Weekend Links 26th-27th September 2015

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Asia 

Europe

Americas

Terra Denial

Global Macro/Markets

…and furthermore…

 

 

 

Comments

  1. Lots of talk these days about lack of startups/technology/biotech in Australia. As if Australia woke up from a deep sleep and discovered that none of the technology (and the medicines) we consume are made here. This might explain why 20,000 Australians are working in Silicon Valley and not here (which was discussed on ABC’s the Business today).
    Funny that only after the mining boom/bust hangover, Australians are questioning why they put all their eggs in one basket.
    Fostering technology development and innovation is not something that can be done on the spot. It’s a very long process that has cultural, educational, political, taxation, and funding components all of which are lacking in Australia (to a large extent). Those 20,000 Australians in Silicon Valley are there because their skills and talents are valued and rewarded there. Here, we value and reward a different type of talent: rent seeking.

      • Exactly. I might add that there are a bunch of other places where they value “their skills and talents”. Germany, Northern Europe, Japan, Singapore, South Korea, etc.

    • Exactly. Coming back to Australia seems a terrible idea after a few years in California. I haven’t met a single Australian here who has any desire to return… ever. I actually got my line about Australians being the most self-entitled people on Earth from not one, but two co-workers who independently said the same thing to me a couple of months apart. Another Australian co-worker said he’s glad he left before the place turned to shit.

      There really is a quite negative view of the place. Educated Americans know about the concentration camps, they know about the bat-shit insane prices.

      I’ll leave you with a quote from the American mother of an engineer I met, whose son worked in Australia for a couple of years:

      “My son worked in Australia for a couple of years. Sorry to say, but he hated it there.” We discussed why; the reasons were high cost of living, rude people (yes, Australians are quite rude in general), and lack of opportunity. Needless to say he’s back in the US.

      Another Australian friend here sent me an article about US tech recruiters turning down Oz companies as clients, because no-one wants to go there anymore. You know when recruiters say they can’t get people to go to your country, you have a problem.

      • Mining BoganMEMBER

        I’ve been in maybe a dozen countries over the last few years. The common question is why. Why has Oz become like it is. Why did we let it happen. Why are we so arrogant. Our reputation has soured.

        Greed and ignorance, I tell them. Greed and ignorance.

        That’s why I want this mess to crash. Not to make money. I just want it to be a nice place to live again.

      • Lord D

        We are rude – yes, sometimes. It’s part of the irreverence established 200 years ago, and newly formed from high costs of living.

        But you can have the gun toting gang bangers in the states and the fake niceness from those seeking a tip.

        You obviously deal with the top 5-10%…. The rest are clueless, see Trump.

        Why do you think their news shows are coloured red white and blue, and the announcers yell or talk loudly and there’s a ticker tape running along the bottom of the screen (that we’ve adopted), sometimes half the screen shows dot points of what is or was being discussed.

        Dumb I tells ya.

        Also, do you think size matters? Does a country have to be large enough to compete or create a silicon valley?

        Large enough to have a car industry?

        Etc etc.

      • Escobar, Norway is smaller. So is Singapore. So, they cannot do everything like the mighty USA. But they are doing much better than us.

      • I’ve been in maybe a dozen countries over the last few years. The common question is why. Why has Oz become like it is.

        John Howard.

      • LD – This is true, I always feel more welcome in America than here. You always have to break through a kind of ‘shell’ with Aussies.
        Escobar – Also agree. It really depends on your proximity and viewpoint. Sure the people coming from SA countries with a bad history of Spanish/American conquest find Americans to be hollow, which they most definitely are on the whole, just like us (nearly identical, forgettable histories). But the Americans outward ‘pleasantness’ whether genuine or not, still provokes conversation and opportunity.

    • Good…. I hope they stay forever in the hotel California…. that is the narcissistic cesspool some call Silicon Valley.

      Skippy….. Fawwwck… Australia expensive – ?????? – Silicon Valley is one of the most expensive in the states and those of its ilk in the states, like a Ranoid roach motel. Just goes to show you how well the environmental conditioning kool-aid works….

      • Skippy: Oz is more expensive than the Bay Area. I once interviewed an American moving back from Australia; he stated that he was moving from Sydney to San Francisco to save money!!! We hired him, and guess what… it worked. He saves much more here than in Sydney.

        As for your dislike of Silicon Valley; the region produces much more than Australia does. All you have is red and brown dirt. Nothing else comes out of Australia except fat belligerent entitled tourists, and the occasional Australian escapee fleeing the stupidity.

      • I don’t use your simplistic metrics to quantify expensive society, anecdotal atomatistic view points aside.

        Produce is such a subjective term, you need to unpack that a wee bit more, its completely non descriptive… here let me help….

        http://www.citylab.com/tech/2014/12/is-startup-urbanism-to-blame-for-rising-american-inequality/383558/

        “The San Francisco Bay Area has been the epicenter for technological revolutions for the better part of the past half-century, the launching pad for world-shaping startups from Intel and Apple to Google, Facebook, and Twitter. But Silicon Valley is also home to “The Jungle,” a 68-acre homeless camp in South San Jose, considered the largest such settlement in the United States. And as tech firms have shifted from suburban nerdistans to more urban locations, longtime Bay Area residents have raged against the Google buses, which shuttle tech workers between their city digs and offices and have become a symbol of the gap between the metro’s rich and poor. There is increasing concern over skyrocketing rising housing costs and rents (which are among the very highest in the nation), growing displacement of long-term residents, and the widening economic wedge between wealthy techies and everybody else.

        All of this suggests that “startup” urbanism—not just the winner-take-all mentality of the one percent—is at a minimum connected to growing inequality and increasing unaffordability of America’s leading knowledge cities. But to what extent?

        With the help of my Martin Prosperity Institute (MPI) colleague Charlotta Mellander, I decided to take a closer look at high-tech startups and these two key urban problems: increasing economic inequality and worsening housing affordability. Mellander ran a basic correlation analysis between several measures of high-tech startups (including the concentration of high-tech firms, the level of innovation measured by patents per capita, and the level of venture capital startups and investment) and income inequality and wage inequality. Mellander’s analysis of high-tech firms and innovation covers all of the nation’s 350-plus metros, and her analysis of venture capital investment covers the roughly 130 U.S. metros that received venture capital investment. (The usual caveats about correlation not equaling causation and pointing only to associations between variables apply.)”

        http://www.citylab.com/tech/2014/12/is-startup-urbanism-to-blame-for-rising-american-inequality/383558/

        Skippy…. you are what you decry… too bloody funny….

      • …. that is the narcissistic cesspool some call Silicon Valley.
        Skippy, that’s a pretty indiscriminate statement to make. Do you honestly expect people to take you seriously when you make such statements? Also, out of curiosity, is there a system, a person (other than yourself), an ideology that you admire or your mantra is just to “hate everything and everyone”?

      • 2b2f… Not really interested in what rolls around in your or your ilks collective heads…

        I’ve supported w/ data, not just some biased rationalized assertion some utilize under the guise of twisted logic. BTW I’ve mentioned more than once I don’t do ridged isms or ologys, so go stuff your groundless projections elsewhere. Additionally I don’t “expect” anything as I’m not selling a product [ideology] or evangelistic [belief], just unpacking the data.

        Skippy…. BTW bang up job on repeating Mav and LD’s mistakes, must be an environmental thingy…

        PS. http://www.ritholtz.com/blog/2015/09/20-cognitive-biases-that-screw-up-your-decisions/#comments

      • Seriously, does anyone understand half of what skippy is talking about? He sure does love stringing long words together that don’t actually fit, or mean anything.

        It’s OK skip, you can feel superior about Silicon Valley if you want. We don’t mind; whatever helps you through Australia’s coming depression is fine by me.

      • Railing against the ‘inequality’ created by the enormously successful progress and wealth generation of Silicon Valley while bragging about the mileage from his new Mercedes – a classic guilty boomer.

      • No point in arguing with skippy, tried that a couple of times. I even thought once that he might actually be a SW program and not a real person..

    • So true. Australian IT strategy is to offshore or bring in 457’s. F#ck your fellow countryman/woman is the practice here.

      • I don’t understand it, but see it at my current shop. The CEO and Global head complain that their kids can’t find jobs since graduating, but when we have an entry level position they only hire people with 5+ years of experience and typically on visas. It think they like to have their hooks in the staff as local employees can leave more easily…

      • And then I guess in a few years when the Aussie is at 50 cents so foreign labour is no longer affordable you wonder why there are no locals with any experience and why computing degree graduate numbers are falling.

      • +1. Just had this out with the management of the place I have worked for 7 years in the meeting they called to discuss redundancy. Jobs are being off-shored with the opening of an Indian office. Every new proposal going out is now based on this model. Some are for state and federal government departments.

        So they are letting people go without any thought to re-train, re-skill into different areas. The pointy end of globalisation. I feel like a miner in 1980’s Britain but with a degree and 15 years professional services experience.

        The irony is that 90% of the company (ASX listed) were brought in on one form of visa or another, myself included. Suppose I got my PR, citizenship but now what? I am classed as a local so surplus to requirements. New people are coming in on 457’s whilst they let the more expensive locals go or hire contractors to fill resource requirements (casualisation of workforce).

        If no other work comes up it is like all those ute stickers for me (+3 dependants) = “back to where I came from”. Something needed to change anyway. On a decent salary in Sydney with only myself working (wife full time mum and carer for our little boy who needs lots of help), we barely survive.

      • They haven’t cared about their fellow countryman for some time.

        Simply put the housing bubble is killing most other industries in Australia, and the disappearance of these other industries is killing the high skilled, high paying jobs required to support the housing bubble. Explaining this connection to anyone in the FIRE industry or who has an interest in it continuing is very difficult.

    • “Fostering technology development and innovation is not something that can be done on the spot.”

      Precisely.

      The really sad part is this; If I offer to pay 100 trillion dollars to whoever can deliver the harvest of a seed I have with me by the close of business Monday, most, if not all, who turn up to collect the seed will be locals.

      • Agreed, I’d only add that societal will normally comes before the education which proceeds the development of any skill, I’d also politely suggest that Australia is stuck somewhere between stage 1 and stage 2. So what’s required is intentional development of an advanced skills base, knowing full well that most Aussies with advanced skills will leave the country. All that’s left is the hope that maybe one day when the AUD/USD exchange rate starts with a 2, some of these people will find their ways back to Oz and consider $1M to $2M AUD for a house reasonable. with them they’ll bring state of the art technical knowledge, an understanding of global markets AND sufficient capital to start the ball rolling.
        Personally I’m not holding my breath waiting, for me that boat has sailed and I’ve made my peace with that reality.

    • Every time I read about innovative success in Israel I think “that should have been us”. So sad that past politicians failed to put the right policies in place, we’ll end up like one of those poor African countries due to poor gubermint that haven’t kept up with global growth

      • Israel is also the largest recipient of U.S. Foreign aid, and has been for 50 years. Maybe we’d have some high tech industries worth talking about if we were on the receiving end of that kind of largesse. Or maybe we’d just have more expensive houses.

      • Not to mention Israel is full of Jews who just happen to be some of the smartest business people on the planet. For all of you here complaining you are getting the rough end of the pineapple, has a quick review of your business skills. No skills = poor.

      • WW Israelis (and Jews) actually do very well in all fields, because they highly value education, unlike most Australians. They are not some of the “smartest business people”, they are simply some of the smartest, best educated people on the planet.

        CSFN Israel succeeds in spite of always being under constant military pressure from their enemies, which is a huge drain on the economy. Regarding Israel getting subsidies from the USA, I think they would gladly trade an end to US support for an end to conflict as that would free the economy to be even stronger. Australia spends less than it should on military, because it relies so heavily on the US deterrent… swings and roundabouts…

      • David Stockmens contra corner….. you have to be joking…

        “Business career

        After leaving government, Stockman joined the Wall St. investment bank Salomon Brothers and later became a partner of the New York–based private equity company, the Blackstone Group.[13] His record was mixed at Blackstone, with some very good investments, such as American Axle, but also several large failures, including Haynes International and Republic Technologies.[14] During 1999, after Blackstone CEO Stephen A. Schwarzman curtailed Stockman’s role in managing the investments he had developed,[15] Stockman resigned from Blackstone to start his own private equity fund company, Heartland Industrial Partners, L.P., based in Greenwich, Connecticut.[16]

        On the strength of his investment record at Blackstone, Stockman and his partners raised $1.3 billion of equity from institutional and other investors. With Stockman’s guidance, Heartland used a contrarian investment strategy, buying controlling interests in companies operating in sectors of the U.S. economy that were attracting the least amount of new equity: auto parts and textiles. With the help of about $9 billion in Wall Street debt financing, Heartland completed more than 20 transactions in less than 2 years to create four portfolio companies: Springs Industries, Metaldyne, Collins & Aikman, and TriMas. Several major investments performed very poorly, however. Collins & Aikman filed for bankruptcy during 2005 and when Heartland sold Metaldyne to Asahi Tec Corp. during 2006, Heartland lost most of the $340 million of equity it had invested in the business.[17]
        Collins & Aikman Corp.

        During August 2003, Stockman became CEO of Collins & Aikman Corporation, a Detroit-based manufacturer of automotive interior components. He was ousted from that job days before Collins & Aikman filed for bankruptcy under Chapter 11 on May 17, 2005.
        Criminal and civil charges

        On March 26, 2007, federal prosecutors in Manhattan indicted Stockman in “a scheme … to defraud [Collins & Aikman]’s investors, banks and creditors by manipulating C&A’s reported revenues and earnings.” At the same time, the Securities and Exchange Commission brought civil charges against Stockman related to actions he performed while CEO of Collins & Aikman.[18] Stockman suffered a personal financial loss, estimated at $13 million, along with losses suffered by as many as 15,000 Collins & Aikman employees worldwide.

        Stockman said in a statement posted on his law firm’s website that the company’s end was the consequence of an industry decline, not fraud.[19] On January 9, 2009, the U.S. Attorney’s Office announced that it did not intend to prosecute Stockman for this case.[20]
        Publishing

        In March 2014 Stockman launched a web based daily periodical, David Stockman’s Contra Corner featuring both his own articles and those from leading contrarian thinkers on geopolitics, economics, and finance.”

        Skippy…. some never learn…

      • Stockman needs an editor to reduce his word count by 70%.

        That said his book is a excellent (very depressing) history of the crony capitalist system across the last century. A century of politics meddling in economics to create awful outcomes. From Nixon using price controls and wrecking the economy to Reagan wrecking the budget fueling the Military Complex and the awful bailing out of Goldman and Co in 2008.

        Stockman’s resume of working at the upper echelon of government and business shows a very high achiever. I may not agree with all of his work, but I would take someone with such experience more seriously than most.

        Raising $1bn plus for a fund isn’t the realm of someone without credibility.

      • Stockman is a neoliberal….

        Its like Larry Summers or Greenspan talking sideways out of their mouth in some form of oblique mea culpa, get stuffed, as he also pronounced himself a “disciple” of Friedman and Hayek.

        Liberation Theologies, Postmodernity and the Americas
        By David Batstone, Eduardo Mendieta, Lois Ann Lorentzen, Dwight N. Hopkins

        “In 1985 david stockman. who came from a fundamentalist back-ground, resigned from his position as chief of budget for Regan’s government and he published a book entitled “the Triumph of Politics. He reproached Reagan for having been a traitor to the clean model of neoliberalism and for having favored populism. Stockmans.s book develops a neoliberally positioned academic theology, that does not denounce utopias, but presents neoliberalism as the only efficient and realistic means to realixed them. It attacks the socialist “utopias” in order to reclaim them in favor of the attempted neoliberal realism. according to stockan, it is not the utopia that threatens, but the fulse utopia against which he contrasts his “realist utopia of neoliberalism. Michel Camdessus, secretarty General of the IMF, echoes the transformed theology of the empire grounding it in certain key theses of liberation theology. In a conferance on March 27, 1992 he directed the National Congress of French CHristian Impresarios in Lille Mid discussion he summarises his central theological theses: – snip – page 38-39

        Skippy…. its OK guys…. being ignorant is not the end of the world…. tho on the other hand… if your not….

      • Oops did not realize last night that the quote went missing, my bad…

        “Surley the Kingdom is a place: these new Heavens and this new earth of which we are called to enter one day, a sublime promise; but the Kingdom is in some way geographical, the Reign is History, a history in which we are the actors, one which is in process and that is close to us since Jesus came into human history. The Reign is waht happens when God is King and we recognize Him as such, and we make possible the extension, spreading of this reign, like a spot of oil, impregnating, renewing and unifiying human realitys. Let Thy Kingdom come….” – read on

        Page – 38, 39, 40

        Skippy…. seems you kids get a fail in histrionics… but keep pushing that propaganda…

      • Yes some confuse messaging with propaganda or a propensity of being wrong most of the time….

        Skippy…. rapture ready as it were…

    • But having examined many aspect of the dangers of property markets to an economy, the conclusion he reaches is…..”There is no chance this will happen to Australia!” (Because with an added emphasis on immigration, nothing bad will happen!). Talk about cognitive dissonance….

      • The last paragraph is quite incongruous. I suspect the heavy hand of the editor so as not to upset the natives or the paymasters too much.

    • The more I reread that article, the more it appears to be a chimera of two parts. The first, and factual, part ending at:

      ” People had believed property prices would continue to rally for ever, and had bet on it by borrowing up.
      The bets failed.”

      The remaining part of the piece look to be ‘that editor’ you mention, and it’s based on hope-and-a-prayer as much as anything!

      • Oh! And notice how the last part champions the ‘real’ reduction in Australia Household Debt? Debt isn’t real… it’s nominal…..any real estate agent worth their salt will tell you that (“Let inflation pay off your nominal debts”!)

      • I noticed the awkward structure when I read it as well. Almost like a uni paper where the author has recycled part of an old paper and just added his opinions on the end.

    • I think the article, ‘When Irish Eyes are Crying’ by Michael Lewis is due for another read.

      http://tinyurl.com/ndcv57e

      The Irish didn’t have a commodities boom, but the other similarities should get you reaching for a stiff drink.

  2. So the religious leader who tells his 1.2bn followers (including 133m in sub-Saharan Africa) not to use contraception, is lecturing the rest of the world on how we are dangerously depleting the limited resources of the planet

    • Let’s just hope the popes stance on contraception brings about the same result throughout Africa as it has in Italy and Poland where Catholicism is far more widespread.

      • Yes it is in everyone’s interest that religious leaders tell their millions of followers living in poverty that using contraception is a sin against their god.

      • When religious leaders spouting rubbish leads to their followers no longer listening that is indeed an excellent result.

      • Imagine the advances that could be made in the lives of the millions of strictly-practicing young catholic women living in abject poverty in Nigeria and the Congo and Angola and Mozambique and Uganda and Burundi and Ghana and Rwanda etc etc if the Pope ended his ban on contraception…or God forbid, actually assisted in the dissemination of responsible contraceptive practices through his church
        The hypocrisy is breathtaking

      • The Traveling Wilbur

        @TP Too true – I can see it now, condoms dispensed during communion… “Would you like a Johnny with your wafer? Oops… wrong one… my bad.”

        The possibilities are endless.

      • @Wilbur,

        Earlier this year Pope Francis publicly chewed out a Filipina mother of seven for having too many babies. If he could re-condition his mind to get rid of the bizarre notion that there are ‘natural’ and ‘artificial” forms of contraception, he just might do it.
        Unfortunately it looks like too much Kool Aid was consumed on the road to the papacy for that one.
        Still, if he manages to be the first pope who doesn’t assist child abusers, that will be a sort of progress itself.

  3. How about VW being sprung with the on off pollution control.
    Lets hope the legal process sends the company broke and insolvent.

    How about the on off pollution control in our major mines, and mining cities eg Mt Isa, where poisonous lead pollution is regularly released into the atmosphere with the full knowledge of the company, the authorities, the mayor, the contractors, the workers, even Dr Smithy from here yet nothing happens.
    All you do-gooder climate change starlings, should take up that cause and really make a difference.
    Lets see if we can get 140 odd posts on this topic WW

    • I wouldn’t live in any mining town with pollution problems. But at least we have a choice with local pollution — we can move. It’s when we cannot move that’s there’s a problem, e.g. with AGW. That’s why you get 140 post threads on it.

      • Jaybone,

        What’s your degree in and what area of research are you involved in that allows you to so blithely dismiss GW?

      • I have a healthy degree of scepticism.

        It feels to me like it has been created in order to build a new industry for the rich to control and profit from, but masqueraded as a threat to mankind. I just don’t believe the extinction risk.

      • JayBone,

        Now we’re getting somewhere. So, you have no science education at all, therefore no research in that area, so it goes to say you have no knowledge whatsoever about climate science? Correct? Your just skeptical about it, another way to word your objection is that you believe it’s a conspiracy, otherwise there’d be a host of not just scientific evidence to go against GW, but at least some reputable organisations that would dispute it, but there isn’t!

        So, to be blunt your knowledge is at my dumbarse level and you don’t need evidence because it’s a conspiracy and they generally don’t any evidence to support them.

        If you had a family member with a serious illness and ALL the evidence from the specialist said the issue is X, would you allow some gut instinct send you off in another direction?

        Btw, I’m not aware of anyone talking extinction.

      • Btw, I’m not aware of anyone talking extinction

        Professor Guy McPherson is. Go here.

        McPherson’s argument is
        1) We have blown past 2 degrees, it’s baked into the cake
        2) Multiple self-reinforcing feedback loops have already begun so even if we stopped burning fossils fuels tomorrow, it will just keep getting hotter
        3) Stopping burning FFs will make it even worse (shielding from particulates lost)
        4) Nuclear power plants cause, rather than prevent, additional warming of Earth
        5) Nuclear plants will melt down once the grid fails (guaranteed total extinction)
        etc

        Lots more fun stuff at the link 😀

      • @dennis & R2M. Tiresome isn’t it?

        I don;t have a science background either and I am a skeptic too.

        From the Greek ‘skeptikos’ one who reflects upon, from ‘skeptesthai’ to consider.

        Having done so, and continuing to do, the evidence is compelling. Poor JayBone, not a skeptic.

  4. As I have often argued, there is limited evidence that HK and Chinese buyers of Australian RE and in fact ‘rich’ but are largely very deeply in debt.
    I may be wrong but in the absence of evidence to the contrary I will take the conservative approach and not view China as a property plateau panacea.

    The graph shows private-debt accumulation from the first quarter of 2008 to the first quarter of 2015, and it’s in terms of each country’s GDP, so the figures are comparable:
    http://business.financialpost.com/business-insider/private-debt

    • Great graphs.

      I wonder if those impressive growth rates for Chinese and Hong Kong debt includes the lending our banks are doing to let them ‘play’ Australian Property roulette.

      Not many realise that Australian taxpayers are going guarantor on a chunk of the foreign buying spree of inner city dog boxes. But then when settlement time comes perhaps the banks will just refuse to complete. The relatives of the buyers might get pressed to step in.

    • As a general rule, all the money Chinese spend are borrowed money. Either embezzled from their own company, or from asset inflation that someone else have to borrow.

    • Hmm, interesting. If all that ‘Chinese money’ is really just well off, rather than outright rich, Chinese investors borrowing up to their eyeballs, you might be correct in that source of demand being far more fragile than it’s portrayed.

    • Oh, I never believed that HK and Chinese buyers of Australian RE are in fact ‘rich’.

      Numbers do not lie. The combined wealth of genuine super rich in China is nowhere near enough to make a dent in the local housing market, that is, without some help from borrowed money.

      No, they are just an Exhibit A of greater fools.

  5. Malcolm Turnbull’s conundrum: stop the brutalising but don’t start the boats

    http://www.theage.com.au/federal-politics/political-opinion/malcolms-conundrum-stop-the-brutalising-but-dont-start-the-boats-20150925-gjux6r.html

    Just imagine if a portion of the billions spent on warehousing people on Manus and Nauru had been spent on building capacity in the region to deal with asylum seekers in a humane way. Imagine if a portion had been spent on subsidising rents while people re-established themselves or providing scholarships for university.

    Valid point for mine. We do nowt about the visa overstayers working in restaurants or building sites who fly in rather than boat it, and the crazy sums involved in sending them elsewhere would provide significant stimulus here. If find myself wondering why we dont just fence off a chunk of somewhere remote and say that illegal refugees need to stay there for 5 or 10 years, make sure there are services there and see if we can turn it into some sort of economic upside – presumably at worst it becomes a tourist destination of sorts inside Australia

    • Gunna, why dont we immediately deport any one who is here illegally, and any boats entering we just stitch up with a row of 50 cal on the waterline.
      Once you let some in you will tempt a flood. You are no smarter that the Labor party.

      • WW, that pretty much is my point. We dont deport anyone who is here illegally.

        They build our houses and fit them out, they carry out all sorts of agricultural work, they serve is in countless shops, restaurants and cafes, and look after our elderly and sick. And while at a certain level I agree that it is ‘wrong’ that they do so (they take ‘our jobs’ at a certain level), I would argue that it has become an entrenched phenomena, that they often do jobs locals dont want to do and obviously many fit into Australian society without any major issues.

        We seem to me to spend inordinately large sums of money in dealing (inefficiently) with one particular type of illegal migrant. That is my essential beef – we blow billions (have you seen the sums involved in Nauru and Manaus Island?) and I dont think this is an effective use of funds.

        If we could get the ‘perfect’ outcome of no illegal migrants at all then I am all for it, but I dont think we are going to. My guess would be that the expense involved in making a serious effort to find and expel anyone here illegally would mitigate against it ever happening.

        I also tend to the view that Australia’s ‘problem’ with illegal migration is relatively small compared with others around the world.

        I dont think we should be giving carte blanche to anyone who rocks up unannounced (and the thought about providing some sort of disincentive was behind my idea of putting them somewhere remote – I dont think it perfect or even a good idea) but I dont think that any ‘good’ ideas are going to happen and think that what we do is mindlessly expensive and ineffective when we could have equally as ineffective an outcome for far less and use the bucks elsewhere……..

      • Gunna, I was fortunate to spend some years in remote New Guinea up on the West Irian border.
        The first thing you learn is to not offer anything you cant deliver as as immediately you lose trust and respect with the locals, to the point you would end up speared. (Cook copped the same treatment in Tahiti) You must never ever offer something to someone and then take it back, or even let something (atractive) become visible or known about, as you will be killed as the locals take it from you.
        Civilised humans are only moderated from their primitive instinct by the rules of civilisation (which we , so called civilised, apply to ourselves) By letting illegal immigrants even get a whif of the prospect of settling in Australia causes major heartache for them and for us too as we have to prevent them coming.
        The easiest for all concerned is for there to be no illegal immigrants in Australia of no prospect if illegal entry. This is no different to drugs, oh yeah Ice is ok, now we have a major problem causing massive upheaval for the youngsters. For me anyone caught dealing in ice etc should be shot.
        Everyday, we read in the MSM how that in 15 years, 40% of the population will be out of work replaced by technology. I have no idea where those 40% will seek alternative employment, or just some activity to while away the hours, Blackfellah style as would be found in some camp in the NT.
        The last thing we need in this country is more people.
        And i dont know the solutions for the rest of the questions.

      • Good idea. Maybe if we’d done the same thing with the Jews in WW2 we wouldn’t have all those problems with Israel and Palestine today.

      • Gunna,

        So there are many jobs “locals don’t want to do” as you had listed? You mean, Morrison was right about welfare cheats after all?

        WW,

        “The first thing you learn is to not offer anything you can’t deliver”

        Isn’t that business 001? I mean, you knew that before you traveled all the way to PNG?

      • @dumpling

        I’ve got no idea whether there are jobs there not being applied for by welfare cheats – I am just of the understanding (and I am pretty well informed by a contact in a government agency which keeps an eye on it) that if I want to find employed non resident Australians then they are the areas to look.

        I’d be dubious about any claims on the subject made by ScoMo. My general suspicion is that ‘welfare cheats’ as a phenomena is probably largely overstated in the minds of the general public (often by commercial media)…..maybe in much the same way that illegal migration is thought to be all about stopping boats when the bigger issue is stepping off planes I wonder if concern about welfare cheats focuses on single mothers when the bigger issue is arguably the negative gearing, SMSFing claim deducting revenue suckler.

        ……and on “The first thing you learn is to not offer anything you can’t deliver”

        I would have thought the very first lesson of Australian business (though I am not by any means suggesting this of WW) is that the first rule should be ……

        “The first thing you should learn is to not deliver anything you offer” as the difference between what the customer thinks they are going to get and what you deliver them is corporate profitability, particularly with services. Maybe rule 1B is ‘If the customer thinks you deliver a product and can be crucified to a two year contract then delivering below that benchmark can be a nice little cash flow backed by contract law’

      • Gunna,

        I am not sure if you were serious when you wrote about “the very first lesson of Australian business”, but if you were, that would pretty neatly summarize what is wrong with this country. Perhaps we are not at a stage to innovate or do anything fancy, but just to get the basics right.

        When you sell goods or services, you should seek feedback from your customers and seek out what they are NOT satisfied about. Because if you don’t do that, dissatisfied ex-customers will not only turn to your competitors in future but also spread bad words about you behind your back. The second effect could be particularly damaging in the Facebook / Twitter era.

      • Gunna,

        It is blindingly obvious that the Australian Government has been working very, very hard for some years now to build a very significant undocumented migrant population in Australia. Why they would be doing this I think you can only speculate why. But I think the important point is that it IS government policy (whether overt or covert) and as such people shouldn’t take it upon themselves to be defacto border force goons. If you have a problem with it, take it up with your local politician. Rest assured when it becomes enough of a challenge then government policy will change and surprise, surprise the MSM will start picking up on it also (right on cue no doubt).

      • “and any boats entering we just stitch up with a row of 50 cal on the waterline”…

        Covering yourself in glory, yet again Wiley Wolf. You really are a piece of work.

    • Isn’t that kind of what South Africa tried? Fence them off. The idea being that it kept ‘them’ apart from each other as much as ‘from us’ as the propensity for a tribal hacking of each other to pieces is problem that might exist in any group of fenced-off migrants.

      • I was hoping to see clarification in that list about when an asylum seeker becomes an economic refugee. To my mind it’s when the closest possible country of asylum is skipped… And Australia is a loooooong way from… Everything! Surely the process needs to be asylum in closest option then resettlement wherever in the world through UN process.

      • Andy!,

        So you think the problem should be lumped on everyone else? Which is what you are suggesting, do Germany and Austria have that attitude? First countries are the Med countries and the ones least able to deal with the issues, same as here! Pakistan, India, Thailand, Indonesia, Malaysia and then us. A somewhat selfish attitude imo.

        Edit: How long does it take for resettlement and how many??

      • “I was hoping to see clarification in that list about when an asylum seeker becomes an economic refugee. To my mind it’s when the closest possible country of asylum is skipped…”
        By your definition nearly all the refugees fleeing Syria and Iraq are economic refugees. No doubt there is an economic element involved as it’s hard to make a living in an economy devastated by war but, often the nearest country is no more welcoming than we are and as such, isn’t a viable refuge. Much of the problem rests with the fact that refugees are well out of sight here and given government policy at the moment, that will remain the case. In the absence of good information and direct observation, public opinion here on this issue is largely shaped by propaganda. It really is that simple.

      • I was hoping to see clarification in that list about when an asylum seeker becomes an economic refugee.

        When they don’t qualify as a refugee ?

        Always amazes me with the flood of 457s we’re happy to let in, people get so agitated about a handful of asylum seekers who might not be “genuine”.

      • @dennis
        I raised this as a question of definitions, because I believe the term “asylum seeker” is incorrectly used and/or abused in discussions around this subject. So again, the fact is once the first/closest “safe harbour” is skipped/avoided one cannot possibly be considered an asylum seeker. Agree/disagree?

        I believe the UN resettlement process needs prompt review & agreement by all signatories – I wouldn’t be able to answer your question but I’m almost certain it was not designed to cater for things like the recent developments in Syria & Iraq as it is “new ground”, let alone being truly effective to begin with.

        I also think there’s some laws/policies around this that Australia needs to tighten up ASAP as we welcome in significant amounts of new people from different cultures/beliefs. This is our home, and if people want to share & contribute, wonderful. If not, well f#ck off Australia is not an appropriate match! Selection criteria is important here – for the cliche (but real) example if one wants to live under the violent/oppressive aspects of Sharia law then under no circumstances should they be a candidate for Australian settlement because this belief is unwelcome and cannot be tolerated here. Deportation laws should reflect the same resultant outcome if this is found out post-Australian settlement.

        @Alex
        Agree with all that.

        @DrSmithy
        I hate hate hate 457 being used as a tool for cheap labour (not skills shortages) which directly affects local Australian jobs, one of one, in our own fkn country. It is used prolificly in I/T and has certainly suppressed wages and destroyed the ability for such an industry to flourish in this country.

      • So again, the fact is once the first/closest “safe harbour” is skipped/avoided one cannot possibly be considered an asylum seeker. Agree/disagree?

        What’s “safe harbour” ?

        Is a country where the Government may not explicitly try to kill you, but there are massive levels of entrenched race/religious/ethnic discrimination against you “safe harbour” ? I’d say no.

      • Andy,
        Where does it say that the asylum seeker who doesn’t stop at the first opportunity loses their legal status. Btw, those countries between us and the problem countries have had (in most circumstances) no part in the wars (Iraq/Afgh etc), we have so we need to accept responsibility for that, or stay out. Your view point is a cop-out, leaving poorer countries to deal with it.

        Your argument about culture is decades old and history has proven it wrong. The same was said about the southern Europeans when they came, then the Vietnamese when they arrived.

      • @drsmithy safe harbours = UN signatories or other neutral countries. If there are underlying problems are the signature is token only then that needs to be addressed – and we need not look far.

        @dennis don’t know when the legal status does/doesn’t change… but I believe it should be clearly defined. Governments and lawyers must love the complexity and vagueness of this disastrous saga to suit any agenda/outcome they desire. Base case is the closest signatory countries have an obligation to accept asylum seekers and we have a responsibility to take our fair share as soon as practically possible, even moreso because of Australia’s stupid involvement. Also the law cannot look favourably on the use of criminal enterprise such as the various forms of people smuggling.

        >> Your view point is a cop-out, leaving poorer countries to deal with it.
        I haven’t said anything of the sort, good imagination champ.

        >> Your argument about culture is decades old and history has proven it wrong.
        There goes that imagination again… all cultures & beliefs are equally comparable/compatible eh? That sounds nice.

        Would you mind explaining your solution/suggestions for dealing with this? You’re clearly very passionate about this topic.
        And P.S I’m not your fkn enemy.

      • “Your view point is a cop-out, leaving poorer countries to deal with it. I haven’t said anything of the sort, good imagination champ.”
        Yet the consequences of removing asylum seeker status from those that want to move on to a more accommodating country would in many cases leave poorer counties to carry the burden. I think that is a legitimate concern.

        “So again, the fact is once the first/closest “safe harbour” is skipped/avoided one cannot possibly be considered an asylum seeker. Agree/disagree?”
        Disagree. The fact someone may want to seek refuge in a better place doesn’t change the reason they left their homes to begin with. I am not so concerned about the legal technicalities although I suspect application of the reasonable person test would probably deliver a sympathetic finding in most cases.

        Would you mind explaining your solution/suggestions for dealing with this?
        Not sure what Dennis’s view is but, there’s much that could have been done in the past to avoid these problems. I would love to turn the clock back and show Churchill et al how the Zionist state would lead to large scale destabilisation in the middle east. I would also love to stop rich countries from being the hired goons of large MNCs by doing business with any despot they can work with and arming them to the teeth. Similarly, the invasion of a sovereign state under false pretences was outrageous.
        Can’t undo those mistakes which in some cases we were a part of. I do think we could learn from them and show some compassion for people whose lives have been turned upside down through no fault of their own. While the right thing to do isn’t always the easiest, it’s still the right thing to do. My 2c.

      • Andy!,

        Imagination?? As I said history has shown your concern about culture as nothing but bs, or do you have some actual evidence against what I have said about the southern European and the Vietnamese settlement here?

        Again to imagination re leaving it to poorer countries, no, wrong again, as that will be the result of your “closest country” argument. In nearly ALL cases this leaves it to those less able to deal with it. I’m sure you realize that any agreement will be slow placed to be implemented and those countries further away will drag the chain in implementing any refugee intake.

        You also appear to ignore our involvement in 3 wars that has torn those countries apart.

        As to my solutions? Shit, if I had anything that was likely to have ANY impact on this I’d be running the UN, not making essentially useless comments on a blog! Pandora’s Box has been opened, I don’t know what the solution is, this is now a humanitarian crisis and any action to meet your concerns have been left too late. I doubt camps in “1st country” will be helpful other than as a quick staging point, this crisis is likely to turn out to last past a decade.

        I didn’t say you’re my enemy, but I feel your “1st country” argument is more race/religion based than anything else.

      • @dennis I guess I haven’t done a very good job of conveying my opinion and allowing discussion to go off track from my initial question. Just to close this off…

        Imagination?? As I said history has shown your concern about culture as nothing but bs, or do you have some actual evidence against what I have said about the southern European and the Vietnamese settlement here?
        >> Well I’m 2nd gen eastern/western european post-WW2 heritage so I think you’ll get a rather biased success story from me on this aspect 😉 I believe some cultures/religions are far more tolerant/compatible than others, but I don’t want to slap a religion/race label on it because that’s ridiculous & vague because the issues are in the detail/level of “extremism” within. Hence my comment about the “extreme/oppressive aspects of Sharia law” as opposed to the whole thing.

        Again to imagination re leaving it to poorer countries, no, wrong again, as that will be the result of your “closest country” argument. In nearly ALL cases this leaves it to those less able to deal with it. I’m sure you realize that any agreement will be slow placed to be implemented and those countries further away will drag the chain in implementing any refugee intake.
        >> When my grandparents selected to come to Australia post WW2 to rebuild a new life (all my ancestry lost everything) there were a lot of character tests beforehand, camps ready to house & feed, employment programs & contracts so they could work & build a new life, etc. If “they” (the diplomatic powers that be) could do it 60 odd years ago surely they could do it better now. The process needs to be fixed, pronto, and there’s decades of programs to evaluate a suitable process on. IMO this is priority 1 immediate help for “closest safe house” (i.e. security, food, shelter, medical, clothing, etc) followed by priority 2 prompt resettlement to a suitable country, including here. In other words, asylum seeking is priority 1, economic refugee priority 2, as per my definition.

        You also appear to ignore our involvement in 3 wars that has torn those countries apart.
        >> No disagreement there. I did try and express this “we have a responsibility to take our fair share as soon as practically possible, even moreso because of Australia’s stupid involvement”.

        As to my solutions? Shit, if I had anything that was likely to have ANY impact on this I’d be running the UN, not making essentially useless comments on a blog! Pandora’s Box has been opened, I don’t know what the solution is, this is now a humanitarian crisis and any action to meet your concerns have been left too late. I doubt camps in “1st country” will be helpful other than as a quick staging point, this crisis is likely to turn out to last past a decade.
        >> UN needs a rocket up their arse. Several. You’re right this is long term stuff and massive, massive amounts of real people. Real people not fkn numbers, I get it. Post WW2 is a good template on how this could be possibly handled. The solution is beyond me, clearly, but I do believe in clearly defined processes (with continual improvement/adjustment as required) and prioritisation.

        I didn’t say you’re my enemy, but I feel your “1st country” argument is more race/religion based than anything else.
        >> Not the intention at all, and without getting further into my background & social groups that wouldn’t fit at all!

        Cheers.

      • If you have the time, I would suggest, putting some clothes on, removing your tinfoil hat and leaving your dark room for a moment and opening the curtains. The climate is the same, and the sea levels are the same. Don’t believe everything you read on the internet. Please add me to your list of heretics that you plan on reporting to the authorities for having a different opinion,

      • The climate is the same, and the sea levels are the same

        Black is white. Just stating an untruth does not make it true. The climate is definitely changed, and sea levels have measurably risen. Take off your blinkers 🙄

        Don’t believe everything you read on the internet

        Ironygasm. Your ilk are fueled by internet lies, nothing else. Oh, and dirty money, shouldn’t forget that.

      • “The climate is the same, and the sea levels are the same.”
        No the climate isn’t the same. Seasons have shifted, rainfall is decreasing in Perth etc etc. The BOM records confirm what I know from my own life experience. Sea level measurements around Perth also confirm the sea level is rising at a rate well above the 3mm per year average for Australia (closer to 7mm in places on the west coast). That explains why many shore reefs have more water over them than they did 30 years ago and similarly, why the dune lines are retreating on many of the beaches I fished throughout my youth.

        “Don’t believe everything you read on the internet.”
        You should follow your own advice and add to that the MSM as well.

        “…putting some clothes on, removing your tinfoil hat and leaving your dark room for a moment and opening the curtains.”
        You know what they say about people in glass houses….

      • No opinion on size of falls required but if there’s a bubble one of its major causes is our pig in a python demographics which concentrate home ownership in one or two cohorts. To make it a new paradigm it’s got to survive the removal of that factor.

      • Good point BB, I prefer to say that Australian housing value in Sydney is at an elevated level given the real fundamental elements in the economy and that these levels are unsustainable unless all domestic and international conditions supporting these levels remain the same. Should any element in the fundamentals change, then the value proposition for housing will be affected and the price acceptable by purchasers will change. If the change is negative in nature, then I would expect to see a negative repricing.

        My own view is we have reached a peak in Sydney with one last spurt expected where the “no it aint so” crowd dive in to take advantage of record once in a life time mortgage rates and perhaps a second smaller spike when the RBA does eventually ease again. After that, I suspect that all the easing in the world by the RBA will have little to no impact on mortgage rates as banks struggle with dropping NIM, much higher borrowing costs and the eventual losses as UE rises, NOM continues to decline and good looking property owners who think they look better than they do move from bangers and mash to support their debt addiction to mac and cheese. Will all end in tears. Disclaimer – we own a couple of properties but own out right and lease our farm (cash used to own the output rather than tied up in the underlying dirt – gives me options to move cattle to other areas/feedlots or accept other animals as the conditions change).

      • “Is that really an ‘asset bubble’ or just a market repricing based on the fundamental variables that can change with time?”
        Absolutely correct BB. Given only pro-purchase factors are reviewed by buyers, particularly those entering/upgrading/adding, it will be fascinating & exciting to watch price reflexivity play out if/when fundamentals change here – i.e. the stuff MB has been reporting on for years which seems more & more inevitable as each day passes.

      • A long time reader will know that my view has been that it will take much longer than many on this site appear to think for our housing bubble to realize its full growth potential and burst. After all, we are yet to see prevalence of insane products, e.g., the likes of dreaded 3 generation loans.

        The simple fact of the matter is; borrowing money = shorting cash. Everyone thinks that the value of AUD will go down the drain with time, so there are massive active short interests. While the shorters are not required to cover their positions, the massive short positions will remain. The question is what will happen when they are required to cover, albeit with cheapened AUD.

        A market is usually moved by a handful of big players. In the case of our housing market, the big players are CBA, WBC, ANZ, NAB, which are followed by the other banks and lenders. Others are practically irrelevant in that they are not market movers. When the big players decide to call in the loans to cover their own short positions for whatever reasons, watch out.

    • Well, what are the supports, and when are they no longer able to be applied?

      The graphs that Soos has compiled show that this bubble has had a lot of help to inflate to this point.
      If nothing had changed form the early 90s, that is, the halving of CGT, continual introductions of first home buyers grants; SMSF being able to go in hard; interest only loans; looser lending standards; the government guarantee; and I’m sure there have been other contributions, then I strongly doubt that we would have reached this point.

    • In he linked op-ed piece by Larry Summers, ‘We Must Act on Global Health because Millions of Life are at Stake’ he writes:

      “The report made a strong case that the benefits of the right health investments far exceed the costs. Indeed, I believe the moral and economic case for investments in health care–both prevention and treatment–is as or more compelling than in any other area in the developing world. The dramatic declines in child mortality and increases in life expectancy demonstrate that policy can make an immense difference.”

      It would be interesting to know his views about the access to health in developed countries, specifically America, and if he still believes that “… the benefits of the right health investments far exceed the costs.”

    • bullionbaron,

      Plot property prices with their correct valuation in US$, €, £, ¥ with the correct exchange rate for the course of your graph.

      What you will find for the majority of Australia is an allready bursting of Property prices in just about every city of Australia except in AUD terms.

      Everything starts with the value of a currency,

      by my own recollection in 2000 the average house in WA was roughly $80,000-$100,000 USD. It peaked at roughly $600,000USD some 12 years later.

      It’s now at roughly $350,000 USD…. Property has burst.

      It’s trending back down to $150,000 USD (IMHO) regardless if houses crash in AUD terms.

      Either our currency depreciates hard or our property market does, either way it will revert back to normality.

      • People aren’t buying their homes in or servicing the mortgage in USD, why would you measure prices in USD? I don’t believe our property market is that far internationalised.

      • Because the biggest storage of wealth in Australia is houses which are all denominated in AUD.

        Wealth is not how much dollars you have its how much those dollars can buy.

        Lower IR reduced the value of our dollar and subsequently our wealth. Yes houses haven’t crashed but our wealth certainly has.

        That’s why you look at houses in USD, JPY, EURO prices.

        It’s a way to know how much wealth we have. Wealth buys all the modern world luxuries we take for granted (medicines, cars, tech,)

        And really that sums it up, many more years of “withdrawing” from our storage “facility” by way of lower IR. This is the dividend of Malinvestment.

    • I think its now BB. For example, even if we had a 25% fall in prices over night Aust property would still be ridiculously expensive compared to international prices.

  6. Michael West (SMH) again showing that we DO have a taxing problem.

    VW

    “The ATO needs to start explaining how this company can double its sales and pay less tax,” says Knapp. “In 2007 it sold 28,000 cars (passenger, commercial vehicles and Skoda) and paid $11.8 million in tax. Last year [2014], it sold 57,000 and paid $9 million in tax.”

    They claim an average profit of $220 per car, not even funny.

    ANOTHER company avoiding paying Australian tax. I’ll not be supporting (voting for) any change in GST, NG/CG/super concessions etc ’til they stop the rorting. Hey, a new chant for Abbott “I stopped the rorts.” Nah, we’ll never hear that.
    http://www.smh.com.au/business/the-economy/vws-tax-payments-need-explanation-20150924-gjuhmh.html

    • VW has shown itself to be a criminal enterprise. Starting with the death a few years ago of a poor woman whose VW just stopped in front of a truck due to a known but hidden transmission fault (subject of a later recall), to the systematic lying about emissions, it just screams out for a consumer boycott and a class action lawsuit in Australia for existing owners who were sold a bill of goods and will see a big resale value drop

      • R2M,

        value drop? Nah, Australians love VDub and euro cars for status enhancement, not any economy/safety factors! Yeah, yeah, I KNOW they say it’s for those reasons, but it isn’t really, it looks good in the driveway!

      • Was going A6 2ltr tdi up to the handover, until I found a few concerns wrt to items on the contract. You should see the reaction when the phrase “fraudulent conveyance” is uttered in a flag ship dealer show room, wife standing next to me in paramedic uniform after a 12hr shift. Thunderbird’s are GO comes to mind.

        Had also looked at the bmw M1 2ltr tdi and 3 series, but ended up with a C200 2ltr tdi with sunroof and panoramic roof in the back w/ the rest of the bells and whistles.

        Skippy…. just drove daughter up coast to a friends for school holidays, 6hr drive through city and to the beach and back. Half a tank [if], 40 bucks, 4.2ltr per 100klm – insert cackle here….

      • Skip,

        The best I could see online for “a” C200 was 38mpg hwy drving, which is 6.2L/100km? Anyway, whatever mileage you get on any euro car you’d get close to on any Korean/Jap (edit) car for much cheaper. It’s ego, and we are ALL affected by it, regardless of how we try to justify it. 🙂

      • Dennis that’s the actual figures for the drive to rainbow beach from Brisbane driving a C200 2ltr tdi, and no the other cars don’t even come close on quite a few metrics, depreciation, build quality, service, safety, et al.

        Skippy…. 40ish years of car experience here.

      • Nobody’s buying VWs as a status symbol. From a status perspective they’re the Ford or Toyota of the euro brands.

        I bought my GTI because it’s the best vehicle in its class. No other reason.

      • Skip, I think you need to look at that 4.2l/100km calc, something wrong there as that’s 55mpg!! Anyway a C200 has a 66lt tank so you used 33lt and @ 4.2lt/100km with a return distance of 480km/100km = 4.8 x 4.2 = 20.16lts Vs your 33lts. I think your getting 6.87lt/100km.

        Hey Doc, I wasn’t meaning to be taken literally! I’m sure some do, BUT, I bet most don’t and imo I’d say most would see status in a VW compared to a Hyd/Toy.

      • Dennis I said half – [if] – see above, and no I’m not joking, not the first time, once out of the city just set cruise control and relax for the drive. Most variances in fuel consumption are driver inputs, hence why I have 45,000kl on the car yet no disk brake pad or rotor changes, get 40,000kl on tires, et al.

        Skippy… urban I get adv 5.5ish ltr – 100km no joke…

    • Australia adds essentially no value to the supply chain for VW.

      The cars are built overseas
      The cars are designed overseas
      The marketing is planned overseas
      Management reside overseas
      Operations are funded from overseas

      Sales are made by Australian motor dealers who employ and pay tax in Australia on their wages and profits.

      • That doesn’t appear to be the case.

        “If you believe the financial statements of Volkswagen Group Australia, audited by PwC, this company makes a mere average of $220 on each car it sells in here.”

    • The Volkswagen scandal: say goodbye to the internal combustion engine!

      However, what the Volkswagen scandal tells us is that, likely, most of the recent improvements may have been obtained, if not by cheating, at least by a creative interpretation of the rules. An especially telling point, here, has to do with the specific point that led to incriminate Volkswagen: the abatement of nitrous oxides. The problem is especially nasty because it arises from conflicting needs. One is of having low pollution, the other high mileage. To have high mileage, you need to increase the efficiency of the engine, and this can be done using diesel engine instead of the conventional gasoline engines. Diesel engines work at higher temperatures and pressures, and that makes them more efficient. But that makes them also produce more nitrous oxides. It has to do with the thermodynamics of combustion and you should know that if you try to fight thermodynamics, thermodynamics always wins. The problem is basically unsolvable, at least at costs compatible with the price of a normal car. And when you face an unsolvable problem, often the reaction may be to cheat. This is, evidently, what happened with the automotive industry and the results have been exposed by the Volkswagen scandal.

      But, if it is true that we cannot win against thermodynamics, it is also true that we don’t need to fight against it. A battle against the combustion engine was lost in the 1970s, but the war can still be won: the electric car is making a spectacular return. Electric motors do not produce any gaseous pollution, they are much more efficient than internal combustion engines, and, in addition, they are compatible with renewable energy. What can we ask more? This time, let’s try to avoid the mistakes we made in the past.

    • So, rejecting government solves nothing. It’s like rejecting food: The real issue isn’t to reject food, it’s to eat healthful food, and to avoid poisonous food. Similarly, the real issue isn’t to reject government, it’s to support good government, and to oppose bad government.

      And so, too, the issue isn’t whether government should be “small,” or “big,” but rather that it should be the best size to serve the public, who must bear its costs.

      In other words: Libertarianism entirely avoids the real question, which is: What type of government is good? As an “ideology,” libertarianism doesn’t even make it to first base: it’s fake, from the get-go. That’s why libertarianism fails.

      Hard to disagree

  7. The Traveling Wilbur

    Oh Canada! Four in 10 Americans Want Wall on Northern Border

    News just in: Ten in Ten Canadians Want Wall on Southern Border

  8. http://www.domain.com.au/news/investor-loan-clampdown-horrendously-risky-for-apartments-20150925-gjv3zr/

    Saw reference to David Stockman above and revisted his site to see this article:

    http://davidstockmanscontracorner.com/restless-in-the-red-ponzi-chinas-julyaugust-capital-outflow-surges-to-267-billion/

    So with strong evidence that China is controlling individual fund transfers out of the country and the tightening locally for investor loans, does anyone else see an opportunity for ANZ and NAB to step into the breach to offer financing in China to desperate buyers caught by the recent changes? Does APRA measure and regulate the increase in offshore borrowing for domestic property? Is this how we will keep our local market elevated for a few more months?

    Or does this end badly with confidence shaken as OTP purchases fail to settle and discounts abound?

    • It’s been a while since I was in Sydney, but which property is 70 km outside of Sydney? Certainly not Drumoyne from memory!

    • TailorTrashMEMBER

      The Domain marketing strategy appears to shifting gear to ….first home buyers and owner occupiers ( an agent “gunning for the underdog ” ………….excuse me while I go and vomit ) ….

      …roll up ,roll up …..great bargains , once in a life time opportunities , Fiberous cement clad apartments going cheap …..only $700, 0000 ………never to be repeated prices ……..get in quick or miss out ……….finance can be arranged ……..so come on down ……we have plenty of developers and investors to take your money ………and the banks need your support ……..

      Poor innocent people ……tell them to stuff it !!……….rent and watch the show from the sidelines ……..

    • TailorTrashMEMBER

      Love it …………There is nothing like the eloquent passion of an old man . ………..from the heart and from a life lived through the thick of it (he is sounding a bit like Churchill ,whose best voice came in his later years)

      …I have seen ” Wedgie ” do his thing over the years and I always thought ……there is a man with a heart and a half ………he always was on the edge and the outer but he always had the voice of his conscience ……….a most admirable trait in a politician …….

      …Bill Fall Shortman should watch and take note ……..if he could get a fraction of this presence then people might listen to him ……………

      • and then Shorten could watch his party fade into irrelevance to all but 30% of the electorate – the ‘true believers’.

    • I like the comment:

      Aneurin Bevan, primary founder of the NHS, during speech at the Manchester Labour rally 4 July 1948 –

      ‘…no amount of cajolery, and no attempts at ethical or social seduction, can eradicate from my heart a deep burning hatred for the Tory Party …. So far as I am concerned they are lower than vermin. They condemned millions of first-class people to semi-starvation.

      ‘Now the Tories are pouring out money into propaganda of all sorts and are hoping by this organised sustained mass suggestion to eradicate from our minds all memory of what we went through. But, I warn you, young men and women, do not listen to what they are saying now … I warn you they have not changed, or if they have they are slightly worse than they were.’

      • Have a think about Australia’s current position through the lens that Naomi is presenting and then consider our new Treasurer and his attitude. We are now heading into our own “shock” event.

  9. Hello Friends….

    In light of the #freekaren excitement yesterday, I have decided to post a list of songs with a climate change/environment theme, in keeping with the (recent) tradition of macrobusiness music saturday nights 🙂

    http://www.smh.com.au/federal-politics/political-news/alternative-music-linked-to-violent-extremism-says-government-radicalisation-kit-20150925-gjuni7.html

    “Environment, the environment exceeding on a level of our unconsciousness, for example what does the billboard say come and play come and play forget about the movement. Your anger is a gift”:
    https://www.youtube.com/watch?v=VxwA-Ikj_w4 although a better version (if you have unblockus or VPN) is this: https://www.youtube.com/watch?v=2nAtfU5HAEQ

    “Where’s my umbrella?”:
    https://www.youtube.com/watch?v=7fdJO3wkR8Q

    “Buy the sky and sell the sky bleed the sky and tell the sky”
    https://www.youtube.com/watch?v=lf6vCjtaV1k

    “But it was like to stop consuming is to stop being human”
    https://www.youtube.com/watch?v=oyVJsg0XIIk

    “Hands all over Western culture, Ruffling feathers and turning eagles into vultures”
    https://www.youtube.com/watch?v=xciIjKJiTbg

    “slowly destroying what we love, shaking it breaking it slowly”
    https://www.youtube.com/watch?v=IFnRVLKlI4Y

    “let’s put our heads together let’s start a new country up”
    https://www.youtube.com/watch?v=YrehJovpKfo

    …and my favourite for the moment:

    “I know there’s something wrong, stop making it up, we’re too proud to see we’ve lost more than our trust…….Who we are, I fear most of the time”
    https://www.youtube.com/watch?v=V_E5ae9ZTwk

    I particularly like the lyric loop at the end starting at 4:12

    • https://youtu.be/jN-_UOvwNA8

      I will command all of you
      Your kids will meditate in school

      Zen fascists will control you
      100% natural
      You will jog for the master race
      And always wear the happy face

      Close your eyes, can’t happen here
      Big Bro’ on white horse is near
      The hippies won’t come back you say
      Mellow out or you will pay
      Mellow out or you will pay!

      Now it is 1984
      Knock-knock at your front door
      It’s the suede/denim secret police
      They have come for your uncool niece

      Come quietly to the camp
      You’d look nice as a drawstring lamp
      Don’t you worry, it’s only a shower
      For your clothes here’s a pretty flower.

      DIE on organic poison gas
      Serpent’s egg’s already hatched
      You will croak, you little clown
      When you mess with President Brown

    • “Never Turn Your Back On Mother Earth”

      When she’s on her best behavior
      Don’t be tempted by her favours

      Never turn your back on mother earth

      Towns are hurled from A to B
      By hands that looked so smooth to me

      Never turn your back on mother earth

      Grasp at straws that don’t want grasping
      Gaze at clouds that come down crashing

      Never turn your back on mother earth

      Three days and two nights away from my friends
      Amen to anything that brings a quick return to my friends
      To my friends

      Never turn your back on mother earth

      I’ll admit I was unfaithful
      But from now I’ll be more faithful

      Never turn your back on mother Earth.

      By Sparks

    • I’ve been a bit busy, did not know about the #freekaren thing until reading your post just know. Wow, so funny! Thanks for the links too. All this has made my Sunday morn!

  10. http://www.theautomaticearth.com/2015/09/merkels-next-big-headache-volkswagens-defeat-device/
    Merkel’s Next Big Headache: Volkswagen’s ‘Defeat Device’
    We must first of all look at the reasons why Volkswagen went as far as to develop specialized software systems to hide real emissions. Surely it must have tried to develop engines that would not emit the 10-40 times legal limits they have been found to do at present, before turning to its programmers to ‘solve’ the issue.

    And if Volkswagen couldn’t make those engines, why should other carmakers be able to? They all have the ability to take each other’s vehicles apart and find out exactly how they function. It’s not an industry that has too many secrets lying around. Once your product’s on the market, your secrets are too.

    • From tax, to libor, to mega-trawlers… Our institutions are degraded beyond the ability to regulate the complexity of the regulations – and don’t they (we) know it. While everyone was busy looking at the new lovely economics plumage, legal philosophy just reasserted itself.

    • 2 Big. Here is the next legal issue.
      For all those owners of dirty diesel, once the fraud has been uncovered and it is proven that diesel emits all that poisonous pollution (as we have always known) what legal risks do the operators and owners of those cars face should they continue to operate that vehicle and continue to disperse harmful emissions.
      My call is, that should you knowingly operate a device which emits a pollution level which is illegal, you should be prosecuted.
      Most of the whinging in the MSM is from persons who are concerned about the deflated value of their once beautiful item of machinery, not from the damage they are doing to the health of others.
      This is going to end up a lawyers picnic, Diesel owners you are on notice!

    • The heavy transport guys are larrfin their guts out about this NOx issue 2b2f. It has been suspected for quite a while that the automotive gurus were sailing close to the wind..
      The heavy diesel sector have been injecting aqueous urea into the exhaust of their donks for over a decade..
      So some diesel people are in the shit , but a lot wont be.

    • Very well written “save Australia” plan.
      One key point I doubt will be achievable:
      “Direct APRA to direct the banks to wind down all wholesale borrowing related to residential mortgage lending to zero over the next 7 years”
      This goes against the business model that Australia has been running for years. To get vested interest to agree to this would be nothing short of a miracle (in my opinion). Not to mention it will kill the housing addiction and piss off 2/3 of the population that own houses because they will see their house values plummet (and as we know that’s not allowed in Australia).
      But, I do agree with the overall spirit of the recommendations however, my suspicion is that such an approach could drive the AUD to pesos levels due to the decrease of overseas demand for AUD and at the same time lack of productive capacity in the economy, but thinking about it, that’s probably what the doctor ordered for the Australian economy to “reset” itself.

      • Yes – no doubt that Step 1 alone would result in higher mortgage rates, for a given RBA target rate, and that would put downward pressure on house prices. That is why Step 2 is so important (I have now added some bright red text to make it clear to Mr Morrison that he cannot ignore step 2 🙂 )

        Step 2 is about making sure that the economy does not fall into debt deflation as higher rates encourage deleveraging of the household debt bubble.

        An important thing about Step 2 is that it is not a debt jubilee and plenty of debtors will be forced to sell their assets if they cannot pay their debts. What Step 2 does is ensure that the money supply is supported when credit creation slows or reverses.

        Certainly the $AUS will fall as that is the entire point of Step 1 – encouraging it down to where it reflects our trade performance. But it is unlikely to go through the floor as we still export a huge amount and once it is low enough that the trade deficit is erased by a bit more local production and higher exports – it will stabilise. Foreigners who want to buy our exports will still need $AUS to pay for them and that puts a floor under the currency.

        The plan is really nothing more than a way of weaning the economy off the proceeds of selling IOUs (public and private) and asset sales without sending it into a recession.

        Do I think it is likely to happen? Not really and the reason is that governments of both sides have been busily signing agreements over the last few decades that essentially prohibit Australia from taking the required actions.

        For starters – Mr Robb’s FTA agreements guarantee a bunch of our trade competitors almost complete freedom to stuff as much exchange rate manipulating capital down our gullets as they please. So to complete Step 1 would involve walking away from a bunch of FTAs (which were always about the capital flows anyway)

        Our pollies (on both sides) are quite remarkable for their eagerness to sign away the capacity of Australia to determine its economic future. Few other countries come close.

    • I encourage MB to post Pfh007 “Treasurer Watch: Mr Morrison can save Australia – a 3 Step Plan” as a guest post. A must read.

    • Thank you, Pfh/TGP. Lots have opinions on what is wrong, some with reasonable accuracy, few articulate a plan.

    • Good to see a proffered solution.
      I chuckled at the Flawse note……Morrison will have a WTF moment.
      Never forget that the economy is a subset of the environment though. Fix that next please.

      • Yes, the environment is very important though I tend to the view that fixing dysfunctional economic models might be the greatest contribution we can make to protecting the environment. The growth dynamic implicit in an interest bearing debt driven monetary system encourages all economic actors to plough forward relentlessly. Some argue that this drive spits out technology that can help the environment but I suspect it barely corrects a fraction of the damage resulting from the growth driven by the chase for I (interest).

    • “The growth dynamic implicit in an interest bearing debt driven monetary system encourages all economic actors to plough forward relentlessly.”
      The system demands the relentless march. I believe we are obligate symbionts to a large degree…most are, at least.
      Agree with your other thoughts. Good work, dude.

    • Have you received feedback from Di Natale?, or any of the people you have contacted?, and if so, how well were your suggestions received?
      Interested to know…….how firm are the ideologies in this crop.

  11. Some sobering figures: US household debt to GDP is around 0.66. Ours is 1.25 (almost double). So despite all the QEs, zero interest rate and money printing in the US, we managed to beat them 2 to 1. Aussie Aussie Aussie..

    • Ah! So this must be that fabled “Real Household Debt” figure spruiked yesterday that shows that Australians have ‘paid off ‘ $30 billion of Real Household Debt in the last quarter. If Nominal Household Debt isn’t doing what it supposed to then compare it to something else, like GDP, to show that it is. (NB: Given that the US is showing an increase in GDP it makes sense that their Real Household debt is falling, but I don’t have your data source to see if I have the right end of the stick! I don’t know what the CBA used to show their Real Houshold Debt fall. Rising Property prices, that back the debt, would be my guess)

    • Don’t worry, 2big… a nice depression and housing crash will cause quite a few of those loans to be written off in the next few years… we’re probably at peak debt.

  12. “U.S-trained rebels in Syria handed over American-supplied vehicles and ammunition to an al-Qaeda linked group….Pentagon officials initially denied media reports… but on Friday … acknowledged it….rebels entered Syria on Monday to fight the Islamic State. They handed over the equipment almost immediately after entering the country.”

    Remind me again. Who, exactly is it, that the RNZAF is going to bomb?

  13. This from Simplicity

    “Plot property prices with their correct valuation in US$, €, £, ¥ with the correct exchange rate for the course of your graph.

    What you will find for the majority of Australia is an allready bursting of Property prices in just about every city of Australia except in AUD terms.”

    Can’t dispute that…and thanks for the reminder. That analysis is often forgotten.

    Crashnix have prevailed.

    We “can buy now”.

    • Escobar, Simplicity said “Either our currency depreciates hard or our property market does, either way it will revert back to normality.” No reason why it can’t be both (and will, imo).

      So yes, ‘we can buy now’, but I choose not to because my existing stock of AUD will buy much more AUD-priced property later (or less of that stock for what it can now etc etc).

    • By all means, buy now. Australia is heading into a once-in-a-century depression; more people piling in now will be more people for me to lord it over when I buy the best house on the worst street.

      Half of Australia’s economy right now is running on fumes from debt and capital gains. WA and SA are already falling over. QLD and VIC will be next. This is going to make make the 1990 recession look like a walk in the park.

      The delicious part is that Australia deliberately killed most of its trade exposed industrials, so there will be little to halt the downward spiral. Ha ha ha!

    • I presume the “Ha Ha” comment is to show you are ridiculing the absurd denialist viewpoint the braindead article at ZH takes?

      • I was wondering who from Australia submitted this to ZeroHedge and for what reason, I don’t believe the editors there put this together.

      • The ZH editors are complete morons. They are the ones who add all the bolding to sentences, so you know they must be on board with the tinfoil cap denialism. FFS, it’s so tedious, all this dirty stupidity. The site is supposed to be against corporate fascism, but by supporting the denial spread by Big Oil and Big Coal, they are playing right into their hands! 😡

        Once again, the Stupid, it Hurts.

    • Ha HA till you are destitute!
      [While we hardly have to remind readers that it is Goldman that conceived of the carbon-credit market. The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle:
      If the plan goes forward as expected, the rise in prices will be government-mandated.
      Goldman won’t even have to rig the game. It will be rigged in advance.
      Goldman wants this bill.
      The plan is (1) to get in on the ground floor of paradigm-shifting legislation,
      (2) make sure that they’re the profit-making slice of that paradigm and
      (3) make sure the slice is a big slice.
      As Paulson said at the time, “We’re not making those investments to lose money.”]
      FYI Goldman Sachs is Jewish.
      All you climate change starlings are just going to follow the trail till Goldman has all your money.
      Mega dumb!

      • we hardly have to remind readers that it is Goldman that conceived of the carbon-credit market.

        CRAAAAP you fuggin’ dunce. 😡

        You’re too goddamn lazy to check the shit you write on wikipedia

        The international community began the long process towards building effective international and domestic measures to tackle GHG(Carbon dioxide, methane, nitrous oxide, hydroflurocarbons, perfluorocarbons and sulphur hexafluoride.) emissions in response to the increasing certainty that global warming is happening and the uncertainty over its likely consequences. That process began in Rio in 1992, when 160 countries agreed the UN Framework Convention on Climate Change (UNFCCC). The UNFCCC is, as its title suggests, simply a framework; the necessary detail was left to be settled by the Conference of Parties (CoP) to the UNFCCC.

        The efficiency of what later was to be called the “cap-and-trade” approach to air pollution abatement was first demonstrated in a series of micro-economic computer simulation studies between 1967 and 1970 for the National Air Pollution Control Administration (predecessor to the United States Environmental Protection Agency’s Office of Air and Radiation) by Ellison Burton and William Sanjour. These studies used mathematical models of several cities and their emission sources in order to compare the cost and effectiveness of various control strategies. Each abatement strategy was compared with the “least cost solution” produced by a computer optimization program to identify the least costly combination of source reductions in order to achieve a given abatement goal. In each case it was found that the least cost solution was dramatically less costly than the same amount of pollution reduction produced by any conventional abatement strategy.[36] Burton and later Sanjour along with Edward H. Pechan continued improving [37] and advancing[38] these computer models at the newly created U.S. Environmental Protection Agency. The agency introduced the concept of computer modeling with least cost abatement strategies (i.e. emissions trading) in its 1972 annual report to Congress on the cost of clean air.[39] This led to the concept of “cap and trade” as a means of achieving the “least cost solution” for a given level of abatement.

        https://en.wikipedia.org/wiki/Emissions_trading#History

      • R2A, what you refer to is the modelling or the business plan.GS, run (the lions share of ) the trading.
        It goes all the way back to the original model of Mr Marcus Goldman.
        From your Wiki reference :
        [Trading in emission permits is one of the fastest-growing segments in financial services in the City of London with a market estimated to be worth about €30 billion in 2007. Louis Redshaw, head of environmental markets at Barclays Capital, predicts that “Carbon will be the world’s biggest commodity market, and it could become the world’s biggest market overall.”[28]]
        That money, young Mambarino, comes in-part form your pocket. Mega, mega dumb.WW

      • The stupid, it hurts 🙄

        We all pay more but it is given back to us. Do you have any idea how an ETS works?

      • Guys, the world is warming,the oceans are rising, that is not in dispute.
        That these changes are occurring IS in accordance with the transition-of the earth through its glacial periods. That you have been sold a lie that this natural event is part of man’s evolvement just shows your gullibility. That you are willing to pay for the delusion, shows your utter stupidity.
        That you allow a merchant company such as Goldman to clip the ticket and enhance the velocity of those funds through this magical circus, indicates to me you have no grip on the modern pea and shell game.
        Fortunately for all, carbon is being replaced by renewables and carbon trading has a limited future, but I’ll bet I could interest you climate change tragics in the monetary worth of a few Tulip bulbs. How about a new Mono Rail?? WW

      • That these changes are occurring IS in accordance with the transition-of the earth through its glacial periods. That you have been sold a lie that this natural event is part of man’s evolvement just shows your gullibility. That you are willing to pay for the delusion, shows your utter stupidity.

        Epic, epic fail. Moderator, why are you allowing Flat Earthers to post here, constantly and unmolested? Click bait? Posts like this qualify the guy as loon pond material, subnormal IQ, cerebral trash. Lift your game, mods, get rid of the dead wood. 💡

      • R2A
        Mummy, Daddy, help.
        The Wolf has me where the Bismark had the Hood, or the Kormoran had the Sydney.
        I’m in fear of the first salvo.
        Mambarino, the place for you is back in the serenity of the Serengetti. Wiley WOLF

      • So it appears williwanka is just another astroturfer. I suspected as much. Their modus operandi is to inveigle themselves into the site’s regular poster clique by posting on all sorts of topics, to thereby create a trusted persona through interacting with other regulars.

        Then, when carbon tax/ETS is mentioned, they go full retard, hoping to sway the regulars and create an anti-tax zeitgeist.

        It’s transparent to me. I suspect the site’s admin allows it because it gooses traffic. 🙄

      • WW,
        What is it with you? Christ, you have no climate science background in education/research or whatever, yet you still insist that you understand the cause, while all the climate scientist must just be dummies.

        I wish you’d use your intellect on curing cancer as that will have a bigger impact, though I can only hope it will have more of a science backing than your beliefs on GW.

      • Guys I have no interest in climate change or the cure for cancer, other than soon I may need another mooring should the Southport Yacht Club go under water.
        But what is going to occur soon, (may already have a head of steam) is that the public are going to question the wisdom being put about by vested interests and merchants, which as the economy falls in a hole, their lifestyles fall in a hole, their finances and personal relationships go south, as the future for their children disappears up a dark tunnel and the prophets are unable to offer a logical cause- effect and means forward.
        The people for years have listened to the mis information put about as the good shepherds kept their flocks under control. The VW case comes to mind, and now the Govt is Syria may also be acceptable, (how many lives do we have at risk over there) as the Soviets man up the military opposition against our incursions over the border. How many were killed at Gallippoli, in WW1
        I can accept you guys have a sincere belief in your position on global warming, but a test of sincerity is not a test of truth. Many people are sincerely wrong. Often the differentiator is education

      • Many people are sincerely wrong. Often the differentiator is education

        [Dalek voice] WARNING WARNING, IRONY OVERLOAD!

        That’s too much, my circuits are overloading and burning out with all this irony. I’m out.

      • I can accept you guys have a sincere belief in your position on global warming, but a test of sincerity is not a test of truth.

        Why would anyone need to rely on “sincere belief” in the presence of such overwhelming evidence ?

      • Wiley Wolf said: “Guys I have no interest in climate change”

        For someone who has no interest in it, you’re attracted to threads about it like a fly to shit. In fact, you quite literally started a thread on it on this very page…

        … and you keep bleating the same utter demonstrably false bunk as good old ‘caught lying again’ 3d1k and that corrupt doofus Researchtime (who you won’t be seeing around here any more after the pin-head told us he works for the minerals council AND said if we sent letters to them he would find out who we were).

        You’re a time-wasting lying astroturfer like the aforementioned. You also mentioned using 50 cal guns on boat people on this page, which speaks for itself really. Covering yourself in glory, yet again.

    • That ZH article is typical ZH garbage and should be read for entertainment purposes except that it’s not really entertaining. I do read ZH sometimes. Sometimes there are some decent articles, but they also have garbage articles (and this one is). They use a common theme where they find some remote events and bring them together in order to patch a story that can be sold as some conspiracy theory (that you should know about). They once tweaked data in a graph in order to create a story.
      …Perhaps the recent probe into the “statistics and data” behind the Australian Bureau of Meteorology were the straw that broke the camel’s back:
      These guys know nothing about what’s happening here (but obviously got you and me to click on that article) and maybe that’s all they care about.

  14. Sydney vacancy rate 1.7%
    Melbourne: 2.2%
    Perth 3.7%
    I’m still a believer that unless we see a vacancy rate north of 6% or 7% in Sydney and Melbourne, prices will remain where they are. Also, I am skeptical about how the vacancy rate is measured. If we have many foreign owned empty apartments (not rented and not advertised), then those will not make it into the vacancy rate calculations. According to SQM research:

    “The Rental Vacancies component is based on all monitored and unique online listings for the period of a calendar month. The series starts off in January 2005.
    All listings are taken from online monitoring of major listings sites. Only those properties with unique addresses or a unique listing id are used. Those advertisements with no addresses are excluded from the series. Any addresses repeated between sites are de-duped.
    Only those listings that have been advertised for three weeks or more (and are still currently advertised as at the time of collation) are used.

    http://www.sqmresearch.com.au/graph_vacancy.php?region=nsw%3A%3ASydney&type=c&t=1

    Serial property investors (apparently there are many individuals out there who own dozens of properties) obviously rely on 1) property being rented and 2) property valuation increase in order to use equity into the next property purchase. The things that will cause them to hit the breaks are 1) interest rate increase and 2) vacancy rate increase. In the absence of the first, the second is needed. If the vacancy rate increases, some properties in the investor’s portfolio will not rent, impacting his/her ability to service some mortgages. This will force him to sell some properties. If enough people do this at the same time, prices will start to fall. As more prices fall, investors’ business model will collapse because as banks re-value the properties (to the down side), they are left with mortgages higher than property values which will force more distressed sales.
    So in a nut shell, higher vacancy rate is needed (in the absence of higher interest rates) to burst the bubble.

    • Anecdotal evidence from a long time ago — I prefer to call it weekly property because after the bubble it will be an income investment.

      I am reading the Case of Oscar Brodski published by R.Austin Freeman in 1912, he was an acute observer and his villain invests his ill-gotten gains in weekly property in London suburbs. He is paying 250 pounds for houses renting at 10 shillings and sixpence a week, I make that about 5 % yield no negative gearing. The bank rate was about 4% and consols about 3%. Not all that far away from the sort of financial conditions we face, so I expect houses are yielding about half that in our big cities. Looking at what long term evidence is available I see 5-6% yield as being right for weekly property.

      As an aside I believe the financial and geo-political problems we face do rhyme with the British Empire before the First World War.

    • I guess higher vacancy rates are pretty unlikely without rapidly slowly population growth and a well stocked construction pipeline. Or people who keep their investments empty selling up for whatever reason.

  15. R2A
    Have you dobbed me into the Minerals Council yet, written to the Press,MSM
    Do I have to write a press release for you.
    Dennis can give you the update for my CV. WW

    • Please do tell us who you are in real life, willy. I’d like to see the who, why and where of the Australian anti-intelligentsia.

      Maurice, is that you ❓ Amirite?

    • R2M, your epic astroturfing (look it up) has turned Macro-business into

      Wacro-business.

      If you really loved the earth you would just kill yourself… you probably own a car…

      • “Epic” and “astroturfing” are my words on this page, look above. You know what they say about imitation being the sincerest form of flattery, Tor-troll?

      • I told MB several times that we need an ignore button. There are few posters here that add no value and take space in order to project their dogma disguised as environmental or economic awareness. Certainly would make navigating through this blog easier.

      • Whoa! Another confounded idiot emerges from the woodwork! The ratio of morons to normals here is 10:1 ❗

        What is it about economics blogs that attracts the antiscience crowd?

      • R2M funny I did not specify who those posters are. You voluntarily included yourself among them and proceeded to attack me.. strange indeed.

      • I mean seriously, where else on the net other than ZH would you get so many science deniers and skeptics? Just off the top of my head, here are some of the recent posters who either outright disbelieve science or express severe doubts:
        Mig (gone thank god)
        2big2fail (perhaps not?)
        WilliWanka
        Willy Nilly
        88888
        Jagster
        DarkMatter
        Guybrush
        Simplicity
        Hugh Paveltich
        Heissenberg (or as I call him, Scheissenberg)

        … and there are many more. The sane few who are not here with a Luddite’s tinfoil agenda are outnumbered. ffs!

        Are most of them Tor-spawn, just bogus accounts all belonging to the same busy and well paid astroboy?

      • R2M funny I did not specify who those posters are.

        2big2fail, are you saying you were referring to the antiscience crowd? Be clearer. The way you said that was wide open to misinterpretation, mate.

      • R2M, could you please explain why you consider me a science denier since I never posted on issues related to the climate and never as far as I remember commented on any of your posts.

      • I took your post above to be referring to me, 2b2f. The other side do not try to disguise anything in “environmental awareness”, they just present a jumbled farrago of lies and half-truths. If I am wrong tell me. Happy to be wrong 😀

      • R2M, I don’t have a dog in this fight. My personal views is that climate change is real and humans are changing the earth’s delicate balance which could lead to our extinction one day.. however, I try not to get involved in religious like debates..which tend to deplete energy and lead nowhere. My comment had a more general purpose and it’s the following: Say someone happens to stumble on this blog. There are two possibility. He might see a blog full with intelligent insightful, and helpful or entertaining comments on one hand. On the other hand, he might see a bunch of people arguing and attacking each other in a religious like debate. The more we appear like the former as opposed to the latter the better this blog will be and the better we can advance our collective knowledge and possibly make a difference in the various issues facing us. When the signal to noise ratio gets too low, some very valuable posts (like the one above by Pfh007) get missed in the midst of attacks and counter attacks. Ideally, self discipline is best, but knowing that some people can not manage that, I proposed an ignore button.

      • On the other hand, he might see a bunch of people arguing and attacking each other in a religious like debate.

        And don’t you think this is exactly what the professional disrupters here want? The only way to stop it is to ban the astroturfers …. or ban people who accept the science. It’s up to the mods.

    • And boy oh boy, does John Carroll capture the essence of the Left delight in cultural masochism.

      John Carroll, sociologist, isn’t he the eejit who Prof Harry Clarke called “silly” over climate?

    • R2A=Stavrogin, “The Possessed” (an exact description)
      All,, you absolutely need to read that 3d link: and absorb and reflect.

    • FiftiesFibroShack

      ‘Cultural masochism’

      Interesting, however it did seem like a long-winded attempt to justify the mindless patriotism that has infected certain sections of our polity – yes those who read Quadrant and to a lesser extent The Oz.

      “The sado-masochistic pleasure gained by some individuals in suffering pain at the hands of another is projected outwards on to the person’s own culture and society. Damaging it, attacking it, seeing it suffer and being diminished, brings pleasure. This is extraordinary.”

      Yes, extraordinary. It would have been a far more interesting piece if the author had investigated the concept of projection, as well as negation.

      “Paranoid extremism is manifest in grandiose delusions of self-importance, or in delusions of persecution.”

      That reminds me of a few people here. Lost your mind after a comment was deleted? or, do you think the world is persecuting white Christian males? You just might be a deluded, self-important, extremist. I guess it doesn’t really matter. It’s only other deluded extremists who care. I say go about your business.

      Anyway, I find the culture wars very boring. Perhaps this subject gets more interesting with age? or senility?

      • I reckon quite a few Young Liberals have gotten into the culture wars, while their lefty equivalents got piercings and dreadlocks, developed new mung bean recipes and swapped tips on which fertiliser to use on a cannabis plant to give the best chance of a female plant.

  16. Given that we’re further ahead of you now; three hours and not two….

    “Chinese property investors are rapidly disappearing from the auction room, says the boss of Auckland’s biggest real estate agency ….the upcoming capital gains tax** and a 30 per cent deposit required for investment properties was sure to have an impact. A New Zealand bank account and IRD number would soon be required on all sales and purchase agreements.

    (** That Capital Gains tax is really an Income Tax Withholding Amount, from 1/10/15. It’s been too easy to avoid Income Tax laws, so now any property sold within 2 years of acquisition has Income Tax withheld and claimed it back if it can be proven that it’s not a result of speculation)

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11519706

  17. The world response (and I mean mostly western powers) to the refugee crisis is very similar to their response to he Ebola crisis: do nothing until things get really bad and danger arrives to our doorstep. It’s precisely what the US/Europe did during the Ebola crisis. As long as only Africans were dying and the danger was away from their shores, they ignored it (for almost a year). Once they saw the danger up close and cases started to pop up in the US and Europe, they acted. The US sent troops to Africa, established hospitals, and controlled the spread of the disease.
    The refuge crisis is shaping up to follow a similar path (though Europe as opposed to the US is impacted). Now that the number of refugees is seriously overwhelming the European nations, we’re seeing some subtle changes in the tone with regards to Syria’s Assad as outlined today by our foreign minister. Similar to the Ebola crisis, Western powers are late and will eventually realize that they have to take some serious measures (which could involve establishing some safe zones around the Syrian region to house the refugees) and would involve direct involvement of the US/UN troops to safeguard these zones. Short of stopping the war, that’s probably the only way they can stop the refugees fleeing the area.

    • TailorTrashMEMBER

      Sadam Hussian was Nasty to Iraqis ……the Americans removed him Iraque is a mess ….Gadaffi was nasty to Libyans ….the Americans removed him …Libya is a mess The Americans got involved on Afghanistan…….it’s a mess ……..the Americans got involved in Lebanon it’s a mess . The Americans got involved in Somalia it’s a mess ……………….the Americans got involved in Vietnam and got their arses kicked and it’s a success ……….I love Americans ………but really ………their process dominated culture does not have a good record of being able to fix anything ………………those men who men in Philadelphia were clear thinkers ……….what went wrong ….??

    • Good read.

      “Abbott’s inspiration should be more George Bush the elder, not Rudd the underminer.

      Bush was a oncer, like Abbott, although he got four years in power rather than two. He was defeated by Bill Clinton in a bruising election.

      Yet he wrote his successor a letter, left in the White House to be read after the inauguration, which read: ‘You will be our President when you read this note. Your success now is our country’s success. I am rooting hard for you.’

      Leaving the odd Americanism aside, the sentiment is astonishing, not that it should be. Bush was no longer his nation’s leader; Clinton was. The patriotic duty of a patriotic American was to wish for the team leader to succeed.”

      The simple fact of the matter is, neither Rudd nor Abbott was capable of emulating George Bush the elder or a prime ministerial material. Because if they were their party wouldn’t have dumped them (political risks of knifing would have been too great).

    • It’s fantastic how those who agree with scientific consensus and basically every large scientific foundation and met office are now labelled zealots.

      This highly concentrated astroturfing from a number of new arrivals is wrecking the comments sections… no doubt their intent.

      I wonder if marking their posts as ‘obfuscating distracting astroturfer. Please ignore’ would help. Reckon I’ll start doing that.

      • “V” is another one, LordD. My list of ‘turfers and microcephalics grows longer:

        Mig
        WilliWanka
        Willy Nilly
        88888
        3d
        Researchtime
        Jagster
        DarkMatter
        Guybrush
        Simplicity
        Hugh Paveltich
        V
        ErmingtonPlumbing