Opes Prime – more than meets the eye:

Jim Hart writes: Re. “Opes fiasco must end the ASX regulatory monopoly” (yesterday, item 1). Stephen Mayne makes some good points about margin lending but his analogy with housing loans doesn’t hold up very well. Domestic housing may be overpriced at times but banks know that even “the worst or smallest houses in the street” won’t devalue down to virtually nothing overnight the way some stocks have been known to. On the other hand banks and their shareholders have been hurt in the past not by loans to cottage-dwellers but by huge ego-driven property deals that went belly-up. If an individual defaults on a home loan it won’t be noticed in the board room, any more than if a couple of mum-and-dad investors can’t meet their broker’s margin call – it’s called spreading the risk. The problem, as Stephen points out, is not so much in the security itself but in the magnitude and concentration of risk. So rather than make a rule that no single stock can be more than 20% of the (borrower’s) portfolio, it would make more sense that no single client can be more than 5% of the lender’s portfolio. Banks have to meet liquidity ratios, public companies have to disclose concentrations of ownership, why not similar fiduciary controls on margin lenders? And while we’re making the financial world a better place, maybe a cap on greed too.

Andrew writes: Hey! Your email subject line, “Optimus Prime survives market woes”, is the same as this graphic I made yesterday for the stock forums.

Oh so witty and incisive… sigh


Peter Shaw writes: Re. “US08: Homeschooling a lesson in post-modernity” (yesterday, item 5). I am not religious, not an anti government wacko, never been home schooled and have no intention of home schooling my own kids. But Guy Rundle’s assertion that it is reasonable for California (or indeed Australia) to mandate that all home schooling parents complete a diploma of some sorts is absurd. The state has no place regulating this. It should have a role in ensuring every child acquires the skills necessary to conduct themselves in society but this can be achieved by rigorous testing of all children (home, private, and state schooled). Mandating the need to have a piece of paper is bureaucracy and credentialism. Sure state schools promote common values but it’s a slippery slope if the state tries to make them universal and such an approach calls into question not just home schooling but a great many independent religious schools as well.

Joe Boswell writes: Guy Rundle’s article on home schooling was quite the strangest thing I’ve ever read on the subject. He’s welcome, if he wants, to believe that conventional schools, preferably state run, are a basic necessity of civilisation at all times and places and that home schooling is the province of religious fanatics. The truth is a little more complicated. For example, I know of parents (in the UK) who chose home education for their child because it was the only way to get a secular education; all the local schools were faith schools. Many of the points Guy Rundle tried to make against home education are rebutted here. Guy Rundle clearly believes all children should be compulsorily removed from their parents’ control and raised in the values and culture of the state without parental interference. As he says, it’s not a new idea. It was good enough for Sparta and many of its successors. It just goes against the grain with those of us who like personal liberty and who think the state should serve the people, rather than the other way around.

Carbon dioxide sequestration:

Kevin McCready writes: Re. “Tall tales from the carbon crypt” (yesterday, item 12). Surely Ben Sandilands meant to say “possibly defer” rather than “eliminate” when referring to carbon dioxide sequestration. And did he deliberately leave out petrol when he said “most of the man made greenhouse gas emissions that are derived from fossil fuels like coal, oil and natural gas”. And isn’t it too cute by half to tout the hypothesis from cloud cuckoo land that one day we could use the sequestered carbon dioxide to warm the planet should we ever need to? Is this the new standard of Crikey reporting?

Rudd’s diplomacy:

David Lenihan writes: Re. Tony Barrell (yesterday, comments). If the Japanese PM wanted to practise a little “diplomacy”, it would have been very diplomatic for him to pick up the phone and call newly elected Australian PM Kevin Rudd to congratulate him, rather than play one upmanship and expect Rudd to call him. Perhaps there was a dose of the “sour grapes” over Labor’s stance on Japanese slaughter of whales in the Southern Ocean. As Tony Barrell correctly observes, the current Japanese PM is hardly winning any popularity contests and unlike his predecessor, who would know his name unless prompted. I think not many. Our PM has hardly put a foot wrong thus far on his trip, much to the disappointment of his detractors. While 17 days is not a long time in the scheme of things, I suspect there will be a few journos who will be happy to see trips end, there hasn’t been much time for sightseeing such is the whirlwind pace. This is indeed a working PM, Australia is getting value for money, so far.

The ABC:

David Tiley, editor of Screen Hub, writes: The ABC insider (yesterday, comments) wrote: “Co-productions now carry the ABC stamp of quality because significant parts of the staff are on loan to co-productions from the ABC production pool … The people who produce programs for the ABC are experts … There is no guarantee that these professionals will be on hand for projects if the ABC pushes them out. Instead the ABC will have to rely on employees of commercial companies. Every one of the millions of creative decisions made in every program’s production will then include a strong commercial perspective.” What planet do you live on? Go and tell that to John Clark, Andrew Denton, The Chaser crew or any of the production companies who have been making documentaries licensed to the ABC and funded by the FFC for the last twenty years, many of which are co-funded by the world’s major broadcasters.

Soup to nuts:

Shirley Stephenson writes: If Victoria Campbell (yesterday, comments) likes the expression “soup to nuts”, I’d advise her to read some PG Wodehouse, whose use of this and many other intriguing expressions has afforded me much pleasure. Toodle pip!

Matt Harvey writes: Re. Guy Rundle’s “soup to nuts” and Victoria Campbell’s quest for an Australian equivalent, we could once have said “From sherry to port” but now the EU won’t let us say either! From nibbles to cheese?

Wicked campers:

Nathan Johnson writes: Re. “Offence is a wicked marketing strategy” (yesterday, item 15). Re. Wicked Campers and their “colourfully” decorated camper vans. A friend saw this van at Ayers Rock a few weeks ago…


Send your comments, corrections, clarifications and c*ck-ups to [email protected]. Preference will be given to comments that are short and succinct: maximum length is 200 words (we reserve the right to edit comments for length). Please include your full name – we won’t publish comments anonymously unless there is a very good reason.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey