“I rather like this chap Rudd. His wife underpays workers, you know …”. This is what one old duffer says to a pal in his club, thanks to the fertile mind of Nicholson in The Oz.

Janet Albrechtsen says the Therese Rein affair is a “conflict of policy, not a conflict of interest”. The conflict of interest could have been managed with appropriate disclosure processes in place, but instead “her business [has] been sacrificed on the altar of the union agenda to get union-driven awards back in our workplaces”.

“Hear, hear” says Henry as he downs his first brandy for the day in front of a roaring log fire in his chosen club.

Early in May, we analysed the “New economy, new gameplan.” Wood has emphasised the international dimension of Australia’s workplace revolution. With the “China Boom” — which Australia’s “Smart State” is doing its best to stuff up –this explains why the Australian economy is looking so good. A Rudd government would cut off access to cheap imported labour and cheap unskilled Aussie labour at considerable cost.

Mr Rudd has wisely asked what happens when the China boom is over, or words to that effect. Henry’s favourite resource analyst, the author of Henry’s Raff Report, remembers Black Monday like it was yesterday:

Any scientist or other sensible person could see that the trend was completely unsustainable. That picture looked a little like the Shanghai share price indexes today where price earnings multiples are stretched averaging over 100 times. The Shenzhen Composite Index is up 211% on a year ago and the Shanghai SE Composite Index is up 163% on a year ago. Even official comments from Beijing that China is in the midst of the mother of stock exchange bubbles has not dulled the thirst to try and get fabulously wealthy without working.

But it is not just China where there is a bit of a bubble, but one is also building in the USA.” A broker today reported that 3.1% of US stocks are now short-sold. This is supposedly the highest proportion since 1931, a truly horrible year for US stocks.

The Raff Report concludes:

There will be another correction and it will be a beauty — investors leveraged to junior explorers with only moose pasture risk heavy losses. If events in China are a catalyst then perhaps we should all ponder on Chinese school holidays. The Chinese don’t have credit cards like most of us so to fund their holidays they sell shares, those that have them, to pay for overseas trips or otherwise enjoy their holiday.

The Raff does not punt the market but June looks like a dangerous period, with risk rising rapidly in early July that there will be a potentially massive correction in China. The ramifications will be widespread, but as to the extent of any collateral damage we will all have to wait and see.

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