Weekend Links: 24-25 August, 2019 – MacroBusiness

Superb and Solid, Howard Arkley, 1998, Art Gallery of NSW

 

Saturday Morning news…..

Macro and Markets

Asia

Europe

Americas

Terra Specufestorus

…and furthermore…

Gunnamatta

Business Journo in Russia and the Middle East. Anarcho-syndicalist, wine lover, poet, and general all round punter. Currently coming to terms with Australian morning TV and commercial network news.........

Comments

  1. C.M.BurnsMEMBER

    “. . . what’s the opposite of shame?”

    “Pride?”

    “No, not that far from shame.”

    “Less shame?”

    “Yeah.”

    Keep your foot on their throat Paine

  2. C.M.BurnsMEMBER

    David Koch just died. Watch out Harry and Rupes you old cnuts, death is finally making his way through his list of the 0.1%

    • bolstroodMEMBER

      The bowling from both teams has been exceptional.
      In 45 yars of watching cricket I have not seen better.

    • Possibly the best day of cricket I’ve ever attended. Left the ground horribly depressed after the Day 1 collapse and that was all turned around in a few overs on Day 2.

      And agree with Bolstrood, the bowling in this series, particularly the last two matches, has been incredibly disciplined. Hopefully we can secure the Ashes today or tomorrow with one more tight performance.

  3. blindjusticeMEMBER

    The hypocritical EU is partially to blame for burning the Amazon rainforest due to their free trade deal with the South American block. Done knowing well what would happen. The politicians are paying some lip service. https://en.wikipedia.org/wiki/Environmental_policy_of_the_European_Union

    “The European Union (EU) is considered by some to have the most extensive environmental laws of any international organisation”

    Or translate that into…..the most extensive network of quangos/funded buddy system

  4. TRUMP:
    “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA”

    I quietly declare Australia dead. Dead and buried. Gone. Finito.

    VALE STRAYA

    Own a house in here?
    Finally. You will see what it’s really worth.

    • The corporatists will never give up their cheap third world labour. Just move to the next third world country.

      • I’m not sure that I agree
        Over the last 20 years the US has lost most of its Production Engineering expertise, while at the same time China has gained this knowledge. Most of the products that we all know and love simply couldn’t be produced without these Production Engineers fine tuning their factories and work practices. Today this knowledge simply doesn’t exist within the US work-force, you can’t study it at Universities because it’s not glamorous, you can’t learn on-the-job because we moved production to China, there are no mentors to instruct / guide you because they all retired 20 years ago.
        As for moving production to a third country, that’s possible but you have the same problem with depth and breadth in your Production Engineering. Where do you hire these experts? Why do they want to move to Vietnam or Cambodia or Africa?
        Any modern day manufacturer that underestimates the value of high quality Production Engineers will learn this lesson the hard way.

      • Have to agree fisho … a lot of talent was pushed out for young inexperienced and malleable sorts for a quick balance sheet buff, not to mention cutting legacy costs. This kind of talent just can’t be conjured from thin air and takes decades to gain, never mind all the support or networks.

        All self inflicted whilst simultaneously considering themselves clever …

      • Agree on all fronts Fisho – also consider that no country on earth comes anywhere remotely close to providing the facilities in transport and export China does.

        China has installed three times the amount of freeways as the rest of the world combined (rotwc) over the past two decades, three times the electric recharging network, ports, high speed rail etc – the parts supply chain, resources, raw materials – nothing comes even remotely close.

        As for third world competing with China

        https://www.huawei.com/en/press-events/news/2019/8/huawei-ascend-910-most-powerful-ai-processor

        They are beating the first world – so best of luck with that.

        If Harmony OS takes off – then its completely over. And so far I can not see how it wont.

      • Bear Claw,

        Chinese has made impressive progress but there is no need to exaggerate

        https://www.newgeography.com/content/002003-china-expressway-system-exceed-us-interstates

        Road network is probably more important and the quality of local roads is critical.

        https://en.m.wikipedia.org/wiki/List_of_countries_by_road_network_size

        http://world.bymap.org/Railways.html

        It is not surprising that finally someone like a Trump decided that handing over industrial production to a country like China was a bad idea.

        Nothing is irreversible and if the USA wishes to rebuild domestic industrial capacity in some areas they will do so. It may take some time but it will be a lot easier for the USA to rebuild the capacity than it was for China to go from agriculture to industrialisation.

        Australia built industrial capacity as a national project post WW2 and then decided to throw it under the bus. If we want it badly enough we can rebuild it.

        At the moment a lot of people are suffering whiplash as the obsession with global neoliberalism runs into the hard edges of national interest and reality.

        Slowly people are starting to understand WHY countries used tariffs, quotas, capital controls etc and other barriers to foreign production.

        It was in their interests to do so.

      • @Pfh007

        That is honestly the most disingenuous response I have ever witnessed in my life. You have posted articles from 2011 and 2014 ???!!

        Secondly the railway map reflects all railways – you know, from 1840’s It in no way reflects high speed railways, bullet trains of which the United States has exactly ZERO MILES.

        Thirdly my post reflected the infrastructure built over the last two decades – not since the United States first built a road.

        Just a completely and utterly absurd post on your behalf – ridiculous.

        Here is a fact for you – in the last two decades China has installed more concrete than the US has in all its history.

        It may take some time but it will be a lot easier for the USA to rebuild the capacity than it was for China to go from agriculture to industrialisation.

        Holy crap – that is the single biggest load of horse fecal matter I have ever read. The US TRIED to install high speed rail in California and failed because its system of governance is utterly incapable of agile development unlike command economy China.

        The bureaucracy and kleptocracy in the US is so entrenched with the regulatory capture so overwhelming corrupted by lobbyists that they are incapable of almost any progress.

        The F-35 is a brilliant example – as is Boeing. Companies entirely overtaken by bureaucracy and entrenched old school ideas of corporate raiding, cutting corners, etc. While the US fails to build its latest 5th generation almost entirely and has simply “moved on” as they put it to developing their 5th gen – China has caught up and overtaken them.

        Its a total disaster – without a radical military level of economic re-tooling on a global war fare level there is absolutely ZERO chance the US could compete.

        China has built what American built over several hundred years in two decades. And you go and claim – America could do it more easily.

        Just risible on a spectacular level. Utterly laughable.

      • Bear claw,

        It is you!

        I was wondering what happened to our keen observer of death rays and other advanced Chinese Sci-Fi.

        We have missed your over heated prose from the Ministry of Truth.

        You do understand that freight is not moved on high speed rail don’t you?

        I noticed that you did not come back with some freight rail track stats. I wonder why ? Perhaps it is because the Chinese government hs spent so much money on high-speed rail (due to internal empire building) that the freight and normal passenger track work is not getting done.

        Concrete pouring reaches new records in China? What does that mean? Not much other than China is investing a fortune in building better quality houses for its farmers. A fantastic achievement but no better than the USA did about a century ago.

        You might not like my links because they do not agree with your biases but at least I have some.

        What have you got?

        Crickets !!!!

        As I said, you don’t need to fabricate reality to make a case that China has made fantastic improvements over the last 40 years.

      • Bear claw,

        Here you go.

        Another link for you to chew on. I highlighted the key points to help your comprehension.

        https://www.railway-technology.com/features/featurethe-worlds-longest-railway-networks-4180878/

        “..The US rail network, with an operating route length over 250,000km, is the biggest in the world. Freight lines constitute about 80% of the country’s total rail network, while the total passenger network spans about 35,000km…”

        “..Rail is the principal mode of transport in China. The country’s rail network consists of over 90,000km of conventional rail routes and approximately 10,000km of high-speed lines. The total rail network of the country is targeted to exceed 270,000km by 2050.

        The rapid expansion of China’s high-speed rail network in recent years makes it by far the largest in the world. The 2,298km Beijing – Guangzhou high speed line is the world’s longest high-speed railway line. The total length of China’s high-speed rail network is projected to reach 50,000km by 2020…”

        It is pretty clear that in 2014 the USA was still miles and miles ahead of China and even allowing for the Chinese obsession with hi-speed rail they were only expected to expand that non-freight part of the network to 50,000 km by 2020.

        Get back to me in 2050 when maybe the Chinese network will excess that of the USA.

        Pretty pathetic rail ambition really when you consider the population of China is about 4 times that of the USA.

        One might expect that their network should be at least some multiple of the US network of 250,000 km.

        But who knows?

        Perhaps the Chinese will pick up speed and buy even more iron ore and coal from Australia.

      • Bear claw,

        It is you!

        Interestingly, not only has the naming scheme changed, but the person(s) behind these posts now have a few accounts on the go at once, rather than just churning over a single new trial account every 30 days. Cant remember the name of the other account (or maybe two ?) active at the moment, but the writing style is quite distinctive so you shouldn’t have much trouble tracking it down.

      • Drsmithy,

        I haven’t been following very closely recently but I wondered what happened to the “philosopher”.

        Good to know we will still be getting high grade inside access to technology break throughs from China.

    • Welcome trump haters. All I have heard in the last three years is that he looks out for him mates in corporate America. This does not fit that narrative what so ever. Trump haters just stop. This move will boost the wages of and increase demand for low skilled workers in the USA. Isn’t this what you wanted even though you don’t like who gave it to you.

      • Narapoia451MEMBER

        You seem to believe that just because he said it, it will happen.

        Odd given his track record but okay.

      • bolstroodMEMBER

        Hear Ye, hear ye, hear ye
        I hereby, by devine decree hereby order,
        2 hamburgers with cheese.
        They must be made in America great again.

    • The Traveling Wilbur

      Dear Donald,

      Thank you. Keep up the good work.

      Sincerely,

      A Bond-holder.

      PS If your Presidential capitalist playbook is looking a little overused, there are some *more* radical left wing policies I can suggest you borrow from – there are some great Authors on the subject: Menzies, Castro and Marx spring to mind. Let me know if you need links.

    • reusachtigeMEMBER

      LOLOLOLOLOL!!! Houses are worth what people are paying for them but at the moment that is probably under fair value.

      • Houses ARE undervalued! The price has not yet risen in proportion to the decline in IR’s. Houses to infinity as we head to zero and below!
        Remember those who said it couldn’t happen!!! Bwahahahaaaaaaa!!!

  5. … CHINA …

    China hits U.S. with tariffs on $75 billion worth of goods, including autos – The Washington Post

    https://www.washingtonpost.com/business/2019/08/23/china-hits-us-with-tariffs-billion-worth-goods-reinstates-auto-levies-state-media-report/

    Freight slump flashes economic warning signs amid US-China trade war … CNBC

    https://www.cnbc.com/2019/08/23/us-china-trade-war-sparks-declines-in-air-cargo-flashing-warning-signs-about-the-economy.html

    China’s enormous debt ‘no longer can be ignored,’ analyst says … CNBC

    https://www.cnbc.com/2019/08/23/chinas-debt-levels-amid-its-slowing-economy.html

  6. https://www.scmp.com/comment/opinion/article/3023639/singapore-calm-while-hong-kong-boils-and-its-down-citys-greedy

    Hong Kong’s street protests are into their third month and continuing, disrupting traffic and daily life. The unrest is also having an adverse economic impact. Why is there not more public anger at these disrupters? An important reason is the widespread discontent over the housing crisis, brought on by the greed of property developers and landlords who are entrenched and politically connected.

      • boomengineeringMEMBER

        Bit more than double head height on the face maybe triple Sat out the back for quite a while (out the back disease) by myself waiting for the bombs but they didn’t eventuate so came back closer to where other guys were, paddled for one missed it and the bombs all on the head. Later caught a bomb, free fell down the face getting up, back down,made the drop, just about to get up and got smashed by the whitewater. No great achievement but felt good after anyhow.
        Was on the 10.8” gun that I broke in half years ago at the German Banks and had to swim 2.5 Klms back to shore in that storm,

    • As a skinny, pale teenager in Canberra, we only had the occasional body surf in Malua Bay, Boom, I never acquired the skills…. Didn’t stop me buying a second hand single fin short board later on, and having a go, but sadly I couldn’t quite find my balance, didn’t persist and it remained pretty much bolted to the top of my RS2000 when I went down the coast

      Good on you for keeping it up, I’m still running but it gets harder each year.

      • boomengineeringMEMBER

        Thanks Chris, could have done better on Thurs but was moving and stacking from home to the factory a big array of my ex gym dumbbells up to 200lb each the day before, so either that or old age. Don’t know how I ever lifted those things as part of the workout as now its even hard just to move them around.
        Keep running, do what you like doing not necessarily what you’re good at as your more likely to keep at it and reap the ancillary benefits,

  7. For the first time in a long time, we’re setting up a generation to be worse off than the one before it – The Conversation

    The Atlantic mentioned it in March 2018:

    At the age of 30, more than nine in 10 Americans born in 1940 were earning more than their parents had at the same stage of their lives. Millennials do not share in this age-old American experience of improving fortunes. Among those Americans born in the early 1980s, only half earn more than their parents did at a similar age.

    https://www.theatlantic.com/magazine/archive/2018/03/america-is-not-a-democracy/550931/

    Millenials in Japan, on the other hand, are richer than their parents. Even 24 year olds have a full time job because Japan keeps 45 year old males with “20 years of experience” out of Japan. I can see just one foreigner in this Japanese workplace – and the foreigner is not a third world male!

    https://www.youtube.com/watch?v=YdiWTYkY1uY#t=12m59s

    • reusachtigeMEMBER

      I agree. We’ve instilled no ambition in the youth whatsoever. The biggest leeches of them all even expect less hours worked in a week rather than striving to maximise their input for long term success by doing 60-80!

    • RecessionImminent2

      Japan won’t be allowed to continue these policies if the neoliberal powers that be have anything to do about it. Japan must immediately stop being so [email protected] and annihilate the future of their youth in order to achieve the promised land of low GDP and wage growth.

      • The worst nations in the OECD are the English-speaking ones.

        Which nations lack high speed rail? NZ, AU, Britain, Canada, USA.

        Which nations have mass immigration? The above.

        They have either drank the madness poison or USA is ordering the 5 eyes to have mass immigration.

  8. https://mobile.twitter.com/realDonaldTrump/status/1165005927864512512

    For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight….

    ….Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer. As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very….

    …unfair Trading Relationship. China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!). Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%…

    …Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!

    Huuuuge escalation in trade war. Bigly! China hiked tariffs, then Trump went nuclear in response (to them, but probably just as much in response to Powell)

    • Its baked in that America has to run deficits as reserve currency, where the job thing has more to do with say how some red states blew themselves up. This whole thing took decades to unfold and externalizing it all on China won’t fix it.

    • Yup, this is getting very spicy indeed. And yet markets still believe this will be resolved — if they didn’t, stocks would have air-dropped and exchange circuit-breakers would be in use again. But no, like worshippers at church on Sunday their faith is resolute (for now). The clock is ticking on my Puts — I need some serious downside action next week or my chips are done 😉

      • I think central banks are buying shares and propping up the stock market while super funds are holding no matter the news. Everything is artificial at the moment until something breaks and the central banks can no longer keep the illusion going

      • Came after market and futures closed 😜

        S&P 500 already had -2.6% day BEFORE the tweets. Monday gunna be epic

      • @Brenton. Not sure you are correct there. From where I was sitting (in front of my computer at 5-30am EST) the tweets were out and the market was reacting. Still trading. It went down to NASDAQ -3.3% and S&P -3.1% before rebounding in the last half hour of trading. I had markets closing at NASDAQ -3% approx and S&P – 2.6% approx. at 7-00am EST

      • @Brenton. I can only say what I saw. I was awake and in front of a monitor as it was happening. Unless I was hallucinating, I trust my senses.
        I can see that Twitter has the time of that particular tweet as 07:00. but I don’t use Twitter and don’t know how they work out what time to display to users around the world

      • I think you’re mistaking his earlier tweets for the actual tweets where he announced the tarriffs.

    • Even StevenMEMBER

      Yes. China is now going to experience pain. I think they’ve grossly miscalculated with Trump. They let their nationalistic fervour and pride get in the way of the cold, hard reality that they will be the bigger loser in a trade war. China poked the bear one too many times and now it’s on like a playground fight.

      The US is on the winning end of this (and Trump will gain political capital from it also) firstly from his domestic voting base, and secondly at a global level where he’s now established a credible ‘don’t f$#k with us’ with other countries thinking of playing games. Smart.

      • The problem, ES, is that Trump’s voter base are feeling a huge amount of pain too and are turning against him. US farmers have never been in more debt than they’re in today and yet their markets have been eviscerated — bankruptcies have already spiked but are set to climb much higher.

        The winners, of course, will be Big Ag who will hoover up all these foreclosed farms for cents in the dollar. It’s actually pretty tragic — the little guy gets shafted again by myopic Govt policy.

      • I don’t know, as I said above, Making things is much more difficult than most people believe it to be.
        In today’s super competitive world of manufacturing Factories that can’t run Six Sigma processes quickly find themselves going out of business. However if you talk to most US Engineers about process Cpk’s you’ll see many blank faces staring back at you. Sure they know what they want but they often lack the skills to make what they say they want (and make it for the price they’re willing to pay). With prior generations this knowledge was the key ingredient in blue-collar value. US machinists knew exactly what happened as their lathe warmed up during the day and cooled down at night. They knew exactly which screw to turn and exactly how many turns it’d take to keep the product within a tight spec despite seeing huge temperature changes wrt feed-stock and even the machine temperature itself changing.
        It’s this knowledge that has simply disappeared in the US, it’s gone, trust me it’s gone.
        Now lots of people talk a good game wrt fully automated factories being built in the US but to be honest nothing F’s up a fully automated factory quicker than a single out-of-spec component. A 1980’s US machinist would have known instinctively how to maintain Production quality specs by trimming the machine to over or under size as a way to adjust to component temperature variance However in the US today they’d be specifying that the entire production facility be held to a maximum temperature variation of say+-1 degree to achieve the same objective….Guess which approach actually yielded the tightest production tolerances?
        Before the US can move production back all of this stuff has to be relearned and learned by a population that sees zero value in this knowledge. The importance of this last point should not to be under-estimated.

      • Even StevenMEMBER

        Thanks Dom. Of course there are winners and losers in any trade war. Trump may even end up extending packages to help US farmers if he feels his voter base is eroding.

        But however much the US hurts, China will be hurting twice as bad. I see this as smart strategy, not myopic. Either US will buckle or China will. And because of the extent of the pain, it will probably be China.

        And even if China doesn’t buckle, the US will have materially weakened them (dissatisfaction amongst Chinese from slowing economy, people within CCP unhappy with how it has played out). It’s also a well sent message to China saying we are done playing. Get your house in order (rein in your ambitions, fix your intellectual property theft issues) and generally start being a better global citizen.

        I don’t think the message can be sent any clearer than that.

      • +1
        This is what’s been needed for a long while now. Course correction, momentum change. Xi is in a corner now.

      • bolstroodMEMBER

        Trade War ?
        Baloney.
        This is nothing but a red herring to distract from the Epstein imbroglio.

      • If you were to step outside the macrobusiness bubble for a second – US is getting absolutely smashed – while China continues to grow at 6% pa (Muh herp we can’t believe the figures).

        https://www.huawei.com/en/press-events/news/2019/8/huawei-ascend-910-most-powerful-ai-processor

        When Harmony OS gets released all hell will break loose.

        There isn’t a single sector that the US is winning with in this trade war – and every single cent of those tarriffs have been picked up by the US consumer – all of it.

      • When Harmony OS gets released all hell will break loose.

        What’s going to run on it ?

      • Their growth is BS as Pettis said years ago if they recognised their “investment” based on earning power rather than cost, the true size of the economy and their growth numbers would be a lot smaller.

      • @fisho +1000 They don’t even know the “known knowns” let alone the “the known unknowns”. In 2010 when I was still working there was a study to get production back to the USA and it was based on Chinese wages exceeding the US, but everything they said didn’t change anything in the globalist mantra of that time. As you know in the big tech industries in the US the majority of the workers are those with skills and they are not borne in the US. The shocked after I’d been there for a few years as realised I was one of the low paid tech immigrants (that was still massive wages though).

      • boomengineeringMEMBER

        Fisho, Too true, like the welders turning their welding machine up at 4.30pm to compensate for power loss due to household consumption.
        The other problem is when a supervisor does come across one of the remaining exelent tradesmen he feels threatened by this superior knowledge and doesn’t hire him.

      • @Boom
        I’ve never thought about supervisors not wanting to hire an old-school tradie that is more skilled than themselves, but now that you point it out it makes perfect sense. I know that I’ve seen the same behavior with British Engineers…maybe it’s something Anglo. Personally I’m always attracted to talent and I believe that real skills shine through if you let them. IMHO that’s the supervisors job to help you discover what you are really good at and help you to excel. Excellence in the work place raises the bar for everyone, those that know they can’t deliver either up-their-game or more often get on their way. Excellence begets Excellence and before you know it customers are coming to you (rather than you having to chase them) because they know that you deliver quality. So I’m always looking to hire someone that’s twice as smart, skilled, talented…. as I am…F’it they make me look good.

      • On the subject of bringing manufacturing back, have a look at American Factory (US Netflix), where the Chinese recommission a former GM plant to make auto glass in Ohio. Quite enlightening. Yes, Fisho, zero chance of the Americans making quality stuff again

      • He’s painted himself into a corner: he wants to punish the Chinese but they’re not playing ball. And he’s furious that his bluff and bluster is not having the desired effect. It’s worked all his business career, after all 😉

        He needs to choose between bashing the Chinese and keeping the stock market happy. He can’t have both, and the Chinese know it. They are playing him like a fiddle. Trump has just over 12 months till the next election so he could possibly put risk assets under the pump and hope to repair the damage in time for Nov 2020 …. but the danger then is that a crashing stock market sends the US into recession.

        I wouldn’t want to be in his shoes right now

      • I was thinking Trump will get re-elected, but if things go real sour real quick before that I wonder? I think he won’t, but I can’t see the democrats putting anyone forward who has a plan?

        It’s obvious to me the world needs to do something about lack of wages growth and housing affordability for young people. If this game goes on indefinitely it will end up like Hong Kong, we need a new economic model, new ways of thinking and new ways to curtail tax avoidance by the big multi nationals and 1%.

        That will fix thing.

      • Just how badly is China hurting at present? It’s major trading partners: South Korea, Germany, Singapore… they’re all in recession, and for a reason (China!). See commodities too.

        The US will follow, but that pain is being front run in China. 3 smallish regional banks already nationalised/bailed out. There’ll be more of that to come. We’re getting a taste in Hong Kong of the type of danger facing the CCP.

        Too much debt everywhere!!

      • GunnamattaMEMBER

        Just how badly is China hurting at present?

        It just so happens that late yesterday eve that very question popped into my mind. I was chatting with a mate online. I went to University more than 30 years ago with him – he wisely did architecture. As a Singaporean Chinese man he has had a fairly distinguished career working outside Australia on residential building developments in China. I mentioned to him about the raft of dodgy buildings now starting to surface in Sydney and Melbourne, and that got us into the cladding etc. Then he propelled the question into my mind when he wrote ‘If you think building standards are suspicious in Sydney and Melbourne you should see them here’ (he is in China).

        From what he was saying a very large number of buildings in China – including lots and lots of the ‘ghost city’ developments – have the same type of cladding now coming under questioning here. When I sent him the pic off the ABC website from yesterdays piece about Mascot (the besser block wall with a fault line running through it) he mentioned you could see that every day, on any given development in China. When I observed that some parts of Southern China had earthquake issues and surely they must have tougher building standards he replied that ‘Its all just another payment to be made to officials. When the next really big earthquake comes there will be a lot of buildings coming down.’

        So I assume China’s economic game plan will have to include rebuilding some of those, and factoring in explaining to owners (who apparently often own multiple apartments in the one building, and leave them fairly untouched) that their investments are worth a fraction of what they have paid for them (borrowing from Chinese banks, and ‘insured’ within China.

      • @Gunna

        Thanks for detailing this conversation – pretty clear that China is no different from anywhere else in terms of paying lip service to standards. You can bet if there was an issue due to cladding or structural weaknesses heads would roll if it occurred in Singapore or Japan, but it would get covered up and ignored by the Chinese media. Kind of like here, until it’s too big not to notice.

      • Even StevenMEMBER

        @ Gunna

        Those sorts of anecdotes suggest to me that China is just a two-step away from widespread disaffection amongst its population on any day of the week. The CCP better have a tight control over their people, lest the pitchforks come out.

      • Dom said,

        “And he’s furious that his bluff and bluster is not having the desired effect. It’s worked all his business career, after all ”

        Dodgy developers are used to lording it over contractors and suppliers. They pay when it suits them, if at all. He’s not used to another party thinking they are better off not being strung along.

    • People keep underestimating Trump. It is obvious that China is looking to set up a financial crash in the hope it ousts him at the next election. On the flip side this is a war without guns, but still a war. Trump has a way of explaining things to average joe so he just might be making himself look like he is trying hard to avoid a financial crash but knows it is inevitable and when it comes he will have good reasons and he will get his patriotic Americans back on his side. The crash was coming anyway its been baked in for years and it was set up so he was always going to get the blame.

      • Even StevenMEMBER

        Agree that Trump should be able to drum up some nationalistic fervour to protect from the fallout. I’m not convinced China is trying to cause a financial crash to oust Trump – it’s too high risk a strategy and has a high(er) chance of China crashing and burning itself. I think China is in an awkward situation of trying to protect its national pride (and probably so as not to be seen as weak within the CCP). I think Trump has outmanoeuvred them. Or it’s dumb luck.

      • “Washington is pressing Beijing to narrow its trade surplus and roll back plans for government-led creation of global competitors in robotics, electric cars and other technology industries.”

        And there you have the basis for Trump and Co entire episode for throwing ones toys out of the play pen, they exported toxic externalities and all matter of employer costs for short term wealth – see billionaires in the U.S. and now can’t get any of them to invest in their own country for long term growth.

    • China will probably devalue again and then once again claim they aren’t currency manipulators. They haven’t played this trade war very intelligently. Due to the size of the trade imbalance they can’t match effect of the tariffs so raising the stakes is just stupid.

      • as few already commented China is targeting Trump’s core supporters and counts on Trump losing the elections. Besides hitting the US farmers China will cause market crash which will trigger recession. Such developments will cost Trump lot of voters.
        But China better watch out if Trump wins or if US foreign policy does not change if Democratic contender wins.

        In the meantime whoever is in gold will make few bucks on Monday. I bought some SAR on Friday as they looked as being oversold and almost doubled up my PNR holdings. If I only agreed to pay another $0.05 I would have landed another 100 000 at 0.20c and make some easy money on Monday. Bugger.. but still expect to be profitable trading session on Monday. Would be nice if gold jumps another $20 – $30 before ASX opens.

      • Niko I succumbed and bought a little gold a week or so ago to curb the FOMO … nice little jump Friday and Monday will be pleasant – but – take the money and run? Or HODL?

      • Arrow2 – first my comment about PNR was meant to be $0.005 not $0.05.

        Mate, no idea. Right now I think I will sell 8000 SAR shares and leave 3000 in case gold goes even higher. What I will think by Monday 10am.. who knows.
        Who can predict what US or China may announce between now and then. I do have other gold stocks that I intend to HODL though. Mainly exploration stocks that haven’t been appreciating with gold price movements as they don’t produce anything yet and markets don’t think gold will be at these elevated levels by the time any of these stocks dig their first ounce.

      • Biko – interesting – thanks. Because mine is speculative and only play money (certainly less than the amounts you’re discussing) and now I have some margin of safety, I might hodl a bit and see if the whole world collapses next week or not…!

  9. The Traveling Wilbur

    ah. Just looked at the markets (long week, been unconscious the last 11 hours). Missed all the cricket and the US market rout.

    Bond yields eviscerated.

    So this is how hnh feels. Nice.

  10. GunnamattaMEMBER

    We have the Australian angle ………….Paul Keating’s daughter

    ‘Randy’ Prince Andy, the paedophile and the Australian ex-PM’s daughter
    https://www.theage.com.au/world/europe/randy-prince-andy-the-paedophile-and-the-australian-ex-pm-s-daughter-20190823-p52k0p.html

    How Katherine Keating blasted into billionaire paedophile Epstein’s orbit
    https://www.theage.com.au/entertainment/celebrity/how-katherine-keating-blasted-into-billionaire-paedophile-epstein-s-orbit-20190820-p52j1t.html

    • Glad to hear we’re represented in this sordid mess. Who says we’re irrelevant on the global stage

    • The Traveling Wilbur

      Sorry Gunna, can’t open the article. Which Australian paedo are we talking about here? (so many to choose from)

      • The Traveling Wilbur

        So… just the ones from jornalism, the entertainment industry and sports left as potential suspects then. OK.

        Oh. And all the other priests, vicars, rabbis and touchy feely religions in general that have also been sent down of course.

    • So his son was charged with assault and his daughter seen coming out of a biliionaire pedophile’s place?

      And this asss clown dares lecture the good men and women of Australia on what’s best for our country and our lives?

      Wow.

      • Yeah I look forward to the another hardball interview with Leigh Sales where he again tells the country Labor lost the election because it isn’t far enough to the right / doesn’t cave in to the rich enough. Even though the wealthy inner city electorates were the ones who swung Labor.
        oh and listening to the self identified oracle we need to further:
        – cut taxes for the rich
        – privatise public services
        – confiscate more workers pay in to the privatised pension rathole
        And the small l liberal vapid nothingist set who claim the “progressive” side still haven’t cottoned on.

      • Hay …. Howard had far more time and power in instituting neoliberalism than mister double breast suit …. not to mention gleefully joining wars based on propaganda ….

  11. A question for all you Amerophiles and/or Americans out there.

    A couple of days ago I was listening to this podcast:
    https://kunstler.com/podcast/kunstlercast-319-chatting-with-financier-richard-vague/
    (Richard Vague is apparently a venture capitalist and managing partner of Gabriel Investments) 

    Just after 28:35, Australia is referred to as a client state of China
    And then,  at 40:05 he states that he’s less confident in Australia’s ability to bail out its financial institutions (compared to China’s)

    Question: is this a common perception on that side of the Pacific Puddle? (When I say common, I don’t mean man-in-the-street common, but financiers, politicians, military strategists and the like; people who have an influence on public policy and can tell the difference between Australia and Austria).
    Corollary question: if the answer to the above is yes, then what impact is this likely to have on the US-Aus strategic alliance in the longer term? 

    • Even StevenMEMBER

      I’m not American. But I’ve not heard previously of Australia having an inability to bail out the banks. Where Australia would struggle is in a depression-like scenario but there would be a lot of other countries around the world to worry about first. With our own currency, we have levers that can be pulled (e.g. RBA buys poorly performing assets off the banks).

      So my answer is “no” and I don’t think there’s much of an impact (from this particular angle) on US-Australian relations. I think there are other, far more significant impacts… e.g. Australia’s decision to say no to Huawei strengthened US relations, but our slowness to crack down on Chinese influence at universities, political donations etc has weakened US relations.

    • The Horrible Scott Morrison MP

      Australia would need to levy additional taxes to bail out the banks. There’d be huge leftist taxes on the necessities of life, on wages and on payroll. So no-one would notice any difference.

  12. Xmas has come early.

    https://www.theage.com.au/melbourne-news/no-longer-safe-for-occupation-mordialloc-apartment-residents-evacuated-20190823-p52k9i.html

    Residents have been given 48 hours to evacuate an apartment complex in Melbourne’s south-east after the building regulator deemed it no longer safe for occupation on Friday. Numerous defects have been reported to the Victorian Building Authority in the 10 years since the apartments were built, including water damage causing extensive mould. A recent investigation by the VBA found cladding on the external walls was combustible and posed a fire risk.

    Kingston City councillor Geoff Gledhill said the council had initially rejected the development application for the apartment, but the developers took it to VCAT where it was approved. He said the council had been dealing with complaints from residents about the building. “Over the last couple of years we’ve made the VBA aware of the issues we had with the building. Not a lot has happened on behalf of the VBA,” Cr Gledhill said.

    • Just the tip of the iceberg.

      The thing is this: how long before the Govt is forced to acknowledge there’s a crisis here – right now they’re doing their best to ignore it. Even the corrvpt Property Council will have to fall in, eventually.

      It’s a lovely thing!

      • Mining BoganMEMBER

        Reckon TPTB have done something about this little one to make it look like they’re doing something without too much disruption of the status quo.

        The big and tall fellas will have to kill some people before they’re looked at seriously.

    • Mining BoganMEMBER

      I have a question.

      Is there anything in landlord’s insurance that covers loss of rent because forced eviction because landlord offered up a substandard hovel? I would guess not but the RE world is so back to front you never know.

      • In short: no. You only get it for loss of rent due to fire, flood (unless exclusion), storm damage etc. There are typically always exclusions for defective design / build / lack of maintenance

    • This one is interesting because the fire system was faulty, which with the cladding made it unacceptable risk. All the property bulls say there is nothing to worry about with the cladding, because we have fire suppression systems in new buildings. The question is how many will actually work when they are needed? In light of all the other defects with new highrise, are you willing to trust your life that they engineered and installed quality components in that system?

    • I’ve often wondered with the Mascot Towers repair bill being so high, is there a funding allocation for a couple Epstein style suicides?

    • “I know this relocation may cause anxiety, but I want to assure the Victorian public that this was not a decision taken lightly.”

      Relocation??? To where? The kerb? Is that what they are calling it when you get kicked out on your arse?

    • The Horrible Scott Morrison MP

      No-one there works because they’re too busy being depressed about the fact that they’re Mexican.

  13. he U.S. education system spent more than $26 billion on tech­nology in 2018. That’s larger than the entire Israeli military budget. By one estimate, annual global spending on technology in schools will soon total $252 billion. To hear presidents and prime ministers tell it, this spending is laudable and even necessary to reduce inequality and prepare a workforce ready to compete in the global economy.1

    But the technology pushed into schools today is a threat to child development and an unredeemable waste. In the first place, technology exacerbates the greatest problem of all in schools: confusion about their purpose. Education is the cultivation of a person, not the manufacture of a worker. But in many public school districts we have already traded our collective birthright, the promise of human flourishing, for a mess of utilitarian pottage called “job skills.” The more recent, panicked, money-lobbing fetish for STEM is a late realization that even those dim promises will go unmet.

    Second, it harms students even in the narrow sense of training workers: the use of technology in schools actually lowers test scores in reading, math, and science, damages long-term memory, and induces addiction. Both advanced hardware and the latest software have proven counterproductive. The only app or device found to meaningfully improve results with any consistency is an overhead projector in the hands of a competent human teacher.

    Finally, educational technology is a regressive political weapon, never just a neutral tool: it increases economic inequality, decreases school accountability, takes control away from teachers, and makes poorer students more vulnerable to threats from automation and globalization. – SNIP

    https://americanaffairsjournal.org/2019/08/rotten-stem-how-technology-corrupts-education/

    Tick Tock …

    • I agree I agree I agree! My kid is being taught to write on ipad only and they are not teaching handwriting anymore I am teaching him myself. Imagine the lack of hand skills and coordination these kids will have when older. As a parent you have to get really involved in raising and educating your kids

      • Was buying stuff this morning at my local machinery joint [more festool] and talking to one of the sales blokes, this business has supplied schools for a long time. He said schools were not teaching manual arts much any more at that age, seems its all funneled into VET [loot] or PPP with ongoing business. Year 10 son is doing a DPI apprenticeship, via some mob in Toowoomba, that when asked at the set up meeting what it business title was [to fit into the computer field] said Ag investment.

        The son was asked what regional VET mob he was using and the agent said they have to make sure their still operating, seems there has been a spate of them closing.

        Its all so Homo economicus, failure after failure, but persist in the idea that one day a generation will magically bend to the code …. presto … utopia ….

  14. Chatting with “Dani Rose” at Telstra.

    Ya know, Telstra, why don’t you bring your call centres back home? NRMA can do it in Australia.

  15. Oh lordy me:

    https://www.domain.com.au/news/sydney-olympic-park-agents-say-suburb-tarred-with-the-same-brush-as-opal-tower-872875/?comment=seeyounexttuesday

    Since the revelation of structural defects in Opal Tower at Sydney Olympic Park late last year, apartment sales in the suburb have fallen away, dropping 85 per cent in the six months to June compared to the same time last year, new Domain data shows.

    “Sydney Olympic Park has been affected because [buyers] think the entire park is a problem, not a particular building,” Mr Vuk-Luboya said. “They’re all looking for that one word … [asking] is Icon the builder?”

    Excuse me while I duck into Officeworks for a new left handed mouse …

  16. https://www.scmp.com/economy/china-economy/article/3023574/chinas-belt-and-road-cargo-europe-under-scrutiny-operator

    China’s belt and road cargo to Europe under scrutiny as operator admits to moving empty containers

    China Railway admits the existence of the problem in an interview with the state-run Global Times but insists it has improved recently

    Cities and provinces were looking to benefit from subsidies offered by both the local and national government as part of Xi Jinping’s plan to boost global trade

    • They keep copying the U.S. like stuffing cars at dealerships or air frames in parking lots et al … @therealtrump – @#tagstopcopyingus …

      • Fair go Harry, we’re not just princing around Epstine’s NY apartment with the Jailbait
        Us BMW drivers have feelings bra.

      • My son also has a 2003 E46 330ci Individual series
        Beautiful car, only 60K clicks just a dream to drive
        So different from my E90 2008 335i single turbo it’s an absolute beast.

      • No argument from me
        The E46 330i is a much better looking car than the E90 335i especially with the Msport packages.

      • I was at a German motor show in Melbourne this morning and I heard these BMW drivers talking about a friend who just brought a BMW 2002 (not year, but the model for 90k and it was beaten up. There was that model 2002 there,and looks 1970’s but there maybe high end ones that would be worth a mint. I like your model and the 2door one of that year.

    • The Horrible Scott Morrison MP

      I drive an Audi but you’ve got to understand that it’s not meant to be driven like a normal car. Holden drivers should be made to pay extra road tax for forcing other motorists to look at their ugly sh1tty cars and faces.

      • Complex Carbon Unit

        Yes you better tickle those nuts and get other boom happening if it already hasn’t !!!

      • The Horrible Scott Morrison MP

        I think we need a new term to describe what’s happening out there. It’s an uber-boom!

    • None of this makes any sense to me anymore. There are obviously a lot of irrational people out there.

      • The Horrible Scott Morrison MP

        Everyone on this site was told by me months ago what would be happening but you all chose to believe the collective fantasy. Anyone who delayed buying due to MB advice is now poorer by hundreds of thousands if not millions. Anyone who listened to Reusa got rich.

      • Sorry to “burst your bubble” ScoMo, but I am not seeing a boom. Here is 1 example, but looking at Melbourne’s listings it’s clear many are selling before auction or privately, not at auction…like in the previous boom.

        Here is 1 example, because I know the area well..
        https://www.domain.com.au/308-north-road-brighton-east-vic-3187-2015486969
        Guide range: $1.05M – $1.14m

        It sold a whopping ~$20k above that range! Woopie.. @ $1.161M

        My mum’s old house was around the corner, similar block size (~600sqm) and it sold for $2.03M in Oct 2017.
        https://www.realestate.com.au/sold/property-house-vic-caulfield+south-108215496

        It wouldn’t cost $1M to renovate this house to a similar standard as my mum’s place. Now yes this is along a main road (mum’s place wasn’t), but do you really think there is $1M difference between the 2 properties?

        I guess maybe Reusa and yourself are right though, properties must be currently undervalued ;).

      • reusachtigeMEMBER

        See that’s your problem. You’re probably way over-educated and should have become a tradie instead. Successful people don’t over-think anything or try and rationalise anything. They just grab every opportunity to be successful. If they aren’t they just grab again. You thinkers lose every time because of the burden of your over-education. It’s a curse and you are best to teach your children not to learn too much and not to think too much and to just go with impulse every single time, especially with relations, but do teach them about dommies for health and bun oven reasons.

      • @Davidra I see a lot of places like that where the backyard is sacrificed for another home at the rear of it. Not for me, I see only 1 car space. Nice street from the look of Street view, but I think you could do better in the area especially if your budget is $800k ish..

        I’ve decided to speak with a buyer’s advocate to see what they can find before stuff officially hits the market. Thing to remember is stuff that gets listed has already potentially been waved past would be buyers and not acted on.

        Seems to have worked for someone I know who bought in Manly North for $2.1m recently. He was getting beaten at auctions and fed up..

      • @gavin I just bought. I did use a buyer’s agent. I still want house prices to fall though. And I think they will.

  17. Not sure if this has done the rounds here.

    When MMT and a Job Guarantee were tried before, they didn’t work
    Posted on March 7, 2019
    The Green New Deal is a radical proposal to tackle the global challenge of climate change and reshape the American economy at the same time. It’s defining the US policy agenda for 2019, and spilling over to places like Australia. The first of its principles is that every citizen should be guaranteed a job with a living wage. And it might be funded using an approach to public finance called Modern Monetary Theory (MMT), instead of raising taxes.

    Both of those ideas—a job guarantee and MMT—have recently been prominent in their own right. They were given a boost by the advocacy of Stephanie Kelton, economic advisor to the Bernie Sanders 2016 campaign, so people have already debated what their possible effects might be. But not much attention has been paid to the fact that they’ve effectively been tried before. And their results, in practice, were not good.

    https://jamiehall.cc/2019/03/07/when-mmt-and-job-guarantee-were-tried-before-they-failed/

      • I consulted my favourite search engine youp0rn with xhamster as a second reference and I do not like MMT.

      • The Horrible Scott Morrison MP

        It’s the fantasy that societal wealth can be created by fiat without the need for real world production. Only really truly stupid people believe in it.

      • Panels from the First International Conference on MMT included:
        * Financial regulation & corporate power
        * Job guarantee in developing countries
        * MMT & ecological sustainability
        * MMT in a global context
        * JG & human rights
        * Money, taxes & sustainability

        https://www.youtube.com/channel/UCjhK7FlMyetqKB88J23N6PA

        Seems a bit more comprehensive than staring at some axis – on some model – with one of the axis being pulled out of the proverbial backside, then some will retort with “I” don’t ***like*** … sigh … see:

        https://larspsyll.wordpress.com/2019/08/24/cherry-picking-economic-models-3/

        I mean slapping the label science on it [economics] was a nice Bernays PR stunt and when that blew up in their faces – used it to then attack any science that did not forward their ideological preferences. Then these people will tell you they are the brightest bulbs in the room …. chortle ….

    • From ‘Appendix B: Why a Job Guarantee would be no alternative’
      https://www.progressiveeconomyforum.com/wp-content/uploads/2019/05/PEF_Piloting_Basic_Income_Guy_Standing.pdf

      “The practical objections [of a job guarantee] become evident as soon as the details are considered: what jobs, who would be responsible for providing them, who would qualify to be offered them, what would the jobs pay and for how many hours, who would pay, how much would it cost to supervise participants and to police compliance with the job’s requirements, and what would be the effects on other workers and on the wider economy?

      To start with, identifying jobs to be provided and administering the process would be a bureaucratic nightmare (witness the shambles of many ‘community payback’ schemes, even though they are on a small scale and the labour they offer is ‘free’). And, when asked what type of job would be guaranteed, proponents never suggest the guaranteed jobs would match people’s skills and qualifications, instead falling back on low-skill, low-wage jobs they would not dream of for themselves or their children.

      Then other questions arise. If guaranteed jobs are providing desired services or goods, and are subsidised, there must be substitution effects – guaranteeing jobs now taken by others – and deadweight effects – putting people in jobs that would have been created anyhow. If somebody is given a guaranteed job at the minimum wage, what happens to others already doing such jobs? Would the job guarantee agency guarantee their jobs as well, with no decline in wages if they happened to be higher? If the unemployed were offered a job at a minimum wage subsidised by the state, this would increase the vulnerability of others, either displacing them or lowering their income.”

      • The practical objections [of a job guarantee] become evident as soon as the details are considered: what jobs, who would be responsible for providing them, who would qualify to be offered them, what would the jobs pay and for how many hours, who would pay, how much would it cost to supervise participants and to police compliance with the job’s requirements, and what would be the effects on other workers and on the wider economy?

        Without actually reading the link yet, that paragraph would seem to suggest its view of the job guarantee is a work for the dole scheme (ie: you must work, if able, to qualify for welfare).

        If that’s true, they’re just attacking a straw man.

      • I don’t think that they author has an all or nothing take on either UBI or JG. Though he is a UBI advocate. I do agree with him that a JG is ripe for mismanagement, wastage and putting people into terrible positions. Though I’d have to see a worked out JG before making a final judgement. Appendix A is interesting as it lists different UBIs, or variations of. Again, it’s hard to say good or bad until seeing a mapped out plan, though I do lean towards a UBI. The author’s works on rentseeking and the modern class system are worth checking out even if UBI isn’t an interest.

      • The problem with a UBI is that ultimately the money ends up in the hands of the owners of capital

        The plebs will spend it on food, shelter, tvs, electricity, internet whatever

        But eventually it ends up in the hands of capital

        The distribution of wealth is the issue

        That is why capitalism eventually collapses in on itself

        A GJG would effectively “seize the means of production” because the government (and therefore the people) would own a productive endeavour : that is the programs created by the GJG . Whether that be nuclear/solar plants, car factories , nursing homes etc

        Does what I’m saying make sense to you?

        The logistics are almost irrelevant – it’s a very big picture distinction

        The idiocy of having the government print money to drip feed to people so that they can swap it for goods and services provided by private entities who control capital

        When instead the government could create those goods and services itself through its own programs making use of under-utilised human resources (labour) thereby improving the quality of life of all Australians and allowing all workers to enjoy the dividends

        In a fiat system, capital is not scarce
        Only labour and real resources are

      • footsore …

        This view shares difficulties not unlike those that want a gold standard E.g. drama is its inherently deflationary, favors Capital in all things, was constantly cheated on by nations, and ultimately fails society when its in peril – hence the need for more authoritarian governance to quell unrest. The MMT – PK administration seeks to remedy the most anti social aspects of hyper capitalism with an eye to human dignity.

      • “…A GJG would effectively “seize the means of production” because the government (and therefore the people) would own a productive endeavour : that is the programs created by the GJG . Whether that be nuclear/solar plants, car factories , nursing homes etc…”

        So a job guarantee is little more than post WW2 socialism?

        A bunch of state owned enterprises?

        Like China?

        Little people are quite capable of making decisions and choosing whether to consume or save. They certainly don’t require a bunch of middle class folk directing their savings choices into the No 7 Tractor Factory or Trabant wheel plant.

      • Pfh: Did you even read what I wrote ?

        The problem is not little people making decisions about what they purchase

        The problem is the inevitable asymmetry that results from capitalism that eventually will cause it to collapse

        Have you ever heard of a guy called Karl Marx ?

      • Comming I’m not sure how familiar some are about the Cambridge Keynesians – particularly Robinson, Kaldor and Goodwin – as well as modern “American” Post Keynesian economics (e.g. Harris, Steindl). Because in an almost McCarthyist manner it was all banned or defunded though the philanthropic desires [tm] of the tertiary establishment funders – see previous link to Institute for Humane Studies and FEE agenda.

      • Coming,

        I read what you wrote and from your response it seems I understood it.

        “..The problem is the inevitable asymmetry that results from capitalism that eventually will cause it to collapse..”

        What has that got to do with UBI v a guarantee of a job in a state owned enterprise?

        If the only solution to our current problems is to have the state (i.e. a bunch of middle class paper shufflers) running the economy that is a pretty depressing future.

        I think it is clear now that the kind of sociopaths who are attracted to large corporations are just as attracted to large state economic organisations if that is the only choice available to them.

        Limiting the opportunities for sociopaths seems like the best approach and that means limiting concentrations of power as much as possible and separating power with checks and balances.

        I am opposed to a UBI because I don’t believe we are about to run out of useful things that need doing anytime soon and therefore there will be plenty of work for any who want it. But the way to do that is to leave as much spending power at the bottom of the economic period and when it trickles up, deal with excess concentrations when they become a problem.

        That means new money creation should be injected by the government in the form of deficits directly monetised.

        But rather than expand the role of government and the middle class know-alls who want to tell everyone how to suck eggs, I think it is preferable that government keeps to its current limited role and instead just reduce taxes on the low income earners. Increased payments for those who genuinely do not have a work capacity would also be appropriate.

        There will be little or no need for a job guarantee if those people with abundant needs for services and goods have the means to buy them. Why because the economy will be bouncing along at full employment and a shortage of labour will be an ongoing issue. The unemployment we have now is no accident, it is a defect of a monetary model that involves pumping new money (bank credit) to rich people / asset owners rather than poor people.

        And yes – the government will continue to have a major responsibility for regulating the tendency of private companies to reduce competition and rig the markets any chance they get.

      • “I read what you wrote and from your response it seems I understood it.”

        Then why would you suggest that anyone is dictating how people spend their money?

        “..The problem is the inevitable asymmetry that results from capitalism that eventually will cause it to collapse..”
        “What has that got to do with UBI v a guarantee of a job in a state owned enterprise?”

        Because the UBI only passes through the hands of the people, before ending up ultimately in the hands of the owners of capital
        The rise in demand is all captured, and used to widen inequality
        This means that increasing UBI is required to maintain growth.
        This is the fundamental problem of unfettered capitalism

        Its very similar to a first home owner’s grant – it does nothing to increase supply, and so it is ultimately futile or even counter productive as it simply increases prices and leaves demand static

        A GJG on the other hand increases supply, and reduces prices

        “If the only solution to our current problems is to have the state (i.e. a bunch of middle class paper shufflers) running the economy that is a pretty depressing future.”

        Strawman. I am appalled you would stoop so low intellectually
        The state does not run the economy. The state puts to use unutilised labour in order to improve the quality of life for all Australians. This provides a non-artificial floor for wages instead of prescribed minimum wage.
        Private enterprise only has to beat this government provided minimum wage (and comparable conditions) to attract labour, meaning that labour regulations are no longer required

        “I think it is clear now that the kind of sociopaths who are attracted to large corporations are just as attracted to large state economic organisations if that is the only choice available to them.”

        Ad hominem which I will choose to ignore

        “Limiting the opportunities for sociopaths seems like the best approach and that means limiting concentrations of power as much as possible and separating power with checks and balances.”

        Complete nonsense. The psychopaths are all the owners of capital and their cronies, if you hadn’t noticed by now

        “I am opposed to a UBI because I don’t believe we are about to run out of useful things that need doing anytime soon and therefore there will be plenty of work for any who want it. But the way to do that is to leave as much spending power at the bottom of the economic period and when it trickles up, deal with excess concentrations when they become a problem.”

        How on earth can any reasonable person think this is true?
        We have countless opportunities for government created projects that require real, rewarding work

        -A first rate NBN. A shovel ready project
        -Solar and wind and nuclear energy plants that need to be built and then run in perpetuity. Will require long term training of highly educated staff.
        -Reforestation and restoration of habitats to prevent erosion
        -Someone estimated that the great barrier reef coral could be re-seeded using divers. This could employ literally hundreds of thousands of people who would swim in tropical waters for a job
        -Daycare facilities
        -Well-staffed nursing homes

        The list is really endless.
        It would improve the quality of life for all Australians, and would either be rewarding or lead to upskilling that could make workers more attractive to the private sector

        You seem like one of the fools who has fallen for the silicon valley marketing schemes to boost their share prices and bilk venture capital.
        No, AI will not be running everything. It has barely advanced in 20 years in my own field

        “That means new money creation should be injected by the government in the form of deficits directly monetised.”

        I don’t really see what this has to do with what we are discussing, nor why it would be mutually exclusive to a GJG.

        “But rather than expand the role of government and the middle class know-alls who want to tell everyone how to suck eggs, I think it is preferable that government keeps to its current limited role and instead just reduce taxes on the low income earners. Increased payments for those who genuinely do not have a work capacity would also be appropriate.

        There will be little or no need for a job guarantee if those people with abundant needs for services and goods have the means to buy them. Why because the economy will be bouncing along at full employment and a shortage of labour will be an ongoing issue. The unemployment we have now is no accident, it is a defect of a monetary model that involves pumping new money (bank credit) to rich people / asset owners rather than poor people.”
        Again not sure why this is mutually exclusive to a GJG.

        This is how we ended up with global warming and environmental degradation – because when profit and private interest is the only consideration, game theory dictates that it will devolve into this misery
        No, all the newly rich tax-free workers will not increase demand – they will push up prices

        DO you honestly believe otherwise?
        After-tax income increases will be immediately capitalised into house price rises, or increases in consumable prices, which will in turn wind up in the hands of the owners of capital and land

        Unless you increase supply (or reduce demand and reduce everyone’s quality of life), there is no other way for the game to play out

        Let me ask you – why would you want unutilised valuable resources like human labour to be left idle?

        Who does it serve?

        Ok, by installing a UBI you at least increase wage pressures, but a GJG does that and produces something of real valuable for the country that might not be “economically viable” when driven only by market forces (such as environmental amelioration)

      • Zomg …. Comming ….

        Blog-ish frivolity aside, I must say, that was a fine riposte without getting mired in the dreck some like to drag others down into, one wonders why.

        Kudos Sir …

        Edit… would caution on the application of GT due to baseline axioms and environmental conditioning of subjects E.g. possibly helpful in constructing questions, but not answers or how they are determined.

      • Coming,

        They are the concerns that I also have. What surrounds the UBI or JG is just as important as those acts themselves. Standing recommends capturing economic rents through going after the worst of the patents. In Australia we’d also hopefully remove the subsidies and rorts that allow the wealthy to keep accumulating for no other reason than they already have wealth and the current system assists them greatly at the expense of everyone else.

        If either a JG or UBI was to be implemented to minimise poverty then I believe that it would be harder to stuff up a UBI. It is simpler, kinder and fairer. I also think that a combination is ideal as those that can’t partake in the JG are not denied yet it also provides the ability to work if there is not suitable work about. It would also keep the JG honest.

        As Drsmithy has noted previously, a functional welfare system, services, affordable basics and and a full employment policy is also a fix. If they don’t decide to reimplement the post WW2 social contract, and it doesn’t look like they are going to, then a UBI and/or JG may be on.

      • Coming,

        A long response but you did not address the criticism that a job guarantee involves government allocating labour resources to purposes/projects that the members of the government value.

        Your faith in our elected representatives and policy makers is touching but you need to do better than that if you are going to deny low income earners the opportunity to allocate resources as they see fit.

        You claim your proposal does NOT involve dictating how people spend their money but it clearly does.

        At full employment any allocation of resources of the government MUST be at the expense of allocations by individuals.

        If you want full employment and employees free to choose what they do and for who and low income earners free to allocate their wages how they see fit only 2 things are required.

        1. Reduce the taxes on their incomes

        2. End the privatisation of public money creation (which is what we have) and instead direct new money creation to financing the deficits resulting from less tax on lower income earners.

        If you prefer a system of centralised control by democratically elected representatives, that is fine (as there are some services which are best delivered that way) but don’t pretend that it does not implicitly deny the general public some control over how they allocate resources.

      • I mean this is a joke

        “A long response but you did not address the criticism that a job guarantee involves government allocating labour resources to purposes/projects that the members of the government value.”

        As opposed to what?
        The capitalist system that allocates resources to building flammable dogboxes for asians?
        The capitalist system that allocates resources to building coffee shops and hiring baristas?
        The capitalist system that allocates resources to coal mining?
        The capitalist system that allocates resources to bidding up the price of existing land?
        The capitalist system that saw manufacturing leave Australia forever?
        The capitalist system that saw the degradation of our universities?
        The capitalist system that failed miserably to generate any high tech industry or research in this country?

        I don’t know if you’ve noticed, but market solutions and economic rationalism have led to all sorts of problems, environmental and social and economic

        Unfettered capitalism is a failure. It always has been a failure.
        Even the USA has its military-industrial complex, space agency, extensive government funded research etc

        Your faith in greed and selfishness is touching though

        “Your faith in our elected representatives and policy makers is touching but you need to do better than that if you are going to deny low income earners the opportunity to allocate resources as they see fit.”

        Low income earners can allocate their resources wherever they like. If they want to blow it all on $5 cappucinos I don’t have any problem with it
        Just that the government will be allocates excess resources (in the form of labour) to nation building projects

        “You claim your proposal does NOT involve dictating how people spend their money but it clearly does.

        At full employment any allocation of resources of the government MUST be at the expense of allocations by individuals.”

        Ah, At full employment becomes the key distinction though doesn’t it?

        “1. Reduce the taxes on their incomes”

        Totally agree with you, but a completely different topic.
        Why are you so fixated?

        “2. End the privatisation of public money creation (which is what we have) and instead direct new money creation to financing the deficits resulting from less tax on lower income earners.”

        Completely agree with you but a completely different topic of discussion
        Why are you so fixated?

        “If you prefer a system of centralised control by democratically elected representatives, that is fine (as there are some services which are best delivered that way) but don’t pretend that it does not implicitly deny the general public some control over how they allocate resources.”

        The government would have control over deploying underutilised resources: namely employment.
        Allocating under utilised resources does not steal resources away from anyone – those resources were sitting at home masturbating and playing video games anyway

        Overall it seems to me that you haven’t really considered the goals and effects of a GJG or a UBI
        You see GJG and you are instantly biased against the idea because of its association with MMT and your own insane fixations

        For what its worth, I agree with you that the big-name MMT proponents have a large blindspot when it comes to private debt. It barely rates a mention in most of their writing, but is obviously the most important cause of misallocation of capital and consequent inefficiency and inequality.

        I’m not sure if that is because they are captured propagandists working for big money (Wray maybe), or they simply are working their own niche into the general conscious first and will tackle the banks later (I can imagine that wealthy would be very likely to try to crush/humiliate them if they considered them a threat)

      • ” What surrounds the UBI or JG is just as important as those acts themselves. Standing recommends capturing economic rents through going after the worst of the patents. In Australia we’d also hopefully remove the subsidies and rorts that allow the wealthy to keep accumulating for no other reason than they already have wealth and the current system assists them greatly at the expense of everyone else.”

        Goes without saying, completely different topic

        “If either a JG or UBI was to be implemented to minimise poverty then I believe that it would be harder to stuff up a UBI. It is simpler, kinder and fairer. I also think that a combination is ideal as those that can’t partake in the JG are not denied yet it also provides the ability to work if there is not suitable work about. It would also keep the JG honest.”

        Why would you allow people to wilfully contribute nothing to society?
        How is that fair to everyone else?
        How is it more efficient than a GJG?

        It’s mind-boggling

        The only people that would be benefitted by a UBI are
        1. Lazy bludgers
        2. The owners of capital, who want to privatise services that could be public so that they can extract profits

      • Huge sense of déjà vu reading this thread.
        I clearly remember now how it felt to have every discussion rerouted into the land of fake warehouse receipts and “private fiat” or whatever it’s called.

        007, you are just rolling out Buchanan style public choice theory – ie. the cost of government intervention is greater than market imperfection.
        A lost decade in the high income world following a crisis which the private sector created all by itself. $17 trillion in negative yielding debt because the private sector refuses to invest in anything productive. And you think the cost of government intervention exceeds the cost of market imperfection.

      • Sweeper,

        “…007, you are just rolling out Buchanan style public choice theory – ie. the cost of government intervention is greater than market imperfection….”

        LOL.

        What I am rolling out is exactly what I said above.

        That you have no response to my proposal of reducing tax on low income earners and financing it directly without bond sales to your banking mates is hardly my problem.

        I have no problem with government delivery services or goods if it does a good job.

        What I have a problem with is ideologues / fantasists who just assume that will be the case in every situation.

        If you think government is so good at resource allocation that low income earners should be denied choice it is up to you to convince the voters of that.

        Blaming your failure to do so on ‘journos’ and a conspiracy is pretty weak.

        Especially when you make apologies for private interests hijacking the power over public money.

      • Coming,

        Considering we are both opposed to a UBI and I have no problem with government making sure that every bit of spare labour is deployed in the national interest, I am not sure where the disagreement is.

        Having seen the likes of Shorten and Hilary lose to what should be the unelectable, I am convinced that trying to convince voters to trust government to spend money is a waste of time.

        You may think I have a fixation about public money creation but that just makes you a hypocrite as your proposals have public control of money creation written all over them.

        All I am aim to do is to get newly created money into the wallets of those at the bottom of the economic pyramid as fast as possible because they will not trust government to make better resource allocation decisions.

        When trust in politics has been lost we must by pass politics.

        Anyway, I have no idea why you seem to think that JG wages will not end up in the hands of capitalists but UBI income will.

        If you are not controlling the activities of capitalists, UBI or JG wages will congeal in their control sooner or later.

        At the moment the most powerful centre of capitalist control is finance/ banking and if that means I appear fixated on them so be it.

        And yes I have noticed the popularity of MMT with bankers and those with family connections to banking.

      • “If you think government is so good at resource allocation that low income earners should be denied choice it is up to you to convince the voters of that”.

        You are missing the point 007. 17 trillion in negative yielding debt… They don’t have to be good at allocating resources they just have to lose slightly less than the private sector bondholder is happy to lose and everyones a winner.

      • And the choice isn’t public transport or toothpaste. It’s public transport or nothing.
        Or public transport + public transport spending inducing a bit more toothpaste v nothing.
        You want nothing, unemployment and negative yielding debt because bureaucrats can’t be trusted because Buchanan said so.

      • Sweeper,

        “…They don’t have to be good at allocating resources they just have to lose slightly less than the private sector bondholder is happy to lose and everyones a winner….”

        Bond holders? Interest rates?

        That’s the problem with old private banker Keynesians like you, you can only process the world in private banker terms.

        As I made clear multiple times above, I support money creation directly into the hands of workers and low income earners.

        Their spending on goods and services will generate full employment combined with the current level of government expenditure on labour. Full employment gives labour real bargaining power.

        I appreciate that you don’t like workers with economic power and prefer full employment via government jobs but the electoral history of the last 40 years indicates I am right and you are wrong, wrong, wrong.

        Naturally, they will be more inclined to spend if they are not choking on debts peddled by your banking mates arguing for more central bank support of their debt product lines and the rising asset prices that stimulate debt demand.

        But we all know about your soft spot for the bankers role in the public money system.

      • Classic 007 response; smear, distraction and total absence of argument.
        What so you aren’t going to have interest rates in your free banking utopia?
        How will you achieve that? reprogram time preference out of human beings?

      • Great thread considering half the other stuff … anywho for those new to the classroom where not on a commodity money barter based anything … so banging on like it is is stoopid [tm] …

        Sweeper we both know exactly what pft is selling and how far he is prepared to sell both himself and everyone else out for because in his cannons its ordained E.g. make money scarce aka austerity so the capitalist will magically become moral E.g. in the sense of the OT cannons dicta.

        Fun fact pft … your reality only works when there are weaker humans to loot ….

      • “Considering we are both opposed to a UBI and I have no problem with government making sure that every bit of spare labour is deployed in the national interest, I am not sure where the disagreement is.”

        So then you are explicitly in favour of GJG? Because that’s what a GJG is
        So this has been a waste of my time

        “You may think I have a fixation about public money creation but that just makes you a hypocrite as your proposals have public control of money creation written all over them.”

        No. Your fixation is on private money creation. Which is perfectly reasonable

        Are you also suggesting that there should be no public money creation? Where would money come from? Gold?

        “All I am aim to do is to get newly created money into the wallets of those at the bottom of the economic pyramid as fast as possible because they will not trust government to make better resource allocation decisions.”

        Incoherent

        “Anyway, I have no idea why you seem to think that JG wages will not end up in the hands of capitalists but UBI income will.”

        Then you have missed the entire point.
        A GJG allows government to undertake projects that will benefit the public interest without profit motivation/cost to consumers, and/or allow any profits to remain in public hands
        Are you really that dense?

        “If you are not controlling the activities of capitalists, UBI or JG wages will congeal in their control sooner or later.”

        I explicitly favour a GJG over UBI because this will limit the concentration of capital/wealth as explained above

      • Skippy,

        I am just happy that I am bringing you and Sweeper together again.

        You big government / big private bank true believers start scratching each other the moment I turn my back.

        Government jobs for all !

        Just a shame no one is buying what you are selling ………but then it is a conspiracy isn’t it.

      • Coming,

        “..A GJG allows government to undertake projects that will benefit the public interest without profit motivation/cost to consumers, and/or allow any profits to remain in public hands
        Are you really that dense?..

        So not believing in your fantasy universe where magical government run by saints make perfect resource allocation decisions …..rather than workers making decisions about the allocation of their higher after taxes wages …..makes ME dense.

        Is there something about 17 out 23 years of LNP electoral success that you find difficult to process?

        With the left side of politics deluding themselves that big taxes and big government can be rebadged as JG and MMT the right side will not need to order in useful idiots ……..they are arriving with free home delivery.

      • I would assume then pfh that you are in favour of privatising healthcare?
        The government doesn’t do a good job on that, so let’s give it all to the private sector. I’m sure it will be far more efficient

        Perhaps we can completely privatise education as well? It has gone swimmingly for the universities so far

        You are a cretin

      • Sweeper,

        “..What so you aren’t going to have interest rates in your free banking utopia?
        How will you achieve that? reprogram time preference out of human beings?…”

        LOL.

        Coming from the guy supporting central bank manipulation of interest rates so as to manipulate the demand for private bank debt that is really rich.

        There will always be interest rates but they will not be a lever for your pointy headed mates to yank up and down to drive the economy as pointy heads think best.

      • Neoliberalism has been toxic electorally. Nobody wants it. That’s why elections have been won through scare campaigns and journalism since the start of Keating disasterism thus the breakdown of politics.

      • “I have no problem with government making sure that every bit of spare labour is deployed in the national interest.”

        I am going to walk away pretending that this was the only thing you said today
        The rest wasn’t worth listening to

      • Coming,

        Cretin?

        You really are having a meltdown tonight.

        Healthcare seems to work best in public hands in an environment where proper regulation of the medical profession and pharmaceutical companies is too difficult. It is a lot harder to gouge a single purchaser of their products and services. Put doctors on a salary and keep them busy!

        As for education, why on earth would you want to remove ANY competition or choice when it is clear that is what a lot of people want. But of course you know best don’t you.

        But you still have not explained your objection to lower taxes on workers so they can make resource allocation decisions for themselves.

        Perhaps if you spent less time having a sook and sounding like Skippy you might make a better case for big government and government jobs.

      • Sweeper,

        “..Neoliberalism has been toxic electorally. Nobody wants it. That’s why elections have been won through scare campaigns and journalism since the start of Keating disasterism thus the breakdown of politics…”

        But you were not scared or influenced by disasterism?

        So voter is stupid in other words?

        No wonder you want a big gummint to tell people what to do.

        The petite bourgeoise vanguard of the revolution…huh?

      • Oh dear – there’s only one person having a meltdown here
        I’ve lost count of the number of times you’ve contradicted yourself tonight
        You are raving like an absolute lunatic

        Most unedifying

        Tata

      • So not believing in your fantasy universe where magical government run by saints make perfect resource allocation decisions …..rather than workers making decisions about the allocation of their higher after taxes wages …..makes ME dense.

        Is there something about 17 out 23 years of LNP electoral success that you find difficult to process?

        With the left side of politics deluding themselves that big taxes and big government can be rebadged as JG and MMT the right side will not need to order in useful idiots ……..they are arriving with free home delivery.

        Pretty much any survey on the subject says a comfortable majority of the population want public services and public assets, and hate the privatisation path both the Coalition and Labor have gone down (even amongst Coalition voters, somewhat strangely – perhaps they still think its Menzies’ Liberal Party, not Howard’s).

        As for education, why on earth would you want to remove ANY competition or choice when it is clear that is what a lot of people want. But of course you know best don’t you.

        The existence of public education does not implicitly exclude the possibility of private education options as well.

      • No you just haven’t been paying attention.
        Neoliberalism has happened behind closed doors with lobbyists and ideologues in Canberra with no public consultation and none of the policies taken to elections.
        Lies and scare campaigns and journalism have been taken to elections. GST scare in 93, relaxed and comfortable scare in 96, Tampa in 2001, Workchoices (genuine) in 2007, debt and deficit disaster in 2013, retiree/housing/death tax in 2019.
        Neoliberalism just happens then journalism takes care of the PR side.

      • Pft …

        Sweeper and I agree on the vast majority of what got us here and what options could be used to sort stuff out, diverge on what one model suggests. As far as MMT goes I posted a comprehensive link above thread which clearly states the multidisciplinary approach of those in the MMT camp – so there is no need for strawmen. Like suggesting anyone with experience in banking is on the dark side, per se Wray or Warren, lest you forget Hudson.

        But in all cases its proceeded by the economists of the period, which then begat the next generation, which then staff national and international organizations, hence everything else is just a reflection of that, of which, banks are a part of and not the sole offender.

        Additionally I don’t get where some get the idea that MMT ignores the private debt issue, all it attempts to point out is the hyper inflation scare mongering, about national debt, but is quite clear on private debt being the elephant in the room. Half the dramas are contending with those that apply commodity money theory on state fiat or can’t except the fact that its currently an ad hoc system due to political forces E.g. Volcker to utilize IR due to political ideologues and taxation et al. That’s without all the geopolitical aspects ….

        Too much private credit undermines growth and increases inequality:

        http://bilbo.economicoutlook.net/blog/?p=31221

      • Drsmithy,

        “..Pretty much any survey on the subject says a comfortable majority of the population want public services and public assets, and hate the privatisation path both the Coalition and Labor have gone down (even amongst Coalition voters, somewhat strangely – perhaps they still think its Menzies’ Liberal Party, not Howard’s)…”

        They may say they want the services but they

        1. Don’t seem to want to pay the taxes involved in higher services with no changes to anything else.

        2. Don’t want changes to the public money privatisation model that might allow for more services for less tax. Sweeper and Skippy in particular protest against this as they constantly run interference on any talk of removing the current role of banks.

        3. Don’t trust politicians to make the right spending choices anyway.

        Until that trust is regained I think the only politically viable option is to remove as much tax as possible on the lower income earners as they will probably vote for that.

        Paying for those tax cuts requires a fiscal deficit and the only way of selling that in an environment of monetary hysteria and ignorance is by zero cost ‘borrowing’ from the Central Bank.

        The crazy part is that we will get monetary reform but only when conservatives have convinced everyone that it can ONLY be done to protect property rights. QE for Debtors and Defence.

        I will probably be still arguing the issue with nut job lefties on blogs who never seem to learn lessons from their failures.

      • Pft …

        Trust is a factor of both right wing and thirdway donor class politicians pushing 50 years of dominate economics, so until some reformed based group [see Sanders et al] trust will be an issue, so its kinda silly banging on about banks which have run with the latitude that the economics allowed.

        Not that your mob destroyed the safety net and public sector which has painted it into a corner or anything, seriously, why would anyone listen considering the outcomes so far, all self inflicted.

    • If Bernie Sanders appears to be on the way to win the nomination and the presidency then buy any zinc, lithium, graphite, manganese miners. That will be my trade if there is real possibility if the New Green Deal.

  18. I wonder when the Lefty Environmental types will get the balls for civil disobedience to protect the planet, and finally do something useful. The HKers have done it for their own problems.

    We need massive, coordinated action blocking and shutting down petrol stations, coal power plants, beef imports from Brazil.

    I’m doing my bit: I don’t have a car, have efficient appliances, don’t eat cows or drink their milk, post about these things on the internet, and plan to have as many children as possible to pass on my environmental consciousness and (on a global level) high-IQ.

  19. Complex Carbon Unit

    Lol, have as many children as possible !
    I have a 68 Plymouth with a 440 magnum with dual quads !

      • @CCU. This is god’s honest truth. In a past life I rode, unbelted, camera in hand, bouncing around the roll cage, in the back of a NASCAR with Richard Petty Jnr driving the high oval banking. I was a photographer for car magazines back in those days. I think he held back a little in deference to my entirely unprotected situation, but it was pretty violent

  20. The Traveling Wilbur

    Wow. My next outing is going to involve the TAB and a wager on the Washington Generals. They are due.

    Sentence you never thought you’d see on MB: Well done Boomers. Magnificent.

  21. I am not sure if this is of interest to others, but it’s a look at the modern Toyota Supra engine.
    https://www.youtube.com/watch?v=MckxlP60cnY
    Engines are fundamentally the same as 100 years ago, but variable cam timing, mechanical fuel pumps (which is how they used to be), coil on plug, intercooler inside intake runner, etc.. it’s quite interesting the packaging these days, but a nightmare for a home hobby enthusiast to work on compared with the older stuff.

    Still it’s interesting to see how manufacturing is changing, tolerances are getting tighter and it’s meaning certain things can only be repaired with $1M equipment.

  22. NEW ZEALAND: Another major reason why the current government needs to be thrown out … the transport debacle…

    … Former senior National Party politician Steven Joyce explains …

    Steven Joyce: Here’s why the Government needs to spend more now (infrastructure) … Opinion … Stuff NZ

    https://www.stuff.co.nz/business/opinion-analysis/115253220/steven-joyce-heres-why-the-government-needs-to-spend-more-now

    OPINION: It makes sense in a slowing economy to bring forward infrastructure investment to boost economic activity and protect jobs. You get the economic boost from the extra spend, plus something to show for it. If you build the right infrastructure it can in turn boost economic growth in the future. …

    … concluding …

    … Everyone knows the Green Party is anti-road and anti-development. The surprise for most people is just how much the Greens are now controlling New Zealand’s roading policy, and how radical that policy has become. Highway funding has been halted purely to satisfy the ideology of one of Parliament’s smallest parties.

    The construction workers will be okay. There is tons of work coming up for them, although they will need to live in Australia. Melbourne and Sydney in particular are crying out for skilled road builders as Australia ramps up its infrastructure investment.

    Our economy however won’t do so well. Rather than a needed infrastructure boost, we are about to have an infrastructure bust. Another politically-induced headwind we simply don’t need.

    Steven Joyce – Wikipedia

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

    • Recent allied MB posts …

      https://www.macrobusiness.com.au/2019/08/links-23-august-2019/#comment-3416572

      NEW ZEALAND’S HORROR HOUSING WEEK: From Nationals Housing Crisis To Labours Housing Disaster …

      https://www.macrobusiness.com.au/2019/08/links-22-august-2019/#comment-3415288

      NEW ZEALAND HOUSE BUILDING: What lessons are being learned from top performing Councils such as Waimakariri and Selwyn ? …

      … It is shaping up to be just a one – term Labour led government in New Zealand … due in the main to constant incompetence … and the fringe loopy – left having way too much influence. Something as Joyce notes above, something that has been a surprise to most New Zealanders.

      • Loopy left … chortle …

        Helpful hint Hugh … this whole RE thing was instituted under the auspices of the far right during the neoliberal period, I mean Thatcher demolished the state housing to open it up for privatization and was front run by financial types, of which, their offspring are now politicians …

    • One might expect that Steven Joyce, a man whose only qualification is a degree in Zoology, might have another view on what the Green Party is trying to achieve! (Although an understanding of animal behavior obviously comes in handy in Parliament!)

      • Well Janet the whole anti road and development is a bit of a ideological ruse considering the decades of environmental destruction in the name of freedom granted by cars and dog boxes – think the whole Salton Sea saga puts it into perspective.

    • Narapoia451MEMBER

      9 years of damage under National to repair, as usual after a long stint of conservative government, can’t expect all of it to be fixed in the first term Hugh.

      • Narapoia451 … Sadly, the Labour – led government ‘blew’ its last opportunity to get back on track with the release last week of the seriously mangled proposed National Policy Statement on Urban Development … on top of the elite soils nonsense.

        And remarkably, we still have not seen the bond financing of infrastructure proposals, which should have been out well before now.

        As you will note from my archival website http://www.PerformanceUrbanPlanning.org , I have been a strong supporter of these guys for a very long time.

        Unfortunately it has just been a dreadful muddle post the 2017 election.

        Here is another article on ‘matters infrastructure’ of a few days ago …

        The $3.5 billion ‘brake’ on the economy | Thomas Coughlan | Stuff.co.nz

        https://www.stuff.co.nz/national/politics/115195602/the-35-billion-brake-on-the-economy

  23. was thinking😒..
    House prices are jumping again and there is no doubt about. These results are on the back of very low volumes. One will argue that even if volumes double (get back to normal) prices will continue to grow because of cut teh rates effect. I say lower IRs only triggered some animal spirits and once volumes get back prices will start to fall.
    The question is why volumes are not rising?
    My view is the economy is still creating jobs. Wages are not going up but are high enough to help people pay the bills. Also, banks have been allowed to play with IO loans and are not under pressure to actually reduce these loans. Matter of fact banks are most likely moving more and more people from I+P loans to IO loans – partial IO loans.
    How do Banks do this by not showing in the books any increases in IO loans? When a family struggles to service their I+P home loan/s bank will restructure the loan into tow loans. First bit will be about 70% of the original loan and will be issued as IO and reminder will become separate (could be tow smaller I+P loans with different rates) loan as I+P. It gives the family chance to reduce the loan over time and a chance to sell without time pressure to do it right away. This is why we don’t see too many distressed sales.
    The magic sauce is the economy must keep producing jobs so people can pay the bills. Next question is for how long can the economy keep producing jobs that pay sufficient wages to allow people to service their astronomical and ever rising loans as hose prices are now going up again.
    My guess (and it is a guess) not for long and we can thank the price hikes for that. My call still stands that we will see max price hikes of about 7% for Syd and Mel which in effect is Australia. Unless our Gov gets lucky with another wave of Chinese.

    Other risks to the economy are US vs China geopolitical games. At some point China will decide to to go through the pain of reducing their steel industry and take out global overcapacity. But on the other hand it will deliver death sentence to our economy. Why would China do this? I believe no matter who wins 2020 US elections there will be no let off in the trade war. This trade war, in my view, has nothing to do with IP rights as H&H wants to present it or the monumental fight between evil China and democracy and freedom loving US. Both are as evil as they come – and for those that want to argue otherwise just think Saudi Arabia and slave markets in Libya. US realised that they must destroy (preferably economically only) China now or it will be too late from preventing China become the next super power.
    Based on the above China will most likely first stop sending students and tourists to our shores and will force us to do something about the IO exports. This way China will blame us when they shut large number of steel mills – patriotism card is always handy in this kind of game.
    That brings us to when our housing and economy collapses. But when? I have no idea. Perhaps China may wait, with false hopes, that Trump loses the elections and the new president will cut a deal and allow China to push US from the No1 spot of global aggressor.

    Opinions?

      • Self awarded “Stable Genius” w/ Kudlow as right hand man … you can’t make this stuff up …

      • ErmingtonPlumbing

        “In 1981, after previously volunteering and working for left-wing politicians and causes, Kudlow joined the administration of Ronald Reagan”

        Left wing Politicians?
        In the US?
        I thought the Clintons and the DNC purged most of them ages ago

    • House prices in ‘straya are determined by

      1. How much the dumbest punters can borrow. The only curb on the number of dumb punters is when most of the would be punters have experienced a recession. That has not happened. What has been in short supply is dumb punters who could get adequate loans. Post the HEM decision and the 2 x rate cuts and a bit of easing and with stable unemployment and ongoing migration, the number of dumb punters who can get loans has increased again.

      2. How desperate the most f$cked vendors are. Up to now, the answer is not very. This requires either ASX collapse with vicious margin calls, or unemployment or their small business goes bust. IO resets are not enough IMHO since exiting investors means the banks take on liability for strata/repair/defect costs whilst they try to sell. Their strategy will be to offload the loan to another lender, something now more possible with the 50 BPS cuts, or if not an agreed sale process so as to drip feed the distressed stock into the market.

      To get a convincing knock to bring prices down you need a common factor with effect on both sides of the equation. That will be unemployment and that really means business collapses. Once that happens, it’s all over.

      Even if the defects issue gets enough traction and the overhang of existing stock becomes genuinely unsaleable (which will be more as a result of lending bans that people waking up to anything – remember the dumb punters are not necessarily getting any smarter), that should sink a good portion of the industry, but still a fair portion of the workforce will be soaked up doing ‘public’ (read tolled) infrastructure which the Government will ramp up to try to rescue things and to be seen to ‘congestion bust’.

      Now that unsaleable defective apartment stock will be quietly sold by liquidators in lines at 30-40 cents in the dollar to ironfisted corporate landlords and rented out as future slums (as happened in the US, see e.g. https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/ – if you don’t think that could happen here, you obviously haven’t been paying attention) in transactions that never make the reported RE stats or in the ‘upmarket’ cases repurposed as serviced apartments for overseas tourists / wealthy students in the case of HRH’s developments (as has already happened in a number of cases) but won’t in any case make a dent on the headline results.

      The key here, which is so often overlooked, is the employment situation of the people who have already bought property. The fact that school leavers / uni graduates / young can’t get any work – except in maybe in cafes – does not matter. They are out of the RE picture as they will never be purchasers, let alone vendors. The unemployment rate of 18-25 year olds could go to 100% and it would not make a jot of difference to house prices.

      It is job losses striking hard at the ranks of the punters who purchased IPs or even PPRs on extreme ratios that will make the difference.

      • Good points, Paint. Depression mate. This government ain’t going to hand out money to rebalance the huge amount of wages which are going to be blown away when people stop spending. The indicators are every where as you point out.

      • RecessionImminent2

        “The key here, which is so often overlooked, is the employment situation of the people who have already bought property. The fact that school leavers / uni graduates / young can’t get any work – except in maybe in cafes – does not matter. They are out of the RE picture as they will never be purchasers, let alone vendors. The unemployment rate of 18-25 year olds could go to 100% and it would not make a jot of difference to house prices.”

        Cannot agree, house prices are so high in part because of the expectation of future gains, and a 100% unemployed younger generation cannot produce any future gains unless they get their sh!t together quickly. Nor do I see high house prices in regions with bad employment statistics — doesn’t inspire people to pay a heap for property.

    • syncpointMEMBER

      Perth? No bounce and still falling. Same banks and not that much difference in unemployment suggests it population growth that is driving the price up. Moreover, Perth prices are significantly more affordable. Most of Perth can afford to live in houses for half the price of a 1 bedroom apartment in Melbourne & Sydney. Perth attracts mostly UK and South African migrants that make up a small percentage of the overall migrant intake.

    • “The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.” Rudiger Dornbush

      … but when? …. much sooner than 18 months I suspect, The Chinese will know that they have to bring about a reckoning well before the US presidental elections, they need to give Trumpy time to show that any answers he has don’t work. If they hold back bringing it to a head until the lead up to the election then Trump will win on the back of the national threat. And if they hold things together until after the US elections and Trump wins, then all bets are off. Maybe they will take the opportunity of Brexit, when the Europeans and the poms will have very little tolerence for Trump’s grandstanding.

      The Russians asked the Chinese to work with them in crashing the international financial system at the worst of the GFC, but the Chinese declined, and actually acted to support the system. From what I have read, it seems that the Chinese don’t appreciate that the West and Trump in particular seem to have forgotten that. It reminds me of how the Japanese were on “our” side in WW1 but were offended with how their support was not acknowledged in the Treaty of Versailles (they expected to be given Shandong Province which the Germans had “colonised” but were ignored). The Japanese nationalists used that slight as reason why they had to unilaterally push their expansion plans.

      • The japs weren’t happy that Woodrow Wilson’s racial equality point wasn’t adopted by the league of nations to placate Billy Hughes and the white Australia policy.

        Mind you, the japs didn’t mind if there was no racial equality… so long as Japanese were equal to Europeans and above every one else. Billy Hughes said no way and that set Japan on their own path till 1945

    • The Horrible Scott Morrison MP

      Look there are a lot of quiet Australians out there having a go, working extra jobs, saving hard, and becoming part of the Australian dream. The question is why isn’t this happening at your house?

  24. boomengineeringMEMBER

    Getting tired, worked late Fri and last night, beat my mate up McCarrs & 60klms this morn, repairing the specialists work (flown in from Melbourne) + other work all day, just had breakfast, now have to install worm gear & wormwheel, shafts, pulleys and other bearings. in factory coffee roaster after extensive work.
    Can’t believe the poor workmanship been coming across lately, two endthrust caged bearings together and the other races together without the balls between, sloppy keyed shafts, no accounting for thermal expansion, gasket goo instead of making new gaskets, incorrect oil seemed to be common in most factories which could in some cases cause catastrophic failure.
    Will be left in factory to finish and lock up so they don’t lose production time.

    • BE I rode 70k yesterday but it was into wind gusting around 60kmh and I felt sh1t and ended up having some belly bug. On the ride I meet a guy with a titanium road bike which was really well made (around 20k price). Made by an ex Toyota engineer in Flemington Melbourne. He said there is a Hand Made Bike show every year. There maybe one in Sydney, but if I’m here then I’ll go to it. I went to a German Motor show today and lots of Porche BMW etc, but one that caught my eye was a Auto Union, and this car was made in South Melbourne until the gov raised tariffs and they went out of business.

      http://www.handmadebicycleshow.cc/show/

      • boomengineeringMEMBER

        Let me know in advance so can bring old bike from Central Coast for me to ride and you on mine. Failing that can see you at the show. Why not email anyhow [email protected]
        About to start work. Adding to above, one job the mechanic tried to fix electrical problem by putting loose wires in any contactor, thermal overload, etc terminals.

    • BE no probs, I’ll email. I’ll try and find out more info as well before hand. There is another Melbourne titanium cycle lot that could use your skills. It might be a business you could start up yourself at some point. I’ve only seen two titanium bikes and the one yesterday was the best. The guy says they totally fit the bike to you as well.

      https://www.curvecycling.com.au/pages/contact

  25. proofreadersMEMBER

    Wonder what the CB nutters are dreaming up at Jackson Hole to further destroy the financial system, as they quaff Cristal and down caviar?

  26. Came across this from a twitter link (cant remember who, was on my list of open tabs to read).

    https://www.newyorker.com/news/q-and-a/a-penn-law-professor-wants-to-make-america-white-again

    The “feels not reals” and cognitive dissonance throughout (especially towards the end) is hilarious, but since this is MB, here’s the real money quote:

    Actually, many people wrote me to say we should have a moratorium like we had from 1924 to 1964, because that would do an even better job. [The Immigration Act of 1924, also known as the Johnson-Reed Act, set extremely low quotas for immigration from Eastern and Southern Europe and blocked immigration from Asia.] Well, I haven’t advocated for that. But, frankly, the racial impacts of taking a more cultural-similarity-factor view—that is up for grabs in a way. You can see that by looking at Australia and Canada. If you think the Australia and Canada points system and restrictions don’t have a differential racial impact, you are kidding yourself. They do. But nobody calls them white supremacist. Well, a few people do. [Laughs.]

    • Gees that woman is like 70 years out of date with that reference to Australian immigration. If only she could come take a train ride to Penrith, a bus to Merrylands or visit the emergency department at Auburn Hospital.

  27. NEW ZEALAND: Why are Kiwis tolerating obvious governance failures ? …

    British migrants flee New Zealand citing expensive rentals and heavy traffic … Ripu Bhatia … Stuff NZ

    https://www.stuff.co.nz/national/115131791/british-migrants-flee-new-zealand-citing-expensive-rentals-and-heavy-traffic?cid=app-iPad

    Migrants from the UK have blamed “terrible” public transport and unfriendly Kiwi “cliques” for leaving New Zealand.

    British expats also pointed to costly rentals and heavy traffic in Auckland as reasons for fleeing the country.

    The comments were made in a Facebook group where Brits in New Zealand offer each other advice and support. … read more via hyperlink above …
    .
    .
    … If you get the land pricing wrong … everything else is wrong …

    … This year’s 15th Annual Demographia International Housing Affordability Survey found New Zealand housing the most unaffordable within the Anglosphere at 6.5 times gross annual household earnings ( median multiple ) … with Australia 5.6; United Kingdom 4.8; Canada 4.0 and the United States 3.5 times.
    .
    .
    … Throughout most of the United States, buying a house is no big deal … check out the States …

    The average home price in every American state – and what you get for your money | Marissa Perino | Stuff.co.nz

    https://www.stuff.co.nz/business/property/113894360/the-average-home-price-in-every-american-state–and-what-you-get-for-your-money?rm=m
    .
    .
    … When do the dithering New Zealand politicians at central and local level intend to learning from the United States … to start on the path of restoring normal and affordable housing markets in New Zealand …

    https://www.macrobusiness.com.au/2019/08/links-8-august-2019/#comment-3406463

    https://www.macrobusiness.com.au/2019/08/links-5-august-2019/#comment-3404056

  28. The Traveling Wilbur

    A good knock from a Root is all England need.

    And the cricket’s looking promising for them too.

    • Just got back from Headingley. Absolutely mad day of cricket. Stupidity on both sides. Stokes was amazing.