Sepp Blatter Deservedly Gets His Own

Some Kind Of Justice

This blog's had a very dim view of Sepp Blatter and FIFA for a long time. It goes all the way back to the 2006 World Cup. 28th June 2006 to be exact wherein a crappy ref decision allowed the Italians to slot a goal and go through to the next round of the finals. It was a tough loss on the back of a terrible referee decision, that even Sepp Blatter thought was a bad call. Somewhere along the line I found the disconnect between the obvious problems of refereeing international games, the way the World Cups are selected and staged and how the money flows amounted to one big conflict of interest with Sepp Blatter at its heart. Amazingly, this wasn't (and isn't) some kind of blinding insight, it turned out to have been fairly commonly accepted information about the modus operandi of FIFA.

The thing is, Sepp Blatter looked too comfortable with all these problems. And usually, the best way for me to understand just how bent these practices are, is to imagine the commissioner of the MLB doing the sorts of things Sepp Blatter has been accused of doing and how unseemly that would look. Would Rob Manfred or Bud Selig before him do...? What would that look like and how would the scribes respond? I'm not saying baseball has better administrative practices (although probably does), but unlike the premier Euro and Latin American sport, it is followed by a fairly critical press that parses everything. FIFA an Blatter in most part looked way out of step, even a decade ago.

I think that's about where this blog parted ways with football. There are other entries since, but really, that 2006 World Cup and its aftermath killed me. Even more than the Red Sox comeback in 2004 which also killed me - but not enough to hate baseball. That being said, bad referee calls are part of sport. The road to hell is paved not with good intentions but umpiring decisions. What really browned me off was Sepp Blatter's cavalier take on it, which amounted to how he doesn't care what the punters think in the outer outposts of football fandom. Especially places like Australia. Which is insulting because a lot of people have put tremendous amounts of effort in to make football have a place in country with 2 variant rugby codes and AFL.

The logical retort to that has been to say I will care no longer for the product you are pushing. I have many other more pleasing options for spectator sport without the aggravation of FIFA and its sport. And that's how it went down with me. Next to the Olympic Games, the most ethically vexed sports aren't the one-time steroids-addled baseball or cycling but the ethically bankrupt football.

As for Sepp and his FIFA cronies, they ended up on the FBI's radar after the dodgy World Cup choice of doing one in Russia. Worse still, there was the failed campaign by the FFA to invite the World Cup to Australia that lost to Dubai, which also cost $40million of our tax payers money in what can only be described as bribes. Yes, worse than the IOC and its 100 or so voting members, the FIFA votes comes down to 23 people, and you can't tell me they're not corruptible or collusive. Where exactly does 40-odd million dollars go in lobbying 20-odd people but inevitably into their pockets?

Clearly the US Federal Government thought FIFA was dodgy and has since pursued them mightily, which has resulted in this bit of good news: Sepp Blatter and his head flunky have been banned for 
8years from the game.

ZURICH: Sepp Blatter says he will appeal against his eight-year ban from football to the Court of Arbitration for Sport. 

Blatter also insists that he still views himself as FIFA president despite being banned for eight years by FIFA's ethics committee on Monday. 

Speaking at a news conference, Blatter said: "I fight for me and I will fight for FIFA. Suspended for eight years for what? 

"I'm sorry as president of FIFA I'm this punching ball." 

Blatter and Michel Platini were each banned for eight years by the FIFA ethics committee in a stunning blow for world soccer's most powerful leaders. 

FIFA president Blatter and his one-time protege Platini were kicked out of the sport for conflict of interest and disloyalty to FIFA in a $US2 million ($2.79 million) payment deal that is also the subject of a criminal investigation in Switzerland.
Blatter's FIFA career is ending in disgrace after more than 17 years as president and 40 years in total with the scandal-hit governing body.

Great. He's going to be a rogue President of FIFA. That's like Rob Manfred taking bribes to rig the amateur draft, then getting banned from the sport like Pete Rose but still insisting he's the commissioner. It's that weird. Clearly he didn't resign like he said he would when the FBI started investigating FIFA. Anyway, it's nice to see them get some cold hard justice served up to them.

News That's Fit To Punt - 03/Jun/2015

There Is A Housing Bubble Going On, Yo'

Sometime this year, the top end of the economics bureaucracy has started to admit there is a housing bubble going on. It's guarded as admissions go, and they limit the scope to high end properties in Sydney and Melbourne, but they're talking about it fairly openly. The funny thing is that the figures that tell us there's a property bubble going haven't changed all that much since the middle of last decade when Steve Keen was telling us there was a property bubble going on; and we know he lost that bet and had to walk to a mountain and back like some Hobbit.

What seems to have happened to change the view of the economic bureaucrats is that there isn't any consumer spending even with the drastically cut interest rates which sit at historic lows. That's right, TwIRP isn't cutting it. So far the RBA has run TwIRP for a couple of months  but it is making all the noises to say it won't go lower.

the RBA's expressed concern that at this stage of the game, cutting rates is boosting asset prices but not investment. It's investment that the country needs, not higher asset prices per se. 

As usual, much of the commentary on monetary policy, being Sydney based, is seen only through the prism of Sydney real estate. National monetary policy can't be set to suit Sydneysiders. 

The Sydney housing bubble is real enough, everyone except the Prime Minister and Treasurer seem to agree, but that can't be the RBA's prime consideration. Funny though that the bias has been dropped when business investment continues to refuse to come to the party.

So yes, it would go back to that problem where people don't seem to be spending their money. If TwIRP won't set you running out thereto buyer new fridge from Harvey Norman on one of those dealswhefre you pay nothing for 12months, then there might be something more profound going on. Steve Keen's theory is that there's simply too much household debt to take on more for the sake of consumption.

Mrs. Pleiades told me a story about the newly built suburb near where she lives, which is chock-full of McMansions that sell for amazing prices. The families move in and deck them out with modern furniture straight out of catalogues. Three years go by, and suddenly money is tight as they have to start repaying for all the stuff they bought when they moved in and deferred the payments. Money gets tight, they fight, they divorce, and pretty soon the block is up for sale again. The point is, a lot of people out there with mortgages buying into the property boom, are up to their eyeballs in debt. They're not going to be spending. The rate cuts are nice if you're a debtor, but we're really seeing the limits of this kind of economic control.

What Happened When the Bubble Popped In Tokyo? (Part 2)

Leading up to the Japanese property bubble popping in 1989 was this period in the media where everybody was talking about how unaffordable property had become. Young couples were deferring starting a family because of this, just at the same time Japan's working population peaked. In the aftermath, property prices plummeted back to historic norms - but on the authorised of the slide down were crippled banks who would then not issue any new loans. So the best educated generation in Japan basically got priced out of property, and then got given short shrift in the aftermath when employment prospects and wages both went down the drain.

All this mess put yet another dent in the population of Japan because that generation simply couldn't reproduce at the same rate as the historic norm, which today has translated into an even smaller pool of workers. What's weird is that wages haven't risen correspondingly because productivity increases ate up the jobs that might haven there in industrial times. Since then, Japan has had a "lost decade" followed by another one just like it, ran into the GFC and all the while had a zero interest rate policy going which sustained a lot of banks and zombie businesses.

Without population growth and with the increase productivity brought about computers, it's not surprising demand stagnated and with it the whole economy, and that's before we look at the mounting debt by both government and private sector. The decision to hold on to as much of the status quo through out this time essentially fixed the economy like a bug in amber. In all that mess, housing prices went back down to historic norms. In Australian terms, we're talking about 1990 prices.

Should the housing bubble burst here and all the debt payments start rolling in and there is massive pressure for the sleazed to sell, the RBA no longer has much of a way to go from TwIRP to ZIRP. Any attempt at quantitative easing will be an attempt to shore up asset prices, but that will inevitably lead to the slow growth future exactly because it will preserve the indebted, uncompetitive zombie firms. Whatever happens next, the property bubble bursting is going to have profound effects for decades to come.

Of course, Tony Abbott seems to think, no, the property bubble is a good thing because he's invested in it (he didn't exactly offer any other reason, and there likely isn't).
Amusingly, the idiot cheerleader-in-chief Daren Goodsir thinks the bubble is a problem and Tony Abbott's comment is part of the problem.

You Ain't Worth What You Used To Be

You know Australia's is in some kind of consumption decline when the GDP grows, company revenues grow and real wages stagnate and go backwards:

Wednesday's gross domestic product numbers revealed a growing and already significant gap between rising company profits and declining employee pay. 

Australia's GDP grew faster than expected over the first three months of the year, by 0.9 per cent on the previous quarter instead of the consensus estimate of 0.7 per cent, driven by greater mining output and increased inventories.

But nominal GDP, which is a better indicator of wages and personal income growth, expanded by only 0.4 per cent over the March quarter, and was up only 1.2 year-on-year. 

"We're working harder, producing more but we're earning less," Macquarie Group chief economist James McIntyre said. 

Mr McIntyre described the gap between company growth and employee wages as "the income challenge" and the key economic challenge of 2015.
Real gross domestic income, which adjusts for the terms of trade, rose 0.2 per cent quarter-on-quarter and was 0.2 per cent lower over the year. 

Australian workers earned an average of 0.5 per cent less over the three months.
Mr McIntyre said waning commodity prices and the dwindling mining boom were pushing incomes and employment growth down.
"It's a slow moving, continual drain," he said.

If major companies don't pass on their profits to workers presumably they are being passed on to investors as dividends. In any case they aren't investing that money as we know from the shrinking CapEx in this country. Beyond the mining sector, growth is feeble and meagre.

But what can I say, restaurants and events are growing. Bread and circuses, people, bread and circuses.

FIFA, Septic Sepp, Corruption And All That

Possibly the most welcome news this past month was that American agencies were investigating 6 top level FIFA officials for corruption, racketeering, and a host of other charges.  If there was an international sporting lobby that truly deserved this incursion, it was FIFA, followed closely by the IOC. FIFA has done more questionable things in therapist decade than the IOC has, such as awarding the World Cup to Russia, then Qatar over much better bids. With staggering amounts of money flying around chasing these bids, it's no surprise that somebody decided to give it a bit more scrutiny.

For a span of a couple of weeks Blatter insisted that he was not involved with any corruption and then promptly went on to wind his fifth term as president of FIFA. Naturally this drew a resounding negative reaction from around the globe, to the point that the Americas and Europe might secede from FIFA. Sepp Blatter is now resigning in the wake of this massive backlash. now it turns out the FBI are investigating Blatter as well.

Frankly, it couldn't have happened soon enough.