The end of arrogance. Spiegel online calls it “the end of arrogance” as the banking crisis upends American dominance of the financial markets and world politics. “The industrialized countries are sliding into recession, the era of turbo-capitalism is coming to an end and US military might is ebbing” is how this magazine puts it.

This is not some rabid leftist talking but a moderate, if liberal, European voice and its analysis suggests that in the washup to this financial crisis there will be a new kind of anti-American sentiment throughout the world community.

Not a smart choice. Choosing an investment banker as leader might not have been such a wise thing for Australian Liberals to do. Those two words – investment and banker – are sure to be well and truly tarnished by the end of this current international financial crisis. Portraying Malcolm Turnbull as one of that breed whose greedy cleverness got the world in to its banking strife is sure to be on Labor’s agenda. References to the self-made, multi-million-dollar man will be coloured by attempts to suggest that there was something ill-gotten about his gains.

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The Opposition Leader’s former boss at Goldman Sachs, Henry Paulson, is already well on the way to becoming one of the most disliked men in American public life. When ordinary Australian working people work out what has happened to their savings and perhaps even their jobs they will be looking for a villain too.

The call by one blogger I read this week to “stop the banksters” is just the kind of saying that might catch on. Every time Malcolm Turnbull advocates a government policy that in any way benefits the big end of town, and particularly the financial engineering smarties within it, he runs the risk of having it applied to him.

Searching for new revenue. It is little wonder that the NSW racing industry is searching so desperately for new ways of raising revenue because the easy way of relying on a hand out from the TAB is clearly coming under threat. Take a look at this offering quoted this morning on the site of Luxbet:

If you wanted to have a bet on race one at Eagle Farm today you could use your account with the TAB and end up with whatever the final dividend paid turns out to be. But if you have an account with Luxbet you can have the choice of the tote price or the tote price plus 5%. Now even the dullest of souls in NSW knows that getting five percent more for your dollar is the way to go so it will not be long before Luxbet is doing all of the account business.

What makes this such a strange situation is that Luxbet is in fact just another arm of the company which runs the tote. The reason it can be so “generous” to the punters is that with its internet and phone bookmaking operation (supposedly operating from Darwin but with staff in Sydney’s Rosebery) it does not have to pay the same large share of the turnover to the racing industry.

It will not be all that long before the TAB, from which race clubs get the revenue to pay their way, is left only with the high cost and unprofitable business from its TAB agencies. When the current licensing arrangements for operating the tote come up for renewal there will be no gravy left on the train.

The attempt to find a substitute form of income by charging a so-called fee to bookmakers for using lists of horse names has also suffered a recent set back with the courts determining that it does not apply to bookmakers taking bets over the phone.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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