Weekend Links 27-28 February, 2016

Artist : Jeffrey Smart (Australia, b.1921) Title : Date : 1945 Medium Description: oil on canvas Dimensions : Credit Line : Purchased 1946 Image Credit Line : Accession Number : 7825

The Wasteland II, Jeffrey Smart, 1945, Art Gallery of NSW

 

China

 

Asia

 

Europe

 

 United Kingdom

United States

 

Americas

 

Terra Incognita


Commodities

 

Capital Markets

 

Global macro

 

…and furthermore…

Comments

  1. Just wrote a letter on Conrad Bernardi’s website against negative gearing…to my shame I got a bit personal… To his credit he actually responded.

    Essentially he said negative gearing is a business principle that applies to all investments. Do I advocate banning it entirely or for only the bits I like? Thoughts?

    • In that case have it tied to the business in question.
      If NG was only tied to a tax reduction on profits made as a land-lord then we wouldn’t have people who have no interest in being land-lords taking it up.

    • Corey played that one with the straight bat of a good opener on a green top on an overcast day.

      Ask why people negatively gear with specific reference to the explosion of it after the CGT discount was introduced in 1999. Therein the truth may await…

      • innocent bystander

        correlation is not causation. the CGT discount was discount in name only. the tax payable under the previous and new “discount” formula was in some cases no different, in some cases less, in some more. something MBers can’t seem to digest.
        I’m not defending it. I think it needs to change, as does NG. but the main issue that needs to be addressed is why banks lend the money to speculate on residential property.

    • Ask why business start up costs are not deductible against other income.
      Startups that generate employment.
      You could also ask why the ATO allows negative gearing deductions when the “business” of property investment is structured and unlikely ever to make a profit…. at law the ATO should be denying the deduction.

      • They have medieval economicideas and think that being lords (landlords) that deserve special treatment. In their minds they are above the law that applies to people who do real economic activity. Rent seeking scum. In France this medieval class of parasites was so entrenched they had to be guillotined to allow the country the space to move ahead. Look around the world and history: everywhere this class becomes deeply entrenched with its special tax treatment, the country falls behind, corruption rises unstoppably, politics becomes increasingly chaotic, social inequality and injustice soars, violence rises, the economy becomes a joke.

    • Actually CB is being a bit misleading. The fact is most property investments these days are speculations on the capital value of the asset, ie the aim is to make a capital gain on the asset, not earn an income through an investment. In this case, they should be treated like investments in gold, paintings and vintage cars etc where the interest expense should be included in the cost base of the asset on sale and not offset against other income. The fact that the ATO doesn’t endorse this is a mix of politisation and poor legislative drafting to exclude transaction that are capital asset speculation in substance (if not in form).

      Regardless of this, subsidising speculation in established housing through the tax system is just plain stupid and negative gearing should be axed.

      As the other comments point out, the CGT discount is the kicker but, without this it is just a timing benefit.

      • Found this interesting.
        http://www.theguardian.com/commentisfree/video/2016/feb/24/i-live-in-real-poverty-and-its-not-what-you-think-video

        At 1:32 Kathleen talks about a bankrupt landlord as one of the big challenges they needed to face that helped lead to homelessness.

        I also think its interesting because I think it is where many Australians are heading now that the mining boom is over and we are staring down at a property bust. When you punish property owners who have overextended themselves you can also end up punishing the people who rent their properties..

      • What I like about MB is that people from totally different backgrounds and ideological perspectives can come together and agree that the housing situation is bat$h1t crazy! It’s funny, when I made a similar comment to yours on The Drum a few years ago one of the regular economic libertarian posters attacked me saying people like me that are ruining the country. Basically his suggestion was that individuals know what they’re doing and how best to invest their money. By memory I had lamented the fact we (as a nation) hadn’t invested more of the pre GFC boom into infrastructure, new businesses and other productive assets. I think it’s pretty clear now that even if the property bubble doesn’t burst, channelling so much debt and savings into a largely unproductive asset class will hamstring our economy for many years to come. And yes, while I’m a socialist, I will admit that government and central banks absolutely have to share the blame, but ultimately the bubbly part of this mess is the fault in Individuals. They could have said no to so much debt and they could have diversified their risk much more. They could have also said no to some of the tax cuts and middle class welfare and demanded the infrastructure and services we’ll need to the next 50 years. Ok, ok realistically that last part was never going to happen, but I am sad at the lost opportunity. A lot of people will look back and see the Howard years as the golden years, but I see it as our real lost decade. I mean what do we have to show for Australia’s record period of economic of economic growth? We have over crowded cities, crappy infrastructure, many mines that may become dangerous white elephants, utterly insanely priced shelter, worsen inequity, and an insane amount private debt that may well will end up on the government’s books… I’m happy to take some of the blame, but this mess really has been a team effort.

    • It’s not a business principle.
      The reason NG rental property isn’t caught out by the non commercial loss provisions, is because the ATO doesn’t consider investment in rental property as carrying out a business.

    • By the same token you could say, Banking’s just a business, so why does it need special regulation? Bad housing policy destroys the nation economically. Exhibit A: Australia.

    • Charlie C he has hit you with a flat out lie. Tell him so.
      “Essentially he said negative gearing is a business principle that applies to all investments”
      Claiming tax losses is not NG, what bullshit it is to state otherwise.
      However It is a principle that the claiming of unrelated tax losses cannot be offset against PAYG tax owed. Why is this principle overturned for RE investment?
      Ask Bernardi that..makes my blood boil

    • There are several errors of logic and fact in your clever question. The common theme that binds them is an attempt to constrain things in definitional, technical and semantic terms rather than analysing the policy and its effects. The former lends itself to self interest and ideology, the later to a true understanding of policies effects.

      The definitional and technical aspects of negative gearing I am more than certain you know the reasons for and are merely feigning ignorance.

      You mention principles and consistency. I feel that you are conflating negative gearing with other things, but let us yield the point for sake of argument. A principle is a general rule, value or ideal that attempts to give overarching guidance. A physician under most circumstances will give an antibiotic if a patient has septicaemia. However the doctor will always look at the particular facts of the persons case and modify their treatment accordingly. They try to gage the effects of their actions in a particular case. If a patient has a previous history of anaphylaxis to the antibiotic which would be more important, the broader principle of the patients welfare or the narrower one of giving a particular antibiotic to a particular class of patient?

      Secondly, is property speculation truly a business. Is the concentration of pre-existing property into housing speculators hands, competing directly with families who wish to buy and who now have to rent a business? Do they make things? Do they provide employment? Or are they like speculators of fine art and gold driving up prices? Not of effete object d’art but of people’s homes.

      A large proportion of people if not a majority of people negatively gear, meaning they loose money on their property. Is this out of the kindness of their hearts? No! It’s on the expectation of capital gains, a process of pricing their own children out of the property market. Why else does the government have endless housing affordability enquirers and yet do nothing? Tax payers subsidising a housing bubble which erodes everyone’s standard of living.

      What is the effect of this on the economy? Reductions in productivity as people are forced to commute from the outer suburbs. People pay more as a proportion of income on housing debt and costs then back in the 90s when interest rates were in the teens, because the principal amount on their mortgage is so high. People are less interested in holding land to live in, to raise children or to run productive businesses, but hoard investments for the capital gain. The economy is left bloated and vulnerable.

      I’ll tell you a secret that no policy maker or economist will admit to, and people like real estate agents and property developers don’t want you to know. Land is special.

      As populations grow, as economies and infrastructure grow, it’s value increases. This is not from the toil of the owner, but rather the productive enterprise of the community. This is called rent seeking. The community has a right to the naturally increasing value of land. Various mechanisms such as a land tax, or taxing properties at a modest rate that benefit from infrastructure have been two proposals. Unless you are using land for productive purposes, such as raising a family or running a business their should be a cost to holding it and waiting for price appreciation. The community should profit from the increase in the value of land it has created for you.

      Australia now is a deflated place. We are a two trick pony of houses and holes (mining). The dynamism had been sapped from the place by years of mismanagement on both sides. The disclosures on the number of politicians who own investment properties is staggering, so the inertia of self interest against change had been high.

      One honest man… This is all we need.

      Rant over. Thanks for your thought provoking question. It was fun.

      Adam

      What are the effects on the economy?

      Sent from my iPhone

      On 26 Feb 2016, at 5:11 PM, Bernardi Office (Senator) wrote:

      Negative gearing is a business principle that applies to all investments. Do you advocate banning it entirely or only the bits you don’t like ?

      CB

      Sent from my iPhoneMy response to Cori

    • he is right, first we have to reclassify all investments into natural monopolies (e.g. land) as speculations and than leave NG for all investments, but not speculations.

      BTW. removal of 50% discount and making rules about what constitutes PPOR much more realistic would hurt speculators far more.

      50% discount should be given only to people who used a property as PPOR for more than 75% of ownership tenure and held it for longer than 5 years. certain exemptions should be kept but should be limited to life/health situations and genuine work situations (e.g. getting new job more than 50km from home after being made redundant on previous job + person should keep the new job for at least a year before getting discount)

      people who used property as speculation only (never (<6mth) lived in it) should be taxed extra 20% on CG if they held it for less than 2 years – to discourage flippers who take advantage of desperate, elderly and uninformed people.

  2. There is no way like the Australian way. It’s the law.

    What with the UK’s potential Brexit, London’s Mayor Boris Johnson in the news during the week.
    On his bike and in his woolly beanie.

    It struck me that LONDON is doing it’s best to be bicycle friendly.

    It is doing this by building an extensive and impressive urban ‘cycle superhighway’ infrastructure designed to help ensure cycling is made even more attractive and will be a pleasurable, safe and efficient activity in a global city.

    SYDNEY is also doing it’s ‘best’ to make itself bicycle friendly.

    It has done this by changing the law so that cyclists are required to wear a helmet at all times, carry photo ID at all times and with new, extensive fines in place for those who don’t comply.

    But just to ensure that the changes would be as user-friendly as possible after the new laws were introduced, the Sydney police (who often wear a paramilitary-style blue ‘one piece’ uniform which is said to be to be in deference to the blue overalls worn by the Party members in George Orwell’s novel 1984), were immediately out in force ensuring they could wring as many fines out of the unsuspecting biking populace before the changes in the law were more widely known.

    Maybe tasers to hand? Just in case? (You can never be too careful these days…….)

    And while it is no doubt true that a number of Australian politicians wanted compulsory licensing for cyclists to be introduced, it is less likely to be true that more than one favoured microchipping all cyclists over the age of 16

    Australia
    Love it or leave it.
    It’s the law

    • As the English would say, it’s a load of bollocks isn’t it? I cycle to work everyday, 2 days ago when I just left home my chain snapped. This week I had to drive in 3 times out of 5 days. It’s been a massive pain in the arse. Dealing with peak hour traffic going over the Anzac bridge, paying for parking at Star Casino, where if you stay exactly 1 minute over 6 hours you’re billed a full 6 hours more ($40 parking). Thankfully I leave earlier to avoid this, but still it means I don’t stay longer or work overtime. I have to do that from home.

      Not to mention it takes longer to drive, cycling is fast. The only qualm I have about cycling is the heat and as a result the sweat, even after an ice cold shower my body temp is still high after and I am sweating in my clothes as I dress. Not fun.

      I’ve got no problem wearing a helmet, and I’m always carrying my wallet with ID etc.. However to require these things or get a massive fine is absurd. Like I said in another comment recently I’m starting to see things more like the libertarian’s do…I’ll admit to running red lights and taking a few calculated chances here and there and those are my chances to take. A fine ok, I can deal with it, but the current fines are heavy handed money grab nothing more…

      In Europe I used to use DublinBikes which were publicly available bikes you’d use a card and ride around the city and drop it at another point. You didn’t require a helmet and it was incredibly successful.

      Do you think Sydney is considering such a communist idea? Nah… We like to actively discourage shite like that. We are such a good rent seeking country we’d probably envy the General Motors Streetcar conspiracy.

      • Don’t forget your bike bell, wheel reflectors and front and rear bike lights, nice big fines handed out for these infringements also.

      • How ridiculous. This is just the start. How things evolve. Soon, we’ll have number plates, then rego checks, then compulsory insurance. You’ll need a bell, good tyres, etc etc etc.

        Heard some FW from Bairds office saying “this is about safety, I don’t back away from that”. Makes me want to smash the TV.

        We’ll let our politicians get away with anything and deserve the fragment of Australian lifestyle we had not so long ago. Like I always say, this is directly linked to population growth. Everything is. THE MASSES MUST BE CONTROLLED, and clearly the bigger the masses are, the powerful we politicians are.

      • Don’t forget your bike bell, wheel reflectors and front and rear bike lights, nice big fines handed out for these infringements also.

        Don’t have a problem with requiring a bell and at least some front/back reflectors if riding after dark (all bikes come with reflectors anyway – they’re only not there if the owner has deliberately removed them).

        You can guarantee if you hit someone dressed in black on a bike with no reflectors on a dark road you’ll be the one to blame.

        Bells are five bucks and sounding them before you go past pedestrians on shared pathways is just common courtesy.

        I reckon compulsory helmet laws could do with a bit of refinement so that they only apply to those under a certain age.

      • @ Richard
        Have you ever seen a person fall off a bike without a helmet at about 50-60km/h?
        Get a watermelon and throw it on concrete… it’ll be graphic enough.
        You seem to argue that any safety is there to control the masses. At best, it is silly.

      • This country is becoming a joke and clear outlier when it comes to international norms. A lot of people can see what is wrong with all this new regulation however I am constantly surprised at the level of support by the masses. A lot of people genuinely don’t care about cycling and see these changes as a positive. Why don’t they care? Because they don’t cycle and therefore don’t give a toss. All this recent BS boils down to one thing. Australians are the most selfish individuals on the planet. I don’t want my kids growing up not seeing these rights from wrong.

      • We’ll let our politicians get away with anything and deserve the fragment of Australian lifestyle we had not so long ago. Like I always say, this is directly linked to population growth. Everything is. THE MASSES MUST BE CONTROLLED, and clearly the bigger the masses are, the powerful we politicians are.

        If they said we want to see cyclists have these safety items fitted, I would say yeah great idea and message. But it’s the way these draconian laws get enforced. The severity of the fines that I oppose most.

        Why not catch the light rail instead?

        A lot of reasons:
        1. The light rail doesn’t go close enough to where I live to walk to it.
        2. The light rail costs money.
        3. The light rail doesn’t keep you fit.
        4. I’m sure the light rail gets crowded.
        5. Light rail requires energy, energy production in this country is driven by coal. Cycling is good the environment.

        Don’t have a problem with requiring a bell and at least some front/back reflectors if riding after dark (all bikes come with reflectors anyway – they’re only not there if the owner has deliberately removed them).

        You can guarantee if you hit someone dressed in black on a bike with no reflectors on a dark road you’ll be the one to blame.

        Bells are five bucks and sounding them before you go past pedestrians on shared pathways is just common courtesy.

        I reckon compulsory helmet laws could do with a bit of refinement so that they only apply to those under a certain age.

        I’ve got a front and rear LED for winter months when it gets dark early. Drivers don’t see you anyway.
        I agree a bell is cheap, I just don’t have 1. I usually just tell people I’m coming through though with my voice.

        I wear a helmet anyway, but it’s the way these laws are being enforced and the reason they are doing it.

        This country is becoming a joke and clear outlier when it comes to international norms. A lot of people can see what is wrong with all this new regulation however I am constantly surprised at the level of support by the masses. A lot of people genuinely don’t care about cycling and see these changes as a positive. Why don’t they care? Because they don’t cycle and therefore don’t give a toss. All this recent BS boils down to one thing. Australians are the most selfish individuals on the planet. I don’t want my kids growing up not seeing these rights from wrong.

        Correct on all accounts, the level of hatred I see towards cyclists in this country is amazing. People get so annoyed with cyclists on the road and act so aggressively towards them. They can’t see past their own nose, and realise that more bikes on the road = less congestion that drives them mad. We are better for the environment, we are less of a burden on the health care system, we reduce congestion and make parking more available. Yet somehow cyclists should be viewed as the enemy.

        All these stupid laws are the knee jerk reaction to a few cyclists in the CBD getting themselves killed, but instead of asking the question of “WHY?” it happened, they think the solution is to fine everyone. Don’t look at the cause, fine the symptom is their rationale…

        All so some politician in their ivory tower can say “Look we are doing something about these cycling deaths”. We fined 100 cyclists for not doing “safe” stuff…

        Really it’s shit like this that makes me want to move to Scandinavian countries..Australian’s will always be happy to sign away their rights if it makes them feel a little more “safe”. Heaven forbid an activity may have some risk attached. Wrap ourselves in cotton wool and don’t venture outdoors the bogeyman is outside!

      • Sorry, no sarc in my comment. Came off my road bike at 42mph on a wet road in Raleigh a few years back. Did a real nice job of cleaning the road with my bum. Helmet definitely saved me there. I see a lot of bikes without bells and reflectors on the wheels or lights on front and back. I am not sure that all non-serious cyclists are aware of the new regulations. Instead of building infrastructure to actively encourage cycling in the CBD areas to reduce congestion, the government, like many Sydney drivers I see, are attacking the cyclists, in this case through ludicrous infringement notices. Listened to triple M on the way to dinner yesterday to hear about speeding fines dished out in centennial park for cyclists riding above 30kmh on the designated bike path! This is really taking this whole thing too far. Welcome to the Nanny state, one step from 1984. Starting to see more freedoms in China than in Australia (a quote from a Chinese friend who has lived in Oz for 25 years).

      • “Get a watermelon and throw it on concrete… it’ll be graphic enough.”

        I’d fully support people being free to take unnecessary risks if the consequences were isolated to them and rest of us didn’t end up picking up the tab (through higher taxes or insurance etc).

      • Not that I don’t have a drama with bikes in the city or CBD, but I don’t think inhaling fine particulates and other combustion byproducts, deep into ones lungs, a healthy choice.

      • @Skip

        Not that I don’t have a drama with bikes in the city or CBD, but I don’t think inhaling fine particulates and other combustion byproducts, deep into ones lungs, a healthy choice.

        Agreed, no a fan of inhaling that shit but what can you do? Other than advocate for more Tesla’s on the road?

      • My bike didn’t come with reflectors…..
        Or a bell. ….
        Or pedals….

        That’s because you didn’t buy a bike, you bought parts.

        Which means you know enough to put them on.

      • Have you ever seen a person fall off a bike without a helmet at about 50-60km/h?
        Get a watermelon and throw it on concrete… it’ll be graphic enough.

        While true in an anecdotal sense, statistics say that at a macro level (i.e.: helmet laws) they make no difference.

        50-60km/h is fucking hammering for a cyclist as well. Few would hit those sorts of speeds, and even fewer without wearing a helmet (regardless of what the law said).

      • @Djenka ever seen a vehicle occupants head after a collision?

        Many more head trauma injuries would be avoided if all vehicle occupants wore helmets – why arent they mandatory when they are for cyclists?

        Here’s the study…….

        http://www.monash.edu/muarc/research/reports/atsb160

        Its pure hypocrisy and discrimination to enforce mandatory helmets for cyclists but not vehicle occupants.

      • DrSmithy

        “That’s because you didn’t buy a bike, you bought parts.

        Which means you know enough to put them on.”

        Was that a joke?

        That’s how you buy road bikes.

        Well, the good ones anyway.

        I couldn’t be the only one on this site riding a road bike.

      • Stomper…

        You should read up on CHI and DIA, even at low speeds under 20k can cause critical injury’s or extended loss of function.

      • Was that a joke?
        That’s how you buy road bikes.
        Well, the good ones anyway.
        I couldn’t be the only one on this site riding a road bike.

        You’re not. I have two. Plus a commuter. Sadly it seems none of them were “good ones” since they all came from LBSes.

        If you buy a bike from a shop, it will come with the required safety equipment. If you build it from parts, you have to take care of that yourself.

        Cars are the same.

      • @ Smitty
        “While true in an anecdotal sense, statistics say that at a macro level (i.e.: helmet laws) they make no difference.”

        LOL,
        * Research shows that helmets reduce head injuries by up to 74 per cent in crashes with motor vehicles
        * Helmets provide a 66 to 88% reduction in the risk of head, brain and severe brain injury for all ages of bicyclists

        @ Stomper
        “Its pure hypocrisy and discrimination to enforce mandatory helmets for cyclists but not vehicle occupants.”

        I guess you’re trying to argue here that the % chances of a head injury in similar accidents whilst in the car and whilst bike riding is the same. If it is… I support helmets for everyone.
        Check the table 3.10 on p40 of the document you provided link and perhaps you want to review your comment about hypocrisy and the whole outlook.

        There is a major difference between bicycle as a recreational toy used on a Sunday afternoon down a pathway in the park and as a mean of transportation.

      • @Djenka

        I’ve seen all sorts of things and reality is I wouldn’t ride without a helmet but don’t need these FW’s telling me I need one. Get out of our lives. Fix the other stuff where people drive pissed or too fast and hit us while minding our own business. Look I get it, it’s not all about me, if my head explodes in an accident there’s all sorts of flow on events for other people. I’m just sick of the wedge forced into my life by clueless fools like state LNP. Always aiming at the lowest common denominator.

        I don’t punch people when I’m pissed, but don’t get glassy eyed or you’ll get kicked out of the club. Fking sick of it all.

        Then again, we’re so soft, driver A drives drunk and doesn’t kill anyone. Get’s 3 months suspended license.

        Driver B, commits the exact same crime but gets unlucky and kills someone, and gets 5 years jail.

        Doesn’t make sense. Sentence should be Jail for 20 years for both offenses regardless of the outcome and neither would do it.

      • @ Richard

        if common sense was quantifiable and installable (like a skill), I believe the legislation could be halved.
        Safety laws are there to bypass the common sense and make everyone comply, inclusive of those that refuse to see the obvious.

      • My goodness dont those of us that would tell others how to live their lives get righteous and indignant when their advice laws are questioned.
        In Shanghai I rode a bike to work most days, I never had a helmet and never had a fall and in all those years nobody ever told me I was irresponsible, I guess I just didn’t understand how free I actually was.

      • @ china-bob

        was it irresponsible to not wear safety belts during decades after the WW2 when cars became part of everyone’s life?
        Not unless you know the difference (which you could not as safety belts did not exist as yet).
        Knowing the difference makes all the difference.

        I grew up without safety belts, motorbike helmets, airbags etc… but we knew less then what we know now. The same way I now understand that a green light for pedestrians is not an indication that every car have stopped but many still cannot understand that being right (in traffic sense) and being dead is not mutually exclusive.

      • @Djenka

        I know you’re right and being Mr Safety myself I know far better, but it just infuriates me the flow on that comes from these politician FW’s.

        You watch, rego, license and insurance will soon follow. My problem is I don’t trust a thing politicians say or do. In my mind they are the biggest scum of society.

      • @ China-Bob

        I will agree on political side of it.
        Implemented safety is often a political tool and due to calculated cost reduction.

      • I said in a macro sense.

        Obviously if you’re already in an accident, a helmet will be beneficial. But people have more accidents when they’re wearing helmets.

        Taken across the entire cycling population, it seems deaths and injuries helmet vs non-helmet is a wash, especially if you start counting the health advantages of cycling, which helmet laws discourage.

        https://en.wikipedia.org/wiki/Bicycle_helmet_laws

      • you are absolutely right China Bob when ever i go to china or taiwan i feel so free, sydney is a fucking hell hole run by 60 year old retards who care for nothing but their own well being and screw any one else – nanny state gone completely fucked – AHHHHHRRRRRRRRRRGGGGGGGGGGGHHHHHH – if you are young and smart enough to leave straya leave

      • “especially if you start counting the health advantages of cycling, which helmet laws discourage”

        so… inconvenience should be factored in safety?

        For me this is tripe (from your link):

        Some Dutch cycling experts and planners have opposed the use of helmets, claiming that helmets discourage cycling by making it less convenient, less comfortable, and less fashionable. They also mention the possibility that helmets would “make cycling more dangerous by giving cyclists a false sense of safety and thus encouraging riskier riding behavior.

        sarc
        I now understand “Macro-sense”
        I guess we should abandon motorbike helmets because they prevent wind in the hair… and safety belts for women size DoubleD as it creases their décolleté line?
        /sarc

        __________

        For a reasonable man, inconvenience vs. safety is not a choice
        Courtesy of UNSW (from your wikipedia link):

        Among cyclists, the decrease in rates at the time of legisla-
        tion was significantly greater for head injuries than arm or leg
        injuries as shown by the estimates of the INJURY × LAW interac-
        tion in Table 2. This effect was not observed to be significant or
        consistent among pedestrians, which suggests that in addition to
        the overall decrease in cyclist injury rates around the time of leg-
        islation there was a further decline in head injury rates. Given the
        attempts of this study to address all sources of uncertainty as far as
        possible, it is reasonable to assume that this differential decrease
        is attributable to compulsory helmet legislation.
        The legislation
        attributable decrease was estimated as 25% or 29% depending on
        whether arm or leg injuries were the comparison; however, these
        figures should be treated with some caution due to the limitations
        discussed below. Among studies that also observed a decrease in
        cyclist head injury rates, a Canadian study found a 23% reduction
        in the odds of head injury when a helmet was worn (Macpherson
        et al., 2002). A Victorian study reported a 39.5% state wide reduc-
        tion based on time series modelling which attempted to account
        for any changes in overall cyclist numbers related to the legisla-
        tion (Carr et al., 1995). An assessment of legislation in California,
        USA, identified an 18.2% reduction in traumatic brain injury inde-
        pendent of compliance and changes in bicycle use (Lee et al., 2005).
        Although differences in study design make comparison difficult,
        the magnitude of these estimates is not dissimilar from our find-
        ings.

        Despite numerous data limitations, we have identified evidence
        of a positive effect of compulsory cycle helmet legislation on cyclist
        head injuries at a population level such that repealing the law can-
        not be justified. We have also developed an analysis which may
        effectively be applied to similar data from other jurisdictions
        .

        Here’s some debunking of anti-helmet inconvenience groups flawed claims:
        Statistical Errors in Anti-Helmet Arguments

        * Adult cycling in Sydney increased 22% after the helmet law
        * From 2nd to 4th survey, adult recreational cycling increased 141%
        * Adult bicycle related head injury hospitalisations decreased by 30% with the helmet law

      • so… inconvenience should be factored in safety?

        Convenience is always factored into safety.

        I guess we should abandon motorbike helmets because they prevent wind in the hair… and safety belts for women size DoubleD as it creases their décolleté line?

        Keep pounding that straw man.

        For a reasonable man, inconvenience vs. safety is not a choice

        Of course it is. If it weren’t you’d never leave the house. You’d never drive a car without airbags. You’d never catch a bus. Motorbikes would be illegal. Selling food at public markets would be banned. Etc.

        I don’t really care enough to argue the toss. The only real impact of compulsory helmet laws on me personally is that they make bike share schemes here impractical so I don’t use them. I wear a helmet when I go road cycling, just like I did when I lived in places where they weren’t compulsory.

        Australia’s helmet laws are the strictest in the world but we don’t have a concomitant lower death and injury rate. Countries with massively higher cycling mode shares don’t see a net benefit in making helmets compulsory. Reasonable conclusion is that compulsory helmet laws are, at best, neither here nor there.

    • Art critic Robert Hughes basically said Australia was land ofthe “wowser” and the “larrikin”. He was right then and he’s right now. Sadly the wowsers are ascendant. Technocrats in critical theory coddle cloaks.

    • While no reasonable person would suggest cycling is anything other than a positive thing in urban Sydney, the Aussie regime – without spending a dollar on infrastructure – has managed to imply that these new ‘command and control’ regulations will improve the quality of life of cyclists.

      Classic Orwellian conceit we have come to embrace as nation.

      There is no way like the Australian way.
      It’s the law.

      • “these new ‘command and control’ regulations”

        Why it is wrong to have compulsory helmet wear for ALL the bicycle riders, front, rear and lateral light indication as well as audible indication?

      • What problem are lights on a bike during the day solving ?

        Statistics say helmets make little difference to overall deaths and injuries, and it would seem they suppress spontaneous short trip cycling like bike share schemes.

      • “Statistics say helmets make little difference to overall deaths and injuries,”

        Except they do prevent brain splatter, estimated in no less then ~60% of accidents where head injury is sustained (up to 90%, case study dependent, some links provided few posts above)

        Perhaps you could substantiate your claim?

      • Lets compare brain trauma/head injuries to the effects of long term inactivity and obesity. People should encouraged to get off their arses and out of cars for all short trips around a city. Current policy setting discourage this.

      • you people need to travel, try amsterdam or dusseldorf to see how people can ride a bike without a helmet and not dieing horribly or being harassed by the police state and fined $319. fuck this country.

      • @ AlbyMangles

        i’ve seen people wheelie a motorbike in a t-shirt and no helmet – and not dying horribly even after many years.
        Should we abandon motorbike helmets?

        @ Jonathan

        UNSW claims that the helmet use does not discourage bicycle riding. Actually, since the helmet legislation it noted increase in bicycle use

      • djenka you have really lived a wild life haven’t you, sit down cos this is going to blow your mind, i saw a pedestrian cross the road on a red light and NOT get fined by the police!!!!! i know right, FFS, where are the cops in sydney i thought they were getting all the jaywalking criminals but no, OMFG society is decending into a helmetless jaywalking chaos WE NEED MORE FUCKING POLICE TELLING US WHAT TO DO

      • Typical libertarian hair pulling and foaming at the mouth….

        Skippy…. when are all of you going to put you money where your mouth is and move to Somalia or some other utopia, and stop trying to force everyone to suffer the consequences of your cults rationalizations.

      • i’ve seen people wheelie a motorbike in a t-shirt and no helmet – and not dying horribly even after many years.
        Should we abandon motorbike helmets?

        Leave the poor straw man alone. Not making them compulsory is a very different proposition to “abandoning” them.

      • Typical libertarian hair pulling and foaming at the mouth….

        Skippy…. when are all of you going to put you money where your mouth is and move to Somalia or some other utopia, and stop trying to force everyone to suffer the consequences of your cults rationalizations.

        The fuck ?

        How do you get from ‘hey, maybe people should be able to ride bicycles around without wearing helmets, like they do in most of the world’ to “move to Somalia or some other utopia, and stop trying to force everyone to suffer the consequences of your cults rationalizations” ?

      • drsmithy….

        Designer ideology’s like libertarianism are just chocker block with inherent contradictions e.g. so on one hand exposing ones self to increased risk and calling it freedom, whilst promoting a role model for others [hay I’m free – w/ evangelical zest], yet forget the costs to society at large, and some are still scratching their heads to why banks and other powerful industry’s run rampant over society.

        Skippy… per the Somalia thingy…. hay I can’t help it that libertarian ground zero over at the Von Mises institute promoted it along with Zimbabwe… or those kooky compounds in south america…

      • @ AlbyMangles
        I agree about pedestrians and how unjust the fines are. Only ignorant will think that fines system in this country is designed purely to defer and that it has no connections to the .gov coffer.
        I never argued about the fines, only that helmets prevent brain splatter in cases where lack of it would otherwise most likely lead to brain splatter.
        IMO fines should be the same for pedestrians and even more draconian in CBD area.

        @ Smitty

        i’ve seen people wheelie a motorbike in a t-shirt and no helmet – and not dying horribly even after many years.
        Should we abandon motorbike helmets?

        Leave the poor straw man alone. Not making them compulsory is a very different proposition to “abandoning” them.

        Here’s why I keep saying that you’re all about winning or proving the other side wrong at any cost.
        You’re not stupid chap yet you decide to grab onto semantics or trivialities with a complete miss of a bigger picture or a point.
        You well know what I meant (it’s simple), you’re not a stupidus.

        Here’s more:

        so… inconvenience should be factored in safety?
        Convenience is always factored into safety.

        as a perfect strawman example

        @ Skippy
        I am sure you will agree that there is nothing wrong with having an opinion on a subject, e.g. Helmets prevent brain splatter and defending it. That’s not enforcement onto others…

      • I don’t think many discussing the topic have the relative experience or knowlage to base their opinions on but… substitute ideological preference in lieu of…

        Skippy… As such, until that is provided excuse me if I’m not compelled by off the cuff remarks… I prefer informed positions and not rubbish in and rubbish out product.

      • As the comments highlight, Australians are on the whole mentally challenged concerning bike riding.
        As for “riding with the ambos for a week”, precious little bike-related trauma comes through the hospital. Pedestrians, more so.
        Compulsory helmets for pedestrians!

      • Designer ideology’s like libertarianism are just chocker block with inherent contradictions e.g. so on one hand exposing ones self to increased risk and calling it freedom, whilst promoting a role model for others [hay I’m free – w/ evangelical zest], yet forget the costs to society at large, and some are still scratching their heads to why banks and other powerful industry’s run rampant over society.

        So because we think its OK to ride a bike through Lyon or Amsterdam without a helmet on we’re loony libertarians ?

        You’re off the reservation on this one.

      • Andrew…

        Wife is a clinical ambo with over a decade of experience w/ teaching at uni, thats not to mention my decades of riding both push and motorbikes w/ hospitalization. This is extended by association through out those I’ve known over such a time e.g. their is a good reason old riders have numerous medical complainants.

        Skippy…. gezz the wife has had to deal with young kids with serious head trama just from tipping over with out a helmet on scooters out front the house… to quote the wife – “their idiots if they don’t ware a helmet” – how about those without helmets don’t require first responder’s and can sort it all out themselves… eh…

      • Its a key philosophical corner stone to the topic and other city’s do not add to the medical science wrt CHI or DIA. What should we bring all the guns back and act like America?

    • Cyclists should be banned from syd roads, Monday to Friday. Too much congestion to try and incorporate some guy trying to ride to work to feel good about himself. Any cyclist on the road Monday to Friday, should pay a registration fee like everyone else. Nice and equitable.

      • desmodromicMEMBER

        Just drive with care and respect. Other cultures seem to manage to do it.

        Australia has a disproportionate number of fucktards that won’t slow their pace for any road-user not in a car. I met a couple this weekend. That said, the new laws in SA have made a difference and most drivers are giving cyclists more room. If we can now get them to slow when there is oncoming traffic rather than force/squeeze past the roads will be safer for all users.

  3. A classic weekend read, from a spruiker defending Irish property early 2007 .Enjoy it, for Strayas sake.

    http://www.independent.ie/opinion/analysis/property-markets-no-house-of-cards-26286184.html

    my favourite:

    “As one who has been involved in the Irish property market for 40 years and has experienced every type of market scenario, I am totally convinced that the market is currently in good shape and that anyone buying now will do extremely well in the years ahead. There is no better investment than Irish property at present, and I believe that I will be proved right in this conviction.”

    lol.

    • Far out, add 9 years to everything in that, put Sydney instead of Dublin and badge it as domain and that article would not look out of place at all. But you forget…Australia is different.

    • Brilliant! Well sourced Ortega.
      This should be widely disseminated in the Australian MSM.

      deja vu…..all over again!

      • 3d1k

        That is great. I can’t wait for Australians to get fired up over this. I want to see politicians jailed and wealth confiscated starting with Turnbull and Baird.

        I love the next one too https://www.youtube.com/watch?v=pCHu1kRT6hU

        Australians should send a message to today’s politicians “if we as taxpayers are forced to bale out banks (or anyone else), all politicians of 2007 to 2018 will all go to jail”

      • Funny Richard as 3d1k works for the sorts which buy off or influence the politicians in the first place…

        Skippy…. 3d1k’s… entire purpose in life is perception management… the perception his betters hire him to promote…

      • Richard,

        Almost all of the close to a Trillion US Dollars that the big banks have borrowed from overseas on the international money markets is already guaranteed by the Federal Government. If the Federal Government didn’t guarantee it the big banks would have to firstly pay a much higher interest rate for the debt and secondly, it is unlikely that the international money market would lend them the new money to roll over and pay out previous borrowings on the international money market as they fall due. The big banks are essentially borrowing short on the international money markets so they can lend long into the Australian Housing Market using an Australian Government Guarantee.

      • The same people are responsible here. Banks and developers.
        Incidentally you would have thought people like Bob Day would be getting on board Labors NG reform since the PM has said it would lead to more affordable housing… And he cares so much about affordable housing.

      • Love this guy. He forgets that everyday people signed up to massive debt on bubble priced realestate, which the bubble would not exist without (i.e. prime responsibility). Same goes for Australia, regardless of whether it is a family home or specufestment.

        I wonder if it is time to rock up to some open for inspections now with a calculator and type in the agents estimated range in front of them… then hit divide… then hit 2… then hit equals… show him/her the screen and say how about this?

      • Andy try reading some psychology and sociology…

        Skippy…. some thought the world was flat long a long time, not to mention even after it was proved wrong…. now we have the young earthers….

      • Andy social psychology and then apply it to history….

        Skippy… your need to ascribe action to individuals in this case is not supported….

        PS. additionally familiarize yourself with the term control fraud.

      • @notsofast

        I know, and if I’m affected, in other words if they try and take my super or cancel ABC or D, I’ll personally lobby to take politicians wealth and send them to jail. I don’t think it would take much in such circumstances to get people running with me.

        Something’s going to crack in Australia. I can feel it coming, and politicians and wealthy will be the target, and I’ll be right behind them stirring the whole thing up. The exact wrong people are running Australia, and they should, they are going to pay for their betrayal.

      • …your need to ascribe action to individuals in this case is not supported….
        Yes true… if you ignore that since 1999 there’s been millions of property transactions by individuals at exponentially increased prices (with the commensurate increased debts).

        Control Fraud is alive & well but it doesn’t excuse the atrocities that individuals commit every weekend.

      • Good grief Andy you making out people buying RE are at war and killing others…. come on…

        Group behavior has its ups and downs, albeit had you seen the doco “Century of the Self” you might understand the basics. – http://topdocumentaryfilms.com/the-century-of-the-self/

        Skippy… spend a bit of time focusing on whom is pushing the buttons before ascribing guilt, its too brown shirt otherwise.

      • Thanks @skippy. It’s a 4 hour documentary and seems interesting so I’ll try to give it a watch this week as time permits. I’m concerned your angle is along the lines of poor innocent weak-minded people being influenced/manipulated to pay/borrow incredible amounts – yet murder under hypnosis is not a legal defense.

      • Umm… no. What I am attempting to show – is – if you are born into or exposed to enough environmental precursors the vast majority will eventually conform to the prevalent social trend. The doco uses the example of Bernays using the concepts of “Liberty and Freedom” to get women smoking as part of the suffragette movement at the behest of the tobacco industry [Richard Kline has a good book too], also the marketing behind Diamonds during 50’s is another good example imo – http://www.theatlantic.com/international/archive/2015/02/how-an-ad-campaign-invented-the-diamond-engagement-ring/385376/

        Skippy… as with both cases… where did the agency come from… did information arb play into it… and whom benefited the most from it…

        PS. Highly recommend all of Adam Curtis docos and blog, if only to broaden ones scope and checking for bias.

      • Skippy, damn you, you’re ruined my Sunday that time you provided the link to ‘Century’.
        Sat in front of the tv until all seen.

      • Hahahaha….

        Look I’m not suggesting Curtis is a soothsayer – by any measure – tho its always beneficial to expand ones horizons and do the hard yards and home work to flesh out perspectives. Especially when one uses events and can demonstrate the thrust of their argument rather than engage in rhetorical axioms and a priori sourced out of a vacuum.

        Skippy…. here’s a wafer thin mint to go with that – Minutemen – This Ain’t No Picnic – https://www.youtube.com/watch?v=UDr25zjd4yM

    • Mining BoganMEMBER

      Still operating too. Lol, intimate knowledge…

      “Knowledge & Expertise
      The key to the success of the company is the calibre of its dedicated team of professionals providing a personal, friendly and efficient service with the back-up of years of experience and an intimate knowledge of the property market.”

      http://www.hookemacdonald.ie/about-us.aspx

      • Nobody saw it coming LOL….It’s be grand like… 🙂 I’m sure we’ll have the same thing repeated here when it takes hold.

    • One word – Grandma-ma

      Had me in tears reading the reviews. Even my demure Chinese wife was rolling on the bed laughing.

      • Aspartame is the technical name for the brand names NutraSweet, Equal, Spoonful, and Equal-Measure. It was discovered by accident in 1965 when James Schlatter, a chemist of G.D. Searle Company, was testing an anti-ulcer drug.

        What you don’t know WILL hurt you. Find out the dangerous effects of artificial sweeteners to your health. Aspartame was approved for dry goods in 1981 and for carbonated beverages in 1983. It was originally approved for dry goods on July 26, 1974, but objections filed by neuroscience researcher Dr. John W. Olney and consumer attorney James Turner in August 1974, as well as investigations of G.D. Searle’s research practices caused the U.S. Food and Drug Administration (FDA) to put approval of aspartame on hold (December 5, 1974). In 1985, Monsanto purchased G.D. Searle and made Searle Pharmaceuticals and The NutraSweet Company separate subsidiaries.

        Aspartame accounts for over 75 percent of the adverse reactions to food additives reported to the FDA. Many of these reactions are very serious, including seizures and death. A few of the 90 different documented symptoms listed in the report as part of aspartame dangers are:

        What Is Aspartame Made Of?
        Aspartic Acid (40 percent of Aspartame)

        Dr. Russell L. Blaylock, a professor of neurosurgery at the Medical University of Mississippi, recently published a book thoroughly detailing the damage that is caused by the ingestion of excessive aspartic acid from aspartame. Blaylock makes use of almost 500 scientific references to show how excess free excitatory amino acids such as aspartic acid and glutamic acid (about 99 percent of monosodium glutamate or MSG is glutamic acid) in our food supply are causing serious chronic neurological disorders and a myriad of other acute symptoms.

        How Aspartate (and Glutamate) Cause Damage

        aspartateAspartate and glutamate act as neurotransmitters in the brain by facilitating the transmission of information from neuron to neuron. Too much aspartate or glutamate in the brain kills certain neurons by allowing the influx of too much calcium into the cells. This influx triggers excessive amounts of free radicals, which kill the cells. The neural cell damage that can be caused by excessive aspartate and glutamate is why they are referred to as “excitotoxins.” They “excite” or stimulate the neural cells to death.

        Aspartic acid is an amino acid. Taken in its free form (unbound to proteins), it significantly raises the blood plasma level of aspartate and glutamate. The excess aspartate and glutamate in the blood plasma shortly after ingesting aspartame or products with free glutamic acid (glutamate precursor) leads to a high level of those neurotransmitters in certain areas of the brain.

        The blood brain barrier (BBB), which normally protects the brain from excess glutamate and aspartate as well as toxins, 1) is not fully developed during childhood, 2) does not fully protect all areas of the brain, 3) is damaged by numerous chronic and acute conditions, and 4) allows seepage of excess glutamate and aspartate into the brain even when intact.

        The excess glutamate and aspartate slowly begin to destroy neurons. The large majority (75 percent or more) of neural cells in a particular area of the brain are killed before any clinical symptoms of a chronic illness are noticed. A few of the many chronic illnesses that have been shown to be contributed to by long-term exposure to excitatory amino acid damage include:

        Skippy…. another goal for Monsanto

      • apparently aspartame is cheaper per litre of an artificial drink then plain sugar.
        Not sure how HFCS stacks up there…

      • @Skip aspartame and artificial sweeteners are absolute garbage. I never touch the stuff, but I have a wry smile when I see people drinking Coke Zero who are clearly over weight. They have been duped into thinking it’s a better alternative and it will help them lose weight, despite no evidence to suggest any of these sweeteners will aid in weight loss.

        But a lot of this shit should never have been approved for human consumption. I remember being in South Africa and seeing my sister was drinking out of a bottle that was listed as “diet” on the back I was surprised to discover cyclamate’s in amongst the ingredients knowing they were banned in many places..

      • I never touch the stuff, but I have a wry smile when I see people drinking Coke Zero who are clearly over weight. They have been duped into thinking it’s a better alternative and it will help them lose weight, despite no evidence to suggest any of these sweeteners will aid in weight loss.

        Yeah I know what you mean. I think the same thing whenever I see someone fat eating a salad.

      • apparently aspartame is cheaper per litre of an artificial drink then plain sugar.
        Not sure how HFCS stacks up there…

        Aspartame, et al, aren’t there because they’re cheaper, they’re there because they can make stuff as sweet as sugar without any of the calorific overhead.

        The same does not apply to HFCS. *That* is a financial decision.

      • @ smitty
        “Aspartame, et al, aren’t there because they’re cheaper, they’re there because they can make stuff as sweet as sugar without any of the calorific overhead.”

        it is astounding that you understand every single business model in artificial drinks manufacture around the globe to such a great detail, Smithy.
        I will disappoint you, though, I did not imply that aspartame is there because it was cheaper, only that it was *convenient* that it is cheaper (although I hear in some markets “Diet”=premium price)
        Even more disappointment, I have 1st hand information that aspartame is cheaper to handle during manufacture and it poses a measurable profit boost with enough incentive to push it however that may be possible.

        Are you again trying to pick on me with our “trivialities before the bigger picture” kind of comments?

      • it is astounding that you understand every single business model in artificial drinks manufacture around the globe to such a great detail, Smithy.

        I’m pretty sure the main selling point of artificially-sweetened drinks is that they have “zero calories” each instead of 150 or whatever it is in a can of coke. Taste is nearly always put in the context of “nearly as good as the real thing”.

        At least, I have never seen one marketed any other way. I’m sure you’ve got an example though.

        Even more disappointment, I have 1st hand information that aspartame is cheaper to handle during manufacture and it poses a measurable profit boost with enough incentive to push it however that may be possible.

        Do you think people would prefer an artificially-sweetened product over one with sugar, all else being equal ? I’m sceptical, and based on most of the advertising I see for diet soft drinks, so are the marketers selling them.

      • WOW you two are arguing about marketing and cost incentives when its clear that the compound was called out by independent scientists, as not only unsafe, but detrimental, only to enter the market after Monsanto bought out the IP owners…. Wheeeeeeeeeeeeeeeeeeeeeeeeeeeee~~~~

      • The American Cancer Society (den of conspirators that they are) has scientific information on aspartame.
        Better than the Huffington Post science promulgated by the resident, self-appointed polymath of MB.

      • “Aspartame is a highly studied food additive with decades of research showing that it is safe for human consumption. As expected, the research is complex making it possible to cherry pick _and misinterpret individual studies in order to fear monger. But the totality of research, reviewed by many independent agencies and expert panels, supports the safety of aspartame.

        A conspiracy to hide the risks of aspartame, however, remains a popular internet urban legend that will likely not disappear anytime soon”

        https://www.sciencebasedmedicine.org/aspartame-truth-vs-fiction/
        Not everything is a conspiracy skip

      • Junkyard the events in the 70s preclude the junk science assertions, in fact post Monsanto you have the Science Mart and Merchants of Doubt effect, which infests almost the entire field to include journals. The compound was red flagged until Monsanto bought the IP, its profit motive compounded by political corruption.

      • Junkyard…. and if you want we can get stuck into some white papers w/ reviewing the methodology e.g. database refinement which is more akin to data mining RTR style than actual science, more neoclassical economics than evidence based policy formation. Its a survey which is more reliant on the questions than the actual science.

        Skippy…. industry papers are not to be trusted full stop….

        PS. btw I have read the EFSA white paper…

        “A 2006 National Cancer Institute study seemed to ease cancer fears related to aspartame, but that study had major limitations, including its reliance on imprecise food-frequency questionnaires, and it included only subjects between the ages of 50 and 69 who first consumed aspartame as adults. The effects of consuming aspartame from infancy or childhood might be very different, says CSPI, as suggested by the new animal study.”

        Groan….

  4. The Ballad of Carried Over Investment Losses

    For ten long years
    They waited in thrall
    For that market to yield
    To its pre-destined fall

    They rented and saved
    Bid their time all the while
    The plumbers and butchers
    Were geared with a smile

    The cleaners, the dentists
    The saints and the knaves
    The surgeons, the nurses
    The masters and slaves

    Were all, to a man
    To a woman and beast
    Stuffing themselves
    In an unending feast

    Engorged, fat and bloated
    They surveyed their Domain
    While the meek shook their fists
    And swallowed their pain

    They cursed those tax losses
    For which they’d been dealt
    A cut to their pensions
    Their schools and their health

    So meekly they asked
    “Could we Please have our Hearing?
    We Must Bring an End
    To this Negative Gearing!”

    Then one point three million
    Loud voices did scream
    “You must be Insane!”
    It’s the National Dream”

    “To gather one’s riches
    From neighbors and brothers
    From colleagues and friends
    From students and Mothers”

    “We’re just humble folk!
    Why fill us with dread?
    There’s nothing more honest
    Than getting ahead”

    “We’re in this together
    Our loss is your gain
    You mess this thing up
    And we all share the pain”

    And so it was settled
    By a lobby of peers
    To keep those concessions
    Allay all those fears

    The Fall Never Came
    No drop of a ball
    They leveraged and geared
    Til’ they damned owned it all

    • Reminds me of an incident I suffered when I was 16. Had been scratching the hell out of my nuts in the middle of the night so I thought a bit of vaseline might calm the itching down. I suppose it would have if I’d applied vaseline, except in the middle of the night it was a jar of Vicks Vapour Rub I grabbed, it didn’t take long for me to figure out something was wrong!

  5. The NY Times article at the top is bit scary. Nothing that we did not know but it appears there will be lot less independent data available from here on.
    Also there is an article in AFR about IMF Lagarde giving advice to reserve banks and governments to be bold (throw more crack coke to the junkies) while German Finance Minister advising the opposite and SM smartly talking himself into irrelevance.
    My point is it all sounds like people arguing about not how to boost the world economy but on how to revive a person that has been clinically dead for 3 days and left on the sun.

      • @Nikola I think that was Teppers job on sixty mins. All the ‘journos’ are now talking in the collective ‘we’ – as in ‘we’ the herd have created the bubble that ‘they’ benefit from. Now it’s time for ‘us’ in our panic at the realised truth, to pop the bubble ‘they’ will benefit from.

    • The one thing you can be sure that they’ll all do is make bloody well sure that workers don’t get an increase in disposable income. That of course is the only thing that will fix it, and it’s something that all governments wish to prevent at all costs. They refer to it as a ‘wages breakout’. The profit share will fall. The velocity of money will rise. Land holdings will underperform.

      The economy is broken because those who control it actively want it this way. It is not a mistake.

      • Couldn’t agree more, the middle classes are being wiped out and they were the ones spending and driving the economy, the top tier 1% hoover up all the wealth and don’t spend it, the bottom 99% have nothing left.

    • What I can’t get my head around is how the size of the Chinese banking sector has gone from about 5 Trillion US Dollars in the mid 2000s to over 30 Trillion US Dollars today. This is significantly bigger than the combined size of the Japanese and US Banking systems, about twice the size of the US banking System and it’s still expanding rapidly. And the Japanese and US Banking systems are global (they include China) in much of their lending and their perspective and the Chinese Banking System by comparison is almost entirely focused on China. By asset size (which I understand is closely associated with lending book size) China has the 4 biggest banks in the world and these four banks have a combined asset base of about $12 Trillion US. By comparison Australia’s big 4 banks have an asset base of a our $2.5 Trillion US.

      The first question I have is, is this information about the size and growth of the Chinese Banking system correct or are the figures misleading in someway? If they are right what does it say about the ability to integrate the Chinese Banking System into the global Banking system? What does it say about the ability to move towards a more market based Chinese Exchange rate?

    • How on earth has MT ended up where he is today within 5 months?!

      “Everything, every single element, is on the table. And I know that always means that someone can then run a scare campaign, but I’m sorry, we’ve got to stop [this]. This is part of the political tradition I’m determined to end. We have got to be able to consider policy options in an unfettered way. We’ve got to have the maturity to have a debate that is not throwing things off the table …Because what happens is politicians who get intimidated by their opponents or by the media or whatever, they say, ‘Oh that’s off the table, that’s off the table, that’s off the table’ and suddenly there’s nothing left on the table.”

      • Easy, Bligh is his middle name. He was destined to be a disaster as was his namesake.
        Turnballs downfall will be the end of the Bligh family saga.
        And good riddance.

      • Because Turnbull isn’t a leader, he couldn’t lead a horse to water. He has no understanding of how to maintain ‘relationships’ with little ability to take people with him. Now he’s just trying to hang on.

      • regards his unpopular 2014 budget as a “badge of honour”.

        hahahaha

        IMO, LNP cannot win the election. There’s just too much damage. Too much chance Abbott gets back in and with a majority brings back workchoices, copayment etc etc etc etc. That’s what I’m telling people anyway whether it’s true or not, these imbeciles have to go.

        All Labor have to do is assure Australia borders will be maintained and they’ve won.

        Centrebet ALP $5.50
        LNP $1.15

        I think that’s going to change.

      • Abbott is the talentless version of Kevin Pietersen. He can’t resist a microphone and he can’t resist picking at the scabs of the wounds that he left behind.

      • Tony Abbott is seriously deluded in every respect.

        I look forward to reading his obituary, as well as some others.

    • What an absolute crock of shit. Peter Hartcher has put down a strong contender for worst article of the year there. Utter drivel. I might start compiling a list…..it can be called The Wankleys.

  6. Here is what I said and his reply…last bit I wrote a bit rude and pompous but was in a bad mood. His response seems to have a few assumptions, namely housing speculation can be lumped in with productive business even after analysing its effects, and secondly that it is always a good thing to be consistent in the deployment of tax policy, rather than to choose to differentiate all the time. The point about the combination with CGT in the 90s, and the sudden rise in negative gearing claimed seems to have been a good one above. I can’t remember the proportion of people who negatively gear, the rise in proportion of housing investors versus first home buyers etc. I’ll reply to his argument later today, but I wanted an opportunity to give a considered (and this time more respectful) reply, and their is a good reservoir of knowledge here.

    The news indicates that he has been one of a group of back benchers approaching MT to stop NG reform, so I thought it important to try. I was surprised when he responded.

    Dear Mr Bernardi,

    I wish to respond to your assertions concerning negative gearing. Australia has amongst the most unaffordable housing in the world. Australia has gone from a private debt to GDP ratio of about 30% in the 1990s to 150% today, most of this debt being out into the property market. A house used to be able to be purchased for 3 times the average income, now its over 6. Taxation schemes like negative gearing favour investment in pre-existing housing, adding nothing to the Australian economy, or housing stocks. Speculators, subsidised by the taxes of first home buyers and renters, outbid them in buying houses for them and their family. First home buyers become renters.

    A recent interview by Saul Eastlake put to bed the myth that it is policeman and nurses who mostly benefit from negative gearing, and that previous drops in negative gearing caused rises in rents.

    Houses in Australia are at bubble prices. They need to come down so the future generation can afford to have the same standard of living as their parents. The wealth lost by a reduction in house prices is illusory in anywise. Either the government begins to correct this situation, or external events will do it for you, with more severe consequences than you could imagine.

    PS:- I am not sure that I am reassured by a person who crosses their arms, and proclaims common sense lives here. To me it projects a kind of contempt for alternative opinions, and that somehow the answer is obvious. In my observation the world and nature is full of ambiguity and subtlety, and the angry defiance of common sense closes one off to this. It is hardly common sense that time runs faster further away from the earth, than it does closer to it, due to the effects of gravity, but thanks to Einstein’s lack of common sense, these time calculations are now used to accurately calculate GPS coordinates. Less of the common, and more of the uncommon I say. Less arm folding, more embracing, and more curiosity…just a thought.

    His succinct reply

    Negative gearing is a business principle that applies to all investments. Do you advocate banning it entirely or only the bits you don’t like?

    • Ban it entirely for residential property!
      It is not is regular business. It is a unique asset class where there are two types of participants – home owners and investors – each with different tax treatments. Restrict business expenses to within that asset class and allow only claims to the extent that income is earned. Any over-cap expenses should be warehoused until future income exceeds expenses ( and they can be brought forward then) or asseses at the time of disposal.
      Business principles are dynamic. They change as businesses and economies change. That’s why all countries operate in differing ways – there is no one ‘right way’ of doing business. Those economies that have the flexibility to change as necessary will be the ones that survive and do well into the future. Those that remain fixed to static business principles, will do badly.
      Bernardi is stuck in the past. He just doesn’t know it.

      • The guy is a prick they all know whats going on, they are not dumb they play dumb and dont give a shit. The crooks always act in whatever their self interest are no matter how far removed that may be from what is right.

    • Mining BoganMEMBER

      Corgi Bernardi eh? In hindsight the gummy bear diarrhea tale should probably have been linked to him.

    • As Janet suggests, you’ve got the perfect opportunity to educate him on how NG is NOT a standard principle applying to all businesses. The fact the he nor any of his hacks knew that completely justifies your letter and any reasonable person’s concerns about their competence. Muppets.

    • Just tell him the ATO says he is wrong. they don’t consider NG to be a business principle because they don’t consider a NG rental to be carrying on a business. If they did in many cases the losses wouldn’t be deductible under the non commercial loss provisions.
      Steve Ciobo said people can NG gold (you can’t), now NG is a business principle. So when I get audited I’ll just say the government said I can NG gold and deduct non commercial business losses.

    • As Peter Martin said NG is really just an inconsistency in tax law and a lie, which the ATO should have ruled on at least since 1999 when the CGT concession was introduced or when rental losses became the norm.

    • Since when has going into business to make a loss been about business principals?

      This is particularly galling because any capital gain that does eventually accrue only results because the big banks and their massive overseas borrowings are essentially government guaranteed.

      • I accept that it is not true, I just want the simplest and most lucid explanation as to why. The comments so far are helpful.

      • Charlie

        To understand tax means you don’t understand it.

        It’s full of antiquated rules based on case law and some judges attempt to interpret it… not to mention the ATO’s attempt to interpret it.

        Tax in Australia is based on incomprehensible rules that once comprehended are inconsistent between each rule or class of income.

        Glad I got out of it.

      • @Esco so the only hope is that some benevolent investment property owner wins a case against the ATO that he/she cannot claim NG.

    • I’ll caviate the following Canberra Times story with, welll it is the Times and facts are always a little loose and they’re some fucken serious property spruikbots in that lot but to publish the following is a “whoa” moment. Actually what was intending is how long it lasted, or didn’t, on the front page. – I had to go digging for this. This article had the front page half life of a VB at Summernats.

      “Shorten’s negative gearing plan wins support in investor heartland”

      It’s home to more negatively geared investors than anywhere else in Canberra, but those shopping in postcode 2615 this week were backing Bill Shorten’s plans to scrap the tax deduction.

      http://www.canberratimes.com.au/federal-politics/political-news/shortens-negative-gearing-plan-wins-support-in-renters-heartland-20160224-gn2hvr.html

    • For absolutely anyone who read the report – it actually says global warming accelerating at an alarming rate, just ever so fractionally less than previously assumed alarming rates.

      Nothing at all about, PAUSE, HAITUS, SLOWING – not one bloody thing.

      It really is astonishing how confirmation / cognitive bias will allow someone to read whatever they like / want into something no matter how completely and utterly it contradicts their misguided fantasies.

      • calm down Pete.
        It seems to me that this is more of a sort of a political narrative rather than a scientific one. By which I mean the data have not changed, just the agreed description of them. The broader significance is of course who is saying it; in the new report, several authors are very weighty names on the orthodox side of the debate. So we are moving toward “consensus” – and that consensus seems to be that the recent period of warming has had less of a positive slope on it than the long term trend.
        It’s not a quick process, eh?

      • … and that consensus seems to be that the recent period of warming has had less of a positive slope on it than the long term trend.

        The slowdown in temperature increases (if indeed there was one) is over. Record warmth occurred in 2014 and 2015. So we have every reason to believe that the warming of the planet and the detrimental impacts of that warming will continue unabated if we do not dramatically reduce our emissions.

        Scientific American: Did Global Warming Slow Down in the 2000s, or Not?

    • There is no catastrophic anthropogenic global warming, not much climate change either:

      …insurance policies are customarily written for one year and repriced annually to reflect changing exposures. Increased possibilities of loss translate promptly into increased premiums.

      Up to now, climate change has not produced more frequent nor more costly hurricanes nor other weather-related events covered by insurance. As a consequence, U.S. super-cat rates have fallen steadily in recent years, which is why we have backed away from that business. If super-cats become costlier and more frequent, the likely – though far from certain – effect on Berkshire’s insurance business would be to make it larger and more profitable.

      As a citizen, you may understandably find climate change keeping you up nights. As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.

      http://marginalrevolution.com/marginalrevolution/2016/02/how-berkshire-hathaway-thinks-about-climate-change.html

      • 3d1k…. do you or have you engaged in activity’s which kill brain cells, recreational or industrial exposure, because it shows…

        “Against a background of more frequent severe weather events, such as floods and windstorms, a new report from Lloyd’s highlights the importance of insurers ensuring that their catastrophe modelling tools keep pace with the effects of climate change.

        Catastrophe Modelling & Climate Change, produced by Lloyd’s Exposure Management & Reinsurance team, explains how the insurance industry increasingly relies on computerised “probabilistic” catastrophe models from different providers to manage their catastrophe risk exposures.

        Through a series of case studies contributed by academics and third party vendor experts, the Lloyd’s report looks at how today’s catastrophe models account for climate change.

        The re-evaluation is important because scientific consensus around effects of climate change is strengthening. Climate Change 2014: Impacts, Adaptation, and Vulnerability, the fifth assessment from the Intergovernmental Panel on Climate Change (IPCC), stresses that increasing magnitudes of warming is increasing the likelihood of severe and pervasive impacts that may be surprising or irreversible.

        Effects everywhere

        The effects of climate change are expected to be felt everywhere, as the Lloyd’s report’s authors point out. In its section on European windstorm trends, for example, cat model company EQECAT highlights several significant predicted future climate scenarios including fewer smaller storms but an increase in the frequency of very large storms; it predicts a four-fold increase in the frequency of years with several severe storms. It is also expected that there will be a shift in the latitude of European windstorms towards central Europe (between bands 48N-61N).

        The overall impact on European insurance companies’ exposure from these changes implies a 3%-5% decrease in the total number of potentially damaging storms, EQECAT says, but a 10%-20% increase in the number of larger storms. Also, the progressive shift of storm tracks to Europe’s central latitudes could multiply the severe storm losses experienced in big European economies, notably France and Germany.

        In the UK, climate change is likely to mean more flooding, according to scientists from the consultants JBA Group writing in the report. Although winter rainfall totals haven’t changed much in the last 50 years and annual totals appear not to have changed significantly since records began in 1766, over the last half century an increasing proportion of the UK’s winter rain has fallen during intense wet spells.

        Research based on climate models forecasts increases in peak river flows from 10% to 15% over the period between 2015 and 2039, rising to a range of 20% to 30% by 2080 although, as the authors point out, flood risk is also affected by property development and by investment in flood risk management measures.”

        https://www.lloyds.com/news-and-insight/news-and-features/emerging-risk/emerging-risk-2014/keying-climate-change-into-catastrophe-models

        Skippy… Buffet is up to his eyeballs in energy exposure to include trains, must be why hes having an off year… hence the move along stuff you regurgitate…. I know I should be nicer to “special people”… but I’m flawed like that…

      • Skip that report is a couple of years old now and there since been acceptance of the hiatus and the general downgrading of the climate scare thingy.

      • Actually no 3d1k, there has been some whitewashing by industry types, but the independent scientists and data to not corroborate their narrative.

        http://phys.org/news/2015-07-slow-down-climate.html

        In human time frames some get confused 3d1k, thermal transition is a process of storing and then releasing stored potential. That’s why even at a regional level environmental degradation is over looked until its past a tipping point and then to late for mitigation.

        Skippy…. I understand you have other priorities tho…. and anyone that believes anything buffet has to say must need a father figure in their life desperately.

      • 3d, so coal baron Buffet says “no wurries mate” about AGW and you are eager to gobble up his thought faeces and regurgitate them here? I am not surprised.

        Warren Buffet’s Utility, MidAmerican, Wants to Keep Polluting

        Climate Activists Tell Warren Buffett Why They Are Blocking His Coal Trains, Via James Hansen

        there since been acceptance of the hiatus and the general downgrading of the climate scare thingy

        ► There is no ” acceptance of a hiatus” amongst climate scientists, only slight disagreement on the incline of the upward slope during the period 2000-2013

        ► 2014 and 2015 set new temp records, so once again the upward curve gets steeper.

        3d, your ingrained science denial brings to mind the quote from Book of Proverbs: “As a dog returns to his vomit, so a fool repeats his folly”

        The incorrigible nature of fools like 3d is further emphasised in Proverbs 27:22, “Though you grind a fool in a mortar, grinding them like grain with a pestle, you will not remove their folly from them.”

        ლ(ಠ益ಠლ)

    • Well done Aussie households… insatiable appetite for debt continues. May action-consequence visit soon after 17 long years.

    • “Australian Household Debt Reaches Record Highs at $245,000”

      This effectively means that some households is in debt $735,000 as of the 14th Feb when I paid off my car and we have no debt at all

      • Mining BoganMEMBER

        Pfft…come to my world. $735k is considered to be girly. One million or you’re going nowhere. Debt is the way to riches. The only way.

      • Well… if you account that 1/3 of the populace is homeless and that their debt level otherwise must be much lower then those with a mortgage… $1mil is not far of the *average* mark.

  7. If Australia’s northern shipping lanes are disrupted the nation grinds to a halt in 7 days.
    Is there a better reason to go for renewables and electric transport?

    • Sounds like war or the brink of. Yikes. A quick response is coal/gas, an enduring response may be coal/gas (after all, we can’t then export it either) or nuclear or renewables or any combination. There’s a lot to then defend.

  8. And for your weekend Macro Gloom – some charts from a Citibank presentation given in London this week which were beamed to me Wednesday night….

      • Something Different?
        Asset Prices inclusion in Inflation Targeting.
        Explicit credit constraints + Money Supply Targeting

        Sacré bleu ! Someones actually come out and said the obvious….But , alas…the objection is “Miles from CB consensus”. So just heap on more of the same stuff that doesn’t and won’t work, I guess….

      • For me it all comes down to the insanity of increasing aggregate “savings” in an environment of global demand deficits.
        Said a little differently: Real Productivity is not and cannot be rewarded until we collectively either increase demand or decrease supply. So is it any surprise that “we” collectively choose to wait out the transition by grabbing fixed assets, regardless of price? Maybe this fixation with the non-productive is indirectly the way that we destroy our own capability to produce and thereby restore balance to the global supply/demand equation. I get the feeling that it’s something we all recognize, maybe at some level it’s in our DNA to cede control to the conquerer…we’re just inventing a new step to this age old dance.

      • I am essentially with you there Janet….

        Ultimately they need to have realistic measures and everyday life has essentially been sanitised from our inflation measures – if they are going to target inflation (and In tend to agree the idea has merit) then they need to be able to incorporate the very obvious bubbles in financialised asset classes that are currently excluded.

        But I also think they need to look out along the lines of what the Citi guys are on about – and that is explicit credit constraints (or purpose constraints – credit is only available for particular purposes, and anything which looks like speculating without building in value to an asset wouldnt count).

        From there I would be looking at placing cash into the hands of the hands of the punterariat and specifically excluding anyone who looks like they have access to wealth (I would go so far as to specifically and deliberately exclude people with more than a particular amount of earnings or asset base). After that we come to the whole creation of money angle and this is why banks are very careful because ultimately the money creation that we could quite easily have controlled by society (and socially accountable administrative means) is currently outsourced to banks for almost nothing, and the banks allocative processes must needs reward themselves first and have only secondary interest in the wider macroeconomic implications of their activities.

        @China-Bob – I would look at taxing the living shit out of anything which looked unproductive……

      • China Bob,
        Although much maligned, negative interest rates are the first real attempt to fix the problem of unproductive savings. Negative interest rates really are a tax on unproductive saving. There is no reason they shouldn’t work.
        Look at Japan, the Japanese state can now earn interest ‘revenue’ by borrowing money to finance stimulus. This is a great result. Up until now a Japanese bond holder has been sitting pretty earning a real yield in a deflationary economy as a reward for maintaining a depressed economy. Now they are being asked to periodically transfer wealth to the state who will actually spend it. Banks and bondholders hate it which strongly suggests it is the solution we have all been searching for.

      • @Sweeper, except negative interest rates make things worse! They increase debt levels which then due to the wonders double entry bookkeeping creates savings. The only way a fractional reserve banking system can get out of this mess is through widespread bankruptcy which the Central Banks of the world are afraid to let happen (for obvious reasons).

      • TailorTrashMEMBER

        Under the heading “what should be done “……………..”Asset price inclusion in inflation target “……..no problem in Australia
        reaching any target we set ……….

      • Pantone…

        If you cling to the fractional reserve perspective it will enviably skew your perspective, which will only increase the inaccuracy manifold as you extenuate it out further… just saying…

      • @Gunna Hmmm tax the “unproductive”, what’s productive in a world of demand deficits?
        Is an extra Iron ore mine productive? I dont know if it’s really working out that well for Gina.
        Is an extra car assembly plant needed? if so is it really needed in Australia?
        Increased Productivity with out serious end demand growth is very deflationary, making assets that hold their value very desirable. I dont think you can tax your way out of this conundrum. Marx concluded that capitalism was @#$%ed if demand was ever satiated, I strongly suspect were at that junction today. So I do agree that countries need to see this economic / social problem through the lens of a post peak demand society. As such they should shift the economic burden of tax away from production/consumption and towards wealth / asset taxes …..but good luck getting that law passed, I suspect we’ll need to see a whole lot of social/economic hurt before that solution raises to the top of the heap.

      • @sweeper Negative interest rates, when the illogical becomes logical
        I agree they’re the obvious solution because they destroy savings, however unfortunately they also create asset bubbles and lead to the development of business models that are only sustainable in a negative interest rate environment. If this is a transient period than the last point is very important because we’ll exit this period with an even bigger problem to solve. If negative interest rates is the new normal than our society needs to do a whole lot of serious thinking about the social implications of policies that destroy wealth. I’d suggest inflation with all it’s problems was a better solution especially for the young unfortunately Inflation requires unsatiable demand growth…which kinda takes us back to where we started.

      • @China-Bob

        I am with you, I dont think taxing the shit out of the unproductive will be easy – but I am quite sure that obviously non productive investment can be picked off ……..one unproductive asset class after another at a time if need be (starting with existing houses and fine art and then working forward as the money collects – in the example of an extra iron ore mine now – I agree, tax the shit out of it [I am not saying that there need be some ‘perfect’ theoretical position established of ‘X’ is productive and ‘Y’ isnt and it will be that way forever more, but to have some scope to say ‘Xis obviously non productive or speculative or has a significant negative social impact at this time and then tax it.)

        You are also spot on (for mine) in harking back to Marx. He and other Marxist (Marxian) economist have written extensively about what is now known as ‘Monopoly-Capitalism’ – while I would be suspicious of any idea that we are in a ‘post-demand’ world (or even on a downhill slope demand wise) I am 100% in agreement that we live in a world where current supply for current demand is saturated – and consequently that those currently supplying need to find some other demand to satisfy and that there need to be something to spark additional demand so that demands are given a monetary form which suppliers find themselves ‘incentivised’ by – we could start with crap housing, addressing health and poverty issues and major land use projects.

        – have a read of the works of Baran & Sweezy, Henryk Szlaijfer & JB Foster The Faltering Economy: The Problem of Accumulation under Monopoly Capitalism Braverman Labor and Monopoly Capital Thomas Palley From Financial Crisis to Stagnationand most recently (2012) John Bellamy Foster and Robert McChesney The Endless Crisis , in addition to Minsky, JK Galbraith, etc –

        You – as someone whom I suspect would be appalled by the idea of being remotely ‘Marxist’ – and I – who know the works of Marx quite well and has no problem with Marx the economist [indeed finds Marx one of the great economists} though I do believe that most political responses promoting a Marxist economic response ultimately will devolve into a political corruption which amounts to just another form of rent seeking unless the power promoting the Marxist response can find some way to be genuinely self critical are obviously on the same path. To me it is obvious that it is the demand – supply balance that is the issue. The accumulation of capital, its concentration, and its tax avoidance, and its marginal propensity to buy entire political systems is the root of the problem, and that which ultimately needs address. I dont for a second think addressing that (short of a major existential war) is likely to be easy.

        On the subject of negative interest rates I see it as purely a means to destroy wealth – but it has the downside of destroying the ‘wrong’ wealth from the bottom up, when addressing wealth in its speculative guises from the top down, would I suspect be the way to go.

      • @Gunna You – as someone whom I suspect would be appalled by the idea of being remotely ‘Marxist’
        Mate you do me a disservice, I’ve probably lived in more communist countries than you have. I’d also wager that I’ve bribed more communist officials, so I’m very familiar to the different paths to wealth under communism and capitalism. Heck I even have a beautiful leather bound edition of Das Capital along with an equally impressive set of Marx’s letters, all purchased at a little book store in East Berlin (that’s right before the wall came down). Matter of fact I enjoy reading Marx, he is without doubt one of the greatest philosophers, I just dont happen to agree with his economic conclusions. I’d suggest my conclusions differ form Marx’s because, as a development engineer, I can always see a clear pathway to better product / better life if we can only invest our efforts effectively(even Marx concluded that Capitalism was the most effective organizational tool available). I suspect in the end analysis Marx lacked that vision thingy and therefore concluded that demand would be easily satisfied within a few short years, naturally leading to the: Than What question? Socialism is the natural answer to Than what? Communism is simply socialism’s political reality.

      • @China-Bob, sorry, no offense was intended.

        I was more a man dealing with the bribery of post-communist officials (The Russian speaking world – and I dont think the bribery changed much in the process of moving from communist to post communist) (and would observe that communism in practice was a superb system for encouraging people not to work, or encouraging pseudo work ‘you pretend to pay us and we pretend to work’). Apart from that – yep the Leather bound Das Kapital etc, the stone bust, all good stuff.

        But he certainly – and his successors in the Monopoly Capitalism field – identified and described to a tee the situation we find ourselves at the moment with capital seeking ever more spurious means of articulating wealth and aggregate demand and prosperity distributing economy going nowhere.

      • CB, this demand saturation is not new – e.g., The Grapes of Wrath in the 1930s – in fact, it occurred each time when a depression hit. Marx and Engels thus concluded that perpetually recurring wars – i.e., total destruction of productive capacity so that we can start over – was an essential part of capitalism.

        Demands for existing merchandise are always limited (by population or the purchasing power of the population in depressed times). So, if there is nothing new – without innovation that creates a new market – a slump is inevitable.

      • Persoanly find Michel Foucault more advanced than philosophy grounded in antiquity [too much esoterica], yet at the end of the day its just deductive reasoning…. comfy chairs, smoking jackets and pipe are barely an advancement from staring at candle flames for hours… or consulting entrails..

        Skippy…. that’s not to mention the manifold enhancements made by multidisciplinary science and soft sciences wrt our knowlage base yet like the Victorians surrounded by the explosion in mans wonders would retire to feast and then clear the table for the mummy unwrapping… at least for those that survived being used as a coal substitute for locomotives…

      • Inflation is definitely a better solution as many savers don’t realise they are being taxed. However there are 2 problems:
        1. It would require CB’s admitting that 30 yrs of inflation targeting has been stupid. Kuroda sort of did that recently actually.
        2. How do you create the inflation? Raising the target and hitting the target are two different things.
        re Marx, many things at the moment sort of square with his crisis theory: Over-abundance of plant relative to labour, potential over-production, mercantilist dumping of goods, capital fleeing to find a higher rate of return (now even fleeing the EM’s). But from memory he regarded inadequate demand, and an apparent shortage of money as symptomatic. In which case negative rates and inflation to force investors out of money assets into real assets won’t fix the problem. As Dumpling said, only actual destruction of productive capacity will fix it.

      • And they will not be allowed to export their way out. Dumping tariffs are already starting to popup all over.
        Sooner or later they will have to start shutting factories down and face the riots.
        And that means even less imports of red dirt, coal and gas. I will not be surprised if Chinese enterprises start selling overseas assets.

    • Yeah it’s pretty ugly. Inflation breakevens fell to a record low this week. The 10yr breakeven was at 1.37%. That shouldn’t be happening with US unemployment where it is and easy money across the world.
      Since 08 risk assets have followed breakevens. When QE program’s have been announced breakevens have increased, real yields have also increased and then risk assets have rallied. Now the relationship has broken down, ultra easy money in the form of negative rates doesn’t seem to be supporting inflation or even depreciation. See Japan.
      Maybe QE was never really responsible for preventing deflation. Maybe it was more of a depreciation effect as money flowed into EMs. And now that money is flowing the other way inflation can no longer be stabilised and the world is becoming Japan. Could be true.

      • More from Stockman

        All this stimulus has “worked” so awesomely that we now have unprecedented overinvestment, malinvestment and excess capacity everywhere. That has triggered, in turn, an epochal commodity deflation and CapEx depression——even as the speculative bubbles and hideous inflation of financial assets fostered by the central banks teeter in the edge of collapse…..there may be only a few sane policy-makers left in the world. So maybe the loud “nein!” coming from Germany this weekend represents the last gasp of rationality…..Wolfgang Schaeuble… said that the space for monetary policy has been exhausted. He warned that using debt to fund growth just leads to “zombifying” economies.

        http://davidstockmanscontracorner.com/man-up-my-eye-the-germans-got-it-right-on-g-20-stimulus-nein/

      • “the world is becoming Japan”

        If only the world *can* become Japan – see the consistently lower unemployment rate than the rest of the developed world?

        Nah, cannot happen – too good to be true.

      • @Sweeper….

        “neel kashkari, the new eu ministry for all things fiscal, the gang of 20 promoting fiscal over monetary; and janet pleading with congress to go fiscal… and nirp: NIRP is good idea if it promotes government fiscal spending because the money the government “borrows” from itself actually earns some tip money and the borrowing and spending could go to create and subsidize an entire complex of new environmental industries with jobs, remember jobs? We need govt spending. We need to control capricious, useless debt creation. We need to clean up the planet. We need jobs before the whole system implodes, as in yesterday. And we need to take the hot air out of the sails of the debt and balanced budget hysterics. So if people won’t spend (bec we are all angry and tapped out and jobless, etc.) we have an excellent solution that is facilitated by NIRP, tried and true-good old gov’t spending, it could solve all our problems and earn some on the side.” – H/T Susan the other

  9. Great Link to where Peter Switzer questions the bona fides of Jonathan Tepper, discovering he has a book to sell…Hence all the scaremongering. So for balance Switzer interviews the operations manager of his business Switzer Home Loans to tell us the banks aren’t being slack:

    http://www.switzer.com.au/the-experts/peter-switzer-expert/who-is-jonathan-tepper/

    Tepper should be ignored because he has a book to sell: Switzer should be listened to because he has home loans to sell.

    The irony…or should that be hypocrisy? Disinterest really is a novelty.

  10. TailorTrashMEMBER

    Looked at a few houses on the Northshore of Sydney this morning ……..definitely a more subdued atmosphere …………the throngs of pushing and shoving Chinese of last year are noticeably absent ………and the buyers look more like family people looking for a home ……… Asking prices still in the sphere of the ridiculous but when an eyebrow is raised at the agent …..the initial quote is quickly changed to a from- too range …….with a spread of 100 -200 k ……………..love how all those agents seem to have 5 series Mercs ……………all those lovely juicy commissions from their buyers big borrowings …………….onya straya!!

    • At least you have Auctions in your patch. In the slums, where I am, auctions are all but thing of the past. Very few. And this is a good thing. When auctions volumes are down it means there are no buyers around so people decide to just list and wait for an offer.
      As long as Chinese “investors” don’t find new novel way to siphon money again – we will witness very interesting scenario in near future.

      • Seems so Nikola. Let’s hope prices start really falling soon. IMO, there’s every indication exactly that is what’s coming. Where I am I can anecdotally see prices have already fallen significantly but aren’t reflected in the published data.

      • Richard, Patience Grasshopper
        When this goes you will wish it hadn’t. There will be blood in the streets.
        Best to lie low until everything settles out.
        When the banks get bailed out you will know when to move, but make sure of your employment first.

      • @Wiley Wolf

        Good call. I agree. Where to put money though, that’s the problem. I’ve got most of mine in unhedged foreign funds. They’re suffering a bit this year, but I think they should do well as the AUD falls. It’s all a big gamble and I try to hedge here and there having bought a positively geared property on the coast. It’s a very difficult time. Nothing is normal. Who knows what the government will do to stimulate house prices. They could rise for another decade or more before the entire country’s wealth is gone.

      • TailorTrashMEMBER

        These were not auctions …..rather open houses …….noticeable drop in auctions on North shore too ……agents prefer to get you in the corner and work you over depending on your level of foolishness ………..anyone paying the asking prices for the age and condition of these houses must have a fair measure of said foolishness …I know it’s the land ………and Australia is short on that !!!

    • Went to an auction for a 4 bed place in the hills this morning. Auction done in 2 minutes – no one had registered to bid and there was less than 10 people there. Now online for 890-940. Would have got over the million last year. Things are happening but it is taking a little time so yes there is a need for patience

    • Yes, I’ve noticed the cars driven by the RE agents in Sydney. When I was in Silicon Valley, people that drove Mercs 5 series were entrepreneurs that built multi-million dollar companies and added significant value to society. Here, you’ve got RE agents barely with a high school diploma and no education mostly driving Mercs 5 series as a result of most of us (the suckers) buying and selling astronomically inflated houses.

      • And you have to remember on top of that, Mercs, etc, in the US don’t come with the 40% price premium they do in Australia.

      • “added significant value to society” and the name “Silicon Valley” are incompatible…

        Also cracking a fat about RE and mentioning Silicon Valley are also incompatible as everything is quadrupedal in price.

      • Lets unpack that a bit especialy as were talking about “value” to society.

        “The answer lies in who is getting scammed, the product, and the value they are expecting to receive.

        In the start-up world, some venture capitalists may pitch an investment product of questionable integrity (a start-up with a flimsy valuation and but a big user base and PR machine) to generally wealthier, but naive investors whom are desperate for returns given the current economic climate.

        The scammers of the internet marketing cartel pitch an investment product of questionable integrity (a business or employment opportunity that makes false or misleading representations about the availability, nature or the terms and conditions of employment or the profitability, risk or other material aspect of any business activity that requires work or investment by others) to gullible consumers whom are desperate to make money.

        In my opinion, the differences between the Silicon Valley start-up scene and scammers of the internet marketing cartel are:

        The primary shareholders does not attempt to use the product as a vehicle to generate new investors from the product user base.

        If this wasn’t the case, I’d expect a big pop-up when I open Facebook telling me why Facebook shares are so cool and how I never have to work again if I recommend Facebook shares to all my buddies.

        In the internet marketing world the hype machine (the ‘syndicate’ as described by Frank Kern) is akin to a boiler room. It’s a system designed to stimulate buyer interest and confidence (trust). End-users/customers whom purchase products promoted within the syndicate become investors by reselling those same products and more. Even a low-priced eBook product will entice you to make money by purchasing a higher-priced product that teaches you more.

        Although start-ups often have affiliate and referral programs established to bring more users on board (even an ‘add your contacts’ tool is an example), these referral schemes generally have non-monetary incentives. Most avoid ‘multi-tiered’ (pyramid) schemes because of their obvious association with the low-brow world of multi-level marketing.

        Internet marketing cartel scammers are not subjected to the same business and consumer protection laws and regulations.

        Savvier internet scam businesses, websites and payment systems are based off-shore to avoid the need for regulatory compliance. Additionally, any publicly-listed venture capitalists are subjected to SEC regulations designed to protect investors.”

        https://www.quora.com/Scams/How-is-the-Silicon-Valley-startup-scene-different-from-the-scammers-of-the-internet-marketing-cartel

        Also search “Silicon Valley Cartel Anti-Poaching Conspiracy” and “60 Minutes, The Cleantech Crash” and “Congress taking bribes via insider trading”

        The real funny bit is Apple runs its “offshore” holdings as an internal hedge fund out of Nevada.

        http://www.nakedcapitalism.com/2015/11/how-ireland-became-an-offshore-financial-center.html

        Skippy…. is it devotion or what – ????? – because your statements don’t reflect reality…

      • skippy dude, we’ve been through this before… I am well aware of your views on this topic, but I see no point in debating this issue. If you’re so allergic to Silicon Valley, I suggest you give up your laptop, your smart phone, and the whole internet for that matter. They are the products of Silicon Valley that you so much despise..

      • 2big2fail….

        It seems your the only one with aversions, inability to discus facts vs. romanticism or worse intentional pettifoggery – miss statement of facts. Especially when you make unsubstantiated claims, which when challenged, you resort to a non reply by putting the onus back on me by more unsubstantiated claim e.g. pathological dramas with Silicon Valley.

        The exceedingly strange thing is you evoke RE price vs. value yet completely ignore the dramas wrt RE in Silicon Valley and surrounding areas, something that has been going on for decades. Its not like I don’t have friends and associates that have been working there since its inception.

        You can also look at it from another angle too…

        “Alexa Clay wants to teach Silicon Valley a thing or two about disruption using lessons from the underground. In her upcoming book, The Misfit Economy, she casts pirates, hackers, scammers, and terrorists as “innovators” and “entrepreneurs” who have valuable insights into strategy and organization for the Musks and Thiels of the world.

        For the book, Clay traveled to Brazil, India, China, and elsewhere to find unexpected, even darkly tongue-in-cheek, case studies to get her point across. For example, one could be forgiven for seeing her invocation of the “rubbish dumps of Lagos”—a populous city in Nigeria where e-waste is shipped in by the ton and scavenged by children and smelted in backyards, exposing people to harmful chemicals—as tone-deaf, considering the book’s intended audience. The same could certainly be said for her description of the US prison system as a center for “amazing entrepreneurship.”

        But when I caught up with Clay, she told me that she’s playing a deeper, and much smarter, game with the folks up in the Valley.

        “This project was a way of positioning this through a different language that made people pay attention,” Clay told me in an interview. “You start paying attention to these entrepreneurs after dressing it up in the language of the dominant ideology, which is Silicon Valley entrepreneurship—which sucks. The point is to say, actually, this whole start-up agenda, of creating pointless businesses, isn’t the right one, so let’s look at what these misfits are doing and the real issues.”

        Waste-pickers in India. Image: Alexa Clay

        Clay might just be on to something here, as the “outlaw” has been a popular archetype among tech companies for some time, especially with sharing economy companies like Uber. Run-ins with city governments and the law, as well as rebel shit like like office raids by revenue agents, have characterized the company’s ascendence. But is this the kind of activity that Clay hopes to see among the techno-elite in the West?

        “Three years ago, everyone thought the sharing economy was amazing and would foster citizen-level entrepreneurship,” Clay said. “But really it’s just a wolf in dressed up in sheep’s clothing. They’re in bed with the same financial interests. Uber’s ethics are really questionable, and it’s a platform that is aggregating capital. It’s not like it’s citizen-powered.”

        So, in short, no. Clay told me she’d be happier with Uber and other sharing economy companies if they operated more like the pirate crews of the 17th century, which are said to have distributed their profits more or less equally. The idea, Clay said, is that Uber takes the age-old idea of people helping people and injects itself as a corporate intermediary, effectively monetizing community. “Now, rather than just borrow your neighbour’s lawnmower,” Clay said, “You have to go through a centralized platform and pay them to rent their lawnmower. I think it’s a pernicious form of capitalism, but with the right probing it could be salvaged.”

        http://motherboard.vice.com/read/what-scammers-and-pirates-can-teach-silicon-valley

        Skippy…. it might be an environmental thing, information arb, inexperience and knowlage, Upton quote, tho I hope its not intentional intellectual dishonesty…

      • BTW 2b2f all the things you mention had their beginnings in Government funded projects and University’s, which then were picked up by the private sector, not to mention the tax off sets and subsidies they receive from Government. Which strangely enough is then leveraged politically once they become 2b2f or powerful.

        Skippy… gets a wee bit duplicitous and hard to draw lines after a bit…. eh….

      • More meaningless blather from Skip. Anyhow, Skip, throw out the laptop and get rid of the internet connection. You’re supporting Silicon Valley. Oh, and stop reading MB; its ads are served by doubleclick, owned by Google, based you know where…

      • And the lorddud has spoken… blather – HE – says… none of the stuff would have happened with out Sillycon Valley and their super powers…

        Hay lorddud did you see IR went down in America without the CB lowering, must need the money to pay for the F-22/35 and those new 500MM B-1 B2 bombers, mean while their having to decamp those homeless near SF after putting them there in the first place….

        Skippy…. not to worry… soon you can do the pilgrimage to Friedman’s likeness in holy land – in Chicago…

      • Skipp’s comments are so predictable, they don’t bother me anymore ? Just surprised there’s no cut/paste from naked capitalism this time?

      • I back up my arguments and not just from NC, yet you two fun boys crack fats and dummy spats without any means to evaluate wtf you say… save your personal assurances… and plethora of contradictory statements…

        Then to top it all of were treated to the burn baby burn final solution, so your cult can rise from the ashes as the new boss… same as the old boss..

        Skippy… hope whom every pays for your day job gets some value out of it… I know some like to keep clowns around as entertainment / public service…

    • The no bidder auction I went to didn’t make it into the official results…what a surprise! Sydney and Melbourne are standing in mid 70’s but closer to mid 40’s clearance rate

      • NSW
        872 Total Scheduled Auctions @ 73% Clearance Rate*

        Sold prior to auction: 127
        Passed in: 141
        Sold at auction: 361
        Withdrawn: 39
        Sold after auction: 5

        Missing in action: 199
        (not the first time)

    • “love how all those agents seem to have 5 series Mercs”

      Do they own them or the agencies lease their corporate cars out so that everything will look good? You know, a part of their uniforms.

    • I thought OMG the NYT is talking about the Australian Senate Crossbench. Only to discover it’s a sideswipe at Trump.

      • FiftiesFibroShack

        There is a large difference between what’s happening in American politics and what gave us our current senate; our situation caused by a government that tore itself apart and didn’t deserve to be re-elected, and a dreadful replacement – the Abbott government.

        Our senate was caused by a collective sigh, rather than a no compromise hyper partisan movement.

        Over the past generation we have seen the rise of a group of people who are against politics. These groups — best exemplified by the Tea Party but not exclusive to the right — want to elect people who have no political experience. They want “outsiders.” They delegitimize compromise and deal-making. They’re willing to trample the customs and rules that give legitimacy to legislative decision-making if it helps them gain power.

        Ultimately, they don’t recognize other people. They suffer from a form of political narcissism, in which they don’t accept the legitimacy of other interests and opinions. They don’t recognize restraints. They want total victories for themselves and their doctrine.

      • I read the piece 😉

        This Balkanisation of politics, and it seems to be happening everywhere, is interesting. Disenfranchised voters, self interested politicians – something to do with Warhol’s 15 minutes of fame, selfies, living life large on social media, belief that your personal interests however obscure, single interest or irrelevant they might be Trump the national interest, representing the collective abandonment of any pretence to interest in the greater good.

      • Hay 3d1k it might have something to do with your stripes little social engineering protect that went off the rails, then preceded to head straight for the cliff…

        Skippy…. hate to be the one to break it to you, but buying everyone and group off does not grant validity, not only that, but at some point it collapses in on its self due to the weight of all its lies…

  11. The Donald Takes on old Rupert as well as the Pope!
    Rupert has for years classed himself as King maker (witness tony Abbots past visits for advice and support). News sources such as The Wall Street journal, The Washington Post and here the Australian and The Daily Telegraph and their associated broadcasting networks such as FOX news have managed how potential candidates, in the UK,USA and Aust, for elections are perceived by the public. An endorsement from Rupert was virtually a ticket to office.
    But now The Donald, a vastly more experienced media manager than Rupert, has had FOX news come cap in hand so The Donald wont boycott FOX programs and kill their ratings and profitability.
    Seems FOX viewers too support the ascendency of DT.

    Since back in 2008 Obama started the Facebook election campaign, Trump has polished it.
    Trumps media skills give him a reported personal audience of 6 million on Twitter, 6 million on Face book and 1 million on instagram.
    The internet has disrupted the landscape: DT is managing the social media to promote his messages, and keep his opponents out of the limelight.
    As we have witnessed here in Straya MSM and traditional syndicated news sources are out of the loop. The elite owners and managers of these old school news outfits can no longer put the spin or manage the presentation of a candidate, and the public are realising they can go around the press news and go directly to the candidate.
    By having such a well working social network DT has mostly received his advertising for free.
    Other candidates have to raise many millions just to run an add.
    Looks to me like the end of mainstream media as we know it.
    Does anyone know what sort of social networking set up Turnstile has.?

  12. Beginner’s luck pays off for engaged couple with $1.16m Leichhardt cottage….last traded in 2012 for $755,000….guide throughout the campaign was $1 million to $1.1 million – the reserve price on the day.

    34% rise but now falling IMO.

    http://www.domain.com.au/news/beginners-luck-pays-off-for-engaged-couple-with-116m-leichhardt-cottage-20160227-gn56oj/

    $1 million to $1.1 million campaign, with the new rules, it’s fallen low compared to agents expectations hasn’t it?

    • As an agent, you must:
      include your reasonable estimate of a property’s likely selling price in the agency agreement (also called the sales agreement)
      provide evidence to the seller of how you estimated the selling price
      ensure the highest price in a price range does not exceed the lower price by more than 10% (for example, $500,000-$550,000)
      record in writing statements made about the price while a property is marketed
      ensure your estimated selling price remains reasonable by:
      revising it as soon as you know (or should be aware) of evidence or circumstances that changes it
      notifying the seller of the revised price
      amending the agency agreement with the revised estimate
      take all reasonable steps as soon as is practical to update any marketing of the property with the revised estimated selling price.

    • Thanks Richard.

      @skippy perhaps we can review this as a case study as I want to understand your point(s).
      The young couple “won” their first home by bidding up to $1.16m and they already have plans to renovate the kitchen and yard (more $$$, likely debt). Their action to bid the most has resulted in an exponential price rise from $755k in 2012 to $1,160k in 2016, and let’s remember this result was spurred on by the individual actions of the under-bidders too.

    • The best bit is the spruiky headline on smh “They were going to get Breakfast instead they spent 1million. (insert photo of debt serf couple here)

    • “a young couple taking the keys at their first ever auction.”
      First auction? Hmmmm.. possible I suppose, but the ‘young’ bridegroom has been playing water polo for 19 years – and that was in 2014, so add 2 more – so I doubt he’s all that young! “When I started playing ( 1995?) the average age was about 30….”
      https://www.youtube.com/watch?v=5bUOtCmFKxo

    • Mining BoganMEMBER

      Obviously no need to axe NG now that the first home buyers are “winning”.

      “This sale and a similar one sale last week are in stark contrast to the previous 12 months where reports of first-home buyers missing out on dozens of properties came in thick and fast.”

    • Andy its nothing more than a Scotts box with the term d’art of market on it. Decades of evolution has brought us to a point where industry writes its own rules, which then end up as bottle neck economics aka neoliberalism.

      Skippy…. RE is just art to be bid up on and the auction house is in on the game, that is how they make the big bucks… I would remind of the paper I linked back sometime ago, which highlighted the effects of the Plaza Accord i.e. capital banks loss of traditional income inadvertently sending them into the RE market, resulting in even more financialization of the RE market, tho whilst increasing risk in the sector was able to off load – hive off that risk on others.

    • What do you know. 15 min and Google produces this trail of breadcrumbs:

      Daniel in the UNSW Magpies:
      http://theprimegroup.com.au/uncategorized/unsw-magpies-win-back-to-back-titles/

      But wait, here is his email:
      Daniel Swinnerton – [email protected]
      from this website:
      http://www.unswwests.com/Programs/SeniorMen/
      And who is Prime Constructions you ask? well, they are a rather large building company:
      http://theprimegroup.com.au/our-story/

      Young couple going for breakfast my arse. This is a fabricated story by another corrupt journo in cahoots with a lobbyist to sway public opinion on an important public matter. A new professional low for Australia. Congratulations.

      • Mining BoganMEMBER

        Good work that man!

        This is why I want it all collapsed. I realise how much community damage it will cause but there’s no other way. Just blow it up.

      • Thanks MB. I used to be optimistic that logic would prevail and they would alter course. Now I have resigned myself to the need for a total reset. I feel sorry for the collateral damage but I can´t see any other way.

      • @ Baron

        Nope, other way round.
        Some facts could have been artistically represented to allow for a creative article after the purchase

    • That Domain article links to the rental listing for the property. Advertised for $620pw, $1.16M sale price, 2.8% yield and yet the guy buying it says: “we thought we should contribute to our own mortgages rather than someone else’s”. He doesn’t seem to realise he’ll be paying well more to the bank in interest alone even if you calculated it at an 80% lend without taking into account the other expenses to buy, than he would have to the landlord.

      • When people make mistakes like that, they just don’t want to know about it. It’s done, they say. And then they microwave the baked beans.

      • Ratinality! The Mrs wants to upsize in Sydney as we look at the whole family starting stuff (call it nesting)…but she refuses to see the argument of if imputed rent is far greater than actual rent then unless you are betting on capital appreciation forever it is hardly worth it.

        (FWIW I’d still see some price growth in Sydney as the outlook gets gloomy and we cut rates more. But the price of housing can’t go up forever as the price of money can’t go down forever! Soon that gloomy outlook catches up.)

      • BB…

        “You think Daniel bought the home for $1.16M just so the article could be written?”

        From experience things like that do happen, but its more complicated than you suggest.

        Skippy…. what have you never heard of the adage – salting the mine – ?????

      • No skippy, no one is buying a 1 million dollar house to get their quote in the newspaper. I’m sure Domain would have taken a quote from anyone who bought it and was prepared to talk to them…

      • BB…

        I’m not making the case that this specific trade was done just for an article. I am pointing out that any industry will use others, to include providing incentive or offsets to accomplish PR goals. I can point out many instances where, especially, people all ready in the public eye are utilized to beguile the herd, in order to create illusions.

        Skippy…. I suggest that you resist from making rationalizations based on what – you – think happens wrt people or groups, and instead delve into the investigation from a more cynical – analytical approach supported by hard evidence. To do other wise is just conjecture of the worst sort.

      • “I’m not making the case that this specific trade was done just for an article.”

        Well that is the trade for which the accusation was made and I was responding to. I was not making a claim about any other scenarios you want to try and deceptively introduce.

      • Nothing deceptive about pointing out the obvious conflicts of interests wrt the buyer w/ industry exposure. This kinda ham fisted MSM PR, especially from Domain, is the subject of constant exposure on Media Matters and other more independent platforms for introspection BB.

        Skippy…. its the same caveat one has to take wrt your opinions imo, selling ones own book.

      • skippy, I look forward to the ‘analytical approach supported by hard evidence’ that you mention in the previous post to prove that the project manager and nurse in this story are in nefarious cahoots with Domain to push their underlying agenda.

        I’m not sure what book I am supposed to be selling here. Unless it’s a book about how skippy tries to obfuscate, deceive and begrudge others with some burden of proof that he does not even provide himself…

      • BB…

        Its common practice, see previous MB post on silly ex sports personality coming to tears…

        I could add a few other industry such as jewelry insurance with replacement being off shored to China using ex sports stars as front house faces to grant a veneer of respectability, when implying its done in Oz. Its just simple psychology BB.

        In the last 10 years I had two separate instances where I had to reconcile dramas with insurance mobs. First one ended up as a cash out because they could not provide the services implied and the second was a complete shite show with dodgy replacement by bespoke jeweler. Which ended up being a old school work out due to vested interests and political ramifications in two states. The director of the T1 bespoke insurance company in Sydney and I had to sort it all out. Even to the point of allowing the jeweler to remedy without call him directly out on it, because I did not want to take his livelihood away, had been going through a rough patch. In the end the in house jewelers in Sydney had to craft a new piece which ended up being above the original spec.

        Skippy…. sorry BB I’ll take my knowlage and experience over your personal rationalizations about what happens and why people do stuff… especially considering your market exposure…

      • I have 0 interest in your intoduced examples skippy as I have already communicated clearly.

        My orginal question was in relation to this specific property sale and article, it had no broader message to suggest such professional collaborations don’t occur at other times.

        So if you can’t provide the hard evidence you say is critical, then we should need no further comment from you and I had reasonable grounds to ask the question of JasonMNan.

      • Sorry BB, but your just begging the question when all the incentive and trying to sound reasonable about it. This coming from an industry with a long track record of such antics and a profit motive.

        Skippy… one day you might move up from semi precious stone rank…. good luck…

      • Could this possibly be the new normal?

        Episode 65

        Disclaimer: All characters and events in this Episode – even those based on real people – are entirely fictional. All celebrity voices are impersonated…..poorly. The following Episode contains coarse language and due to its content it should not be viewed by anyone.

        Not so long ago in a galaxy not so far away …..

        Chancellor Palpatine: Remember back to your early teachings. “All who gain wealth are afraid to lose it.” Even the savers.

        Anakin Skywalker: The savers only use their wealth for good.

        Chancellor Palpatine: Good is a point of view, Anakin. The savers and the good-looking property investors are similar in almost every way, including their quest for greater wealth.

        Anakin Skywalker: The property investors rely on ZIRP for their strength. They think inward, only about themselves.

        Chancellor Palpatine: And the savers don’t?

        Anakin Skywalker: The savers are selfless… they only care about others.

        Chancellor Palpatine: Did you ever hear the tragedy of Darth Stevens “the wise”?

        Anakin Skywalker: No.

        Chancellor Palpatine: I thought not. It’s not a story the savers would tell you. It’s a central bank’s legend. Darth Stevens was a Dark Lord of the neoclassical economics who lived many years ago. He was so powerful and so wise that he could use the Force to influence the total amount of currencies in circulation to create credit… He had such knowledge of NIRP that he could even make money from borrowing to the hilt.

        Anakin Skywalker: He could do that? He could actually make money from borrowing up to his eyeballs?

        Chancellor Palpatine: The Dark Side of the Force is a pathway to many abilities some consider to be unnatural.

        Anakin Skywalker: Is it possible to learn this power?

        Chancellor Palpatine: Not from the savers.

      • Well as noone else replied to your comment I will cease giving you a platform to carry on with your personal opinions sans any relativity to demonstrable reality…

        Skippy…. IT w/ hobbies…. chortle…

      • @Dumpling
        Young Anakin has a lot to learn.
        I reckon Darth Stevens will resign in protest before he is forced to implement NIRP. He is still a friend of the savers.

      • BoomToBust – Yep that’s nuts to be paying these sorts of prices relative to rent, especially at this point in the cycle for Melbourne and Sydney.

        skippy – I don’t need anything from you, nor could I care less about anything you have to say. So perhaps next time you have an irrelevant skipiphany you think is worth sharing under one of my comments, think again.

      • Coming from someone who’s grasp of reality is path dependent on some books, which have little or no grounding in historical context, nor advancements in human understanding, I’ll take that as a complement BB.

        The guy that back in the day professed only gold was – real – money… because he read it in a book and believed it… that’s called indoctrination BB… and some wonder why people buy expensive RE… yet gold is productive….

        Skippy… maybe when you have a few thousand hours more reading and conversations with those in numerous fields of inquire, out side market fundamentalism, we can have an informed conversation… till that day…

      • I’m not sure what books you are referring to. I don’t recall having ever suggested only gold is real money.

        I have no interest in having a conversation with a liar skippy.

      • BB… you acumen is touted as RE and precious metals… en fin.

        Gold has gone from $660 an oz to nearly $1900 and then back down in the last eight years. You can hardly call that sort of volatility “a store of value”. Not only that but its been some time since you sold anticipating a crash, so its not like your keen or anything for a crash or anything to cloud your perceptions.

        Skippy…. your track record speaks for its self mate… I just don’t like seeing others blinded by the fairy dust.

    • …(they) had thought about heading out to buy breakfast but instead bought something much more substantial.”
      Don’t you love this sensationalism. How cute this story is!!!!
      Well folks, this is all good. More confirmation that irrational behavior is rampant and on the rise. More reason to stay the f*@k away from the big mess we’ve created for ourselves.

  13. It was overpriced in 2012. Lambs to the slaughter…..hope their marriage survives the impending financial calamity, many won’t.

    • I was in the area today at a friends rented place. I thought it’s a nice convenient area, but the prices being asked simply don’t reflect what they are worth. How did it all come to this?

      • Had dinner in Norton Street last night – great area – lovely chat with the Mrs in between the aircraft landing……..

        You would want f***ing good double glazing!

  14. The Traveling Wilbur

    If I owned a house worth $1m (well owned 50% of it anyway, with the bank being owed the rest) would I talk to a random telemarketer about investment property as a tax saving mechanism? No. What if I already had two IPs as well. Definitely no. What if the two IPs were both under-water and I was desperate… then yeah. Definitely.

    Tis on one and all, the wheel is turning and it is to late to get off. Or so I’m reliably informed. And while one anecdote does not shape the world, to those listening, it is only one of many. Where is Reusa when we all need a good cheer up?

  15. “In particular, it could drastically reduce negative externalities—valued conservatively by the United Nations Environment Programme at $40 billion1 —such as “leakage” into oceans as plastics escape established waste-collection systems. Today, almost a third of all plastic packaging leaks, with about 8 million metric tons annually polluting oceans.”

    http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/rethinking-the-future-of-plastics

    If this is true, it’s an utter disgrace.

  16. Teppit’s book Endgame A strong Australian dollar will also begin to affect Australian exports. Quantitative easing (QE) in other G10 countries is partly to blame here. As we have already discussed, QE creates what we call excess liquidity, essentially extra money that is surplus to requirements for productive purposes in the economy. Excess liquidity tends to flow along the path of least resistance, and in the economy, that generally means it flows into asset markets, such as stocks, bonds, commodities, and property. For Australia, more QE in the United States may lead to higher commodity prices and higher inflation, which in turn may lead to further interest rate rises by the Reserve Bank of Australia, Australia’s central bank. More tightening will make it harder for Australian households to pay their mortgages as increasing rates feed through to higher mortgage payment costs. Approximately 90 percent of Australian mortgages are variable rate, which means that rate rises are passed straight on to the majority of mortgage holders. Higher interest rates in Australia are also pushing the currency much higher, providing another headwind for Australia’s exports. The Australian dollar reached 25-year highs on a trade-weighted basis in 2010 and shows signs of pushing yet higher. Quantitative easing might also negatively affect China, which would crimp Australia’s trade balance further. As excess liquidity pours into these commodities, QE will help push food and energy prices higher. Countries like China are very sensitive to such input prices and

  17. Auction rates in Sydney show again absence of West and South West properties. Although I can see more than last week numbers are still very low.
    Also overall volumes in Sydney are still very low @648. We have to wait until number of auctions gets closer to 900-1000 before we see where we stand.
    Melbourne on the other side is already listing 1200 auctions.

    • Low number of auctions because the buyers aren’t there like they were when clearances were 85% and higher..

  18. G-20 Finance Guys agreed on Sweet FA…..

    As economy chiefs nod in agreement, differences emerge – Nikkei Asian Review

    http://asia.nikkei.com/Politics-Economy/International-Relations/As-economy-chiefs-nod-in-agreement-differences-emerge

    G-20 Wants Governments Doing More, and Central Banks Less – Bloomberg

    http://www.bloomberg.com/news/articles/2016-02-27/g-20-wish-list-wants-governments-to-do-more-central-banks-less

    G20 to say world needs to look beyond ultra-easy policy for growth – Reuters

    http://www.reuters.com/article/us-g20-china-communique-idUSKCN0W004T

    G-20, Rejecting Major Policy Shifts, Plays Up Basic Strengths – NY Times

    http://www.nytimes.com/2016/02/28/business/international/g-20-rejecting-major-policy-shifts-plays-up-basic-strengths.html?ref=business&_r=0

    • Why expect anything from this bunch of hollowmen (women). Never forget the 2% additional growth committment of the 2014 Sydney G20.
      Just a bunch of muppets swilling from the public purse believing in outdated policies.

    • yes, i noticed the difference of language between IMF and the German Finance minister (commented somewhere here earlier). It all points to a broken system.
      It seems they can’t agree on anything moving forward. But one of the issues that can impact us most is overcapacity and it looks they don’t know what to do about this either.
      We have massive overcapacity in China and that has not been dealt with. How China will handle this will be very crucial for Aus in particular. Do the attempt to export their way out?
      If they do, how rest of the world reacts?
      If they don’t and start shutting down lot of their plants, how much less Iron Ore, Coal and Oil/Gas will they need?

  19. I live in a high growth area, so it’s may not be representative of other areas, but the local hardware store I clean has been incredibly busy this fortnight. Say what you want about Boomers, they sure can spend!

  20. http://www.smh.com.au/nsw/cyclist-knocked-down-in-alleged-hit-and-run-on-bridge-road-in-glebe-20160227-gn5ht8.html

    Looks like fines for reckless car drivers should be 100 times what they are. How about Baird theC leave the sensible bicycle community alone and target drivers?

    Just yesterday, I’m riding the Vespa with the wife on the back near the city and this woman pulls out of Maccas gnawing on her chips. I look over at her at the lights and she just had contempt for us. Still gnawing.

  21. Just got back from a 4 week trip to mainland China. What an eye-opener. (Guanzhou, Guilin, Changsha, Zhangjiajie, X’ian, Huangshan, Hangzhou and Beijing) Travelled within by fast, slow and sleeper trains, coaches, taxis and planes. Unfinished buildings and infrastructure-bridges etc inside cities and towns….even outside cities….countryside showing many abandoned projects. All on a massive scale. Sites simply tidied up and unfinished projects simply left to watch sunrises and sunsets. Some have been like this since 2008 and perhaps even before going by the weather staining on the outside faces of unfinished, windowless apartment buildings. Extreme and bizarre. I asked several opinions from natives as to why…..one answer was ‘ Well the Govt is smart, when they saw that we were going to run out of money they ordered everyone to stop work immediately’ Hmmmn. Many country ‘hamlet’ type towns were fortunate enough to have had their old homes (not heritage type at all) replaced with new.
    Saw thousands of electric vehicles mainly public buses and motorbikes. Could count on one hand the number of helmets seen/worn across China. Saw one road accident and it was minor, no injuries. Crazy driving skills practised but quickly figured the traffic would come to an immediate stop if no-one practised breaking the rules. A crosswalk is simply road decoration btw, cross one at your peril. The slowest motor vehicles through traffic are Lambo’s, Audis, Mercs and BMWs- their drivers are not prepared to take as many risks as the rest Lol. Car Parks hardly exist so pavements are for parking and roads, already maxed out with vehicles are for pedestrians stupid. They need to ban cars in cities and use more electric bus/tram vehicles, would solve the issues (both congestion and smog) imo.
    Hospital emergency depts (two) and their pharmaceutical depts get top marks for speedy, quality service and treatment at fair and affordable prices-Huangshan/Hangshou. Am still reeling with amazement at how such a large volume of people can remain so calm at all times. I admire them for this. Most seemed content and happy. The friendliest in the southern regions. China is hungry for meat. Saw seventeen happy cats, many well fed pet poodles, several much loved husky type dogs…..and a handful of tired but careful street dogs. Never saw one single solitary rat during the entire month-most worrying. Saw one solitary brown cow wearing a bell and saw it’s worried expression follow my carriage as I seared past the friendless bovine at 301km/hr through the Chinese countryside. The fast/bullet trains are absolutely fantastic. Smooth as butter. Engineered to perfection. We should have these in bloody Australia! Now!! Meat. Never saw one gram of Australian beef for sale anywhere. Ordered noodles and beef in a good restaurant as one of 3 dishes in Hangshou…… re-read small print in menu certainly explained the 4 morsels of beef in dish ’10 grams of beef’ ‘ wow. Chinese have embraced the Germans re. motor vehicles and noticeably beer. Chinese have learnt from these German brewing experts as Chines beer is very good. Now back home and pleased to see clear blue skies and hear the Australian accent I am cross that Australia was not visibly represented (except for a sheepskin slipper/shoe company called Jumbourg seen in a ritzy shopping mall which I suspect was a Chinese starter) in any shape way or form. Sheepskin products would sell like hot cakes there. Beef, lamb, emu……anything would be welcome. Better nutrition than pig intestines/ear, dog, chook foot or rat intestines on a skewer or scorpion/grasshopper on a stick even.
    Perhaps the people cannot afford our beef. Well, we should be astute enough to come up with a cheaper value added product…..add some cereal (fibre) and veg (vitamins and trace elements) to our beautiful beef and promote this throughout the provinces and major commutes. Do both our countries a service. Would revisit Guilin for all the mountains, ZJJ for same and X’ian again as wonderful history.
    Just had to share, Cheers.

      • 2B2F re. ‘Odd about not finding any Australian beef:
        in 2014 -15 Australian beef exorts to China totalled 128,700 tonnes, worth $758 million.
        http://dfat.gov.au/trade/agreements/chafta/fact-sheets/Documents/fact-sheet-agriculture-and-processed-food.pdf
        I thought odd/weird also….but kept asking for ‘nuroo’ and closest I got was being offered ‘water buffalo’. Was chewy and very fatty. Forgot to mention in my speil that monkey meat was common also. Horse was available. Also saw many, many ducks living happily in streams and rivers near farms and plenty being prepared in city restaurants. Saw a few hens and country-fied roosters from train carriage windows…..A recent favourite in one of last provinces visited was the eating of ‘live’ native/field mouse……I was not living on the street when there btw! This is in local restaurants and 3-4 star restaurants and some street vendors.Have not done the maths on your offered figures but there are as many people in Beijing as found in whole of Australia…..there are ‘a lot’ of people-lean, hungry people in China.
        Noticed a huge ‘gap’ of difference between the very poor and the very wealthy over there. Kudos to them for looking after their street people/homeless. No fanfare or carryons just average Chinese residents quietly seeing that homeless get donated freshly cooked meals and warm bedding etc.

    • Aussie beef is there. It just sells quickly. WB is the largest “beef” import to China as it is very cheap. I spent the weekend with the company from Jiangsu I am assisting with beef exports to. No one trusts the Aussie products in the shops in China, most appear to be counterfeit including wines and vitamins. Same with the Aussie beef – saw in Handan local beef being sold as Australian beef.

  22. Mastercard calling a ‘downturn’ in the property market. Its the first time I can think of this ever happening. They must be getting some doozy figures 😉

    http://www.theage.com.au/national/how-a-shift-in-our-spending-habits-points-to-a-housing-downturn-20160228-gn5kfo.html

    “Until recently, the hot property market and booming residential construction, especially in Sydney and Melbourne, fuelled robust expenditure on household goods. But MasterCard’s new SpendPulse report, which tracks retail trade in Australia, shows growth in household goods sales has been below the three-month moving average for five of the past six months and the slowdown is expected to accelerate. Mastercard analyst Sarah Quinlan said this trend foreshadows “a downturn” in the housing market in 2016″

    I bet sales of baked beans are up tho.

      • Yep.

        “Mr Mott’s report also pointed to rising bad debts at Macquarie Group, highlighting an increase in non-performing loans to 3.6 per cent of gross loans.

        “This is higher than any major bank since WBC in 1994 and is closing in on the impairments seen by SUN following the GFC,” Mr Mott’s note said.

        lol. Strayan banks. Winter is coming.

      • The Band has known for some time it’s going down with the ship. Its job is to play some soothing music until panic is inevitable. Then, they’ll put their instruments down, have a drink or two, and wait for what’s coming.
        The band’s name, by the way, is the Reserve Bank of Australia….

      • The band may play as the ship sinks Janet, but right now the souls on board are barely aware an ice berg has sliced the ship open.

        As I suspected, the 60 min report was laughed off and its protagonists promptly demonised.

        And judging by the haughty back-slapping and jingoistic greed-bingeing in the msm this last week, we’re already back to “property-equity-shit-maaaate- equity!- you’ll be rich-don’t miss-out-just pass the baked beans” lunacy we’ve had the past, I dunno, 20 + years.

        I think an international Lehman type cricket-bat-to-the-face moment beckons. Then, the panic will come.

      • Just one example of a potential cricket bat to the face type ‘moment’

        http://www.telegraph.co.uk/business/2016/02/26/north-sea-firms-are-sleepwalking-into-disaster-as-insolvencies-l/

        Mr Tysoe said: “Most oil companies have in fact not been selling their oil at $30 a barrel, they’ve been selling their oil at prices like $75 a barrel, notwithstanding the spot price of oil, because they’ve had financial hedges in place.” “The impact of this collapse is going to look very bad. In oilfield services, the position is significantly worse. The question is: when will lenders pull the trigger?”

  23. I just asked Tepper if he thought the AUD was going higher as per here in the Endgame (it’s worth the read) The Australian dollar reached 25-year highs on a trade-weighted basis in 2010 and shows signs of pushing yet higher.

    He said That was six years ago. I expect the Aussie dollar to fall more. It rose due to high commodities and interest rate differentials He gave a disclaimer too of course. Was good of him to reply.

    • Unfortunately I visited their ad / facebook page and I’ve been added to their Remarketing Shit List. Which means I keep getting their diatribe also. No cold hard facts, just lots of nonsense being spouted about how negative gearing allows young people to enter the property market and rents to remain stable lol.. They actually don’t say low, which is an interesting tactic…

  24. Anecdotal evidence here, but over the past 2 months I’ve been looking for a new rental in Sydney’s inner west, not happy with our cockroach infested, 1970s decor house we are looking to move to something a little nicer and a little more expensive on a per week rate.

    I’ve noticed many properties remain empty 2 months after I first noticed them, admittedly it’s the other dumps, but a couple of years back they were all disappear quickly. Now they are taking their time. Seems the rental market is slow.