Blues In The Key Of 18C

'The Right To Be A Bigot' Politics Truly Sucks

I don't mean to write a lot about politics or economics. It just ends up that way. I couldn't imagine being a real life political correspondent covering the comings and going in Canberra. I imagine it would be quite insular and tedious to begin with, but made worse by the rhetorical games and the not-answering-your-question-but-shoving-my-agenda thing that politicians do that makes bullshit out of important subjects and perhaps does more to obfuscate things rather than reveal.

The modern cadre of journo covering politics would have the added horror of having to follow politicians through social media as well as having to translate the politi-speak employed by the politicians into plain English. It's not an enviable job. Back in the day when Peter Smark, Peter Ellingsen and Alan Ramsey wrote for the Fairfax, you never got the feeling that they got too exasperated even when the going got silly or for that matter violent as it did in Tiananmen Square.

Then again, they didn't come up against the wall of bullshit that gets erected daily by our contemporary politicians. The wall of bullshit can get so high, it can get a man with no idea and no policies of merit, get voted in to become Prime Minister of the land. That's some steep bullshit.

I can't really imagine what it's like to be Katherine Murphy or Laura Tingle who have had to work the press gallery in Canberra during the Abbott Government, because some of what they've written lately betrays a quiet disillusion with government, politics and what politics can achieve in this country, given the calibre of people we've voted in. I mean, it's bad enough blogging this stuff. Doing it for work would suck.

That in a roundabout way brings me to this current brouhaha they are having down in Canberra to do with the Racial Discrimination Act part 18C. The Liberal Party claims with the highest possible ground can muster, that 18C interferes with freedom of expression. To recap, this notion exists because conservative commentator Andrew Bolt got himself into a spot of bother over vilifying somebody for not being Aboriginal enough. It's stretching things. This then gave enough impetus for the Coalition government to try and rewrite this little section that says you can't offend and humiliate people, and George Brandis infamously championed the cause of people's right to be a bigot.

If the great crusade for freedom of expression culminates with the right for people to be bigots, then you have to think maybe you took a wrong turn somewhere. Surely you'd think the moment those words left his lips, George Brandis might have thought, "hang on, maybe I'm giving ammunition to the wrong people?" After all, the first thing that sprang into my mind was the line from 'Catch-22':

"Racial prejudice is a terrible thing, Yossarian. It really is. It's a terrible thing to treat a decent, loyal Indian like a nigger, kike, wop, or spic.”

If you're arguing for a special, specific spot to protect plain obnoxious assholes from the Racial Discrimination Act, maybe you're arguing too fine a point to be called 'freedom of speech'. If you want a special exemption from the RDA, and that exemption is to be allowed to offend people and humiliate them by calling them words like nigger, kike, wop/wog or spic, (or abo, boong, chink or gook too!), maybe it doesn't say much about the free press or freedom of expression in this country? After all, what kind of press is going to say, refer to Mr. Obama as a nigger and cite freedom of expression to allow it, and by extension, not to cop to the judgment and opprobrium such a description would earn them?

Maybe it just says more about George Brandis and his own tremendous, irrepressible desire to be a bigot? Is it really a win for freedom of speech if the upshot of changing this act is so that Andrew Bolt can use the bully pulpit of his radio microphone to vilify people without much of a voice in our community? Maybe this is simply too hard asking the party of "ditch-the-witch" to consider. Maybe it's just too hard for them to comprehend.

Think of all the things this government doesn't support, like a bill of rights. Or the things it chooses to censor, treating its own citizens like children. It goes after artists for fear their work might be paedophilia; it censors films that point to the corrupt nature of power, like 'Salo'; you can't argue this wowser government is doing everything it possibly can to protect freedom of expression. How can all this fixation and fuss over 18C be anything but the desire to be bigoted and not to be punished for it? One can't possibly take this bunch on their word about this principle.

So here we are, folks - a Parliament busily arguing the imagined merits of rewriting 18C. Read it and weep.

View From The Couch - 21/Mar/2017

It's Not A Bubble If You Don't Call It That

Day after day, there's this concern about the Property Bubble. Looked through the hosing affordability prism, the bubble looks enormous, but looked through the prism of investments, housing-as- asset still looks safe to the majority of investors piling into the market. If you're hoping to get you quarter acre block and raise your kids in the manner that your parents did, in a neighbour that resembles the one in which you grew up, the likelihood has diminished to unlikely to zero chance doing it on your own.

If you're in the real estate racket, then it's in your interest to talk it down like it's not big deal.
This made me laugh:

Australia's banking regulator says the country's housing market is in an environment of "heightened risk", but he won't say there's a housing bubble. 

Australian Prudential Regulatory Authority chairman Wayne Byres told a Sydney conference that he wouldn't use "the B-word" to describe the housing market. 

"I don't use the B-word. I refuse to use the B-word. It implies a binary, that's too simplistic," Mr Byres said speaking at the Australian Securities and Investments Commission annual forum. 

"We are in an environment of heightened risk. House prices are high and particularly in this one (Sydney) they're rapidly rising," Mr Byres said.
"If everyone is not careful the risks are going to rise," Mr Byres said.

Mr Byres said APRA was watching the housing market, but he stopped short of saying the authority would bring in new curbs on investment lending.

I guess it's not a Bubble if you don't call it that. That's a bit like saying Tony Abbott isn't a dickhead because he's not called Dick Head, but Tony Abbott.

"What Bubble?" They Asked

Outside of Sydney and Melbourne, real estate pricing has not risen at the same dizzying rates. Of course, Australia's a very big place but GDP growth is concentrated in pockets. That is to say, there are only a few places in Australia worth being. You can go live in Tenterfield Queensland in a shack priced at 20k, which is the middle of nowhere, for instance, but it is days from amenities one expects of civilisation and if you didn't get your NBN connection out there, why, living conditions could approximate the 19th century more than the 21st.

Something like 8% worth of Australia's GDP's economic activity takes place in the precinct surrounding Wynyard and Town Hall stations. Think about that: 1/12.5ths of Australia's economy converges on 2 railway stations (I happen to know this because I talk to people at the UTS TRC). The whole point of Sydney is to service the 2 stations, and to that end, the public transport system has grown into radial spokes around the surrounding land all the way out to the hinterlands. It grew that way through a combination of factors, some of which included lack of vision by the NSW government; the small-ness of scope given to a precinct known as The City of Sydney which covers these two stations, but nowhere near far out enough to urban coordinate planning or transport planning; the fact that the Sydney basin as a whole had no urban planning for a good two decades in the middle of the 20th century; and general class sniping which has persisted from English Colonial times.

Unfortunately the physical need for participants in the economy to converge on the two stations is so immense it has absolutely warped the perception of value in Sydney. The CBDs of Melbourne and Brisbane also present similar problems. Combined, the central districts of the three cities would contribute to a quarter of Australia' GDP, perhaps a third -all of it sitting in a clutch of about 5-6 train stations. That's a lot of economic activity that needs to be serviced by public transport.

In a sense, it is like light. For every doubling of distance away from these hot cores of the Australian economy, the value of the land would lose by a square root. While this is common sense, the way the property prices have been growing is anything but. If Sydney's economic output as a whole is not growing by 18%, it's hard to justify 18% rises in the property - and that's just comparing like with like. If you compare the GDP output of Sydney with world cities, it is hardly worth the prices its property is fetching. I mean, Sydney's a nice-ish place to live, but it's not that nice. People are having themselves on if they're putting it up higher than NYC, London or even Santa Barbara, California.

Except perspective is very hard to come by when you've decided where you are so damn wonderful, and the market is full of these people. Do you wonder why some people think it's all going to end in tears?

Bad Ideas Still Get To Run

There's this argument going around that maybe first time home owners should be able to access their superannuation in order to put a deposit down for a house. Paul Keating thinks this is a terrible idea. Others are in favour.

The succinct summation of why it's a bad idea is here (take it away, Mr. Keating!):

The average superannuation balance of those aged between 25 and 40 hovers around $45,000. Were this to be taken from a saver's account to be employed as a housing deposit, it would effectively destroy that person's ability to compound any future sum into a meaningful retirement supplement. 

More than that, once the preservation rule has been breached, the whole investment system would be compromised as superannuation trustees were required to make provision for short-term withdrawals from an otherwise, fully preserved system. This would be completely disruptive to professional funds management.

If you look at it from a longer time frame, you'd have to say property prices will not keep going up, or even stay above their historic trend forever. it's doubtful it would stay that way over a working life. The insane price rises we're seeing are based on the delusion that these markets never go down. People are forgetting what an economic contraction looks like, what a recession looks like, and how it impacts prices of things.

It's kind of crazy to pull your money out of diversified funds and stick it into one asset. Not one asset class, but one asset. And then you assume that one asset will keep going up enough that you could liquidate it at the time of your retirement to fund your retirement. If you believe that, I have a bridge I want to sell you. 

Quick Shots - 14/Mar/2017

Arrival

This got a lot of good reviews so I was really looking forward to it. I have to say its a bit naff and maybe even condescending. I did have an odd idea as I watched it, that maybe the reason we don't hear from other alien races in space is because no other sentient species wants to traverse to distance to find another sentient race. That maybe earthlings - homo sapiens - is somehow the crazy species in the galaxy that keeps on imagining scenarios of alien encounters that essentially hinge on paranoid violence.

Maybe it's not quite what i thought it would be, while some of it looked like a parallel text to 'Independence Day' without the out and out spectacle of cities getting destroyed. It also seems to owe a debt to 'Close Encounters of the Third Kind'. Clearly this is about the fifth or sixth kind.




Sarajevo

A little perdue piece about the aftermath of the Grand Duke Ferdinand getting assassinated in Sarajevo which of course triggered World War I. An oddly depressing topic, tackled with some amount compassion and intrigue.

Below is the only relevant clip I could find. It gives you a sense of the understated nature of the drama.



The main contention of the film is that the assassination of Franz Ferdinand was a false flag operation perpetrated by the Australian military who were champing at the bit to fight what became World War I. Had they any amount of foresight, they might have avoided such moves at all costs.

The RBA Fears Apartment Price Collapses

Just following on from the previous day's entry about the RBA and its seeming indifference to the property bubble, it turns outfit is a little worried about the apartment glut they think is going to happen in Brisbane and Melbourne.  They think Sydney should be fine, but then, it's not the prices as such that worries them but the systemic impact on the banking sector such a shock would have:

"It is about whether or not they are adequately provisioned, whether their lending standards are adequate, and if there is an oversupply and falling prices, whether they end up under water or wearing larger losses than they expected because they hadn't anticipated this. 

"Have households purchased these apartments in the expectation of rising rents and rising prices, and with a glut may not be able to rent them out and may not be able to get the price they paid for them?"

Although the Prudential Regulation Authority instructed banks to tighten lending standards for investors in 2014 and succeeding in bringing the growth in investor lending down below 10 per cent, "everyone would be aware that more recently investor housing growth has started to speed up again". 

Between October and January, the annual growth in lending to property investors jumped from 9 per cent to 27 per cent. Investors borrowed $13.8 billion in January, more than the $13.6 billion that was lent to owner-occupiers. Of the $13.8 billion, only $1.2 billion was for building new homes. 

"We are watching it because investors can be the first ones to get out if things turn down," she said, warning that a rush for the doors could make a slump "much bigger than it would otherwise be". 

Invited to repeat an assurance by Treasurer Scott Morrison on Monday that rapidly climbing house prices in Sydney and Melbourne were "not the function of any sort of investor credit bubble or anything like this", Ms Bullock declined, saying: "I would not like to speculate on what is a bubble and what is not, personally".

That's a funny response. When you ad this scenario to the stranded housing assets out in WA in the wake of the mining bust, the apartment glut would be a classic case of supply arriving in time to rebalance the market. After all, all the politicians have been saying there's no bubble, merely a shortage in supply. If the system can't handle the arrival of supply, it raises serious questions as to just what the fuck is going on with the price rises.

In any case governments are moving to readjust some policies on the edge to "make housing more affordable" - which is semaphore for deflating the bubble slowly. Nobody seriously disputes that this is necessary; there's even bipartisan support for it in NSW - but of course the vested interests are already howling.

The property industry slammed the move to increase the surcharge as ill-conceived, cynically populist and counter-productive. 

Developer lobby group the Urban Taskforce said it would put the brakes on supply at a time when Sydney was still delivering new homes at below the Department of Planning's target rate of 40,000 a year. 

Chris Johnson from the group said "lifting the surcharge on foreign investors will obviously slow down to some extent that market which provides homes for renters in Sydney. Throttling down supply is not a good move." 

Glenn Byres from the Property Council said foreign investment funded large scale developments and boosted pre-sales. 

"Adding more taxes to foreign investment would actually hurt supply, particular at a time when lending conditions are more stringent on offshore income," he said.

Premier Gladys Berejiklian has repeatedly said that boosting supply was the key government response to the housing affordability crisis.

Steven Mann from the Urban Development Institute of Australia NSW said foreign buyers were an easy target.

"By targeting a group of people that are unable to vote our politicians are showing a predilection to winning votes rather than obtaining the best outcome for the greater good," he said.

NSW Treasury calculations released in a call for papers after the 2016 budget showed that the government's own modelling predicted foreign buyers would be discouraged from the NSW market by the 4 per cent foreign investor levy.
Treasury estimated a modest decrease of about $30 million a year in its stamp duty collection from foreign buyers for 2016-17 after the levy was imposed.

Labor pointed to this as evidence that increasing the surcharge would improve housing affordability. 

So, there's that. All those people want the Bubble tontine for as long as possible, but they don't seem to have an exit clause for themselves so naturally you have to question their judgment if not sanity. The RBA and State governments as well as the opposition is moving to rein in the Bubble. Screaming against it only makes you look out of step. 

More On That Vested Interest Thing, Part 1008

The mining lobby went pretty hard against Kevin Rudd because of the Mining Rent Resources Tax. Julia Gillard took the opportunity presented by the fall in his polls to assume the Prime Ministership, and wound back the tax so it hardly hurt the mining companies. By the time Tony Abbott became Prime Minister, it became a target for repeal, much like the ETS, and so the mining lobby got away with murder. I know, that's not nice language to describe it but their campaigns killed the tax, which deprived money for the Australian government that would have been spent on health and education amongst other things, so it stands to reason that in some chain of events, the austerity of the Abbott Government would have killed somebody, and that blood belongs on the mining lobby's hands. It's not hyperbole, it's logic.

So, naturally, it's interesting to see the mining lobby went after WA National Party leader who said there should be a mining tax.

West Australian Nationals leader Brendon Grylls has conceded defeat in his seat of Pilbara, following a $2 million campaign against him by the mining industry angry at his iron ore tax proposal. 

Mr Grylls said he had contacted Labor's candidate Kevin Michel to congratulate him on his victory. 

The ABC's election computer no longer lists Pilbara as a seat in doubt, putting Mr Michel more than 500 votes ahead and declaring the seat for him. 

"It's quite clear that I can't catch up in preferences now," Mr Grylls said.
"The Nationals remain strong in the West Australian parliament and just like I replaced a leader, I'll be replaced and they'll get on with the job.

Just in case you're wondering just how much our democracy is being fucked with by lobbies, and how our government can't get its proverbial shit together to enact sensible laws  like having an ETS, or having a mining tax, there it is in black and white.

Politicians might be dumb, but they know enough that political necessity forces solutions. Sometimes they are against their own side of politics. After all a great leader can only be measured by their willingness to whack their own to make deals stick. It's eminently understandable why Mr. Grylls might want to propose an iron ore tax, given the parlous state of WA's affairs. Therefore, it's interesting to see the mining lobby is entirely happy to whack their own - and by extension we can see who wears the pants in conservative politics. It's the vested interests, all the time, all the way. The actual politicians are just sock puppets.

News That's Fit To Punt - 13/Mar/2017

Mining Bust Out West

Jeez, that election in Western Australia looked like a real rout. It's funny how the state votes in the conservatives during the years of the boom and somehow trusts them to do the right thing with it, and then when the boom turns into a bust they discover the conservatives have squandered it. It seems to be like a collective insanity that takes hold of the state. During the mining boom years, the rest of Australia had to listen to utter idiocy coming out of the WA Government thanks to the fact the recent mining boom turned  WA into a net contributor to the GST regime rather than a net recipient. Then they cried poor about it , and got very little sympathy - as they should - and now that the state finances are in ruin, the people finally vote in the ALP. When you consider that at one point the WA LNP were mouthing off about seceding from the rest of Australia, it's certainly laughable that they will be a net recipient to the GST regime once more.

I guess one shouldn't laugh at the misfortune of others, but this one was pretty predictable.

Mining booms often turn to busts. Most Australians know this, except it seems, the outgoing administration of the nation's resource-rich west. 

Western Australia's now former premier Colin Barnett bungled the bonanza, splurging windfall cash during the good times only to find the cupboard bare in the bad ones. The upshot is the state's budget deficit and debt have spiralled, the AAA rating is gone and people are fleeing, the latter at least has the advantage of containing an unemployment rate that's already the nation's highest. 

"There's an element of Dutch disease there, and the government certainly mismanaged the boom, but it also reflects the sheer size of the mining sector in WA so when it collapses it drags everything down," said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. 

"WA didn't seem to learn any of the lessons from Australia's past mistakes during commodity cycles and now the state is effectively in recession." 

(edit)
Western Australia's Treasury was projecting the revenue windfall from mining would still be continuing in 2018-19, despite commodity prices peaking in the third quarter of 2011 and mining investment not too long after. 

As a result, the government has been trying to cut outlays in a weakening economy and there's even been talk of tax increases as gross debt is on course to surpass 20 per cent of gross state product in coming years.

It's pretty laughable when you have a long memory. So much for the notion that WA somehow had organised things differently to all the other mining boom and bust cycles in the past. Tire's a lesson in there for the fossil fuels industries too.
There's a lot more to be said bout all this, so I'll come back to this below.

100 Days Of Tesla

We live in times such that a tech billionaire tweets something and it turns into a head-to-head discussion with the Premier of SA and PM of Australia. It's weird but all of a sudden people want this project to happen - which would be nice of South Australia but also, - which would be the proper part of the renewables tech business getting a crack at the Australian electrical grid.

Tesla's Elon Musk may have put large scale battery storage on the national agenda with his offer last week to solve South Australia's power crisis for free if he did not deliver a large system with 100 days of signing a contract, but both the Prime Minister and South Australia's Premier are looking for more detail before taking him up on the offer. 

Mr Turnbull and Mr Musk spoke for an hour early Sunday afternoon, with the Prime Minister yet to form a view on the merits of power storage systems in solving South Australia's power supply woes. 

"They had an in-depth discussion on the value of storage and the future of the electricity system," a spokesman for the Prime Minister's Office said. 

Their discussion was not political in tone, but rather a discussion between two people "picking each other's brains" over the options for energy storage in Australia, one source familiar with the discussion said.

Elon Musk for his part has resumed campaigning for a shot on Twitter. You'd look an idiot if you turned him down now, wouldn't you? Of course these are people in government in Australia are people who don't mind looking like an idiot, so you have to subtract your optimism. Or is that curb your enthusiasm. In any case, the offer is there. Now begins the process of looking the gift horse in the mouth.

Time To Start Collecting Canned Food?

This link is from Pleiades.

While economists love trade, it has extremely political ramifications. And it is politics that in Every’s view is driving the world back to a 19th century style trade world. A world where after a period of free trade, high tariffs were set up and where trade became a conflict involving domination of one country over another.

And the problem is that economic conflict can quickly become real conflict.

It was a scary prospect – not only would raising trade barriers reduce our standard of living – but if the path of the next 10 years follows the path of the late 1800s and early 1900s then the world gets very dangerous very quickly.

The biggest difficulty for those selling the idea of free trade is that a soon as you start talking about things such as “comparative advantage” people quickly switch off. It’s much easier to understand trade in what is known as a mercantilist sense – the “domination” point of view, where the aim is to export more than you import.

That is certainly the view of Donald Trump and his trade advisor, Peter Navarro, who has recently argued that because GDP is made up of consumption, government spending, investment and net exports (exports minus imports) reducing the US trade deficit is a good way to grow the US economy.

The problem with that view is that in the US – as in Australia – the size of net exports pales in comparison to consumption, investment and government spending.

Clearly, if the benefits of trade are not doled out to the public but instead, accrues to a small percentage, as has happened in the last 30years, the public becomes less enamoured of free trade; and so we must wonder if we've hit that point where the public has decided it won't back free trade any more. It would explain the shift toward  parochial kind of anti-tradepolitics as seen in the Brexit debate/debacle as well as the rise of Trump-ism (devoid of any coherent ideological framework, it does seem to to be a cry against free trade).

A Scary Passage From Crikey

Also from Pleiades was Crikey's entry about the WA election, which I think deserves a long quote.

They have to do something. They should have done something before. When the red dust settles and the tallying’s done, the verdict on the mining boom in WA will be a harsh one. No Norwegian-style social fund was established — Norway now has a trillion dollars under management from North Sea oil and gas, and the whole country could retire — and much of the money that did come in served principally to inflate prices to, well, Norwegian levels. FIFO was imposed on people who wanted settled jobs, and no government stepped in to oblige the companies to give their workers more options. Men and women of modest skills and earning capacities were suddenly pulling in huge wages, with little advice as to how to invest it. Many bought houses in regional FIFO towns at prices approaching capital city levels — and then saw them halve in value as the boom died away. Meanwhile, the towns that became FIFO bases — from Singleton in NSW’s Hunter Valley to Kalgoorlie to Bunbury — were drained of the communal stability that makes life possible. “How can you organise a footy team? How can you even get a picnic going,” a woman had said to me in Singleton, two years ago, “when you never know who’s going to be here? The shops are empty, the town’s bled dry.” Two days ago, someone said the same thing, near word for word, in Kalgoorlie. In both towns, and many others, the miner’s mansions have “for sale” signs in front of them, directed at a market that isn’t there. 

Some didn’t even make it to the bad-investment stage. A lot of people were drawn to FIFO by the idea that it would allow them to make big bank, on the simple principle that once you’re in camp, there’s nothing to spend your money on. But that scheme misses the effect of 14-day, 21-day, 28-day stints of 12-hour shifts on the human psyche. Beyond a certain point of such punishing, inhuman labour, it is all but impossible for most people not to blow their money in the first days off, especially if they’re young. Everyone who’s done night shifts, continuous shifts, back-to-backs knows this. The money spends itself, burns its way out of your pocket. Potlatch, the old tribal custom of wanton destruction, takes over. You stride into a bar and fuck it, you’re not going to drink beer, or Red Label, you’re going to drink Chivas! A double! Chivas for everyone! For some people who just came to do a couple of years in the mines and party up, that’s probably no great tragedy. Others have worked years at grinding, dirty, dangerous work and have nothing to show, a fact that must be part-cause of the suicides, depression, domestic violence and addiction that has broken through FIFO communities like a long wave. 

Given a free kick by 4 billion years of geology, and a chance to reinvest, Western Australia appears to have created a situation in which Wake in Fright and The Unknown Industrial Prisoner serve not as dystopian warnings, but as HR manuals. Now a state that has spent a decade chipping bits of itself off and floating it northward for silly-money prices cannot pay for its most basic services, pay down its debt, and is proposing taxes that should have been being levied since the 1990s and scrambling to fill the gap with infrastructure projects it can’t afford to start. Services cut include those to Aboriginal people, which in turn has produced unwilling population movements, pressure on centralised and reduced services, and a resultant and distinct fraying of white-black community relations in a range of towns, a fall away from such detente and mutual understanding as has been achieved in recent years. What looks like a racial political issue, is, in reality, a product of the state’s fiscal crisis, and its panicked efforts to plug the gap.

That's pretty bleak reading. It turned out they needed a mining tax but realised it after they campaigned hard to get rid of it. Oops. What do you do with this kind of collective hubris and stupidity? It doesn't end well:

The gap has been plugged, instead, with meth, a drug that has boomed out of control in WA, simply because it has become so cheap, easily made from base chemicals, in suburban labs springing up in every city and town. Those looking to explain its reach in WA by its occult power to turn people into speedfreak zombies are ironbarking up the wrong tree — meth hit the big time when it became cheaper than dope. Its popularity is a product not of addled obliviousness, but of the judicious application of rational choice theory by substance abusers, looking to maximise their investment. It’d make the Institute of Public Affairs proud.

All that, in overlapping bits and pieces is the conversations you get into across the state — with everyone. Miners, ex-miners, civic boosters, NGO officers, emergency services, journos, snappers. In WA, everyone’s become an amateur political sociologist, hot on the trail of where it all went wrong, and what the solution might be.
Whatever happens on Saturday, the state’s dilemma concentrates the mind wonderfully. Kalgoorlie stands as a metonym for Western Australia; Western Australia for Australia itself. We are all aware that we have not stored away for the lean years, and the fat years come to an end. The prospect, delicious for pundits, less for the public, is that either major party will fall short of a majority, and have to cobble together government in both houses of Parliament. Looked at clear-eyed, this often delivers good government, but the public rarely thinks so, and the golden west exemplifies the decay of political legitimacy and effectiveness in Australia, and if that occurs here, it may not be too long before the state is back at the polls once more. 

What WA needs is the Unflux, the many nations in one — a party with a realistic and integrated program to deal with the reality of resources-led states, not the fantasies they offer. As goes the state, so goes the nation.

Everybody's got 20-20 hindsight it appears. Right now, it's hard not to think of all those mortgages underwater in Western Australia and what that's doing to the banks' bottom line.  It all went crazy out there with the low interest rates and the seemingly low inflation as 'measured'y the RBA. If the reality was in fact significant inflation, then clearly Western Australia was not served well at all by the RBA's policies in the last decade. You can start to see the whole thing start to unravel. You have to wonder just how long will it be before it hits the East Coast?

So Which Is It?

The Banks Say There's No Bubble

This is getting to be like a game.
The banks believe, or at least want us to believe that there is no bubble going on in the Australian property market.

Testifying at the parliamentary inquiry into banking this week, the chief executives of National Australia Bank, Westpac and Commonwealth Bank all said that while they are worried about elements of the housing market, prices aren't over-inflated.

"I would draw the distinction between a speculative bubble in prices and prices beyond what fundamentals would justify," Westpac's Brian Hartzer told the parliamentary committee on Wednesday. A bubble isn't occurring in Sydney or Melbourne, where house prices have risen the most, he said.

"There are increasing risks, but I still believe the answer is no," National Australia Bank's Andrew Thorburn said when asked if houses in Sydney and Melbourne are overpriced.
Commonwealth Bank, which is the nation's largest mortgage lender, is seeing "lending at levels we are comfortable with" across Australia, Chief Executive Officer Ian Narev told the committee when he testified on Tuesday.

Funnily enough that reminds me of the scene in 'The Big Short' where a market bull tells Steve Carrell's character that he's going to buy more shares in a bank that is about to get smashed. If history is any guide, it's going to look perfectly fine until the moment it isn't.

John Hewson Says The Risks Are Greater Than The GFC

Former Opposition Leader and famous driver of Ferraris as well as a note economics academic John Hewson thinks there is a problem. He closes his column like this:

However, our whole system is at risk of a significant drop in house prices as, indeed, was the US/global financial system in the run up to the global financial crisis, where the mountain of debt was built on a US sub-prime housing loan, which was simply a punt on house prices not falling. 

Our banks are, today, heavily exposed, having become essentially building societies that also issue credit cards. These exposures are over and above their considerable climate exposures – not just to mortgages on coastal properties, and to fossil fuels, but more broadly. 

The risks being run actually dwarf those of the GFC. If it goes bad, the government will be called on to intervene.

I imagine John Hewson's kids have grown up and suddenly he's had to have a closer look at this housing affordability for his kids. That must have led him to believe there is a problem brewing. Certainly the OECD's warning wouldn't be falling on deaf ears with him. 

What The OECD Thinks Of All This

The OECD were pretty rosy aboutAustralia except this property bubble thing. 

The survey says in real terms house prices have climbed to 250 per cent their level in the 1990s, with much of the increase taking place in the past few years, "straining affordability, especially for first-time buyers in Sydney". 

"A continued rise of the market, fuelled by both investor and owner-occupier demand, may end in a significant downward correction that spreads to the rest of the economy," it warns. 

(edit)

Sydney house prices climbed another 4.5 per cent in the three months to February to be up 18.4 per cent over the year. Melbourne prices climbed 5.5 per cent to be up 13.1 per cent. Australia's ratio of household debt to GDP has climbed to 123 per cent, an all-time high and the third-highest in the world. 

The OECD report argues that it is mainly local investors and owner-occupiers, rather than foreign buyers, that are pushing prices high. It says the markets are vulnerable to a sudden rush for the doors should prices start to falter and investors believe capital gains are no longer to be certain.

I was talking to an old friend who said to me he had $400k to put towards a house. He could get a loan for $400k. If his spouse does the same, it comes roughly to about $1.6m which is the price of a house in Sydney, with nothing left over. There's no money for innovation or investing in other things. 

It's astronomical money for a house in Sydney when you consider what you can get for that money in other parts of the world. As we were driving around the inner city, he pointed to arrow of tiny workers' cottages and said they were all going for well over a million. He's probably right because he's been looking. I told him "it's not really sustainable, given how low wages growth are and how more and more people are getting forced out of full time employment." 

"So it has to all end in tears, right?" he asked. 

The rational part of my thinking says absolutely. But then I've been writing that for like a decade now and it keeps going on, so maybe those banks are right. And yetI can't help but think of 'The Big Short' and just how much people must be stretched to take out million dollar mortgages. The economy's growth is sluggish because any amount of discretionary spending goes towards paying off the mortgage, so effectively the low interest rate thing doesn't help the consumer one bit. It only helps baks that get to make out the silly-money loans. 

Quick Shots - 06/Mar/2017

Vikings Season 4

This series keeps delivering on its product. The cinematography and production design remain top notch. It doesn't quite feel like the sagas because the emotional lives of these characters are so much more intense and seem to have more in common with bikie gangs than say, Njal or Guunnar from 'Njal's Saga'. All the same, the violence is great, and the battle scenes glorious. The action cues really pump and the stakes are always abstract as well as practical. The writing is pretty snappy and in many ways the cast are hiding their stride playing these characters. In some ways I think this series appeals to me more than even 'Game of Thrones'.

Some of the events the series is based upon is beginning to overlap with events sourced for 'The Last Kingdom' which is Netflix's own series about medieval England around the time of the Viking invasions. 'Vikings' is inevitably aiming at showing us the Great Heathen Army, while 'The Last Kingdom' is working towards the reign of King Alfred in defiance of the Vikings who settled in England. It's all so interesting viewing if you're into medieval history.

The thing is, when i was studying medieval history back in high school, I never really got just how much blood guts gore, violence and sex there was in all of this. I wish I'd known - I'm sure I would have paid more attention.

Bullshit For Everybody

Trump is spreading the love. Okay no he's no, he's spreading evermore bullshit, possibly in avid to distract the world from probing further into his Russian connection. His current flavour of bullshit is that President Obama was wire-tapping him in Trump Tower, which sounds as preposterous as... oh I don't know, Area 51 housing alien corpses.

Of course, if President Obama had used the powers of his office to do so, there would be a trail of paperwork to make it so, and of course there isn't; the FBI have said they've done no such thing, and you'd think that would be the end of it, but no. The Donald is pushing for an inquiry, which is a bit like asking for people to officially sniff his butt to see if his bullshit indeed stinks.

There are days where I wonder where the world is going.  Today I know I don't have to wonder at all,  it's obvious it's going straight to hell in a hand basket full of deplorables.

The Vested Interests Of Politicians

The government likes to talk out housing affordability but isn't willing to actually do anything that might make a difference. Yes, that's right, they won't because all the gyrations of the RBA combined with shoring up the banks during the GFC (and including the debt-monster Macquarie Bank in that set) had everything to do with shoring up asset prices, and in most instances, those asset prices were homes. Why on Earth then would the government feel an incentive to knock down housing prices when the incentives are pointed in the other direction?

Here's an article that lays it all out.

The federal government's problem with making housing more affordable is that it becomes, by definition, cheaper. And that's not something that the federal government wants to see happen for some very understandable reasons. 

Back in the Howard era Australians were encouraged to invest in housing as a form of wealth creation, partially as a way of addressing rental strain and mainly as a way to ensure people had assets and therefore didn't go selfishly claiming pensions later on. That's when the negative gearing and capital gains exemptions were introduced that made buying property such a sweet deal. 

So now there are a lot of Australians who have put their retirement eggs in the basket marked "leveraging the hell out of my mortgage to buy more investment properties" for the last couple of decades and who will be therefore disadvantaged if the value of housing drops. 

And then there's pure self interest at work too, since between a third and half of all our representatives have investment properties - the PM himself owns seven properties, for example. How keen would you say that our parliamentary representatives are to make their portfolios drop in value, especially for something as stupid as the greater good? 

Also, as well we know thanks to the efforts of the NSW Independent Commission Against Corruption, the NSW Liberals are so beloved by property developers that the party went to some effort to find a way of accepting donations from them despite those donations being completely illegal. If they suddenly become the party that makes property less lucrative, there'd be no donations to justify the creation of opaque entities like the Free Enterprise Foundation.

Yes, they are part of the vested interests do with the Property Bubble. No, they won't be doing what needs to be done so that too will be left to the market.

View From The Couch - 28/Feb/2017

Oscars Mix Up

I don't really have anything to add to the chaos that resulted from the wrong movie being announced as winner. I just want to say it's just a fuck up and nobody was killed or injured. It'll pass.
In the mean time, congrats to all the winners. It feels all so faraway, really.

I just noticed 'Piper' won Best Animated Short. I feel very happy for Adrian Belew who did the score for that short film. He's been posting updates on the progress of that project on Facebook and I know what it means to him, so congratulations are definitely in order there.

Clean Coal? The Banks Don't Think So

This is one of those funny things that happen because the politics is so retrograde and politicians so inept in this country - APRA is saying banks can't be allowing investment into 'clean coal' projects because they have every chance of being a stranded asset in the future. That's basically the banks telling the party of the banks to get their policy on renewable energies and emissions control sorted out properly.

What's amazed about the intransigence and the grandstanding about not doing anything to control emissions except Direct (in)Action by the Coalition Government is that given the vagaries of a two party system, if they don't control the policies to do with climate change, it's going to fall upon the ALP and the Greens to devise an ETS and renewable targets; and when that happens, it won't be as favourable to the business sector as the one they could devise on their own.

I can't believe I'm arguing for it, but essentially, the Liberals and Nationals need to get their shit together and sort out a proper set of policies if they don't want to be consigned to the waste basket of history. Which, is not a bad thing for me, but it boggles the mind that these politicians can't figure out the ramification of their own political snafu into which they've snookered themselves.

But Of Course Policy Isn't Their Strong Suite

Peter Hartcher thinks this lot are so inept, they're missing oral the sitters that could easily be dispatched and be good policy.

Australia's need for more power plants, roads, rail, bridges, ports and airports is dire. Ken Henry, former secretary of the Treasury and now chair of National Australia Bank, made the point about Australia's failure forcefully this week: 

"We do not have the infrastructure capacity to support today's population, far less the population of the future," he told the Committee for Economic Development of Australia on Thursday. 

"On the basis of official projections of Australia's population growth, our governments could be calling tenders for the design of a brand new city for two million people every five years; or a brand new city the size of Sydney or Melbourne every decade; or a brand new city the size of Newcastle or Canberra every year. Every year.
"But that's not what they are doing. Instead, they have decided that another

3 million people will be tacked onto Sydney and another 4 million onto Melbourne over the next 40 years ... 

"And even if we do manage to stuff an additional 7 million people into those cities what are we going to do with the other 9 million who will be added to the Australian population in that same period of time? Have you ever heard a political leader addressing that question? Do you think anybody has a clue? At the very least, we are going to have to find radical new approaches for infrastructure planning, funding and construction." 

Without sensible solutions to hand, politicians are turning to extreme ones. Tony Abbott's speech on Thursday night is an example. He proposed cutting the immigration intake to take pressure off housing prices: "Why not say to the people of Australia," posed Abbott, "we'll cut immigration to make housing more affordable?"

This is remarkable. This is a former prime minister who presided over Australia's normal, relatively large immigration intake who now calls for it to be cut.

Yeah sounds about right.

Coming To Think Of It, Neither Is Mathematics

Part of the problem is that Malcolm Turnbull is so hamstrung that he can't really make policies that could save his neck, get past his own party. This is compounded by the odd politicking of Tony Abbott to destroy polling figures for Turnbull but also offer idiotic advice for which nobody asked.

There's even rampant speculation that the Right wing of the Liberal Party might head for a spill and install Peter Dutton as Malcolm Turnbull's replacement. The joke is out of the bag and is getting ridiculed soundly.

Here's the thing. Let's say they do this and remove Malcolm Turnbull.
Will Malcolm Turnbull have any reason left to stay in politics? Likely not, seeing that it's unlikely he'll ever be PM again.
What happens if a pissed-off Malcolm Turnbull then resigns on the spot to spite the party and the government loses its 1 seat majority right there. The new PM - presuming it's Peter Dutton, but it doesn't really matter who - immediately has to go to the GG and say he doesn't have the numbers;  so it's election time all over again and the electorate will punish them for the shenanigans.

That the Coalition would have to be sub-75 IQ to attempt the switch was my first guess but... you never know your luck in the asylum called Parliament House. These people can't seem to count how many seats they have.

Back To The Moon

SpaceX have announced, some time next year they're going to send 2 people around the orbit of the Moon.

"This will be a private mission to a paying customer," said company Chief Executive Elon Musk. 

"This should be incredibly exciting."

He declined to identify the individuals, or say how much they would pay for the weeklong mission, except to say that it was "nobody from Hollywood".

Musk said the two prospective tourists knew each other.

The flight would last about a week, circle the moon and head out deeper into space before returning to Earth. 

"Like the Apollo astronauts before them, these individuals will travel into space carrying the hopes and dreams of all humankind, driven by the universal human spirit of exploration," the company said in a statement.

"Other flight teams have also expressed strong interest, and we expect more to follow. Additional information will be released about the flight teams, contingent upon their approval and confirmation of the health and fitness test results."

All I can say is that if I had the kind of success Elon Musk has had, he's doing exactly what I would want to do. Actually Ido have one more thing to say, and that is this: in his fiction, Robert Heinlein predicted that private enterprise would get us to the moon. Even though he lived to see NASA do it, his concept was always along the lines a maverick, enterprising business person putting together the project on his own and getting it done. Elon Musk is like a character straight out of 'The Moon Is A  Harsh Mistress'. That's somewhat exciting. Maybe there will be more things to grok in the near future.

The Price Of An Education

Un-Open University

My significant other has been doing courses with the Open University. She's been using them to skill up in areas of her work to do with research and psychology, and mostly because in order to do the course she really wants to do, they put up all kinds of pre-requisite courses. Some are justified, but others have been head-scratchers. Yet, over the last few years, she's managed to go through most of the maze of courses and navigate her way to the last 2 she wants to do.

Except this year, Swinburne University has raised their courses from under $1000 to $2700. In order to finish her maze of courses, she now has to stump $5400 for a pair of Open University courses. When she queried the price rises, the answer she got from Swinburne University was that inflation forced them to raise the prices.

Think about that for a moment. They had a 300% price rise. As I wrote before, I know that CPI inflation is less than reliable given that they under-report inflation, but all the same, CPI is also less than 3%. The rest of the 300% can't possibly be because of inflation. Nothing is inflating like that in 12months. The clear answer is that Swinburne University has decided to gouge the Open University students. Yet, they are not alone. The participant institutions are all asking for $2000-$3000 per course.

It's enough to make you wonder if these institutions know what they're asking of their students. Let's say you need to do 30 courses for a diploma. That's $60,000-$90,000 they want from the Open University students. A rough back-of-the-envelope calculation says you need to earn a lifetime $600,000-$900,000 gross to pay off the 10% education cost of the career. That 10% seems a bit high. HECS is more like 3%; at least that's the way the ATO went out taking out my HECS repayments in After-Tax dollars (believe me, it hurt that it was After-Tax).

So if we adjust backwards from HECS, you need to earn a lifetime of 2million-3million to justify doing that course. At 150k p.a., that's 12-20years, and that's assuming you can go do a course and land a 150k job (we wish!) and work it for the rest of your career. The average salary in Australia is more like 65k which means you could work a full lifetime and never earn the value of your education based on how the ATO and Federal Government thinks you should earn the value of your education. When you factor in that most participants in Open University are mature age students, it means they've got less time to make the education pay for itself.

In the context where wages are also decidedly not rising, it seems appropriate to say that education at that price is definitely not going to pay itself off. You really can't be telling your kids to go to Tertiary education any more given how much it burdens them with student debt. That's how crazy this has become. Even if you take the position that education must send a price signal to the market, if it prices itself out of being meaningful, then it's just not worth undertaking.

I kind of expect that their revenues from the Open University programme are going to collapse.

View From The Couch - 22/Feb/2017

A Quick Note About Inflation

It's been this blog's contention that inflation has been under-reported for a very long time. It happened because the incentives were lined up in such a way that under-reporting helped successive governments point at figures that made it look like inflation was tamed, as well as businesses that wanted to borrow money more cheaply from banks, and so it suited them that inflation was under-reported and thus resulted in lower interest rates.

The net result is that we have today whereby Australian households have record debt, and housing affordability is at a minimum, while interest rates are also at a minimum which encourages maximum borrowing, and therefore in a circular manner contributes to the record debt. This is against the context where the ABS cost of living index has come in much higher than the Consumer Price Index for well over a decade.

A week ago Pleiades sent me an AFR article, and lo and behold, somebody is saying exactly that:

Martin Conlon reckons the so-called "great moderation" of the past two decades is, not to mince words, "bollocks". And investors need to wake up to that fact if they hope to get anything out of the local sharemarket in the coming years. 

At this past week's Portfolio Construction forum in Sydney the head of Aussie equities at Schroders Investment Management told a packed auditorium that "we have been sold down the river" by central bankers who "have been asleep at the wheel for 25 years". 

This may all sound like old hat to you, but it's worth taking that little trip down memory lane to appreciate where Conlon is coming from and why it still matters now. 

It was once common currency that central bank mathemagicians had tamed the business cycle. The developed world was growing at a solid and stable economic growth, and those damaging inflationary outbreaks were a thing of the past.

The GFC came along and exploded that conceit. Rather than fostering stability, low rates had fed a massive run-up in debt that, via the US housing market and helped along by dodgy lending and misincentives, almost crashed the world's financial system.

But instead taking a new tack, central bankers doubled down via quantitative easing and pushing rates to zero and below. 

Conlon's biggest bugbear is how this has happened thanks to the narrow definition of inflation as the movement in a basket of consumer prices. CPI growth has indeed been low and contained for many, many years.

But he finds it "anomalous to say the least" (read: bollocks) that we can say that building material prices going up is inflation, and is therefore bad, but you put them all together in a house, and when the price of that goes up, it's good.

The very details of how the central banks calculate inflation is hidden from view, but occasionally we're given a glimpse and we find that it includes things like extreme luxury vehicles. Given that they are by nature stable in pricing, and outweigh the price of household staples of any description, it's easy to see how the Central bankers have found it relatively easy to suppress CPI figures for quite some time. Add in the fact that if you choose to look at things that are least vulnerable to inflation for your index, when there's actually any inflation (or deflation) going on, it's even harder to find any movement to your index.

 So, here we are today and the consequences are what we have - high private sector debt, low growth, historically low interest rates, terrible housing affordability, and a Reserve Bank that is suddenly a little concerned about all this. 

"We have been seeking to balance the risks from having inflation low for a longer period against the risks from attempting to increase inflation more quickly, which would partly occur through encouraging more borrowing," said Lowe, who has kept rates steady since last easing in August. 

While there was a danger low inflation could lead to a self-fulfilling decline in inflation expectations, he did not see "a particularly high risk" of this in Australia. 

However, he did see risks in encouraging more borrowing by households where debt to income ratios were already at record highs. 

"At some point in the future, households having decided that they had borrowed too much, might cut back consumption sharply, hurting the overall economy and employment," he warned.

"It is difficult to quantify this risk, but it is one that is difficult to ignore."
This is a major reason financial markets have almost priced out the chance of another cut in the current 1.5 percent cash rate following two easings last year. 

Lowe noted that high levels of debt combined with subdued wages growth were already making households wary of spending freely, choosing to save more instead.
While some pick up in wages growth was expected, the RBA's liaison with business suggested the upturn was not imminent, he said.

Knowing what we know, that all reads really funnily. The RBA is worried that the illusion of low inflation they've created might lead to a deflation through perception - but the governor doesn't see a high risk. If the CPI is masking inflation, then yes, the physical economy might just prove to be entirely different to the fiction created by the CPI. Given that the CPI is what it is - an elaborate fiction - it's hard to see how there would be a real deflation breaking out anytime soon. 

The governor then follows with the idea that households borrowed too much money and can't spend, so if the interest rates go up, it "would cut back consumption sharply hurting the overall economy". It's contradictory that people have money but won't spend because they have an expectation of deflation, but at the same time have no money because they're stretched to their limits with debt. Furthermore, if inflation has been under-reported for a while, there's a good case to have a bias towards tightening, but the governor seems to be making a case as to keep things as they are.

Should we be worried?

If doing it wrong for 20-odd years has become the new normal, resulting in very distorted outcomes, do we begin to worry or do we consign such worries to outliers and pay no heed? If you set sail from Sydney for LA with a broken compass and three weeks later you find yourself sailing in the antarctic ocean amongst the icebergs and penguins, do you worry? I don't know. I would, but the RBA seems to think not. It's steady as she goes and onward into the storm.
I don't know how this is going to get unwound. I imagine a black swan is going to come and shit all over the status quo. The outlook is rather bleak that way.

Larry Coryell (1943-2017)

Fusion Guitarist Extraordinaire

Goodness this is hard to write, especially since it's a matter of weeks since Alphonse Mouzon passed away in late 2016. It feels like a kick to the guts, every bit as David Bowie and Carrie Fisher.

Back in the day when I was young, dumb and still buying 'Guitar Player' in magazine form, I'd come across a lot of guitar players whom I had no way of learning about if I simply went hunting up records at record stores. Larry Coryell was an interviewee that grabbed my attention - I can't even remember why - but likely because he was very open about discussing his technique and at that point in my development, what he had to say was exactly what I needed to read.

I know the big name in fusion guitar is John McLaughlin, Al Di Meola and Jeff Beck, but when I cast my mind to who's playing sits in my wheelhouse, it has to be Larry Coryell. His body of work was always intelligent, daring, as well as sounding so natural. You never get bored of his playing.




Fusion gets a bad rap. Compared to the amount of ink spilled for say, heavy metal virtuosos or the endless line of punk/grunge/emo players who don't want to talk about technique in a constructive way (they like to talk about it in deconstructive ways, shall we say) fusion players offer glimpse into the outer possibilities of electric guitar. And so Larry Coryell to me, for a very long time was an inspiration, a guitar player who led the way towards interesting ideas. Through the 1990s, I was able to acquire some of the seminal albums he worked on, and found a player who had been to places I wanted to go.



As you can see he had a fluid technique and a deep commitment to riffing chromatically with a cosmic phased tone. It's otherworldly and unique. He had a technique that was deeply human and infused with his touch. He was easy on the ear, and yet had a beautiful sense of melody that you couldn't help but be drawn to.

Here he is with John McLaughlin and Paco de Lucia:



You don't get invited to play with those guys unless your chops are astronomically prodigious.
As fusion stylists go, Coryell had a varied palette of tones and techniques, and had a wonderful way of slipping from one mode to another seamlessly. He also had a breezy freedom to his playing that allowed him to make tremendous leaps in style as well as tone.

It wasn't just his electric guitar stylings. He was also just as adept on steel string as well.
One dreams of playing like this, with so much expansiveness:



Vale Larry Coryell. A truly splendid player.

'Dirk Gently's Holistic Detective Agency'

I Read The Books And Forgot It All

Is this series anything like the books I read? It's so long ago, I can't freaking remember! I didn't recognise any of the plot points so I figured it must have been reworked extensively.

Anyway. Uh, in case you haven't read the books, spoiler alert.




What's Good About It

I don't know that I go for quirky any more, but this is certainly good quirky. The story is put together in a weird patchwork and even includes a portion of time travel paradox, which is telegraph but nonetheless cool. It's rather circular and strange, which seems to be Netflix's thing this year with their  original content. There's something about this series that is echoed in 'Travlers', 'Stranger Things' and even 'The OA'. Perhaps Netflix is working up to a theme across their original content series.

Some of the moments in this series are really good. It's a shame it is mostly inconsistent in tone and that makes it hard to gauge of the things are happening because of the directorial touch being inclined to quirkiness or whether it is genuinely important to the plot that the quirky thing happens in an awkward manner. All the same, the unpredictability is something good, so it gets points for tht adroitness.

Fiona Dourif's Bart is a scene stealer. There is something truly unhinged about this character that is wanton, reckless and insane, but somehow really peculiar and interesting.

What's Bad About It

There's something a bit slack and skewiff about the tone of the series as well as the performances. The characters seem to simultaneously inhabit different kinds of mimeses and don't really gel together well. The performances are very spotty through out, with only Elijah Wood looking like he knows what he's doing. But you expect that of Elijah Wood after all, he is Mr. Frodo who sustained that character through 3 lo-o-ong movies.

The tone sort of jumps around from comedy to thriller to action adventure and back to farce. It comes across as very unsure of itself. In the current market place of good TV content, it's a terrible, annoying problem to sit through. There are other shows out there that know exactly how and what they want to put across to the audience. This one is a little lame that way.

What's Interesting About It

Why is this Dirk Gently? How is this Dirk Gently at all? Why did they have to hang all this on to the character name? It's so weird.

I've come to the conclusion that this series isn't inherently interesting despite what it claims to draw as source material. it's more interesting in the context everything else going on with Netflix and their original content.

What 6 Billion Would Buy

Netflix is going out on a big limb in 2017, as it has slated US6billion for original content. Judging by what we're seeing so far, Netflix has been consistently good with what it has given us, but just in the last few series, I've noticed that maybe the editorial decisions have not been as good. In the category of absolute winners for Netflix would be the three Marvel TV shows - 'Daredevil', 'Jessica Jones', 'Luke Cage' - and 'House of Cards' which has been its flagship. Other shows to impress include Season 3 of 'Black Mirror', 'The Expanse' and 'Stranger Things', while 'Traveler' was reasonably better than okay but not quite excellent. 'The OA', was probably the first of these shows where I felt the content wasn't quite up to scratch, while this one is telegraphing  that maybe there isn't as much good stuff in the pipeline.

'Designated Survivor' starring Kiefer Sutherland has been good, but in a weird way competes with 'House of Cards', and may not exactly be as good as the earlier show. There has been the trope of the special girl and the nosebleed that popped up in 'Stranger Things' followed by 'The OA', and a growing sameness about the kinds of mysteries these shows are mounting. Against all this hyperactive production, I'm not convinced 'Dirk Gently's Holistic Detective Agency' is delivering the goods. When you compare it against the slew of good shows being produced outside Netflix, 'Dirk Gently' begins to look really amateurish and a bit ordinary.

Netflix have announced there will be a second season later in 2017. I'm not exactly holding my breath.

News That's Fit To Punt - 13/Feb/2017

The Weekend From (The Hottest Part Of) Hell

Goodness, we survived that one. It was nice to be forewarned about how awful it was going to be. It's only the middle of February and apparently we've smashed heat records for February. We've smashed number of days over 35 degrees in a summer, and we've simply not seen heatwave like this. The news tonight is that there will be more on the way.

It was good then to see our idiot Treasurer Scott Morrison wave around a lump of coal telling us coal was the future when clearly the future was here and it was a furnace-like summer, just as predicted by the science over 30years ago. It's not much fun being vindicated but there you have it. And it's staggering to note the Coalition still want to carry on with their pantomime of pretending none of theses going on, and that somehow doing more of the same is going to improve things.

Naturally, the government got a pasting from Lenore Taylor in the Guardian over the weekend.
Katherine Murphy was equally pointed about the Coalition Government's antics. Her headline read:

Scott Morrison brings coal to question time: what fresh idiocy is this?

I know I keep bringing it up but Machiavelli wrote that the moment a government allows itself to be held in contempt, that's when it really loses. This is true of Princes and Democracies according to the man who had ample opportunity to witness both modes of government. Here, we have a government that finds new depths of stupidity and wonders why its polls are so devastatingly bad.

At this point in history it is clear that the Coalition Government is bankrupt of ideas. For all this talk about being the economic managers, three years into this government, it's looking like they haven't got a grip the economy, they're trying to claw back non-existent monies from the poor on welfare, and they're helpless in the face of the sheer force of nature unleashing a historic heatwave. They can't talk about it, because it exposes them to the fact that they dismantled what little policy was in place to combat it, and that they have spent the last decade fighting very hard not to do anything about the existential threat of our times. All they can do is muster up some blame game on to the ALP - of whom it must be said were also reluctant in bringing in the ETS, which in turn got them voted out.

Ten years on from the election Kevin Rudd won trying to combat climate change, went have a government that has steadfastly refused to do anything worth doing.

Still, it's quite the sight to see these Coalition frontbenchers hyukking it up with lump of coal between them as if they've made a point. Most of Australia with an understanding of climate science were looking at that as the moment the Coalition refused to pull their collective ostrich heads out of the air conditioned holes in the ground. I don't know how to say this politely, but what they are doing is criminal negligence.

Of course over the weekend, a township went up in smoke and fire fighters were out there in conditions labeled 'catastrophic' as they fought blazes across the state. The contrast couldn't have been starker, the irony deeper. Scott Morrison and the coalition are going to regret that stunt.

UPDATE: Nick Xenophon blocked the 4bn bill to cut welfare to fund the NDIS. he labelled it "dumb policy and dumb politics". As you do with such policy and politics.

Liars' Scissors

The revenue is shrinking, mostly thanks to tanked commodity prices and the sluggish demand for iron ore and coal from China. The Australian establishment is a bit in denial about China with its clockwork 6-7% annual GDP growth. The closest thing to the string of 6-7% figures China has been posting in the last decade - in the face of the GFC and post-GFC era no less - was the run of steady 7% returns Bernie Madoff's Ponzi fund was allegedly delivering for its members. Think about that for a moment.

Anyway, the point is, the deficit is growing, so the natural thing the Coalition Government wants to do is make cuts. The plan this week is to cut welfare and give it to the NDIS. Yes, the NDIS was a great idea that was put in to place by Julia Gillard's ALP government, and everybody knew the time it was unfunded, but it was so important it had to be done. Now that the Coalition arena government, they've decided that the way they'll fund it is by cutting welfare. The kinds of money they're talking about is $3billion, with the full funding for the NDIS clocking in at $21billion with about half of that coming from the Commonwealth, the rest coming from other disability sector. It all feels like robbing Peter and Paul to pay Mary with the shaky hand.

Here's the thing. This government is letting $50billion slip through their fingers just this year while they do this little ugly shuffle. Yes, and that's just the Gas multinationals walking away without paying tax. I kid you not, this is the level of incompetence this government has sunk to in order not to have the big end of town pay its fair share. But it wants to claw back imaginary debts from welfare recipients, cut their welfare and use that money to fund the NDIS. It's so low, you can't but help call it what it is: depraved.

It's a bit like the Titanic is going down not because it hit the iceberg but because the captain opened the Kingston valve, letting the water in. Then they're rushing to shuffle beds in the sick bay. But they want you to believe they're the better managers of the ship's affairs.

A Repressed Bastard

People really thought Malcolm Turnbull was going to be something different. With the departure of Cory Bernardi and the string of bad news his government has had over the summer, this is just not going to happen. In fact, I came across this little bit with this worthy quote:

(It is true that Mr Turnbull is very rich. Just last year he gave the Liberal Party $1.75 million; an unthinkably large sum, probably even nearly enough to buy a two-bedroom flat in Sydney. And it is equally true that Bill Shorten hangs out with billionaires. It's just that neither man much likes to be reminded of either truth.) 

"This is what people miss about Malcolm," one colleague observed happily after the spray. 

"They think he's a repressed social moderate. Actually, he's a repressed bastard."

It's nice to see people spell it out. You don't get to be Malcolm-Turnbull-rich being a social moderate. You get there by being a bastard. He got to be Prime Minster by being a bastard. Let's not kid ourselves that he's anything but the 100%, genuine, full-hide, shameless, bastard we expect the 1%-ers to be.

Listen up folks, he is the class enemy no. 1.

View From The Couch - 10/Feb/2017

When Satire Lands A Punch

Donald Trump has rightfully earned himself a lot of satirical blows. What's funny about President Trump is that he's no different to the Donald Trump on 'the Apprentice', which is to say he's just carried his reality TV persona into the White House, and leaks suggest he is fuming that people are able tome fun of him so mercilessly. His hapless advisor Kellyanne Conway has been a faux-pas machine blessing the world with such notions as 'alternative facts' and a totally imaginary 'Bowling Green Massacre'. Then there is his Press Secretary Sean Spicer who just can't land on the truth.

The novelty news of he week has been just how good Melissa McCarthy's take down of Spicer has been (and it really was spot on as well as hilarious) and Spicer meekly offered that perhaps the Saturday night Live crew were being mean. This is was sort of funny coming form the administration that went out of its way to be mean to women and muslims in the first ten days, so it was a bit rich.

All of this got me thinking a bit because I've been watching 'Designated Survivor' on Netflix and truth be told, they who plays the Press Secretary in that show looks ten times more competent than Sean Spicer. Actually, Kiefer Sutherland's accidental President looks to be ten times more competent than the Donald, and both men are having problems filling positions in their administration, even if it is for totally different reasons (I won't spoil it).

What's interesting about the real life chaos in the White House is that after watching 'West Wing', 'House of Cards' and 'Designated Survivor', most people would have a better idea of how to go about presenting for an administration. Clearly that's not the case with these people, Sean Spicer and Kellyanne Conway. To the extent that politics is a kind of theatre, then what we are seeing is a long-running Broadway show in the Obama Administration giving way to an underground variety theatre troupe, sort of trying things out as they go along. As State Actors go, they're terrible talent. Even with Donald Trump's experience with all the camera hogging he's done in all his life, he's actually not really anywhere near a good a talent as Alec Baldwin who is crucifying him. Melissa McCarthy is far more talented than Sean Spicer, and as for Conway, well...

A picture tells a thousand words. She shot her own credibility and all she has as comparison is Beavis.

The last time the SNL crew got it so well was when Tina Fey did her Sarah Palin back in 2008, and again, what was at play was just what an amateur talent Palin was, next to a consummate professional camera talent as Fey. This doesn't mean politicians ought to go to acting school or that - god forbid - more actors should be drafted into politics. It's just that the capacity for well-executed satire to demolish the pretensions of a politician resides in the gap of camera talent. It also explains the fact that the reason Reagan can be revered by so many Republicans is that at the end of the day, Reagan too was a great camera talent despite his track record as a B-Movie actor. The phrase 'B-Movie Actor' probably disparaged and undersold his genuine strengths as camera talent.

It's a peculiar problem of American Democracy because Americans value public speaking so much and so many of their good orators put across dodgy arguments with great presence and presentation. The very nature of charismatic leadership lends it self to image-over-substance and so it is understandable that a reality TV star beats out a field of bad camera talent, as Donald Trump did. It also means the whole system is susceptible to a talent like Donald Trump to short circuit proper discourse and shoehorn himself in to the White House - which is the big irony in all of this stuff. Therefore, as hard as it is to believe, Trump's still okay talent, but he needs to straighten out his act a lot if he wants be taken seriously.

If one casts one's mind back to recent Australian politics, we can see a parallel in the rise of Kevin Rudd, who basically built a demographic support out of a TV audience which over-rode the political considerations. The fact that he was reasonably equipped to tackle the job of leader and then Prime Minister might have been a tangential aspect to his leadership. What really fuelled his rise to theta was in fact his stint as pundit on a morning breakfast show. Similarly, the rise of WTE Joe Hockey to Worst Treasure EVER was facilitated by the very same show appearing opposite Rudd.

That being said, the leader Trump resembles most in the Australian landscape is of course Tony Abbott. Both men stand firm on the side of denying climate change is real, and both men entered their office as the most unpopular incoming leader. It took two years before the Liberal Party felt compelled to remove their leader in TonyAbbott, so we'll see just how long the US Republicans can tolerate the irrational, temperamental, unstable leadership style of Donald Trump.

All this is to say, it's really interesting to find out what an Administration is made of when a satirical punch lands as hard as Melissa McCarthy's turn as Sean Spicer.

News That's Fit To Punt - 08/Feb/2017

That John Alexander?

Long time readers know of my immensely low pinion of John Alexander as tennis commentator. He was simply terrible, in as much as he offered no technical insight and often ascribe bad motives to the characters of the players, much like an armchair psychology buff. A typical line of John Alexander commentary would be that a player X missed a shot because he has a bad character. It drove me away from watching tennis on channel 7.

Anyway, it has been the big surprise of his time in politics that he backs building a high speed rail network in this country, and all for the right reasons. He is still continuing his push, and even getting called a crusader for it.

Crusading Turnbull government MP John Alexander, who has supported a debate about negative gearing, said vision and innovation needed to replace the "debilitating political argument" about housing. 

A bipartisan committee chaired by Mr Alexander backed his vision for high-speed rail, recommending the government seek proposals for a link between the two major cities, and evaluate ways to raise private capital through value capture. 

Under that model, previously trumpeted by Prime Minister Malcolm Turnbull, major infrastructure is privately funded by the increase in land values that accompanies the creation of new or larger cities made possible by that infrastructure.

(edit) 

"It would appear there's a perfect storm of opportunity to liberate [regional] cities through high-speed rail," Mr Alexander previously told Fairfax Media. "You will push up prices enormously around Goulburn; people will be delighted." 

But he warned on Tuesday the report's ambitious goals were only achievable if all three levels of government co-operated and were "willing to forgo individual revenues to ultimately maximise total revenues". 

Mr Turnbull and the new assistant minister to the treasurer, Michael Sukkar, have promised the government will say more about housing affordability this year, as Labor continues to push for negative gearing reform.

It's kind of crazy that the only person in government making any bloody sense is John Alexander.

About That Housing Situation...

Turns out the record private sector debt is now sitting at about a trillion dollars, and the cracks are beginning to show. Don't be fooled by the price rises in Sydney and Melbourne, there's substantial pressure on the housing bubble right now.

Homeowners, consumers and property investors around Australia are making more calls to financial helplines as three warning signs back up the spike in demand: mortgage arrears are creeping up, lenders' bad debt provisions have increased and personal insolvencies are near an all-time high.

"It's steadily out of control -- I don't know of too many financial counselling services where demand doesn't exceed supply," said Fiona Guthrie, chief executive officer of Financial Counselling Australia, who says the biggest increase in calls is from people suffering mortgage stress. "There are more people who have got mortgages that they can't afford to pay."

(edit) 

"There's so much household debt that a couple of rate hikes here would completely knock the wind out of the housing market, and a lot of people would be impacted by it," said Gareth Aird, economist at Commonwealth Bank.That's partly why he doesn't think the RBA will lift rates until 2018 at the earliest. 

While most borrowers in Sydney have plenty of equity in their homes as prices keep rising, that's not the case elsewhere. In the mining state of Western Australia, which is struggling to cope with the end of an investment boom, more than 10 per cent of mortgage holders have little or no equity buffer, according to a Roy Morgan report last week. In South Australia and Queensland, 8 per cent and 7.2 per cent of borrowers respectively are in negative equity. 

That may not matter if you're a homeowner with a secure job and comfortably servicing your mortgage. But Australia's labour market is far from solid, with the RBA citing it as one of the economy's biggest uncertainties. The jobless rate rose for the second straight month in December to 5.8 per cent, while underemployment -- the number of workers wanting more hours -- is near an all-time high. At the same time, wages growth is the lowest on record.

It's notably unaffordable, everybody's been so eager to get into it, there are signs of housing being over-bought everywhere. It's okay in the main but the fracture lines are running elsewhere. Hmmm...

The truth is that the RBA sort of glommed into this problem by keeping rates low for such a long time, and because nobody's ever had the negative signal for the market, there's a profound belief that it only goes in one direction, up. All the while they invited the other parts of the economy needed the low interest rates, but also, by under-measuring inflation they've given themselves even more reasons to keep the rates low. If the average household debt is 187% of income, you know it's not sustainable - but all the while they've not really addressed the irrational exuberance.  

Politics being what is, its practitioners like to emphasise different parts of problems instead of talking about the private sector debt for what it is, and despite the more-than-abundant evidence that there's a  property bubble in progress, the politicians have sought to characterise all this as a 'housing affordability' problem. Implicit in this shifting of focus is the idea that the problem isn't with the property bubble, it's with the people who can't afford to get in on the same RBA-funded gravy train investment. Even more pernicious in that shifty little manoeuvre is the idea that they want to keep the asset price gains, and to that end - all the politicians are property owners and investors, as well as the big wigs at the RBA - these people will do and say anything to talk down the bubble. A simple cui bono examination explains how the interest rates stay low in a bid to keep the asset prices inflated.

As somebody who dabbles in the equities market, I find the utter lack of caution for the bubble to be quite absurd. Markets by their very nature are meant to go upend down. The fact that the housing market in Australia hasn't fallen to historic norms in a very long time, can only mean there's long way to fall when the perfect storm will hit.

Housing never falls, right? We all love housing. In case you're wondering how this all shows up in our political rhetoric, have a look at this next one:

"I've Got Mine, You Can't Have Yours" Says Malcolm Turnbull

This is pretty ugly.

Prime Minister Malcolm Turnbull has unleashed a blistering attack on Opposition Leader Bill Shorten, slamming him as a "simpering sycophant" and a "parasite" who yearns for his own harbourside mansion. 

The energetic end to Question Time came after Mr Shorten launched his own barbs at the Prime Minister, accusing him of attacking families, attacking standards of living, of being tough on pensioners and soft on banks. 

"The Prime Minister is seriously the most out-of-touch personality to ever hold this great office of Prime Minister," Mr Shorten said. 

Mr Turnbull's response, which led to the rare display of Coalition members thumping their desks, was brutal and an effort to counter attacks on his personal wealth just days after he revealed his $1.7 million donation to the Liberal Party. 

Mr Turnbull said Mr Shorten was a "would-be tribune of the people" and accused him of rising to prominence by networking with prominent Melbourne businessmen like Richard Pratt. 

"There was never a union leader in Melbourne that tucked his knees under more billionaire's tables than the Leader of the Opposition," he said. 

"He lapped it up, yes, he lapped it up." 

The Prime Minister accused Mr Shorten of "knocking back Dick Pratt's Cristal" and looking forward to living at the personal expense of taxpayers. 

"This sycophant, blowing hard in the House of Representatives, sucking hard in the living rooms of Melbourne, what a hypocrite," Mr Turnbull said.
"They call themselves the Labor Party; well Mr Speaker, manual labour is a Mexican band as far as they are concerned. Most of them have never done a day's work in their lives."

If you are an egalitarian liberal as Malcolm Turnbull claims he is, how can he begrudge his fellow citizen for wanting a Harbourside Mansion when he has one himself? I mean, what's wrong with that aspiration if it's good enough for himself? 

How can Bill Shorten be a parasite just because he has had career benefactors, when Malcolm Turnbull himself had a career benefactor in Kerry Packer? People need a break here and there. What is so morally objectionable about that reality? 

It's really weird how the conservatives have a thing about harbourside mansions. Barnaby Joyce recently said people should move out of Sydney because not everybody can afford a harbour views. If you notice, its only the coalition talking about harbourside mansions. It's not as if the ALP's in Parliament screaming everybody needs a harbourside mansion. 

You'd think these people never watched 'The Castle'.