Weekend links 8-9 August, 2015

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Ensor1891ChristsEntryintoBrussels

James Ensor, The Frightful Musicians, 1891

China

 

Asia

 

Europe

 

United Kingdom

 

United States

 

Americas

 

Terra Incognita

Commodities

 

Capital markets

 

Global Macro

 

…and furthermore…

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Comments

    • 2big2fail

      The architect-led, collectively funded R50 Baugruppen project in Berlin is a new model for housing.
      http://www.metropolismag.com/May-2015/Dont-Call-It-A-Commune/
      ..Nineteen households built the building together, the modern way: Funds were pooled for construction and the purchase of the plot, and participatory planning catalyzed a comprehensive vision, from communal space to window fittings. The group and its architects, a collaboration between ifau with Jesko Fezer and Heide & von Beckerath, selected the site from a set offered by the Berlin Senate Department for Urban Development—part of a city government bid to spark development outside the usual mode of initial investment for maximal short-term profit.

  4. 2big2fail

    Opening statement transcript by Lindsay David to the House of Representatives Standing Committee on Economics Inquiry into Home Ownership –
    http://blog.australiaboomtobust.com/2015/08/opening-statement/
    …To put it into perspective how expensive land is across Australia, you can find cheaper blocks of land per square meter on the hills of Malibu, California with a view of the Pacific Ocean than you can find in locales like Alice Springs or St Marys. Representatives, this is not normal, and quite frankly, laughable if the matter was not so serious.

    • Hugh Pavletich

      Why are Australians allowing urban planners to force them to live like this ? …

      http://www.dailymail.co.uk/news/article-3184283/Mesmerising-images-amazing-tower-blocks-Hong-Kong-City-s-claustrophobic-housing-estates-resemble-piece-abstract-art.html

      Why are urban planners BANNING the Australian Dream … Sydney 1966 …

      https://www.youtube.com/watch?v=vR1CU8NjGW0

      Here is what Americans want (likely the same for Aussies and Kiwis) … just released Trulia Research …

      http://www.trulia.com/trends/2015/08/american-dream-home/

    • Hugh Pavletich

      New Zealand Prime Minister THE BLUNDERER John Key lying about housing … again … whats new ?

      PM John Key says non-Aucklanders tell him they would love more Chinese buyers; says Aucklanders like it when house prices are rising, but would prefer slower rises | interest.co.nz

      http://www.interest.co.nz/property/76953/pm-john-key-says-non-aucklanders-tell-him-they-would-love-more-chinese-buyers-says

      … THE REALITY …

      Experts predict Auckland median house price will break $1m mark in 18 months … Anne Gibson … NZ Herald

      http://m.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11485580

      Quarter-acre dream fades for city – Anne Gibson – Business – NZ Herald News

      http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11478443

    • dennis

      2B2F,
      I was pretty hopeful when I first started reading what Lindsay David was writing, the hope being it would not just ignite debate, but light a fire under RE in the media and normal everyday people would want to know what’s happened, but no, all you will get is blank looks. I quickly came to realise they will be “seriously” thanked for bringing this to “our” attention and then promptly ignored and the public will just look on quizzically.

      I would get annoyed at those would claimed it was all greed on behalf of those who invested, but I was wrong, it is. I’ve tired of arguing with those buying their 2nd/3rd property over the rights/wrongs of NG with their “I’m paying too much tax”, who have no real response to “how will this pan out for others starting out 15 yrs down the track” or with “they’ll have to work hard like I have.” The blank expressions when you point out the parabolic nature of RE prices in comparison to wages and they then say “but’s it’s always been like that.” I feel like saying “Are you FUCKING stupid, how can it have been!” Or those who believe they SHOULD be able to sell their house to non residents etc.

      I’m not smart, but I think the general pop is just plain fucking dumb. Sadly our political system is too corrupted and nothing will be done, it will eventually collapse and will then be rebuilt in the same fashion, and those in the industry will make another killing. Thus it will ever be.

      Will I jump with glee when it burns? No, but when they all start crying over what they have lost, I’ll just think “you got what you worked for, nothing more, nothing less.”

      • BensonMEMBER

        +1

        I dong even bother trying to have the conversation now, even with close relatives. Complete blank faced ignorance to the issues

      • China-Bob

        Yea it really is a case of the Emperor’s new clothes, only those that have drank the koolaid can see the beautiful fabric and exquisite workmanship that justifies the price…for the rest of us he’s just parading around naked wthout any thought given to the morality let alone the risk of his actions.

      • Escobar

        “I’m not smart, but I think the general pop is just plain fucking dumb.”

        Sadly true. Have you ever worked with people that aren’t professional / haven’t had higher learning or even with young people…. they know SFA and show it. They’re constantly surprised by anything because they simply know Jack S#!+

        Why do you think good people get paid so much?

      • Hugh Pavletich

        New Zealand is considerably more advanced in dealing with the housing issue … from the time Deputy Prime Minister Bill English announced the Government policy October 2012 to focus on …
        • Land supply
        • Infrastructure financing
        • Process … and …
        • Construction costs …

        https://www.youtube.com/watch?v=FEads92iu-o&feature=player_embedded

        … and with the appointment of Dr Nick Smith as Housing Minister early 2013 …

        Nick Smith tasked with affordable housing | Business | 3 News

        http://www.3news.co.nz/business/nick-smith-tasked-with-affordable-housing-2013012218#axzz3iBBw8kfS

        It is well past time we saw focused structural advocacy and political progress at the States level in Australia.

      • [email protected]

        ” I think the general pop is just plain fucking dumb”
        Don’t let ’em of so easy Dennis. I won’t be.
        fucking greedy is what they are. Immoral future eating whores.
        And your other ” you got what you worked for” phrase is gunna be on constant repeat in my camp.

      • RobW

        That really sums up why this country is going down the sinkhole. These same people will probably blame everyone else but themselves when the cycle turns in them.

      • dennis

        Escobar,

        I’m sorry, but I’ve had this conversation with Drs, lawyers, engineers etc. Just as many have a degree as those that don’t. When I say dumb I don’t necessarily mean in an academic sense, but most just can’t seem to get past some sort of bias. EDIT: I was talking to my then yr12 daughter on RE and explaining what Soos had published etc, now she could see it. I think it it’s more long term indoctrination of belief.

        Now, I’m not saying things will collapse, but you’d fucking think that the way things are people would be on the edge of the seats, looking at the data and not only saying “shit, how did we get here?” But , “how the hell didn’t I see this earlier!” But no, most think you’re off the plantation!

      • 2big2fail

        Dennis,
        We are a nation of free riders.
        http://www.britannica.com/topic/collective-action-problem-1917157
        Collective action occurs when a number of people work together to achieve some common objective. However, it has long been recognized that individuals often fail to work together to achieve some group goal or common good. The origin of that problem is the fact that, while each individual in any given group may share common interests with every other member, each also has conflicting interests. If taking part in a collective action is costly, then people would sooner not have to take part. If they believe that the collective act will occur without their individual contributions, then they may try to free ride.

      • flyingfoxMEMBER

        +1.

        Agree it is not just the uneducated sort. I think the whole society is being dumbed down. People just refuse to think.

        I have had blank looks from accountants when I try to explain that NG means you are losing money in the mean time. This was in Brisbane where the market had been now where for 3 yrs (and subsequently has gone nowhere for another 4).

        Why do you think good people get paid so much?

        The really good people get fired or start their own business because they rock the boat too much.

      • Escobar

        FF

        You can be cash flow positive and still negative gear.

        Not everyone is losing money when negative gearing.

      • Hugh Pavletich

        Aucklanders (fleeing and) buying up big in regions … Anne Gibson … New Zealand Herald

        http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11493739

        Aucklanders are leaving in such numbers that half the house sales in the Waikato outside Hamilton and nearly a quarter in Tauranga are to those from the big city.

        Jamie Farmer, Westpac’s northern consumer bank head, today releases CoreLogic data which shows the growing scale of the Auckland exodus and put the first precise numbers on the activity.

        This year, half of more than 300 properties sold in the Waikato region outside Hamilton were to people leaving Auckland and a quarter of people moving house in Tauranga have been from Auckland – double the number in 2012 and up from the previous peak of 15 per cent in 2007, Mr Farmer said … read more via hyperlink above …

      • PantoneMEMBER

        @escobar, excuse me. I’m 26 and my higher education is mostly from the local library. I know finance students who can’t read a cash flow statement. I know people who work for Macquarie in tonnes of mortgage debt.

      • Escobar

        Pantone

        There are exceptions to everything everyone says.

        You are excused.

        I know accountants that know nothing about tax and accountants that know nothing about financial reporting and accountants that know nothing about commercial accounting.

        But I wasn’t talking about specialisations.

      • flyingfoxMEMBER

        You can be cash flow positive and still negative gear.

        Not everyone is losing money when negative gearing.

        And I know how to do some basic maths….

      • RobW

        I just think people across the entire social and economic spectrum are (understandably) really bad at identifying and assessing complex risks.

      • AlbyMangles

        all great comments, now pass me a diet coke, i gotta watch reruns of the block while picking out my next tattoo on my ipad

      • flyingfoxMEMBER

        where Aucklanders are fleeing the place for the regions … big time.

        Have some friends and family in the Waikato region. It is booming big time from those leaving Auckland now those from Christchurch has subsided.

      • permacuppa

        +1. It all comes down to a childish selfishness and lack of responsibility across the country from rorting pollies to self-entitled, “self-made” property investors. If people stopped and thought about what they’re doing, they’d see just how ugly they really are. And no good looking investor wants to see their true reflection, now nor ever!

      • Jagster

        “I have had blank looks from accountants when I try to explain that NG means you are losing money in the mean time.”

        This is incorrect. This statement shows me you don’t really understand how negative gearing or cash flows work. In a low LVR or low interest rate environment you would most likely be be cash flow positive like a lot of investors should be today. In a higher LVR or interest rate environment you would have negative cash flow anyway, however negative gearing reduces the burden.

        Negatively gearing is a tax outcome whereby you are effectively using the taxpayer to assist you in reducing your after tax cost on levered investments and they are essentially helping you to service your investment. With the inclusion of non-cash deductions, if your after tax cost is less than zero – your after tax cash flow would be positive. It really is free money.

        However, you have the usual risks associated with the underlying investment.

      • PantoneMEMBER

        @jagstar, having positive cash flow doesn’t mean you are profitable. Depreciation is a real expense, the tooth fairy doesn’t pay for capex. When that oven breaks you have to pay for it.

      • flyingfoxMEMBER

        @Jagster

        In this particular instance, given that you are not privy to the facts and figures nor where you a part of the conversation, I think you are more than over reaching. This was in 2009 in Brisbane. Alternative use of their investment, given that they were on the 30% bracket would have been much better off.

        This statement shows me you don’t really understand how negative gearing or cash flows work.

        Trust me when I say, I understand it perfectly well….you pick up more than a few things growing up in businesses with multi-million dollar turnovers and also multi-million dollar, debt free, property portfolios. I’ll leave it at that.

      • Jagster

        Use this as a general example only:

        Data
        Purchase price $500000
        Purchase costs @ 4% of price is $20000
        LVR @ 80% is $400000
        Loan interest rate is 4.49% fixed for 3 years
        Rental income $400 wk
        Cash expenses at 25% of Rental income (Some banks use 25% as an estimate)
        Depreciation expenses (Non-cash costs) after year 1 is $8000
        Marginal Income Tax Rate + ML @ 34%

        Income
        Rental Income $400 x 52 = $20800 pa

        Expenses
        Loan expense $400000 x 4.49% = $17960 pa
        Cash expense $20800 x 25% = $5200 pa
        Depreciation expense after year 1 is $8000 pa

        Income less Expenses
        $20800 – $17960 – $5200 -$8000 = -$10360 Tax Outcome is Negatively Geared
        Therefore -$10360 x -34% = $3520 Tax Refunded (This is effectively the TAX PAYER giving you money to help service the investment)

        Cash Outcome
        $20800 – $17960 – $5200 + $3520= $1160 pa cash flow positive

        The reason you purchase an IP is for capital growth not for the tax break while servicing the investment. If you made a bad investment and it were growing at say CPI (3%) – you would end up with approximately (15k capital growth + 1.16k cash flow) $16.16k increase in your asset value at the EoY. This doesn’t take into account any future CGT liability – which is also quite generous for the investor – which would be payable on sale, however there are ways to minimise this.

        $16.16k (asset increase) / $120k (owner’s equity) = +13.5% after income tax and before any CGT liability on what was really an ordinary 3% pa growth asset.

        Maybe next year it will get 5% growth or 7% growth – maybe it won’t – AND THAT IS THE RISK.

        I’ll leave it at that.

      • flyingfoxMEMBER

        @Jagstar

        Stop quoting slides from specufestor seminars. Different situations lead to different outcomes. This particular gentlemen has since come back and told me he would have been better off taking my advice.

        Maybe next year it will get 5% growth or 7% growth – maybe it won’t – AND THAT IS THE RISK.

        I’ll leave it at that.

        Yeah I’ll ask you again in 6 months how your docklands apartments are going now that there is a new apartment tower every few hundred meters.

      • drsmithyMEMBER

        I think calling something “cash flow positive” because of a once-a-year tax refund and an assumption of 100% occupancy might be a little generous.

      • emess

        Jagster,

        That $8000 depreciation amount is not for spending. It is not merely some irrelevant accounting number. Your asset is worth less by that amount, so unless you put that amount aside somewhere out of your free cash flow, it has to be taken off the return. And if there’s a bubble, those returns are nixed IN ADDITION.

      • Jagster

        LOL… Back in January HnH suggested I “deleverage with swiftness” from my IP portfolio due to the risks he saw with the residential property market.

        In that period I would have made six figures in capital growth from my IP portfolio – though this is difficult to estimate. More than many earn for their blood, sweat and tears over a year. Many IP investors would have made lots more.

        I am more than happy with the bed I made. What If I did sell up back in January as HnH suggested? What chance do you think I would have HnH compensate me for the missed six figure growth? Pretty slim..

        em – Learn that building depreciation is treated by the ATO as a non-cash expense. You effectively get your marginal rate + medicare levy back on that expense. Just as in the example above. Yes the depreciation comes off the capital improvement amount and cost base on sale. WRT your last sentence, that is the risk you take.

        drsmithy – Learn what an Income Tax Withholding Variation is from the ATO. Order the form. Have a look what it is for yourself.

        FF – I suppose any learning for you would be a waste of your time.

      • PhilWMEMBER

        So you claim $8k depreciation per year to land $1k tax refund? You’re effectively getting the ATO to liquidate your properly slowly with an 82.5% commission to them. Then, if you property doesn’t actually lose $8k per year when you go to sell it, you pay your CGT on that $8000 which is likely to be higher than $1k.

        So worst case, you liquidate and lose 82.5% as you go. Better case, you pay back more than $1k in advance.

      • Jagster

        You must be an Accountant right? But seriously, I think we’re on different wavelengths.

        Firstly you get the depreciation allowance on the capital improvement when you purchase the property. It comes with the property. A schedule is completed by a quantity surveyor which many PI’s don’t seem to claim – which they are entitled to! Secondly, in the example the tax refunded by the ATO was $3520 – perhaps I could have been clearer. The positive cash flow on the investment at the end of Yr1 was $1160. Thirdly, this was just an example to explain how NG works cause many ppl just don’t seem to understand it properly or think they understand when they actually don’t.

  5. MavMEMBER

    Re Adani, how did they manage to spend $1.3bn on land and engineering plans.. looks a bit fishy.

    The figure often cited is something just shy of $4bn. But of Adani’s Australian spending, more than $2bn went to the purchase of the existing T1 port at Abbot Point. The port is already given over to other coal exporters such as Glencore, Rio and BHP and will be accepting nothing from Adani’s own Carmichael mine, That leaves $1.3bn that Adani has spent directly on its own mining export project, including land, engineering plans (now suspended) and so on.

    • Jason

      I wonder if that includes the inherited liabilities on the existing Abbott Point terminal, like the legal proceedings with John Holland?

  6. Hugh Pavletich

    Russian “food crematoria” provoke outrage amid crisis, famine memories | Daily Mail Online

    http://www.dailymail.co.uk/wires/reuters/article-3188990/Russian-food-crematoria-provoke-outrage-amid-crisis-famine-memories.html

    http://www.abc-7.com/story/29735324/russia-is-facing-a-fuel-shortage

    LONDON (CNNMoney) — Russia has lots of oil, but in a weird twist of fate, the nation could soon run dangerously low on gasoline.

    The head of Russia’s biggest oil company is warning that the world’s second largest oil producing nation could soon face a fuel shortfall.

    Rosneft’s Igor Sechin predicts that Russia’s gasoline shortage could reach 5 million tonnes a year by 2017. It produced around 38 million tonnes of gasoline in 2014, according to the energy ministry.

    The expected shortfall is a result of many factors, including new tax rules, a weakening economy and Western sanctions that are hurting Russia’s oil refining businesses. This is pushing fuel prices up.

    • AlbyMangles

      +1, some artist in straya should paint an aussie version titled ‘the frightful real estate agents’

  8. Revert2Mean

    New Zealand Pledges An End To Coal By 2018

    It appears that New Zealand is finally ready to throw their domestic coal habit into Mount Doom — by 2018, the country will cease to use coal as a source of domestic energy production.

    “Historically coal has played an important role in ensuring the security of New Zealand’s electricity supply, particularly in dry years where our hydro-lake levels are low,” Simon Bridges, New Zealand’s Energy and Resources Minister, said in a statement. “But significant market investment in other forms of renewable energy in recent years, particularly in geothermal, means that a coal backstop is becoming less of a requirement.”

    Bridges’ statement comes on the heels of the country’s largest electricity and gas retailer, Genesis Energy, announcing its intentions to shut down the last of their two coal-fired boilers at the Huntly Power Station, located south of Auckland, by December of 2018.

    “Its closure marks the end of coal-fired power generation in New Zealand,” Bridges said, noting that the closure of the plants would also help New Zealand significantly reduce its carbon emissions.

    ————

    The Ridiculous Responses Climate Deniers Had To Obama’s Climate Plan

    ► West Virginia attorney general Patrick Morrisey says residents are “turning to drugs because Obama is shutting down their coal plants”.
    ► Murray Energy said: “It will dramatically increase the cost of electricity for all Americans, with no environmental benefit whatsoever.”
    ► Mike Huckabee: “Obama’s carbon crusade shows he’s more committed to confronting American coal miners than Iranian clerics who chant ‘death to America‘”

    • Revert2Mean

      As if to underscore it all, here’s another nail in humanity’s coffin. Rolling Stone Magazine has just published this:

      The Point of No Return: Climate change nightmares are already here

      I used to think it was kind of hard to make things in the ocean go extinct. But this change we’re seeing is happening so fast it’s almost instantaneous.

      Historians may look to 2015 as the year when shit really started hitting the fan. Some snapshots: In just the past few months, record-setting heat waves in Pakistan and India each killed more than 1,000 people. In Washington state’s Olympic National Park, the rainforest caught fire for the first time in living memory. London reached 98 degrees Fahrenheit during the hottest July day ever recorded in the U.K.; The Guardian briefly had to pause its live blog of the heat wave because its computer servers overheated. In California, suffering from its worst drought in a millennium, a 50-acre brush fire swelled seventyfold in a matter of hours, jumping across the I-15 freeway during rush-hour traffic. Then, a few days later, the region was pounded by intense, virtually unheard-of summer rains. Puerto Rico is under its strictest water rationing in history as a monster El Niño forms in the tropical Pacific Ocean, shifting weather patterns worldwide.

      On July 20th, James Hansen, the former NASA climatologist who brought climate change to the public’s attention in the summer of 1988, issued a bombshell: He and a team of climate scientists had identified a newly important feedback mechanism off the coast of Antarctica that suggests mean sea levels could rise 10 times faster than previously predicted: 10 feet by 2065. The authors included this chilling warning: If emissions aren’t cut, “We conclude that multi-meter sea-level rise would become practically unavoidable. Social disruption and economic consequences of such large sea-level rise could be devastating. It is not difficult to imagine that conflicts arising from forced migrations and economic collapse might make the planet ungovernable, threatening the fabric of civilization.”

    • Jagster

      George Carlin’s take on global warming is pretty funny. He makes a lot of sense.
      https://www.youtube.com/watch?v=BB0aFPXr4n4

      No solar wind by 2030 allowing more cosmic rays entering our atmosphere assisting in the formation of cloud cover and greater precipitation.
      https://www.youtube.com/watch?v=ojL7XoJ6ijY

      Tasmania receives the most snowfall in 30 years
      http://www.abc.net.au/news/2015-08-05/tasmania-snow-cold-snap-revives-fortunes-ben-lomond-ski-field/6673068

      Also an interesting doco debunking AGW’s false claims. The Great Global Warming Swindle.
      https://www.youtube.com/watch?v=D-m09lKtYT4&list=WL&index=2

      • Revert2Mean

        George Carlin’s take on global warming is pretty funny. He makes a lot of sense.

        Carlin said: “The planet is fine, The people are fucked …. We’re going away. Pack your shit, folks. We’re going away. And we won’t leave much of a trace, either. Maybe a little Styrofoam … The planet’ll be here and we’ll be long gone. Just another failed mutation. Just another closed-end biological mistake. An evolutionary cul-de-sac. The planet’ll shake us off like a bad case of fleas.”

        He could be right. Carlin does not say AGW is not happening, just that we are going to go extinct and the planet does not care.

        No solar wind by 2030 allowing more cosmic rays entering our atmosphere assisting in the formation of cloud cover and greater precipitation.

        You should never get your climate data from an anonymous BoobTube channel. Only an idiot would do that. Scientists (real ones, not BoobTube ones) say that the solar sunspot decrease could make at most a 0.1ºC difference in temp — chickenfeed. New Ice Age, Sun spots, Maunder Minimum
        http://www.metoffice.gov.uk/news/releases/archive/2015/solar-activity

        Tasmania receives the most snowfall in 30 years

        Completely in keeping with the polar vortices caused by AGW. Do you want to know why this is happening, denier-bot? No, of course you don’t, but for others, go here: (watch from 12m:30s)
        http://www.abc.net.au/catalyst/stories/3796205.htm

        Also an interesting doco debunking AGW’s false claims. The Great Global Warming Swindle.

        That is a total crock of shit. 🙄
        http://rationalwiki.org/wiki/The_Great_Global_Warming_Swindle
        https://en.wikipedia.org/wiki/The_Great_Global_Warming_Swindle

        The problem with The Great Global Warming Swindle is that to make its case it relies not on future visionaries, but on people whose findings have already been proved wrong.

      • Josh MoorreesMEMBER

        cosmic rays and solar wind are completely different things and don’t interact with each other. Earths magnetic field is primarily protecting us from solar wind (ie protons) and the atmosphere protects us from cosmic rays (high energy radiation from outside the solar system).

      • Jagster

        Evidence suggests that during times of stronger solar activity, galactic radiation (cosmic rays – possibly formed by exploding supernova) are deflected from our solar system by the stronger and denser solar wind. During times of weaker solar activity – as we are currently experiencing – more cosmic rays enter earth’s atmosphere creating the nuclei for cloud formation.

        The Cosmic Ray Factor of a Solar Magnetic Shutdown
        https://www.youtube.com/watch?v=nPSV01oLuLc

        Physicists claim further evidence of link between cosmic rays and cloud formation
        http://physicsworld.com/cws/article/news/2013/sep/09/physicists-claim-further-evidence-of-link-between-cosmic-rays-and-cloud-formation

        Also a great presentation by John L Casey author of THE COLD SUN.
        Global Warming – The Great Deception. Don’t believe the Liberal Media! Forgive the audio.
        https://www.youtube.com/watch?v=miIEAOAOgyI

      • Jagster

        The author of that blog is a biologist and describes himself as an ecologist and environmentalist. No climate credentials to note. Like a lot of other liberal left wing bloggers – full of fluff but no puff.

        Mr John L. Casey on the other hand is a former White House space program advisor, consultant to NASA Headquarters, and a senior field engineer on the Space Shuttle program. He is one of America’s most successful climate change researchers and climate prediction experts. He is also the founder of the Space and Science Research Corporation (SSRC) – a leading independent US climate research company. The author of the internationally acclaimed climate science books, “Cold Sun” and “Dark Winter,” which describe the rationale for understanding why solar influenced global warming has ended and the effects of the new cold climate era has begun.

        http://spaceandscience.net/id1.html

      • Jagster

        LOL!! Are you serious?? No doubt that data can be discredited quicker than you can say “UN adjusted datasets”. They are basing future climate trends on data specifically made to look like great warming is occurring when its actually not. Looks to me like that report may have been compiled by a Yr12 science student if there are any left!! Perhaps a social-sciences student? Our taxpayer dollars hard at work there boys and girls!

        http://joannenova.com.au/2015/04/two-thirds-of-australias-warming-due-to-adjustments-according-to-84-historic-stations/

        For those of you serious about the subject of space weather and the interaction between the solar cycles, solar magnetic fields, sunspots and the potential upcoming grand minima and want to investigate further, there are Abstracts and a couple of links below:

        Principal Component Analysis of Solar Background and Sunspot Magnetic Field in cycles 21-24 and its implications for the solar activity prediction in cycles 25-27 Abstract: Principle component analysis (PCA) of the solar background magnetic field (SBMF) measured from Wilcox Solar Observatory (WSO) and sunspot magnetic field (SMF) measured by SOHO/MDI magnetograms reveals the two principal components (PCs) of waves travelling in time. In addition, the independent components analysis helps to uncover 8 pairs of SBMF waves in latitudes: two large symmetric magnetic waves, which are the same for all cycles 21-23, and three pairs of asymmetric magnetic waves, which are unique for each cycle. In each pair the waves travel slightly off phase with different phase shift for each cycle and have a different number of equator crossings (Zharkova et al, 2012). These SBMF variations are assumed to be those of poloidal magnetic field traveling slightly off-phase from pole to pole which are caused by a joint action of dipole and quadruple magnetic sources in the Sun. The simulations with the two layer Parker’s dynamo model with meridional circulation revealed that the dominant pair of PCs can be produced by a magnetic dipole accounting for the two main dynamo waves operating between the two magnetic poles. The further three pairs of the waves are unique to each cycle and associated with the multiple magnetic sources in the solar interior: with a quadruple symmetry in both layers for cycle 21, with quadruple magnetic sources in the upper layer and dipole sources in the inner layer for cycle 22 and with the quadruple magnetic sources in the inner layer and the dipole sources in the upper layer for cycle 23 (Popova et al, 2013). The PCs derived for all three cycles from SMBF were used as a training set for the magnetic wave prediction for the cycles 24-27 by using Hamiltonian approach (Shepherd and Zharkova, 2014) and verifying by the SBMF observations in the current cycle 24. The prediction results indicate that the solar activity is defined mainly by the solar background magnetic fields while the sunspots and their magnetic fields seem to be derivatives of the SBMF variations.

        Prediction of Solar Activity from Solar Background Magnetic Field Variations in Cycles 21-23 Abstract: A comprehensive spectral analysis of both the solar background magnetic field (SBMF) in cycles 21–23 and the sunspot magnetic field in cycle 23 reported in our recent paper showed the presence of two principal components (PCs) of SBMF having opposite polarity, e.g., originating in the northern and southern hemispheres, respectively. Over a duration of one solar cycle, both waves are found to travel with an increasing phase shift toward the northern hemisphere in odd cycles 21 and 23 and to the southern hemisphere in even cycle 22. These waves were linked to solar dynamo waves assumed to form in different layers of the solar interior. In this paper, for the first time, the PCs of SBMF in cycles 21–23 are analyzed with the symbolic regression technique using Hamiltonian principles, allowing us to uncover the underlying mathematical laws governing these complex waves in the SBMF presented by PCs and to extrapolate these PCs to cycles 24–26. The PCs predicted for cycle 24 very closely fit (with an accuracy better than 98%) the PCs derived from the SBMF observations in this cycle. This approach also predicts a strong reduction of the SBMF in cycles 25 and 26 and, thus, a reduction of the resulting solar activity. This decrease is accompanied by an increasing phase shift between the two predicted PCs (magnetic waves) in cycle 25 leading to their full separation into the opposite hemispheres in cycle 26. The variations of the modulus summary of the two PCs in SBMF reveals a remarkable resemblance to the average number of sunspots in cycles 21–24 and to predictions of reduced sunspot numbers compared to cycle 24: 80% in cycle 25 and 40% in cycle 26. [full paper] ~
        http://computing.unn.ac.uk/staff/slmv5/kinetics/shepherd_etal_apj14_795_1_46.pdf

        North-South Asymmetry in the Magnetic Deflection of Polar Coronal Jets Abstract: Solar jets observed with the Extreme Ultra-Violet Imager (EUVI) and CORonagraphs (COR) instruments aboard the STEREO mission provide a tool to probe and understand the magnetic structure of the corona. Since the corona is an environment where the magnetic pressure is greater than the kinetic pressure, the magnetic field controls the dynamics of plasma and, on average, jets during their propagation trace the magnetic field lines. We discuss the North-South asymmetry of the magnetic field of the Sun as inferred from measurements of the deflection of polar coronal hole jets when they propagate throughout the corona. We measured the position angle at 1 and at 2 solar radii for the 79 jets of the catalogue of Nisticò et al. (2009), based on the STEREO ultraviolet and visible observations, and we found that the propagation is not radial. The average jet deflection is studied both in the plane perpendicular to the line of sight, and, for a reduced number of jets in the three dimensional (3D) space. We find that the magnetic deflection of jets is larger in the North than in the South, with an asymmetry which is consistent with the N-S asymmetry of the heliospheric magnetic field inferred from the Ulysses in situ measurements, and gives clues to the study of the large scale solar magnetic field.
        [2015 presentation slides] ~
        http://www2.warwick.ac.uk/fac/sci/physics/research/cfsa/people/nistico/openday_warwick-monash/wamo.pdf

        NB: I couldn’t include the adsabs harvard edu links to Abstracts as I kept getting the “comment awaiting moderation” message. With some research you can locate these yourselves. Enjoy.

      • Jagster

        Jo reported on the analysis of Chris Gillham who discovered the BoM warming trend was solely based on the post hoc “adjustments” of historic temperature data to make it appear cooler than it actually was.

        From the link –

        Two-thirds of Australias warming due to “adjustments” – according to 84 historic stations

        Chris Gillham has been working with CSIR documents and official Commonwealth Year Books. Last month he used the 1953 Year Book which contained 44 weather station averages for 1911-40 to compare with 2000-14 temperatures, but has since discovered that the 1954 Year Book provides an additional 40 stations with 1911-40 data. The average rise in mean temperatures across all 84 weather stations around Australia over the last 70 years of global warming is about 0.3C. This larger dataset suggests as much as two thirds of the current official trend in Australian warming was due to post hoc adjustments, not heat recorded by thermometers.

        Bear in mind – some adjustments are necessary because raw is not automatically right. Stations have moved. But the Australian Met bureau can’t explain why all these adjustments are necessary, and indeed still claims the adjustments make no difference to the trend when clearly they do.

        And then there is the bizarreness of the half a degree adjusted cooling that occurs in these historic records when modern screens are much more likely to be near tarmac, bitumen, jumbo jets and 15 storey apartment blocks. The Urban Heat Island effect means that modern temperatures are artificially elevated in city CBDs by as much as 5- 7 C, with tests also showing several degrees of UHI at regional weather stations. So we have the paradox that the old records near dirt roads and horse drawn carriages were apparently reading artificially warm compared to thermometers today near roads with 10,000 internal combustion engines passing daily.

        This would be funny if it wasn’t so serious…

      • AlexD

        …and the war on science by Jagster continues. Look mate, if you’re going to continue to regurgitate dodgy sources from the blogosphere then talk to my hand. There is no discipline or rigour in what they do because they are searching for an outcome they want and they have no background/grounding in a related science. Jo Nova and the self-referencing circle of denialistas never put anything substantial out for public comment and when they do, it gets shot down. Just like the claims of data manipulation by BOM have been many times before:
        Examples:
        https://theconversation.com/no-the-bureau-of-meteorology-is-not-fiddling-its-weather-data-31009
        http://jennifermarohasy.com/wp-content/uploads/2014/01/BOM_Response-to-Dr-Marohasy_MARKUP.pdf
        I say again: stop posting rubbish from poor quality sources Jagster and give the war on science a rest.

      • Jagster

        LOL!! What an absolute fluff piece of journalism that was!! No justification whatsoever for what they did. No rigour in the analysis.

        The BoM need to “please explain” their methods in “homogenizing” historic temperature data sets at every instance. They need to publicly display their reasoning and analysis on why two thirds of the current official trend in Australian warming is due to post hoc adjustments, not heat recorded by thermometers – but they staunchly refuse to.

        You have way too much faith in the system because it meets your agenda. The BoM need to be held accountable with results open for public scrutiny and independent verification. Not blindly followed by sections of the community with the tagline – Trust us we know what we are doing.

        On the contrair, I am strictly on the side of science and NOT the unexplained falsification of historic data sets.

      • AlexD

        They (BOM) already have explained everything in the links posted in the second link I provided above. Their methods and data have been made available for some time and are peer evaluated. They are experts in climate and in recording, tracking and interpreting climate data. Your “proof” is just a bunch of misleading words in the blogosphere from a nobody that is cited by a nobody.

      • Jagster

        LOL!! I wonder why you didn’t include the full link to Dr Jennifer Marohasy’s blog? Perhaps this is why??

        http://jennifermarohasy.com/2014/01/bureau-confirms-calculating-australias-average-temperature-involves-some-hocus-pocus/

        Bureau Confirms Calculating Australia’s ‘Average’ Temperature Involves Some Hocus-pocus

        The Bureau’s solution is to select a subset of about 112 stations from the 750. Some of the stations in the subset started recording temperatures in the 1850s, others not until the 1960s. Then the bureau truncates the longer temperature records, in some cases by discarding over 50 years of data, indeed everything before the somewhat arbitrary date of 1910. Data before this date is not considered reliable, but then the Bureau applies corrections to some of the rest of the data even though it should be reliable. Then the adjusted and truncated values from the subset are fitted to a grid to generate an area-weighted average of the data.

        There is no single document that describes this methodology. Rather in a letter from the Bureau dated 24th January, responding to my request for information, I was directed to a mix of Bureau reports, peer-reviewed papers and also a PhD thesis by way of justification, methodology and for a list of stations.

        In short, there is no straightforward way to verify the claim that last year, 2013, was the hottest calendar year on record. This is the claim the Bureau made in a media release on 3rd January 2014.

        When individual stations with long temperature records are examined the late 1890 and 1930s appear to be as hot as recent years.

        Ever since Climategate, deeply disturbing questions have been asked about the way climate science is conducted and also the state of the climate data. The Australian Bureau of Meteorology’s own databases feature in the leaked emails with the infamous ‘Harry Read Me’ file complaining about jumbled values and incorrect start dates for particular stations.

        The mainstream climate science community has a vested interest in the average temperature for Australia increasing year-on-year because it has embraced the theory of anthropogenic global warming and invested heavily in research that assumes this theory.

        It is time that the Bureau was more transparent in how it calculated its average annual values, and that it developed a method for benchmarking these annual average values. The benchmarking could be against satellite data and also against individual stations in Australia for which there are long temperature records.

    • skippy

      Free markets…. Ha…

      Following the fall of the monarchy in 1974, Meskel Square was renamed “Abiot” or Revolution Square. It was greatly expanded so that it could accommodate the annual Revolution Day and May Day parades on September 12 and May 1. Three gigantic portraits of Karl Marx, Friedrich Engels and Vladimir Lenin were erected in the square. The population of Addis Ababa would joke that these were the “new trinity”

    • drsmithyMEMBER

      It would be interesting to put a video camera on that, and some similarly large intersections with traffic lights and roundabouts, for a day, to see what the actual, measured throughput of cars was in each.

      • 88888

        Ethiopia is a very exciting investment opportunity for the next decade.

        Textile factories, as per the usual growth path, are taking advantage of a young and motivated workforce and local cotton supply. Foreign investment is growing at 100% per annum, debt is low and demographics are excellent.

        If the country can avoid corruption, religious nuts and socialism – Ethiopia could be an opportunity like Taiwan in the 70s.

        EDIT: Replied to wrong part of thread. Though I think the intersection’s efficiency would at least benefit from a roundabout.

      • flyingfoxMEMBER

        @5×8

        yeap, under the current economic growth model only parts of Africa will flourish mainly due to demographics.

    • malien

      The bigger the vehicle, the greater the right of way. That seems to be how it works in a lot of developing countries. “Free market” is spot on.

    • Escobar

      Thanks Dark.

      Good to see a different take on house prices.

      The average Australian mortgage size is around $300k. And in 2001 was around $150k. Obviously less in 2000.

      He’s claiming that the average full time wage can accommodate a $500k loan?

      Living on what? Baked beans on toast, 2-min noodles.

      • hamish

        $500k loan on an average wage (approx $1100 pw net)? A quick play on one of those mortgage calculators shows that will take $660 per week out of your post tax income at todays historically low rates, and on a 30 year term, doable, but it would be greater than 50% of your take home pay so your life will be pretty frugal. Bump the rates up a couple of percent to 7% and suddenly it’s $830 per week, and you are in real trouble…

        As ever, someone conflating affordability with serviceability, not to mention $500k gets you f**k all in Sydney these days.

      • John

        The article describes exactly what has happened though. Incomes have risen faster than non-housing consumer costs (cars, clothing, whitegoods, electronics, etc are much cheaper in real terms), and the extra disposable income has been captured by economic rent in land, thanks to the combination of constrained fringe supply and opposition to infill.

    • dennis

      DM,

      I can’t even count let alone call myself an economist, but I was nearly spitting chips when I first started reading that. May be he’s right, like i said, I can hardly count, but I’d have thought that with an ever increasing P/I ratio, historically high household debt, lowest IRs EVER that the conclusion would be it’s more likely to fall over due to its own weight than being able to continue finding more buyers with even more debt for it to continue.

      To me this is australia’s RE situation:

      https://www.youtube.com/watch?v=HJZPzQESq_0

    • drsmithyMEMBER

      The use of average, rather than median, wages is enough to rule out anything else he says.

      • md

        Very true. I think the median wage is more like $57K or so per year. In addition, we now have moved to a casualisation of the workforce, so less people are now on permanent full-time salaries.

        This article claims that it is supposedly easier now to buy a home than it was in 2000. “The fact wage inflation has been higher than goods inflation means they can pay a higher mortgage without changing their standard of living.” Really? See, if the wages (salaries) of highly paid people rise, that can skew the whole wage data. I doubt wages are going up enough to keep up with house prices.

        The author talks about servicing a $500K loan – interest only, of course; no need to even think about paying off the principal any more. And as Hamish says, “$500k gets you f**k all in Sydney these days.” So you’d need to save a deposit of $500K first, and then another $100K for stamp duty and costs. And by then, prices will have risen to an even more affordable $2 million.

      • hamish

        Just looking through the tax tables and using the home loan calculator a bit more. To buy a median Sydney house of $1,000,000, assuming a 10% deposit you would need a loan of $900,000, which is $1200 pw on a 30 year PI loan at current rates.

        You could probably get by adequately on $400 pw living costs, so you would need an after tax income of $1600 pw minimum, which works out to a gross annual income of around $120,000 putting you in the top few percent of income earners. All to live frugally in a modest house in an ordinary suburb hoping to hell interest rates don’t rise…

      • Escobar

        Hamish

        I doubt there are many people that would borrow $900k on $120k income.

        The $1m properties would be bought with a whole lot of equity or be purchased by those on higher incomes.

      • flyingfoxMEMBER

        I doubt there are many people that would borrow $900k on $120k income.

        The $1m properties would be bought with a whole lot of equity or be purchased by those on higher incomes.

        It’s common enough for combined incomes in the 140-200K category.

      • flyingfoxMEMBER

        @Escobar

        There is no big chasm between a single person on 120K and a combined income of 150K….

      • hamish

        Escobar, admittedly a quick look at Aussie Home Loans ‘How much can I borrow’ calculator shows they won’t lend $900k to someone on $120k, they can only get $800k….. (Joint loan actually looks to be a bit lower) Further to FF, friends on a combined income of about $180k have been offered something like 1.2 million, so there must be people taking out these sorts of loans. No idea of how common it is as I don’t have that sort of information to hand.

        Anyway, that really wasn’t the point I was trying to make, it’s more about the absurd situation we find ourselves in where people who are doing extremely well by any reasonable measure, can only afford to buy a very modest house in an ordinary location in the nations largest cities, and even then it’s going to be a bit of a stretch. It makes all the post-hoc claims of “affordability” being just fine, no probs with high income to value ratios etc, look as ridiculous as they sound.

      • Escobar

        Hamish

        I agree with you. And with average loans of $300k, it appears on speculators would borrow more to offset their incomes through negative gearing.

        Seems that with a low average mortgage, people are buying with equity or in less desirable areas.

  12. China-Bob

    Interesting read on the history of momentum investing
    Two Centuries of Momentum – Newfound Research…well worth a read…
    I especially liked the “limits of Arbitrage” section, this is a topic close to my heart and a source of on going discourse especially with the Compliance officer.
    Internally we run a VAR model similar to everyone elses VAR model I’m sure, so in cases when the underlying VAR model is wrong taking the Arbitrage position is more costly then it should be and therefore represents an inefficient use of capital at risk. The arbitrage opportunity exists there for all to see, it’s like a forbidden fruit, yet take one bite of that fruit and you’ll have the compliance officer crawling all over you asking stupid questions about how this risk is hedged.
    I sometimes wonder if the big banks built deliberate flaws into VAR so that they could reserve certain market functions ….but then I talk their Quants and I realize that they cant even see why their VAR formula is wrong when it’s pointed out to them and proven with regression analysis.

    • skippy

      “But that is only part of the story. Coincidentally, we now have near-uniformity in model risk in the name of VAR, and an increasing deployment of risk-parity approaches. Both of these are profoundly gamma-negative. Volatility, suppressed by abundant liquidity, infers diminished risk as measured by VAR, encouraging a complacent accumulation of risk using available leverage. Risk-parity often results in a similar rear-view risk-assessment, and acquisition of leverage. Faced with a spike in volatility accompanying almost any potential event (exogenous or endogenous), The Market’s aggregate positioning and leverage will deterministically trigger demands for liquidity, most likely in the same direction as the shock, into a veritable vacuum, replete with classical feedback loops. This is before considering the large increase in mimetic trend-following, momentum and CTA strategies’ relative size and importance within market ecosystems, and the large army of discretionary day-traders waiting for set-ups and breakouts. These are unmitigated amplifiers of already-gamma-negative feedback loops. The paradoxical result, in a world with more risk-managers than ever, using better measurement and technology, with more position limitations, thresholds, and more-than-abundant capital is a market that is likely to prove more brittle than ever before. For not only will the modern liquidity providers intent on avoiding costly adverse selection step out of the way, they too will turn and trade in the direction of the impulse. LOR’s Portfolio Insurance, will, by contrast, appear benign.

      To most fundamental equity, fixed-income, FX, and commodity traders, the Quant Wreck of 2007 hardly registered. To those running systematic model-driven equity long/short strategies, recalling these mid-summer events is likely to trigger PTSD-like responses. But the lessons they burnished, worth heeding in regards to today’s broader systemic structure are clear. Everything’s fine until its not. Models, while useful, are always flawed. Participants habituate behavior basis the recent past – and are not forward-looking. Leverage is poison. Participants caught in risk/margin/redemption crosscurrents cannot discriminate and can only unwind their positions. Gamma-negative behavior outweighs gamma-positive behavior by a large margin. The exit is always smaller than perceived in aggregate before the theatre fills with smoke. Feedback loops cause dramatic overshoot. Out of the wreckage arises amazing opportunity. Dry powder is essential for credit is often impossible to obtain when the opportunities are the juiciest.”

      http://nihoncassandra.blogspot.com.au/2014/10/the-risk-that-will-bite-you-next-is-not.html

      • China-Bob

        Hey Skippy, that’s not playing fair throwing Cassandra-does-Tokyo back at me. There really are some gems buried in that blog…pity she no longer blogs regularly, without her wit and insight the world’s a poorer place.

      • skippy

        @tonydd,

        I think its prudent not to over generalize, “leverage” in shudder quotes [its all bad] its akin to speaking the devils name in quantifying. One could argue what methodology is applied in leverage e.g. Brownian laws of motion magnified by computational power w/ feed back loops across complex network nodes in hyper times with minimal human input vs. the onus of risk responsibility assumed by those that create it.

    • skippy

      1997…. phew its been awhile…

      Against Value-at-Risk: Nassim Taleb Replies to Philippe Jorion

      Copyright 1997 by Nassim Nicholas Taleb.
      Since then I have been calling Jorion a certified charlatan based on evidence from subsequent events.

      Philippe Jorion is perhaps the most credible member of the pro-VAR camp. I will answer his criticism while expanding on some of the more technical statements I made during the interview (DS, December/January 1997). Indeed, while Philippe Jorion and I agree on many core points, we mainly disagree on the conclusion: mine is to suspend the current version of the VAR as potentially dangerous malpractice while his is to supplement it with other methods.

      http://www.fooledbyrandomness.com/jorion.html

    • aj.

      What I find funny, is that the financial analysis is rarely ever the weakest link in the chain. For example despite all the swanky pants capital models for a certain big tunnel project, the weak link was something as simple as the traffic flow modelling that was gamed against European traffic models to generate through-put.

      History seems to show it works until it doesn’t.

      • tonyddMEMBER

        @Nylita Will Australian banks now have to curtail growth in their loan books? I expect this to be the case as equity takes a hit, financing costs, impairment costs and legal costs will crimp loan growth.

        As per Steve Keen … its the change in the change of debt. What is next is the change in the change followed by merely a change.

        I expect a 64% lower floor to house prices in Sydney some undershoot likely. Elsewhere could be worse.

    • China-Bob

      Just for the record I probably hate VAR more than you BUT the unfortunate truth is that once you take on leverage your risk exposure will in one way or another (at some point in the chain) be assessed by VAR. Take positions that VAR discourages and you’ll pay through reduced margin, this applies even when it’s abundantly clear that events are unfolding that nullify all the data assumptions underlying the formula. Investing (even speculating) within these constraints is definitely akin to trying to win the Indi 500 looking only in the rearview mirror, stupidity for sure.

      • 88888

        I watched a recent presentation from David Dredge of Fortress who simplified the effects you are describing of VAR and financial risk management in general.

        He basically said that financial risk management fails in that it focuses on where the last bushfire happened (where the vol is still high) and more than likely where any further shock is going to have an overall lower impact. While the area that has had no recent shocks (where the grass has been able to overgrow) has limited risk prescribed to it in the models despite being the area where any small spark can have huge implications as all the fuel (typically leverage and overvaluation) has ballooned.

        David Dredge runs the convexity book for Fortress.

        The worse thing about momentum investing, as alluded to in skippy’s link, is how crowded all the trades are and how quickly liquidity approaches zero. If there is no other reason than price momentum for anybody to want to buy say, a $1bn market cap umbrella factory in Hong Kong, once that momo dies the trade dies and there are no buyers until the bottom of the elevator shaft is discovered.

        Negative gamma indeed. But the ‘allocator’ at the pension fund needs to tick the VAR box before being able to cut a cheque to prove how prudent he has been in his due diligence.

      • China-Bob

        I like a lot of what I read wrt Convexity modelling but in reality it always seems to degenerate into some form of polynomial curve fitting. In a way convexity modelling is about finding the turning point of the systems momentum, unfortunately for highly nonlinear systems (as in those with positive feedback) the 2nd or higher derivatives (turning points) are no more useful than the momentum indicators themselves. In a way this lack of real forward looking market risk pricing data is exactly why the exit positions get so crowded, that and the feax liquidity that come with momentum. Unfortunately understanding these limitations in no way changes your game plan in part because of the inherent asymmetry present in hedge fund management the reward (pay) structure

      • skippy

        @China-Bob,

        Mate when a demigawds bonus is riding on muthimitics saying the right things, VaR et al can see way~~~ into the future…. because it has too….

        As such I think your “deliberate flaws into VAR” is close to the mark.

        Skippy…. Now whack on the incoherent EMH into the weirding modulator and mister hamster becomes a balloon!

    • hamish

      A laypersons comment here. If everyone is using the same models to assess risk, and these models are based on historical behavior, doesn’t this fundamentally alter the behavior these models are trying to assess thus rendering them useless?

      • 88888

        Yes

        At its worst the models will forbid an investment in a company that has been very volatile but now trades at a discount to cash while allowing more investment in a Chinese listed fraud that has had low volatility because the CEO has being manipulating the close with money borrowed on margin secured by the company stock.

      • China-Bob

        At one level we’re seeing exactly this play out wrt Australian exporters. Logically as the AUD falls the value of Aussie exports increases (including its manufactures) yet view at these same facts through the VAR looking glass and all you see is Risk, recent volatility (up or down) is Risk. Volatility is interpreted as the inability of the market to properly price the object, in a way it represents the thinness of real at-risk positions. wrt exchange rates it’s abundantly clear that they wax and wane with the flow of capital rather than representing any change in projected cash flow or NPV of the good ship Australia.
        So logically with the AUD heading towards 60c export opportunities should be becoming more attractive…truth is they’re becoming less attractive…@#$%ed by Momentum.

  14. dennis

    God, I think I was right! It isn’t just intelligence, most people REALLY are dumb!

    http://www.smh.com.au/good-weekend/ahmed-fahour-delivering-the-goods-for-australia-post-20150723-giizdo.html

    OMFG “Discussing his level of remuneration, he makes clear that he considers it no more than his due. If anything, he thinks Australians are getting his services at a bargain rate. He is paid “a very attractive sum”, he allows, “but it’s a lot less than I used to earn.” The same goes for many of the talented people he has hired. “The team and I knew that we could stay in the commercial world and earn a lot more money somewhere else if we wanted to,” he says. “But we chose to be here because we’re doing something we think is very important.” This bit, yes,yes, WTF.

    What is he doing that is so vital for the country, is he fronting the barricades against ISIS or something, producing a vaccine for malaria? No, he’s just running a fucking postal service. How has he managed to get a salary like this, and why would they think the job required it.

    But there’s more…””I’m the CEO and I have to lead by example,” he tells me. (ditching a 2m bonus, for what?). Lead by example and live on $10 ph like your contractors you wanker.

    People, generally, no matter their education seem to be easily taken in by pretty wrapping and ribbons. I’m not referring to the writer, but the people who employed him and think he’s worth what he’s paid. Anyway, if he’s so sharp he needs to take responsibility for the contracting mess, no excuses please.

    God, this is going to be a shit w/end, I’m losing the plot, I should be doing my taxes or packing for an up coming work trip, or cleaning up the garden prior to the nazi’s next visit ( I can see a weed!!!!) I need a sedative!

    • haroldusMEMBER

      I did my taxes in the free time made available to me by our cricketers. I even alphabetised it!

    • innocent bystander

      at the time there was a rumour he was appointed to Post so they could start up their banking services

    • 2big2fail

      Never seen an article with so many carefully selected adjectives:

      “Flamboyant, A first-class schmoozer, diligent networker, sleek good looks, supremely self-assured personality, Gorgeous, George Clooney of Australia, larger-than-life quality, extravagant, impassioned, more than comfortable in the spotlight, highly visible, has real magnetism, None of the politicians… worked a crowd better than him, kind of like walking around with a rock star, Remarkable stamina, strong-willed, passionate, always on, incredibly inspiring individual, infectious enthusiasm, astonishingly clever, has an ego you cannot climb over, relentlessly charming, feels very self-made, very strong self- belief, excellent negotiator, hugely talented, his drive is so strong that he knocks people out of the way, It wasn’t his capability or his performance; it was his style, classic alpha male, very blunt and brash manner.”

    • marked64

      Know someone who worked with him when he was at NAB. Described him as the biggest dickhead he’d ever come across and arrogant to boot.

  15. Ino

    AHAHAHAHA!!! Sloppy Joe has ordered the sale of 6 overseas infestors!! TAKE THAT! You bunch of thomases!!

    I think we need more scandals involving MPs so that the govenrment starts taking this kind of actions to distract attention from their own malfeasance!

    ABC NEWS24 has it running now! Sloppy II Joe is making a song and a dance of the 5 suckers! Look at me! Don’t look at Pyne and leave Bronwyn alone!! For God’s sakes people, I’ve ham-strung 5 infestors for you – why do you keep asking me about all that other shit! Look – I’m kicking them as we speak, can’t we talk about this and not that old crap already?

    • Djenka

      Yep but the rules are interesting: 25% of the property value and CG in penalty and RE agents to be treated as criminals,,,

      Interesting (coincidental?) timing too: 8/8 the lucky number for Chinese

      • Malcolm

        As soon as the ATO were made responsible in lieu of the FIRB the wheels would start turning because the ATO has processes in place for enquiry, enforcement and collection. It’s happened in a relatively short time frame too, so I expect this to be a signal to the illegal investors who will seek to divest quickly and beat the rap. The dicks holding the can will be the RE agents unless they decide to immigrate to Iran.

      • Djenka

        Iran?

        I doubt.
        When scum defects it is usually to equally slimy state.
        Do i need to remind you where the worst scum on this planet defected?

      • Ino

        I’ll bet you anything that the real reason why he made this announcement is to distract attention from the “minister entitlements scandal”.

        That is the one and only reason why this came up! That’s it! and we will hear no more about this until another scandal pops up to shine light on the kitchen cockroaches.

    • dennis

      Ino, no disagreement there, like the balls on a staffy!

      The sad thing is do they not realise it will be seen through. ffs.

      Just watched the clip, brilliant.

      • dennis

        This is nothing but bs, they all panicked and handed themselves in, hahahahaha.

        Notice still no requirement to prove residency etc prior to purchase or any requirement for RE agent to do so, or have any consequence for selling to a non entitled person. What a waste of f….. time. They know most will ignore the rules (so quiet encouragement) and will wack those who get caught and proclaim their good job done!

      • Ino

        Yep – it’s like the ASADA debarkle – the only sucker who took it up the arse full force was the one who came forward and said “yeah – I took performance enhancing drugs”.

    • V

      Sloppy announces they are from four different countries:
      China
      中华人民共和国
      Zhōnghuá Rénmín Gònghéguó
      People’s Republic of China

  16. bolstroodMEMBER

    Today (tonight actually) I”M SAVED
    I’m saved from watching the Cricketers loses the ashes.
    I’m saved by having to watch us play the ALL BLACKS…..
    UMMMM let me rephrase that….

  18. V

    Here’s an anecdote for you.

    With all these dog box units under construction, there are people out there renting who have purchased a new unit and decided to rent it out rather than move in.
    However I was speaking to someone who intends to rent it out at a lower than market rent so it can be negatively geared and the gearing will allow for a lower tax bill than if the property was rented out at a higher rent.

    Sounds unbelievable, firstly it doesn’t sound particularly legal, but then again as in the case of FIRB, who is checking?

    The dynamic on the govt tax take and rental market would be interesting though if the strategy is widely adopted.

    • innocent bystander

      actually, I am told that they consort to rent them to each other while living in their mates’ IP

    • Bullion Baron

      “the gearing will allow for a lower tax bill than if the property was rented out at a higher rent.”

      Sure it will, but he still has to spend $1 for every 45c (or less) he saves in tax.

    • Malcolm

      It’s risky as the ATO have pretty good rental income parameters that pick these discrepancies up. Wouldn’t do it as the penalties and fines are bloody enormous not to mention that you remain on the radar for many audits. Dumb stuff.

      • GunnamattaMEMBER

        I have been trying to set aside enough time to write something up but right at this moment across the APS the compliance functions (those checking the veracity of peoples claims in order to claim deductions for example) are running at less than 5%.

        Bullshitting the system is something which pays dividends and has a smallish risk profile

      • Djenka

        It can be done under the radar with a complaisant RE agent (anyone will do it if their income is not affected)
        There is always a bottom of the scale and someone has to be there.
        If it was a private deal it could be different.
        Moderation is the key

      • Malcolm

        Now that MyTax is contained within the MyGov shared platform, the liberated ATO IT resource capacity allows significantly more data matching time. I wouldn’t want to lose sleep for five years while Freda clicks away in the background uncovering discrepancies. We haven’t seen anything yet. The personnel numbers are down but don’t underestimate the IT capacity. This is how the unpaid tradies GST was discovered and goes back years. Don’t screw with your tax….you will lose.

      • Malcolm

        I hear you Gunna, but deduction veracity, offsets, depreciation etc are fully automated. Very few random checks are carried out by officers. Please explains are generated without human intervention and the onus is on the taxpayer to provide the proof – mistakes are not accepted as a defence. I cite a recent example where a genuine error was made, but no defence was accepted despite the client never having a single query over thirty plus years. Consequently, a penalty, fine, interest and arrears were assessed payable within a few weeks of demand. And that a genuine error.
        Taxpayers may evade initially, but sooner or later they get caught. Someone mentioned a compliant RE assisting to avoid — that’s a fairytale as these guys know if they get caught it’s a one way ticket before the beak…..possible time inside. Expect a visit from Organised Crime Division. Any RE doing it is plain dumb.
        Fifty multinational are being tested with the revise Part IVA assessment methodology and MAAL operates from January 2016. RE Foreign investment and NG claims are well under control. Technology utilisation is far ahead of what most people realise and in my view anything of substance is on the radar.

    • Wing Nut

      Sadly none of these illegal purchases were found by the FIRB; they all dobbed themselves in! Meanwhile, ten times that many illeagle purchases were made on the weekend….

    • Econo-fart

      Ugh, for the first time ever on the MB website I am replying to my own post. I feel like a dirty loser. I wanted to edit, but the time lapsed.
      This article reminds me of the exchanges between say, Steernorth and Skippy. The former focuses on culture shaping our economy. (ie, boomers culture is destroying our economy / way of life, destroy the boomer culture), and the latter focuses on the system, (ie, the economic system shapes culture, change the system).

      So, does culture influence the economy or does the economy influence culture?

      “Investment scams, conflicts of interest, lapses of judgment, and those evergreen entrepreneurial party tricks of good old fraud and embezzlement are now utterly unprecedented in magnitude. Who’s to blame? In an issue of the Journal of Business Ethics, Clive R. Boddy, a former professor at the Nottingham Business School, contends that it’s psychopaths, pure and simple, who are at the root of all the trouble.”

      http://chronicle.com/article/The-Psychopath-Makeover/135160/

      • skippy

        Philip Mirowski – Why Is There a Nobel Memorial Prize in Economics?

        The Nobel Memorial Prize defines high achievement in economics, and it validates the discipline’s claim for scientific authority. And yet, historically, it can be understood as a reflection of domestic policy conflicts in Sweden. This, Philip Mirowski would say, is but one example of the multifaceted nature of history. He and his team investigate how the Bank of Sweden’s goal of political independence wound up elevating the status of neoclassical thinking within the economics profession. Writing the history of the Nobel Memorial Prize to tease out the influence of economic doctrines on policy norms in recent decades — this is new economic thinking.

        https://www.youtube.com/watch?v=dLtEo8lplwg

        To which I would add…

        « Back
        Libertarianism Simplified: the Three Proper Powers of Government

        Bruce Webb | August 8, 2015 12:22 am

        In your basic Austrian style Libertarianism Government only has three proper functions: External Defense, Internal Policing, and Enforcement of Contracts.

        Or we could simplify all that as: Protection of Private Property, Protection of Private Property, and Protection of Private Property.

        It really is that simple, at least once you define private beliefs and personal freedom as property. And property does mean “pertaining to me, my own”. A neat circle.

        “Middle English propre proper, own, from Anglo-French, from Latin proprius own”

        “Amour propre” French for “love of self”

        Tags: glibertarianism, libertarianism

        http://angrybearblog.com/2015/08/libertarianism-simplified-the-three-proper-powers-of-government.html

        Skippy… When economics [sociopolitical theory] attempts to narrow the discourse by limiting the scope of inquire, one has to ask why, especially the last 60ish years. Which then brings us to a Foucault like – Should Economists be Experts in Markets or Experts in “Human Nature”?

        PS. Whoop…. Wallabies!

  21. Hugh Pavletich

    China cancels $17.6bn construction projects ‘to protect the environment’ … Xinhua / RT News

    China: What is really going on ? …

    Xinhua (Chinese Government media outlet) states there are more than 60 million empty apartments (near half the total U.S. housing stock) … and that the construction industry needs “reviving.”

    Confused ?

    China cancels $17.6bn construction projects ‘to protect the environment’ … Xinhua / RT News

    http://www.rt.com/business/311870-china-construction-investments-refusal/

    • 88888

      60 million empty apartments !

      Construction is 20% of GDP

      Some pickle that is.

      China may encourage huge immigration to fill the empty homes – at least they’ve built the infrastructure in advance.

      • Hugh Pavletich

        88888 … Wops … I stand corrected !

        On checking back through the hyperlink to the Xinhua article, I note the RT version was not a direct reprint, but had considerable more material as well … including the “more than 60 million vacant units” statement.

        So this number noted in this RT article DOES NOT come from that specific Xinhua one.

        Where RT got it from I don’t know … although it is a figure that has often been stated by others.

      • StatSailor

        It would take just shy of 2% of the population of the rest of the world or 1 1/2 to 2 years global population growth to fill those apartments. If the Chinese try to immigrate their way out of the predicament, the rest of the world’s economy will go into cardiac arrest.
        (assuming the 60 million figure is real)

      • 88888

        I was joking regarding the immigration solution. But mildly serious regarding the infrastructure.

        How many ‘international’ airports now?

        Add the crazy amount of commercial buildings also bereft of tenants and the total overhang is beyond anything in history by a factor as far as I can tell.

        All leveraged

        All uneconomic

        All a massive ‘suck forward’ of real demand

        The vacuum is upon us

  22. Hugh Pavletich

    Venezuela: The shocking state of its health service … YouTube

    https://www.youtube.com/watch?v=TNaFflW357I

    Published on Jul 29, 2015

    Inflation heading for 200 per cent and shortages of basic supplies – and as a result Venezuela’s hospitals are at breaking point. Photojournalist Betty Zapata obtained exclusive access to the country’s crumbling health system. Warning: graphic images.

      • Djenka

        Hugh,
        when AlJazeera started, it seemed as an opposition to CNN and BBC’s hegemony.
        Later, I saw AJ being regularly re-broadcast on MSM in the Westworld.

        I would take BBC/CNN/AJ’s reporting on countries US does not approve no different then RT.com on Russian affairs. Not with a pinch of salt but with a truckload of it.

        However, I do not claim that the article is incorrect.
        Just that it may be a narrow angle zoom shot with very shallow depth of field.

      • Ernesto Che Guevara

        Hasn’t been a thread where you haven’t pushed your anti-venezeula crap – you are an absolute hack.

        You are a worse spruiker and astroturfer than Peter Fraser.

        Blows me away you can even post here.

      • Hugh Pavletich

        Djenka … In my view, the AJ programme is good, in the sense, it allowed a diversity of views.

        Viewers of course can draw their own conclusions.

        Ernesto … Kindly discuss the issues. Thank you.

      • Ronin8317MEMBER

        Venezuela is falling into the same foreign currency lead hyperinflation routine as Zimbabwe last decade. People who are ‘connected’ can exchange USD at artificially low rate, then sell the USD at the black market. People who are not connected will buy goods at a subsidized price and sell it in Columbia. The entire country is now an economic scam.
        Chavez did a few things right, however his death left Venezuela in a real mess. His successor is a sock puppet.

    • RageMEMBER

      I shouldn’t be surprised, but I’m still disappointed (yeah, with you, Chris Bowen) that there were financiers behind this.

      • RageMEMBER

        You’re right Skippy, but I’m still surprised at the level of naive stupidity because with the ALP occupying some of the Centre there is at least the chance that someone with enough gonads will see through all this.

    • aj.

      It could be it’s time to throw in the towel on the quaint notion of social morality. The neolibs and financial aristocrats have won a crushing victory, to fight this is now just shouting at the dying ocean. In the words of Lord Voldemort “there is only power, and those too weak to seize it”… or something like that.

  26. AusDreamNoMore

    Gold deposit discovered -http://mobile.abc.net.au/news/2015-06-29/gruyere-gold-deposit-develops-new-goldfields-province/6582204

    • St JacquesMEMBER

      Truly ironic that the US shale oil program is undermining the stability of the Saudi regime. Had they not gone for a Big Saudi Arabia paid for by the oil boom years, their financial and political position would now be safe. lol

    • aj.

      They’re just following (in this case testing) the rules … Just like property investors etc so it’s all ok.

  30. 3d1k

    Doug Noland, read him each weekend http://creditbubblebulletin.blogspot.com.au

    Long interview with Foss at TAE, my favorite collapsnik http://www.theautomaticearth.com/2015/07/interview-nicole-foss-for-a-simpler-way-crisis-as-opportunity/

    Oz politics: Barnaby was Right! Don’t go too deeply into political entitlements, they all do it. But Tony Burke is a disgrace in every sense.

    US politics: Trumped by Trump…and then the unfortunate blooding. Be interesting to see if he can side step this one – sure as hell saw his appeal to those pissed off by the usual PC crowd.

    • bolstroodMEMBER

      Thanks for the Foss link 3d1k, much appreciated.
      As for Tony Burke , he has been trumped by the Leaner in Chief, Fingers in the Till Hockey, $14,000 to fly the family.I am never sure if he is a Lifter as in shop, or a heavy weight Leaner.
      They are ALL doing it. A group of undistinguished former Thieves, err I mean Parliamentarians, are going to court to enhance their Entitlements. Apparently entitlements are set at the pay rates at the time of leaving parliament. These little beauties reckon that they deserve to be paid at today’s rates.
      They have a lean and hungry look let them ALL ‘ware the Ides of March.
      In the light of the on going pillaging of the Public Purse.
      I advocate a National Voters Strike at the next Federal Election. Nothing illegal, turn up at the polling booth have your name crossed off and cast an informal vote and state your reasons on the blank ballot paper.
      In the face of the unrestrained contempt of our elected representatives it is up US, WE THE PEOPLE to take matters into our hands and put these buggers in their place.

      • Janet

        Why do you guys HAVE to vote, anyway ( or else!)
        Surely, it’s not some throwback to ‘our forefathers fought and died for the right to a Democratic society. And, by God, you’ll respect that by being compelled to turn up and have you name ticked off, as ‘present, sir”?

      • aj.

        As the major parties have rigged the system to make sure they get paid per vote (thanks for coming suckers), then a little selective voting will hurt a bit. Practically the duopoly will be very hard to break in the lower house, forced preferential voting has this locked up.

        http://www.aec.gov.au/parties_and_representatives/public_funding/Current_Funding_Rate.htm

        The Senate is where voters can smash the major parties. Paradoxically, the House of Reps is now the unrepresentative swill doing the bidding of the lobbyists safe in their duopoly power.

      • aj.

        Yes forced voting is a peculiar thing. not likely to change with the pay-per-vote system the parties have rigged up.

      • 3d1k

        Aj+bolstrood – obviously the system is broke. My gripe with Burke is same as Bronny, the overweaning entitlement, his kids business class, his staffer soon to be partner, first class to Europe. Jeez, there’s a real divergence going on there. And then the dude stands up and makes all the fuss about Bronny and P plates. He needs P plates – forget about twerking, Burke is all about perking.

    • 2big2fail

      That (long) interview with Nicole Foss was great and definitely worth watching.. Thanks for posting.
      If what she’s envisioning comes true (which I believe it will, to one extent or another), this country is totally fu*ked. Functional stupidity, yup, we’ve got plenty of that..

      • 3d1k

        Lots of interesting ideas there. She’s a very broad thinker, she is totally realistic about renewables, limits to finance etc – a curious mix of Foss and Tyler Cowen have had influence on my thinking and what may transpire in years to come.

      • StatSailor

        Cash in while the cattle price is at high as it’s ever been. Nothing to be gained in risking it falling.

      • Malcolm

        I guess it’s the new normal for Australian business. Cash in when prices are high rather than reaping ongoing profits because there might be a business risk. This is what hacks me off with governments. All the tax benefits provided for speculation when productive business does it tough and we wonder why the future is disappearing down the sewer.

  32. Jake Gittes

    @Janet –

    Compulsory voting was first advocated by Alfred Deakin at the turn of the 20th century. Voting was voluntary at the first 9 federal elections.

    Compulsory enrolment for federal elections was introduced in 1911.

    In 1915, consideration was given to introducing compulsory voting for a proposed referendum. As the referendum was never held the idea wasn’t pursued.

    Also in 1915, compulsory voting was introduced in Queensland by the Liberal Government of Digby Denham, apparently concerned that ALP shop stewards were more effective in “getting out the vote”, and that compulsory voting would restore a level playing ground (ironically, Denham went on to lose the 1915 election).

    The significant impetus for compulsory voting at federal elections appears to have been a decline in turnout from more than 71% at the 1919 election to less than 60% at the 1922 election. The Bruce-Page government (a conservative coalition of the Nationalist and Country parties) was reluctant to be too closely identified to such a proposal.

    In 1924, a private member’s bill to amend the Electoral Act was introduced in the Senate by Senator H. J. M. Payne (Nat. Tas) sponsored in the House of Representatives by Edward Martin (Nat. Perth). It was only the third private member’s bill passed into law since 1901.

    The impact was immediate, with turnout at the 1925 election rising to over 91%.

    Victoria introduced compulsory voting in 1926, NSW and Tasmania in 1928, WA in 1936 and SA in 1942.
    http://www.aec.gov.au/about_aec/Publications/voting/

  34. willy_nilly

    “46 per cent of the world’s population now lives in 83 countries with low levels of fertility, where women are having fewer than 2.1 children on average over the life course. ”
    http://www.abc.net.au/worldtoday/content/2015/s4284478.htm
    “JOHN WILMOTH: That’s a very difficult question. The births have stopped increasing. Hans Rosling talks about peak births, that we’ve passed peak births and he’s correct. The number of births has more or less stabilised over the last 20 years and that’s not increasing, but what is increasing is the number of people living at older ages and this is an enormous sign of success. “

    • nyleta

      He is saying on that site that income tax withholdings in the USA have just gone from increasing at 6% per year to increasing about 2% per year, if true that is less than the rate of wage increases this year and means a real downturn may be occurring not just a nominal downturn.

    • aj.

      Think of the Labor right as completely captured by the property industry and you have your answer.

      • Malcolm

        To be fair though Guys, if Hockey was addressing NG and Capital Gains as well as dodgy Foreign Investment, then he would have something to crow about, Isn’t this the point Bowen is making considering the ALP has flagged NG and CG?

      • Powermonger

        @Malcolm

        I am all for addressing NG and CGT for property, but find it very hypocritical for Bowen to critisise crack downs on foreign investment in property and crow about housing affordability, when it was Bowen and the Government that he was in that unleashed the Chinese dragon on us to begin with.

      • Mining BoganMEMBER

        Rudd and Bowen will forever try to deny the massive SNAFU they invoked with their door-opening.

        Look-over-there won’t change their sordid history. Scum.

  37. Djenka

    Records smashed in Redfern and Turramurra on biggest winter auction day
    http://news.domain.com.au/domain/domain-news/latest-news/records-smashed-in-redfern-and-turramurra-on-biggest-winter-auction-day-20150808-giunkx.html

    “In Redfern, a young couple made a windfall of almost $900,000 in two years after selling their Chelsea Street house for a record $3.45 million” (picture available via link above)

    Momentum is not lost but apparently yesterday was not the best day at the auction:

    “With 674 of the results reported to Domain by Saturday evening, it was clear not every seller was lucky on the eighth day of the eighth month. The clearance rate was 75.4 per cent. “It’s not only the lowest clearance rate for the year, we’re now tracking below where we were a year ago,” Domain senior economist Dr Andrew Wilson said.”