Wall St meltdown:
Ken Lambert writes: Re. “Global market wrap: In a word, panic” (yesterday, item 1). This is from the Reserve Bank of Australia Website: “The Bank (RBA) would lend directly to an illiquid deposit-taking institution authorised by APRA only if it was of the view that the failure of the institution to make its payments could have serious implications for the rest of the financial system.” With panic in the air and overseas sources of liquidity drying up, its time to re-visit the old idea of “lender of last resort”. In this brave new world of financial engineering and sneaky fine print, the old verity of deposit taking institutions (who mostly call themselves Banks) in Australia having an ironclad “lender of last resort” guarantee of depositor’s funds from the Reserve Bank is a definite “maybe”.
APRA fills you with confidence doesn’t it? Remember the HIH fiasco, and the impotence displayed by our hapless prudential regulator? We all know that APRA would be hopeless in the event of a whiff of blood in the water causing a run on a “deposit taking institution”. The Northern Rock run in the UK was stopped only by the British Govt nationalizing it. Bear Stearns and AIG have been effectively nationalized by the US Federal Reserve after drawing the line with Lehman and then blinking in the searching lights of US financial collapse. What guarantees financial stability is certainty — ironclad commitment that depositors will not lose their money. This can only be given by the RBA.
The above RBA statement is not ironclad — “yes if it was serious enough we would send cash, but if it were a smaller deposit taking institution of lesser import and we felt like doing a Lehman today — tough titties”. And while the RBA was holding emergency meetings with its forum — APRA, ASIC and Treasury — the “moms and pops” of Australia would be filling their pants in queues outside our wonderful “deposit taking institutions”.
Donna Webster writes: As we see market carnage unfold in the US and begin to feel some of the consequences, I am alarmed about an issue I have been discussing with my (banking) partner. He can not ask the question loudly, so I want to. Is it true that virtually all Australian savings are unsecured? In the US at the moment, we are seeing cautious savers allocate their money in $100k lots in different banks, as this is the level that their savings are secured to.
I have Japanese friends who have money invested here in Australia as they believe that their money is secured. I have money that I think is secured in banks… as I am sure most people do — just differing amounts. It is not a question any one I know has ever asked since the Pyramid collapse all those years ago. My partner says 20k is the limit secured — and that is only a recent legislative change! Is this right? Can you bring it to our very non aware nation’s attention if it is a fact? Please.
Keith Thomas writes: Great reporting yesterday by Glenn Dyer: lots of it, big facts, and memorable quirky bits and terrific on context!
Alexander Zalmans writes: Re. “Is Russia the first nation crippled by Wall Street’s woes?” (Yesterday, item 25). I do not comment on the news about the financial situation in Russia — I know it for the fact it is very tough. My only one comment would be about your remark at the end of the article: “It’s much easier to invade a country, it seems, than to run an economy on an even keel.” You’d better get your staff educated on what’s really going on in Russia, rather than tuning on to the stories told by the American propaganda. Learn, first, about the official results of the inspections conducted by the international bodies on who invaded what and when.
Ken Burgin writes: Re. “Macquarie plunges as Rupert’s hacks sink the knife” (yesterday, item 2). How fantastic it is to have Stephen Mayne’s encyclopaedic memory and analytical skills at our disposal each day — well worth the subscription cost just for him… Keep up the great work.
Kate Newton writes: Re. Yesterday’s editorial. ”Power without responsibility, the prerogative of the harlot throughout the ages”. Crikey has quoted this line a couple of times recently. Once it may have been easy to pick on the recalcitrant common worker for the ills of the world, but hard to make it stick in this subprime era. Besides, s-x workers are obliged to be very responsible these days. So back off.
Inflation, recession and hysteria:
John Goldbaum writes: Re. “HBOS and Lloyds merge as Wall Street tumult reaches UK” (yesterday, item 22). The credit crunch is due to poor targeting of inflation which kept interest rates too low for too long and encouraged debt to grow out of control. At last, Glenn Stevens has realised that the CPI is not an accurate measure of inflation. The problem for past monetary policy was the failure to distinguish between bubbles in financial assets and bubbles in house prices. Houses are mainly owner occupied, so they should be categorised as consumer durables, much like cars and furniture, and therefore be measured as a CPI component. Houses are only similar to financial assets when they are owned by investors. Deflating house price bubbles have an immediate impact on consumer confidence and spending on Main Street and can more easily cause recessions than the popping of financial asset bubbles. If central banks distinguished between these two classes of assets, there would be fewer recessions.
Martin Gordon writes: Re. Wednesday’s editorial. Increasing taxes (which increases prices) is a perverse way of reducing inflation, yet the increase in the luxury car tax does that. The projected rise excise collections (an 11.2% increase year on year for four years) on alcopops suggests that demand for them won’t fall either. Perhaps they are just blatant tax grabs after all. Cutting incentives for solar panels is an odd way of rewarding environmentally responsible behaviour too. While none of these personally affect me, the more you analyse the Labor Party’s budget the more inconsistent the message and the actions appears. I thought the whole Rudd campaign about inflation was hysteria, and their budget actually hit demand when it was slowing anyway, not to mention the RBA’s mistimed hikes in interest rates. Two things you don’t do when a recession threatens (and this was learnt in the Great Depression) are to increase taxes or protection. Rudd has done the former here, and oddly Obama is proposing both in the US.
Terrorism, politics and throwing out Greg Sheridan:
Peter Rule writes: Re. “Terrorism and politics in Australia: an absurd farce” (yesterday, item 10). I enjoyed Bernard Keane’s commentary yesterday: a pretty good summation in my view. It’s all so childishly ridiculous it would be laughable if it didn’t have such a serious impact on those affected. He’s certainly correct about Greg Sheridan “the leading spruiker for the National Security State garbage…” etc. Sheridan does write some unbelievable garbage on the subject. Incredibly, I once read his book called The Partnership: The Inside Story of the US-Australian Alliance Under Howard and Bush (…OK I admit I bought it). It is easily the worst book I have ever read. I have never before encountered such sycophantic dribble passing itself off as serious commentary.
I kept reading it, in shock I think, because I couldn’t believe it could get published. From memory, he even put himself at the centre of the Australia/US alliance in some secret-seven type group of high powered government and business types who meet occasionally and apparently plan it all for us. When it came time to weed out my collection of books at home, I generally donate those that don’t make the cut to the Salvos or Vinnies. Obviously this one was on the top of the pile to go, but I just couldn’t bring myself to include it; I couldn’t inflict it on another. It had to go in the bin… I don’t think I’ve ever chucked out a book before.
Matthew Weston writes: Bernard, it’s fascinating to see how you will twist yourself in knots to land a blow on the hapless and pretty hopeless federal opposition, to the extent that even judges can be tarnished in the splatter of your invective. The judge was right, the comments made by the Attorney-General where unnecessary, as was the Haneef fiasco’s underlying motivation. It’s pretty obvious that he was trying to make political capital out of it, but as a learner to our federal parliament he made a poor showing of it. Our pathetic, inept and woefully unrepresentative swill that are the political types that populate [or should that be infest] all levels of government will take anything and seek to twist it to suit themselves, and if that’s going to be your style, and that of the commentariat, then your profession will soon join that of politicians, at the bottom of the ranking of professions that are trusted and respected.
Walt Hawtin writes: Re. “More than meets the eye in prostate cancer screening” (yesterday, item 5). Melissa Sweet takes up the cudgels against the pharma industry once again, but this time it is to belt a men’s health issue, prostate cancer. Along with that, Melissa tries to “name and shame” the Prostate Cancer Foundation by placing them in Crikey’s fearsome “Register of Influence“, because the Foundation accepts corporate funding from the pharmaceutical industry.
Fair enough, but of the Foundation’s total income, 5% is derived from this resource, as Melissa points out. But apparently contributing funds to a perfectly ethical, above-board medical research outfit is grounds for shame and humiliation on Crikey’s Register of Influence, where it is stated that the Register “… is not intended to denigrate the key (medical) opinion leaders themselves – their involvement in such campaigns is a reflection of their expertise and standing, and reflects genuine professional concerns.” Yet at the same time these persons of “expertise and standing” are accompanied by this denigrating imagery.
Perhaps Crikey could conduct a simple Reader Vote? Something along the lines of: “Does the imagery in this logo insinuate subterfuge, dishonesty, or malignant activity?” or “Do you feel that a person or company linked to this imagery is a trustworthy person who is involved in altruistic activities aimed to assist human beings to improve their lives through ethical medical research?” Come on Crikey — keep the Register by all means, but get rid of this misleading and inappropriate logo.
Kevin McCready writes: Thanks for the link to the 2 June 2003 Reps debate and Wayne Swan’s extraordinary outburst. Did any of the experts ever challenge him to repeat his words outside the parliament? The simple fact is that prostate cancer is not prostate cancer. My research, perhaps flawed, shows it’s a range of conditions from benign to aggressive and the PSA test can’t tell the difference. We need better science to distinguish between them. I’d rather the money be spent on research, not on tests which don’t tell us much. Keep up the good work on the Crikey Register of Interest.
William Fettes writes: Re. “Rundle08: Lost in syllables, Obama can’t make McCain pay” (Wednesday, item 5). Though I have taken great pleasure in reading Guy Rundle’s frequently witty and satirical coverage of the US election, I must say I am beginning to find his recent spate of Dorothy-like impressed credulity at the GOP’s electoral framing, and the inevitable triumph of Sarah Palin’s parochial red-state identity, to be a bit tiresome. With all this almost wistful glorification of the Republicans’ message discipline, and their ability to sustain a maverick, outsider gloss despite being on the wrong side of most issues, as well as strongly tied with the Bush era, lobbyists and banking deregulation, it does seem that Rundle just might be affected by a kind of Stockholm Syndrome for political dialogue.
Also, soothsaying about the Democrats may be a perennial pastime for any progressive political junky, but I must say Rundle’s relentlessly grinding on the Obama campaign is starting to reach Joe Klein-levels of milquetoast, triangulation-worshipping, beltway wisdom. Rundle writes as if Obama has already lost, but there is little underlying analysis of the dynamics of the election to support this. McCain’s recent numbers are stronger than most thought plausible in such a hostile environment for Republicans, which explains the change in the betting markets as an adjustment to the tyranny of low expectations which existed about GOP prospects, but those numbers are already recovering in Obama’s favour, so pessimism is premature.
At this point in time, Obama is still in a better position than either Gore or Kerry were in terms of national polling going into the general, GOTV infrastructure, campaign spend, and red-state flip potentials — and those were both extremely close elections. Furthermore, national polling now shows that McCain’s lead has reached and gone past the apex traditionally associated with the convention bounce spike. There’s also been some movement in Palin’s unfavourables as a result of her Gibson interview and the NYT article — and it’s hard to see her doing well against Biden in the VP debates. More realistic numbers will be known then.
Pooners and snedgers everwhere:
Chris Johnson writes: Re. “Privacy is not in the interests of the Labor Party” (yesterday, item 3). Any wonder the infamous Orkopoulos tampered with the office database. Its just one of numerous “tools” and benefits handed our MPs to arbitrarily manage and personally interpret. This laissez-faire approach to governance is what political parties rely on. Flimsy principles, guidelines and loopholes in the laws they make all serve their purpose. We’re permanently distraught about the state of the environment, national welfare and infrastructure yet we just grin and bare the level of governance we’re getting. It should be installed as an essential service.
We’re gobsmacked at the panoply of misfits who spilled out of the NSW, Qld and WA parliaments in recent times but we don’t test John Faulkner’s blind faith in the morals and ethics of modern MPs. It’s never placed on the agenda. Every system should be prudently tweaked particularly when it’s starting to look a little frayed. You’d think a long list of paedophiles, frauds, thugs, extortionists, pooners and snedgers taking seats alongside belligerents and inepts in our parliaments would cause alarm. Any correlation between the blown budgets and threats of credit-rating downgrades?
If political parties are running short on skilled, tested and professional talent, not fussed on who they entertain they should declare they’re thin on competent candidates and administrators and install relevant human resource recruitment and management practices. Privacy IS very much in the interests of all political parties when it comes to their own. As for those they represent — that’s another database.
Mark Freeman writes: Re. “Tips and rumours” (yesterday, item 7). As a working lifelong unionist it’s with sadness I see the fruits of past intransigence in the proposed new IR arrangements. It used to be that theft or physical violence of any sort at work guaranteed instant dismissal no questions asked — and eveyone though it was fair enough. In the twenty years before WorkChoices I saw several cases of documented theft and clearly witnessed fights at work not leading to dismissal because of unfair dismissal protection. It may well have been that the law was not on the offenders’ side but in all cases the employer either thought otherwise, was unsure or simply wouldn’t risk the time and money on a possible court case. This led to widespread contempt for the applicable laws and enforcement procedures. Unfair dismissal protection was and remains an important workplace reform — but it should clearly apply only to unfairness and be readily and easily applicable.
Libs and Nats:
David Lenihan writes: Ross Copeland (yesterday, comments) determined the Nats are not in a coalition with the Libs… but a “Power sharing arrangement “. To quote Jim Trott from the wonderful series Vicar of Dibley, “no no no no”. Coalition is defined as alliance; union; agreement, if that’s not what the Nats have got then Tony Abbott will be the next Pope … The Nats are in Alliance with the Libs, they have arranged to agree to form Government, hence a Coalition of the two. Power sharing is too damn convenient by half, so I hope we are all clear on that.
Daniel Lewis writes: It is interesting that Irfan Yusuf has had the time to write an article for Crikey. He apparently hasn’t found the time to update his blog to note he was forced to apologise to Daniel Pipes for libelling him with a disgusting smear. Nor, as JF Beck notes, has Irfan retracted the offensive remarks from his website. As Pipes said: “His having embarrassed the Canberra Times should send a signal to responsible media everywhere to decline his tendentious writings”. This means you, Crikey!
The thing speaks for itself:
Peter Faris writes: Re. “Faris v. Barns: Terrorism is not a thought crime” (yesterday, item 15). Yesterday I criticised Greg Barns for his comments about the terror legislation. I have now read the comments of Benbrika’s barrister Remy van de Wiel QC which were published on Wednesday on The World Today.
Van de Wiel was the lead silk in the case and ervstated: “The position with this terrorist legislation is that it is so wide-sweeping that it is a complete destruction of free speech, it is an insult in this community that a parliament that we’ve elected to govern us could behave in such a lick spittle manner as to pass this legislation. They could only do so if they were lap dogs of George Bush, because just about anything you say which is aggressive and contradictory to what the established line of thinking is could put you in a situation where you are charged with this legislation.”
All I can say is “res ipsa loquitor” — the thing speaks for itself. The mp3 of the comment can be downloaded from The World Today. I now have it on my iPod. Highly recommended.
Crikey reader Carl Holden writes: I was almost killed in the crash of a (CASA “certified”) Australian designed and built Aircraft in 2001. Engine failure was the cause. At the time, I was a Chief Flying Instructor in Sydney. After the crash I started asking questions and digging up a lot of information that has to this day not been pieced together publicly. If it was at the time, I would never have gone flying in the thing. I firmly believe there is a major story here, of incompetence, cover-up, negligence and potential conflict of interest by “the Regulator” (CASA), that has resulted in preventable crashes, injuries and deaths.
I wish to publicly submit the proposition that any reasonable person could deduce from the facts that the claimed certification and safety record of this particular brand/type of aircraft and engine (same manufacturer) should be questioned. I wrote several letters to the CASA CEO Bruce Byron in 2006, asking detailed questions about CASA Certification and other claims made by the manufacturers, about the aircraft/engine combination. Bruce Byron has refused to answer since. His office acknowledged receipt of the letters. Why will this man not answer simple questions to do with Safety of an Aircraft type he is responsible for?
The aircraft engine is the subject of a damning report from the Civil Aviation Authority in South Africa following crashes there, and is being investigated by the UK. Aircraft Accident Investigation Board at Farnborough, due to in-flight failures there. And failures have happened here in Australia, some very publicly.Yet CASA and CEO Bruce Byron refuses to act. Why?
I believe that an independent investigation into the following claims is warranted:
- The engine has inherent design defects;
- Is not fit for purpose;
- The Public and Pilots have deliberately not been informed of these facts;
- Question all aspects of CASA involvement.
I was unaware of the Senate inquiry until a few days ago, too late to make a submission. More details of my crash are available here.
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