Henry arrived in Hong Kong to learn that Qantas is to be sold after all. After trying to eat toast that must have been made in Melbourne (and not even reheated), one can presumably look forward to even less of the same as the new owners squeeze increased earnings from this national icon.

“What we need is a world class safety record,” one imagines a new director saying. “Clearly the previous board was obsessive about keeping accidents below world’s best practice, a serious indulgence.”

The Oz takes up the macro issues:

It is an uncomfortable irony that the Qantas board has rejected an $11 billion debt-funded takeover offer just as the world’s central bankers united to warn of a possible crash landing ahead…

Qantas is a private company, and the deal is small beer in the context of the debt bubble that has prompted warnings from the financial market regulators. Australia’s new Reserve Bank governor, Glenn Stevens, is the latest to add his voice to the chorus of concern that heavy corporate borrowing to fund deals such as the Qantas bid may result in a more painful landing should the world economy experience a shock.

Whilst this grand wheeling and dealing might be a cause of concern for the architects of our economy, Australian consumers are showing increased confidence in the run-up to Christmas.

As Henry reported last Friday, the December Roy Morgan Consumer Confidence rating showed renewed strength despite the November rate hike, jumping 5.9 points to 117.4. The delayed, yet much more widely reported measure, the Westpac-Melbourne Institute Consumer Confidence Index reported a similar jump in confidence, rising 11.2 points to 106.2. This graph shows the extent to which the two measures follow the same trend, although the Roy Morgan rating is released five days earlier, and yet the media (except Crikey) ignore it.

Henry’s coverage of the Iraq War continues, with our man in the US, Henry’s Lexington, providing a fascinating perspective:

Bush’s delay of his National Address on Iraq to early next year risks creating a public perception that Bush is searching for “a magic bullet” – his frenetic consultations with a myriad of various study groups also suggests this…The White House has suggested the delay is to give the new Defense Secretary time to get up to speed. Lexington finds this rational faulty. Gates only resigned from the ISG to accept the Defense post – he is up to speed.

Read more at Henry Thornton.

Peter Fray

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