Weekend links 12-13 January 2013

Here’s a list of things Reynard has read so far this weekend.

Global Macro:

  • US, China signal global recovery – AFR
  • Fed official warns about slipping into currency wars – Reuters
  • Growth slowdowns redux: Avoiding the middle-income trap – VOX
  • Precious metals in 2013 – The Short Side of Long
  • Unemployment: it’s not all back the 1970s, but a serious chunk of it might be – FT Alphaville

North America:

Europe:

  • Draghi hails Euro’s new health – AFR
  • Bondholders in Crosshairs as Merkel Travels to Cyprus – Bloomberg
  • The great eurozone yield convergence – FT Alphaville

Asia:

  • Japan plans $110 billion boost for economy – AFR
  • Samsung: How the Korean firm got to be the biggest tech company in the world. – Slate
  • Japan’s Abe Unveils 10.3 Trillion Yen Fiscal Boost: Economy – Bloomberg
  • Big China Short Shows Downside of Kleptocracy – Bloomberg
  • China Economic Data Fixed, Says Benford’s Law – Bloomberg
  • Did China Really Lose $3.75 Trillion in Illicit Financial Flows? – piie.com
  • China Powers “Two World” Economy – thediplomat.com

Local:

  • First home buyers boost comes with a catch – AFR
  • Global growth forced up AUD – AFR
  • Nation primed to ignite following scorching tempretures and low rainfall – The Age
  • Cabinet to push for dole rise – The Australian

Comments

  1. Climate Change Summary and Update

    American actress Lily Tomlin is credited with the expression, “No matter how cynical you become, it’s never enough to keep up.” With respect to climate science, my own efforts to stay abreast are blown away every week by new data, models, and assessments. It seems no matter how dire the situation becomes, it only gets worse when I check the latest reports.

    😯

      • Maybe also the absolutely astounding mineral resources per head of population that we have been willing to flog off, as in-ground assets, to maintain consumption spending?

    • 3d1k, you miss the point.

      I’m going to turn to (shock) News Corp to find something on the Right to convince you. Try this report:

      ‘Extremes more common’ with climate change

      Something which has become a once-in-a-decade event rather than a once-in-century event might still be rare. But it is now 10 times more likely than it was.

      Educate yourself about this issue, 3d. You owe it to your children.

    • Not every summer will be hotter than the one before. In fact this year is markedly hotter than the last couple of years when we had relatively milder and wetter conditions.

      But what we are going to find on average is more of the hot extremes and faster increases in the future, over the next 10 and 30 years, that we have seen over the last 30 years – more hot extremes, more heatwaves and more extreme fire conditions.

      Climate scientists have been talking about these increases for more than 20 years in Australia. We are now seeing exactly what was predicted more than 20 years ago.
      Professor David Karoly

      http://www.abc.net.au/news/2013-01-12/climate-commission-predicts-more-heatwaves-bushfires/4461960

      • Fortunately there couldn’t be any possibility of self-interest and self-promotion there.

        I keep wondering what it was in the late 70’s was never under 38 for the whole month of Feb. Again early 80’s above 40 was common reaching 47. Now it’s ‘devastating’ and on the national news that the temp there a few days ago reached 42 for one day.

        I’m not against looking after the environment I’m just against the BS that is continuously spun on ‘climate change’. It doesn’t do the real debate any damned good at all.

        • Fortunately there couldn’t be any possibility of self-interest and self-promotion there.

          Ah, the old “climate scientists are part of a vast conspiracy to get funding” meme.

          I thought nobody was still dense enough to trot that one out. I was wrong.

          • Good on you for standing up to be counted as a realist, R2M. James Hansen, the NASA scientist who I think coined the phrase ‘global warming’in about 1970, originally made a name for himself predicting that the earth would enter a cooling phase towards a new ice-age. The physics, according to him, indicated that this is what would happen. He discovered in the process that the planet was actually warming. He pointed out in his book ‘Storms of my Grandchildren’ that being outspoken about climate change has been nothing but bad for his career and funding. His career stalled, funding dried up because of the position he took. No-one seems to mention that from the deniers’ camp.

        • Fortunately there couldn’t be any possibility of self-interest and self-promotion there.

          Possibly there could be. Perhaps you could be more specific so we know who you’re accusing, and of what, exactly ?

          Maybe you could throw out a few anecdotes of wealthy climate scientists living lives of luxury – thanks to their corruption – as well, to go with it ?

          • Let me think now … what’s more likely, that thousands of nerdish scientists all over the world hav had secret meeting to co-ordinate a global conspiracy to gouge money from governments to fund studies that will have bogus conclusions about climate, or that the richest companies on earth, the oil, gas, coal, energy and vehicle companies have funded a huge disinformation campaign to spread doubt and denialism, and thus allow themselves to keep making their outsize profits?

            It’s a tough one! 🙄

            I’m glad we have some Einsteins here at MB who have seen right through those rotten scientists! 😉

          • R2M,

            For the sake of playing Devil’s Advocate, given that the “solution” to the “problem” that is touted most prominently and vociferously, is CO2 “pricing” (thence trading thence derivatives leveraging and trading) – a “solution” which has proven itself wholly inefficacious vis-a-vis actually reducing CO2 emissions (cf. James Hansen cited above) – and further, given that it is banksters who are best placed and have the most to gain ( > profit, power, control) from globally linked CO2 trading schemes, is it possible that what we have here is simple Hegelian dialectics?

            Problem – “Big Green” scare

            Reaction – “Big Fossil” resistance

            Solution – Global CO2 pricing/trading

            All at the behest of Big Finance.

            I submit for consideration that the last 200-300 years of history ably demonstrates that Big Finance is the ultimate player in everything. Everything. “Money makes the world go ’round”, etc. From financing both sides of every major war, to both “sides” of every major Hegelian dialectical “public debate”.

            Follow the money.

          • @ op8 – I’m inclined to agree with you here.

            Our fear of ghg induced warming is not enough for the political dopes to suggest that we stop exporting coal in massive massive volumes, but it is enough to suggest that a globally trivial ghg producing country buy into a moronic trading scheme that enriches a few and impoverishes most.

          • aj, the coal export ban is coming, even though it may take 10 years. Factor that into investment decision, peeps.

  2. “US, China signal global recovery – AFR”

    Recovery??

    While the UK,EU,USA,JAP are on central bank life support!

    While government debt is monetised!

    While real unemployment is 10% plus in the ‘healthy” economies!

    While we have not payed a single cent back on the exponentialy increasing 30 year debt binge!

    Recovery?

  3. Just for some perspective;

    http://joannenova.com.au/2012/11/extreme-heat-in-1896-panic-stricken-people-fled-the-outback-on-special-trains-as-hundreds-die/

    “In January 1896 a savage blast “like a furnace” stretched across Australia from east to west and lasted for weeks. The death toll reached 437 people in the eastern states. Newspaper reports showed that in Bourke the heat approached 120°F (48.9°C) on three days (1)(2)(3). It stayed above 100 degrees F (38.8°C) for 24 days straight.

    By Tuesday Jan 14, people were reported falling dead in the streets. Unable to sleep, people in Brewarrina walked the streets at night for hours, the thermometer recording 109F at midnight. Overnight, the temperature did not fall below 103°F. On Jan 18 in Wilcannia, five deaths were recorded in one day, the hospitals were overcrowded and reports said that “more deaths are hourly expected”. By January 24, in Bourke, many businesses had shut down (almost everything bar the hotels). Panic stricken Australians were fleeing to the hills in climate refugee trains.”

    “I love a sunburnt country………”

    • Denier alert. Just keeping score here: the MB deniers club consists of Flawse, GSM, SMc, and a couple of the bloggers (be nice if they’d put their hands up).

      Anyone else?

      • There’s zero evidence humans are the main source of climate change. And don’t bother pointing me to some debunked alarmist site like skepticalscience for “evidence” please. The climate has been changing for millennia, naturally. Anyone who denies that is the real denier. QED.

        • desmodromicMEMBER

          MP, no-one denies that the climate changes naturally. The concern is the rate of change. There is no proof that humans add to the rate of change but the weight of evidence that they do is overwhelming.

          If you take the time to think about the scale of the economic activity the concerns most of us on a daily basis, it is impossible to believe that human presence on the planet is benign. The Industrial Revolution started around 1760 when most economic activity was agricultural and the human population was around 850,000,000. What has changed since then? Almost everything, including a eight-fold increase in human population. Does this activity affect the earth’s climate systems? Certainly. Is the effect large enough to threaten us and the biological systems on which we depend? Probably. Will there be another 250 years of economic expansion? Probably not because Nature Always Bats Last.

          The more complex question is how do we maintain modern systems and well-being globally without the need for constant economic growth?

          • There actually is proof that we are directly influencing the climate.

            Since 1800, CO2 in the earth’s atmosphere has risen 40% and because of the greenhouse effect, warmed the planet. The obvious source of the added carbon is the 330 billion tons of carbon that burning fossil fuels has added to the atmosphere since the Industrial Revolution. Yet global warming deniers deny this obvious fact. Well then, let’s prove it.

            First, coal, oil, and natural gas also come from plants and also have the distinctive carbon isotope ratio of plants. As CO2 in the atmosphere has built up steadily, its isotopic composition has shifted just as steadily in the direction of plant carbon. That tells us the added carbon is coming from plants. But what kind of plants? That question we can also answer.

            One carbon isotope, C14, is radioactive and dies away to undetectable levels in 50,000 years or so. Fossil fuels, being millions of years old, have no C14 left. Adding ancient carbon should have lowered the proportion of C14 in the atmosphere—and it has. For the last 50 years, as the amount of carbon in the atmosphere has increased, its C14 ratio has fallen steadily.

            Just as the carbon isotopes prove that Landis doped his body, they prove beyond reasonable doubt that humans are doping the atmosphere with ancient plant carbon, carbon from fossil fuels.

            Unlike people, isotopes do not lie.

            In depth explanation

          • “how do we maintain modern systems and well-being globally without the need for constant economic growth?”

            Excellent question, that gets to the nub of the matter.

            And the answer is …

            Ban Usury. Problem Solved.

            In the absence of any requirement to repay unrepayable usury charged on our “money” supply – a Ponzi system that necessarily demands constant growth in economic activity thus population size in order to feed the Big Parasite (banksters) – a steady state economy becomes possible.

            “Climate worriers” and “deniers” are both looking in the wrong direction. IMHO.

      • What amazes me, is that these are clearly people who are mathematically literate (if nothing else, their jobs must depend on at least a senior high school grasp of the field), that can if nothing else look at *graphs* with clear and obvious trends, yet continue to argue it’s all just some sort of hoax (in aid of what, exactly, is never really made clear).

      • JamesTheBearMEMBER

        You can add me to the list of ‘deniers’ – we seem to love horror scenarios as a species, growing up in the 60s we were going to run out of food, then in the 70’s it was a new ice age coming, now we’re going to cook ourselves to extinction…

  4. Regarding the Reuters article, How kind of the Fed to warn against currency devaluation! The gold medal for hypocrisy?

  5. dumb_non_economist

    Why lower Canadian home prices are a national priority – The Globe and Mail

    With regards to the above link when will this country openly discuss this?

    Print /
    License
    AA

    If Canada wants to slay its household-debt dragon, it will have to cut down house prices at the knees. But there’s an economic price to pay for that – and it goes well beyond a cooling of the residential real estate sector.

    The Bank of Canada – one of the twin forces in Ottawa, along with the Finance Department, that are working to bring runaway consumer debt loads back under control – published a study this week that found that house prices are a key catalyst both for household debt and for spending. On the surface, this seems a pretty obvious conclusion; a higher house price means both bigger mortgages and bigger outlays of consumer’s money on home purchases.

    And a couple of comments.

    Winston Churchill

    7:11 PM on January 11, 2013

    Jesus H. Christ. This has been obvious for more than a decade. There have been books written on this very factor. The stagnation of middle class wages, coupled to tremendous housing and car price inflation have K.O’d the economy. Read ‘The Two Income Trap’ for fricks sake.

    This isn’t news. its tragedy . . . or tragedy, insofar as it can be called that, when the victim is relentlessly, willfully, deliberately ignorant.
    3 replies
    Report Abuse

    Score: 8
    Old Curmudgeon

    9:26 PM on January 11, 2013

    I own my house. I have no debt. Why? Not because I was lucky or rich. But because I never borrowed for consumables. My house is not an investment. Whether it is worth $100,000 or $1,000,000 is irrelevant. It’s where I live. It’s a roof over my head. I had to get a mortgage for the house, but worked on paying it off with spare cash. I didn’t have to have a car. Nor yearly vacations in exotic locales. I didn’t eat out a lot. I didn’t need a lot of clothes. And I don’t give a sh*t about impressing the neighbours.

    For the most part, all the debt problems people have stem from their own greed, consumerism and lack of self-control. Don’t blame the market. Don’t blame the banks. Blame yourselves. But in our society, it is impolite to force people to confront the consequences of their own actions.

      • Words like ‘denier’ and ‘carbon pollution’ are Orwellian and do not add one jot to the pursuit of truth or the need for change. The desire to twist language like this is currently predominantly the hallmark of the left in the pursuit of social outcomes and is at best spooky and at worst sinister.

        The most evil has been done in this world by people that believe they have truth on their side and that the means justify the ends.

        The ghg debate is complex, most reasonable people would suggest the risks warrant action, but it is infuriating to watch this debate play into the hands of big industry and their government patsies. What is not contestable is that the new sewage of chemicals and plastics is polluting our environment on a staggering scale and that ecosystem and habitat destruction have moved to unprecedented levels, that urban environments are sick and rotting as more of the new sewage finds its way to every waterway, park and beach.

        The ghg debate is a great place for the industrial growth machine to obfuscate and stonewall, and for politicians to do what they do best at – nothing. There are other elephants in the room that will are just sickening to contemplate.

  6. dumb_non_economist

    SMH:
    http://www.smh.com.au/business/singapore-puts-price-on-australand-20130110-2ciy7.html

    Singapore to sell out of Australand.

    Any comments on the jorno’s comment below?

    It has also reorganised its structure, which has served to highlight its growth options in China and Singapore. Any decision to sell out of Australia should be seen in the context of redeploying capital to higher-growth markets, rather than a more fundamental view on the outlook for Australia’s property markets.

    • It is an odd piece.

      Robins writes in vague unsourced statements of fact then appears to contradict himself.

      He says …”Of no interest was the residential development arm, given the pressure on both the Queensland and Victorian markets”

      Then he says..”Any decision to sell out of Australia should be seen in the context of redeploying capital to higher-growth markets, rather than a more fundamental view on the outlook for Australia’s property markets..

      Then he says..”Similarly, it is in no rush to sell out of Australia”

      odd