Macrobusiness Weekend Links, 13-14 January 2018

The Intruder, Albert Tucker, 1964, Art Gallery of New South Wales


Macro, Markets & Investing








Terra Incognita


…and Furthermore…


Allure: What is it – Who’s got it?, 1978, Vicki Varvaressos, Art Gallery of New South Wales




  1. As close to first as I’ll ever get! Was in Newcastle last Friday and caught a cab to a huge club. Was there for well over an hour and when I went to the rank, there he was. No jobs except for me in 2 hours ( $22 return fare). He reckoned he was going home it was so slack and it had been touch and go for months.

    • I still don’t understand why uber has been allowed to operate without having to meet same requirements as the taxi business.

      • What about AirBnB?

        Taking rentals, locking young Australians out of both buying and renting while claiming negative gearing.

      • I still don’t understand why uber has been allowed to operate without having to meet same requirements as the taxi business.

        Because it’s the drivers that are actually breaking the law.

      • Uber offers a far better service in my experience, no selective drivers re destination, clean cars. Taxi industry should pressure the govt to lighten their regulation rather than shut down the competition.

        No one compensated video store owners when Netflix arrived, so why should taxis get special treatment.

      • There’s no way a taxi driver can be any more (or less) “selective” about a destination if you’re booking it in advance.

      • Yeah what’s more.. I don’t think the cab drivers are any better at following law anyway. I wanted to catch a cab once from the station to home, the cab driver quoted me a flat fee. I asked for the meter to be turned on (as is law in Australia) and he told me he did not want to lose his position in the queue for bookings. I got him to drop me off because I was not going yo accept a random flat fee. I ordered an uber and was home in 15 mins. What’s more the uber charge was way less than this flat fee the dodgy cab driver was going to charge me.

      • So… You got out of a taxi because he wasn’t obeying the law and got into an Uber with a driver who also wasn’t obeying the law ?

    • Newcastle night club scene is a bit quiet. Been down there a few times and love the place but night life seems a bit sparse. Ok with me because I’m over the club / bar hopping thing these days.

    • Yep. My partner used to drive taxis in Newcastle.. Would sometimes end up with less than the dole

      • Drove a cab in Brisbane in the late ’90s.

        On a good night would end up with maybe $12-13/hr (for a 12hr shift, 1600-0400).

        On a bad night half that.

        I don’t imagine the situation has improved.

  2. Harrington park asking price of $1.3m in oct/nov sold for $1.05m first week of dec.
    Oh first – my subjects, serve your lord with fear and..

  3. Anyone with reasonable explanation why gold has been gaining all day? The aud has not been keeping up with the gold price.

    • Great news. U$21/MWh. I have no idea how windy Colorado is though. The coal power stations in AUS will probably die by 2020.

      • ” I have no idea how windy Colorado is though”

        Very on occasion, just have a look at the topo and annual wind direction.

  4. Woohoo thanks Gunna for picking an Albert Tucker painting. My grandfather and mother were best friends with Burt Tucker and I’m proud to say I knew the man, big beard and all. My grandparents travelled with Burt through Europe in the 1940s my grandfather and Burt both dated Joy Hester at different times of course.

    My own grandfather was a good artist but never had the confidence to publicly display his works. My mum and her 2 sisters have a lot of his artwork on display in their homes.

    We are hoping to do a public gallery display of his work at some stage in future. His work is very similar to Burt’s but obviously has his own style too. I always thought his work was equal to Burt’s, shame he didn’t have the same success.

    My grandfather and mother had a factory on City Rd in Melbourne and my grandfather had a studio above the office area. Nobody was ever allowed in, I got to see inside once as a kid but all I can remember is an old yellow rotary dial telephone on the table.

    • I just showed my mum the photo and she said Q. Do you know why there is a parrot in the painting? I said I didn’t know and she told me Burt said that it would sell the painting…😁

      • Know IdeaMEMBER

        Clearly it was just asking to be looked at. After all, under all those feathers it is completely naked.

      • Thanks for the inside goss. It’d be interesting to see how art scholars interpret the role and meaning of the parrot now knowing why it sits there. My only complaint is that Mr. Tucker didn’t have the foresight to make it a Norwegian Blue.

      • GunnamattaMEMBER

        ….to be spoken in a deep gravelly Robert Hughes style art critic sotto voce (a packet of Peter Stuyvesants and a slab of Vic tins will get most people into roughly the right vocal settings)

        …….set against the somnolence of Australia’s landscape, festooned with emotionless, unthinking Australian grotesqueries, in a nation sold unto the myth it is lean, hard and stoic, as it weathers into eternity, the green parrot of Albert Tucker’s ‘The Intruder’ (1964, AGNSW) is a bringer of life and of questions. A nut cracking beak to make short work of the head upon which its landed, its cameo in the painting provides a counterpoint to the leitmotif blandness of contemporary Australia. Should it rip off an ornament from the unresponsive face, or shit on a shoulder? Would anyone care – the viewer the statue or the parrot? Should it do anything now, or do it later? Seeing as it can come and go as it pleases while Australia is cemented into place.

        But it is the viewer for whom the parrot saves its most searching gaze, not just of Haroldus, but of the Nation. Is the eternal ménage à trois of past present and future, of subject and object and art, or of knowledge, belief and contract signing? He taunts us with possibility. Are we sharing love, or obligation, or are we just friends? Why is any of us here? And where is here? Is this it? Is this where we are? Is this where it ends? and if it doesn’t end here is where it ends any better than here or where we were at the start? And why are we here? He mocks the audience gently. Why are they looking at a brown painting with a dollop of green? It is of course because of the parrot – he has life, he has freedom, and he engages with them – they are there to pay homage, and the Intruder is God……and if the viewer leaves with no answers, he was promised none at the outset by a green parrot, who still offers more than contemporary Australia, and the possibility of an answer if only they worked at it, and stopped playing with their nuts.

      • I think it was Nietsche who said it best.

        Und wenn du lange in einen Papagei blickst, blickt der Papagei auch in dich hinein.

      • Hey haroldus – just remember that gunna speaks Russian (I’m guessing you used naughty words in that quote)..

        I recall John Newcombe describing the Romanian tennis player, Ille Nastase, as the dumbest bloke he knew on the basis that Nastase could speak multiple languages but on court would always swear in the local language thus being more likely to be fined. In contrast Robin Williams reckoned that in the Mork and Mindy series he used to swear in various obscure languages to get around the censors.

      • @triage – it was rude of haroldus to use the ‘du’ form but that seems a level of etiquette above the spambot’s settings.
        Could have been tripped by grammar but roughly he said ‘if you look at a parrot for long enough it looks back at you’.

      • The Traveling Wilbur

        > What’s orange and sounds like a parrot?

        Sophie Monk.

        > I can’t stop looking at that parrot.

        I’m surprised by that actually. I would have thought you were inured to that kind of thing by now. I mean you must have seen a cockortwo in your time?

      • The Traveling Wilbur

        What’s white and screeches like a bat that’s been ejected from the colony?

        And I think Nietzsche said it best with: Manchmal ist ein papagei nur ein papagei, aber während sie ein beibringen können, ja zu sagen, ist das nicht dasselbe wie Zustimmung.

    • boomengineeringMEMBER

      Pretty good Gav, having an artistic family, my old man wasn’t too bad either, better than me even though I topped the school in art 1960s, never did get back to it.

      • Might be why your good at problem solving with tools…

        disheveled… but then again its second fiddle to people with MBAs….

      • boomengineeringMEMBER

        Skip, very good at some things, very bad at others eg poor people skills, very poor facial recognition, remember numbers not names.

        Extreme Male Brain Type = good at 3 things, physics, engineering and music.

        Also could have a problem with gene 17, seek out Adrenalin sports to top up the lack of.

      • boomengineeringMEMBER

        Add to that blatantly honest and undiplomatic. Was spearing yesterday and told two guys that they weren’t from around here were they anchoring their boat where waves usually break.Swam back from The Wall 1klm out from tip of Long Reef, very quiet no fish.

      • Now, boom, correct me if I’m wrong but “spearing” ist verboten where you’re talking about. Used to do the same thing with my Dad (scuba) when I was about 14-16. Grouper which were a great eating fish would come closer if you missed them the first time. Protected now. Apart from your good self, of course. Jumped off the very tip of Long Reef once and landed on a basking wobbegong – he disappeared at a rate of knots and I came out of the water like a Polaris missile. Amazing bit of territory, Longie, with all that shale etc. A bit like the so-called Tesselated Pavement in Tas.

      • boomengineeringMEMBER

        Yeb, you stand to be corrected, spearing and line fishing is is allowed but gathering anything off the reef by hand is not (marine park) the signs are prone to misinterpretation. NSW law states that if you can’t see open ocean you can’t spear, also the reason I don’t use a torch at night because is because its illegal to spear at night using a light or scuba anytime. Sometimes I swim 3 klms East off the point and other times to the wall 1K klm NE.
        Watch those Wobbegong’s, not as friendly as most believe, got attacked by a huge one around from DY in the days when you tied your bleeding fish around your waist, I kept kicking it away but it just persisted over and over again.
        Now on the subject of Grouper, they may well be our pets being extra slow and unafraid but so are rabbits, they are destroying the coral because of their overabundance. This is what happens whenever you give one faction of any society special privileges negative gearing for example causing distortion.

      • boomengineeringMEMBER

        I suppose nowadays to be seen fending off a Wobegong by kicking and punching it would be deemed politically incorrect but it was after all bigger than me.

    • another fine selection of Australian paintings.

      I would have to say I have learned more about Australian painting from Macrobusiness weekend links than from any other source. I wouldn’t say I knew much, but what small bit I do know, I have picked up here. Cheers

  5. sounds like haiti is quite literally a shithole:

    “Port-au-Prince, Haiti, is one of the largest cities in the world without a central sewage system. There are no sewers connecting sinks, showers and toilets to hulking wastewater treatment plants. Most of the more than 3 million people in the metro area use outhouses, and much of that waste ends up in canals, ditches and other unsanitary dumping grounds where it can contaminate drinking water and spread disease.”

    • Sounds a bit like Sydney and its beaches… who was talking about bondi cigars the other day.

      Anecdote about Hong Kong: when I was living in Honkers there was a court case about a seafood restuarant that was filling its fish tanks with water intended to be used for toilet cisterns (HK had 2 separate water systems, one of potable water and the other, less treated, for cleaning and toilets and such). The thing is the law allowed seafood restaurants to pump water from the harbour but which was also where untreated sewage was pumped. On the other hand the semi-treated water was not for human consumption. The restaurant argued that the semi-treated “toilet” water was actually clearner than the water from the harbour but rules being rules they lost the case. Always good to keep your hep A vaccinations up to date …

      • boomengineeringMEMBER

        Wasn’t that long ago when I ( first to) surfed Deadmans near North Head sewage outfall, during heavy rain they would let it out raw. Yep had to hold my head up extra high to avoid yellow foam and blind mullets associating with women’s sanitary napkins.
        On the other token, when the pipe was extended I expected to see a brown bottom but it was like someone switched on a light the day it was used, behold a clean underwater scenery.

    • stagmal, I was shocked at the Rio Olympics. Nations should be required to pay a $10 billion bond within a month of winning the right to host the games.

      No more “we promise to build a sewage treatment plant”. As the games in Delhi and Rio showed, they are simply 3rd world basket cases.

      The swimming pool in Rio turning green? “not to worry” they said. As days went by, the pool became smelly and opaque. Then they admitted fault.

    • Mining BoganMEMBER

      Is this going to become a thing, because there’s many places I’ve called sh!tholes over the years. I’d like to retain that right without someone screaming accusations at me.

      • MB – I reckon as long as you don’t run for POTUS we’ll luv ya just the way you are. A bit like how a weekend golfer and Jason Day:is viewed after an air swing (even though as the shark pointed out they both put their duds on one leg at a time).

      • I too demand the right to call a ‘shit hole’ a ‘shit hole’ without the inevitable howls of indignation; there are a fck load of places in Australia that qualify and should be called out as such!

    • Having just come back from Sydney, I’d say the cbd was a total sh!thole and was absolutely filthy, similar to a third world country. Beaches and harbour were beautiful and worlds apart.

  6. Chinese lending data out today dropped half a trillion from 1000 billion to 500million, bye bye you housing wreckers!

    • That’s it, it’s the students, the students I tells ya. They’re all coming, cash only buyers, wealthiest on the planet. So rich, they’re coming to get an education so they can become doctors working 120 hours a week for $80K, with intense sleep and life deprivation whilst their $20m property portfolio just hums along. Strange priorities.

      • Some offered to work for free!

        TWO fee-paying medical students have offered to work for a year without pay — forgoing the typical doctor’s starting salary of $55,000 — if it is the only way they can win the public hospital intern positions they need to complete their training.
        The extraordinary offer by the pair — both University of Sydney fee-paying students from overseas — is the latest sign of alarm among medical students who worry that a looming training bottleneck may leave some of them jobless.

        Final-year student Mian Bi, 25, who is from China but grew up in Singapore, said he had spent nearly $400,000 on his education in Australia, and adding an extra year’s living expenses of about $20,000 would make little difference.

      • Wow. I’m sure the Doc who posts here would have some further insights on this sort of behaviour. What’s Mian Bi talking about? His extensive property portfolio would surely be offsetting any large costs he’s incurred during his study. Have fun staying awake every night for the next decade! One might think it’d be easier sitting in a cafe ogling your X5 and collecting rents from the locals.

      • Suppressing wages even further ensuring house prices either get further away from incomes or prices correct

      • @Jimbo: I may be the Doctor to whom you refer? In any case, my impression is that there are still big family expectations on these students to become pseudo-white Doctors in a western country because of the status of it all, even if the cost and ultimate earned income is a drop in the ocean compared to the family wealth.

        The article is 9 years old, but still I gather that coming here, studying medicine and then for some strange reason not actually getting PR and working here is regarded as a total failure. I still am yet to hear of anyone not getting an intern spot, but I am a bit further down the track to know exactly what the score is now.

      • I sense it’s their culture. an aggrandizement/elevation thing.
        You can study medicine and become a doctor in China, however you’re worth more if you study medicine and become a practicing doctor in Australia.
        I saw a documentary some time ago, think it was Foreign Correspondent, about the rise of living conditions in China.
        The tv crew were in the kitchen and the wife was walking around pointing to the foreign brand names on her appliances.

      • patrick

        Is that your experience or more just your guess? (honest question as my experience is now somewhat dated)… but I lived in China for a number of years and the clear impression I had was that Chinese students only chose to study undergraduate courses outside China if they could not gain entry to the top rung of unis in China. Just like there is an Ivy League of unis in the US and the sandstone unis in Australia there is the top 100 universities in China and the vast majority of Chinese high school students dream of getting into one of those unis. If they cannot then gaining an international qualification becomes more of an option, particularly if their family is well off. The other factor is if a Chinese kid completes high school outside of China they cannot get into a Chinese uni, but rather are forced to go with a foreign uni.

        When the post-Mao era was newly forming there was some advantage in having a foreign qualification but as a general statement I don’t think that applies so much now (but when you having millions of Chinese kids looking to enter uni each year so even if we attract a small fraction of them then it is a big deal for our unis).

      • triage,

        I notice things.
        For example, I’ve noticed how lower income Asians tend to buy an old Volvo rather than a much later model Commodore.

        However you prompted me to find something more scientific, so have a look at this;

        Here’a bit,
        “Chinese personal welfare, interest and achievement are set collectively(Triandis 1994); therefore social, status, roles, and relationships are explicit and public and play an important part in social life. In this context social value is an important index of happiness and life satisfaction (Barger et al 2009). Anything that can bring social status will bring happiness Material success is one such thing. In conventional Chinese society, pursuing material success and surpassing others in life and career are the highest forms of success. The people with the highest wealth and status often represent the the ultimate goal of happiness.”,

  7. I finally met someone who has admitted to losing money on cryptos. Many more I know are currently well ahead, but at least this person could laugh about it.

  8. robert2013MEMBER

    “Introduction to LSTMs with TensorFlow: How to build a multilayered LSTM network to infer stock market sentiment from social conversation using TensorFlow. – O’Reilly”

    I didn’t not expect to see such a technical paper on MB. What are you guys doing with this stuff?

    “China Sets New Records for Gobbling Up the World’s Commodities – Bloomberg”
    I’m starting to wonder if I understand anything MB has said about China slowing later this year.

    • I know LSTM based architecture is being used to predict future returns (consequently used for trading) and are already in use/production across two investments firms (atleast) here in Australia. Both have them on their HKX and Nordic desks, I think. But using ‘social conversation’ is a very interesting angle. I think Bloomberrg’s Gideon will be very interested in speaking to Garreth.

    • that comment about the uber driver above, is all you need to know to predict stock market returns
      an excellent read is 1 up on wall street. read that and act on it and you will be a wealthy man
      PS from Links
      In short, and pun not intended, we now have confirmation of what we have long suspected, namely that both retail investors – such as the wildly famous former Target manager Seth Golden, and hedge funds, are now net short vol to an unprecedented degree, something also shown in the chart below.
      So what does this mean?
      First, recall what JPM’s head quant, Marko Kolanovic, warned last June, namely that there is now a risk of “catastrophic losses” amid various vol-selling strategies, should the VIX move by a mere 5 vols, from 10 to 15:
      If this sounds familiar, it is because Fishman has loosely paraphrased an almost identical observation made by Barclays several months ago, which warned that the key risk, “is that of a “one-two punch” scenario which unfolds in two phases.”
      In the first phase VIX spikes moderately due to adverse fundamental news and then stabilizes for a few days at an elevated level. The VIX ETP investors follow their play-book of selling volatility expecting a mean reversion. However, if at this point, the fundamentals were to deteriorate further, it would create an air-pocket phenomenon where the subsequent spike in VIX could be amplified.”

      • Welcome to reality adjusted by not divinity…. but their successors AI…

        disheveled… tho it is curious about whom created both….

    • So they start his blurb with a rhetorical (unanswerable) question about why fewer Aussies own their home. 5 sentences later: “here’s one man who owns hundreds of properties”. I’m not a scholarly type but I think I have an inkling

    • He’s also a consistent contributor to Bloomberg. Here he is on the stable instability of Central Bank backed markets.

      “Higher asset values are neither permanent nor sustainable. Unfortunately, once asset prices become the focus and instrument of policy, they also can’t be allowed to freely adjust to their true level, because that might threaten the too-big-to-fail banking system, insurers, and pension funds.

      Stable instability also distorts capital allocation. Low interest rates allow zombie companies to survive, delaying bankruptcy and preventing capital from being redeployed. Fundamental principles of value — future cash flows, price volatility and inter-asset correlations — are subverted, encouraging the mispricing of risk and distorting investment economics. In functioning markets, investors sell overvalued assets and buy undervalued ones. This strategy fails when interference with the market mechanism means that all assets become artificially overvalued. Investments become premised on momentum — that is, on what other buyers, especially state institutions, are doing.

      Direct central bank purchases are especially distortionary. With increasing restrictions on its ability to purchase government bonds, the Bank of Japan has been forced to buy equities. It now owns about 75 percent of all listed Japanese exchange-traded funds and is a top 10 percent shareholder in 90 percent of Japan’s listed equities. The Swiss National Bank has become a major shareholder in many U.S. companies as it invests the proceeds of its currency interventions. These purchases are based purely on artificial formulas (usually index weights) to avoid favoring individual securities, meaning that they largely ignore the fundamentals of risk and valuation.”

      What could possibly go wrong?

      • robert2013MEMBER

        The only thing to stop elites pushing asset prices ever higher is the willingness of the population to revolt. That won’t happen until people are starving.

      • Skippy

        “…Tis strange how central bank function …”

        The only change was that they were captured by the private banks.

        The franchisees took over the franchisor.

        It was only a matter of time.

        Privatizing the power over public money was never going to end well.

        But that’s right you don’t see any connection between the hijacking of the monetary system and neoliberalism do you?

        Poor little banks just playing the cards they were dealt.

        Good grief.

      • From links” This isn’t a judgement, but a fact – democracy is a tool wielded by practitioners to retain the status quo. Democracy is most effective for ‘killing two birds with one stone’.
        People believe that it’s the best way to hold decision makers accountable in ensuring that they fulfill their promises to increase the living standards for the general population and empower individuals to actualize their full potential.
        BUT in reality it is a tool for perpetuating the permanent bureaucracy in power (and sometimes even the public one as well) while superficially or sincerely giving the citizenry hopes that they’ll eventually bend to the majority’s political will in carrying out policies that will ultimately benefit them
        Democratic systems gives the “deep state” the best chance for controlling the citizenry in the most cost-effective manner, controversially limiting the pace of actual change in contravention of democracy’s original conceptual mission to let this process flow freely and according to the public’s will.

      • oo7…

        Please attempt to use facts and not your collection of biases.

        Main stream economics was a project forwarded by the pro business sector via such mobs as FEE, the business front is more of a guise for the fundamental ideology, underpinning the whole shebang, aka religious platitudes e.g. uninformed antiquarian notions of humans and the orb they live on.

        Seems your only grievance is notions of debt, the rest is all good.

      • 007, please at least attempt to support your arguments with the historical record.
        Who came up with the Chicago Plan? Supported at least in early days by Friedman and today by economists with a RBC orientation like Cochrane.

      • Monetarists view the fractional reserve powers of private banks as an irrelevant distraction analytically clouding or at worst creating lags for the overall money growth policy of the CB.
        From a neolib point of view, it would be far easier to remove the confusion adopt 100% reserve banking, program the CB computer to achieve 2% deflation at all times so bond holders would always get their real yield and Friedman’s shoe leather cost would be avoided.
        Which would then provide space for the business community in power to continue kicking unions and cutting taxes. And you probably wouldn’t have an issue with that because banks could no longer create “private fiat”.

      • Skippy and Sweeper,

        How about you guys make a case for your preferred private banker centric model.

        You are good running interferrence against any and all reforms but seem incapable of justifying the status quo!

        All you guys do every week is deny that the private banks have a role and whatever role they do have is never their fault.

        Skippy even argued yesterday that banks are mere creatures of an environment created by mysterious neoliberal druid third parties. They are the same people!

        When you are backed into a corner both of you finally confess that yes pumping asset prices with bank credit is stupid but still you cling to the current model for dear life.

        Skippy even claims that it anti-democratic to mess with his private banker buddies privileges.

        And then you both have a sook when I call you out for supporting the status quo.

        Lefties who hate neoliberalism but support the privatisation of the power over public money.

        Cognitive dissonance in neon.

      • Sweeper,

        “…Who came up with the Chicago Plan? Supported at least in early days by Friedman and today by economists with a RBC orientation like Cochrane….”

        Support for reforms to the current private bank centric model comes from a wide range of folks. What they have in common is a concern with centralisations of power. Some are lefties some are libertarians some are socialists of the small and local variety.

        The problem you have is that the private bank centric model is universally endorsed by neoliberals, stalinists and anyone else who like the idea of keeping power as far as from the general public as possible.

        Which describes you and Skippy to a T.

      • Skippy,

        Well Hudson certainly is not in your private bank driven monetary model camp.

        He, like most people who understand how the banking system operates, understands that it involves the privatisation of what should be a public power.

        You think privatising that public power is democratic and ensures freedom.

        We get that.

        Banks are just a tools without agency doing god’s work.

        Banks create credit and allocate it to productive purposes

        Just tweak the banking regulations a bit and we will be back in a goldilocks banking sweet spot.

        Its not the banks it is the neoliberal conspiracy that fiddled with the regs.

        Yadda yadda yadda.

        That you claim that your position is not part of the neoliberalism proforma is the joke.

      • As you know 007 I don’t support the status quo. I support bank nationalisation in many cases and much stronger regulation of all credit provision enforced by tough criminal penalties for Directors and Executives overseeing all different types of lenders. Caps on remuneration, removal of limited liability, clawback of assets, public scrutiny. And you know all this.
        I just don’t take the money crankist line than being able to call some of their liabilities money is some inordinate privilege and the downfall of western civilisation.

      • oo7….

        Pretty much in line with Sweepers comment, with the addition of other observations by NEP, EPI, and TJN.

        Your suggestion about siding with neoliberals is an epic joke or act of desperation.

      • Sweeper,

        Here we go again.

        “…I support bank nationalisation in many cases and much stronger regulation of all credit provision enforced by tough criminal penalties for Directors and Executives overseeing all different types of lenders. Caps on remuneration, removal of limited liability, clawback of assets, public scrutiny. And you know all this….”

        When pushed on the point that deregulated bank credit creation is pure neoliberalism in action, Sweeper and Skippy fall in a heap and insist that they actually do support massive regulation of private bank credit creation.

        Sweeper even says he supports nationalisation which means nothing else than the complete removal of the privileges of private banks.

        Nationalisation involves removing the private bank privilege with regard to credit creation!

        Remove that and they are no longer banks.

        What you gooses call money crankery.

        It is always amusing to see Skippy back up Sweeper on the bank nationalisation line when for the last few days Skippy was running the line that it is anti-democratic for a government to nationalise banking.

        When you guys fess up and admit you agree with tight regulation and complete abolition of private banking there is not much left to argue about.

        Glad we got there in the end.

        If you are serious about the worst excesses of neoliberalism you have to be serious about extremely tight regulation or the complete abolition of the private bank privileges with regard to credit creation.

        Though I anticipate the back sliding will begin in earnest once you guys realise what you have conceded with Sweeper insisting that banks have no privileges, are nothing special and hate being banks at all.

        But Sweeps still wants to nationalise banks despite that.

        By the way

        “…I just don’t take the money crankist line than being able to call some of their liabilities money is some inordinate privilege and the downfall of western civilisation….”

        Is your imagination.

        The line I have been running is nothing more than that regulating the credit creation privileges of private banks right out of existence is an important reform considering the poor record regulating the privilege over the medium term. It took only a few decades to unwind the reforms and regulations introduced after the 1930s.

        But as you both now seem to agree there is no need to labour the point further.

      • Skippy,

        So you are already back sliding from your support of Sweeper’s private bank nationalisation plan?

        “…. It relies on the overnight interbank lending rate (fed funds rate) as a policy instrument…”

        No kidding!.

        Havent you noticed the usage of that policy instrument over the last 3 decades.

        Did you miss the news about ZIRP/NIRP?

        You know how that policy instrument is supposed to work?

        You know stimulate demand for private bank credit, goose asset prices with private bank credit, make asset holders wealthy, trickle down for everyone else.

        But that’s right it is the ancient democratic model isnt it?

      • “You know how that policy instrument is supposed to work?
        You know stimulate demand for private bank credit, goose asset prices with private bank credit, make asset holders wealthy, trickle down for everyone else”.

        You got that all wrong 007; it works by making todays current and expected cash flows on all assets more valuable, stimulating demand for assets, which then pushes down yields and thereby reduces the qty of goods and services which can be bought tomorrow with money v goods and services which can be bought today with money, stimulating demand for goods and services today.
        The bit about bank credit is just your imagination. And your attempt to impose it on reality. There is no relationship between the policy rate and bank credit growth.
        Legislation could be passed to outlaw all bank credit, and changes in interest rates would be just as effective in managing aggregate demand.

      • Although evidence says cuts in interest rates are less effective at stimulating demand compared to increases in interest rates which kill demand almost immediately. For the reasons Keynes laid out; ie. interest rate cuts never catch up to collapsing animal spirits or the herds sudden downward revisions in future cash flows on risky assets.
        not because of bank credit just cause people suddenly stop wanting to hold risky assets because markets are stupid.

      • Sweeper

        “..There is no relationship between the policy rate and bank credit growth…”

        Minutes later

        “..Although evidence says cuts in interest rates are less effective at stimulating demand compared to increases in interest rates which kill demand almost immediately..”

        Enough said.

        You realised that you were pushing the technical limits of your obsfucation machine huh?

        At some point it just starts blowing smoke.

        Your framing of the issue as ‘yields’ as driving the demand for assets which drives the demand for the means to acquire assets (bank credit) amounts to the same thing.

        Demand for bank credit increases. Is it a one to one or perfectly correlated relationship or one that holds no matter what?. No but who said it did?

        Standard Sweeper and Skippy stuff…..going on and on about meaningless distinctions and desperately mischaracterising arguments so you can have a swing.


        But it is all small beer now that both of you have conceded that you also wish to restrict and regulate private bank credit creation even to the point of extinguishment….nationalisation.

        We finally reached agreement.

        Welcome to “money crank” world.

      • oo7…

        You over state your case per usual, as well, as attempt to interpret sweepers and my statements to your preferred frame work.

        I have zero dramas with credit issuance, nor am I stoopid ™ enough to think one can regulate the quantity of it, tho I do side with per se Warren et al on the contractual status and the penalties for breaching that code of conduct.

        disheveled… the rest is born out in the NEP link I submitted.

  9. China not picking up the Wests recycling. We have felt this with Visy cutting recycled cardboard prices in half.

  10. Hey people – has anyone out there got any accurate data on the Sydney property market?

    I am ready to call BS on the stats we are getting through the media – apart from the obvious inconsistency between the various houses and many aforementioned issues with the way thy report, here is the thing….

    We have been bombarded with the fact that Sydney prices were up over 70% from around 2012 till mid 2017 give or take a few percent here and there.

    Now I know that the median house price (not dwelling) was around $680-700,000 at that time. And at peak they were quoting $1,150-1,200,000 for those houses – which neatly fits that narrative.

    But last week they said it has fallen back to $1,050,000 – which seems to fit with the anecdotal evidence and I guess it is still falling…

    So how the hell in anyone’s book no matter how you diddle the figures can that same property have only fallen by circa 3% in the past five months, you tell me?

    The numbers simply don’t add up and I can’t see how they can massage them like they do to call this a “cooling”?

    If they are sitting at that current price either a) they never rose 70% at all or b) they are now trying to limit the fall out narrative or c) they simply can’t add?

    • No stats but I have been talking to a bunch of agents the last couple of weeks.

      They all seem happy to agree that the market has slowed very quickly in the last few months.

      They seemed pretty happy to point the finger at APRA putting pressure on the banks lending policies…not much mention of foreign buyers. Note – new immigrants are not considered foreign buyers even if they are very very fresh off the boat.

      The general view seemed to be that APRA and the RBA want prices to stagnate not fall.

      Having investors exit the market by selling at current prices to home buyers appears to be the objective.

      In other words make sure that the investors – boomers/Gen X/Y – get to lock in their profits and exit the market.

      Heard the same story over and over again. Investor moving interstate. Investor changing plans.

      Investors dont want to stick around if capital growth is off the table.

      The only fly in the ointment being that low income growth means that buyers were struggling to swallow the current price level. Thus why the banks are calling for wage rises. Such cyncism….surely they care.

      So if you think that APRA and RBA are doing anything other than trying to maintain the private bank asset price pumping model, think again.

      The interests of private bankers and the owners of assets getting pumped up in price are still the only game in town.

      Some love this private bank asset price pumping monetary model.

      They even think it is democratic.

      • Totally agree – they want to maintain a complete air of respectability without spooking the horses – unfortunately if we have more than a cooling and prices have pulled off 10-15% already they won’t be able to keep that information out of the public eye forever – there is a massive army of some million “investors” and of course while there are stacks in there who really probably don’t know what the heck is going on, I am sure there are enough in there who care enough to watch the market closely – this could be an interesting year…

      • Insights from Real Estate Agents – like race tips from the bookie. Good one.

        The APRA narrative has been pushed hard – very hard – but its crap. The reality is that $50 Billion was wiped from the Australian investment market from Chinese buyers once in January, again in February, again in March then for good measure July.

        The numbers coming in from Chinese investors was beyond insanity – and anyone thinking that 30-50% of the market being wiped out isn’t the cause, but in fact a trifling adjustment on the most periphery of remote edges on a tiny fraction of interest only loans was the cause of the correction also think a Federal ICAC is a bad idea…..

        Cow fertiliser pedlars can spruik the old “its all a well orchestrated game” all they like – any alternative speaks in strange serpent tongues of market forces, demand and supply, capacity to pay, buy and sell – no way. Best we believe in an invisible hand gently guiding us from the back of our head to the casually parted high priests of bankings gown.

        No. Its not all part of the plan.

        The reality is that the Chinese have up and left – Beijing has spoken and the numbers are eye watering.

        Secondly there are hundreds of billions of loans coming up for adjustment in 2018,2019,2020 etc which were issued 5+ years ago with a 45% increase in monthly repayments for a nation of debtors who are unable to afford a $60 / week increase in the average loan.

        Its all good mate – no worries. Just grab that hymn book and join me in the cloister for a debrief on how secure Australia’s banking system is – and for gods sake don’t bring that heathen from Standard and Poors .

      • Fred,

        If Peter Dutton cuts the rate of immigration and does not hand out residency to anyone willing to pony up the purchase then you might be right.

        But what sign of that is there?

        200,000 – 300,000 per year will soak up the pipeline.

        And that is without restrictions on foreign being relaxed.

        After the GFC the ALP just allowed any one to buy anything.

        You seriously reckon Dutton and Turnbull would not match that sort of betrayal?

        We had a cooling market that was flat lining in 2011-12.

        And what happened?

        The credit creation and the population lever was pulled hard and price shot up for the next 5 years!

      • There is a simple answer to this. If the wheels are falling off the IP industry, then the best thing would be to make sure the properties get transferred to people who can find the monthly payment – somehow. Raiding super might be part of the solution. The other fall back would be to transfer the properties at peak price to large immigrant families who can pack about 12 people in, and by frugal living and by sheer numbers come up with the mortgage payments. That would probably make sense to a banker.

    • I thought the price drops are from Core Logic’s house price index, which the RBA dropped as it ‘overstated price growth’

      Hardly representative of the whole market, but plenty of anecdotes of 20-30% declines in some areas..

    • Don’t like your chances, we can’t even build a house that doesn’t leak let alone anything complex.

      • Don’t confuse quantity with quality (manufacturing output per capita or as a % of GDP). Aus has some very advanced manufacturing capability – it’s a scale problem not a quality problem.


    Over one billion metric tons of iron ore imported into China in 2017! Very good for Australia, the big miners at decent margins. China “gobbling up” other commodities too. This predicted to continue thru 2018 and beyond.

    Whilst this is my view, it is not the Macrobusiness position. A recent article here ridiculed BHP for flicking NickelWest and firming up on iron ore, “Luddites” was the inference.

    I’m still on the China growth train that will take commodities with it. And for Australia’s sake, I hope to be right.

    • My view is that China is SERIOUSLY PISSED at the accusations Turnbull has been making vis-a-vis China meddling. They generally have a decent time lag in their response and I suspected we would see a massive surge in port stocks before the Chinese New Year – followed by an almost complete wind down in port stocks to drive home a massive message through March.

      China has launched wave after wave of new initiatives on pollution, transitioning economies, slowing housing construction over the past three months and I suspect we will see a massive wind down in construction to go along with the draw down on port stocks to send a deep, long term message to Australia via utterly smashed commodity prices through March.


    • reusachtigeMEMBER

      Exactly! This will translate into a supreme mega intense way beyond boom in housing the likes we haven’t even imagined. A great time to buy.

    • Fred Douglass:

      I suspect Turnbull has been kissing Chinese arse all Christmas, both unofficially and via diplomatic channels. As he should.

      Can’t see why China would target iron ore: stockpiles only equate to little more than 30 days steel production and China has been stockpiling all important commodities, possibly as a backstop should maritime tensions develop.

      Far more elegant to opt for their South Korea option and simply ban package tours to Australia. Sends a decent message, doesn’t hurt important Chinese sector like steel, tourists can still go to NZ or Bali to holiday etc. Or Chinese students could be encouraged to seek further education at first class global universities rather than majority second rate Australian ones.

      Or the Turnbull charm offensive may have worked! Or perhaps not!

    • Got two things from this; right wing intellectuals are an oxymoron and “taking my talents to the South beach” is a new term haroldus should get a grip on.

    • This pretty much sums up the reason we’re fucked.

      Steve Bannon sees America as hopelessly divided into two hostile groups, one of which will win and one of which will lose. It is a modern undeclared civil war in which the rise of one side will mean, necessarily, the marginalization of the other.

      Bannon and his followers are basically incapable of co-existence with “the other”.

      • You just worry about yourself and not ‘othering’ someone when they disagree with you and you won’t be so fuched.

      • I thought the same thing. Divide and conquer is an ugly strategy that makes the lives of the people, those that these types of dunderheads pretend to care about, worse off in the long run. No matter who ends up winning animosity and bitterness will have spread and grown. The sad thing is that he’s not going to be the last as he’s a symptom, not a cause.

      • You just worry about yourself and not ‘othering’ someone when they disagree with you and you won’t be so fuched.

        This “just worry about yourself” thing is one of the major issues lying at the core of our problems. “Just worrying about yourself” is what leads to not caring about anyone else, which is what brings about the breakdown of society and the social contract.

        You have described the problem with Bannon, et al. They are actively seeking to exclude/diminish/drive out “the others”. Their philosophy is that co-existence and compromise of differing beliefs/opinions is not possible. It is fundamentally xenophobic and anti-democratic and cannot function at any scale (at least not while retaining a semblence of modern civilisation)

      • “Bannon and his followers are basically incapable of co-existence with “the other”.

        You mean in the same vein as Hillary, the entitled Democrats and their collective loathing of the rest of the population, the Deplorables?

      • Blue dog democrats are kissing cousins to Bannons crowd, Hillary was a Goldwater girl that saw potintial to forward her identity politic within the democratic camp.

        Anywho…. voting records are a more accurate picture than bleating in the MSM for tribalist eye balls.

      • You mean in the same vein as Hillary, the entitled Democrats and their collective loathing of the rest of the population, the Deplorables?

        This is what all the cool kids are calling “Whataboutism”, right ?

        (I do find it odd that some people think assault, harassment, discrimination, racism, bigotry are desirable behaviour, though. But that seems to be the world we live in.)

      • How do you get on without a mirror?

        Do you ever cut yourself on all that broken glass lying around ?

      • All the good looking people are on holiday on the mainland buying property. Don’t question the boom mate, it won’t get you invited to any relations parties.

      • You are not getting the bigger picture, of course the others sold you have to assume that. RE agents are a humble bunch they don’t like to harp on about sales, so if they don’t report them you know they sold.

    • Mining BoganMEMBER

      Why would Queensland have so many auctions this time of year? Hoping someone up on holidays would spy a bargain and make a spontaneous buy?

    • 100% clearance rate in Canberra too! 2 auction, 1 sold on 1 reported auction therefore equals 100% on reported auctions not 50% on scheduled.

      • @AI

        He’s like Principal Skinner from the Simpsons, when he was advertising for a t*tty-bar in the street:
        {monotonous voice} Girls! Girls! Girls! Wowza!{/monotonous voice}

        You can tell he’s excited about the news he’s delivering! He slipped a “wow!” in there…

  12. a 16 yr old drunk driver without her licence crashed her holden commodore into my apartment building wall on friday night:

    aftermath the next morning:

    it went right through the refrigerator and sounded like a bomb going off. i doubt there will be prison time at all for her, probably a few years driving ban and a big fine. she should be in jail for trashing my place.

    • ErmingtonPlumbingMEMBER

      Prison time!,…come on Stagmal,….she’s not a terrorist!

      She’ll be old like you one day.

      “Everybody thought it was a drink-driver. People who do that should have their hands chopped off I say. Make them drive with their teeth! Anyway, we all love Harold. So funny to see him almost run six people over. Such a character!”

    • Sorry to hear that stagmal, thankfully nobody in your unit was hurt. Given that insurance is unlikely to touch this one, she should be made to pay for all damages however the building owner will now have to battle with the insurance company and you’ll have to do the same. As for the girl, the legal aid lawyers will pull a sob story and the little dear will be out on the streets once again.

    • The Traveling Wilbur

      Clearly someone with issues. It’s​ a real pity she decided to share them with y’all. Best of luck with the repairworks. And I’d look into whether you’re eligible for any state based victims of crime compensation money going in your state. You should be, especially as it’s unlikely the courts will make her or the parents pay anything through a judgement (except a fine).


    “As you may know, my colleague Carole James is working on several measures related to speculation, loopholes and tax evasion in the housing market in conjunction with the preparation of our February budget. As I have more information I can share, I will let you know.

    “In the meantime, although it is not squarely related to housing, I thought you might find my remarks related to trans-national money laundering in BC casinos of interest.

    “I delivered this speech, which touches on areas broadly related to housing policy, to a December conference co-hosted by Transparency International Canada, UBC’s Allard Law School, and the International Centre for Criminal Law Reform.

    “It may give you some idea of the challenges our new government faces, and the need for the significant reform work we are undertaking.”

    • Makes me all teary eyed for the LNP polie that opined we only need a few more billionaires and it would all be sweet….

  14. Can more of the badly done by Chinese foreign buyers up and leave real soon??? I’d like to afford my rent on intermittment wages and not share with 3 other adults in their ’40s. Yes it sounds racist. Do I care? NO. Could the $457 visa holders leave at the same time. I’d be grateful as would my funemployed & renting peers.

    • Leave? Nonsense… School and uni year enrollment is just about to start.
      Back in your cage slave.

      • The Traveling Wilbur

        Cage? Cage?! People round your​ end of town can afford cages these days can they? Well lah-di-dah aren’t we an upwardly mobile new-age utopian type then. When I was a lad we couldn’t afford cage. We had to sleep out in the street under the wagon wheels on the carts with the horses and tie ourselves on with bits of string so that the wagon we was under didn’t run over us while we slept. Then we had to walk five miles to work with no breakfast pay mill-owner a shilling and then walk six miles back. Cage? Luxury is that. A cage. Don’t know they’re born this lot.

      • Oh no, the slave cages are rentals. Cray pots for the children.
        Five miles to work (well lah-di-dah..) then six miles back to the cart eh? Universe was expanding rapidly back when you were hatched.

      • The Traveling Wilbur


        By that time of day ‘orse was down tuther end ‘o town, near the mire, waiting for us to give it bath and massage it’s sturdy fetlocks. Ohhh… that brings back some memories lad… Then we’d slop through mire looking for enough slugs to trade with the town baker for a dead-rat pie. On a good day we’d be lucky to get enough slugs for a pie and a half for the five of us to share. But the baker always insisted on us providin’ our own rat for the half pie of course. No charity there.

      • Rats? Rats!? Luxury!!

        When we were fetuses we had to scavenge for algal pond scum amongst the polluted tailings of the lead and cyanide factory to render down into blue-green porridge over burning car batteries in old shell casings from the war. We were living in no-man’s land on the western front at the time.

        And we were grateful for that!

    • Oh oh oh! He’s on Sunday Night on 7… exposing his “secrets”…. quick, write them down before everyone finds about them!!!!

    • Mr Birch said he wasn’t worried. “…Look, I’ve heard lots of these scenarios. We’re not a Detroit, we’re not America…”
      Mr Birch said he believed the best place to buy was the Gold Coast. “The market here I think is only just scratching the surface,” he said. “It’s like Australia’s Miami.”

      • Mining BoganMEMBER

        It’s like Australia’s Miami…he really said that?

        That’s some Crockett and Tubbs front right there.

      • @Mining Bogan

        Jan Hammer says he won’t be writing the theme for mr Birch… He said, and I quote: “Short answer is ‘no!’, long answer is ‘f*ck, no!’… “

  15. One sure fire way for Turnbull and Cormann to get the outcome they desire from the banking royal commission; simply don’t let people make submissions!

    “Banking royal commission: Fears customers are being shut out from having their say”

    It has been six weeks since the financial services royal commission was announced, but victims of bank misconduct remain in limbo about when, how, and even if they can have their voices heard.

    Royal commission website has no way for members of the public to lodge complaints ACTU says call centre was operational within two weeks of unions inquiry being established Nationals senator says voices of banking misconduct victims must be heard
    While the major banks and some advocacy groups were invited to prepare submissions weeks ago, members of the public still have no way to lodge their complaints.

      • Gramus, you’ve said a few times you expect even more foreign students this year carrying cash for housing…do you know something?

      • @JohnR there will be significant growth in international student numbers this year (ex WA) A proportion of them will be buying property, their demand is seasonal peaking in March.

        Whether the extent of their buying is greater than last year is an open question, but there will still be seasonal support for housing from international student demand.

        Did you notice in the article that the greatest growth in international student numbers was in TAS (25%) which is also where property prices are rising hardest….????

      • Thanks Gramus. Re TAS, yes I did, and it raised my eyebrows. On the other hand I bet that’s off a low base.
        I’ve heard that Chinese investors like to buy into rising markets; maybe this explains a few things around Australia right now.

  16. Watching the Ghan arrive in Darwin was more informative. I flicked over briefly but the gag reflex was too much.

    • Meh… TV… I still have 4 large trees to cut and stack for the winter… the storm on the 2nd of Jan really gave us something to do, as if we didn’t have enough… TV! HA!