Links 12 October 2018

Global Macro / Markets / Investing:





Leith van Onselen


  1. The creationists wish to be protected from ridicule. Guard your freedoms well.

    Already in Victoria severe criticism of religion is a criminal offence punishable by six months imprisonment.

  2. Is this like being “a little bit pregnant?”
    ‘What you’re seeing is a bit of a panic’??:
    Numberwang on the ASX. (In billions)
    ASX losses over the last 10 weeks
    63+9+ 45 +42 + 100 odd yesterday plus another 40 odd today =/= $300 billion.
    Remember houses are down only 36 billion odd this year.
    So round figures,
    Equities, read Super funds for most, are now losing your money 10 times faster
    Than housing is losing your money.

    • Know IdeaMEMBER

      Understood. But you also know full well that share prices rise and fall all the time. However, house prices only go up.

      And as noted by another yesterday, it is more the percentage change in the equity that would be more interesting.

      • An interesting thing about equities and property, is
        it takes almost double the percentage gain
        to recover the percentage loss.
        a cardinal rule of investing for long only punters is
        never let a loss occur
        not only does it take 2x the rise to recover the loss
        you also incur loss of opportunity costs.
        If you are leveraged, as many are, a loss is fatal.

        I am more than happy to hear how this can be turned around in say 3 to 5 generations.

      • @WW That is pretty much the case with anything in life – i’m afraid.

        You take a tumble and it’s pretty damned hard to recover – some people are never the same after a broken limb.

  3. THere has to be a book in this now rolling collapse
    Remember Mary Durack’s “Kings in Grass castles”
    how about WW’s book. “Emperor’s in Clothes of Paper”
    the market is being shredded like the girl with a balloon.

  4. Was watching 730 report last night and said they’ll be doing a multi part report on immigration and population next week. Something to watch for

    • Knowing the ABC the main focus will be to remind us all that it is racialist to mention that the 2 major cities are overcrowded and that our quality of life is fast approaching the third world.

      • We should make a Dr Demography Bullsh&t Bingo card – and yell “*BINGO*” on MB everytime one gets full house a line…

      • Who else will be there? Bernard Salt, Chris Johnson, Saul Eslake.

        Who won’t be there? Dick Smith, William Burke, any genuine climate scientist.

        I like the ABC but this is one area it fails the Australian people.

    • Have to give Usman credit *through gritted teeth*.

      I never saw any problems with M Marsh at 4. What could possibly go wrong?

      • Usman’s main problem has been not being part of the establishment. It’s a shame that it took three players getting suspended for him to be given a stable opportunity.

        Maxwell might have invented a few new choice phrases after seeing the Marsh brothers performance.

  5. From this morning’s “Letters Fairfax Won’t Publish” file:

    11 October 2018

    For Australians the real lesson of the Kavanaugh appointment (“Transforming America”, The Age, 11 October 2018) is the danger of creating a “judicial oligarchy” by entrenching constitutional rights. US Supreme Court appointments are contentious because the judges have such enormous latitude interpreting rights that they can effectively “legislate from the bench”.

    Contrary to popular mythology, such judicial legislation has usually been detrimental to the downtrodden[1]. Most people can cite Brown v Board of Education as the landmark decision which overturned the “separate but equal” doctrine. Far fewer know it was the judges themselves who invented that doctrine 58 years earlier (in Plessy v Ferguson) for the very purpose of allowing discrimination. Only one judge dissented.

    The history of constitutional rights is littered with similar examples. In the Lochner Era of the early 20th century, judges routinely threw out legislation which sought to protect workers’ rights. Even today – even before Kennedy retired – the Court was upholding the right of wealthy campaign donors to subvert the electoral process (Citizens United v Federal Election Commission).

    Many people fondly imagine that if only their faction could seize control of the Court, then they could impose their vision of Utopia on everyone else. The danger, as we now see, is that precisely the opposite can occur.

    In the long run, people’s rights are best protected by normal democratic process, not by Platonic Guardians wearing black robes and sitting in a marble temple.

    Stephen Morris

    [1] See, for example:

    Dred Scott v Sanford (1857) which held that a negro, whose ancestors were imported into the US and sold as slaves,whether enslaved or free, could not be an American citizen and therefore had no standing to sue in federal court; or

    Pace v Alabama (1883) in which the judges unanimously affirmed the constitutionality of state anti-miscegenation laws; or

    the Civil Rights Cases (1883) in which the judges restricted the equal protection clause of the recently enacted Fourteenth Amendment to cover only actions by a state, not by individuals, thereby allowing discrimination by individuals; or

    Plessy v Ferguson (1896) in which the judges (with only one dissent) created the artifice of “separate but equal” so as to permit continued racial discrimination; or

    Twining v New Jersey (1908) in which the judges refused to apply Fifth Amendment rights against self-incrimination in state cases; or

    Schenck v United States (1919) in which the judges unanimously read down First Amendment rights to affirm the conviction of a defendant who had been prosecuted for publishing material advocating opposition to the military draft; or

    Palko v Connecticut (1937) in which the judges refused to apply Fifth Amendment rights against double jeopardy in state cases (Frank Palko had been acquitted of first degree murder at his first trial but was convicted the second time around and went to the electric chair in April 1938); or

    Betts v Brady (1942) in which the judges denied counsel to indigent defendants when prosecuted by a state; or

    Korematsu v United States (1944) in which the judges approved the forced relocation of US citizens of Japanese decent on the basis of their race; or

    Dennis v United States (1951) in which the judges read down First Amendment rights in order to uphold the conviction of defendants who had “conspired” to form a Communist Party but who had not taken any direct action. (“They were not even charged with saying anything or writing anything designed to overthrow the Government. The charge was that they agreed to assemble and to talk and publish certain ideas at a later date” – Justice Black’s dissent); or

    Bowers v Hardwick (1986) in which the judges upheld a ban on sodomy.

    Most of these decisions have since been overturned as Elite opinion on the matters changed, but that did little to protect people at the time.

    On the other hand, the judicial oligarchs have demonstrated long-running support for politically powerful groups.

    For example, in Santa Clara County v Southern Pacific Railroad Company (1886) they decided that the “rights” of the Fourteenth Amendment applied not only to natural persons but to corporations. Thus, attempts by the state to regulate the profits of railway monopolies were struck down because (in the opinion of the elite judges) they infringed the “right” of the railroad monopolies to charge (what the judges considered to be) a reasonable profit.

    This line of thinking continues to this day. Citizens United v. Federal Election Commission (2010) prohibits the restriction of independent expenditures on political communications not only for natural persons but for corporations. It interprets “freedom of speech” to include the “right” of corporations to buy politicians.

    And then there is Meyer v. Grant (1988) and Buckley v. American Constitutional Law Foundation, Inc. (1999) which struck down the repeated attempts by democratic states (those with initiative and referendum) to regulate the payment of petition collectors.

    And then there were such beauties as Lochner v New York (1905) in which the judges overturned state laws regulating working hours or minimum wages because these were held to infringe the “liberty” of workers to negotiate with employers who had an overwhelming bargaining advantage. Or Coppage v Kansas (1915) in which they overturned laws protecting workers’ rights to join a union because these were held to infringe the “liberty” of workers to negotiate with employers who banned union membership (“Yellow Dog Contracts”).

    As the famous US judge Billings Learned Hand once observed:

    “[Judges] wrap up their veto in a protective veil of adjectives such as ‘arbitrary’, ‘artificial’, ‘normal’, ‘reasonable’, ‘inherent’, ‘fundamental’, or ‘essential’, whose office usually, though quite innocently, is to disguise what they are doing and impute to it a derivation far more impressive than their personal preferences, which are all that in fact lie behind the decision. . . . .

    “If we do need a third chamber it should appear for what it is, and not as the interpreter of inscrutable principles.”

    • Even more happier:
      AJ is appealing the decision in the Wagner case.

      Ive been trying to tell you guys the BB Wolf has been seen coming down the road.
      and yet some yesterday were asking, what happened??
      as they teach in business school, its best to leave those wondering- perplexed.

  6. The Coal/gas lobby must be one of the strongest ones in Australia at the moment. The logic appears to be clear – get as much as you can out of the ground and sell it before demand/prices go into freefall. If you can lock in some mugs for long term supply contracts, great. Explains lots of current arguments for gas, coal and against renewables. Support for Snowy 2 is interesting as it is being sold as solution coming soon. Looks like a solution that can be slowed down / delayed indefinitely.