            Actually I don’t think it is a generational thing as such. It’s more an indulgence of the profligate consumer as against the prudent producer.

            The producers and prudent of the boomer generaration got particularly shafted.

            The next generations just seem to have magnified the problem and now seem to sit with some sense of grudging entitlement.

            Like all generalisations this doesn’t apply to everyone and certainly not aimed at anyone here in particular.

          • dumb_non_economist


            I’d say that their are plenty of BB’ers who are profligate spenders and if those generations who came behind are the same or worse their parents need look nowhere but in the mirror. I’ve done my part, my daughters are not consumers and have a work(study) ethic that would impress anyone, so much so I don’t like it!

            Mav and others of his age (I gather early 30s at most) have every reason to be annoyed, unfortunately Mav, the numbers are against you.

            By the way, the BB’ers I’m referring to are at the younger end of the range.

          • GSM, I was too tired yesterday to respond to your reflexive extreme right wing “solutions” and unsolicited personal financial advice.

            I wasn’t generalising at all – I was merely pointing out most of my generation weren’t even born when the trend towards debt fuelled consumption started.

            Yes, most of my generation picked up the habit, but they didn’t start the trend. My question was how to reverse this trend without harming a lot of people of my generation.

            And you had to turn up and attempt to make this into a Right versus Left ideological slanging match.

          • I would like to add that consumption isn’t bad per se. We wouldn’t have a market if there were only producers and no consumers!

            IMHO, debt fuelled consumption is bad.

          • Mav,

            This was your question;

            “why should my generation take the fall for someone else’s mistakes?”

            I can’t see that you referenced debt fuelled consumption. It read like another “woe is me” moment.

            My answer is posted and I can’t see anything political in it whatsoever. Not that it would stop you falsely insinuating something entirely different .

        • ““Yeah, always amazes me how two economists can look at the same data and make completely different interpretations.”

          Economists are like chefs with recipes. Same ingredients yet producing entirely differing outcomes. The good “chefs” always cater to the tastes of those who are paying them. The trick is finding out who the chef is actually cooking for and where he did his apprenticeship. No mean feat these days.

          (Apologies to all economists btw) 😉

      • To Peter Martin’s credit he has at least come around to the view the strong dollar is causing damage, and that stratospheric iron ore prices might not last forever. It took a very, very long time though, and I think Tim Colebatch has had an influence.

  4. Peter Schiff on QE

    Peter m,ay have not got every stupid gyration of this insanity right financially but he sure as hell has the big picture down pat.

    To have got every gyration right you’d have to be as mad as the Central Bankers and as criminal as all the crooks in the Banks.


    “The Fed is trying to build skyscrapers on a bad foundation. Each subsequent structure it builds not only collapses, but also weakens the foundation that much more. The result is that subsequent structures collapse at increasingly lower heights and require more effort to build. Instead of trying to build, the Fed could concentrate on repairing the underlying foundation. That might delay construction, but in the end the buildings will be much sturdier.
    Because the Fed has kept interest rates too low for too long, Americans have saved too little and borrowed too much; consumed too much and produced too little; and imported too much and exported too little. Too much of our labor is devoted to the service sectors and not enough to goods production. Too much capital goes to Wall Street speculators and not enough to Main Street entrepreneurs. We built too many homes but not enough factories. We have developed too many shopping centers, and not enough natural resources. The list of Fed induced misallocations goes on.
    By trying to preserve the jobs associated with this old economy, the Fed prevents the market from creating the ones we actually need. Unfortunately no one seems to understand that, and we continue to chase blindly after failed economic models. Look for such misunderstanding to be on high display this week in Charlotte as Democrats gather to call for even greater intervention to perpetuate a failed economic model.”

    Those who advocate even more negative RAT interest rates here should take note.

    • Yes, that is the nut of the problem.

      One thing that is very unfortunate is the tendency for hysteria the moment anyone suggests that a fundamental part of the necessary adjustment is less reliance on interest rate manipulation.

      Just because one thinks interest rates are too low doesnt mean that one thinks the economy is going gang busters. The Bear Hawk is a rare specie but quite different to the Bull Hawke.

      The binary interest rate/inflation mindset is the paradigm that many struggle to see beyond. Inflation provides no guide to interest rate policy when inflation is low.

      The adjustment Schiff describes is critical and will be a challenge and will require intelligent and possibly quite proactive policy to keep people fed and clothed if not living in quite the manner they have been accustomed.

      It does not mean cranking up interest rates to drive the economy into the ground but it does mean allowing them to drive the readjustment to a less highly geared economy. Simply requiring greater reliance on domestic savings for investment (we have seen a bit with banks reducing their reliance on wholesale markets) will probably be sufficient to encourage more appropriate interest rates, more saving and less debt fuelled consumption.

      Keep in mind that we are still choking on debt and at best the rate of increase has slowed.

      We will never make the adjustment if all we get is complete hysteria at the slightest mention of reduced reliance on the interest rate lever or allowing asset price levels to adjust – downwards.

      We need courage, commitment and compassion but the journey cannot be avoided.

      • The Fed is currently pondering QE3 because the recovery is so fragile. Even with record low long-term rates, Corporate America thinks there’s a lack of profitable investment opportunities. Yet Shiff thinks raising interest rates is the solution. Why are American companies going to turn around and start building factories because the Fed raises rates? Shiff’s argument makes no sense.

        • Well it seems clear that people are not as silly as they look when they resist the idea of taking on debt to undertake investment opportunities that ONLY make sense at near zero interest rates.

        • Or to put it another way. The only way to defuse an economy built around debt is to gingerly retrace ones steps. Moving forward repeating the same mistakes will not work – at least not for much longer.

          The only real issue is how fast we should retrace those steps. I am not saying at a reckless pace but to date we have simply slowed our forward direction.

        • So Sweeper how is lower interest rates, re-inforcement of all the old consumption models and resulting more debt the solution?

          • Why are you assuming that lower rates will lead to excessive consumption and more debt? They won’t, because households are wary of debt and banks now consider household lending (even when secured against land) as being risky. Lower (real) rates will increase spending – that is the only thing that is guaranteed.

            The US has 2 challenges. They need to grow now, and they need to rebalance over time. Since households want to save, the obvious way to achieve both is to encourage business investment and narrow the trade deficit (even run a trade surplus). Lower interest rates will help achieve this.

            I don’t actually disagree with what Shiff says about the US needing to move away from services and back to manufacturing. But his prescription (higher interest rates) is nuts. Why will business invest in plant, if the Fed is promising to further cut demand for their goods? To put it another way, why would a sane CFO start putting cash to work if the Fed were promising deflation?.

          • A bit hard to see how the US can reduce interest rates when they are already at 0.25 per cent.

            The interest rate lever has clearly failed. This suggests that it wasn’t the right tool for the job.

            Removing payroll taxes combined with incentives to hire new workers and incentives for export -oriented business might have some favourable impact.

          • It’s not that hard – just raise the inflation target to 5%.

            Payroll tax exemptions would be a good idea. More small business tax breaks would be good as well.

          • Raise the inflation target to 5%!

            Good grief – if distorting the economy with manipulated interest rates is not enough, your solution to that disaster is to drive inflation through the system.

            It is the lever pulling mad scientist approach to economics that is causing the problem. How about backing off the lever and just accepting that when an economy has run on debt steroids for 20 years an adjustment process will take place if you are serious about weaning yourself off the junk.

            There is not always a hi-tech pill you can take or lever you can pull to make a problem go away. Sometimes all you can do is take an aspirin, keep warm and get through the detox as best you can.

  5. Mining robber barons (a lil poorer these days) promise to undermine democracy yet again with millions of $ in ad spend, and roll yet another Prime Minister?

    Relations with business sour as hopes of tax cut fade

    The miners, who threatened an advertising campaign if the government touched the diesel rebate in the budget in May, are again threatening to fight back if it is touched to help pay for promises like the Gonski school funding reforms or the blowout in asylum seeker costs.

    Gittins goes on holiday and look what a gem of journalism turned up in the place where you usually find his establishment-friendly twaddle that passes for Business journalism these days:

    Sir Humphrey alone would be at ease in this mire

    Last, but not the least, Michael West touches on a topic that MB bloggers may be familiar with – threat of libel litigation from vested interests.. * cough * he who cannot be named * cough *.

    It’s a ‘dog eat blog’ world out there

  6. “labor goes after super tax breaks” I’ve said this for a long while. But, not just your super, but more tax in general….a lot more. Road tolls, higher fines, higher personal direct taxing, probably higher GST, financial, etc.etc.; stay tuned it’s coming.

    On super though, in 20 years what sort of return will we be getting?

    • None. Twenty years hence the government (of one ilk or another) will have seconded much if not all your super. As per numerous countries abroad – Argentina, Hungary, France, Poland, USA – your super will be seized (redirected, reinvested) to prop up the government budget (following banking implosion/bailouts). If you’re lucky, you will receive a pension commensurate with how much super you had when the government grabbed it.

      Of course, it may well begin here with a mere (extra) “tax” or “levy” on your super, as per Ireland and the UK. But the endgame is clear. As Billy Shorten wrote, your super is “our sovereign wealth fund”.

      • I think you are misinterpreting Shorten’s intent in his statement that “Australian already has a sovereign wealth fund: it’s called superannuation”. To the extent – which is his argument – that it represents national saving, and in aggregate can defray the need for foreign capital, then it that sense is already providing some of the mooted benefit of a sovereign wealth fund.

        If we are concerned that we have left ourselves over-reliant on foreign capital, then given the hundreds of billions of superannuation dollars that already gets allocated to offshore secondary equity markets and derivatives strategies – which add nothing to Australia’s productive capacity – then personally I think that government should be mandating that a portion of super is invested – at arms length, by the private sector – in research and direct investment in local industry.

        • On the same sort of topic I contacted the Future Fund asking why that were allocating more investment outside Australia when, at the time, there was noise about small business in the manufacturing sector struggling. They did reply, and I did go over there website to check what they said, and found a few holes with respect to return percentages. At the time I was wound up they were investing in the Rothschild’s new IB in London.

        • Yeah, but the difference between a SWF and super is that a SWF is a policy instrument, whereas super is just a privately managed pension system.

          If a commodity exporter has a SWF, they have a tool which can be used to manage net capital inflow (and therefore the exchange rate). Super can’t do this.

      • Don’t forget Ireland as well. I checked the government information on that one, and then the bondholders data and only two or three were pension funds. So what the Irish government told the electorate was false, and if you knew where to look you could find the fraud. As far as I know it got no oxygen in Ireland. When that happened those private bond holders were bailing out so I know why it happened, but the Irish got screwed.

        And I guess when it’s our time we’ll get the same treatment, but not so for the politicians…that aspect of our government has to change.

    • Let’s not forget that the Labor has already setup the “ATO Small Business Superannuation Clearing House”, a totally innocuous (/sarc) scheme to encourage employers to send employees’ super direct to the ATO along with quarterly BAS payments, rather than direct to the super fund. So helpful, streamlining things for we employers.

      And let’s not forget this clever idea is a blatant theft of what was first a Liberal policy, one quietly announced with nil fanfare in June 2011 –

      The Coalition will relieve the red tape burden from Australia’s small businesses by giving them the option to remit the compulsory superannuation payments made on behalf of workers, directly to the ATO … The ATO will be responsible for sending the money to superannuation funds directly.


      Now taking bets on how long it will be before that “option” becomes “compulsory”.

    • It’s about time tax concessions on property investment in super were fixed. Gear into property through your SMSF and don’t pay any capital gains! Given the Australian property cult, this is asking for trouble. The last thing we need is more speculation through super.

      There are whole financial planning companies that exist just to help people do this. I saw a planner a while back and all they did was push me to gear into property in QLD mining towns. Leveraging into a boom built on a boom – what could go wrong?

      I wonder to what extent this is done and what effect changes could have on the property market if it goes through.

    • +1

      And while Germany seems to remember the hyperinflation during the Weimar republic, they seem to forget what led to the rise of a chap named Adolf Hitler in Germany – humiliating “austerity” like conditions and war reparations imposed on a defeated Germany in WWI.

      History doesn’t repeat but it rhymes.

      • I’m wondering just how long, and what will be the straw that breaks the camel’s back, before Germany decides it is in their best interests to cut the Euro loose and go it alone with the DM and Bundesbank. Rather than see their hard earned wealth being pilfered by irresponsible others.

        Germany knows the repercussions of giving into the temptation of printing money as a “fix”.

      • Mav, I enjoy the odium of being labelled a “conspiracy theorist” rather frequently. So be it. I find it very difficult to believe that so many policymakers, and their advisers (bureacrats, academics, “intellectuals”), could be so ignorant of human nature, and the lessons of history, as to wilfully pursue actions that so clearly and closely mirror those that have led to very ugly outcomes in the past, without recognising that they are indeed repeating the mistakes of the past. I find that many/most folks prefer to believe (ie, find comfort in believing) the trite platitude that we “should not attribute to conspiracy what can easily be explained by stupidity”. I have great difficulty buying that comforting rationale. Especially when I observe that many average folk can see what happened in the past, is happening in our time, and are capable of concluding where it is likely to lead.

        • “many average folk can see what happened in the past, is happening in our time, and are capable of concluding where it is likely to lead.”

          I think you might have a biased sample Op8. I think those types are a very small minority. The rest are just sitting banging their spoons and mindlessly yelling ‘we want our entitlement’

          • Touche 😉

            My point being, I struggle in vain to believe that so many (hundreds? thousands?) of those whom are presumed to be the best educated, most knowledgeable people, whose careers centre around socio-economics and governance, cannot see the historically-demonstrated inevitability of the consequences of their choices, when there are lay folks all over who have done their historical research, and can see where we are inexorably heading. While you are quite right, those clued up lay folk are indeed a tiny % of the global “commoner” population, for mine this only begs the question of why the vast majority of the elite, educated, “ruler” classes apparently can not see where they are taking the world. I don’t buy it. Some or many must know where this is going. But they continue to drive it on, or at minimum, meekly go along with it.

          • Opinion8red, don’t make the mistake of confusing schooling with education or education with learning. That is one of Gillard’s biggest blind spots.

            The best educated people are often the self-educated, because they are the most motivated and usually the most widely read.

        • With the exception of a handful of economists (Keen and Roubini come to mind), the failure to warn/predict/spot the implosion of credit, debt and bank balance sheets (GFC) by the economist community was indeed a huge wake up call to investors worldwide.

          Economists were and are largely seen as captive to the requirements of their Masters – Banks, Govts, Investment Houses etc. Very few are truly independant. Since the GFC there has been some more public free thinking by economists. A very good thing.

          But, I’m convinced now more than ever that one must not rely on the vanilla product served up in the MSM and Financial Advisors. You have to do it yourself with indepenant analysis tools.

    • For those that don’t have the key to the cupboard

      “Bank of Queensland to axe 100 jobs, freeze salaries at the top

      BANK of Queensland will cut about 100 jobs by the end of the year, according to its chief operating officer.

      The bank is cutting costs as it battles slowing credit growth and continuing weakness in Queensland’s property markets.

      “We have done this to make Bank of Queensland more customer-focused, more efficient, more competitive and ultimately more sustainable,” chief operating officer Jon Sutton said. “Overwhelmingly, staff affected will come from middle management and back-office functions.”

      The lay-offs would affect less than 10 per cent of the bank’s 1400-strong workforce.

      Mr Sutton said the bank would not outsource jobs offshore and would expand its call centre in Brisbane.

      The bank has also ordered a pay freeze for workers earning more than $100,000 a year not on enterprise bargaining agreements.
      . .
      The move means chief executive Stuart Grimshaw’s base remuneration, and that of his senior executives, will be put on hold.

      The nation’s banks are trying to boost business as credit growth has stalled and rising wholesale funding and deposit costs have crimped margins.

      BoQ has been hit particularly hard by falling house and commercial property prices in its home state. It reported a loss of $91 million in the six months to February after provisions for bad debts soared to almost $200m.

      Mr Grimshaw announced a $450m capital raising in March to reduce bad debts and improve earnings. The bank sold some of its impaired property portfolio to Goldman Sachs last month.

      The layoffs are the latest in a string of redundancies at the big banks. Westpac and ANZ are cutting nearly 2000 staff combined while Commonwealth Bank and National Australia Bank are also laying off staff.

      Macquarie Group has also shed nearly 1500 staff across its global operations

      • For some reason this story has not been picked up by the local Qld media since it was announced more than 24hrs ago.

    • Air conditioners are really the outstanding symptom of a society not prepared to but up with even the slightest discomfort.

      I often feel like taking a French stick to the heads of my ‘greenie’ friends who live with air-conditioners!

      The main benefit we have had from air conditioners has been to help Gerry Harvey get very rich. As usual it is now the poor beggar who has nothing to do with teh indulgence who foots the bill. I keep trying to think of an answer to it…install a separate meter for air-conditioners? I know it would be ridiculously expensive but we have to start to get serious about this sort of stuff.
      Ah! That and ban sales of ‘water’ in plastic bottles!!!!!

      • I guess these days it is possible to install a smart meter that “knows” the wholesale price of electricity at any moment and can bill you at an appropriate retail price. And give you a readout of your current electricity price at all times. This would be the ultimate application of “user pays”. I imagine it would meet with stern resistance, however.

        The ultimate alternatives are that we just accept the cost of the additional infrastructure required to meet high peak demand (personally I am OK with that – we are a very wealthy society and should be able to afford this easily) or load shedding/brownouts.

        • I guess these days it is possible to install a smart meter that “knows” the wholesale price of electricity at any moment and can bill you at an appropriate retail price. And give you a readout of your current electricity price at all times. This would be the ultimate application of “user pays”. I imagine it would meet with stern resistance, however.
          Particularly if those of us with Solar PV could sell our power back to the grid at that same spot price.

          The ultimate alternatives are that we just accept the cost of the additional infrastructure required to meet high peak demand (personally I am OK with that – we are a very wealthy society and should be able to afford this easily) or load shedding/brownouts.
          Personally I think this “gold plated” grid will be considered pretty fortuitous in 20 years if everyone is recharging their electric cars.

        • That would certainly help. We could even insist on an EER of 10 (requires no artificial heating or cooling) in most of the inhabited parts of Australia.

          IMO the current standards are probably OK, but their implementation and enforcement is frequently woeful.

          • A big issue that comes up with the builders is the cost – the capex is obvious to the buyer upfront, the opex is not.

            Of course is the price of land was a lot less, this would disappear as an issue.

      • The explosion in the use of air cons coincided with the explosion in McMansions. Big poorly ventilated houses built on small blocks crammed in together restricting airflow and circulation. Remember growing up in North QLD and Darwin where Queenlanders or Govvies were high set and surrounded by windows on large blocks with good ventilation etc. Problem I see living down south now is that most new houses use a cooler / heater system cause it’s colder for longer. The price of gas is just rude – we’re swimming in the shit yet we’re paying through the nose for it; go figure.

        • Spot on, WN. The mystery is how these McMansions meet the more stringent EER requirements these days. I suspect the builders are mostly lying about it and bribing the building inspector with a slab or two.

      • Air conditioners are really the outstanding symptom of a society not prepared to but up with even the slightest discomfort.

        Oh, I don’t know, I can think of a few others

        * Automatic transmissions
        * Microwaves
        * Hot running water
        * Indoor toilets

  7. A thoughtful piece from PVO today. Of late he seems to be becoming increasingly frustrated with our current masters.

    He highlights the opportunity missed to speak with the smaller miners, all looking for confidence to invest in and grow their businesses.

    “There was no question and answer session to follow the set speech”…..” And the PM had to dash off immediately after she spoke”…”The PM’s destination was a local school where, in contrast to her address to the miners, she was prepared to take questions from the assembled children”


    I thought his analysis of small/developing miners was spot on with this;

    “Which is why a pair of professors from the University of Western Australia released a report this week titled Where are Australia’s Mines of Tomorrow? It is a damning assessment of investment in greenfield exploration in this country.

    The report highlights that while investment in non-bulk commodities in Canada, for example, has increased from 14 per cent to 18 per cent as a share of global exploration in the past decade, in Australia it has almost halved, from 21 per cent to 12 per cent. Australia’s poor comparison with Canada is important since the government likes to dismiss comparisons with exploration growth in African countries because of our higher standards as a developed nation. The Canadian comparison shows that a developed nation supported by the right policy mix can continue to compete and grow.”

  8. Cando shows the way;


    “Aurukun Mayor Derek Walpo said that he backed the pro-development push on the condition the government listened to Aboriginal communities, which are involved in the drafting of the regional plan. “We want development; we want jobs from the mines so that we can develop our own businesses, own homes and have the same sort of community as anywhere else,” he said”

  9. V and Lef-tee,

    Saw both your comments yesterday. Despite what you wrote, I nor any reasonable person, would be taking an iota of personal pleasure in your circumstances. It is happening to some in my circle too. It has happened to me too often. Welcome to the private sector such as it is.

    There was a good comment also made about the hardships seen in Europe when Govt withdraws. I thought it spot on. Gov’t should NEVER be so big that it dominates the economic prosperity of the masses- no Govt. You then end up with a populace entirely dependant on the whims and largesse of politicians , forced to surrender freedoms for survival.

    • Gov’t should NEVER be so big that it dominates the economic prosperity of the masses- no Govt. You then end up with a populace entirely dependant on the whims and largesse of politicians , forced to surrender freedoms for survival.

      Extremely sensible comment, which I hope to work into every in depth conversation I have in the next week or so …. + 100

      • Lets remember that Gov’t is a delivery vehicle of the political process. Gov’t would be smaller if politicians could tone down voter expectations and made realistic policies. Stand in the way of a politicians and a bucket of money? The result are there to see.

        • There are plenty of people, far too many in fact, who demand the Govt spend irrational ammounts of other peoples money on them.

          And when political parties impose strict spending, you cannot hear yourself think above the bellyaching.

          Entitlement is what matters, don’t you know?

  10. Patrician…you’re silly! The prices are down a couple of percent so it’s time to buy a bargain. I dunno some of you blokes just don’t get it!!

    Nevertheless I’ve been looking in two markets Sunshine Coast and Gold Coast. There seems little doubt that the reduction in interest rates has provided a bit of a boost in both markets.