Weekend Links 10-11 October 2015





Global Macro/Markets

…and furthermore…



  1. AUD/USD on a tear last night – top of 73.445 low of 72.446 – closed at 73.260 – gain of 3.5c over the week.

    Crazy stuff – hopefully some sense will come back in when China data hits home

    • At least they’re not alone:

      This “Unlivable $350,000 Shack” Is The Cheapest Home In San Francisco



      Can someone explain to me why this formatting does not work for me?

      [url=This “Unlivable $350,000 Shack” Is The Cheapest Home In San Francisco]http://www.zerohedge.com/news/2015-10-09/unlivable-350000-shack-cheapest-home-san-francisco[/url]

      • Agree with Kevin, given it’s location relative to the CBD, something similar would be more expensive in Sydney.

      • @Kevin “If I recall correctly, SF also has double the rental yield of Sydney.”

        That would make sense given that our negative gearing laws have contributed to prices rising far ahead of rents. Which doesn’t mean our rental prices are low, by any means, just that prices in Melbourne and especially Sydney are more than ridiculous.

      • TailorTrashMEMBER

        No aggrivation ………..I can dig that
        “If a blind man walks into a well ……….who is to blame……..the blind man or the one watching ?” …………lot of blind men in Australia ……..so any little thing us watchers can do must help .

        Nice philosophy ….”.do great things with purpose ” ……….not once a mention of “growth” ….”profit ” or ” bonus” ………..things which most business people obsess over ………..and I’m sure his philosophy gets him all these things …….but it helps others along the way ……….more of this thinking required ……..the MBA schools have a lot to answer for ………

      • lot of blind men in Australia ……..so any little thing us watchers can do must help

        That’s the only reason I comment here

      • TailorTrashMEMBER

        R2M …..was the I meant …as In you personally …….or meant as in a continuation of the quote …..therefore ……I as in me ………sometimes the context here is lost among the sarcasm …….

  2. Looks like odd-Kiwi-out Westpac is the one headed for bottom of the banking League 😉

    “ANZ anointed, New Zealander Shayne Elliott, studied at Auckland University, where fellow Kiwi big four bank bosses Ian Narev from the Commonwealth Bank of Australia and Andrew Thorburn from National Australia Bank, also studied.

    • Peter Wadhams is Professor of Ocean Physics at the University of Cambridge, UK. With over 40 years of research on Arctic sea ice, icebergs and polar oceanography, he is considered one of the leading experts in his field.

      He sounds the alarm bells. 😯

      Download/Listen (mp3,27MB)

      Wake up, you fools, wake up!

      • I don’t agree when he says: “We can’t do it by reducing our emissions or by stopping our emissions because things have gone too far”. We need a more sustainable way of life that will reduce emissions anyway…which he brings up later when he talks about moving away from industrialised agriculture .

        He also brings up the solutions:
        “90% of research funds are spent on military research…take all scientists in the world (forget NASA & military research and get them working to figure out) how we take carbon dioxide out of the atmosphere because that is the only thing that will save us, that will bring the C02 level down.” “and ….do things that will protect us in the shorter term…like methane outbreak or wet weather changes that will cut back on food production…so we can adapt”

        With so many scientists going into military research and Wall Street, it made me think of this:

        Naomi Klein on Disaster Capitalism

        They are mobilizing to profit from what is coming, not to find solutions. Batshit fucking crazy. Diabolical.


      • flyingfoxMEMBER

        I don’t agree when he says: “We can’t do it by reducing our emissions or by stopping our emissions because things have gone too far”. We need a more sustainable way of life that will reduce emissions anyway…which he brings up later when he talks about moving away from industrialised agriculture .

        On netflix https://en.wikipedia.org/wiki/Cowspiracy. Should make most think twice…

        With so many scientists going into military research and Wall Street, it made me think of this:

        The whole scientific establishment is a problem but I can’t blame them…So many around me are depressed, moving on or seriously considering moving on.

      • @FF, woops, I just read your post and it lead me to think I did not communicate my ideas properly. I was not talking about the scientists or criticizing them at all. When I said “they are going to profit”.. I meant the 1%, the system, not the scientists. I was talking about neo-liberalism specifically. It has undermined the science community and scientific research for a long time.


        I also want to clarify that I do believe we need to reduce pollution/emissions as well as take C02 out of the air (the latter communicated in the MP3 stream).

    • I live in the Bay Area. It’s all tech money. If you’re not benefiting from the tech money, then LEAVE! If you look at the U-Haul index, more people are leaving CA for TX than the other way around. As it should be. For the average non-highly-skilled-tech-worker, it makes sense.

      At some stage, Silicon Valley will correct, although it may take a while. My reasoning is simple. Tech is only going to grow as a percentage of the economy. The cities around here are NIMBY infested and have made growth effectively illegal (at least for housing). Silicon Valley is the worst; the boomer land owners in Mountain View make Berkeley look like pro-development fanatics, and that’s some achievement, I can tell you.

      Therefore, somewhere else will grow instead. Probably Austin, Denver, Boston, Montreal (yes, there’s interesting things happening there), and a number of other cities in the US/Canada. Even twenty-somethings up-and-comers are getting sick of the Bay Area; I was speaking to one today who wants to leave at my employer; I encouraged him to ask for a transfer to the Zurich office.

      Dare I say it, but at some stage Silicon Valley will go out of fashion. The tech sector will still be growing, but where it grows will change quicker than anyone thinks.

      • California is a desert in the making, with most of the greenery fed with water from the disappearing Colorado river and the disappearing fossil water aquifers and Lake Meade, which is in terminal decline.

        Another reason I left.

      • When I worked in Boston, set up a tech support team in Montreal. Turned out to be the best producers of quality code in my org. Boston has had its day, know quite a few companies there that moved to either Portland ME, Nashua NH, or the Triangle in NC. Think red hat in triangle and some brilliant games developers. Austin has quite a few tech breeder areas now and for a Texas town is ok to live in.

        SF will suffer if the techies dont have their fav micro brew pub open. Still remember what it and the 128/495 belt in Boston were like both pre and post dot bomb.

    • At least you can find a shack in SF for $350k. You can’t even find a shack for that price in Sydney.

      • Sorry, didn’t have time for a synopsis this morning , just a quick comment and link.
        Here’s the gist:

        In response to individual homeowners making a windfall profit on their homes (by virtue of the fact that a re-zoning particularly around so called “Transport hubs” means owners can command multiples of the previous market value), politicians want to ‘value capture’ or tax those house sales. We’re talking PPOR, not just investment properties.

        Former tennis player (you can’t make it up) John Alexander is pushing this whilst he chairs a House of Reps housing affordability inquiry. He says:

        “Our growth is being limited by the fact we’re outgrowing infrastructure,” Mr Alexander said. “Under a value-capture system those people who have had wonderful windfalls would be asked to contribute to infrastructure, that’s something I believe the average Australian would find fair.”

        “Extraordinary unearned benefits have been taken by homeowners located close to planned transport hubs,”

        He thinks these people have not “earned” their money, so they shouldn’t get it all, and then that can pay for “infrastructure”?!

        They literally want the money from a lucky break, to be “shared with the community”. Lol

        “I agree with the principle that the financial benefit of a rezoning should be shared by the community as well as the landowner,” NSW Planning Minister Rob Stokes said.

        And Saul Eslake agrees with idea, as does at least UBS.
        No details, probably sending up a balloon to see if the sharecroppers accept it.

      • Homeowners across Australia’s suburbs could face a surprise ­impost if they sell out to developers at sky-high prices, with plans to capture their profits being considered by state and federal politicians.

        Yep. that is a weird version of the Land Value Tax .. Instead, abolish stamp duty and impose a proper LVT.

    • Why just home owners? Because they have made the headlines recently by grouping together to maximise profits and sold at 2-3* individual price?
      How about all the commercial real estate owners that have made super profits by land banking in any suburb in South Sydney (Mascot, Alexandria, Waterloo, Green Square) or around all the other NSW Government priority precincts that have gone through wholesale rezoning?
      Functional industrial properties worth $20m from income become worth $100m as a residential site overnight with the flick of a pen!!

      Why not super tax the farmers that on the fringe of cities (growth boundaries) have for years made super profits from selling their hobby farms for commercial or major housing developments. Houses bought for $400k returning $23million. Ha? Did they “create” that profit? Who gets to share the super profit?

    • GunnamattaMEMBER

      it is, but there is an issue with the magnitude of the debts that the commodity trading sector has (with Glencore a key part of that) and the use of their Letters of Credit.

      I am not sure that Trafigura or Cargill (for example – and there are others) are going to be any inherently cleaner than Glencore – though obviously they have not gone the route of expansion into the production side in quite the same way.

      If the markets start to question the value of the trades in the commodity sector then someone is going to lose an awful lot of money, and at any time when global demand is so obviously weak how can they avoid questioning a lot of commodity trades

    • What looks like the end for Glencore, was the take over of Xstrata, where spite prevailed rather than metrics.
      Sooner rather than later the juggler is going to drop one. It will probably be coal.

  3. How Our Aversion To Change Leads Us Into Danger
    It’s easier for us to ignore the changes that the behemoth political, economical and military structures in our own societies have undergone, and that’s who they like it. At a certain scale, an organizational structure gets too large too wrap a human mind around, nobody oversees what happens and why, and the organizations therefore attract the wrong people as leaders, the sociopathic types who thrive in exactly such situations.

  4. The Sydney suburbs where investors are hiking rents – Domain
    I know the words journalism and Domain dont belong in the same sentence BUT this puff piece plumbs new lows, why dont they just throw 200 years of market theory in the garbage bin and say Rent’s are raising because investors need higher rents (markets are made at the margin…@#$% that Adam Simith stuff…appearently in the Sydney rental housing market prices are determined by the needs of the beautiful people, naturally the means of the grubby renters play no role in the calculation. Only the beautiful people (aka IP owners) make the market…..Naturally the article finishes with the implicit advice that renters can positively affect their plight by becoming owners.
    It’s flat out embarrassing the shite that Fairfax willingly puts it name too.

    • Yea.. I’ve seen this line of thinking in Domain several times before. Investors’ “needs” trump everything. This is rooted in the entitlement ideology that’s deep and prevailing in this country. Worse yet, it’s expected that no matter what happens in the economy, property investors can not lose money under any condition and therefore, whatever changes happen in the economy, we should react so that investors are protected even when they make stupid decisions and buy significantly overpriced properties. It’s almost as if they are first class citizens and every one else is second class (our own cast system indeed). It’s really pathetic that in 2015, this mentality continues to prevail here.

    • For a branch of the MSM that tends to adopt a more sympathetic tone when it comes to minorities and the less privileged of society, it is remarkable how willing Fairfax is to jettison all that when it comes to looking after their own property centric interests. It underlines and undermines everything else they do.

      They are a complete sham.

      • Yea guys what really bugs me is that so many MSM readers still hold Fairfax in high esteem when in reality they seem to be something closer to a click whore with a Real Estate addiction. What is it they say…
        Nobody ever went broke underestimating the intellengence of the American Australian public..

      • “Nobody ever went broke underestimating the intellengence of the American Australian public..”

        That is my conclusion, too. It took me a while, but I am fully convinced now.

  5. GunnamattaMEMBER

    Theres plenty in this…..

    The Torynuffs would know that the Macro runs against them pretty strongly from here, all the way through to and beyond the next election. The Mining Capex downturn picks up steam, the carmakers close, and the apartment building boom comes off [while more people start asking about services and the numbers of foreigners buying Australian houses].

    That isnt to say the ALParatchiks can address any of the serious issues (and therefore resonate with the electorate) any better – I dont think they can, certainly not under Shorten.

    The Turnbull dilemma: go now, or go full term


    • Good post in the comments section of that link:

      Kroger, telling the audience the party deeply admired Abbott, but was in the business of winning elections. “Politics is not personal, it’s business,”
      Well this is where politics and politicians in Australia have lost the people. Politics, Michael, is not about ‘WINNING ELECTIONS’, it’s about governing for ALL the people of Australia, not just for your political backers, big business and lobbyists. And believe it or not, but more often than not, ‘IT IS PERSONAL’ because the decisions politicians and governments make actually affect people!
      This is where politics, (on both sides), in Australia has lost the plot and the confidence of the voters. PARTIES MUST GOVERN FOR THE PEOPLE AND THE COMMON GOOD AND FUTURE OF THE COUNTRY, NOT JUST SO YOU CAN WIN THE NEXT ELECTION!!

      • GunnamattaMEMBER

        I’m with you there Janet.

        It is the reason that things like the TPP (and almost any government measure) are viewed so suspiciously.

        Ordinary punters know that the government (and opposition) isnt about governing in the interests of the people, but governing in the interests of enough people for them to win, and to provide benefits for people they think are like them (when the rest of us generally think they – whether they be ALParatchik or Torynuff) are essentially the same type of sociopathic arsehole we see on any given day in middle and upper management of any organisation larger than about 10-20 people, in the media, in that section of society which believes it ‘owns’the assets etc etc etc.

        That for mine is the question. How can they keep winning without pissing off more and more of the punterariat? How can they govern for the interests of a nation without some of their ‘own’ being called to account.

        For Malcolm it would appear that the Super concessions are some low hanging fruit to be sacrificed (and well done for coming to that – should it happen) but there needs to be far far more.

        essentially our politicians treat us the same way or phone companies, banks etc treat us when we call them to make a complaint or to ask something

        ……it is our fault unless we can prove otherwise, and they will make proving otherwise as expensive as they can, and drag out the result longer than it is in our interest to wait.

      • He (Turnstile) described the party as a broad church that drew on a wide variety of backgrounds and experience. But then things turned nasty.
        “We are not run by factions,” he said to instant guffaws of laughter.
        A visibly uncomfortable prime minister handled the confrontation as best he could: “Well you may dispute that but I have to tell you, from experience, we are not run by factions,” he said.
        “Nor are we run by big business, or by deals in back rooms.”

      • Those comments by Kroger just illustrate the real problem. The people populating the political ranks are so completely out of touch that they simply cannot govern in the best interests of the people. Even the statistical few who will have some significant adversity in their current lives have abundant resources to deal with it. Poverty, hardship, unemployment, and social alienation are only concepts to these people. They are incapable of understanding what is going on outside of their bubble, and there is no logical prospect of that changing under the current system.

        That and “Politics is not personal, it’s business,”.

        That someone of his presumed intelligence can even utter words like that illustrates the disconnect perfectly.

      • By Bye Bill.
        In March,(this year) a move to crack down on (Labor Party) branch stacking through rules requiring all membership dues be paid by traceable means, such as a personal credit card, was defeated at state conference.
        Labor even offers members a $15 discount if they pay by traceable means.

      • Gunna,

        How do you arrive at the conclusion that TTP is government initiative as even most members of government don’t even get to see it, that is reserved for corporate lobbyists et al.

    • We were up in Taree at the weekend and were staggered at the size of people. It is very scary.

    • The industry decision to switch from cane sugar to corn fructose in the early 80s, just to increase profits by a few cents is turning out to be a tax on everyone down the road.

      • It is more deeper Skippy,
        Corn is the pivot point of US agriculture (spice it up with Monsanto) hence the push to produce *anything* from corn rather than any other produce. (e.g. cows-corn-e.coli link).

      • I agree that the industry is driving this (for profit), but most people do have a say in what they eat. Sugar in diet (which we know has addictive properties) is not only making us fatter but has devastating effects on health long term at great economic cost. Following the same pattern as early days tobacco, whatever it takes for large corporations to make a buck.

      • @Djenka,

        I actually trace it back to the corporatist green revolution –

        “Borlaug’s “green revolution” has been criticised for decades by a wide variety of different groups for all sorts of reasons – ranging from making farmers dependent on a range of industrial products to soil and aquifer depletion to creating a food production system that is dependent on a finite supply of fossil fuel based inputs. One memorable description of this combined school of thought came from Zaid Hassan, who noted “there are so many criticisms around the current global food system that for a while I started wondering if in fact it had already collapsed and I was studying a post-apocalyptic food system”.

        Input-intensive monoculture farming – The primary criticism of “green revolution” style industrial agriculture is that it results in farmers becoming dependent on a range of industrial inputs – farming machinery, fertiliser, pesticides, irrigation equipment, seeds and even capital (debt) to purchase these inputs – often resulting in small scale farmers being pushed off the land (particularly if they are unable to repay their debts during a bad season) and resulting in large scale agribusinesses that produce monoculture crops that are prone to pests and diseases unless large amounts of pesicide are applied. Critics from the developing world often note that the profits from this transformation seem to be reaped by multinational corporations like Monsanto, Dupont, Cargill and Archers Daniels Midland rather than the farmers growing the crops (who often saw crop prices fall as yields increased) – and that their national food security was now dependent on foreign suppliers.

        Side effects of fertilisers and pesticides – The side effects of large scale fertiliser and pesticide use are also pointed to by Borlaug’s critics, noting increased rates of cancer and other health problems in rural areas and damage to the ecosystems that these inputs drain into (for example, the “dead zone” in the Gulf of Mexico).

        Water and soil depletion – As a result of modern irrigation practices, aquifers in places like India (once Borlaug’s greatest triumph) and the US midwest have become depleted. Soil depletion is also a problem – since the 1880s almost half of the topsoil of the Great Plains of North America has disappeared.

        Genetically modified crops – The risks associated with genetically modified crops – the next frontier for increasing crop yields in the wake of the first green revolution, which Borlaug dubbed “The Gene Revolution” – remain hotly debated, with critics raising objections based on food safety issues, ecological concerns and economic concerns (centering on the application of patents and intellectual property rights to engineered seeds).

        Fossil fuel dependence – The inputs for green revolution style industrial agriculture are almost entirely derived from fossil fuels. Production of nitrogen fertiliser via the Haber process (mostly in the form of anhydrous ammonia, ammonium nitrate, and urea) consumes between 3 and 5% of world natural gas production. Farm machinery like tractors and irrigation pumps consume fuel, and tractor tyres and plastic irrigation pipes are made from petrochemicals, as are pesticides. Writers like Richard Manning (The Oil We Eat), Dale Allen Pfeiffer (Eating Fossil Fuels) and Glenn Morton (The Connection Between Food Supply and Energy: What Is the Role of Oil Price?) have argued that the green revolution will prove unsustainable once we have passed their peak production point for fossil fuels.

        Borlaug dismissed the claims of most critics. Of environmental lobbyists he said, “some of the environmental lobbyists of the Western nations are the salt of the earth, but many of them are elitists. They’ve never experienced the physical sensation of hunger. They do their lobbying from comfortable office suites in Washington or Brussels. If they lived just one month amid the misery of the developing world, as I have for fifty years, they’d be crying out for tractors and fertilizer and irrigation canals and be outraged that fashionable elitists back home were trying to deny them these things”.

        Borlaug was also indignant about arguments in favour of natural fertilisers like cow manure rather than inorganic fertilisers. Using manure would require a massive expansion of the lands required for grazing the cattle, he said, and consume much of the extra grain that would be produced. He claimed that such techniques could support no more than 4 billion people worldwide, well under the current global population of almost 7 billion.

        This point is still being debated, with researchers at the University of Michigan and University of California claiming that organic farming techniques can indeed feed the world. We can also increase food production by making better use of urban land (something “guerilla gardeners” are fond of – and similar ideas are being put into practice by large scale tree planting programs in India).

        Even if we don’t fully take the organic agriculture path, some of the objections based on fossil fuel depletion would seem to be solvable. If we shift completely to renewable energy sources for power production, we can eliminate a large proportion of our natural gas and coal usage, freeing the remaining reserves for agricultural applications and extending the lifespan of green revolution techniques far out into the future. Whether or not we choose to do so quickly enough remains to be seen.”

        Skippy…. some great studies were done last decade wrt herb-insecticides and children’s mental and physical development, especially Mexico. Seems banned or old stuff was set across the boarder and used, marked difference between groups, even casual observation.

      • interested party

        Chem based agriculture…”conventional” farming……cannot be replaced with organic practices, if one is to consider just changing the practices and not the land areas. Every civilization that has relied on agriculture has ‘gone away’. We have had the benefit of hydrocarbons to enhance the quantity of crops however we have paid a heavy price in the quality of that cropping.
        For those that want more understanding of the harm that biocides do….you need a basic understanding of soil science so here is a teaser………

        Strange that some still believe chem based “””””food””””” is no problem….

      • What about some personal responsibility not to eat the shit ‘food’?

        Education is a problem too. Nutrition education is a disgrace.

        If I ate according to the classic food pyramid, 5-7 serves of carbs a day, I would be as big as a house.

      • Have just twigged as to what is going on with the sugar FTA. (for us)
        The sugar industry has been sooooo heavily subsided in QLD, (remember the Federation wouldnt allow QLD to join the other states back in 1890 or so as we used slaves on the plantations) and they were against slavery, ( though most of the wool was managed by convict labour in the past) so it was approved that the sugar industry would receive home support to make the industry viable using white man labour.
        Ever since then the industry has had more and more subsidy and as a result more and more farmers have taken to sugar. It is possibly the most heavily subsided agricultural industry in Aust.
        None of the crop has EVER been sold at a profit.
        So this sugar into the USA caper is to garner more sales to the USA and thus reduce the total outlay paid by the Govt to the farmers.
        Janet set it out the other day, that theses inefficiencies just keep being rolled over and now the social impact of shutting down the sugar industry is dramatic.
        But now both QLD and the Fed Govt are totally broke. The next moves are going to be interesting.
        You can add a heap of other crops to the sugar example.
        This joint is in serious, serious trouble WW

    • For anyone having weight issues, try making this one change for a few weeks: cut sugar from your diet! I’m doing it now and have already lost a kilo in a week. We’ve been sold lies about fat. Sugar is the problem!

  6. Markets have started to rethink the whole “money printing” power more comprehensively; beginning with what QE actually is, and how bank “reserves” aren’t money, aren’t printing but are just some concentrated, generic and largely inert bank liability totally conditioned by the actions of primary dealers and their dealer activities….. The Fed hasn’t been in the “money printing” business in decades, and simply hopes that nobody notices. Part of that, and a great deal of our current problems, rest upon the fact that it didn’t notice either. Not only are Yellen and the FOMC expecting to further fool the markets, they are still fooling themselves. One is finally realizing it; the other likely never will.


    • That’s a great article.

      I especially enjoyed the remarks about Tulip’s judgement of property prices in Australia. This is certainly a case of an economist stuck inside a model, and the assumptions that are made, and not thinking at all about the reality on the ground (and all he needs to do is ask some of his mates).

  7. Was listening to ABC News Radio one night this week, while they were broadcasting NPR News Hour. Was alarmed to hear that human trafficking is the second most lucrative criminal activity behind the drugs trade.

    Human trafficking represented an estimated $31.6 billion of international trade per annum in 2010. Human trafficking is thought to be one of the fastest-growing activities of trans-national criminal organizations.


    The average cost of a human trafficking victim today is USD $90, which, in comparison to the Southern American slave trade in the 1800s is significantly less. The average slave in 1800 America was the equivalent to USD $40,000.

    I guess this is what happens when you have uncontrolled population growth.

    • Rife here in Australia but nobody gives a fuck, these people are considered lower than renters, deserving of there lot!

      Australian morality has all but disappeared, at least where the moral stance has no advantage for the individual. We need tough times a tough leader and I think we will get one.

    • Some of the low price for slaves is probably because you can’t legally sell one in the first world like you could in the nineteenth century. Also mechanised farming probably reduces their usefulness outside certain niche contexts.

    • I thought weapons are the most lucrative items to trade. Oh sorry, it has to be *illegal* to qualify for “criminal activity”.

      • its a grey are with 457’s all that is needed is a debt bond and its open slather for exploitation. Begins friendly enough then it gets ugly and targets are set and raised, family at home get a visit from some goons a selfie with their favorite sibling, with a gun to his her head or knife to his her throat.

        There is no legal means by which to deal with this type of crime!

      • “Begins friendly enough then it gets ugly and targets are set and raised,”

        I thought you were talking about our housing market. You know, later entrants need increasingly higher returns because of the greater levels of debt incurred.

  8. Am writing up some notes for my next start-up, may as well share some of them.
    Startups don’t turn into unicorns (Billion dollar companies ) without a good story.
    Master the storytelling that locks down massive rounds of funding from the likes of Goldman Sachs, Harvard University, and JPMorgan
    There’s a formula to the narrative of the pitch and the “importance of narrative.”
    “Investors are not solely evaluating your company’s story,”
    “They are also evaluating your ability to convey that story.”
    Fundraising documents are designed to dazzle. Investors spend only 3m 44 sec on average flipping through a pitch, so make the future look big and bright. Plenty of images and charts
    The initial presentation has to get the investors into the funding groove.

    A start-up presentation mesmerizes investors with tales of:
    1. An undiscovered market or
    2. Your destruction target should be framed as a stodgy industry just aching to be upended by increased efficiency.
    3. Your product needs the faintest veneer of Patented technology (Patents must at least be applied for)
    4. Your company should appeal to coveted customers, such as young people and/or citizens of the developing world.
    5. It should swear that it can scale on software alone (that’s why Uber insists it’s not in the transportation businesses — even as it develops driverless cars).
    6. Your narrative should impel investors to look away from short-term profitability and instead gaze upon the mammoth size of your potential market.
    7. Work to the sharing economy, a technology platform that connects to ??? just like Uber and Airbnb connect them to cars and homes, (Note demand for Uber is not limited to the taxi market),
    8. Note: it must be a tech as tech startups command higher multiples, because building and shipping software is relatively cheap and easy compared to making physical products.
    9. It has to be a Name brand. T-shirts, Clothing, Branded summer camp etc.
    10. Portray your company as on a phenomenal trajectory. (hockey stick–projections)
    11. That demand, profits, membership, and locations grow at an enviable rate ,
    12. Highlight the additional commission revenue from ancillary services
    13. “Investors want to hear a story,” so frame your current plans as merely the beginning.
    14. Have 2 presentations, one for punters which uses standardized accounting practices
    15. And one for institutional investors with “audited financial statements.”
    16. Need a five-year financial forecast and a slide presentation.
    17. Financiers will keep the company afloat until it dominates this new world.
    Right now investors are flush with cash and open to any company with the faintest veneer of technology,
    if it sounds like the upside is Uber-sized.
    where valuations can double in a matter of months and where investors who are so “desperately afraid” of missing out on the next unicorn they will slap a horn on a horse.

    • JUst reading The Northern Myth right now.
      Sugar farmers have been provided with Home Support Grants since day 1.
      Its all over for them as the money for the support is no longer available
      But, any cropping north of the tropic is non viable. Lots of stuff I didnt know, Many many experiments tried and failed.

      • Not just cropping, coming from a family of Brisbane Valley cow cockies in the uranium boom of the 70’s I got the shock of my life when I saw the myall cattle around Sleisbeck, though the young off-siders had no trouble growing dope under the caravans, along the sides. I made them plant tomatoes as well to give us a bit of a comeback if we got any grief, but no-one ever said anything.

      • WW & nyleta, another CSIRO paper. Not contemporary but, better, (it appears) not subject to political interference that we see too often in supposedly independent reports these days. Even trying it on BOM these days, ffs.

        On a side note, it is still important that the tropic’s research institutions remain, preferably independently, even (especially?) if research conclusions are not favourable to this or that proposal. Too late for Davies Lab though.

      • Rage FYI.
        CAPRICORNIA ((Xavier Herert 1937.From the book “The Northern Myth” Davidson. (338.1894-1972))

        “There’s plenty of empty space to fill up down South yet.
        This railway is only the whim of a few transplanted cocknies that hate to see places without tram lines in ’em, and of engineers that want jobs, and of manufacturers that want to sell things to the men employed on the buildin’, and a few newspaper editors and other blowbags that dunno what they’re talking about and dont care as long as they can talk.

        Listen this country has been settled donkey’s years and has all the chances of development that the rest has.
        Yet today there’s less people here and less business doin’ than there was 50 years ago.
        Why’s that?. I’ll tell you. It’s because its an utterly useless land.
        You can’t grow nuthen properly on account of the climate.
        Dry Season it’s like a desert.
        Wet season, it’s like a lake.
        A fair indication of what this country’s like for growin’ things is the fact that all vegetables used in town are imported from the South.
        I’ve paid a shilling a pound for potatoes there. And green stuff costs as much as tobacco nearly.
        If you could grow them things here in marketable quantities, don’t you think someone would try.
        And if you can’t- aint there sumpen darn well wrong?”
        What about tropical produce? asked Norman
        “What’d you do with that?.They don’t want it down south. They can grow it ’emselves, in the subtropical parts, as well and better that we can-yes, and grow more than they want, too, as you can see by the fact they have to limit production.
        And they can’t export it, because Australia being a workin’ mans paradise.
        Which is better than being a paradise for Plutes, their cost of production is too high for competition with countries where labour is sweated.
        Anyway they’re too far from the rest of the world. Yes, producers in the South’d go mad if we started sendin’beef. They’re all mixed up financially as it is on account of overproduction.
        Well where else would we sell. To the East? Course we couldn’t.
        They can produce anything we can at a hundredth of the cost. And they dont eat beef.
        There’s loonies suggest we ought to grow sheep. I’ve seen it in the Southern papers.
        Amazing madness. And at the same time they’re killing off their sheep down there so to stop a glut in the mutton market.
        Anyway a jumbuck aint tall enough to keep his head above water here when it rains good and earnest.
        Aint it a significant fact that rabbits don’t live here? why dont they?
        Cos the blunny place is either a desert or a lake.
        Rabbits’ve got more sense than them blowbags that write in the Southern papers.
        But what is going to happen to the place if we don’t do something with it asked Norman
        It’ll look after itself, Sonny, till it’s really needed. It’s been here a hundred million years or so without evaporatin’ for the need of the want of bein’ cleared and fenced.”

    • Could have been Durack cattle. No fences up there in the Territory.
      I see ERA has their hands full with a fire out of control up there at Ranger

  9. ‘Tax grab looms for property windfalls’ – inspiring piece in The Oz. John Alexander , chair of Reps inquiry into to affordable housing: under a value-capture system those who make windfall gain through rezoning will be taxed to fund infrastructure. He is working at state & federal level.

    • Some snippets behind the paywall;
      I’m not paid by a bank, or by any financial flogger.

      I’m fiercely independent and get to say whatever the hell I want.

      So here’s my two bob’s worth for all the renters out there:

      You’re not a loser for renting.

      It’s not ‘dead money’.

      In fact some of the most financially insecure people I deal with are those who’ve bought homes (and LMI insurance) they couldn’t afford.

      Financial stress rips families apart.

      By all means buy a family home — but only after you’ve done the sums, and you know you can comfortably afford it.

      Ultimately it’s you who has to front up to decades of repayments, so for godsake own your decision.

      Don’t be rushed into it by anyone.

      Tread Your Own Path!

      • True enough, but look at the gains previous buyers have made (even if it’s on paper), just in the last few years. Those who didn’t buy have missed out. If we knew for sure that the bubble is going to be allowed to pop, and it certainly is a massive bubble, then Scott Pape’s quite right. But if our government and other vested interests are hell-bent on growing this bubble even bigger, then maybe not. The fundamentals no longer count for anything.

      • Notably the same Scott Pape who hosted the property porn show ‘Under the hammer’. He generally strikes the right note with his commentary, but you do wonder if there is a price for which anyone will sell their soul.

        Opportunists abound.

  10. Oh my god – check out the blatant, unrestrained illegal activities on Real Estate .com.au – they aren’t even bothering to advertise in English anymore – there can be absolutely NO DOUBT that this is aimed directly at Asian buyers in order to take advantage of Australia’s incredibly generous education and health care system at the expense of Australian tax payers while forcing young Australians out of their own society.

    Disgusting – and yet still, nothing happens – not a damned thing.

    These apartments are on one of the most congested, busiest, disgusting roads in Melbourne, it really is an absolute hell hole. I would prefer to live in the middle of the Hume Highway – at least there would be less braking and engines roaring. Meters from two of the largest, most congested thoroughfares in inner Melbourne.

    These apartments are skinnier are barely wider than a bed – That is truly astonishing. There is ONE room per house outside of the bedrooms – and the asking price ?

    $1.125 MILLION

    My brain literally fell out of my head and rolled around the desktop.

    Best of luck.

    Previously on this site was the Jika Jika hotel – where you could rent rooms for one hour if you know what I mean – named after a high security prison.





    Makes me sick.

    • I don’t think it is legit.

      “They plan to renovate the interiors and use the house as a holiday home in Sydney.”

      I thought foreign buyers have to pull down established homes and replace them with at least two dwellings. They probably have used some loopholes, though, to buy legally. Not that there’s anything in the article about the legality or illegality.

      Personally, I would like to see ALL foreign buying banned. I want this bubble to pop. But the problem is that there are too many vested interests who want to keep it going (and growing).

      • the problem is that there are too many vested interests who want to keep it going (and growing).
        including the 2/3 of the population who own houses and salivate every time they read Domain. Last time I checked, roughly 1/3 rent, 1/3 own outright and 1/3 have a mortgage. Those 2/3 want the bubble to keep growing.

    • Speaking of reporting, it turns out the Brighton woman who had $1m worth of handbags stolen this week is the wife of a Chinese businessman. They returned home from China to discover their home had been burgled. She’s distraught and they’re extremely private people who don’t want to draw any attention to themselves! No shit! Sounds like one for operation fox hunt.

    • “It last traded in 1999 for $3.02 million when sold by lawyer John Gerathy.”

      If you take the stump duty and other transaction costs into account the net purchase costs should be much higher than $3.02m. Then it was sold for $10.5m after 16 years. For real? During the greatest housing bubble in our history?

      Doesn’t sound like a good return at all. I would be disappointed if I bought a stock at $3.02 in 1999 and sold it at $10.5 in 2015 without receiving any dividend in between. I mean, one could do much better than that by simply putting all the money in Woolworths.

      Oh sorry, I forgot. Stocks are risky and houses are safe here because Australia is different!!

      • The trouble is that PPOR still incurs stamp duty and other transaction costs. One can assume that the total purchase cost of the above house was at least $3.3m.

        Meanwhile, the total fully franked dividends accumulated over the period were about $9 per share. The purchase price of WOW on June 30, 1999 (mid-point of the year) was $5 per share. So one could have earned 180% from fully franked dividends alone. Then, $3.3m worth of WOW shares would have earned $5.94m by now, without selling a single share.

        If one needs the proceeds of $10.5m now for some reason, one can sell a small fraction of his WOW holding to cover the difference. The closing price of WOW on Friday was $26.73 per share. You can do the math. There is no way you could have done worse by putting all your money in WOW in 1999.

      • But it is the buyer paying stamp duty, the seller has a clean exit. Point taken with the WOW example though, curious as to how would an ASX basket would look.

      • The issue is the gearing level you can get via property. He could have put down a 10%deposit, then ended with a tax free gain. Verses wow. Geared at say 50%, and taxable at the end. This is the issue, it’s a fkn joke.

      • Interest rates were quite high in the middle part of 1999-2015. If you borrow 90% for PPOR, as you suggest, you cannot deduct the interest costs. If it were for IP, you would incur CGT when you sold the house in 2015.

        And I am sure you can leverage quite a bit with WOW if you want (up to the LVR of 75% for Commsec) for which the interests are fully tax deductible.

        You can calculate the total return of the above house for the 2 limiting cases of (1) PPOR and (2) IP. I am sure no matter how you look at it, there is no way you could have done worse with WOW.

      • dumpling, you also have to take into account the rent one would pay over that period if they don’t have a PPOR. Not saying you wouldn’t still be better off with WOW shares but we’re all much wiser in hindsight.

  11. Question: How many different house valuations can a landlord request?
    A mate of mine (lives just outside Newcastle) told me yesterday that his landlord was having the property valued for the 3rd time in the last 2 months. Naturally he’s pissed (4 inspections in 2 months) but it leaves me just wondering how many valuations can an Ip owner request? Does he get to pick the highest? Don’t really know much about how it works in Australia but this “shopping” for the highest valuation seems a little odd to me. Does anyone know the law on this issue?

  12. TailorTrashMEMBER

    Attended an auction in Sydney today and had a free Coffie from a mobile green van with DOMAIN printed all over it .
    Asked the young girl who served my cappuccino who supplied it she said the van was supplied by Domain and her and her mate were employed by Domain.

    Ah well ….if it all goes to custard they will be in a good back up business !!

    Ps ……….her well informed opinion on the state of Sydney real estate was that a change was in the air …….she thought that was good as her and all her young friends were now well out of any chance to be homeowners.

  13. “Reason for low rates is real, monetary and financial – Martin Wolf” ???

    Sheer nonsense !!!!

    • Just a comment, but its likely not a bad way to launder $, just over pay to a mate, or then get the seller to repay. Criminal minds everywhere, pitty the ato doesn’t employ a few to wake up to what’s likely going on in some situations.

  14. “Between 1986 and 1992, Croasdale’s team looked at both the positive and negative effects that a warming Arctic would have on oil operations, reporting its findings to Exxon headquarters in Houston and New Jersey.

    The good news for Exxon, he told an audience of academics and government researchers in 1992, was that “potential global warming can only help lower exploration and development costs” in the Beaufort Sea.

    But, he added, it also posed hazards, including higher sea levels and bigger waves, which could damage the company’s existing and future coastal and offshore infrastructure, including drilling platforms, artificial islands, processing plants and pump stations. And a thawing earth could be troublesome for those facilities as well as pipelines.”


    I love how sociopaths think !

    • It’s only the bottom line that counts. Just look how they responded with the link to tobacco and cancer, by lying, obfuscating, hiring “scientists” to claim otherwise, and marketing to less aware populations (developing countries, teenagers, etc).

      “A General Manual of Denialism”

      * attack the messenger
      * cherry-pick the data
      * minimize the problem
      * call for more evidence
      * hire industry friendly scientists
      * create front groups
      * question the personal motives and integrity of the scientists
      * cite nonexperts with minority opinions as authorities
      * manufacture doubt
      * shift the blame
      * delay regulations
      * question the science
      * divert attention
      * frame the issue as a threat to personal freedom
      * claim that acceptance would repudiate a key philosophy, religious belief, or practice of a group.

  15. Where ohh where is Hugh and others that were spruiking Texas RE, if not Texas itself as the – Gold Standard – economy…. oops….

    “Aaron From Texas

    Hello Mish,

    Good article on Chicago. We are seeing a similar slowdown on the high end here in Houston, particularly in the Energy Corridor (West Houston). Right now Texas has a huge problem with skyrocketing residential property taxes. I was on the local news last night talking about the City of Sugar Land’s latest exercise in corporate welfare as they gifted about $8 million in new tax incentives to Schlumberger. That’s $8 million that will be strapped to the backs of homeowners who have no real access to due process to fight our corrupt appraisal districts. It’s actually fairly easy for corporations to get a nice discount from the CADs because Texas is a non-disclosure state, and the CADS get roughed up when they are sued in district court.

    Aaron Layman

    Oh Those CADs

    I gave Aaron a call. “CAD” stands for County Appraisal District. It seems the CADs go way out of their way to appraise business property low and home prices high. They can get away with it because sale prices are not disclosed.

    Aaron has his own real estate business and a blog. He wrote about the Schlumberger deal recently in Sugar Land Homeowners Get Steamrolled.

    In a second email Aaron wrote …

    Hi Mish,

    It was a pleasure talking to you. Thanks for the call. We have a “Sugar Land” TX, but not a “Sugar Town”. My market here in Katy is more directly tied to the Energy Corridor. We have seen a very noticeable drop in new construction sales here this year in Katy and West Houston. Builders were chasing the high end of the market, and now those homes priced at $500,000 and higher are not selling nearly as well. What a surprise!

    Cross Creek Ranch was one of the nation’s hottest spots for new home construction in 2013 and the first half of 2014. Now things are rolling over. 6 of the last 7 months have resulted in negative YoY prices. One of my clients was able to get $119,000 off of the original list price for a new spec home.

    For additional background, I am not just a licensed, practicing real estate broker. I am also a licensed educator and frequent blogger. I enjoy writing, and I have become fascinated with the crony capitalism from the Federal Reserve and various levels of government. Our financial markets are now a comedic farce, similar to our warped & manipulated housing market. It is an absolute travesty what is happening in this country, and I am continually amazed at the lengths our politicians and apologists will go to as they attempt to whitewash all of the fraud that is taking place and keep corporate criminals out of jail.

    Interesting times!

    Best Regards,


    Skippy…. as Mish once said to a comment I made at his blog to another commenter…. skippy is just politely trying to tell you that you were… lied too….

    • So a company is moving its national HQ to a county in Texas in exchange for a limited 10 year property tax holiday. And somehow that proves Texas RE model is wrong? You think that does not happen in California or any of the other states?

      You are delusional, you officious twit.

      • @Mav,

        The only thing delusional is your projection about – my – ‘assumed’ issue[s, did you not read the link?

        Skippy…. comprehension issues – ????

    • I’ve read the article and your post twice now, and I have no idea what point you’re trying to make.

      • Here let me give you a hint dr and mav, intentional disparity between land valuations e.g. lower valuation and tax offset to corporatist, whilst higher valuations and taxes for homeowners.

        Skippy… what is truly funny is a bloke like mish groks it, yet you two play dumb….

      • So you take that one anecdote and somehow you are scandalized by that? Isn’t there similar valuation differentials all over the world?

        Mav..Skippy is a pointless, officious twit.

      • Smell the corruption Mav or just as you say…. everyone’s doing it… must make it ok….

        BTW the tax payers are being double taxed, gift to corporatist [who also use public infrastructure] in both cheap land and tax concessions – out a decade] only to be hit with higher land valuations [arbitrary] and increased taxes – out a decade.

        Seems you both missed how that game works out, see Walmart, bleed counties and states dry and then piss off leaving tax payers holding the bag.

        Skippy…. like mish is some radical socialist or something… what – ???? – you two are a couple of closet Ancaps or something – ????

  16. A friend of mine went to an auction in Clayton South (Melbourne) and she said the house was sold for $750k (approx). There were 3-4 people bidding. After the house was sold, my friend went up to one of the bidders and asked “did you actually want to buy that property?” and he responded “No”. Then she asked “then why were you bidding?”. He smiled and walked away, he did not give her a response.

    -Was he a fake bidder employed by the RE agent/govt?
    -Was he just arsing around?
    -Was it Reusa?

    Another house in Clayton was bought by Overseas investor a couple of years ago. The house was not rented out, the owners let it become dilapidated. According to the RE agent, they applied to subdivide to build three units (they haven’t been built yet) and now the dilapidated house will go to auction for $1.3million.

    • Went to an auction in the hills district of Sydney yesterday. An asian girl of about 20 bids $1.1 mil, everyone walks away after some begging from the auctioneer. But the weird thing is that he announces it did not get reserve (better houses have sold for less so I thought the bid was overs) and he ushers the girl inside to bargain. He said that a sold sign will go up but it hasn’t and the result was not recorded. Maybe an RE plant like you spoke of?

  17. The Traveling Wilbur

    We are at that point in the commodities downturn and the US ‘recovery’ where it seems timely to reflect on the winning and loosing prognosticators… and hands down the winner is Mr H. Undoubtedly. As to the biggest looser (other than the Australian economy and Atlas shareholders) who could we nominate as a self-proclaimed expert on all things iron-y, an industry insider with their finger on the very pulse of the latest developments in the west, a man with unprecented contacts both here and overseas and an infallible track record in the biz? Well, no one actually, so instead lets hear from 3d in his own words what it was that the future had in store for the Australian economy.

    To be fair, predicting things is hard, especially the future… as 3d demonstrates as follows, in chronological order:

    Simply comedy IO/gold
    October 20, 2011 at 9:27 am
    It would be better to plan assuming a more moderate position (allocate expenditure on that basis) and anything above that is cream – to forward plan on peak return solely is foolhardy. This would then be more aligned to resource companies forward planning methodology, they well understand the cyclical nature of the business. [ROFL]

    Warning, do not read the following while eating or drinking:
    October 20, 2011 at 9:34 am
    My guess would be that if iron ore prices dropped by two thirds over the next twelve months some sort of global calamity had occurred – $150 to $50? Commodities would be the lease of our problems. [sic]

    Gas prices to survive any commodities slump!
    August 29, 2012 at 12:51 pm
    Can anybody tell me why the collapsing commodity prices and slowing global economy will not have any impact on the demand for LNG?
    August 29, 2012 at 6:30 pm
    Power generation.

    2012, the year the IO price stabalised
    October 15, 2012 at 10:06 am
    C’mon mate, take the Kouk view. Sure, a drop in prices (from record levels) – the new normal perhaps – but nonetheless demand continues at pace and price has steadied.

    Stimulus will save us – it’s a good thing! (as long as it’s in China and not here)
    October 15, 2012 at 12:03 pm
    China will stimulate. Guaranteed. Not to the extent post GFC, but enough.
    [Not enough apparently… still, there’s always the next crack at stimulus prediction in 2014, yep… you guessed it. See further below.]

    Well… the jury is in, and 3d is in need of an endoscopy
    October 15, 2012 at 12:20 pm
    Well I’m happy to run with it [IO “demand holding up”] until it is proven wrong…and my gut feel is that it won’t be.

    Balance is Abbott and Hockey coverage dependent it would appear
    October 25, 2012 at 2:38 pm
    Nonetheless The Oz, as always, maintained its strong focus on balance and fairness – and publishes a range of views

    $120 4EVA!
    November 6, 2012 at 9:13 am
    You [Mr H] left out the good bit, Mitsui see $120 being supported on back of continuing stimulus.
    [There was more but it was by way of justification rather than the usual equivocation and someone-else’s-view disendorsement waffle. Too long and uneccessary to include here.]

    Australia is not just a one-trick economy
    February 6, 2013 at 4:30 pm
    I read Das yesterday. Both Garnaut and Das have correctly identified the economic dislocation we can expect should the resources boom/ToT crash. Das’ Nauru comparison detracted from the piece. We are not Nauru, a tiny financially and institutionally unsophisticated economy reliant on a single product.
    [I’m glad 3d is quite literate ’cause you could not make this stuff up. Time for him to get Das Boot from his paymaster?]

    • The Traveling Wilbur

      3d lashes out at energy Dr Dooms!
      October 22, 2013 at 12:27 pm
      The OECD (acronym now for Organisation for Ejeets and Capital Destruction) has recently opined on the risk potential ‘stranded assets’ in a carbon-entangled world may pose to oil/gas/coal energy producers.
      Will not at all be surprised to see this start a blowback from relevant parties and we see momentum build and serious challenge engaged to negate the growing alarmism and inherent eonomic threat.

      China to stimulate again after having stimulated “enough” already
      1: March 17, 2014 at 2:45 pm
      New Urbanisation Plan to create huge demand for public infrastructure [hmmm… really?]
      2: March 17, 2014 at 4:43 pm
      All going well this should be the template for a number of years to come [oh dog…]

      CSG prices to hold
      April 3, 2014 at 11:08 am
      UE – might be time to loosen up on CSG (perhaps proviso 10% reservation) otherwise eventually we may be paying international prices for gas.
      HnH thinks it’s going to get a lot cheaper. But I wouldn’t bet on it

      24-days after calling ‘stimulus in our time’:
      April 10, 2014 at 5:55 pm
      Lol. You need to tell Lorax that. I’ve said ‘No stimulus’… there’s enough in the pipeline.
      [Backtracking… true – see above. But correctly! But fiscally-speaking, incorrect anyway as things turned out.]

      Caught out on ‘agnostic’ global warming belief
      1: April 15, 2014 at 6:50 pm
      HR sorry to disappoint but I’m agnostic on global warming and a believer in climate change – don’t see why the climate would stop evolving now! 🙂
      2a: July 14, 2014 at 5:21 pm
      AGW alarmist claims are a lot of hot air.
      2b: September 9, 2014 at 6:16 pm
      Much ado about nothing. Too many Climate Spectators with too little to do now the hiatus is here to stay and the AGW scare is abating

      Leadership issues, what leadership issues?
      April 22, 2014 at 6:18 pm
      Labor politics is broke but for the Libs it’s still pretty much business as usual. …

      3d on: no one really votes Green
      April 22, 2014 at 7:58 pm
      Monkey I think that very fair comment. The Greens are for many little more than protest vote ( now shared with PUP ). It is up to the majors and media to ensure Green inadequacies are as lovingly exposed as those of Labor and the Libs.

      3d on: mining stocks
      June 4, 2014 at 1:44 pm
      Aj – want a piece of the action, buy shares in your favourite miner – bet your super fund has done it for you.

      Illegal and/or foreign-buying of Australian RE? Nothing to see here… move along.
      June 19, 2014 at 2:27 pm
      Foreign purchases seem limited to select segments of the market, leaving plenty of options for all. I don’t really see an issue.

      • The Traveling Wilbur

        “And 8 has a fortuitous ring to it” and IO to go higher!
        August 12, 2014 at 3:02 pm
        Former World Bank economist sees two decades of circa 8% growth in China: exports are booming; emerging middle class demanding more consumer product (rolled, flat, stainless etc) for white goods and vehicles; China is transporting its infrastructure model to developing countries around the region and Africa; exports of Chinese produced steel and consumer goods find new markets etc.
        At current IO prices significant displacement of Chinese domestic IO production has taken place – there is a happier medium for all – and it’s higher!

        Oz gas and prices expected to rise!
        August 21, 2014 at 10:17 am
        Agree new projects unlikely at present but expect that will change: waiting to see FLNG prove; US exports fail to ignite and pricing consolidate!

        Quality IO from Atlas is the go for the future
        August 28, 2014 at 8:02 pm
        RTime – Your comment has gone – I’m sticking with new mill demand but agree re both exothermic benefit for many mills and specific production – Sino-Citic, Karara, Atlas and the mid-West may yet have their day

        Reef scientists are wrong but I forgot I agreed with them earlier
        1: September 9, 2014 at 10:30 am
        It’s [dredge spoil] not going to kill the reef; Crown of Thorns might though.
        2: August 18, 2014 at 10:23 pm
        There was a Conversation article recently which identified a range of threats to the GBF of which dredging spoils were but one.

        Oil’s well for LNG in Oz
        February 5, 2015 at 2:33 pm
        Generally 70-90% of gas from Australian projects is contracted supply. Leaves a little for the spot market I guess. And there is more than one buyer for spot.

        But the most amusing words extracted from 3d should be credited to:
        June 19, 2014 at 1:40 pm
        So please tell me 3d1k that you haven’t got an exit strategy planned.
        June 19, 2014 at 8:44 pm
        An exit from what? [Doh!]

        Actually, maybe the last word should go to the man himself, who back in 2011 almost got one right and seemed like an almost totally different person… makes you think dun’it?
        August 26, 2011 at 8:49 pm
        If the AUD goes to 60-70 my guess is there is a global recession and I don’t see the Australian economy roaring back to life any time soon. Hell of a lot of debt to work through, Aussie banks under pressure, woeful trade, yada yada yada.

      • To be fair, some of those were probably written by the intern. As for the rest, I don’t call it the ‘George Costanza of political economy’ for nothing. It’s wrong about almost everything.

        There were also a number of occasions where it was caught straight-out lying about the contents of specific climate change papers. And remember when it started going on bizarre rants about hispanics operating photo booths at Walmart? Happy times!

      • 3d, or not 3d, that is the question:
        Whether ’tis Nobler in the mind to suffer
        The Slings and Arrows of outrageous Comments,
        Or to take Arms against a Sea of Sockpuppets,
        And by opposing end them

    • OK Unravelled Wilbs, I’ve had a bit of a look at your selected excerpts – a bit weird to the way you’ve carved the comments up, out of thread context and incomplete – but you had your agenda.

      Pretty hard to find anything of substance there I materially disagree with, even now. All things being equal, any of our comments made up to several years ago, were a product of the time!

      An IO price of $50 is pretty calamitous, to producers and the nation, China slowing was always my caveat having impact here and more broadly. That said, IO demand from the Australian perspective has stood up well. FMG are still here. A lot of steel continues to come out of China. Infrastructure continues with a concerted effort to clear local government debt barriers and build the Silk Road. I do think the global economy is skirting with recession. The collapse of oil prices is the biggest story in town – and again how Lucky were we that as the AUD tanked, oil tanked further thereby sparing real pain across the economy. LNG is a mixed bag. I’m still skeptical as to US shale, much is now junk status and most uncommissioned projects unlikely to go ahead at this stage.

      AGW is being gradually being dismantled, morphing into the murky realm of Climate Change and after a two decade pause, falling off the radar of ordinary people, if not yet the regulators and those who make a living generating fear.

      Re serious voting for The Greens, meh, they have one Member in the House of Reps. The Oz is our best paper. Labor was a debacle in Government. Each self evident.

      Finally, lest we forget, respected economic commentators were calling for regulatory intervention to slow the magnitude of the mining boom, such was the belief…

      Cheers Wilbs and thanks for the weekend workout 😉

  18. The Traveling Wilbur

    Why was this necessary? That’s an easy one… It was spurred by 3d’s vain attempt to rewrite his personal history on the very day and in the very post where MB declared victory:

    That was too much to bear.

    I can’t bring myself to republish any of the ass covering half-truths he posted there (hence the link for those with the stomach for it), suffice it to say, his comments on that day relate to ‘what-if’ scenarios he made clear in the past were NEVER going to happen without some post-GFC uber-tsunami of unanticipatible misfortune sweeping the globe. And he was wrong about that too. Here’s the link where he puts that in black and white in his own words:

    Secondly, and more importantly, no one should be forced to suffer the one-eyed pontifications of someone who gets things so wrong lest some poor unfortunate stumble across such mind-numbing meanderings and take them to be the work of the man of perception and foresight that his occassional self-agrandising comment of the ‘my-in-the-know-mates-in-the-company’ type purport him to be. Think of this as an MB public sevice anouncement in other words.
    The mantra of ‘everything is fine, business knows what it is doing, you are just too dumb to see it, so get out of the way and vote for smaller government so we can make your life better in ways you cannot possibly imagine [while we smile gleefully as we screw-over you, your kids and their kids]’ must end. The ‘too dumb’ part at least…

    In that respect: I hope this helps.
    To sum up, this guy reminds me of the dufus that made the news recently who blindly followed his GPS’s orders onto some railway tracks, bailed out of his vehicle when he finally saw an oncoming train (which admittedly took a few years to arrive) watched his leveraged, uninsured vehicle get smashed, and who is still trying figure out what went wrong and why his vehicle is now in tiny, tiny pieces.
    And to put that in other words:
    Never, in the field of economic endeavour, has one man, been so wrong, in front of so many, about so much, so often, for so long.

    Have a good weekend y’all.

    • Ballad of the Minebot

      Unravelling Wilbur’s been a busy lad, has a talent for the forensic
      Polling through posts of old, seeking retribution Dickensik
      Flattering I have to say, to be the focus of such intense attention
      Shall I lay my cards down and humbly seek redemption!

      A voice of sanity with clarity crystal clear, the conscience of the blog
      One who believes in reward for effort: one kid three dogs
      One not easily caught in the web of reactionary alarmist spin
      And most of important of all, who chuckles as you put the boot in!

      China Fan Boi, resources buff, Randian aficionado
      Teller of unwanted truths, threatened with incommunicado
      Knows climate is in constant change, carbon not the culprit
      Piques the climate warriors when they preach from the pulpit!

      Supporter of taxes low and limited government intervention
      Fiscal conservative, social liberal, small L libertarian intention
      Welfare as a safety net and not a way of life
      Knows expressing such on MB guarantees a degree of strife!

      There’s been a few ups and downs on the prescient MB ride
      Irritation from Holes, deletion from Prince, lucky had a tough hide
      Arguments, agreements, laughs and consternation
      Universal recognition of rampant macrobation!

      As Taylor says and Minebot agrees, haters gonna hate
      So draw your weapons, take your aim, no time to hesitate
      Spew your bile, vent your spleen, take your best shot
      Bot’s grown accustomed to occasional skirmish with you lot!

      Let fly, strike hard, double back and rain the blows
      Score a point, if you can, three if in rhyming flows
      But as the dust settles, and the anger seeps away
      Remember one of us is impervious, doing this for pay…so you say!

      Let’s agree the verbal stoush, the entertaining to and fro
      Celebrates diversity of opinion, and our shared braggadocio
      Comments civil, the barbs sharp, and the humour close to hand
      Only made more perfect when the Minebot rules this wide brown land!

    • Ballad of the Minebot v2

      Unravelling Wilbur has discovered a bent for history
      That he kept this unique talent so quiet for so long, no mystery
      Views and opinion, forecasts and prediction
      Only the brave dare speak out, most fear affliction!

      One twenty a ton, a great price for our iron ore
      Penned in a lighthearted way, said it was the floor
      Indeed it was for many a month, riches did ensue
      Alas good things come to an end, including windfall revenue!

      O the Lucky Country, blessed by minerals all
      Survived the gfc on the back of our resources haul
      We rewarded ourselves handsomely, nothing did we pine
      Enjoying it at the pinnacle, a global wealth sublime!

      A choirboy and a redhead, blew out the national debt
      And believing in the never never, placed the losing bet
      Their whirlwind of regulation, their feckless spending
      Ensured generations not yet born, debt never ending!

      Intent on moral fiscal rescue, a most unlikely Knight
      Man of passion and conviction, with the will to do the right
      He defeated the angry foe, the government of The Killing Season
      Replaced hysterical madness, with border security and reason!

      Abbott did not count on a media and Crossbench hell
      Sadly, a good man, unable to work the magic spell
      Another captain lay in wait, and presented in times dire
      A polished urbane philosopher king, he stepped into the mire!

      Immediately he set to work, to build trust and consensus
      Allay fears, unite forces and remove all that was contentious
      Media swooned, the commentariat did love, the nation was on a high
      All rejoicing our 21st century Prime Minister, this man Bligh!

      For there was much need for unity, and focus as a nation
      On the perils our economy faced, the inevitable transformation
      China slowing, our minerals losing shine, our dollar so very low
      Our standard of living in decline, our growth has begun to slow!

      What will become of us, this great land girt by sea
      Have we the ticker to reform, to become all we can be
      Let’s not be riven by partisan hate, let’s give it all we’ve got
      And Wilbs rest assured, it’ll be chronicled by the Minebot!

      • Wasn’t sure anyone would pick up on the Gina connection. Surprised a boy from the Bay Area ( 😉 ) did. Well done.

      • Knows climate is in constant change, carbon not the culprit

        Why can’t you become one of the smart conservatives, you know, like Maggie Thatcher, who believe in science and acknowledge AGW?

        Of course, Thatcher did have degree in chemistry from Oxford, so that differentiates her from 99.9% of neocons, but still, there are others who have not donned the blinkers, such as Arnold Swarzenegger.

        Quote from Thatcher:

        It is no good squabbling over who is responsible or who should pay. Whole areas of our planet could be subject to drought and starvation if the pattern of rains and monsoons were to change as a result of the destruction of forests and the accumulation of greenhouse gases. The environmental challenge which confronts the whole world demands an equivalent response from the whole world. Every country will be affected and no one can opt out.

      • R2M, there’s more to the story my friend

        “In bringing this about, Mrs Thatcher played an important part. It is not widely appreciated, however, that there was a dramatic twist to her story. In 2003, towards the end of her last book, Statecraft, in a passage headed “Hot Air and Global Warming”, she issued what amounts to an almost complete recantation of her earlier views.

        She voiced precisely the fundamental doubts about the warming scare that have since become familiar to us. Pouring scorn on the “doomsters”, she questioned the main scientific assumptions used to drive the scare, from the conviction that the chief force shaping world climate is CO2, rather than natural factors such as solar activity, to exaggerated claims about rising sea levels. She mocked Al Gore and the futility of “costly and economically damaging” schemes to reduce CO2 emissions. She cited the 2.5C rise in temperatures during the Medieval Warm Period as having had almost entirely beneficial effects. She pointed out that the dangers of a world getting colder are far worse than those of a CO2-enriched world growing warmer. She recognised how distortions of the science had been used to mask an anti-capitalist, Left-wing political agenda which posed a serious threat to the progress and prosperity of mankind.

        In other words, long before it became fashionable, Lady Thatcher was converted to the view of those who, on both scientific and political grounds, are profoundly sceptical of the climate change ideology. Alas, what she set in train earlier continues to exercise its baleful influence to this day. But the fact that she became one of the first and most prominent of “climate sceptics” has been almost entirely buried from view.”

        I share the Thatcher view.

      • Lady Thatcher was converted to the view of those who, on both scientific and political grounds, are profoundly sceptical of the climate change ideology

        Because by then the North Sea Oil industry had her by the balls, if you’ll excuse the image. It’s amazing what people will say when their funding is threatened.

        In 2003, towards the end of her last book, she issued what amounts to an almost complete recantation of her earlier views.

        2003? Her senile dementia had already kicked in:

        Carol broke the news that her mother had been suffering from dementia in 2008. She first noticed her mother’s memory failing over lunch in 2000, relating in her book how she “almost fell off her chair” with surprise. As dementia tightened its grip, Thatcher frequently forgot that her husband, Denis, had died.

  19. St JacquesMEMBER

    How can handing final judgement over laws passed in our elected parliaments to non state ISDS legal tribunals outside of our national sovereignty NOT BE A MASSIVE DEAL MR GITTENS???????
    It’s soporific articles like this by well known opinion makers in the MSM that activate my conspiracy theory suspicions. Are these well known opinion makers being paid by corporations or other agents of the TPP? Or are they just getting woolly headed and lazy with their advancing years?

  20. Outstanding win by the Wallabies against Wales this morning. No tries but take-no-prisoners exciting. Particularly impressive was the scrum – Ledesma’s training in scrum dark arts is telling – and the defence (of both teams actually) especially when Australia was down to 13 players for most of a 15 minute period defending the try-line – Wales crossed twice only to have knocked on once and being held up in the other. Black marks to the repeatedly losing possession in attack, though this is partly due to that Wales defence.

    Best of all is the esprit de corps – Cheika has done this outstandingly well.

    • Since you bought up sport, here is a song about cricket that is a lot better than any song about cricket should be.
      It is about Shane Warne’s Ball of the century and the band, the Duckworth Lewis Method, only do songs about cricket.


      • thanks footsore, just watched it with my 12 yo cricketing lad and his sleep-over friend. Love the self-deprecatory humour in that.

    • No problems Rage.
      The song writer is Neil Hannon.
      His other band, the one that pays the bills, is The Divine Comedy.
      I would rate their album Promenade as one of the best of the last 25 years.

    • Ouch.

      Not knowing much about Labour, Bowen and Albanese seem the obvious contenders.
      Lindsay Tanner would have been a good card to play about now.

      • Albanese is not a serious candidate. It’s a speech thingy. Bowen is smart, smart enough to remove any vestiges of ALP from his campaign office last election but can come across over-groomed and petulant. Lorax will pop up and cry Plibersek Plibersek. No.

      • 3d,

        I’m sure that you must realise that your saying ‘Anyone but Pilbersek.’ is an endorsement of her.

    • By Bye Bill.
      In March,(this year) a move to crack down on (Labor Party) branch stacking through rules requiring all membership dues be paid by traceable means, such as a personal credit card, was defeated at state conference.
      Labor even offers members a $15 discount if they pay by traceable means.

      Looks like the boys are finally cooked this time. Man we are getting through some parliamentary leaders in this country. Was just out at the airport and Big Clive has removed the National Coat of Arms from the Fin of his (not too small) jet and replaced it with the Aussie flag. Wonder what is going on?

      • Some market research showed that his target audience responded better to the flag than the coat of arms.

    • Excellent, I hope it presents a compelling case for action. Thanks be to an independent ABC, commercial media is hopelessly conflicted.

      • Yes, let’s hope there is some mention of the appalling lack of data on these transactions.
        Lets hope someone asks Brian Wilson why the FIRB has not commenced a prosecution in 8yrs.
        Let’s hope someone asks Kelly O’Dwyer why Brian Wilson is still chair of the FIRB.
        Lets hope some one asks Kelly O’Dwyer why she didn’t get the data during her year long inquiry.
        Let’s hope there is some mention of the fact that there is still nothing preventing a foreign national from registering an unapproved and illegal transfer of title of an existing Australian dwelling in their own name.
        Lets hope someone asks Kelly O’Dwyer how many Australian dwellings are owned by foreign nationals.
        Lets hope someone asks the Treasurer or the Attorney General why they haven’t amended the AML laws to include real estate transactions.
        Don’t hold your breath

    • GunnamattaMEMBER

      I will be interested to see if there is any comment about the legality of the money departing China, and the verification of that legality coming into Australia….

      …….and the thought that it might have a ‘princeling’ on would surely be of interest too (both here and in China). I have heard stories (out of HK) more than once about some guy who is reputed to have more than 100 apartments in Sydney. I will also be interested to see if they lay anything on an entire industry facilitating this (while being careful not to ask questions) in Australia (and presumably Canada, NZ, the US and parts of the EU).

      • The Weekend Australian has a story you’d like Gunna: Bentleys, Harbour Cruises on luxury yachts, wining and dining, midnight finishes…all the effort put in by hard working realtors to lure and secure the top end Chinese buyer.

    • Don’t expect any support from Labor.

      “Labor accuses government of unfairly targeting Asian investors”

      The political fight over Chinese trade and investment is set to intensify, with Labor accusing the Turnbull government of unfairly targeting Asians with its foreign investment crackdown.
      Labor is set to oppose the government’s plan to impose stricter controls on foreign investment in agricultural businesses, with one prominent NSW senator (Sam Dastyari – say no more) likening it to the White Australia policy


      Labor are seriously misreading public sentiment on this issue.

      • Except Australians are not price out. You can see that debt is rocketing up at a very fast pace. If Australians are really prices out, the rise in debt would slow down while house price continue to rise.

        The reality is Aussies who are willing to leverage are pricing out Aussies who are prudent.

  21. This, from breaking smart, might be relevant here 🙂

    In previous issues, we looked at biases like solution aversion and the objective paradox that can derail attempts to break smart. Continuing with that theme, here’s another big one: being unable to listen to people who disagree strongly with you. This is an especially strong force on the Internet and can severely limit the value you get out of being online, as this great xkcd strip suggests. The key to cultivating this ability is an idea called Miller’s Law.
    1/ The parable of the three blind people and the elephant is deeper than it looks.

    2/ In complex systems, there often IS no elephant. Or what is almost the same thing, no sighted people.

    3/ To navigate, you must be able to switch perspectives fluidly. Most people think of this as an emotional intelligence skill.

    4/ They think it is about cultivating empathy, learn non-violent communication and active listening.

    5/ These behaviors create harmony, but harmony is neither sufficient, nor necessary for complex-system comprehension.

    6/ Comprehension involves either harmonizing truths (not people’s relationships) or proving one side wrong.

    7/ For comprehension, you need to reconstruct others’ mental models, and a principle called Miller’s Law helps do that

    8/ It states: “To understand what another person is saying, you must assume that it is true and try to imagine what it could be true of.”

    9/ The computing metaphor of running a “virtual machine” of the other person’s mental model in your brain shows why this is hard.

    10/ You must have enough room (an “open mind”) and preferably, a faster “processor” than theirs.

    11/ The high cost of doing this means you should only do it when you suspect the other person is not just bullshitting, trolling or lying.

    12/ Frankfurt’s definition of bullshit, as the utterances of someone who is indifferent to truth rather than lying, fits neatly here.

    13/ With bullshit — and there’s a lot online — Miller’s Law does not apply. There is nothing the other person even WANTS to speak truths about.

    14/ Liars and trolls are also not worth a Miller’s Law effort. I’ll leave you to think about troll and lie detection for yourself.

    15/ Once you eliminate bullshitters, trolls and liars, you are left with sincere people who believe they are right.

    16/ Your job is to either get their truths to harmonize with yours, prove yourself wrong, or prove them wrong.

    17/ Only the first goal is truly interesting for Miller’s Law. If you suspect only one of you is right, it’s a zero-sum debate about a non-complex system.

    18/ To get truths, rather than people, to live together in harmony, you can use either a fox or hedgehog strategy.

    19/ The fox strategy is to simply learn when to apply each truth. A hedgehog strategy is to seek a Grand Unified Theory.

    20/ Either way, the job is one of constructing a mental model that is intelligible to you, out of the data that is the other person’s view

    21/ There are no formulas for this, but there ARE three handy rules of thumb that prevent 80% of Miller’s Law failures.

    22/ First, resist an attribution error where you prematurely conclude the other person is just biased and generalizing from their own experience.

    23/ The second is to be sure to translate across the greatest divide in emulating other minds: moral reasoning versus logical reasoning.

    24/ The third is the simplest yet most violated: factoring out dislike. We easily assume somebody is wrong just because we dislike them.

    25/ If this sounds like a lot of work, you’re right. But it’s worth it. I believe a high-effort Miller’s Law application is at the root of many great relationships.

    26/ This is especially true on the Internet, with it’s currently low emoji-fidelity relationship support capabilities, based 90% on text.

    27/ As YouTube comments show, most people utterly fail to develop quality relationships on the Internet.

    28/ But a minority not only succeeds, but often creates far richer relationships online than offline.

    29/ This minority enjoys a very powerful edge over those who are not skilled enough at Miller’s Law to thrive online.

    30/ Miller’s Law blackbelts in healthy online forums tend to be 6-12 months ahead of the curve in their fields.

    31/ The situation awareness edge may seem small, but it compounds over time to create a vast lead in mental model sophistication.

    32/ As our worlds shift increasingly to online streams, your fate might very well rest on your ability to create such a lead.


    • Marc Andreessen technoglibertarian quasi religious purview – ??????

      If you had not noticed the list you provided looks just like someone writing code, which is quite reminiscent to the approach used in the project called the bible code.

      Skippy…. its a bit like Chomsky Language Acquisition argument imo…

  22. PERTH is the second-most overpriced property market in Australia despite falling house prices – and remains more overvalued than even booming Melbourne, according to a national property report.

    Perth property is overvalued by 27 per cent and is ranking just below Sydney to take the title for the most overpriced city in Australia, according to SQM Research’s Housing Boom and Bust report, which will be officially released on Tuesday.

    SQM Research managing director Louis Christopher said Perth prices were yet to catch up with the mining downturn and would experience an “accelerated correction” in the next 12 months.


    • Quick, send moisturiser packs and beauticians to Perth! The Beautiful people are getting flustered with the negative press – they know property prices only ever goes up. Labour will come to the rescue with relaxed foreign investment rules to support the Perth property market and calm will once again be restored to the land.

      Two sides to every Chinese investment story. Was at a dinner last night where Sam Dastyari and a number of other federal, state and local politicians were present. Most of the Chinese present have started successful Australian businesses from nothing and many are giving support to help the next generation in their areas start a range of different businesses (this group sponsors 20 young entrepreneurs with $1million funding each). Repeated Australian governments have failed to adequately invest in the real needs of Rural Australia, so maybe Chinese investment would be better.

      • I don’t have a beef with Chinese investment nor property purchases. The major impact to the Perth market is the winding down of the mining investment boom: the decline in new intrastate arrivals takes pressure off housing demand and rentals and will eventually impact incomes of many who relied on well paid mining sector jobs (direct and indirect)…

      • Sorry 3D – second paragraph should have been under an earlier post – just got lazy. In parts of QLD I am familiar with, we are seeing exactly the same thing with mining jobs. Brisbane not being impacted at present, but can’t imagine it be long before it will be. As the mine closures continue, spending drops as LNG projects start to go live, commodity prices remain depressed and el nino works it horrors (yes cattle prices are extremely high at present, but so are the sale rates to abattoirs so restocking will be an issue) on both crops and livestock, QLD revenue will decline. I fully expect to see Public service job cuts next year and a lot more distressed farmers in need of drought relief. Maybe by June or July, we will start to see stories of a market decline in BNE.

      • They don’t have to be young millionaires. There are already many lost skills we need help with, reference the Burmese refugee community efforts on the Gillot Farm as market gardeners, as well as Dr.Tronc’s quail farm. I really would have trouble finding an Australian market gardener on the southern outskirts of Brisbane, they are all sitting around since their father died waiting for the land bankers to get to them and make them rich.

  23. Here’s some poetry…

    I was out on the investment highway, straight line through the ZIRP desert, when lo, a liquidity mirage appeared in the distance. I knew that scooping up that liquidity was difficult, gain always seemed to recede into the future, but with smoke and mirrors there is a way. So I stopped and gathered brush and set up my mirrors and lit the fire. This distracts the liquidity so you can sneak behind it and scoop it up, if you a lucky. I climbed into my 4WD SUV and took off over the open desert to corral this fortune. With great guile and a smoking good fire, I surprised the mirage and threw it in my carpet bag. Humming along to the next burg, I stopped at the only motel for the night and inspected the haul. It turned out to be a bunch of out of the market shorts and a bunch of derivatives from counterparties that cancelled each other out. Darn. Forgot to pick up my mirrors as well. – Jay M

    • Then, you rubbed your eyes and realised that those derivatives that your thought that cancelled each other out? They weren’t compensated at all! And you were on the hook for those in the money, but had to stand in line as a creditor for any value owed to you by your defaulting counterparties. The mirage of mutual protection vanished as fast as the worth of your hegded CDO’s and CDF’s did, the last time you trecked through the liquidity desert just, a handful of years back…..

  24. http://www.afr.com/real-estate/ato-…nlawful-foreign-buyers-20150814-giz31h?stb=fb

    A personal email from Australian Taxation Office assistant deputy commissioner Michael O’Neill convinced a Sydney estate agent that a government crackdown on foreign buyers was not in fact “a farce”, as he had previously believed.

    Mr Robert Simeon, director at estate agents Richardson & Wrench in Mosman on Sydney’s lower north shore last week described Federal Treasurer Joe Hockey’s announcement of 6 divestment orders against foreign homeowners and 462 property investigations as “nothing more than a PR stunt”.

    In comments to The Australian Financial Review he claimed there were tens of thousands of illegal purchases.

    But on Friday he said he was “left eating humble pie” following the surprise email and later phone call from Mr O’Neill, who heads up serious non-compliance at the ATO.

  25. I’ll be watching this with a keen eye.

    A friend mentioned (Google has yet to bring up anything to confirm) that also as of either October or November; local lenders will be required to submit the tfn numbers of their customers who’s names appear on the loan docs (I.e. personal named buyers, not people buy in trust or company structures ).

    If true, this would be a dramatic evolution of the crackdown. It would mean that illegal buyers who suddenly have say $1 million appear in their account within a financial year, and suddenly buy a property, will be identifiable to the ATO. The ATO will say ‘where did the $1mill come from?’. The person who’s name is on the mortgage would then have to pay a load of income tax.

    Of course, I can easily think of at least 4 ways that cunning illegal buyers can find work arounds… cash purchases (no lender data needed); using foreign lenders who aren’t subject to the rules, to buy in Australia etc. Plus avoidance of tax on account of the $$$ being ‘family gifted ‘. I wonder how many generations removed are the gifting tax law?? I.e. can 9th cousins gift each other a million $ and avoid tax??

    Sometimes I wish Australia would just get rid of cash altogether. Once we do, there’d be no hiding for anyone and it’d be fair. We would know where all money is coming and going from. No more “cash only” restaurants etc.

    • “Sometimes I wish Australia would just get rid of cash altogether. Once we do, there’d be no hiding for anyone and it’d be fair. We would know where all money is coming and going from. No more “cash only” restaurants etc.”

      That, and add some Georgism as it aims to tax economics rents not the effort that goes into production. The land tax is the big one. Your name is on the title, you pay the tax. Simple. No hiding, trickery. As easy as ABC. If the tradie wants to do everything cash in hand, they can, but then they still pay their taxes on their rents.

      There would seem to be too many nooks and crannies for the cashed up and cunning to hide amongst.

  26. Oh Hugh….

    Tories to build thousands of affordable second homes

    THE government is to build 200,000 second houses to help homeowners onto the buy-to-let ladder.

    In an impassioned speech, the prime minister vowed to end the housing crisis which has deprived millions of a respectable second income.

    Cameron said: “Why should students be waking up in their childhood bedrooms when, with a little help from the government, they could be living in a new house bought by their parents and serving as the capricious, cold-eyed landlord to their friends?

    “We need to shift from generation rent to generation rental portfolio.

    “By the end of my term as prime minister, Britons will no longer be deprived of a bolthole in the country, and thousands will once again be able to earn £500 every weekend by putting their London flat through Airbnb.”

    29-year-old Emma Bradford said: “We’ve just gotten married and would like to start exploiting other people like us.

    “Our dream is to be able to say ‘you can’t have your deposit back because there’s biscuit crumbs behind the sofa’ with a you’ve-hurt-our-feelings facial expression.”


    Skippy…. rimshot….