Better put on your best Don Draper incredulous ironic face and ask "really?"
It seems we're up to our necks in credit card debt of all things. something like 2million people are close to defaulting on their credit card payments.
That includes about 600,000 people who are at "high to extreme risk" of defaulting, an analysis of credit records by credit agency Veda shows.
The analysis comes from extrapolation of almost 1 million "VedaScores", which is a number up to 1200 that summarises an individual's credit record.
The national average VedaScore is 760 and a score of 200 means the person has a 50 per cent chance of having an "adverse credit event" within the next 12 months.
Pretty wonderful how this news turns up this month when markets are at their highest alert awaiting a October meltdown. The Coalition has banged on long enough about debt being a problem, but they've mostly been targeting public sector debt. Adding insult to the injury of looking in the long place, they've long made a case that the budget is in a crisis because of these public sector debts when in fact the public sector debts have been pretty minimal when compared to the rest of the OECD nations. If public debt is as bad as they've been saying then, you'd think all these other countries would be in a panic. I see no panic in the countries except the outliers of the Euro zone, the PIIGS, and even that panic seems to have been mollified.
What's not been discussed has been private sector debt, and clearly people are up to their necks in credit card debt. If the property prices are any indication, then most people with a mortgage are up to their necks in debt - and should property prices stagnate or fall, they'll be in over their heads. This is all stuff Steve Keen has been talking about.
If and when the big correction hits, there are going to be a significant number of people holding housing as stranded assets or drowning assets. The RBA would predictably cut interest rates down to close to zero, initiating ZIRP regime here. The only way the people drowning in debt will get a bail out from the government would be if the government did what the Rudd government did, which was to shove money into people's accounts. That would effectively help to keep the asset prices afloat like it did last time. Somehow I can't imagine this government repeating that largesse. The more likely scenario is that they'll let those people go to the wall- because it would be the same logic they used to refuse to give more money to the automobile manufacturers. And you can just imagine all this sanctimonious talk about "moral hazard".
How About The Moral Hazard Of Not Taxing International Corporations?
Here's an article that talks about the fine line between tax avoidance and tax evasion.
Billionaire retailer Harvey said it was "morally wrong" to avoid paying tax in your home country. Indeed, as Harvey Norman already operates in Ireland and Singapore, it would be easy for him to dodge tax.
Others such as the head of Google Australia, Maile Carnegie, have decried the media "naming and shaming" corporations on tax. Sadly, naming and shaming is the only thing which works. Without naming and shaming, there would have been no parliamentary inquiry.
Now, there is finally the prospect that real people may have to come out of hiding, front a public forum and explain how it is that their corporations reap billions of dollars selling goods and services in Australia to people in Australia while paying virtually no tax.
In the extraordinary lengths to which they go to avoid tax, aided and abetted by government, Facebook provides a classic case. Although it has a market value of $US200 billion ($228 billion) and sales of $US10 billion-plus, Facebook managed to win an exemption from the corporate regulator in order to class itself as – to quote the exemption, "a small pty company controlled by a foreign coy which is not part of large group".
What part of $200 billion is not large? The point is that it did that to skive out of having to file consolidated financial statements in which it would have to provide greater disclosures on tax and transactions with its associates offshore.
So the big question is whether there will be an inquiry or not. We are guessing that this Coalition government will not proceed with this, despite having made noises about corporate tax evasion being an issue for raising revenue.
It's going to be an interesting week.
Hottest Grand Final Day
It's going to be an interesting week.
Hottest Grand Final Day
Rugby League is a game that has long pissed me off so much I have very little nice to say about it, but today's grand final did offer up a wonderful little story and chart:
Fairfax Media has compiled the data for the temperature on every grand final day in the past 105 seasons of the NRL.
"Mother nature is turning up the heat just in time for the highly anticipated grand final," Weatherzone's Ben McBurney said.
"The city is being blessed this October long weekend with warm and sunny conditions due to a persistent region of high pressure and northerly winds dragging down heat from the interior."
Isn't that just grand? I love how there is a line of best fit pointing ever upward, with that kicker of a rise for this year. It's a miracle 2013's Grand Final Day was as cool as it was, given that it broke all kinds of records. (Thanks to Pleiades who supplied that link).
That ought to give pause to deniers, but I imagine even this will sail right past them.
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