Breakfast Media Wrap with Richard Farmer

Monday 13th October 2008

The pick of the morning's stories

• The Australian: Big banks ignored sub-prime troubles
• Sydney Morning Herald: No recession but jobless to rise: leaders
• Melbourne Age: Rudd's $700 billion bank guarantee

• New Zealand Herald: Govt guarantees bank deposits to stop panic withdrawals

What the papers say about politics and economics - the stories

Sydney Morning Herald:

• No recession but jobless to rise: leaders  - Jessica Irvine writes that the federal government believes Australia is likely to avoid recession, but economic growth will slow and more people will lose their jobs as the global financial crisis hits home
• Rudd moves to shore up $700b in banks  - Phillip Coorey on the government's new action plan to guarantee deposits in banks, building societies and credit unions.
• Crisis spreads faster  - Anne Davies gives the view of Treasurer Wayne Swan visiting Washington
• Subsidy for bulbs 'wasted'  - Brian Robins reports the view of the NSW State Opposition that a flawed scheme to cut greenhouse gas abatements by giving away lightbulbs has squandered an estimated $60 million of NSW taxpayers' money
• Uncertainty still plagues markets  - Colin Kruger finds the futures market is pointing to a gain of 27 points this morning on the ASX, but it's still very hard to predict

Melbourne Age:

• Rudd's $700 billion bank guarantee  - Michelle Grattan and Vanessa O'Shaughnessy write of the three-pronged package unveiled after a two-day weekend crisis meeting of cabinet's strategic priorities and budget committee, which included Treasurer Wayne Swan on the phone giving updates from a series of international meetings in Washington.
• Banks unite in praise of Canberra's plan  - Vanessa O'Shaughnessy and Jesse Hogan say banks have embraced Kevin Rudd's blanket guarantee on deposits and praised initiatives to help them compete for funding in international markets.

The Australian:

• Banks anchored against storm  - David Uren and Geoff Elliott on moves by the Rudd Government to secure the banks against the global tide of panic by guaranteeing all deposits as key nations agreed on the need for co-ordinated action to tackle the world financial crisis but stopped short of declaring what that action should be.
• Rudd to use surplus to battle slump  - writes Lenore Taylor
• Big banks ignored sub-prime troubles  - FOI Editor Sean Parnell finds that Reserve Bank documents, obtained by The Australian using Freedom of Information laws, show a change in lending standards was driven by competition and the housing boom as the big  banks not only relaxed their lending standards in recent years - ultimately luring many customers into financial distress - but held off tightening their terms of credit to build a better market position.
• Dollar dive sucks up savings from oil price fall  -  Julie-Anne Davies finds that the Australian dollar, which plummeted to a five-year low last week, has wiped out any petrol price cut to consumers from the fall below $US80 a barrel in crude oil prices
• Retirees warned of 'enormous stress' to come  - Christian Kerr gives the forecast of welfare organisations
• Small business backed in IR brawl  - Ewin Hannan finds the Rudd Government has backed small business over unions by moving to kill off a compulsory redundancy proposal that it warned could cost employers and taxpayers up to $100 million a year.
• Curriculum to scale back Aussie history  - Justine Ferrari writes that the emphasis on teaching Australian history in recent years will be scaled down in the national curriculum, as its initial draft, to be released today, outlines a course that places the national story in the context of broader global events.
• Mental care plan blows out by $1.4bn  - Adam Creswell says demand for a federal mental health program has caused its cost to rocket to more than three times the original budget amount of $143.1 million

Sydney Daily Telegraph:

• I'll shut pubs to stop bashings, top cop vows  - Garry Linnell and Vikki Campion deliver the view of Police Commissioner Andrew Scipione
• Kevin Rudd plan to brace Aussie banks  - Alison Rehn and Byron Kaye write that bank deposits, no matter how large, will be guaranteed by the Government to shield Australians from the full brunt of the global financial crisis.
• Shoppers cut back on spending  - Michelle Cazzulino says a survey of almost 1200 people, conducted just two weeks ago, found that consumers were increasingly feeling the impact of financial pressure and had changed their lifestyle accordingly
• NSW Lotteries sale plan a $1bn jackpot  - Joe Hildebrand reveals the State Government has secretly prepared an emergency plan to sell NSW Lotteries if it needs to, reaping a one-off cash injection of about $1 billion that it desperately needs

Brisbane Courier Mail:

• Meetings fail to find solution to financial crisis  - Liam Walsh and agencies report investors will continue to face more volatile sharemarkets after international meetings failed to agree on measures to halt the global financial crisis.
• Stubborn Howard cost us votes - Malcolm Turnbull says climate change stance cost votes  - Clinton Porteous interviews Opposition Leader Malcolm Turnbull

Melbourne Herald Sun:

• Rudd Government issues trillion-dollar guarantee on deposits  - Gerard McManus costs the promises
• Migrant growth unease  - John Masanauskas reports on a Swinburne University study
• Prospective bosses left out the security loop  - Geoff Wilkinson says a police decision to release security checks only to applicants, rather than prospective employers, has been described as political correctness gone mad.

Adelaide Advertiser:

• Hand over your guns  - Miles Kemp, Doug Robertson, Michael McGuire write that while gun owners will be asked to hand in illegal, unwanted and unregistered weapons as part of an amnesty proposed in the wake of last week's Gouger St shooting, a Government document obtained by The Advertiser shows police have failed to make a significant dent on gun crime, despite taking thousands of guns off the streets in the past five years.

What the papers say about politics and economics - the opinions

Sydney Morning Herald:

• Restoring confidence is the clear necessity  - says Phillip Coorey
• Beneath the financial crisis waits a nastier beast  - Waleed Aly reflects that as the foundations of our lives erode, we search for an anchor, and social politics very often provides it. When all else fails, we may still rally around old certainties: nation, culture, religion, race. We crave strong authority figures that can imbue us with certainty and articulate for us a sense of self. That often involves fabricating a scapegoat who becomes a mortal enemy.

Melbourne Age:

• Australia faces softer landing  - Underlying commodity strength will play its part in pulling the country through is the view of Kenneth Davidson
• PM's hand forced as cold wind began to blow  -  Michelle Grattan sees the Government's dramatic measures are the inevitable result of the global nature of the all-engulfing financial crisis.
• G-7's plan offers hope  - Malcolm Maiden says the Rudd Government's three-year bank deposit guarantee is extreme, but necessary, and other Western countries that have not yet done the same thing are likely to follow suit as the battle to contain the global financial crisis reaches what must be its pivotal moment.
• Avoiding potential cash chaos testimony to PM's smarts  - Peter Martin writes how if foreign lenders are too frightened to finance Australian mortgages (which are among the safest investment propositions in the world), the Australian Treasury, with much better access to information, can do it and make money along the way as well.

The Australian:

• Finance ministers have to act fast  - Michael Stutchbury argues that their word may be their bond, but the world's top finance ministers and central bankers must quickly deliver on their plan to jump-start the seized-up international banking system with the mother of all government promises.
• We will all have to learn to save  - says George Megalogenis
• New class warfare  - Glenn Milne plugs a Liberal mate who sees the return of Labor's old divide of rich private against poor state education systems.

Brisbane Courier Mail:

• Protecting banks the best defence  - is the opinion of Dennis Atkins

Melbourne Herald Sun:

• World focuses on economy, not climate  - Jill Singer believes that with the economy sliding, the Rudd Government seems unlikely to back ambitious (effective) greenhouse emission targets over modest ones.

Most read stories on the internet news sites

• Sydney Morning Herald: Nightmare that ended in a quiet inlet
• Melbourne Age: Turmoil grips stumbling McCain campaign
• The Australian: Morgan Stanley, Mitsubishi in bailout talks
• Sydney Daily Telegraph : I'll shut pubs to stop bashings, top cop vows
• Melbourne Herald Sun: Twin consolation for dumped Hugh Hefner
• Brisbane Courier Mail: Rudd admits: We're in trouble - Government focused on creating growth, says PM
• Adelaide Advertiser : Jess Leo's verdict on US Kath and Kim
• The West Australian: Body raises more questions than answers for Britt’s family

From the international press

• The Times, London : Brown sells British bank bailout plan to Eurozone countries
• Financial Times of London: UK to inject £37bn into banks
• New Zealand Herald: Govt guarantees bank deposits to stop panic withdrawals
• Toronto Globe and Mail: Tsvangirai threatens to pull out of power-sharing deal

•   Los Angeles Times : Obama rides a wave of bad economic news