Links 10 January 2017

Macro Markets, Economics & Investing

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Europe/Middle East

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Comments

  1. Original JohnMEMBER

    “Pope tells women to feel free to breastfeed in church” – I mean seriously???? Bare boobs in church now? Why not just stay at home and watch TV? Makes me want to renounce my religion and become an atheist!!!

    Wait, I’m not catholic and bare boobs in church….. damn I getting the Californication Pilot flashing before my eyes now!! Making me wanna go and …SLAP!!!!! DAMN IT WOMAN DON”T SNEAK UP ON ME WHEN I AM TRYING TO WATCH THE OPENING SCENE OF CALIFORNICATION EVERY EVIL DOERS WET DREAM!!!!!

    • Recognise the odd contributor?
      What I think is funny is the reluctance to lay out factual support for opinions given, rather relying on abuse by reference to commentators whith which the SJW disagrees. Then there is no need to discuss the merits of any argument.
      The problem is that this behaviour does nothing to persuade others if the tactic of shutting down the argument fails. It is readily seen for the BS it is.
      Thanks for the link.

      • Remember this farce from Macquarie Dictionary?
        A Response from the Editor on ‘misogyny’

        “The original meaning of misogyny has NOT been replaced with the new definition. The entry for misogyny now has two definitions. If you look in a dictionary at any entry with more than one definition, you are probably looking at a word which, through use over time, has developed meanings beyond its original sense. New senses of existing words do not replace the original meaning, but provide an extension of it. A branch in the sense of a tree was joined in the dictionary, over time, with a branch of a river, and a branch of science.

        (WTF did I just read)

        This one always makes me LOL:
        “What’s mansplaining?” Senator Mitch Fifield offended by Senator Katy Gallagher’s allegation

      • ‘mansplaining’ is a both misandrist term and clumsy portmanteau used by low information voters. The gender neutral words are ‘condescending’ and ‘patronising’. Given Australia’s isolation from science in its culture and reliance on social science instead, it is no wonder that our ‘national’ dictionary incorporated an infrequently used slang term as a real word whilst the Meriam Webster Dictionary does not even recognize it for dictionary inclusion. Low-information voter should have a different meaning in this country as well.

    • Ronin8317MEMBER

      Centerlink is not an IT problem. It’s a management problem. The government want to show they’re getting ‘tough’ without spending the time to look at the data or implement a dispute resolution process. The political price will be paid when ordinary Australians start being bankrupted by debt collectors being sold phantom debt.
      As to the census, IBM stuffed up by hiring overseas IT contractors who do not take any pride in operating the census. If you look at the survey, it is hand written javascript that uses no external library and minimizes size. The author of the code wrote it with both care and passion : the entire code, unjumbled, is less than 4kb. In contrast, IBM refuse to pay a bit more for DDOS mitigation from the ISP, did not test their backup router prior to going live, and most damning of all, did not take charge of the situation when things start failing. There is a lack of pride and care for those working on the Auatralian census at IBM, something I cannot imagine for anyone who grew up in Australia.
      As to QLD health, when the pay system is too complex, that it can only be done in Excel spreadsheets 😛

      • The Traveling Wilbur

        … with lots of VLOOKUPS. VLOOKUPS are fun!

        But yes. They would have been better off with Excel. It would have made a better Rostering tool too than the one selected.

      • Ronin,
        You seem to allude to the theory that “overseas contractors” have no care/passion towards Australian census. If you may, can I ask you to comment on care/passion of our beloved elected representatives (which by the way you/ we have elected) towards Australia?? If they had any then we would have not have had the Browns, Leys, Turdballs, NoAbbots, i-will-grab-what-can-and-dont-care-about-anything and the likes.

      • The federal police are still asking questions about the cencus. The technical part is known, the scapegoat is yet to be chosen and sacrificed.

    • Money. Here is an example:

      I started work on a short-term contract for a good hourly rate under a big brand company subcontracted to a government department on a data migration project. A recent immigrant from an easily guessable country of origin started at the same time as me, but as a permanent for the company.

      It became apparent, very early on, that my co-worker did not know even the simplest thing about what he had been hired to do.* I reported this to my supervisor, a permanent worker for the company, and was told not to worry about it, and to help my co-worker to do his job.

      At contract renewal time, my co-worker was kept on, and I was let go.

      * An equivalent could be a Newtown waiter who doesn’t know what a smashed avocado is.

  2. From the Australian:
    ‘Rose Jackson, NSW Labor’s ­assistant secretary, has unloaded on the party for being SEXIST, ­HOMOPHOBIC, TOO WHITE, undemocratic and highly factionalised.’

    Gender Studies intersectionalists getting promoted in the NSW Labor Party.

  3. GunnamattaMEMBER

    Spurious visionless drivel from a management consultant on pensions & superannuation

    The scourge of the neo liberal age is the management consultant type which never actually delivers much of an outcome for anyone, but regularly appears in private sector and public sector workplaces, usually under the guise of doing something ‘strategic’ which involves talking to lots of ‘stakeholders’ but sometimes looking at ‘processes’ and how ‘efficiencies’ could be extracted from these. There is nothing wrong with any of that, of course, but would many reading this piece look at those words without wondering if some highly expensive ponce would come traipsing through the workplace to recommend something either highly impracticable or something that the entire workplace could have come up with after ten minutes, and similarly there would be plenty of managerial types look at those words reflecting on times when they engage (and I speak as one who has done the engaging, as well as one who has done the consulting) management consultants who’s first question to them is ‘what outcome would you like?’ before relating to them in detail the precise nature of the outcome they want (usually something sensitive, involving shafting an individual or some part of the workplace, which it is plausible down the track to be able to solemnly declare ‘well this was what the consultant said we should do, and they wouldn’t get paid all that money if they didn’t know what they were doing.’).

    This piece from the Fairfax press has been written by a woman who has a law degree, a physics degree, and has completed a course from the Institute of Company Directors – the full bio here http://www.loquemur.com/bio – along with some nebulous senior positions with Westpac, some workplace advisory leeches, and Freehills. No problems with any of that but it does give the impression of someone who has never settled in anywhere, and probably isn’t using too much of the physics or the legal qualifications in hanging out her shingle as a management consultant.

    Let’s look at the bilge she serves up – and which Fairfax have seen fit to plaster across the front page of their website. Interestingly she tells us she also does communications, speech writing & media and corporate events; readers can be their own judges of her skills in this are at least.

    Retirement will disappear like the fax machine
    Elizabeth Henderson

    http://www.theage.com.au/comment/retirement-will-go-the-way-of-the-fax-machine-20170106-gtn9if.html

    My children and I were born into different technological worlds but one thing we have in common is none of us had heard of a fax machine until our early teens. My daughter once asked “Mum, what’s a fax?” I could’ve asked the same question at her age. Although 1990s office workers couldn’t imagine working without one, in truth barely a generation relied on the fax for any meaningful period.

    Australians today can’t imagine working without retiring, spending decades of healthy, active years not needing to work. A century ago retirement barely existed. In the late 19th century, half of American men aged 80, and three-quarters of British men over 65, worked and only a minority lived that long to begin with. Most people worked until they died. A recent ad features a child and his grandfather visiting a museum exhibit of a couple driving in a convertible. “What are they doing grandpa?” the child asks. “They’re in retirement,” grandpa responds longingly. Grandpa may well have had to explain the exhibit to his own grandfather too.

    Elizabeth has a problem with evolution. Call me crazy, but I tend to the view that when it comes to inventions and ways of doing things, evolution tends to lead to better simpler easier ways of doing things, and so it is with the fax machine.

    If Elizabeth had thought to go back beyond the fax machine for maybe thirty years or so she would find a few interesting things: 1. That there were loads of people using carbon paper in typewriters and smudging their fingers stabbing invoices and receipts and the like onto spiked trays, and 2. The majority of the people doing this type of work were women, and 3. It was probably the only type of work the women could get, and 4. It was expected they would probably spend most of their lives at home looking after family.

    Since the early 1990s the fax has largely been replaced by email, and digital imagery and electronic signatures. As someone who manages a workplace where there is still need to deal with carbon copies, holed pieces of paper from the distant past, and facsimile machines, I am firmly in the ‘this is a major improvement in doing business’ school. As a former workplace relations man I would also observe that the demise of the typing pool and rise of women throughout the workplace outside the typing pool is generally a good thing.

    Elizabeth then makes the conceptual leap from the supersession of the fax machine to the take up of the late 19th century as the direction we are heading when sorting out retirements for the populace. She is quite right that a century ago pensions barely existed, and that large numbers of men worked into their dotage in the US and UK – though she omits to mention that women almost universally did not do paid work in that era – but she doesn’t go within a bulls roar of looking outside the English speaking world.

    ‘Most people worked until they died’ is the message Elizabeth is looking to sell, possibly with the addition ‘that’s all any of you should expect, too’ – and in doing so she presumably wants to earn her consultancy a fee for writing something some client would like to tell the world – and Elizabeth and the client, are presumably of the they don’t want to pay tax to fund those retirements line of thought, after a generation of selling the line that workplace should be more flexible, but that people can take on more debt because they are working longer, and generally being of the view that the dividends from any efficiency should go to the shareholders, who should be free to treat employees as chattels.

    After the fax machine and the reference to the late 19th century she wheels out a reference to a recent advert featuring someone’s grandpa. This is interesting because many peoples grandpas are at this moment on particularly generous pensions, made even more generous by the tax free status of a house they bought in the 1970s which is now worth more than a million dollars, often (and maybe this is where some of Elizabeth’s clients come in) after setting up SMSFs or negatively gearing real estate to avoid paying taxes for a large slab of their lives – and they think that is an entitlement.

    Elizabeth’s basic contention is that in order to free her clients from the need to pay tax people entering (or in?) the workforce today should be anticipating working until they drop, while still providing entitlements for those retirees already in the banana lounge. It sounds like bullshit, and it is.

    Australia introduced the aged pension in the early 1900s when life expectancy at birth for men was 55 and for women, 60. If you made it to pension age, and most didn’t, you’d expect to live on the pension for no more than a decade.

    That management consultant mindset certainly doesn’t go anywhere near the idea that we could simply say to people ‘Well you only get ten years of public pension, no matter what, or addressing that many people who could easily live without a pension think it is an entitlement and structure their affairs to ensure they still get it. She also doesn’t go anywhere near addressing the small fact that for most Australians the largest single outlay they will make in their lives is an abode and that for the last decade Australian houses have been many times more expensive than they have been at any time previously – leaving Elizabeth free to avoid contemplation of the possibility that there wouldn’t be as much need for a pension if houses weren’t as insanely expensive as those current pension beneficiaries (and those privileged enough to soon be joining them) and the exceptional amounts of private debt they have taken on (and forced on the rest of society to take on with them – usually with the enthusiastic prompting of corporates and governments).

    The Inter-Generational Report uses forecasts that factor in life expectancy increases during a person’s lifetime. Using this data, a 60-year-old Australian today can expect to live to their late 80s, a child to their 90s. That’s averages. Half of Australia’s children today will probably live past 100.

    Australians are living longer, and are likely to continue to live longer, thus making it all the more important that we sort out some way of funding their existences and providing them with meaningful jobs, is the point Elizabeth wants to make. She (and her client) probably doesn’t want to go anywhere near making companies pay more tax, and taxing society more effectively so that those making money (particularly through rent seeking which doesn’t add to productive value, or just straight out tax avoidance) actually pay their fair share of tax.

    I’m from the first cohort of Australians to have superannuation their whole working life, accumulating it since my late teens with little time out of full-time work since finishing university. Super was supposed to work for me. Yet there’s no way I could retire in my 60s and avoid the pension, let alone maintain similar quality of life. It’s not due to poor returns or exorbitant fees. The key variables are retirement age, retirement savings and age of death. We can only influence the first two and the third is galloping ahead at such a pace that massive adjustments are required to the other two.

    Elizabeth is personally affected. When she says ‘It’s not due to poor returns or exorbitant fees,’ she means that the entire system is not working as it was originally planned and that large numbers of pension beneficiaries have been avoiding paying tax through SMSFs or negatively gearing, taking their superannuation entitlements as a lump sum and blowing this or stashing it in such a way as to retain entitlement to the aged pension, while at the same time the contribution side has never been made as large as it should have due to conservative governments baulking at increasing the mandatory contribution (presumably though concerns about the possibility of annoying some of Elizabeth’s clients). Similarly Elizabeth doesn’t look at any other mechanisms for funding retirements (eg land tax, reverse mortgages). It is also worth mentioning that through the entire piece there is no mention of what all these people will actually do to earn their keep, amidst thoughts that large numbers of jobs will simply be made redundant through automation, and at what point low wages or part time work ceases to make sense vis a vis the vicissitude of age.

    In their book The 100-Year Life, Linda Gratton and Andrew Scott consider the implications of longevity on retirement scenarios for different generations. Their modelling demonstrates the post-war generation could achieve a reasonable retirement income with affordable savings during their working lives, supplemented by corporate and government pensions.

    Yep, and they generally had cheap housing, and being in the workplace during the era when mass credit (debt) was made available they got first access to it, bid up the prices of assets, and now are in a position to enforce subsequent generations to do then same.

    However, someone born in 1971 with a life expectancy of 85 and retiring at 65 would need to save about 17 per cent per annum to retire on half their final salary, assuming they get a modest aged pension from the government. Quite confronting considering Australia’s compulsory super rate is 9.5 per cent per annum and the Inter-Generational Report predicts someone born in the early ’70s will live closer to 90.
    For someone my age, retiring at 65 essentially requires income earned from two thirds of my adult life to stretch over the remaining third. No wonder the system is buckling under its own weight for Generation X.

    Elizabeth does have a valid point here. The system as it is currently set up makes absolutely no sense whatsoever for anyone under the age of 50. If we had political leadership in this country we would expect policy changes, but the current regime (and opposition) is largely about running the current system until it simply seizes up. The answer is to fund the superannuation system properly, to make it work as a superannuation system (as opposed to a tax avoidance system), include the principal place of residence as part of the basis for calculation of access to the government funded pension, and to remove incentives to take lump sums and blow the cash. Beyond that there is a case for working out what careers will gainfully keep people occupied as they get older, making it worthwhile for them to continue working, and assisting and promoting people taking up opportunities to do so.

    For the younger generations the current system becomes unworkable. In Gratton and Scott’s modelling, a person born in 1998 with a life expectancy of 100 and retiring at 65 would need to save 35 per cent of their working income to retire on half their final income. At 9.5 per cent annual contributions, my daughter will need to delay retirement to at least her 80s to retire on half her final salary. Still assuming a modest aged pension.

    People under the age of 40 should be given the opportunity to opt out of superannuation and to direct the funds to housing. The current superannuation regime is unfair and makes no sense for anyone born in 1998 and it is profoundly regressive to expect them to contribute to the pension of those for whom the system is delivering satisfactory/good outcomes.

    In this context current political arguments over pensions and superannuation are rather meaningless. Increasing the pension age to 70 (well below what’s realistic) should be a no-brainer, not a political football. The complaint that workers in physical jobs can’t keep working past their 60s or re-skill doesn’t stack up. Medical advances are not only increasing life expectancy but also leaving people fitter and healthier for longer. Anyway, exponential growth in technology wand automation means regular re-skilling will be the norm for 21st century humans, whether they’re 65 or 35.

    Yep, I would even buy this but Elizabeth is missing the strategic picture. Australia currently has a taxation structure which rewards avoiding tax – capital gains taxes, negative gearing, SMSFs, PPOR concessions etc. Getting rid of the distortions and enabling people to make choices on the best allocation through life, and particularly underpinning a framework which makes home ownership – which has been demonstrated to reduce health and aged care costs for the elderly – cheap and accessible (rather than a cash cow for governments and a ticket clipping exercise for the FIRE sector. Get rid of this and the super system will work better

    A bigger political challenge is restructuring super so it works. Tinkering with tax rates and concessions, contributions caps and limits doesn’t address structural deficiencies caused by 21st century demographics. A more fundamental problem is people accessing super two or three decades below their life expectancy. Or whether it’s realistic for people to lock money away for 60 years, in what more resembles a time capsule than an investment. Especially with politicians licking their chops to get their hands on it either through taxes or by forcing super funds to invest in pet projects.

    The bigger political challenge is ultimately going to be to front up to the public and identify this is the equation, and at that point work out who has dibs on the proceeds, or to sell the idea that we need to contribute massively more to the superannuation system. For sure there is a case for saying that people may need to work longer, but at the same time there is a case for saying that we may not have the jobs to give them anyway, which means that we approach the point of working out if society is a by-product of the capitalist system. But first up there needs to be a whole new look at wealth creation, wealth distribution, taxation, and the allocation of government monies, and the role of people in that – and that is before we get around to the question of how many more people we need.

    Most likely, we’ll choose to return to our forbears’ practice of working as long as we can. Like the fax machine, “retirement” may prove to be a transitory innovation.
    Elizabeth Henderson is executive director of Loquemur.

    Well that maybe the case but only if we tell ourselves that we can’t think of a better way. Given that much of the world is coming out of third world status on the back of globalism, it would be truly Trumpetarian if the best that the management elite could do is tell us that for that to happen we need to send our aged back into neo-feudal serfdom to survive. And if that is the message then enlisting todays teenagers to contribute to society may be a hell of a tough ask.

    Ultimately though, Elizabeth makes some points, but wraps the piece up in some spurious obsession with fax machines. Anyone looking to engage her as management consultant should probably only do so for operational issues because there doesn’t appear to be much strategic vision there, little ability to think towards outcome by thinking outside the square, and pretty heavy writing skills to boot.

    • Spot on Gunna. I note that equity does not loom large on the list. Perhaps what is really needed is a comprehensive change in the whole system. Shall we tax assets and not income? Seems fairer.

    • Sounds like Engineers Australia has sold us up the river to enrich it’s own pocket. Ironically, the WA president of EA was unemployed the last I heard.

  4. ‘Alibaba job boom: Jack Ma chats with Trump about how to create 1 million US jobs over 5 years ‘
    http://www.cnbc.com/2017/01/09/alibaba-to-discuss-expansion-plans-with-trump-company-aims-to-create-1-million-us-jobs-over-the-next-5-years.html

    ‘Bernard Arnault Meets With President-Elect Donald Trump
    The LVMH chief discussed opening more factories in the U.S., among other issues.’
    http://wwd.com/fashion-news/fashion-scoops/bernard-arnault-lvmh-president-donald-trump-10742788/

  5. “(I like this Pope – an actual person first, Christian second)”

    Since this topic is now broached, from my perspective I can count three problematic assumptions in this short throwaway:
    Firstly, that it is of any importance that a ‘Vicar of Christ’ be likeable; in fact 2 Timothy 3:12 states “Yes, and all that will live godly in Christ Jesus shall suffer persecution.”
    Secondly, the assumption that the Pope is a Christian – an undoubtedly common assumption, but nonetheless questioned by some. Only Francis and God truly know whether this is accurate. The internet has more on this if anyone cares to investigate.
    Last – but certainly not least – that one cannot simultaneously be a human being (I presume this is what is meant by the legalese term ‘person’) and a Christian. https://en.wikipedia.org/wiki/Dehumanization