Weekend Links 12th-13th September 2015




United States


Home of the boom .. mic

Global Macro/Markets

…and furthermore…

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  1. Re: The change to the way the DoJ MIGHT in future prosecute wrongdoing…“The statute of limitations has run out on the majority of the most egregious cases stemming from the financial crisis”. Funny, that….

    • “Americans need to come together to demand that the Department act, not just talk, to restore the rule of law and prosecute the bankers that led the fraud epidemics that drove the financial crisis. There is very little time left to prosecute, so the effort must be vigorous and urgent and a top priority.

      Here is an example, in the cartel context, of the Department’s long-standing position that deterrence of elite white-collar crimes requires the prosecution and incarceration of the businessmen that lead the crimes. It contains the classic quotation that the Department has long used to explain its position. Note that the public statement of this position was early in the Obama administration (April 3, 2009), but plainly was already long-standing. The Department’s official made these passages her first two paragraphs in order to emphasize the points – and the fact that deterrence through the criminal prosecution of elite white-collar criminals works.

      It is well known that the Antitrust Division has long ranked anti-cartel enforcement as its top priority. It is also well known that the Division has long advocated that the most effective deterrent for hard core cartel activity, such as price fixing, bid rigging, and allocation agreements, is stiff prison sentences. It is obvious why prison sentences are important in anti-cartel enforcement. Companies only commit cartel offenses through individual employees, and prison is a penalty that cannot be reimbursed by the corporate employer. As a corporate executive once told a former Assistant Attorney General of ours: “[A]s long as you are only talking about money, the company can at the end of the day take care of me . . . but once you begin talking about taking away my liberty, there is nothing that the company can do for me.”(1) Executives often offer to pay higher fines to get a break on their jail time, but they never offer to spend more time in prison in order to get a discount on their fine.

      We know that prison sentences are a deterrent to executives who would otherwise extend their cartel activity to the United States. In many cases, the Division has discovered cartelists who were colluding on products sold in other parts of the world and who sold product in the United States, but who did not extend their cartel activity to U.S. sales. In some of these cases, although the U.S. market was the cartelists’ largest market and potentially the most profitable, the collusion stopped at the border because of the risk of going to prison in the United States.

      As prosecutors, (real) financial regulators, and criminologists, we have known for decades that the only effective means to deter elite white-collar crimes is to imprison the elite officers that grew wealthy by leading those crimes (which include the largest “hard core cartels” in history – by three orders of magnitude). In the words of a Deutsche Bank senior officer, the bank’s participation in the Libor cartel produced a “mountain of money” for the bank (and the officers). Holder’s bank fines were useless – and the Department’s real prosecutors told him why they were useless from the beginning. No one, of course, thinks Holder went rogue in refusing to prosecute fraudulent bank officers. President Obama would have requested his resignation six years ago if he were upset at Holder’s grant of de facto immunity to our most destructive elite white-collar criminals.

      Our saying during the savings and loan debacle was that in our response we must not be the ones “chasing mice while lions roam the campsite.” Holder, and his predecessors under President Bush, chased mice – and fed them to the lions. They overwhelmingly prosecuted working class homeowners who had supposedly deceived the most fraudulent bankers in world history – acting like a collection agency for the worst bank frauds.

      As a U.S. attorney, Loretta. Lynch failed to prosecute any of the officers of HSBC that laundered a billion dollars for Mexico’s Sinaloa drug cartel and violated international and U.S. anti-terrorism sanctions. The HSBC officers committed tens of thousands of felonies and were caught red-handed, but now Attorney General Lynch refused to prosecute any of them – even the low-level fraud “mice.” Dishonest corporate leaders are delighted to trade off larger fines – which are paid for by the shareholders – to prevent the prosecution of even low-level officers who might “flip” and blow the whistle on the senior banksters that led the fraud schemes. To its shame, the Department’s senior leadership, including Holder and Lynch, have pretended for at least 11 years that the useless bank fines were a brilliant success. Those bank fines are paid by the shareholders. The Department’s cynical sweetheart deals with the elite criminals allowed them to keep their jobs and massive bonuses that they received because of the frauds they led. The Department compounded its shame by bragging that it was working with Obama’s (non) regulators to create guilty plea “lite” in which banks that admitted they committed tens of thousands of felonies involving hundreds of trillions of dollars of fraud were relieved of the normal restrictions that a fraud “mouse” is invariably subjected to for committing a single act of fraud involving $100.

      The Department’s top criminal prosecutor, Lanny Breuer, publicly stated his paramount concern about the fraud epidemics that devastated our nation – he was “losing sleep at night over worrying about what a lawsuit might result in at a large financial institution.” That’s right – he was petrified of even bringing a civil “lawsuit” – much less a criminal prosecution – against “too big to prosecute” banks and banksters. I lose sleep over what fraud epidemics the banksters will lead against our Nation. The banksters have learned to optimize “accounting control fraud” schemes and learned that they can grow immensely wealthy by leading those fraud epidemics with complete impunity. None of them has a criminal record and even those that lost their jobs are overwhelmingly back in financial leadership positions. In the aftermath of the savings and loan debacle, because of the prosecutions and criminal records of the elites that led those frauds, no senior S&L fraudster who was prosecuted was able to become a leader of the fraud epidemics that caused our most recent financial crisis.”


      Skippy…. so… the next question – is – which policy advocacy group informed both public and private sector high level agents, whom write laws, deliberate on the meaning and use of laws, which enabled this orgy of “self interest” and host it up as the apogee of successes….

      • It’s interesting, where you see criminality I see process.
        We are entering a period wherein the baton of global direction and leadership must change hands, there is a process by which an individual takes leadership and indeed a process through which they surrender leadership. To take leadership you must generate value to surrender leadership you must dissipate whatever stored / residual value exists.
        Seen in this context all these fraudulent financial schemes, that you so deplore, are essential steps in the realization of this new global equilibrium. It’s the death of Demand that created the illusion of savings not backed by Productive undertakings. If I were looking for real fraud that’s where I’d focus my attention because capital that’s not backed by productive capacity is Illusionary anyway and Productive capacity that’s not driven by real Demand is pointless.

      • Its interesting China-Bob where you see “progress” I see “sociopathic tendency” – PCL-R

        Psychopathy Checklist-Revised: Factors, Facets, and Items

        Glibness/superficial charm
        Grandiose sense of self-worth
        Pathological lying

        Facet 2: Affective

        Lack of remorse or guilt
        Emotionally shallow
        Callous/lack of empathy
        Failure to accept responsibility for own actions

        Facet 3: Lifestyle

        Need for stimulation/proneness to boredom
        Parasitic lifestyle
        Lack of realistic, long-term goals

        Facet 4: Antisocial

        Poor behavioral controls
        Early behavioral problems
        Juvenile delinquency
        Revocation of conditional release
        Criminal versatility

        Many short-term marital relationships
        Promiscuous sexual

        Factor 1 has been correlated with narcissistic personality disorder, in contrast, factor 2 was found to be related to antisocial personality disorder, social deviance, sensation seeking, low socioeconomic status and high risk of suicide. The two factors are nonetheless highly correlated and there are strong indications they do result from a single underlying disorder

        Narcissistic personality disorder. They are associated with extroversion and positive affect. Factor 1, the so-called core personality traits of psychopathy, may even be beneficial for the psychopath (in terms of non-deviant social functioning).

        Now apply these optics to Milton Friedman wrt to his actions in writing propaganda for the developer lobbyists and extenuate all the way up to now.

        Skippy…. BTW Capitalism runs on sales, spending creates income, income creates sales, and sales create jobs. Anything that screws with that process is anti capitalism e.g. Fraud is anti capitalist as its parasitical.

      • Skip Mate, you’re missing the point completely. Maybe you’re right maybe sociopath’s have invaded the positions of power, however I’d counter that such personalities seek out and occupy these positions under any and all regimes, so their presence at the levers of control is simply to be expected.
        What’s important is to be able to see change as it happens and understand the social economic and monetary implications of change. Think back to the time when IBM was at the zenith of their corporate existence, at this moment they created the IBM-PC (personal computer), they created and nurtured a cheap computing solution that would clearly destroy their main source of value (mainframe computing).
        It’s also not be accident that at a corporate level IBM basically gifted to Microsoft the real monopoly value (the operating system) of a distributed personal computing world. When I think of the extreme fictionalization of America (and indeed the entire world) it makes it easy for me to distinguish between steps in the process and the end game goal. That’s what I find weird, you find fault in a process without understand or accepting that the process is but a step towards the goal.

      • China- Bob its one thing to understand those that have excessive personality disorders seek certain positions and can actually thrive in such environments, tho it is a completely different thing to nurture it and worse hold it up as the paragon of achievement. The unintended consequences to society, as a whole, using that as a base line is playing out right now. So do you think the pendulum, invisible hand, equilibrium will just assert itself and this “Natural Force” will somehow lead us to the next great epoch.

        If that’s the case I have some land on Mars to sell you.

        With the aforementioned noted is important to understand it origins, which for convenience sake can be attributed to a certain school for economics and those that funded that enterprise – Malodorous Profit Society…. aka… MPS. Just the case of Born highlights the destructive agency this group think, stemming from antiquarian musing, can enable.

        Skippy… There are historical layers to this I don’t think you have a clue too CB.

        BTW Bills wealth is largely due to IP and EULA law not innovation and competition… just saying…

      • Skip mate, The big difference is that don’t believe that anything I do or could/would do significantly effects the larger system. So that makes understanding the system (as it is) far more important than understand one’s own interaction with the system. You ponder why? when instead you should ponder what, when and where.
        portraying this as a profound moral issue is weal… real weak….the system moves, if you correctly guess the when and where than you make money, if you can influence just one corner of the system to behave as you wish than good for you because you’ll continue to make money. ..For me, if there is a moral issue here at all it involves what you do with the money.

      • China-bob I not arguing a moral issue, I’m pointing out cause and effect, contrary to your price – profit determines T or F.

        If I remember your statement of intent recently, correctly, you help others steal money, not earn it, your own words mate.

        Skippy…. BTW your I’m just a small “individual” in a big market, without agency, to paraphrase Locke, means you absolve yourself of said “individuality” and as such relegates you to a “willing slave”. Did you also pierce your earlobe in the Corporate door way for all to see – ?????? – possible contractual back door if not, just saying….

      • Perhaps you’re both missing the point. Another argument is that corporate structure itself was designed (non intentionally) to make sure psychopaths rise to management positions. Sociopathy is a euphemistic term for a low level psychopath, popularized by the APA in the 70’s – probably because the APA is run by psychopaths. For sure, the academic structure suffers from the same problems as does many other organizations. I can say with near certainty that corporate structure was designed by post industrialist psychopaths. So, it follows that said structure benefits the random (non genetic) nature of pyschopathy; being that 5% of all people have some sort of psychopathy.

      • Guybrush,

        I grok where your coming from although its a bit more complicated, just for sake of keeping it some what simplistic [2b2f might take umbrage] post WWII and psy-opts like FEE have more to due with out currant problem set as they have more bargaining power than citizens themselves, in fact libertarianism loathes such conventions as people having rights which are not attached to property. To think such is tantamount to socialism or communism or ungodly.

    • Reading the book at the moment. What is surprising is his description of banking.

      While he is very much concerned about debt in all its manifestations (yay!) his discussion about banking is very much the loanable funds model and banks as intermediaries between ‘savers’ and ‘debtors’. While that is the standard approach I think it tends to confuse more than illuminate.

      His message would have even more impact if he described exactly how banking works (loans create deposits etc – and the actual reasons why banks seek to attract deposits) and the role of the central banks in that context as that would make it much easier for the reader to understand why the current neo liberal monetary system is fundamentally broken and it is not merely a matter of bad boys who skipped Sunday school lessons once too often.

      But still I am only 20% through to will reserve further comment.

  2. Elon Musk reveals plan to drop thermonuclear weapons on Mars to prepare planet for humans – Independent

    Musk made the comment on Steven Colbert’s show .. for crying out loud. Some people have no sense of humor.

    • The punch line tho is Mars does not have a magnetic field e.g. the surface will never be habitable….

      Skippy…. Albeit I hear its a GDP multiplier….

  3. Can anyone give me one good reason why our AML laws shouldn’t apply to Australian real estate?
    “AUSTRAC has identified that laundering illicit funds through real estate is an established money laundering method in Australia; criminals are drawn to real estate investment in Australia because it is possible to purchase in cash, it offers reliable returns and it is possible to disguise ownership’ and criminals also use professional facilitators such as lawyers and accountants to help them seem legitimate.”
    Call us old fashioned but this looks like a dead-ringer for a money launderers’ paradise. They don’t even have to obey the law, what more could they wish for … taxpayer-funded bodyguards on legal aid?
    It would appear the Taib allegations are merely the tip of Australia’s money-laundering iceberg. Billions in illicit money from China pours into the property market, and real estate agents – along with lawyers and accountants – have remained exempt from the very money-laundering legislation the government promised to introduce almost ten years ago.”

      • Yes Mr Attorney, you must have a very good reason why you have deliberately left the gate wide open on money laundering through Australian real estate.
        What is it?

      • In the English speaking and British influenced world we use the common law system. In Europe the Civil law system is the norm.

        I believe that lawyers write laws in a way that will increase the need for lawyers. Let me give an example of approaches to law writing in the Common and Civil law Jurisdictions.

        We will use food laws for the example.

        New York City banned the use of trans fats in food. As this stuff was found to be bad lawyers worked tirelessly for years and were finally successful in making business change. Business will find new stuff to put in food to make it do this or do that, and the game lawyers play will continue for ever.

        However in Germany laws are often positive in that that law will specify what IS permitted and whatever is NOT on that list is banned. If a corporation wants to use something they must convince the authorities to allow that change.

        This is where we need to head with much of our legal system including TAX immigration and many others. Loopholes will be finished as a source of frustration for honest people.

        In the case of money laundering, is that anything not legal in terms of transactions is illegal.

      • Yeah tonydd, that’s exactly what we need. A country where anything that the government hasn’t specifically legalised is illegal.

        What do we want? Tyranny. When do we want it? As soon as government authorizes us to want it.

      • BB the problem is not government per say, its whom government is beholden too.

        Skippy…. trick question… whom might that be….

      • +TP
        In the interest of skin in the game, the continued enablement of the crime by each relevant AG must be seen as primary accomplice to this very serious crime, and punished accordingly.

    • Can anyone give me one good reason why our AML laws shouldn’t apply to Australian real estate?
      One possible explanation is that our RE agents do not possess the intellectual capabilities to handle AML laws..

      • RE agents or the current and previous three or four treasurers?

        Whatever their ability to understand complex legislation , quantum physics or the Hegelian dialectic, I bet one thing RE agents do have a vast capacity for is highly effective lobbying, meanwhile.

      • @2b2f

        Average person’s IQ is 100. That is equivalent of 100 RE agents combined.
        RE agents are not the class nor qualified for such task. Government institutions can inplement this simply through the transfer requirements. So… make it a buyer’s responsibility to provide required documents for a successfull transfer.

  4. Observation:
    That….is a great list of links for the weekend reading. Thx! Not too many, not too few, and everyone I’ve done so far…a great read. The GDP one being a cracker!

    “(Philipsen,) compares G.D.P. to any number of villains in order to make tangible the number’s many flaws. Trying to explain the concept to his student, he describes a pill-dependent smoker who, on the way to his divorce lawyer, crashes his oversized car into a school bus because he is texting about an impending derivatives trade”

  5. Why a correction in Sydney house prices is unlikely, but a correction in our standards of living is a sure thing
    House prices in Sydney is a highly charged topic. I used to be a die hard believer in the Sydney housing bubble theory. I am no longer. Those of us who have been living in Sydney for over 10 years however can see a significant deterioration in our standards of living. Not only skyrocketing house prices and increased cost of living, but significant demographic changes, and a disappearing sense of community and belonging.

    The reasons why I think house prices will not correct (at least not in a significant way) are multifold:

    First, according to a new survey from McCrindle Research, Sydney is adding 1400 people every six days (and that’s more than what the entire state of Tasmania adds in a year). Sydney’s population is almost five million now.

    Second, due to population growth, the vacancy rate is very low (1.9%) despite the massive construction activities taking place.

    Third, despite the already inflated prices, people continue to line up at 7am (after they have paid a $5K deposit just to be there) at off the plan property launches and willingly pay the asking price with no room for negotiation. Hundreds of off the plan apartments get sold within a space of 2-3 hours. As long as this continues and as long as the Sydney real estate market continues to defy traditional supply and demand and price discovery rules, the madness will continue.

    Forth, Sydney continues to be popular choice for overseas buyers. According to Credit Suisse, Chinese are on course to take out 20 percent of new homes in Australia in 2020, up from 15 percent now.

    Furthermore, properties have gone up so much in value over the past few years that property investors can withstand a significant shock and still be “in the money”. This means less likelihood that investors will rush to the exit door all at the same time. Add to that that a significant portion of the property investors are high net worth investors and therefore they have various options to deal with shocks.

    It’s also clear that would be first home buyers understood the game being played and became property investors themselves while living with their parents (or renting).

    Add to that the complete lack of data on who owns what (foreign vs local) which makes any enforcement of the rules very difficult. Furthermore, real estate transactions in Australia are not covered by the anti-money laundering rules (In the US and UK they are).

    The impact of this on our standards of living is staggering. Not only skyrocketing housing prices, but significant demographic changes, massive traffic jams at rush hour, and very expensive fruits and vegetables.

    Median house price now stands at around 13 times annual income. A new 50 sqm 1 bed apt within 20K from the city center fetches a price tag (starting) from $700K which is way out of reach for families in the middle-income range.

    Poor and middle-income families are being driven out of the inner suburbs and into the city fringes (50 to 60km away) or in some cases out of the Sydney metro area altogether in what can be described as a form of “social cleansing”. Out with the poor and middle-income class and in with the rich and the mega-rich. This is diminishing the sense of community and belonging for a lot of people. Lots of areas are being re-zoned as high density. People are being forced to sell or put up with living next door to high density apartments and traffic.

    Traffic on major roads is becoming a problem during rush hours. Basically, you don’t want to be on a major road around Sydney between the hours of 4:30pm and 6pm. Prices of fruits and vegetables are higher than those in London and NY. Hotel rooms are more expensive than those in NY.

    One of the biggest surprises in the McCrindle survey was that most of those surveyed said they would consider moving out of Sydney. 23 per cent had “seriously considered it”, 21 per cent “somewhat considered it” and 22 per cent “slightly considered it”. Only 34 per cent said they had not. More than 80 per cent of Sydneysiders believed that public transport, roads, hospitals and infrastructure were not keeping up with population. About 47 per cent believed it was “nowhere near keeping up”.

    The factors that keep coming up as potential triggers for a correction are: potential Australian interest rate hike, China hard landing, significant job losses in Australia, and a US triggered global correction due to rate hike there.

    With regards to interest rates, it’s likely that Inflationary pressures due to the depreciating Australian dollar be counteracted by opposing forces due to constrained wage growth and spending. This means less likelihood of an interest rate rise in the foreseeable future.

    With regards to China’s economy, people tend to forget that it’s a managed economy. You just have to look at their GDP figures to realize that. Therefore, the Chinese government will use every lever at its disposal to prevent a hard landing of its economy (which could lead to social unrest and political instability). This is not a guaranty that things will not implode but a stark difference from other free market economies. If deleveraging in China is handled in a balanced manner (by balancing the inflationary and the deflationary levers), a hard landing could be avoided.

    With regards to job losses here, it’s true that we will see more job losses in mining and in whatever is left of the manufacturing sector, but that is unlikely to impact Sydney property investors, most of whom, as mentioned earlier, have already built a buffer due to the significant appreciation of property values over the past several years. Although private debt levels are very high and income growth is falling, asset prices continue to increase and credit is still available. Therefore, a deleveraging process does not seem to be on the horizon yet.

    With regards to US interest rates, the Fed will not tighten if they feel that the economy/markets will not handle a rate hike. Given the current volatility in world markets (especially emerging markets) and the low inflation environment in the US, the Fed will probably err on the side of waiting. Even if they do increase rates, they will do so in baby steps in order not to spook the markets.

    Finally, housing is currently a corner stone of the Australian economy. Policy makers will adopt a “whatever it takes” approach to prevent a collapse in housing and therefore defend the wealth of the rent seeking class (which by the way includes many of our policy makers). Even if such a collapse were to happen, if history is any guide, speculators, rent seekers, and the banks will be bailed out (one way or another) and savers and people who played by the rules will foot the bill while getting shafted at the same time. No reason to believe it’ll be any different this time.

    I hope I am wrong.

    • Well reasoned. But as you’ve know for some time, up until now, you will be wrong! No country that has suffered a property price collapse saw what was coming. And when it happened they fought it tooth and nail, and it still happened. It will be the same locally as well, for the reasons embedded in your post. Specifically unemployment, and by extension, lower wages. Yes the standard of living for most Australians will fall. There won’t be an adjustment to living standards absent of a correction in property prices. Time will tell, and there isn’t much of it left ( see Das link by RobW above)

      • Rage,

        I do not know the population growth rate of Tokyo in 1989, but inflow of people from local areas must have been strong because its economy was booming back then. I recall reading about people commuting 200km using expensive bullet trains. One wouldn’t do that if rents were affordable, if only a tiny ‘capsule’ hotel. After all, Tokyo was the largest city on the planet with astronomical population density.

        In any case, Dublin showed that strong population growth could not prevent a housing bubble from popping.

      • Dumpling, (i’m up country, dodgy cover, lost my last reply) maybe, though Dublin may be more analogous. I agree this will burst, eventually. Construction is the explicit policy response to a the post resource investment phase. Rising prices underpinned by population growth. Everything including the dog will be thrown to keep this going, until overwhelmed. Cheers.

      • 2b2f,

        First of all, thank you for your trouble of finding the reference.

        Figures 10 and 11 are for Japan as a whole, not about Tokyo. Could the steady rise in the national vacancy rate be a result of urbanization as more and more people in rural areas deserted their home towns / villages? If so, the population of big cities, especially Tokyo, must have been rising sharply.

        BTW, I am not sure of what to make of the ‘negative’ vacant housing data in the 1970s shown in Figure 10. Do you have any idea as to how to interpret that?

      • BTW, I am not sure of what to make of the ‘negative’ vacant housing data in the 1970s shown in Figure 10.

        Not sure. Could be no data for that period. Looking at another source (looks more accurate), vacancy was 7.6% in 1978, 9.8% in 1993 and 12.2% in 2003 (yes, they kept building throughout the correction).
        See page 24

      • 2b2f,

        Thank you again for the second reference. Very interesting read.

        So the urbanization started much earlier, in the 1950s and 1960s, and the housing boom also started back then. They started building houses early but house prices kept rising into the 1970s and 1980s. In fact, house prices kept rising in the late 1980s LONG AFTER the urbanization subsided AND housing construction remained strong (one would expect both of these factors to lead to low house prices, not high)!!

        What to make of this? Was the lag in the house price response extremely large? Or the effects of population growth and housing supply were both negligible compared to the availability of credit? After all, Japan’s urban house prices took off still higher after the Plaza Accord had de-regulated its banking in 1985.

        Now, back to Oz in 2015, we are not building nearly as many as Japan was. Does this mean that the lag in the house price response may be even bigger? On the other hand, if the credit tap closes…..

    • When policy makers make housing the cornerstone of the economy, they destroy the productivity of the rest of the economy, and that can only go so far. An MB reader should know that by now. When the economy weakens, immigration slows. I also wonder how tolerant those Chinese investors and launderers will be of further declines in the currency.

      • When policy makers make housing the cornerstone of the economy, they destroy the productivity of the rest of the economy,

        I agree with you, but that’s the story of this country.. kicking the can has worked as a policy for this country for a long time..

      • “When policy makers make housing the cornerstone of the economy, they destroy the productivity of the rest of the economy,”

        Which beg the question of why in America they undermined the very bedrock of capitalism [ownership rights] to the tune of 60% clouded title on vintage RE, all whilst diminishing the allure of equity’s.

      • Skip, could explain what you mean by “60% clouded title on vintage RE, all whilst diminishing the allure of equity’s.” ?

      • St Jacques,

        The use of MERS [Mortgage Electronic Registration Systems] destroyed the chain of title thus clouding property rights by securitization.

        I’ve read a number of legal analyses of MERS, and this is one of the tidiest I’ve seen of what is so wrong headed about it. I try to avoid long extracts with limited commentary of my own, but I think you’ll see why I’m treating this selection as worthy of your consideration. The full paper, “The MERS Mortgage in Massachusetts” was sent by the author Robert Ludden to 4ClosureFraud, and you can download it there.

        A “continuity” made of smoke and mirrors. In the MERS model, the mortgage doesn’t pass by assignment from one owner to the next by formal assignment; in fact, it really doesn’t pass at all, at least not in any ordinary sense that would involve time and a sequence of events. Rather, in the Mersian world there is a kind of simultaneity of time and event in which all ownerships of the mortgage exist ab initio by virtue of the MERS membership agreement and do not have to be independently established. It is very much a framework of interrelationships in the form of a venn diagram. Let’s say that a particular mortgage changes hands three times before it is foreclosed— which would mean a total of four owners. And let’s use a circle to represent each of the four owners. In the MERS model, these four circles are arranged symmetrically so that each one overlaps the other three in equal measure to form a common area at the center. That common area is MERS acting, as Arnold has said, as a “common agent” with respect to that mortgage. Because each owner is already tied conceptually to the mortgage, there is no need for an assignment and MERS, in its capacity as agent, may therefore simply remain the mortgagee of record at the local land office. Indeed, the MERS model is in many ways quite elegant. But the complex and recondite nature of the thing has served well to obscure its falsity under well-settled principles of agency and contract law.

        There is a point about which we must be very clear from the outset, and it is one that has been overlooked in a number of foreclosure cases: what is “common” to MERS members is the use of MERS as their agent—not the ownership of the mortgage itself. Membership in MERS cannot and does not establish a joint ownership of the mortgage. Given the functional identity between principal and agent and the fact that MERS is acting in a representative capacity, ownership of the mortgage must still pass from Lender A to Owner B regardless of whether or not they happen to be using the same agent. The same principle would apply to any subsequent transfer, as, say, from Owner B to Owner C, all the way down to the foreclosing entity. There is no legal authority in Massachusetts that stands for the proposition that the mere use of a common agent serves to transfer ownership of the mortgage with regard to which the agency has been established.

        Putting absurdity aside, let us nonetheless assume for argument’s sake that the opposite is true. There is yet a further problem: the MERS model, like our venn diagram, is spatial, but the twin realities of ownership and representation are both spatial and temporal; thus the MERS model is unavoidably static, while the transactional reality it seeks to control is dynamic.

        Stated less abstractly, before MERS can represent Lender A with regard to the mortgage, Lender A must in fact own the mortgage. The point is elementary and applies in equal measure to all subsequent owners: the ownership of the mortgage by the principal must precede, in time, any authority the agent may have to act with regard to that mortgage. This follows from the well-settled principle that an agent cannot do what the principal herself cannot not do.33 However, the MERS model turns the reality on its head by asserting that ownership of the mortgage passes without the need for an assignment precisely because the agency relationship was established first in time via the MERS membership agreement.

        A somewhat overlapping problem is this: In the MERS model, there is again no need for a written assignment anytime the mortgage changes hands—unless the mortgage is going to be foreclosed by someone other than Lender A or removed from the MERS system. An unavoidable side-effect of this is that Lender A remains the mortgagee of record at the local land office, albeit with MERS acting on its behalf. In other words, the clear implication is that Lender A’s status as mortgagee at the local land office somehow survives the multiple transfers of the note that take place along the road to securitization. But MERS cannot have it both ways: the MERS model is designed in its own way to tie ownership of the mortgage to ownership of the note—which means that once Lender A has sold the note it has no further interest in the mortgage and its continuing status as mortgagee in the land office records34 is at best a negligent misrepresentation and at worst an act of fraud. It is also in any event a breach of the complete transparency required under G.L. c. 244, § 14.35 This “personality disorder” has a further consequence as well.

        Because Lender A remains the mortgagee of record, any subsequent assignment of the mortgage must name Lender A as the grantor in order not to memorialize a discontinuity in the chain of ownership and thus cast a cloud on the title; if Lender A (with MERS as it agent) is the mortgagee of record there cannot be an assignment from the true present owner of the mortgage, say, Owner C. And here we meet the same conundrum: if we accept the validity of the “common agent” device by which MERS avoids the need for assignments, Lender A no longer owns the mortgage and has nothing left to assign; thus an assignment directly from Lender A is also at best a negligent misrepresentation and at worse an act of fraud. Its failure to name the true grantor would be contrary to existing law.36 If the assignee happened to be a part of the mischief, it would further diminish her authority to foreclose the mortgage.37 Again, the assignment would violate the statutory requirement of transparency. It is upon this bedrock of sober fact that the mortgage industry and registry officials must weigh the integrity—and indeed the legality—of every recorded assignment directly from MERS as nominee for the originating lender to the foreclosing entity in a case where there have been interim owners.

        There is yet another wrench in spokes of the MERS model. Even if the “common agency” mechanism could somehow allow Lender A’s role as mortgagee to survive multiple transfers of the note on the secondary market, and if, as Arnold has said, the mortgage follows the note, the agency relationship vis-à-vis the mortgage ends when the note is transferred; like Lender A’s status as mortgagee, it cannot survive the transfer. This owes itself to a few basic principles of agency law. Without an interest to assign, the agency relationship between MERS and Lender A that was established in order to act with regard to that mortgage interest necessarily ends; Lender A’s circle is in effect removed from the Venn diagram previously mentioned.

        What has happened is that the purpose for which the agency relationship was created no longer exists with regard to that particular mortgage; there has been “an occurrence” the effect of which is to terminate the agent’s authority.38 Once the originating lender, Lender A, has divested herself of her interest in the mortgage, she can no longer be the mortgagee and therefore MERS can no longer act as mortgagee on her behalf vis-à-vis that mortgage. Notice of the termination need not be expressly given to MERS;39 rather its actual authority “may terminate upon the occurrence of circumstances under which the agent should reasonably conclude the principal would no longer assent to the agent’s taking action on the principal’s behalf. If the principal has engaged the agent for a particular task, its completion is such a circumstance.”40 Surely, MERS, with its sophisticated tracking system, is presumptively aware of any termination…

        The persistence of MERS as Lender A’s agent in the public record in effect accomplished with smoke and mirrors—and it conjures a host of evils. Yes, every MERS member establishes its own agency relationship with MERS. But immediately upon transfer of the mortgage from Lender A the agency relationship between MERS Lender A ends. The agency between MERS and Owner B is in fact a new and distinct agency relationship—and, given the functional identity between principal and agent, a new and distinct “MERS” as well. Again, in the absence of a valid assignment, the status of MERS as the mortgagee in the public records becomes a misrepresentation of material fact at the very instant the mortgage is assigned by Lender A, and from that point on the mortgage industry is, in effect, using a ghost to do its bidding—and one of dubious character at that. Only the name “MERS” remains; the “continuity” is a chimera, an illusion, the purpose of which is to make an end run around the need for a formal assignment. It has also served as a red herring, distracting courts from the sober fact that the role of MERS as a “common agent,” for all of its theoretical elegance and self-proclaimed validity, simply cannot in its present form be fit into the framework of existing law without inflicting collateral damage upon the very principles of fairness and transparency on which that framework has been built over many years and through many efforts and sacrifices. What this all boils down to it this: in order for MERS to remain the mortgagee of record at the local land office without fraudulently misrepresenting itself as such three things must occur.

        First, since an assignment of mortgage is a conveyance of an interest in land that requires a writing signed by the grantor,41 there must in fact be an assignment of the mortgage from Lender A to Owner B. If the public record indicates that the mortgage is being held by MERS on behalf of Lender A, the assignment must be from MERS on behalf of Lender A. Second, the assignment must make clear that the mortgage will be held by MERS in its capacity as agent for Owner B; that is, it must say something to the effect that “MERS, solely as nominee for Lender A, hereby transfers its interest in the mortgage to MERS, solely as nominee for Owner B.” This distinction is not an easy one to draw, but it is essential to knowing the substance of the transaction. And third, to avoid discontinuity in the land office records and allow for proof of ownership in the event of foreclosure, the assignment must be recorded. The same would apply to a subsequent transfer from Owner B, and so forth all along the chain of ownership.


        Skippy… this is what can happen in the void of cyber space when wet ink is replaced…. code becomes law and removes human responsibility… tho it has been said its more capital allocation – economically efficient… CALGON TAKE ME AWAY


      • skippy, sure you could have said that in a couple of sentences plus a link. No need to cut/past huge amount of text from elsewhere which makes this blog less readable.

      • @2B2F,

        Sorry old chap but the devil is in the details, reductive unpacking is a form of information arbitrage, which withholds granularity [agency]. Those that embrace that methodology are key agents in how we found ourselves in this fine mess in the first order of acts.

        If I was you medical practitioner would you like me to withhold information.

        Skippy…. your personal tastes and unwarranted attempt at authority are noted…

      • Seriously? This is not a matter of personal taste. You’re just doing cut/paste of text from other sources. If every one on the internet did that instead of using links, no blog will be readable. It”s just a matter of efficiency and organization.

      • “It”s just a matter of efficiency and organization.”

        Would that be economic efficiency and organization or academic?

        Skippy… reading is contra – ?????

      • 2b2f

        The Chinese just showed the world that they could not prevent the crash of the Shanghai stock market. What makes you think that our government can do any ‘better’? Surely you are not suggesting that our government is more capable of controlling markets than the CCP?

      • Dumpling,

        American threw 24T at the hole just to stabilize liquidity and attempt to put a floor under trust, yet refuses China a place at the SRD table as an equal.

      • Skippy, I am not sure of what to make of your comment. My point is that a government is powerless in the face of a market crash. Are you agreeing or disagreeing to that point?

      • Dumpling, the 2 economies you mentioned are very different and are driven by different forces and are facing different challenges. It’s easier for China, being a managed economy, to intervene and make adjustments than say a free market economy would. With regards to our challenges here, it’s clear by now that the government has been managing the bubble (successfully) as opposed to managing the economy. How long can this continue? this is where everyone has an opinion.

      • 2b2f,

        I am not sure if I understood your point. We all think it must be easier for China to intervene and make adjustments than a free market economy would. And yet, they recently tried and failed to prevent the crash of the Shanghai stock market (I think I know why they failed). So, even the almighty CCP was powerless in preventing a market crash!! Who knew?

        Could it be that the influence of a government is grossly exaggerated?

      • Dumpling it depends on what you consider a market crash, we run out of money, fail to exercise our monetary sovereignty or bend over to the machinations of the all knowing eye…. some call the markets.

    • TailorTrashMEMBER

      Just like in Vietnam where the village had to destroyed in order to save it , so in Sydney we are destroying it in order to “develop” it
      I have seen in the last 40 years the evolution from a paradise to what is fast approaching a shit hole . Even those temples of consumerism the shopping centres are these days fast becoming more like in Bangkok. Once they at least had a public isle to walk thorough now to eke out a few more rental dollars the owners sell all the centre isles for sushi bars ,coffee shops and key cutters ( the keystones of future Australian economy) .
      I agree with your observations on the future of Sydney ……….we will develop it into a 3rd world city …..i hope you are wrong on the price issue …..sooner or later people might question the value versus the price …….but then again apparently the price of apartments in Mumbai is quite high too
      BTW ……are you In the realestate /developer industry ?

      • BTW ……are you In the realestate /developer industry ?

        Far from it.. my background is in the SW industry (though I’m no longer in that industry). I tried in this post to look at things objectively with some detachment.. As an investor (mostly US stock market) I try always to question my (and others) assumptions. There’s already lots of “Zero hedge like” posts on MB. I hope not everyone who posts views different from the mainstream view of MB readers gets labeled a developer or someone with an agenda..

      • TailorTrashMEMBER

        2big2fail……….noted …..
        agree that well balanced arguments from all sides are always good …..if we only want reinforcements to our own views then we can be trapped in the wrong place .

        “There is no absolute point of view from which real and ideal can be finally separated and labeled “. TS Eliot

    • @ 2 big 2 fail- I agree with all of your statements however the one aspect I think you have overlooked is the banks. Unfortunatley the banks are exposed to Australia in totality, while Sydney is its own bubble from the rest of the country what happens when WA finds itself ina depression over the next 2-3 years and the car manufacturing ends in Adelaide in 2017? There are severe issues facing the rest of the country where there are plenty of houses with loans attached that have been issued by our banks. When the loans start to go bad and provisions for bad debts increase exponentially what happens to the banks at that point and lending in Sydney? I work in the industry and can categorically say that borrowing capacity’s for people looking for lending have dropped at a minimum 15% and dependent on an applicants situation up to 30% so the process has already begun. The banks don’t want to get left holding the bag on this one ( even though APRA has acted 3 years to late) when the whole thing implodes they will be able to say ” we took action it wasn’t our fault!”

      • We believe the strong increase in RMBS issuance in the past two years is due to a variety of factors. These include increased domestic and offshore investor interest, mainly due to a lack of supply in other markets; a search for stronger yields; the Reserve Bank of Australia (RBA) allowing senior prime RMBS to be an eligible asset under its committed liquidity arrangement, attracting strong interest from balance-sheet investors; the continuing strong performance of Australian RMBS during and after the financial crisis; originators’ prudent underwriting and lending practices; and Australia’s sound economic outlook.

        While new issuance volumes have picked up in recent years, we do not expect new issuance to reach the levels observed in 2006, when total issuance in the Australian RMBS market exceeded A$60 billion. Before the financial crisis, many Australian RMBS issuers met strong investor demand by issuing fewer transactions, with larger volumes and tight margins. At the peak of issuance, more than 60% of the RMBS issues were placed with offshore investors, but these markets essentially closed to Australian RMBS issuers in mid-2007 because offshore investors had limited ability to invest. Furthermore, some of the investors who were active in the Australian RMBS market before 2007 no longer exist, such as structured investment vehicles. The emergence of covered bond issuance as a funding source in Australia has also reduced the need for some lenders to securitize.

        Issuance during 2014 was predominantly Australian dollars, mainly because of the high cost of currency swaps, as well

        An Overview Of Australia’s Housing Market And Residential Mortgage-Backed Securities
        as offshore investors’ willingness to invest in Australian-dollar issuance.

        Australian Government Support

        Australian Office of Financial Management

        The new issuance between 2007 and 2011 was predominantly to domestic investors and the Australian government through its Australian Office of Financial Management (AOFM). The AOFM set up a program in 2008 to purchase up to A$8 billion of RMBS to support competition in Australia’s mortgage markets. The program was extended by A$8 billion in October 2009 and A$4 billion in April 2011 under the government’s Competitive and Sustainable Banking Package. This initiative supported the livelihood of smaller lenders in the market.

        As of April 2013, the Australian government ended the AOFM RMBS Investment Program citing that the market had sufficient private-sector support to operate on its own, although the AOFM would continue to hold any securities already purchased until their maturity. The AOFM’s decision reflects a return of investor confidence and interest in the market, particularly for nonbank originators and regional banks, which had been mostly dependent on support from the AOFM. Recent sales by the AOFM, made through reverse inquiry, also suggest secondary market activity is increasing.

        Reserve Bank of Australia

        To improve liquidity in a number of domestic markets, the RBA expanded the range of securities eligible for its repurchase operations (repo-eligible), which include ‘AAA’ rated RMBS. A number of lenders, particularly financial institutions, have structured repo-eligible RMBS to meet their liquidity needs since 2008.

        The RBA in October 2012 announced new eligibility criteria for RMBS. Issuers of eligible RMBS will be required to provide loan-level data, security level data, and cash-flow waterfall data for repo-eligible transactions on a monthly basis. These data requirements will become mandatory as of June 30, 2015.


        Skippy…. eh… Asian RE investors replacing the previous off shore security buyers… oops…

      • Mathew, I agree, that’s a substantial risk. Hard to quantify without going through the financial statements of the banks and identifying percentage of loans in WA, SA and Queensland vs Sydney and Melbourne.

      • skippy, same as above. You’re making this blog less readable. There’s something called a link, you know… where people click on and it takes them to the text you’re referring to..

      • @2b2f,

        How is concise information a detriment to this blog and whom made you arbiter of what good for this blog, are you entitled to make such distinctions or is it self awarded.

    • Unfortunately, 2big2fail, I agree with you that we are not likely to see much of price fall, if any. In fact, only this morning I was saying to my spouse that I see property prices doubling rather than halving.

      Before the GFC we were already in a property bubble, and like other housing bubbles elsewhere in the world, I was sure that ours was going to pop. Now that prices are much more unaffordable than they were then, I can’t see the bubble popping. I wish it would, but even if there was a small downturn in prices, there is a huge number of people waiting on the sidelines, just ready to jump in. But even at the ridiculous prices now, there is no shortage of people queueing up to pay outrageous amounts for dogboxes, let alone houses. And with the equity property owners have amassed, their buying power is even greater than ever before.

      If unemployment rises, and people are forced to sell, there are more than enough migrants and foreign investors to take their place. And as long as our government allows money laundering and even legal foreign investment in its present form, there is an endless amount of buyers. Even if no Australians were able to buy from hereon in, it would make little difference to house prices. But the way things are, there are still plenty of Australian buyers willing to fight it out with foreign buyers, and pay whatever price is necessary to get a roof over their heads.

      Yes, the standard of living is worsening markedly, and in so many ways, but in a few short years our big cities will be almost unrecognisable from what they were previously. And mostly in a bad way. I’m sorry for sounding so pessimistic. And I also hope I’m wrong.

      • md, yes, Sydney is already very different from what it was 20 years ago and it’s only getting worse. The concentration in Sydney and Melbourne is a dysfunction in this country. Now we’re living with the results of the mistakes made in the past by putting everything in 2 major cities.

    • 2b2f

      Your list of ‘rationale’ applied equally well to, e.g., Dublin in 2006. It is not any evidence that Sydney will be any different.

      You may wonder what happened to all the Chinese who were supposed to buy up 99% of the Dublin properties by now.

      • But Sydney is different. Dublin wasn’t a free-for-all for 1.3 billion Chinese. I don’t know whether money was laundered in Dublin real estate, but if it was, it was hardly likely to be on the same scale as it is here.

        Where else in the world is the average house 13 times the average income? And growing? I never thought I’d be saying this, because several years ago, I thought an average house of $500K doubling to $1 million would be preposterous, but that’s exactly what’s happened. That means that everyone who owns a house outright, no matter how much or how little they paid, are now millionaires. Most people who own a million dollar house also own other properties (and whatever else). They might be in a lot of debt, but as long as their equity and wealth keeps growing, they’re more than ok.

        Now with both sides of government hell-bent on doing whatever it takes to keep prices rising, I am sure that there would be a lot of buyers for those $1 million houses at $2 million. And when those $2 million houses become $4 million, they will still be in demand. Why? Because there will be less houses on full sized blocks as houses keep getting torn down to build dogboxes. Every scrap of land is now seen in terms of how much wealth it can generate and everyone wants a piece of the action.

        Eventually it will will slow down or reverse, but not for years yet.

      • Md,

        I agree that it is still a few years away before the tide turns. As I had asserted a number of times before, a bubble has to achieve its full growth potential before it can burst.

        Once the tide turns, it will turn very quickly. I posted a quiz a few weeks ago. http://www.macrobusiness.com.au/2015/08/weekend-links-22nd-23rd-august-2015/#comment-1868401

        A fitting analogy for a housing bust would be to replace the size of the armed forces with the number of houses on sale.

    • First it was “Innovation” [so last decade] now we have “Disruption – Sharing – Gig” [Creative class – Hipster econo speak], yeah I’m so not inspired.

      Skippy…. BTW Richard Branson is part of the problem, so what ever he comes up with count me out.

      • I think many will jump at the chance to save money on commissions, so even if you are not enthused, most will be.

      • Yes many will act out of shortsightedness and never address the fundamental issues…. because that’s what consumers are indoctrinated to do…. compared to what citizens might do…

        Skippy…. and some wonder how the whole RE boom started…..

      • I used Gumtree to sell a small acreage without any commission at all earlier in the year. I priced it for profit and I sold it in 2 months to the 3rd looker. Branson’s business model is stuffed before it began.

    • quote from link: “Crucially, that extra $20,000 has greatly increased her spending power, equating to almost an extra $180,000 on her new home loan.”

      There’s your problem right there….. If all these ‘savings’ do is allow people even greater leverage, well that’s hardly an improvement.

  6. Peter Dutton and Abbott giggling about people losing their homes to climate change due to global warming.

    These men are not worthy of their high offices.

    We cannot allow adolescents to run our government. Where are the adults, ffs? 😡

      • “Compassionate conservative” is an oxymoron about morons.

        And Abbortt is a “Christian” too, right? That’s the sort of compassion I’ve come to expect from Christians. 🙄

      • Mining BoganMEMBER

        Christians eh? If they’re the type of christians we’re snaffling from Syria then let’s leave them there. Don’t need more of that sort of rubbish in this country.

  7. His time is up:::Abbott is fighting to protect his arse from a fresh coup from within his frontbench.

    Multiple sources have told AFR Weekend that the plan is to mount another leadership challenge REGARDLESS of the outcome of next week’s by-election in the Western Australian seat of Canning.
    Malcolm (Tourang) Turnbull is the likely rival while Asbestos Bishop stays as deputy.
    However Some who previously supported Bligh Turnbull, confided that they could now vote for him.
    “There’s no alternative,” said a source.
    “Everything changes if the top changes,” said one powerbroker. He added that the move this time was “not about Mr Morrison” insofar as he was not being lined up for a leadership role.

    Abbott confronted the issue on Friday after it was reported he was under pressure to bring forward a reshuffle of his ministry, scheduled for Christmas, to head off the mutiny.
    The publication of a list of ministers supposedly to be targeted for demotion sparked an internal round of hostilities and finger-pointing as to who was behind it.

    Mr Abbott rang ministers on the hit list, including one of his top performers Trade Minister Andrew Robb, to assure them the list did not come from the Prime Minister or his office. Some ministers rang Mr Abbott or his office first to seek clarification.
    One (LNP) minister called the list published in The Daily Telegraph “the most Machiavellian act ever perpetrated”. “This is a bastard of an act.
    We’ve had the best week we’ve had all year,” he said, in reference to the well received decision to accept 12,000 Syrian refugees.(Well not all of us agree on the immigration and refugee issue)

    Mr Abbott is believed to still have the numbers to protect him against a challenge but one MP keen on a change said “things are moving pretty fast”.
    “There’s a lot of chatter among the frontbench but it’s not clear where this is landing.
    “That’s the worst of both worlds. The government suffers from the chatter.”

    The government suffered a modest setback in Canning on Friday when the Liberal Democratic Party, led by Senator David Leyonhjelm, announced it would direct its preferences away from the Liberal Party in response to an ongoing legal dispute with the Liberals and to protest some policy decisions.

    One theory circulating on Friday was that the reshuffle story had been leaked to blow up the government in Canning and ensure Mr Abbott’s ouster.

    Treasurer Joe Hockey was drawn into the firing line when 2GB radio host Ray Hadley, a supporter of the government and who has a good relationship with Mr Morrison, suggested to Mr Hockey during a live interview that he should resign for the good of the government and Mr Abbott.

    “If [Mr Abbott] says, ‘Look, Joe we’re moving into election cycle, it’s next year and you’re one of my best mates, you’re a great bloke, I think you’re a great Treasurer, but we just might have to move things, we might have to put you somewhere else’, would you take one for the team without bluing or screaming?” Mr Hockey dismissed the suggestion.

    Mr Abbott survived a motion to spill the leadership by 61 votes to 39 in Februrary.
    After what he described as that near-death experience, he asked his team to give him six months to turn the ship around.(His time is up)

    But despite a brief surge in the wake of the May budget, the government has been pretty much lagging Labor by 54 per cent to 46 per cent on a two-party-preferred basis.
    One frontbencher told AFR Weekend that he believed it was a matter of if, not when, the leadership would again be confronted.
    “It’s like the election,” he said. “There will be one, we just don’t know when.”
    AFR &WW

    • His time is up:::Abbott is fighting to protect his arse from a fresh coup from within his frontbench.

      The saga of our very own Captain Bligh continues. Let’s hope the mutiny succeeds this time. Get MT in and have a good look at him before an election.

      • Please, do not insult the memory of Bligh. He should never have been put in charge of men, but at least he was a highly competent navigator.

      • SJ You are aware I’m sure that Maclolm Turnbull is related to Capt William Bligh
        In fact Turnbull’s full name is Malcolm Bilgh Turnbull.(Google it)
        and MBT should never be put in charge of men, nor is he any sort of navigator.

      • SJ that is the one. of Bounty fame,and who was later deported from Aussie to NZ as an incompetent Governor.(though I must admit they were turbulent times in those days, with a sheep farmer MacArthur running the show) . I think later he was also asked to leave NZ. with Samuel Marsden, Janet will know.

  8. “It’s interesting, where you see criminality I see process.”

    Yep, unethical and antisocial behaviour is only a crime when harm is caused by poor people. I mean the elite were never going to create laws that effectively police or affect their own!

  9. The Traveling Wilbur

    In anticipation of future developments in the coming week: “When doves cry” (with apologies to Prince/TAFKAPWIKAPA)

    Dig if you will the economics of the picture
    Of you and I engaged in QE
    The nervous sweat of your body covers me
    Can you my central banker
    Can you tell me if this is the picture you see?

    Dream if you can inflation
    An ocean of smokestacks in bloom
    Financiers strike curious poses
    They feel the interest
    The interest rising between me and you

    Why can’t you just leave rates standing?
    Standing alone in a world that’s on hold? (On hold)
    Maybe I’m just too demanding
    Maybe I’m just like Greenspan, too bold
    Maybe you’re just like Yellen
    She’s never satisfied (She’s never satisfied)
    Why did we print fiat at each other
    This is what it sounds like
    When doves cry

    Touch if you will my heart
    Feel how its rate rises inside
    You’ve got the arteries all tied up
    Don’t make me default on us
    Even doves have pride

    This is what it sounds like

    When doves cry
    When doves cry (Doves cry, doves cry)
    When doves cry (Doves cry, doves cry)

    Don’t Cry (Don’t Cry)…

  10. From Bill Mitchell’s Australia’s crawling Internet speed signifies wider fiscal failure (above):
    “And, the ‘Neo-liberals on bikes’ (aka The Greens) was quoted in the press today (Source) as saying:
    ‘Joe Hockey can either raise $18.1 billion unfairly over the the next four years with his rejected budget measures, or raise $106 billion fairly through measures like axing unfair tax breaks and asking the big banks to pay more.'”

    What the hell! So a progressive tax agenda aimed at making the rich pay their fair share makes the Greens Neo-liberal o_O

    • So a progressive tax agenda aimed at making the rich pay their fair share makes the Greens Neo-liberal o_O

      No, I suspect it’s the promotion of the idea that you need to raise revenue from taxation before spending it, that makes them neoliberal to Mitchell.

      • Concur drsmithy, HPM is spent into existence and not mined from a whole in the ground, on a sovereign level [state and local is funded in part by taxation]. This causes a wee bit of dis cog wrt corp vs individual taxation, tho use of national infrastructural and resources by non national corps does pose a question.

        Skippy… tho I am pro taxation for its intended purpose wrt progressive tax.

      • @ drsmithy
        No, I suspect it’s the promotion of the idea that you need to raise revenue from taxation before spending it, that makes them neoliberal to Mitchell.
        Yep, I understood that but it is still a flimsy premise for such a label. You only have to look at the Greens economic policies to see that. I quite liked much of what Mitchell said in the piece re the NBN etc. I just find it annoying when a progressive kicks an own goal with remarks like that.
        PS: I suspect you probably agree with me drsmithy. Probably could have been clearer about my thinking.

      • AlexD,

        The comment was wrt momentary theory, to that regard Bill is more or less correct, how some might feel about all the other works of the greens is a separate issue. His umbrage is based on policy is dictated by the monetary reality, that the greens work with in the neoliberal framing – is – his sore spot.

      • @Skippy
        “His umbrage is based on policy is dictated by the monetary reality, that the greens work with in the neoliberal framing… “
        Skip, I understand what he is trying to say. The reality is that taxation is an important source of government revenue and it always will be. You could argue debating this in the context of balancing the budget might be seen as selling out but, given the problems with taxation currently I see no reason why Mitchell should get carried away with the Greens pointing out fairer measures that could accomplish this same objective. We shouldn’t forget it was the Greens that helped remove the debt ceiling for government spending around 18 months ago. To label a party with this history and these economic policies neoliberal is a little silly imo.

      • I don’t think you do understand AlexD

        Michell is saying the government is not revenue constrained

        So “taxation as the best form of revenue” is redundant

        In fact the main effect of taxation is to increase demand for Australian dollars

        Which in turn puts upward pressure on the exchange rate, and downward pressure on inflation
        Neither of which Australia needs right now

        Which begs the question

      • I don’t think you do understand AlexD
        Perhaps I should make myself clearer then.

        Michell is saying the government is not revenue constrained
        ..and good luck to anyone trying to get elected on that fiscal platform at the moment. While you can say whatever you please when you’re a blogger/Uni Prof, those in politics are not so fortunate. I am aware of how fiat currencies work coming. I am even sympathetic of QE for the people (not banks), I just think the term neoliberal has been used way too loosely here.

        The Greens economic policies are reminiscent of a time when governments actually understood their role in addressing market failure and the needs of its communities. There is clearly a much bigger role for government in the overall economy. That is at completely at odds with the ideological heart of neoliberalism which is a belief (perhaps “blind faith” would be a better choice of words) in rolling back the government sector so that markets can thrive and function effectively.

        Bit pressed for time here but, as for the rest of your remarks on balance I think the Green’s tax policies roughly equates to more tax for the rich and less for the poor. Over the long term, I would suggest taxation will still be a very important source of government revenue. Some policies would also put upward pressure on inflation (eg: big public infrastructure spending etc) although housing prices would definitely fall. Sadly though, there’s a part of me that wouldn’t mind an epic economic calamity (like deflation) we don’t escape from. That might actually move the Overton window far enough for some meaningful progress to be made for long term gain.

      • But fiscal austerity and budgetary balance and tax to spend mentality are the very definition of neoliberalism: allowing money to dictate policy, rather than vice versa – policy comes first, money accommodates to enact the policy

        Without that realization: Sine qua non

        All the rest (gay marriage, refugees dtc) is just fluff: hence neoliberals on bikes characterisation is a fair one

        Even global warming becomes a nonissue after the realization that the world is not constrained by money, only by intent

      • All the rest (gay marriage, refugees dtc) is just fluff: hence neoliberals on bikes characterisation is a fair one

        I have to agree with AlexD that it’s not really fair.

        If one of your measures is “policy first”, then the Greens match that principle IMHO. Their policies are defined not by asking “how much money have we got”, but instead by asking “what do we want to do”.

        Of all the parties, they would be the most aware that the only real constraint is physical resources (though I suspect they’re prone to underestimating what those physical resources can deliver).

      • @coming and Skip
        “But fiscal austerity and budgetary balance and tax to spend mentality are the very definition of neoliberalism: allowing money to dictate policy, rather than vice versa – policy comes first, money accommodates to enact the policy”
        While I think drsmithy has nailed it pretty well above, I would also suggest you’re definition is incomplete (Edit: as is the evidence Mitchell offers)

    • MB, should they stick their nose over the border and intercept one of those Stinger missiles (hundreds are still not accounted for from the Afghan war) then there will and hue and cry.
      Or maybe a fair dinkum Buk Russian missile, which just happens to be loaned to the rebels.

  11. More agents bragging about foreign real estate purchases in today’s local paper.
    Isn’t this activity illegal?????????

    “Take a waterfront property in King Ave, Balgowlah. It was, sold recently by Anthony Walls, of real estate group Max Walls International. The ultra-modern home with five bedrooms set over three levels was on the market with a price guide of $4.5 million.

    The property was bought, sight unseen by a UK businessman based in the south of France. He had seen the property on the internet­ and paid a cool $6 million for it. He commented to Mr Walls that the sale price was in real terms a lot less for him given the exchange rate.”

    “Mr Walls said Chinese buyers had also returned­ to activity levels not seen since before­ the country’s stock market crash. He said the majority of buyers were leaving the homes empty, preferring instead to just park their money.”

    One of the trends that has surprised him is the age of the majority of cashed up Chinese buyers.

    “I recently had a guy from China who was 22 and he wrote a cheque (for a property) for $8.5 million,” he said. “For them this is cheap.”


      • Is anyone notifying the FIRB or ATO about this? Not that I expect them to do anything, but there needs to be public pressure on these organisations to DO something! A website wall of shame? It would be great if these illegal purchases were publicised on some sort of broadcast – maybe part of a radio or TV show once a week or once a fortnight. Something, anything to let them know that we know that they are not doing their job.

    • This is not a real story its pure psych-warfare for the plebs who are becoming a bit concerned about the economic lay of the land. Read a few stories and Sunday BBQ conversations and they will sleep well tonight. Dismiss this, don’t be sucked in, I have witnessed first hand the euphoria (scary) created by similar stories circulated in the past.

  12. A lot of Macro Moaning here – anybody got something positive to say?

    I’ll kick it off:

    I have a small electronic engineering business. I took a punt and started it in 2001 after 25 years in the corporate world – just as I was going to chuck it in a few orders arrived.

    It’s a niche business as most Aussie businesses have to be. I run it from home. I design the products and then outsource my manufacturing to local assembly companies. I spend about 2 months a year developing new products – some work – some don’t.

    Alan Kohler had a good series on successful small and family businesses on his site – they might be there in the archive – worth a read.

    Any other good news stories out there?

    • ironically Ian, MacroBusiness is a very good news story. A group of guys who took their interest in economics and politics and their hobby of blogging and turned it into a successful business that continues to grow and slowly, but surely, influence policy. A long way to go, but quite a remarkable achievement and something we are all extremely proud to be a part of.

      • TailorTrashMEMBER

        Hope some of our “leaders ” monitor this site (I’m sure they do….maybe via ASIO or Border Force ). While it may be seen by some as being dominated by pessimists it’s certainly a counter to the real real estate dominated MSM with their stories of how someone snapped up a decrepit rotting dump for the bargain price of $1.8 million …………..keep up the good work of putting forward insights on ( to paraphrase Julia Gillard ) a good country that has lost its way ………..

      • WW – I’d like to keep a degree of autonomy on this site but happy to provide details one on one if there’s a way to do that.

    • I went to a short presentation at this spruiker’s company some years back… the excel spreadsheet presented had a sensitivity analysis of prices doubling every 7-10 years or so and the compounding effect of that on ones wealth over the decades. I thought it was a joke but looking around the room it was pure porn fantasy material with eyes popping out, tongues wagging, toes wriggling and speech bubbles above everyone’s head saying “shutup, c’mon, where do I sign”. Jokes on me though – they’re now rich as fk and I’m comparatively 100’s of 1000’s poorer.

    • Is anyone predicting a “crash” in the sense of a 50% fall in price over two years? I don’t know of anyone. I think Australian property is massively overpriced, but property doesn’t “crash” like the stockmarket. Instead you just get year after year of decreasing prices a la Japan. Generally a real estate bubble takes as long to deflate as it took to inflate. From a purchasers perspective the outcome is the same – you wouldn’t buy in at the top of the market.

      The next issue is more interesting. In the face of a prolonged deflation in housing prices would you buy? Some people might think, well I’m sick of renting so I’ll take the haircut, others might be willing to wait or else move elsewhere.

      • If property doesn’t crash, why is there a specific term for it?

        Nobody buys in a falling market, and thats why they crash. Buyers want it for less, Sellers want more than its worth, the banks won’t lend to most people, and then you get the people who HAVE to sell, and thats where the new price is set, at the margin, at CRASH levels, or to put it another way, at the true value of the property.

      • I think Australian property is massively overpriced, but property doesn’t “crash” like the stockmarket.

        Er, Ireland ?

      • That is exactly my problem Scott. I would love to buy my own place in Perth. But sale prices are slowly falling. Buying now could easily cost me $100,000 a year in capital loss over the next two years. So I rent and wait. If I were in Sydney I simply could not afford anything. So it’s impossible for an ordinary person to buy at either end of the country.

  13. Canada has 10 million people spread over 10 cities. Australia has 15 million people spread over 6 cities. That’s one reason why Sydney and Melbourne have housing bubbles. Worse yet, our grand plan is to keep adding people to Sydney and Melbourne instead of spreading people over other cities.

    Canada total population 35 million
    Cities with over 600,000 people:
    Toronto, Ontario, 2,600,000
    Montreal, Quebec, 1,600,000
    Calgary, Alberta , 1,019,942
    Ottawa, Ontario, 812,129
    Edmonton, Alberta, 712,391
    Mississauga, Ontario, 668,549
    North York, Ontario, 636,000
    Winnipeg, Manitoba, 632,063
    Scarborough, Ontario, 600,000
    Vancouver, British Columbia, 600,000
    Total 9,881,074

    Australia total population 24 million
    Cities with over 600,000 people:
    Sydney, New South Wales, 4,840,628
    Melbourne, Victoria, 4,440,328
    Brisbane, Queensland 2,274,460
    Perth, Western Australia 2,021,203
    Adelaide, South Australia, 1,304,631
    Gold Coast-Tweed Heads, Queensland/New South Wales 614,379
    Total 15,495,629

    • 2big, you aren’t comparing like for like there. You should be comparing the Urban or Metro population figures for the Canadian cities to get a more meaningful comparison. For example the 600k figure for Vancouver only refers to the inner core area around the CBD, and doesn’t include all the surrounding suburban areas. The Metro figure for Vancouver is 2.3 million and is comparable to the way Australian cities population is measured. Likewise the Metro figure for Toronto is ~5.5 million, so is a much larger city than the ~2.6 million figure for the city proper would suggest.

      • You’re right. Thanks for the correction. We’ll scrap that theory then..
        Damn Google.. I should have relied on more than just the first link that popped up…

      • St Jacques, sounds like the Brisbane city local govt area is the most similar to the North American ones in terms of size. Anyway, these differing interpretations of ‘City’ is something that can catch you out when trying to make comparisons between things like population density, physical footprint, and even average house prices.

    • Good article, I quite like this little extract as it illustrates the problems we face when the Auto industry shuts down in Australia.
      “And the knowledge economy? Never showed up. It turns out there is no replacing a manufacturing base. That a highly educated workforce doesn’t just magically create new industries or economies. “

      • I cant say it better than this, for all manufacturing jobs which are being replaced
        “Replacing steel plant jobs with a call center jobs is like losing your dog and replacing it by taking your hamster for more walks.”
        Us Aussies have has lost the plot! WW

    • …and you can already sense the political establishments’ response.
      “Ok. So you peasants want an alternative to us, who know everything better than you do, and have gone for Madman Corbyn? Well we’ll find you an alternative Madman on the other side to chose from when you vote!”
      It’s happening in the States…..Sanders on one side, Trump on the other. The trick will be ensure that whichever Madman is elected…is really one of us! (Who Trump already is, for instance)

      (NB: It will be no different to days of yore, when landed families sent one son to fight for the Cavaliers and another for the Roundheads, to make sure that whoever won, The Family won….)

      • Yes, I can see the headlines now, those nasty socialists will strip you of all the ( imaginary ) house price gains that we, the bankers friends have provided to validate your ( entirely imaginary ) sense of being an investment genius, ( so that we can rob your children of their birthrights while you are distracted )

        A thirty years long credit boom will take a generation to unwind, we can either cancel half the debt soon and all take a 50% cut in what we laughingly think of as our wealth, or go on to the end and it all blows up and we all start from scratch again.

      • The problem nyleta is those that don’t even have a functional knowlage of what socialism is let alone social democrat, everything is a monolith and Pavlovian dog whistles the means of communication.

    • I like some parts of the Guy, but I think he is about as much chance of getting UK Labour elected as flying to the moon. This is the sort of coverage he gets (from the Telegraph, which hates Labour)

      Death of New Labour as Jeremy Corbyn’s socialist party begins a period of civil war


      I think he will be great for UK policy debate though, and some of his ideas are likely (given the economic backdrop to our future) to resonate here in comparison, with the Australian ALP essentially having a left wing gimp bound and gagged in the basement for its left wing contribution. Look out for his comments on housing in particular, but in general he has had a generations worth of ridicule to sow his field as UK Labour leader, and most Poms I know (and I know a lot) seeing him through that prism.

      • Here is his piece in the Guardian

        Jeremy Corbyn: ‘Britain can’t cut its way to prosperity. We have to build it’

        he has the usual social manifesto guff (which should resonate with more not currently being considered by contemporary mainstream UK politics)

        I particularly liked

        Everybody aspires to an affordable home, a secure job, better living standards, reliable healthcare and a decent pension. My generation took those things for granted and so should future generations.

      • TailorTrashMEMBER

        A labor man that looks and sounds and talks like a labor man …….I like that !! ………unlike that smarmy Oxford lefty Tony Blair ……….I look forward to him getting some air into issues that might concern the majority of the people. Who knows if he gets enough notice and attention maybe Bill Fall Shortman may feel shamed into taking a stand on some issues that matter to the average struggling Australian.

      • Similar patterns of response to austerity are playing out across Europe. The barriers to entry for new parties and politicians are lower as people demand something different.

        Corbyn will be attacked relentlessly by the murdoch press, and he may not last. But he will most certainly shift debate and break down the dismal consensus that a generation of Blairite drones have propped up.

        If he can highlight the grotesque inequality of the UK and the dominance of the City, and force some change then no bad thing at all. BTW, folk on this blog who lament the skewed tax system in Oz would be advised to have a look at the UK to see just how bad it can be. The place is still ruled by the aristocracy and scratching the surface reveals the same medieval structures that have stood for centuries.

      • Gunna, I saw it start wiht my own 2 frigging eyes. It was the day the apprenticeship ceased and a man with a contract was worth more than a tradesman. the idiocy strated in the hands on trades, then sperad to the services trades. Now some very reliable sources say we have gone too far and the country is now a lemon. Some learned types are saying it is a throwback to our convict heritage.
        Richard Branson is here at the moment and he runs his business as I run mine, Customer service before all else. HE says that is what saved Virgin against Qantas, for me it kept me out of the grips of the Ready Mix companies.
        My call is that until we get back to putting the customer first, the economy is rooted because as Jason outlines, we are currently paying full value, plus legals, for 80% of what we expect.
        It took 21/2 generations to get to this unsustainable level, if it corrects in one, I will be amazed. But it will crrect. (all the frigging Jehovas Witness bashers up here are in prophecy heaven) WW

      • WW

        Richard Branson runs a – brand – which he leases out to others, his over all track record wrt his personal startups is abysmal.

        Skippy… Virgin is service oriented – ??????

    • Jason wrote it up to the exact detail: This practice of half building something then head to court is endemic. For all those who wish the subs to be built here, take note.and wise up WW
      JasonSeptember 11, 2015 at 12:05 pm
      StatSailor is probably closer to being correct on how major projects are actually operated.
      Ones that are priced realistically would never get off the ground, so usually there’s a whole bunch of assumptions baked into the cake, which your project engineering team will get lumped with after they’ve already signed the contract.
      They’ll get squeezed from both sides (client and primary construction contractor), so the design will be delivered but only just barely with a lot of compromises and things left out. Then the construction guys will grab it, and bitch and moan about a design riddled with errors because of things either overlooked or left out because the project team was over budget, so they’ll build about 80-90% of the project. Then the commissioning team will come through and realise they’ve only got 80-90% of the plant they were supposed to get and the resulting fixes end up using a lot of their budget so they only commission 80-90% of the 80-90% plant because they don’t understand the design (and the design team is well off the job by now). So now you’ve only got 60-80% of the actual plant you originally set out to build.
      Then it all gets lumped on to operations, a plant that has only been 80-90% constructed, 80-90% of which has been commissioned with lots of weird design that nobody understands the history off, due to the project engineers being long gone and the total lack of communication between designers and operators in the design phase. So they have to re-invent the wheel to come up with a brand new operating plan/procedures/etc. from scratch since no one was thinking about how the plant would actually be run while they were designing, building and commissioning it.
      Oh, and the client, primary construction contractor and the principle engineering firm that did the design will all probably spend a few years in court trying to recover additional costs from each other until they all realise they’re just wasting even more money and write the whole fucking thing off.
      In the last 5 years I’ve been on 6 big $$$ projects like this and they were all exactly like this.

      Wiley WolfSeptember 11, 2015 at 12:21 pm
      Ah Jason that is pretty close to the mark
      They are in commissioning phase on the GLNG at the moment.
      It will be a few YEARS before handover. Just as you say.

      • I missed it when you wrote that WW, but its on the money.

        The bigger issue though, for mine, is that the whole of society is now essentially being exhorted to behave on the same motivations and impulses. From marriages, to the handling of the aged and sick, to education, the contracting out of services, the phones lines we must endure when asking about banks, internet, phones etc. All based around the concept of offering one thing, providing another, and leveraging the difference between what the customer thought they were getting and what they get.

        We promise (or are promised) one thing and delivered something different, and the arbitration on that divide comes through courts, which are essentially structured to protect property rights first – without looking at the veracity of the property accrual process.

      • This is pretty much how I imagined these big projects went down haha. Funny to hear someone actually say it.

  14. very good read about the carnage that has taken place in the centre of Melbourne

    Dirty extraction of high-rise gold will pollute central Melbourne for generations


    Melbourne is one of the top 12 destinations for overseas residential investment. About 50,000 high-rise apartments have been approved recently or are in the pipeline. Approved foreign investment in Australian residential real estate doubled in 2013-14 to $34.7 billion and Chinese housing investment has been forecast to grow to $60 billion in the next six years.

    Deregulation feeds this boom as investment capital is sent towards the least internationally regulated markets. The role of money laundering and corruptly obtained investment capital by mega-rich international investors in helping fuel Melbourne’s property boom still has not been examined properly.

    The Victorian government must be well aware of the powerful players it stands to offend, from investors to building companies and unions. But the choice for Melbourne is clear.

    We either acquiesce to the misery that flows from the inevitable boom and bust cycles of unregulated property markets or expect government to manage a process of orderly development in the interests of all.

    The Melbourne apartment market is headed for a major price crash because its dependency on foreign capital is creating an oversupply of units. The effects will be dire if this trend intersects with falling international sharemarkets and an impending Chinese property price collapse.

    • Good article. There will be a glut of apartments, especially of those of the tiny, poorly built variety that nobody will want to live in, and I’m sure there will be a downturn there. Unfortunately, I don’t think this will translate to a bursting of the bubble of houses. In fact, they will continue to soar as they become more scarce in areas within 15k of the city.

      The best we can hope for is that if the Chinese lose interest in apartments, they might also turn away from established properties, but this isn’t likely in the foreseeable future.

    • “Some blocks are already showing signs of deterioration. Their inefficient energy use, high maintenance costs and low living standards will define them as classic building lemons that even property bottom feeders won’t pick up. They will blight our city and stand as monuments to greed, short-sightedness and a failure of government to act in the public interest.”

      I wonder if these blocks will be bulldozed? It happened in the US after their price crash. (Houses built in the outskirts). There is no point keeping them if they are too expensive to maintain and if no one lives in them.

      • They are the ready-made slums of the future. Whilst nobody will WANT to live in them, they will nevertheless be occupied by those who can’t afford anywhere else. A depressing thought.

      • If they are as shoddily built as popularly believed, and the proportion of offshore owners is a high as claimed, then demolition seems virtually assured, even without a property crash (and could potentially cause it).

        Step 1: Shoddy construction leads to high maintenance/ repair bills.
        Step 2: Body corporate managers experience difficulties obtaining funds from offshore owners.
        Step 3:Repairs are delayed
        Step 4: Unequal burden for coughing up falls on local owners, some of whom refuse to pay/ run out of cash
        Step 5: Further delays to repairs lead to bigger problems
        Step 6: Repeat steps 1 to steps 5 until no solvent owners remain
        Step 7: Building is condemmed.

        Given that if this scenario did occur, all owners (of apartments in uninhabitable buildings) would lose almost everything, if there was more than a single isolated case, it would kill any foreign funded construction stone dead.

    • Finally, something good and useful comes out of RMIT (as against Sinclair Davidson of IPA and Doc “Comical” Ando Wilson’s dubious PhD)

    • I doubt you’d get protests like that here; at least not to such an extent. We are far too politically correct, and even if there was such a protest, there would be another on the same day conducted by the bleeding hearts.

      • Uh md I think you are forgetting Cronulla. We have had things good for a while, and this is the only reason things have been pretty quiet. You wait til the economy deteriorates, jobs are scarce and people are hurting at the hip pocket. All of a sudden, people will start noticing just how many foreign looking people are around, maybe doing better than them, and very quickly history’s favourite scapegoat will return.

        If you give a monkey a banana, he’s happy. Give him another, he’s still happy. Try and take one of those bananas away and he’ll be furious – more so than if you hadn’t given him anything. We are monkeys and we are going to blame whoever we can when our banana gets taken. Easiest target is always someone from an ‘outgroup’

      • You might be right, Ranald.

        I would like to see protests in the street about the unaffordable housing market, kept alive, in part, by the amount of foreign investment, a not insignificant portion of it illegal. Even the legal foreign investment is keeping prices at unaffordable levels for ordinary Australians to compete with. You would think that a whole generation, priced out of housing as we used to know it, would be furious. Maybe they are, but they’re keeping mostly quiet about it. It’s probably akin to boiling a frog or a lobster slowly – they don’t realise what’s being done to them.

      • I doubt you’d get protests like that here; at least not to such an extent. We are far too politically correct, […]

        Indeed. That’s why the two major parties compete for votes based on who can treat the scary brown people the worst. Because political correctness.

        People aren’t protesting against foreign investment because of political correctness, they’re not protesting because for decades they’ve been told a) property investment is the noblest of pursuits and b) anyone with money deserves everything they can get with that money and “the man” shouldn’t get in their way.

        Or in other words:

        “Desperate people fleeing persecution need help ? Fuck ’em !”
        “Rich foreign investors are buying up property ? Good on ’em !”

      • What rubbish Smithy.

        Anyway, not that the MBStasi can say much – furtively seeking foreigners to dob in, to inform authorities of…when it comes to that great Oz love, property.

      • What rubbish Smithy.

        You’ll need to be more specific.

        Anyway, not that the MBStasi can say much – furtively seeking foreigners to dob in, to inform authorities of…when it comes to that great Oz love, property.

        There’s nothing “furtive” about the people here asking for the law to be enforced.

      • The whole ‘brown people’ trope.

        The MB commenter rejection of immigration per se, 457s (particularly Chinese and Indian), property purchasers, whatever.

      • There you go… 3d1k uses the rashist card like much of the hypocritical mainstream media.

        3d1khead, I am browner than you are, yet I oppose 457s..because, as Paul Krugman said the other day, these visas create a permanent underclass of 2nd class citizens, with employers treating them like slaves.

      • The whole ‘brown people’ trope.

        I guess I must have missed the part where we were aggressively pursuing all those holiday visa overstayers and threatening to send them off to foreign concentration camps as a “deterrent”.

        The MB commenter rejection of immigration per se, 457s (particularly Chinese and Indian), property purchasers, whatever.

        Such transparently false straw men, minebot ? You can do better.