Weekend Links June 22-23

ScreenHunter_01 Apr. 02 06.19

Global Macro/Markets:

  • Profits without production Krugman
  • Bond market sell-off causes stress in $2tn ETF industry – FT
  • Macroprudential Monetary Policy: What It Is, How it Works – Conversable Economist 
  • Four Charts to Track Timing for QE3 Tapering – Calculated Risk
  • Bernanke Jumps the Gun, Markets Say ‘Slow Down’ – realclearmarkets.com
  • The EM “sell off” chart du jour FTAlphaville
  • Re-live the 1994 Fed reserve tightening – BI

North America:

  • Municipal Bond Market Rocked As Interest Rates Spike Reuters
  • U.S. Weighs Doubling Leverage Standard for Biggest Banks – Bloomberg
  • Bank of America’s Foreclosure Frenzy – Bloomberg
  • Philly Fed Manufacturing Survey indicates Expansion in June – Calculated Risk
  • Fed Seen by Economists Trimming QE in September, 2014 End – Bloomberg


  • The rise of the fear-mongers: Germany’s new Euroskeptic elite Der Spiegel
  • Greek party chief wants his ministers to leave government-sources – Reuters , Reuters
  • Greek bonds fall, under-performing rebounding peripherals Ekathimerini
  • Eurozone bailout fund given power to ‘directly recapitalise’ banks – FT
  • Latvia is in – Europa
  • Dutch consumer spending dives again in April RTTNews


  • China steps back from severe cash crunch – FT , Bloomberg
  • The Chinese credit crunch – Marginal Revolution
  • China credit crunch Q&A – FT
  • Abe’s Arrows of Growth Dulled by Japan’s Three Principles – Bloomberg
  • Russia has agreed to supply oil to China over 25 years in a deal valued at $270 billion – Marketwatch
  • Japan rocked by Wagyu Ponzi scheme – BI


  • For the sake of the nation, Ms Gillard should stand aside – The Age
  • ASIC declines to reveal timings in CBA probe – AFR
  • Targets, bonuses, trips – inside the CBA boiler room – Adele and Chris


  • Scientists Create Long-Lasting Batteries from Wood OilPrice
  • Booz Allen, the World’s Most Profitable Spy Organisation – Bloomberg
  • Brazilians protest in Rio de Janeiro, Sao Paulo – Reuters Video
  • Gasoline prices by country – Bloomberg
  • Cheetah-Cub is a cat-like quadruped that’s the fastest bot of its size – TechCrunch
  • Russia to deliver S-300 air defense system to Syria and Surprise! China has stolen F-35 fighter jet data – The Diplomat


  1. It blows my mind that a media outlet would write an opinion piece as ‘The Age’ (no author). Are we to assume that the article on Gillard represents the opinion of everyone working at The Age?

    • For the sake of the nation, my ar$e. For the sake of the ALP , more like.

      This will form the next stage of the election conversation- don’t give the LNP too big a majority because it is damaging to democracy.

      • Well there is a very good question you have brought up there GSM – well done!

        ……Is it in the interests of the average Australian to give the Torynuffs a big majority?

        Now what would be the policies that we give them a big majority to enact?

        Would they tend to want to inflict budgetary pain early in their tenure (good self righteous nationally cleansing budgetary pain though it may be) if their majority is bigger?

        What sort of scope would the average Australian feel it appropriate to retain to remove them from office should they not prove capable of doing something constructive on the economy?

        How are they going to generate economic growth again? (sufficient to offset a -1% of GDP per year impact of mining spending windback I mean)

        What are their policies about real estate affordability? or speculation?

        How are they going to manage what would appear to be a rise in industrial action sentiment drifting onto the radar?

        That health and education spending reduction they plan – who is going to be affected by that?

        Great question mate….

        ……Is it in the interests of the average Australian to give the Torynuffs a big majority?

      • In terms of housing affordability, I don’t think it will be any better or worse.

        It blows my mind that on the front page of the smh they have a story on the shenanigans of the financial planners at the CBA, then just below it a “Sydney property is walking out the door” advertorial.

        I detest the double standards where it’s ok to hate bankers, but property parasites are the salt of the earth.

      • Well whatever the Libs do it is going to be a lot better than the mess the current mob are making and have already made!

      • Gunna,

        “Is it in the interests of the average Australian to give the Torynuffs a big majority?”

        It would depend on what you mean by “big”, and this election is not done yet by a long shot. Personally, I think enough of a majority that guarantees at least 2 terms is acceptable. But the way the ALP has behaved/is behaving, they certainly deserve everything they have coming to them. The Qld style majority is too extreme. But it was all Labor’s own doing then as it is now. So I think its appropriate to also ask ; given the ALP’s performance as a Govt, by what margin is it reasonable for Labor to lose?

        And, since you asked, more than anything, I think Australians want a return to adult, sound governance rather than the nightly circus performances we see from the Union controlled puppets .Australian families want to know and believe that their Govt’s plans extend to them and their family futures, rather than ad hoc plans contrived to just stay in power. They want to see good and mandated policy executed as designed into reality, rather than slogans and repeated policy cock ups. They want Govt to represent them and be competent and not treat them with contempt. The current climate of divisiveness is appalling.

        Australians have 6 years of the ALP Govt performance to review and consider, in all it’s glory. This election won’t be pretty but the ALP will, as will the LNP, have to answer for their performances.

        Don’t purport to know or predict exactly how the LNP will behave or perform in the changing economic situation we have coming at us. That’s just your speculation like any other. My speculation is that they will not inflict the type of economic pain you seem to be promoting. My guess is that our declining economic conditions will overrun any plans the LNP has now for economic growth and massive revision will be called for because of that. But any plans they have will include major assistance directed towards SME’s in the form of regulatory, workplace and taxation relief.
        There will hopefully be a Royal Commission into Union activity in Australia. Lots of outcomes there for sure but the most important would be accountability along the lines of existing corporate requirements as well as prosecuting cases of malfeasance and fraud.

        The Federal Govt has not one patient or one pupil. Yet Health and Ed are, along with far too many, immense taxpayer funded beauracracies in Canberra . You do the math. I know where I would rather see the money spent.

      • Tend to agree GSM. The next stage of the narrative to question the wisdom of the electorate providing the Coalition with a landslide victory – and if that fails to penetrate calls for a pox on both their houses Vote Donkey! Desperate days indeed.

        It has long been my view that Gillard is an absolute liability for Labor and that it was an appalling error of judgement to instate her in the first place. However considerable humble pie need be consumed by AWU Howes Ludwig et al – not to mention the extraordinary narcissistic character of Gillard herself and the barrier to concession that implies.

        Would a landslide be good for the nation – you betchya! Mandates Coalition policies, stymies Green wreckers attempts in Senate and delegitimises almost every bleating from the mouths of Oakeshott and Windsor and ensures their role on supporting this current dysfunctional regime as the electoral Judas’ they are.

        Also gives the ALP a chance to redefine its role into the twenty first century to evaluate union dominance and damaging power plays that have near destroyed a once worthy party.

        Win win !

      • Keep it going there fellas, keep it going…..

        a good bit of Torynuff bile splashed over any commentary..

        That will get the voters out

        gibber gibber gibber!

      • Gunna,

        “a good bit of Torynuff bile splashed over any commentary..”

        You’re the one who asked the questions so it’s a bit rich now whingeing about the responses if they don’t fit your view.

      • I’m certainly not whingeing about my daily dose of Torynuff bile…..

        But now I am off to the football with some economics and business journalist type to see the Dees and Saints, which presumably will give us loads of time to talk.

        Keep that gibbering coming.

    • Mining BoganMEMBER

      It’s because they’ve been wrong for the last three years. She has made every political pundit they have look like a fool. They couldn’t roll her by telling lies so now they’re just saying go.

      The arrogance of people who have no credibility left is mind-boggling.

      The bit I like is they say they want a discussion on policies yet they refuse to discuss them. The media only wants to talk about leadershit. Watch Question Time. The Opposition has been getting a mauling over outright lies they’ve been telling for months now. What goes into the news report? Leadershit.

      Australian media is just plain embarrassing.

      Here, this sums it up for those who didn’t see it yesterday.


      • ‘Australian media is just plain embarrassing.’

        You can say that again….Just plain embarrassing

        You look at the way the Canberra press gallewry completely misread the initial sexism outburst from Gillard to Abbott in parliament last year. Now regardless of which side of the aisle you wear your tie, they all, to a man, talked the event down – seemingly ignoring the fact that a national political leader screaming sexism with some invective was actually a global news event. They couldnt see the event through the fog of small town insularity for what it was. I had international media calling me to ask what the perception of it was like in Australia.

        After you look at politics (and I think much of the coverage of Abbott is just glib nuff nuff stuff too) you look at coverage of business and economics, in particular the complete impossibility of our national media covering a policy narrative, and the inability of politicians (what comes first – chicken or egg) to look at issues like the domination of the real estate lobby on the national economic decisionmaking process.

        Basically our media is so bad it is a net impediment to effective politics. And that largely reflects that our national media print or broadcast comes in 2 flavours (Rupert or Fairfax, or broke commercial broadcasters) – you would need a very sensitive gauge of faecal quality to distinguish between them.

        Yes, GSM and others of like view, there is the ABC and its particular brand (with a market share requiring an electron microscope – although I do watch it from time to time) – you guys can argue it is pro ALParatchik, I tend to the view that it is about Australia’s sole media attempt at looking at issues, maybe issue examination per se is anti Torynuff.

      • Gunna,

        “you guys can argue it is pro ALParatchik, I tend to the view that it is about Australia’s sole media attempt at looking at issues, maybe issue examination per se is anti Torynuff.”

        You would – but misleading, much?.The ABC refuses FOI requests to disclose it’s spending of taxpayer funds. A budget of over a Billion. The ABC journo survey shows extreme Greens bias and the remainder predominantly Left- diametrically opposite our political/Green makeup socially. The ABC current affairs, political reporting complex is not much more than nuanced propaganda of the Left and this Govt. The insult being is that taxes fund it.

        As examples of bias, some questions for you:
        – Point me please towards the ABC’s in depth analysis of Global NON warming over the last 16 years and detailed coverage of the AGW skeptic viewpoint?(AGW ranked very low in a global survey concerns)
        – Explain why, during that ludicrous “Menu” palava, ABC journo’s were still taking Conservative personalities to task with false reporting 24 hours after it was already confirmed they had nothing whatsoever to do with it?
        – Why is it that such a preponderance of hard Left leaning figures are hosting top ABC Current affairs programes ( Tony Jones Q&A and Barrie Cassidy Insiders as examples) with panels stacked with Left bias?
        – So to enforce good reporting etc, a fact checker is appointed. Married to an existing high profile ABC identity and having a long history of pro- ALP work? No bias there?


        Don’t claim there is no bias Gunna- it’s an insult. Bias in fact rampant in the ABC. All of it funded by taxpayers, dished out lovingly by this Govt.

        So if the ABC and it’s collective of supporters wants it’s stench of bias to go away, all they need to do is simply be more balanced and not run its current Left/ Green only agenda. Be fair dinkum. The public can then work out the rest.

      • The Australian media is merely the reflection of the Australian society today. Sad, but true.

  2. thomickersMEMBER

    The China debt issue is quite epic!

    There is so much more to come…

    This may pretty much knock out any investment strategy or lifestyle that is a geared to the hilt.

  3. GSM……”Why is it that such a preponderance of hard Left leaning figures are hosting top ABC Current affairs programes ( Tony Jones Q&A and Barrie Cassidy Insiders as examples) with panels stacked with Left bias?”

    Tony Jones = hard left…..very very funny.

    Panels stacked with left bias…like the truly vile Piers or the eternally lame Gerard Henderson.

    GSM, the ABC gives the LNP a very respectable run – which is more or less inevitable seeing they lift most of their editorial content from News Corp.

      • briefly

        Just in case you are wondering about Maurice

        About as fine an example of pommy Torynuff gargoyle as was ever carved into the edifice of an institution anywhere…..


        Political views[edit]

        Newman helped establish the Centre for Independent Studies, a conservative Australian political think-tank. He was a member of the first CIS Board which consisted of Neville Kennard, Maurice Newman and Ross Graham-Taylor.[3] Newman was associated with, and spoke at a CIS event in December 2007 given in honour of conservative economist Milton Friedman.[4] Newman is said to have been a close friend of former Australian PM, John Howard. Interviewed in 2010 about this by the Institute of Company Directors he stated: “Much is made of my friendship with Howard, which is long standing. Little is made of my friendship with Bill Hayden, which is just as close and of longer standing. The truth is, I am not party political. I have voted on both sides of the fence, state and Federal, because I am driven not by labels, but by policies.”[5] During his tenure as Chairman of the Australian Broadcasting Commission, Rupert Murdoch delivered the 2008 Boyer Lectures, “A Golden Age of Freedom”. On the subject of financial market regulation he is reported as having said: ” “Politicians are getting into regulation and Regulators want to get into business. Regulators should look at ways to ensure transparency, but should not end up killing the business.”[6]
        Climate change[edit]

        In a speech to senior ABC staff on 10 March 2010 he said climate change was an example of “group-think”. According to an ABC PM account of the speech: “Contrary views had not been tolerated, and those who expressed them had been labelled and mocked. Mr Newman has doubts about climate change himself and says he’s waiting for proof either way.” Interviewed by Brendan Trembath he said: “But climate change is at the moment an emotional issue but it really is the fundamental issue about the need to bring voices that have authority and are relevant to the particular issue to the attention of our audiences so that they themselves can make decisions. So that we are seen to trust and respect them sufficiently that they can make up their own minds about the various points of view that are being expressed through the medium of the ABC.”[7] In answer to the question of whether he was a climate change denier he replied: “I am an agnostic and I have always been an agnostic and I will remain and agnostic until I’ve found compelling evidence on one side or the other that will move me. I think that what seems fairly clear to me is that the climate science is still being developed. There are a lot question marks about some of the fundamental data which has been used to build models that requires caution.”[7]
        Wind farms[edit]

        In an article published in The Spectator, Newman expresses views in opposition to wind energy. He wrote “I am not a conspiracy theorist, but we have witnessed the birth of an extraordinary, universal and self-reinforcing movement among the political and executive arms of government, their academic consultants, the mainstream media and vested private sector interests (such as investment banks and the renewables industry), held together by the promise of unlimited government money. It may not be a conspiracy, but long-term, government-underwritten annuities have certainly created one gigantic and powerful oligopoly which must coerce taxpayers and penalise energy consumers to survive.” His article concluded “But don’t expect help from academia, mainstream media or the public service. They are members of the same establishment and worship together at the altar of global warming. By ruthlessly perpetuating the illusion that wind farms can somehow save the planet, they keep the money flowing. All the while the poor become poorer, ever more dependent on welfare and colder in winter.” (“Against the wind”, 21 January 2012, http://www.spectator.co.uk/australia/7589188/against-the-wind.thtml)

      • Gunna,

        “… Torynuff gargoyle… ”

        Honestly, if you want to be taken seriously Gunna you will have to mature a little first, …mate.

        I think Newman has more runs on the board than you with your half-baked blogging attempts.

        Enjoy the game!

      • “Maurice Newman – former chairman of the ABC. I guess he doesn’t agree with your view either”

        GSM…this is a bit like complaining that physicists, mathematicians and astronomers have “control” of the understanding of cosmology.

        Climate change is all too real. I wish it were not so, but the first hand evidence in Western Australia is indisputable.

        The LNP should stop treating this as a debating point. It’s not. Climate change is real. It is already damaging property-owners and workers in agriculture, fishing and viticulture in Western Australia.

        The tragedy is that it would not cost a whole lot to prevent further pollution of the atmosphere, but for political reasons denialists will ensure we experience very large future economic losses. This is the very antithesis of prudent, conservative thinking.

      • briefly,

        In case you missed it, the LNP is not sceptical of Climate Change. Nor am I for that matter. What I am deeply sceptical of is the cause of the changing climate and attributing it to CO2, the need to tax the CO2 and the $Billions in taxpayer money being wasted to subsidise failed and bankrupted Green programs and pet Green projects, throwing economies into turmoil, all of which have not proven this AGW thesis.

        This scepticism is ratcheted up when the PM lies to the electorate , just to get elected then imposes a tax on said gas, when in fact it is simply a poorly diguised wealth distribution scheme that also appeases the Green vote she needs to hold office. I also note that the often alarmist predictions regarding AGW have uniformly FAILED to materialise. In fact, AGW predictions are falling off the bottom of virtually every model constructed by “peer” review. Warming by any measurable measure has not been seen in 16 years. Some sources predict 20 now… the next prediction?

        So yeah, there is some scepticism there, but not about the changing climate. Let’s also not forget sceptism and “denialism” played a healthy part in almost every major technological advance civilisation has ever made.

    • General Disarray

      There’s always going to be someone that thinks if you’re not nodding in furious agreement with the likes of Bolt, or Ackerman, you’re a biased leftie.

      Their opinion is 100% worthless.

  4. ALP…LNP..??

    Does it matter? From one perspective, with the exception of policies on renewable energy and carbon pollution, there is very little to choose between them.

    Both sides are bound by a demoralising denialism.

    Neither side is offering to reform the tax system in order to restore secular fiscal balance and distributional equity.

    Neither side is willing to repeal the tax shelters, which is essential to reforming the investment framework.

    Neither side is willing to make the hard and soft infrastructure spending we need.

    Neither side is willing to reform the markets for land and housing, nor to challenge the rent-taking by the finance sector.

    Neither side is willing to reform the exchange rate-setting apparatus – that is, they are content to allow domestic monetary conditions and the competitiveness of the economy to be determined in New York, Tokyo or Frankfurt.

    In a truly disgraceful perpetuation of the scapegoating and myth-making of the last 25 years, all sides play reprehensible political games with boat people.

    Neither side will carry out the most important reform of the 457 visa system: the abolition of indentures. For good measure, the ALP have moved the ground on this issue from economics to law enforcement. In a throwback to the past, Labor have contrived reasons for workers to distrust other workers as well as employers. They deserve to be condemned for this.

    Meanwhile, the LNP persist with a politically-inspired, archaic and bigoted approach to unions as if this is even slightly relevant to the welfare of most parts of the economy.

    For all the vacuous politicking at the margins of the labour market, neither side has figured out any viable policies to promote sustained, balanced future growth in employment and incomes.

    The election should be about these issues – about incomes, fiscal reform, achieving balanced growth, the composition and distribution of social spending, productivity and competition policies and the environment.

    Instead we are set to have an election – the result of which already appears to have been decided – and that will do no more than ratify and extend the status quo. If ever there was an argument in favour of voluntary voting, this is it.

  5. “GSM


    In case you missed it, the LNP is not sceptical of Climate Change.”

    The facts are, however, the LNP are opposed to doing anything to prevent atmospheric pollution. Call it what you like, but it this is thorough-going denialism. It is the purest cynicism imaginable.

    There is plenty of real-life, 3-dimensioned, data-based, technically-verifiable, theoretically-consistent evidence of unprecedented, irrevocable and rapid climate change in Western Australia. This is driving irreparable economic losses to property owners – irretrievable production losses.

    You can try to cloud the facts with polemics and debating points, but these will not change the economic reality. The sad facts are these losses were all avoidable, but for ideological reasons the LNP has preferred to deny their reality. This amounts to a betrayal of farmers, fishers, wine-growers and other property-owners by the LNP for their own political purposes. It is a disgraceful sell-out by the LNP of its most trusting and loyal supporters.

  6. briefly,

    Are you saying that the LNP policy on CC has caused rapid climate change in WA and worse, they witheld the means to prevent it?

    And you have incontrovertable proof of that?


    ” ..but these will not change the economic reality. The sad facts are these losses were all AVOIDABLE, but for ideological reasons the LNP has preferred to deny their reality.”

    I am in WA as well. Here is something about deserts/desert like areas that should be of importance to note, especially when people choose to live near the edge of them. DESERTS MOVE – along with the weather, wind and rainfall patterns that create them in the first place. The tiny SW corner of WA (and the continent of Australia) where more than 90% of WA’s population has perched itself hangs on the tail sweep of rain bearing lows coming up from the Southern Ocean into the Bight for it’s rainfall. If those storms miss by a few hundred kms, that’s it, no rain hits the mainland. A margin of error of a few hundred kms- it’s really hit or miss.

    I’m not trying to downplay the hardship of those concerned, but any human settlement directly adjacent to desertified areas is a precarious thing around the world. Attaching this situation to AGW is a convenience spruiked by AGW alarmists.

  7. “GSM


    Are you saying that the LNP policy on CC has caused rapid climate change in WA and worse, they witheld the means to prevent it?”

    Don’t be disingenuous. Of course no-one is saying the LNP has caused Climate Change.

    The LNP simply refuse to acknowledge the reality of CC and, one way or another, refuse to do anything of substance to try to prevent CC or even to mitigate its effects. Rather, the LNP have set out to stymie policies aimed at arresting co2 emissions. Your rhetoric is all of a piece with these constructs, which are not designed to serve the economic interests of the public, but to serve the LNP’s political narrative.

    There is already plenty of evidence of economic loss in WA that is directly attributable to climate change. The facts are we have already experienced irrevocable losses that are entirely explicable by climate change, most notably in the case of changes in the coastal littoral. These changes are attributable to pronounced warming of the sea surface waters and have already resulted in unprecedented and irreparable destruction. To reiterate, it is not necessary to speculate about the future. These changes have already occurred.

    The LNP have decided to place their political tactics ahead of the economic interests of their hitherto most loyal and trusting supporters, and are therefore responsible for some of the most cynical acts of economic and political treachery ever seen in this country.

    I am fully reconciled to a resounding victory by an extremist, ideologically-seized LNP. Fortunately, I do not expect to be personally affected one way or another by this, no matter the harm the LNP will probably do to most of the population. Nevertheless, the ascendancy of the LNP is not something that any person who is concerned about the pollution of the atmosphere could possibly welcome.

    LNP policies in relation to the environment really do represent an insult to every principle of prudent, conservative and evidence-based policy.

  8. desmodromicMEMBER

    “Point me please towards the ABC’s in depth analysis of Global NON warming over the last 16 years and detailed coverage of the AGW skeptic viewpoint?”


    Science is not a democratic pursuit where everyone gets their view published. You need evidence to support your arguments. I’ve had plenty of rejections from my scientific peers. Looking back I can usually see that the evidence simply wasn’t strong enough to support my interpretation of the data. Occasionally I see that my interpretation was wrong and move on.

    The weight of evidence for AGW is overwhelming. Yes, there are parts of the puzzle we don’t understand and some contradictory observations. But that doesn’t mean all the observations are wrong. Nor does it mean that the media or politics should give equal weight to all views. They should and do evaluate the weight of evidence and mostly report the consensus. The consensus matters in this case because it is an uncontrolled experiment where n=1.

    If you remain doubtful, go to the epicentre of the warming in the Arctic. The landscape moves most people and the scale of the change that is occurring leaves many wondering why we seem unable to deviate from the path we are on. Last year in Alaska the summer was late, cold and short. But that is the weather not the climate and the warming continued unabated.

  9. It is not just housing that suffers from mindless land use policy

    “Aldi has built a portfolio of 311 stores since opening its first site in Sydney’s west in January 2001, but its pace of growth has slowed since the peak of 2008 when it opened 37 new sites to 26 last year, with even fewer to open this year.

    Mr Daunt attributed the slowdown to restrictive planning laws, which reduced the pool of sites available, as well as a glacial development approvals process.”

    “The single biggest impediment to any new retailer is planning; the availability of appropriately zoned land for retailing is low and is being outstripped by economic growth,” he said.


  10. Alex Heyworth

    That Krugman article is a cracker. I normally don’t have a lot of time for him these days, but he has nailed it with this one.

    Briefly, it amounts to monopoly or quasi-monopoly rentiers are making potloads of cash from market dominance, without the need to invest. Hence high profits, low investment and a stagnating economy.

  11. Alex, I read Krugman…makes some very good points. I generally like him. He is a clear thinker and articulates his opinions very well.

    • That last para wasn’t specifically addressed to you!

      My main beef with Krugman is his anti-austerity obsession and his tendency to wander off into areas in which he has no particular expertise (eg climate change).