Links 14 September 2018

Global Macro / Markets / Investing:






    • I am having trouble manufacturing any sympathy for the guy who borrowed money to invest in Storm Financial. He seems to have a house, and really given how stupid he was, he deserves to be living in an upturned dumpster.

      The idea of borrowing money to invest in a scheme that can’t really explain how it “generates wealth” is not being exposed as gross stupidity. He is not a victim, he is a greedy idiot. We have allowed the word “invest” to become a religious dogma. My contention is that nobody actually understands what “invest” means – the original meaning has been lost and replaced with this new mantra of financial religion.

      The financial world of past centuries seems to live on in a make believe illusionary mesh of phrases like “investment portfolio” etc. People who have mortgages on several properties, but earn less than $100K – how is that an “investment”? Nathan Birch – how is he an “investor”? All this is an unproductive, parasitic Financial Ceremony. All that is missing is the feathered headpieces and face paint.

  1. No Jab, No Play

    Mark McGowan needs to have a policy of “no valid visa, no enrollment in government school”. ie, order every kid studying in a WA government school to prove that their parent does not have an expired visa.

  2. Newcastle anecdote time: colleague is selling their apartment, and buyer fails to get financing and wants to delay settlement by 3 months. Colleague is now freaking out about an oversupply with all the apartments going up everywhere, and worried about taking a loss.. Open houses have been dead quiet. Colleague has spoken to others trying to sell apartments in the CBD, and it sounds as though the market has gone cold. Apartment sellers unable to find buyers after several months.

    Yet many more projects are underway or just about to commence.. People getting a bit skittish about all the apartments being constructed everywhere, and this before we even consider all the new housing estates popping up in the outer suburbs.

  3. The Sydney areas where properties are taking longest to sell
    “Among them is Ropes Crossing homeowner Matt Crabbe, whose four-bedroom duplex has been for sale since July. Had he sold this time last year, his sales campaign would likely be over.

    Instead, his family’s modern duplex has been on the market for 54 days … and counting, and the price guide has been reduced to $620,000 to $640,000 — sitting just above the $618,000 records show it sold for in 2016.”

  4. (From links). Why do you have “No jab, no pay” as a vaccination policy?
    The usual reply is “Oh. If your child isn’t vaccinated they could infect the rest of the class/school!”.
    If all the other children are vaccinated, how can ‘my’ child, unvaccinated, infect them – or any other person- if vaccination works?

    • FiftiesFibroShack

      Unfortunately the scenario where it’s just one person who isn’t vaccinated is becoming uncommon. It appears that “all the other children are vaccinated so why should we bother” as a health strategy, has a few flaws.

    • Ah yes, the “I’m alright Jack” strategy. You all get needled and then i don’t have to.

      If only there were just a scattered few selfish types trying to do this. Unfortunately there seems to be many…

    • And if I let my dog sh1t on the footpath, what difference does it make, really? It’s just one dog, after all.

    • A doctor I posed the same question to said that it is the issue of herd immunity. If too many people within a group aren’t immunised then there are more opportunities for the disease to spread. If it was only one or two who weren’t getting immune immunised then it would not be a concern. When the numbers grow and it becomes a trend any outbreak that starts is a lot harder to deal with.

    • Vaccination and degree of immunity is NOT an exact guaranteed level – especially as time progresses. Bacterial and viral populations vary in ‘vitality’ the same as animal populations do. If part of the population is unvaccinated then it leaves a greater capacity for various grades of immunity to develop and this will eventually result in vaccinations against a particular disease becoming ineffective. The ‘Generation Interval’ for bacteria and viruses is very very small!!!

    • Herd immunity requires a critical mass to be effective. Personally, I don’t care if peoples idiot offspring get polio. They’ll start caring if their spawn give to mine though.

      • FiftiesFibroShack

        I’m concerned direct democracy could end up being mob rule in the worst possible way. But with safeguards it could be preferable to government beholden to lobbyist/donor. I’m leaning toward a clean-up of the current system, combined with some options to trigger political action, or depending on the issue, a popular vote. Ironically, the gay marriage plebiscite is an example of what we shouldn’t be allowing a popular vote. The mob voting on the legal rights of a section of the community makes my skin crawl.

        Frankly, anyone that has had one look at the #metoo movement should be concerned about what direct democracy could look like.

      • The people weren’t voting on anyone’s rights. That is a Fallacy of Petitio Principii, or assuming the antecedents. The vote was on whether or not such a right ought to exist. Assuming it existed already is to assume the antecedent.

        Rights do not exist in the positive sense that moon exists or Pythagoras’s Theorem exists. If they did there would be no need for democracy, direct or otherwise. There would be no need for Parliaments. There would be no need for Courts of law. If rights existed positively one would merely need to commission a team of scientists to go out and measure their existence or non-existence. Or in the case of something like Pythagoras’s Theorem, commission a team of Logic professors to work out from first principles whether or not the right existed.

        Rights exist because some organised group of people decide (as a matter of preference) that they ought to exist and go about enforcing them. As the legal maxim puts it: “There’s no right without a remedy.” The remedy is that some organisation with the power to do so will enforce the right.

        The language of positive rights is powerful rhetoric. Standing up and saying, “I think such-and-such ought to be a right” is insipid. People prefer to announce, “Such-and-such is a right.”

        But rhetoric is not logic. If one starts to believe one’s own rhetoric one falls into the trap of intolerance . . . and the worst form of intolerance: sanctimonious intolerance. One runs the risk of forgetting that other people have different preferences. In the case of same-sex marriage, some people genuinely believed – for example – that the word “marriage” should retain its traditional meaning and that an equivalent bundle of rights and obligations could be created under the name “civil partnership”. Just because one disagrees with that view doesn’t mean that one’s own view is “correct” and one’s opponents’ views are “incorrect”, or – even worse – “evil” as some would have us believe.

        A generation ago (I know because I was alive) the idea of same-sex marriage would have been inconceivable to most people. That the prevailing view has come to change is not because the laws of nature or logic have suddenly altered. It is because people have come to hold different views.

        Once one recognises that rights are do not exist in the positive sense, the question then becomes not “Does the right exist?” but rather “How is the community to decide whether or not the right ought to exist?”

        There are many answers to that. One might support the principle of Parliamentary Supremacy in which an elected legislature has the final say. One might lean towards a constitutionally entrenched bill which empowers unelected (usually elite) lawyers to make that decision. (But beware! Unelected lawyers are prone to doing unexpected things: ) One might lean to the view that the citizens being governed ought to have the final say.

        Whatever method is adopted, the question remains, “Who is to choose the method? And how?”

        And it is here that Democracy comes to the fore as a means of demonstrating the legitimacy of the system. For if the People being governed do not choose the system of government, then who is to choose it for them? Who has the “Charter from Heaven” authorising them to make that decision on behalf of everyone else?

        If no-one has the Charter from Heaven then the only way – logically the only way – to make the decision is for people to make it using a “non-privileging” aggregation of their differing preferences. Otherwise, who is to be privileged? Who is to decide who is to be privileged? Who is to decide that? Ad infinitum.

        And it may be shown that such a non-privileging aggregation must have the characteristics of an indefinite-pass initiative-and-referendum system with sufficient compulsion to prevent a voting Prisoners’ Dilemma.

        In other words, some form of direct Democracy!

      • Having said all that, look at the end of the paper at the various methods of initiation and ratification which might go some way to alleviating the concerns of those who worry about hasty or ill-considered votes.

      • FiftiesFibroShack

        “The people weren’t voting on anyone’s rights. That is a Fallacy of Petitio Principii, or assuming the antecedents. The vote was on whether or not such a right ought to exist. Assuming it existed already is to assume the antecedent.”

        They voted on legal rights. These legal rights already existed for the majority. The vote was to extend these existing legal rights to cover the evil doers.

        “Rights do not exist in the positive sense that moon exists or Pythagoras’s Theorem exists.”

        Yes, I’m aware that rights are based on legal framework (and its interpretation), and are not the same as a mathematical proof or physical object.

        “One runs the risk of forgetting that other people have different preferences. In the case of same-sex marriage, some people genuinely believed – for example – that the word “marriage” should retain its traditional meaning and that an equivalent bundle of rights and obligations could be created under the name “civil partnership”.”

        Sure. My preference was for the marriage act to be renamed the civil union act, or similar. It seemed in keeping with the idea of secular democracy. People could use the nomenclature their belief system warrants, legally they would all be civil unions. Anyway, it’s over now.

        Thanks for your response. I’m sorry I missed it on Friday (I don’t check the email account tied to MB).

  5. You think the new liberal candidate from northern SYDNEY will go down well as the member for the Eastern suburbs?
    I think local people are likely over this Sht

  6. From this morning’s “Letters Fairfax Won’t Publish” File:

    13 September 2018

    Tim Hollo’s excellent article on outdoor advertising (The Age, 13 September 2018) concentrates on its external costs, but its regulation is also well supported by the economic concept of “positional goods”.

    Positional goods are those which have value not because of their absolute qualities but because of how they are positioned relative to their competitors. The “position” need not be physical position, only the position in some ranking of quality. The classic example is the towers of San Gimignano which property owners built ever higher and higher to outdo their neighbours.

    Positional goods necessarily impose an external cost on the owners of other positional goods: they gain value only by reducing the value of their competitors. As a result they are inefficiently over-produced. They have the characteristics of “arms races”: such a race race can never be won, not even with infinite resources devoted to arms. But the arms race diverts valuable resources away from activities which are of real social value. And as Tim Hollo explains it may also cause actual social harm.

    Resources thrown at ever more, ever larger, and ever more garish advertising billboards are an arms race for the essentially limited attention of the human beings at whom they are targeted.

    Such market failures justify either regulation or taxation to prevent the mis-allocation of resources and the external costs imposed on the community.

    Stephen Morris