Weekend Links 25-26th April 2015


Global Macro / Markets / Investing:




Terra Ironoria :


Weekend Face-Palm:

For Laughs:



Latest posts by __ADAM__ (see all)


    • Cui bono, I’d suggest you stop focusing on who’s the registered purchaser of the bonds and ask yourself two questions
      – Why would existing bond holders allow FMG to issue additional secured (Ponzi) bonds? (Hint: it dilutes the assets backing their existing bonds, why allow this?)
      – Are there ways for create value (for anyone) by operating FMG at a loss?

      I took a stab at answering the second question here.

      • Bob what are your thoughts on the China FTA all of a sudden being approved when ore started falling off a cliff? That FTA was ten years in the making… I think China will become owners a lot easier now. That is their leverage. We buy your mines and you can try sell us your shitty services. China wins.

  1. Gloroius Property seen close to default after Kaiser tumble … Bloomberg


    … concluding …

    The strains at Glorious come as China’s new property starts slid 18 percent in the first three months of the year. The nation’s cooling economic growth has left a backlog of unsold homes and depressed prices.

    “Glorious management has come to a stage when they realized they may have to sell assets to make debt payments,” S&P’s Yip said. “But finding the right buyers in this market would be challenging.”

    • What reform ? …

      Loans to Chinese property developers surge again in Q1 | Reuters


      (Reuters) – Loans to Chinese property developers surged again in the first quarter despite the country’s housing downturn, official data showed on Friday, a sign that authorities were exhorting banks to do more to support the cooling property market.

      Banks’ loans to property developers leapt 24.1 percent to 6.08 trillion yuan ($981.8 billion) by the end of March, central bank data showed, picking up from a rise of nearly 23 percent in the corresponding period last year. … read more via hyperlink above …

      • Is China Facing a Warehouse Bubble? – China Real Time Report – WSJ


        Real estate oversupply has long been a problem in China’s residential, office and retail sectors. Now, a not-so-glamorous industry segment that had previously held promise – logistics – is starting to display similar signs.

        Since 2013, warehouses have been a preferred vehicle for Chinese property investors, following a downturn in the country’s housing and commercial property segment. The lack of land for such warehouses – an unpopular zoning choice for local governments because they yield less tax revenue — as well as a boom in e-commerce had made logistics property a popular way to park money. … read more via hyperlink above …

    • Investing in Chinese Stocks—投资大中华地区股市: When The Credit Cycle Ends, It’s Over: Banks Refuse to Buy Local Govt Debt


      FTAlphaville: The trouble with market-based financing… in China

      The thing about market-based financing is that market-based financing isn’t always available the way you want it.

      Which is why it’s big news in China on Friday, as the FT reports, that several Chinese provincial governments have been forced to postpone bond auctions as banks balk at the low yields on offer. The news comes by way of state media. … read more via hyperlink above …

    • China bad debt spikes by more than a third … CNBC


      Chinese banks face a spike in bad loans amid slowing economic growth, PwC warns in a new report.

      “There are a variety of indications that credit risk exposure is accelerating,” said PwC China Banking and Capital Markets leader Jimmy Leung in a press release published on Thursday. … read more via hyperlink above …

    • Investing in Chinese Stocks—投资大中华地区股市: Borrowing Surge Points to Weakness in Real Estate


      … extract …

      Debt piles up fastest at the end, when the only way to survive is to extend and pretend. Fake it until you make it, stay solvent until business conditions improve and then dig your way out of the hole… read more via hyperlink above …

    • Good one. It’s called having a “skin in the game” and works all the time (benefits performers and punishes slackers). I would take this one step further. Apply the same concept to policy makers, politicians, and political parties (…and good luck with that)

    • Same thinking on healthcare we always see from these kind of people – that receiving medical care is like deciding whether to make a sandwich at home or go to Subway.

      His complaint about needless medical testing (and proposed solution which, unsurprisingly, makes no account for people who cannot afford it) is aimed at patients when it should be aimed at doctors (and, really, more likely aimed at lawyers).

      • “really, more likely aimed at lawyers”

        Absolutely. They are the cause of so much of the excess and waste in almost every sector of our economy – and we reward the b….ds with the highest fees! They are always over-represented in the political parties and the make rules. It’s difficult to see how anything can ever change in this situation.

    • “Strong foreign investor activity in the property market is propping up the economy, and home prices would be a lot higher without it, ANZ economists say”

      Translation 1. My million dollar salary relies on it.

      Translation 2. We pay LNP hundreds of thousands in donations for this right, and we are selling Australia so the bank can suck the wealth out of Australia.

    • Some twisted logic in this. On one hand overseas investors are propping up the market and on the other hand they’re stopping prices from rising. Amazing.

  2. We should read the words of the Greek Finance minister and digest the logic they extol. Australia will need similar (at least) reforms in the coming years to address the same macro problems of aggregate debt ratios and gross mal-investment. The projections made by ‘our authorities’ regarding ToT have been corrupted by vested interests and if continued, will lead us to an inflection point that MUST result in the end of our cohesive society.



    • That was interesting, cheers.

      It appears that they wish to culturally reform both the Greek people and the European technocrats at at the one time. All the best to them.

    • notsofastMEMBER

      I understand that Yanis is also a dual Australian citizen. Maybe after he has sorted out Greece and extracted the best possible deal for the Greek people we can use him in Australia to save us from our current bunch of leaders. Yanis as our Treasurer and Graeme Wheeler as the Governor of the RBA maybe our only hope!!!

  3. Wayne Byers you STAR. Couldn’t script this incompetence better if you tried.


    ‘Australian Prudential Regulation Authority chairman Wayne Byres says the market may never know if the banking regulator takes action to curb the growth in lending to property investors.

    Mr Byres revealed to the House of Representatives economics committee on Friday that an increase in capital levels for particular banks is on the cards but such imposts will not be disclosed.’

    Keeping his masters in parliament and the banking world very happy.

    • APRA social club at work. Where is ASIC by the way? Any concerns regarding an informed market? Nope. Sound of crickets.

      Suppose the rest of us can play the guessing game where a) a bank raises capital because they want too; b) they raise capital because they were told too.

  4. An interesting article on Mike Nahan the illustrious treasurer of WA.

    “Before he was treasurer of Western Australia, Mike Nahan was executive director of right-wing think tank the Institute of Public Affairs. There, he railed against any form of wealth redistribution. Since joining the government of our richest state, Western Australia’s fortunes have changed, as has Nahan’s tune. Economist Saul Eslake tells Mike Seccombe Western Australia begging for a federal payout is like “a pensioner who wins the lottery and then complains they’ve lost the pension as a result.”


    • Another AET et al ideologue “Hoist with his own petard” its a long list and growing imo…

    • Nahan is being entirely consistent. GST is taken from WA and redistributed to the other States (including Eslake’s Tasmania where circa $1.80/$1.00 is returned as opposed to WAs $0.30).

      He welcomes an end to this redistribution. Not that I’d expect any at The Saturday Paper to understand such nuance. What a rag…digital detritus.

      • 3d1k is out there touting the Rupertarian every chance he gets…..

        He knows a fair bit about digital detritus

      • Come now 3d. Your new- found parochialism serves you poorly. Also, those advocating increasing GST should get a griip.

      • Did you read the piece?
        From that comment it appears not.
        It would almost seem that you are replying based upon a pre-decided position.
        Now why doesn’t that surprise me.

      • Your new- found parochialism? Are you kidding?

        3d has gone in to bat for WA at every opportunity, and shown zero sympathy for the plight of exporters “over east” in the four years I’ve been here.

      • Lorax, you must have missed my calls for preferential tax regime for exporters (eg Ireland) – East Coast West Coast, wherever.

    • Cheers for that, its an interesting read.

      While I was reading through it I couldnt help but think it didnt touch on a key variable, the ability of the middle classes to move.

      The money coming out of the emerging world tends to be that aspiring to some form of middle class in the developed world (though often it looks like wealth when it departs the emerging world). I tend to see it as the poor and middle class in the developed world which is under pressure given that it lacks a competitive position in an increasingly globalised and cost centric production and trading world for goods and services. What I am seeing (with a wife who is foreign and very good contacts with expats offshore and migrants here) is that those coming here want to be here for quality of life, freedom from corruption/law, sometimes education etc – but they arent coming here for economic opportunity (the chance to do something of economic value here, moving forward).

      Rather they are seeing migration as something which may afford opportunities through accessing education or even accessing a new passport, but where the actual driver of their wealth is either their own activities of the past [they’ve had a business offshore and have sold it to migrate], an ongoing economic activity in the environment they have left [sometimes through family/social connections] or a skills set they have developed in their home environment [or elsewhere] which gives them an advantage here [where here can be almost anywhere in the developed world] – eg medical specialists, IT guys, many forms of engineer etc. I would posit their ‘commitment’ to being somewhere new is reflective of the ability of that somewhere new to offer them meaningful economic opportunity, as well as the ability to provide the quality of life factors. It is here I would suggest that Australia is breaking down about now (knowing migrants to Australia who came here intending to stay but who have decided it offers little for their children long term, often limited employment for them here, and are now waiting for the passport before moving on – indeed my wife and I talk about exactly that).

      This transience [and I suspect it is growing among the middle class moving about the world] would be a key factor in global socio-political volatility [as well as a key result of it] which would represent a significant concern for bigger corporates.

      • Uranium GeoMEMBER

        + Many on the social/physical mobility front.
        This is also a frequent topic of conversation between myself and the better half, which frequently includes other members of our social circle. I do wonder about the majority though, particularly in regard to debt obligations on fixed assets (houses). Some will not be so lucky or prepared to cut their losses. Inevitably the tide will turn when as you say the economic opportunities become less apparent. I do wonder just how substantial that exodus will be and how catastrophic the effects would be for Australia?

      • Only problem being is the event horizon is functioning on a manifold multiplier due to the markets hyper connectivity e.g. Galt gulch is becoming just a shimmering vision at the limits of ones vision, once arrived the conditions have changed or soon will and the process is repeated with increasing speed.

        Skippy…. this is all complected by upper quintiles bleeding the middle class dry in an effort to fend off their peers cannibalistic nature.

  5. Talking about Chinese funeral stripping
    China Says Please Stop Hiring Funeral Strippers – WSJ
    reminds me of a small town funeral in Taiwan many moons ago….
    I used to go regularly to a real locals only Fish restaurant / bar that was around the corner from a small hotel where I stayed while on business in Taiwan. I’m probably the only Laowai (white fella) that ever set foot in the place. Anyway late one night the owner fell off his moped, probably drunk, and died. Well his mates arranged the Funeral and wanted me to attend, OMG what a cultural eye opener, I though I’d seen everything but this was one of those “and now for something completely different” moments.
    The funeral was some sort of cross between a Shinto/Shendao ceremony, Bucks party and KTV karaoke night. The only guy in the huge tent (yes tent) that didn’t get some action was the dead guy, and what’s more disturbing is that I’m not even certain of that fact. They had me drinking some traditional Taiwan (Hakka, I believe) concoction till I was off-my-face. Apparently it aids the passage of the spirit if everyone is uninhibited….. or so I was told…I guess I didn’t take much convincing.
    So yea the headline “Chinese Funeral Strippers” didn’t even cause me to raise an eyebrow.

  6. Couple of good reads on an all too, sadly, familiar themes;

    “If we were ever the lucky country, we aren’t now”

    We have become a nation of individuals with a sense of entitlement, and are prone to narcissism, jingoism and chauvinism. What’s more, there’s no political leadership of any colour to turn this around, writes Bruce Haigh.


    “Tony Abbott and the normalisation of bad politics”

    Bad policies and embarrassing behaviour have become so routine that they are able to hide in plain sight. The default rightwing settings of the political class see to it that dissent is massaged to the margins, writes Tim Dunlop.


    Ok, Tim’s abit of a lefty but the vibe is there…

    • Things got so bad at one stage that an establishment journalist such as Laura Tingle felt compelled to write a piece in which she said that “we actually are being governed by idiots and fools” and she marshalled evidence to support the case. The disturbing thing about her piece, though, was how little impact it had.

      Coz nobody cares except a few people who read blogs like this

      • Funny

        Tingle correctly highlights the Fiscal disaster developing in Australia

        The Drum guy complains there is too much Right Wing influence in Australia

        What would the Budget look like if the Left Wing was dominant?

      • @8~

        Firstly what denotes weft wing in your opinion, surly you don’t think the ALP is left wing.

        Next which is more important in the long term, government surplus [private – public sectors are juxtaposed wrt savings] or full employment with a living wage and decent security.

      • I’m just using the definitions given by the author. If the ‘fiscal conservatives’ (yeah right) are racking up $40bn in debt – what does the alternative hold?

        You need to balance your books over the cycle – otherwise you are borrowing ‘living wages and security’ from your children.

        This is a global phenomenon and parties of all persuasions are equally culpable. At the end of the day – they are all politicians and have limited use of a moral compass except to win over the crowds when campaigning. The future be damned.

      • eff me …It’s always the bloody same stupid crap. If you favour prudence in government and private sector you are somehow an advocate for unemployment and an unfair society. It really is the refuge of the intellectually bereft and corrupt!

      • @above,

        Non sequitur responses which amount to gnashing teeth and pulling hair with highly subjective.

        Amounts and what future potential they might have is a more relevant issue than those that want governments run like private enterprise. Which is sort of a absurd juxtaposition given that corporatist are and have been the driving ideological force behind most developed country’s…. for some time now.

      • What would the Budget look like if the Left Wing was dominant?

        This is a loaded question as the Budget is but one small component of Government.

        One would assume a “Left Wing” Budget would have higher taxation of the rich, particularly on unproductive wealth, greater funding of public services and assets, and some form of jobs guarantee.

        If you want an equal, equitable and democratic society, you won’t get it from “The Right” who harken back to their historical utopia of Fuedalism: a landed gentry, a small cohort of privileged administrators, and a vast array of disposable peasants. The only difference is this time they’re imposomg it through debt servitude rather than force of arms.

        As Stephen Morris has opined frequently: the only real solution is Democracy. Which, like most of the other things we of privileged modern life take for granted – individual rights, free speech, etc – is a product of “The Left”.

      • If you favour prudence in government and private sector you are somehow an advocate for unemployment and an unfair society.

        That’s because “prudence in government” and support for the “private sector” is almost invariably a euphemism for “an unfair society” – the gutting of public services (education, healthcare, etc), removal of legal power from workers, etc – and a gifting of monopolies to favoured rentiers.

        I’ve yet to meet anyone who thinks “prudence in Government” doesn’t mean “cutting the dole so those lazy bludgers get jobs”, rather than “reducing tax breaks so the wealthy pay their share and everyone gets a decent chance at a prosperous life”.

      • “If you want a prosperous, equitable and democratic society, you won’t get it from “The Left” who harken back to their historical utopia of Communism: a small cohort of privileged administrators, and a vast array of disposable peasants. The only difference is this time they’re imposing it through massive government debt rather than force of arms.”

        Bit of fun.

        Equality of opportunity is not the same as equality of outcome and ‘guaranteed jobs’.

        One leads to success the other failure.

      • drsmithyMEMBER

        “If you want a prosperous, equitable and democratic society, you won’t get it from “The Left” who harken back to their historical utopia of Communism: a small cohort of privileged administrators, and a vast array of disposable peasants. The only difference is this time they’re imposing it through massive government debt rather than force of arms.”

        Bit of fun.

        Indeed. Trouble is switching the words only works when the resulting statement remains at least somewhat coherent and reflective of the facts.

        Equality of opportunity is not the same as equality of outcome and ‘guaranteed jobs’.

        Your straw man is predictable, but I have never even suggested that equality of opportunity is the same as equality of outcome.

        A jobs guarantee – full employment if you prefer – is an entirely separate issue.

        One leads to success the other failure.

        The biggest uplift in quality of life in human history came during the post-war decades in America, with what I’m sure you would describe as confiscatory taxes and communist obective of full employment.

        We know how to create success. It’s not the way “the Right” – at least in contemporary politics – want to do things.

      • Post war USA cashed in on their respective position of wealth while Europe rebuilt itself.

        Decades later they have become bloated, inefficient and completely indebted. Now they are living in some bizarre fantasy world where they kid themselves of their ability to deliver as promised under their social security / health system. Both side of politics are equally culpable.

        Some economies have been very successful taking a different path.

        The US has been taken over by a number of more dynamic economies not weighed down by an enormous debt burden – the result of hardly balancing a budget in the last forty years.

        Targeting full employment is vastly different to guaranteed jobs. You mentioned the latter.

        “Which, like most of the other things we of privileged modern life take for granted – individual rights, free speech, etc – is a product of “The Left””


        The IPA must be Australia’s most vocal advocate of Leftist values.

      • drsmithyMEMBER

        Decades later they have become bloated, inefficient and completely indebted. Now they are living in some bizarre fantasy world where they kid themselves of their ability to deliver as promised under their social security / health system. Both side of politics are equally culpable.

        There’s really only been one side of politics since the neoliberals took over in the ’70s.

        The USA of today is not the USA of post-war prosperity. Now it is a machine geared towards funnelling the wealth of the middle- and working-classes upwards, rather than expanding it outwards.

        Some economies have been very successful taking a different path.

        The US has been taken over by a number of more dynamic economies not weighed down by an enormous debt burden – the result of hardly balancing a budget in the last forty years.

        I expect your definition of “taken over” will be very convenient. Last I checked, the largest economies of the world were the EU as a whole, the USA, daylight, China, more daylight, Japan, and then individual EU countries like Germany and France.

        Targeting full employment is vastly different to guaranteed jobs. You mentioned the latter.

        I said job guarantee, which is a term fairly interchangeably used with “full employment”.


        The IPA must be Australia’s most vocal advocate of Leftist values.


        The IPA is only interested in free speech in as much as it can be used to deceive, obfuscate and intimidate, and individual rights in as much as they can be used as a lever to prise away the protections society affords the weak from the strong.

      • @8~

        “The IPA must be Australia’s most vocal advocate of Leftist values.”

        What planet are you from?

        “The IPA is a non-profit company, which has a restricted membership of 54 people. It was established in 1943 by G. J Coles and a group of businessmen based in Melbourne who appointed Charles Kemp as the first director. From the outset, it had close ties to the Liberal Party under its leader Robert Menzies. Australian journalist Paul Kelly argues that the IPA’s C.D. Kemp was “probably the principal architect of the original Menzies platform” (“The End of Certainty: The Story of the 1980s”, p. 47).

        The IPA was not influential again until the 1980s, when C.D. Kemp’s son, Rod Kemp took up the leadership. Rod Kemp transformed it from a conservative organisation to a neoliberal one, funded mainly by major corporations groups, and pursuing a pro-free-market, pro-privatization, pro-deregulation and anti-union agenda.

        According to Cahill (2004: 210) members of the IPA executive from 1976-1984 included David L. Elsum, Hon Vernon Wilcox, Sir Frank Espie, Douglas Hocking, Sir Wilfred Brookes, James Balderstone, Hugh Morgan, Peter Bunning and Charles Goode.

        Throughout the 1980’s the IPA’s primary focus was on issues such as economic policy, privatisation and industrial relations policy. It also dabbled in a few broader issues such as the role of the Australian Broadcasting Corporation and the role of churches in public policy debates. It wasn’t until 1989 that the IPA began to pay any sustained interest to environmental issues. Since then it has campaigned against the ratification of the Kyoto Protocol, promoted the use of genetically engineered crops and defended the logging of native forests.

        More recently, the IPA has been the driving force behind the establishment of a number of new non-profit front groups, including the Australian Environment Foundation – which campaigns for weaker environmental laws – Independent Contractors of Australia – which campaigns for an end to workplace safety laws and a general deregulation of the labour market, and the ironically named Owner Drivers Australia, which campaigns against safety and work standard for truck drivers.

        Australian Prime Minister John Howard, in a speech to the IPA justifying the 2003 Iraq War, commented that “the Institute has played a role in shaping, as well as articulating, our nation’s values.”[2]”

        Skippy…. am I to be informed that in your opinion that the IPA / neoliberal camp is an advocate of leftist platitudes and as such, since its been an influential force in driving government policy’s, for some time, that all the drama we are experiencing are due to the IPA leftists bent – [?????????].

      • Skippy I was responding to this statement:
        “like most of the other things we of privileged modern life take for granted – individual rights, free speech, etc – is a product of “The Left”.”

        Individual Rights and Free Speech…

        Smithy – I would count growth in per-capita GDP as a more important (but not perfect) measure of economic success than gross GDP.

        USA post war prosperity was a result of not having to compete with the rest of the world. It is hardly a valid argument for the welfare state.

        Again, it is strange how despite ballooning debt and deficits for 40 years, the governments in charge are labelled as neo-conservatives. What would they be called if they had of balanced the books?

        I totally agree the US has become an ugly situation

        Getting back to the start of this thread – I simply just laugh when these commentators start labeling and getting into the right/left nonsense when it is totally irrelevant.

      • @8~

        Your off the cuff reasoning is a poor substitute for historical facts, drsmithy is correct in stating increased social rights, post WWII, was a direct result labours increased bargain rights Albeit the pay to play political enviroment soon transformed the labour party in to a twisted caricature of its rival [see Hilary Clinton and our ex PM doppelganger].

        WWII need not have happened if for not the odious actions of debt collectors and the resulting industrialists and bankers which re tooled Germany’s military capacity, acerbated by their egos in thinking they could control the wing nut they helped into power. Which is bloody funny when some of the said industrialists tried to sue the US gov for damaged property – after the fact.

        BTW a JG is not a feature of the welfare state, tho subsidies and tax minimization et al to corporatist – would seem to fit the definition of the term. Which is actually a free lunch at the end of the day… eh.

        Skippy…. your cognitive bias wrt debt, due to your personal feelings about the nature of money, is self inflicted and can lead to false assumptions. Per your reasoning, as aforementioned, how much debt is a direct result of corporatist favoritism, as noted above, a result of unbalanced influence in governance.

      • drsmithyMEMBER

        Smithy – I would count growth in per-capita GDP as a more important (but not perfect) measure of economic success than gross GDP.

        Convenient, indeed.

        USA post war prosperity was a result of not having to compete with the rest of the world. It is hardly a valid argument for the welfare state.

        Tell me what you mean by “the welfare state” and I’ll tell you if that’s what I’m arguing for.

        Again, it is strange how despite ballooning debt and deficits for 40 years, the governments in charge are labelled as neo-conservatives. What would they be called if they had of balanced the books?

        I’m not quite sure why you think “balancing the books” is a relevant metric of political views.

  7. stop the stoats

    100 Years Ago Today, British Imperial forces including soldiers from Australia, New Zealand, Newfoundland and India landed in the wrong place along the Dardanelles as part of a reckless plan to simultaneously procure naval access to the Black Sea and prevent the Ottomans from entering the war in continental Europe by cutting Constantinople off from the rest of the Ottoman Empire. Doomed from the beginning, the plan went ahead regardless of protests from senior officers, being led by known mopey tosspot General Sir Ian Hamilton. Imperial forces underestimated the Ottoman troops considerably, and as a result, suffered over 250,000 casualties in this wholly unsuccessful campaign, over 28,000 of which were Australian soldiers.

    Today we remember this campaign not, as some would like, as a nationalist spectacle where the identity of our nation was forged, but as a cold, harsh lesson of the horrific costs of war and the dangers of following the lead of foreign Imperialist powers. The true lesson of ANZAC Day is that no more should citizens in service to our country ever set foot on the sovereign soil of another nation in service to another’s ends. Lest we forget the terrifying cost.

    • StS,

      “but as a cold, harsh lesson of the horrific costs of war and the dangers of following the lead of foreign Imperialist powers.”
      Do you really believe that is how we remember? I’d like to think so, but I doubt it. We’re spending 150mil on this the 100 yr anniversary, yet only weeks ago 4Corners showed how tight we are when it comes to looking after returned soldiers affected by their service for “our country”. The media, Gov and the ADF rabbit on about “honouring” their sacrifice, what a load of codswallop, how about we look after those returned and alive now so as to minimise the damage, physical and mental they have suffered and not perpetuate the known lot of returned soldiers. Nah, their isn’t any grandstanding to be had in that, and more to the point, it costs more!

      I’d do my utmost to dissuade any son (if I had one) to join the ADF at the pointy end, fighting/dying for your country is the most successful marketing campaign ever.

      Lest we forget

      • Just get your kid to read a bit of Gen Smedley Butler.

        Skippy… one has to wonder what the old “Fighting Quaker” would make out wrt all the sub contracting done now days… Two’fer methinks….

      • My Dad was in the Australian army and after WW2 was part of the British Occupation Force
        He was one of the first to arrive at Kure (about 7km from Hiroshima) they arrived about 6 months after the Atomic Bomb was dropped. To this day the Australian govt REFUSES to acknowledge that the sky-high rates of cancer among these troops had / has anything to do with exposure to radiation/fallout or the disposal of large caches of chemical and biologic weapons that were stored around Kure. (google unit_731 to get an idea of what agents they were probably exposed too, naturally without the proper protective clothing or understanding of the dangers)
        The whole endeavor was one of Australia’s least glorious moments (the war was over and the boys had a very good time with the local girls… if recent Japanese court proceedings are to be believed) As a result this whole episode has largely been white washed from Aussie military history. Trouble is it did happen and Diggers that served their country are still to this day dying as a result of injuries received as a direct result of service to their country. Its is shameful that the Australian military refuses to even acknowledge that Aussie troops stationed near Hiroshima suffered any adverse health effects, shameful truly shameful!

      • Exactly DE. They found $350m for the anniversary but I bet it can’t be found to help the returned soldiers.

      • There’s helping our allies when really needed, and then there’s being a completely soft touch for every dickhead’s lost cause.

    • CB,
      Your Dad’s circumstances are another example as to why I have utter disdain for the “service to country” notion. You can add Agent Orange, the Monte Bello Islands and Maralinga to that as well. After “serving your country” and your service is no longer needed, Govs and bureaucrats lose interest and do their utmost to disassociate your issues from your service.

      Anyone joining the ADF should have their own motivation other than service to county.

      • Dennis, this all reminds me of the character of Boxer the carthorse in Animal farm, and how he was sent to the knackers once he was of no further use.

  8. Has Barnett released a cost benefit analysis or is this yet another example of “don’t worry, be sweet as bro!”

    “Controversial $2bn Perth freight link ‘waste of public money’ says report”

    Report author compares freight link to Melbourne’s scuttled East-West link and Sydney’s proposed Westconnex motorway, saying “all three of them are dogs”


  9. Good read from credit bubble bulletin:

    Some estimates have over $1.0 Trillion of corrupt “money” having fled China. How much has made it to U.S. real estate and securities markets? For that matter, how much global finance Bubble “dirty money” has made its way to America? How much legitimate wealth has escaped local fragility for greener U.S. pastures – from China, Russia, Brazil, Venezuela, Latin America, Europe and the Middle East? And how much “hot money” has been unleashed by respective QE currency devaluations from the Bank of Japan and European Central Bank? How big are global leveraged “carry trades”? What have been the impacts and what are the ramifications from these historic flows that I view as unsound, unstable and unsustainable?

      • Gee that made lol Skippy, even w/o reading the ref. piece. Up country, rained off, dodgy cover. Sounds good 2b2f, ta. Back to it now.

      • The thing to remember is QE is dead money, whats more important is the underwriting on any new private monies.

    • I’ll give you that the photo is more consistent with logistics than manufacturing but it doesn’t give much reason to think it’s abandoned. Noteworthy that the article refers to five other warehouses that collapsed in the same area, so potentially factory is actually correct.

  10. Interesting excerpt from the 2015 intergenerational report:

    Box 2.2: Rapid debt increase in Ireland
    In Ireland, gross debt was estimated at around 25.1 per cent of GDP in 2006 (Chart 2.6). The 2007 Budget, which was released in 2006, forecast that gross debt would decline across the forward estimates, falling to 21.9 per cent of GDP in 2009. The onset of the Global Financial Crisis pushed the Irish economy into a recession and brought an end to its housing boom. Irish banks required substantial Government support, in turn increasing the public debt burden. This alongside a fall in revenues saw a rapid increase in Irish gross debt between 2008 and 2013. In contrast with the outlook presented in the 2007 Budget, the Irish Government recorded gross debt of 124 per cent of GDP in 2013. Ireland’s experience provides a cautionary warning for all governments. Government balance sheets can deteriorate rapidly in the face of large economic shocks, especially when public finances are exposed to contingent liabilities in the financial sector.

    Highlights the current similarities with Australia 2015 (similar level of government debt to GDP, similar housing bubble, similar fall of government revenues). Only missing ingredient is a global financial shock and things will undoubtedly unwind in a similar fashion (government will have to support the banks while housing crashes). This is one of the reason the current government is hesitant to touch any policies (negative gearing, etc..) that might rock the boat. However, one thing they have no control over is external global shocks. Given the current global economic outlook, there’s a high probability of a shock happening within the next 2 years. Such a shock will have devastating effects on the Australian economy given its current state.

    • Thx 2b. Hope for mean reversion house prices and the anhiliation of specufestors still simmers. Devastatingly good times ahead.

      • Good note 2X I suspect the effects here will eventually be decidedly worse than Ireland. The problem with the whole debt scenario is that it distorts the real economy. So when the debt machine stops there is no real economy left to sustain us. In Aus case we have not only had the debt machine but also the asset sales to foreigners machine. Both have distorted the economy and logically that distortion is worse than the debt machine alone.
        For the immediate future we can continue to sell assets to foreigners – including houses. However I’ve been thinking lately that this house price effect of the CAD and foreign buying is going to finally bring the bad effects of the sell-out of our nation to the cities. Previously it had only been rural communities who had been devastated (and who gives a damn about them?) while cities were enabled to live the very high life. Perhaps in a few years people will wake up to what has been done.
        But…It will be all too late. The answers lie back in time.

      • Date? The only dates I’ve got right in my life were a few beef cycles back in late 70’s early 80’s plus the 2000 stock market crash and the GFC. Everything else my timing is simply c..p! I always expect everything to happen much sooner than it actually does. I’m far too governed by trying to work out what SHOULD happen.
        I wouldn’t listen to me for investment advice!

      • Ok so its fair to say the stock market is not a very good indicator of socioeconomic well being and in fact, at its apogee, is a negative indicator, save a few that profit from all the ensuing destruction.

        Skippy…. pretty weird incentives if you ask me….

    • should be highly entertaining. I’ve spoken with a couple of lawyers on this and got the view that if the company was registered in Australia then forcing a sale would be complex and difficult. That throws up the possibility that during the 18 month lead up to the next federal election we can have the prospect of the federal treasurer having the foreigners buying houses issue (and his inability to do much about it) regularly in the press.

      • The media coverage at the time made mention of advice that Hockey had from the Commonwealth Solicitor. One wonders what it was, and whether Hockey actually following it.

    • Mining BoganMEMBER

      “Open for business.” The scariest words ever spoken by an Australian politician.

      Reckon this was just showboating by Fat Boy. He’ll be hoping now it blows over so he doesn’t have to do anything. Like usual.

      • Think your correct. Just doing whatever it takes to ensure house prices do not collapse on his watch. Even if this particular case does go through the courts it will sure to proceed at a glacial pace. All part of the plan.

  11. Thought the oil supply chart was very interesting. I think the shale supply situation is somewhat more elastic than some believe. Plenty of Fracklog if prices rise enough. Shale is a game changer and here to stay in my mind.

  12. Beautifully put by Michael West…….

    Far from free, gas is becoming the ‘risible’ market – all the way to the bank


    But you could extend this line of thought to other areas of Australia’s economy

    We are being reamed by…..inter alia…

    Grocery retailers
    Phone companies
    Resources companies
    electricity & gas companies
    insurance companies
    superannuation providers

    and on and on and on…..

    • Gunna – profit! Is that a concept the business you’re in is interested in pursuing? Essential for survival of most.

      • yeah,

        …. all relying on government legislation one way or another to extract their profit – all tub thumping about market forces – all bullshitting.

      • Interesting. I never took you for a free market deregulation kind of dude!

        Anyway you’ve got to work with what you’ve got, make then best of the situation. An imperfect world.

      • too right,

        But if we are going to have a half regulated market delivering taxation bases that dont add support the economy, which have Australian consumers paying larger margins than anywhere else in the world, or [for your resources mates] take an Australian national resource to deliver profits for foreign owned Singapore tax paying entities while babbling about labour market uncompetitiveness why not change the regulation around a bit to see if we can get better Australian economic outcomes, and better consumer costs…..

        Making the best of an imperfect world – letting go of free market dogma about perfect competition (except where it comes to actually having something resembling more competition for them) – asking if we can do better than the free market (or that posing as it) may be delivering

      • @3d1k

        “Interesting. I never took you for a free market deregulation kind of dude!”

        Surly you jest, Gunna is a pro free market stripe or were you confused by the avatar. Seems your knowlage base is quite narrow and prone to all kinds of indoctrinated dog whistle biases [the color red and the fist iconography] or its just a facade to begin with, per the clumsy “I never knew shtick denoted above”.

        The really interesting bit is – the market is more liberal [cough free market] now than it has be since pre GD, yet as deregulation and self regulation has progressed so has the sociopolitical and economic dramas, tho the only remedy this camps “great thinkers [navel gazers]” can come up with is more of the same which created the mess in the first place.

        Skippy… equilibrium or bust – insert late night mig-i cackle here….

      • Surly you jest, Gunna is a pro free market stripe or were you confused by the avatar.

        I’d refine that to say Gunna is pro *competitive* markets.

      • @ drsmithy,

        See my comment below – “Competitiveness is a wonky bit of nomenclature which is grounded on even more wonky metrics like the difference between productivity vs productive activity’s.”

        We have had manic productivity since the mid 70s, yet productive activity’s have diminished, along with wages.

        Skippy… Competitiveness is a free market corner stone imo, which put it as a neoliberal meme. Cracks me up when their is none [compettitveness] in the labor market, try finding a labour “market” in the last 22 quarters. Hence the need to always have a structured surplus as a buffer e.g. 6% nominal unemployment vs full.

      • drsmithyMEMBER

        I wasn’t really speaking in terms of competitiveness between economies, but in terms of competitiveness with the lumps, bumps and negative aspects of a “free” market smoothed out (eg: working against the natural monopolistic tendencies, ensuring workers have bargaining power against employers).

    • The ATO
      Motor vehicle industry
      Booze / cigarette taxes
      Public transport – both taxis and public transit
      Private hospitals and insurers
      The construction industry
      Chemists (though drugs are very cheap)
      Pay television

      • Competitiveness is a wonky bit of nomenclature which is grounded on even more wonky metrics like the difference between productivity vs productive activitys.

  13. Think you super is safe in the cash option ?


    Even physical cash is not safe from your friendly neighbourhood central bank. Negative interest rates exist for a reason, check out Miles Kimball’s idea for running down the debt with no banker being left behind. If you can’t see it with a short walk you don’t own it.

  14. Interesting article on why we need recessions.


    Day of reckoning: why our economy needs a recession

    Ultra high net worth wealth ­advisory is not just focused on making money, it is mandated to always endeavour to protect it, too.

    At this level of management, protecting wealth often becomes more important than enhancing it. Because of this, an important national conversation is being aired and argued across the boardrooms and private investment offices of Australia at this very moment.

    For great fear of being compared to Paul Keating in any way, we should be reminded Australia has not experienced a recession in more than a quarter of a ­century. For any economy to expand without technical correction for such a long period should concern all. This is because markets and the investments we make within them should, and eventually do, become a reflection of the performances within our real economy.

    Put simply, the S&P/ASX 200 will ultimately reflect the true ­nature of our real economy when trouble hits, explicitly evidenced by the stockmarket crash of Black Monday, October 1987.

    The precise nature of the “cause to consequence” is never linear, but markets cannot indefinitely escape fundamentals.

    A recession, by definition, is two consecutive quarters of negative economic growth, measured by GDP.

    The last official Australian recession was from the September quarter 1990 until the subsequent September quarter 1991. The US had a deep recession and because of it is once again on the ascent.

    Recessions are painful but are often critically important to the long-term health of an economy.

    They clean out exuberances, inefficiencies and excesses within economies and by doing so purge the misallocation of resources and labour seen during better times. I have always argued the most important ingredient within a healthy real economy is an ­enhancement to productivity growth — recessions help clear the fog that often collects around economies where misallocations are allowed to occur.

    For those who delayed the pain or sidestepped “The Great Recession” — also referred to as the GFC — thanks to the Chinese commodities ­supercycle running parallel during these years, the day of reckoning could be particularly painful.

    This is because there is much economic science to illustrate that postponing recessions can amplify the depth of their eventual fallout. Sophistry is often masked by fallacious arguments that Australia, for instance, did not need to suffer a recession and is dangerously inaccurate.

    Economies need recessions — this is a brutal fact and thoughts to the contrary are both naive and ultimately indefensible.

    It should not be a surprise that those only remunerated for short-term gains would take the stance a real economy recession is not needed. But for those with Australia’s perennial interests at heart, the topic becomes a very important one to discuss in the public forum.

    To be clear, Larkin Group’s “house view” remains supportive of US, Chinese, select Asian and even some European markets but holds the view our Australian broader markets, best exemplified by the ASX 200, are now floating on vapours that are difficult to justify given sober and objective reflection.

    Sideshows such as bickering over the tweaking of domestic interest rates, or whether the Australian dollar should be floating higher or lower, are less important than discussing how we can clear the broader fogs blocking our path to greater efficiencies and productivity. On a day of remembrance for the many Australians who sacrificed so much for us, let us put Australia first and ourselves second.

    Larkin Group is a Wholesale Wealth Adviser focusing on high yielding global investments. http://www.larkingroup.com.au

  15. Top scientists start to examine fiddled global warming figures – Telegraph


    … extract …

    The panel is chaired by Terence Kealey, until recently vice-chancellor of the University of Buckingham. His team, all respected experts in their field with many peer-reviewed papers to their name, includes Dr Peter Chylek, a physicist from the National Los Alamos Laboratory; Richard McNider, an emeritus professor who founded the Atmospheric Sciences Programme at the University of Alabama; Professor Roman Mureika from Canada, an expert in identifying errors in statistical methodology; Professor Roger Pielke Sr, a noted climatologist from the University of Colorado, and Professor William van Wijngaarden, a physicist whose many papers on climatology have included studies in the use of “homogenisation” in data records. … read more via hyperlink above …

    • Given that this “investigation” is funded by the right wing think tank “The Global Warming Policy Foundation”, an organisation set up to “challenge” (deny and spread FUD) about the science behind global warming, it’s got a monumental credibility handicap to overcome.

  16. The French housing Bubble also has Roots in Excessive Land Use Regulations | Vincent Benard | Newgeography.com


    Despite the claim to uniqueness that is quintessentially French, the housing bubble shares the same root as we see in the Anglo-Saxon world. To be sure, some analysts blame it only on low interest rates: they made the households more solvent, and thus drove home prices up. This rise in purchasing power might have been enhanced by some specific subsidies to new rental units. Some also y point to normative constraints on new buildings have added to production costs.

    These facts are undisputed, but a demand-only driven bubble can’t happen in a really free market where price signals provide incentives to supply more units, moderating price escalation, and eventually revert the price curve. After all, there hasn’t been anything like a “car price bubble”. So there has to be a supply side factor constraining the building of new homes. And since building itself doesn’t require scarce skills, the constraint has to come from land. These analysts observe that in middle America booming cities like Texas’ Houston and Dallas, or others in Kansas, Georgia, Oklahoma, and elsewhere didn’t experience such a price bubble despite identical credit conditions, despite in some cases, as in Texas, an even greater surge in demand. … read more via hyperlink above …