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'. 

 

Quick Shots - 07/Feb/2017

More On the Liberal Party Split Thing

As it turns out, there's more about Cory Bernardi that's worth knowing. We could have guessed it, but it bears pointing out:

Bernardi first sensed a problem in 2009, when during a heated and divisive partyroom debate on whether the Coalition should support Kevin Rudd's emissions trading scheme, one of his colleagues, the now deceased West Australian MP Don Randall, rose to his feet and said: "I don't give a stuff about the national interest, I want to get re-elected and this needs to go away." 

Bernardi went back to his Senate office and wrote down the quote. He never forgot it. It was the beginning of the end.

I don't know how else to put it but that right there is the mocking gun that these Liberal Party politicians are nothing but hacks sucking on the pubic teat. As if Bronwyn Bishop and Sussan Ley weren't enough proof, here in the segment above is the distilled essence of how these bastards think. 

The late WA MP Don Randall said he doesn't give a stuff about the national interest, he just wants to get re-elected. It begs the question why the hell we need to re-elect such a person; as it turned out, he died shortly before the recent election and truth be told, judging from the quote, it was probably a good thing too, because he certainly had no intention of serving the national interest. It's easily arguable that the most he served the national interest was when he died, thus depriving himself of more opportunities to suck at the public teat. 

That Cory Bernardi thought the quip was worth writing down as quote to which he is going to make his political credo, tells us well enough that he too doesn't think much about the national interest - he too is all about getting re-elected. It's strange that he thinks he has a better chance not as the Liberal Party's No. 2 on the SouthAustralian Senate ticket but as an independent. Maybe there's more money in being a leader of a party of one. It's hard to figure how the dollars an cents work out, but it would be remiss of the media if it didn't investigate this strictly pecuniary angle. After all, the man's motto amounts to, stuff the national interest, he's only in it for himself.

If I may offer a bit of gratuitous advice to Corgi BurntNazi, it is that the ALP have found "Disunity Is Death". Leaving a major party that would put you in as a senator is likely the dumbest move he's made in politics. 

Grexit Again?

If there's one thing that really puts the fear in the markets the world all over, it's the notion that Greece will default on its debts. That being said, the narrative to date has been, the Euro Zone won't let that happen, and the Greeks have to eat a lot of humiliation not to be allowed to default or leave the Euro. This has resulted in the ECB cycling through a lot of money that pays off the debt for Greece in exchange for Greece making immense cuts to its expenditure - some of which might have been reasonable but others that have resulted in terrible cuts to services. There doesn't even seem to be any coherent link between the cuts demanded by the Euro Troika and how the money is spent seeing that most of the money goes to paying off the bonds. And as the Greek economy shrinks and shrivels, it loses any chance paying off the debt.

With that in mind, here's something from Yanis Varoufakis, the ex-finance minister of Greece.

“This two-pronged preparation is the only way to prevent another excruciating retreat by the prime minister in the short term and [German Finance Minister Wolfgang] Schaeuble’s plan in the long term,” Varoufakis wrote. 

In his article, Varoufakis suggested that Schaeuble’s strategy is to lead Greeks to the point of exhaustion so they ask to leave the euro themselves. 

Noting that the “parallel payment system was already designed in 2014”, Varoufakis stresses that Tsipras had “two delusions” that led the government to the current impasse:

• a. that on the night of the referendum, the dilemma was between Schaeuble’s Grexit Plan and the 3. bailout
• b. that the obedience to the 3.bailout could be political manageable through a parallel, society-friendly program.

Both of these “working assumptions” were based only on autosuggestion, the ex finance minister stresses adding that he tried to explained this to the Prime Minister on the night of the referendum 

“In reality there was never a basis for hope that the toxic 3 bailout would be gradually rationalized, in terms that the European Commission would support Athens so that the austerity and anti-social IMF measures would relax, the IMF would force Berlin to accept debt restructuring and lower primary surpluses, the ECB would include Greece in the bond purchase program (QE),” Varoufakis wrote 

He accused leading European negotiators of lying. 

“That Moscovici [EU Monetary Affairs Commissioner], Coerer [ECB] and Sapen [French finance minister] might have given such promises was not an excuse.
Since May 2015 we were fully aware that these gentlemen know how to lie and fail to deliver on their promises when they do not lie.”

Greece remains the thin end of the wedge. If Greece goes, then, the dominoes are in play for the rest of the PIIGS, and will lead to the destruction of the Euro. While it stays in the Euro Zone, the world can live with the fiction that everything is okay, except there is the glaring issue of Brexit, whereby cozy assumptions about the health of the Euro Zone can't be ignored. If the UK can leave, then it offers a practical blueprint for Greece to leave.

The weird thing is that the UK need not ought to have voted to leave, while Greece needs to leave if it wants any semblance of control over its finances. The horror show of bluff and intimidation made by the Troika to keep Greece in the fold and to keep taking the austerity medicine in a sense informed the UK public as to the failings of not having control. Even more ironic may be the case that the UK already had kept its pound sterling as opposed to adopting the Euro, so in a sense it was the state with the least problems of losing control to the Euro Zone. thus if the UK still seems it fit to leave the Euro Zone, then it follows that perhaps Greece needs to reconsider its desire to stay.

If all things are equal, the next time the Grexit show hits the road and world markets panic over the possibility of Greece leaving the Euro Zone, it might be better to put your money on the likelihood that it does leave, and that it's a good thing.

News That's Fit To Punt - 06/feb/2017

Australian Kakistocrats

A long time ago, Don Chipp defected from the Liberals to form the Australian Democrats, a party that was eventually brought to ruin by its own careerist apparatchik Natasha Stott-Despoja. Anyway, we are finding out today that careerist, right-wing-nutter, Senator Cory Bernardi is splitting from the Liberal Party to form his own right wing party.

Cory Bernardi is set to upend centre-right politics in Australia and announce on Tuesday that he is resigning from the Liberal Party to head his own conservative movement in a stunning move that will rock the Turnbull government as Parliament returns for the new political year. 

Fairfax Media has learnt that in recent days Senator Bernardi informed his staff of his decision to defect from the party he has represented in the Senate for a decade. He will join the crossbench as an independent conservative senator for South Australia, fearing that populist parties will continue to rise if right-wing voters aren't given a viable alternative.

That's all very interesting as a rationale. He's indicating that there is a crowd of deplorable people out there that need a Fuhrer, so to speak, and he's nominating himself. Its interesting how fascists always think alike that way.

It would be interesting to see if Fatuous George goes with him from the Queensland LNP. It would be a party of pretty awful kinds of reactionary fascists wanting to attract the worst elements of society. I think the term to describe that is 'Kakistocracy'. So it would be appropriate to call themselves the Australian Kakistocrats.

What Aussies Want (But Won't Get)

Pleiades alerted me to this one today. This one is an interesting bit of polling.

In a survey covering dozens of hot-button issues put to a representative sample of Australian voters, a desire to rely less on imports and to manufacture more at home stood out as the number one thing most people agreed on.

In the aftermath of Mr Trump's US election victory, where he strongly advocated reviving that nation's manufacturing industry, nearly 83 per cent of surveyed Australian said they strongly agreed (42 per cent) or agreed (40.5 per cent) with the notion we are too reliant on foreign imports. Only 6 per cent disagreed.

Support for an expansion of Australia's manufacturing sector was robust regardless of age, gender, income or locality.

This striking finding comes from the Political Persona Project, one of the most comprehensive attempts ever made to profile different types of Australians based on their lifestyles, social values and politics. Conducted by Fairfax Media in collaboration with the Australian National University and Netherlands-based political research enterprise Kieskompas, the project revealed seven types of Australians, representative of the seven most dominant patterns of thinking in Australian society.

I hate to break it to people, but this is not what the future holds. Manufacturing jobs are disappearing, even in China. Even Foxconn, the famed manufacturer that produces stuff for Apple sacked their workers and replaced them with robots. Even over in America, Elon Musk's Gigafactory opened and it is entirely 'staffed' by robots. The assembly line jobs are not coming back to Australia or America if they're being lost even in China. In fact the trend has prompted Elon Musk to declare that Universal Basic Income will become the future because he sees no other way giving enough people, enough jobs.

Thus our politicians can posture all they like, but those manufacturing jobs aren't coming back. In fact, even the service sector jobs will also be under threat, and basically humans are going to be superfluous to the economy with the vast majority not being beneficiaries of the said economy.  In the past, the work ethic was used to compel people to work the boring jobs, but if those jobs won't exist, it's going to be harder to sustain a culture on work and valued labour. The near future will be the government flogging people for not getting work that doesn't exist... which of course is what Centrelink is doing already.

More importantly, China is trying to re-gear its economy so that domestic consumption can sustain its own manufacturing behemoth as the combination of automation and rising wages eats into the long standing competitiveness of the Chinese exports. China is going to be hard pressed to keep its manufacturing as time goes on, and then they will have the same question of just what kind of industries are meant to emerge to keep people employed. Against that context, it's hard to imagine manufacturing making a big come back in Australia. If it ever comes back, it will come back as robots.

It's amazing that neither political party is spelling it out, because not being honest with the public is what is going to give rise to the Deplorables who vote for Brexit, Trump and ... well, Abbott.

The Crazy Is Everywhere (Please Don't Go Encouraging It)

I have to say, Paulin Hanson is the herpes infection of Australian politics, a despised, socially embarrassing irritation that keeps coming back.

Senator Hanson told Sunrise on Channel 7 on Monday she was thrilled with the strong performance of One Nation and even speculated that one day she could be Prime Minister.

"To be PM, what an honour that would be. It is a privilege to be the leader of the nation. But it is a tough position and I can understand that you can't please everyone all the time," she said. 

"My job now is to represent the people of Queensland and to build the party. Maybe one day, let down the track, in 15 or 20 years time, who knows what will happen."

It's cloud-cuckoo-land, that conversation where Pauline Hanson is casting herself as a Prime Minister. I guess our society is dumbing down and the more and more of the worst elements are getting their way, but if it ever turns out that One Nation is producing a Prime Minister for this country, it is the end.