Correction:

Bernard Keane writes: Re. “Now Lee is a Green, expect the Labor mud to fly” (yesterday, item 11). To correct the record in relation to Ronan Lee’s family circumstances following our Crikey article yesterday: Lee has one daughter, Ailbhe, who is not the daughter of Lee’s marriage, but of another relationship conducted while Lee was separated. Lee subsequently left that relationship. Lee’s marriage featured prominently in his 2001 election campaign and he subsequently thanked his wife in his maiden speech. His subsequent relationship, and his daughter, featured prominently in his 2004 election material.

Interest rates, the RBA and the banks:

David Havyatt writes: Re. “Banking the Australian way: Four pillars, no competition” (yesterday, item 9). Bernard Keane has nailed it. In case you missed it what he said was “The tendency to oligopoly in Australia remains our key unsolved economic problem. A decade and a half of competition policy, while effective at reducing the blight of government-owned monopolies, has failed to seriously address a native tendency to consolidation. This is the real market failure we need to address, even as the financial crisis comes and goes.”

The key point is that he isn’t just writing about Australian banks, but supermarkets, petrol-retailing, airlines and everything else. But it isn’t just an Australian problem. Information and communications technologies have changed the ability of large firms to co-ordinate and we now face a world of industrial consolidation and oligopoly. The impact of this is incredible. It creates great instability as the world becomes increasingly reliant on a few firms.

The capital structure results in management not answerable to shareholders and instead responding to ever less astute fund managers steering companies by short term profit expectations where current share price is more important than the future viability of the business model.

David Nolan writes: Re. “Aussie Banks are crying poor but spending big” (yesterday, item 20). The most disappointing things about the potential mergers between the CBA and HBOS and Suncorp are that the banks:

a) clearly have excess capital or they would not be able to make such a move.
b) Still record multi billion dollar profits and more importantly GROWTH in profits
c) Operate in a unique environment where they take big risk in cyclic ways and if it goes wrong come home to mummy being the RBA and get assisted to keep running the way they are. i.e.: The taxpayers ultimately bear their risk!
d) Canberra will take a popularity quiz to see if it is okay as a merger and if it polls okay then it’s okay with them to approve.
e) Graeme Samuel will use his ouija board model to confirm it doesn’t in some way reduce competition! Even if the ACCC does not approve then the Banks will appeal to Canberra that they face obliteration if it does not go ahead the way they want. Then back to d) above.
f) The Banks are even dipping into the Future Fund now to fund their books. This of course is run by David Murray ex CBA CEO.
g) Still won’t be able to pass on the RBA rate cut because things are too tight — unreal.

Interesting times where you see an industry consolidating its power amongst the big four more than ever whilst confusion reigns. Time to buy bank stocks if you are a medium term investor.

John Goldbaum writes: Re. “Plunging currency highlights Australia’s financial weaknesses” (yesterday, item 2). We shouldn’t view the plunging Aussie dollar as a problem. It is our shock absorber on a bumpy economic road. Likewise, four pillars, or even three pillars, in banking is not a permanent oligopoly. New lenders can take a slice of the action when the dust has settled.

John Craig writes: Stephen Mayne’s probably right that Australia’s current account deficit is a problem. But we have another problem that is equal to it — namely that China is likely to be forced (by weaknesses in its financial institutions) to slow its economy to match the huge recession now likely in US.

Julian Gillespie writes: Re. “Global market wrap: Everywhere you look, carnage” (yesterday, item 1). We called it the stock market once — this is no longer a true market — it’s a place we come and get told what to pay.

Bill Henson, beauticians and tough love:

Keith Perkins writes: Re. “Faris: Henson and school principal should be investigated” (Monday, item 9). Regarding the Peter Faris outraged outburst against Bill Henson over his visit to the St Kilda Park Primary School, I would ask him to be a little less selective in his criticism of Henson. I would advise him to read any of the many clothing magazines that can be purchased at any newsagency and view the scantily clad children within their pages. By Peter’s standards these would be a pervert’s smorgasbord. Not being conversant with all the fact of the St Kilda case I can only surmise that Henson had no intention of striking deals with the children and assume that any deals would have been done through the children’s parents.

If Peter is sincere in his concern for outside influences affecting our pupils let him divert some of his attention and vigor towards a group of modern-day, psalm-singing, evangelistic missionaries who are attracting converts to their cult by accessing our schools posing as beauticians. They claim that by teaching the students the correct application of make-up they are building the pupil’s self-confidence. This may be so but I am sure that they view the increased recruitment to their ranks as a far greater achievement. Peter Faris may care to do a little research on this issue. Questions like are they qualified beauticians? Have parents given permission for their daughters to participate and have police probity checks been conducted on these beauticians?

Broaden your crusade Peter; you never know just where it might lead.

Ernie Biscan writes: Re.”Forget Henson, politicians are partial to playground trawling too” (yesterday, item 13). Greg Barns’ ill-informed and slightly hysterical outburst about politicians visiting schools needs a response. Politicians do indeed need prior consent from schools and parents before they visit. Unlike certain photographers they afford parents this small, albeit token, courtesy. When Bronwyn Bishop visited my son’s school a few years ago a note was sent home to all parents alerting us to her intended appearance. We chose not to quarantine our son from her visit. Some call it tough love.

Tony Barrell writes: The feral commentariat hates art because it is elitist and artists because they are latte sipping wankers. Simple really.

Bill Cushing writes: I understand that Peter Faris purports to be a lawyer. Amazing.

Fairfax:

Marcus Ogden writes: Re. “Fairfax slash n burn style just won’t work” (yesterday, item 15). Good on Crikey for getting stuck into Fairfax over declining production values. But if you’re going to take the high moral ground about attention to detail, a bit of fact checking of your own wouldn’t hurt. Eric Beecher’s article on Fairfax (“Beecher: Gawenda’s right, Fairfax ruined by incompetence” yesterday, item 4) quoted parts of Michael Gawenda’s speech that Beecher claimed The Age “did not publish today”. But if the last paragraph looked familiar to Age readers, it’s because it was in The Age after all: “The editors… have no control over their papers’ websites… Already the online newspaper sites of the main Fairfax mastheads are at odds with what those mastheads long stood for. They are much more populist, much more celebrity and entertainment focused. This is a recipe for disaster.”

Political bed hopping:

Patrick Blackall writes: Re. “Now Lee is a Green, expect the Labor mud to fly” (yesterday, item 11). When will somebody on either side of politics do something about the despicable practice of politicians being elected to represent one party only to decide halfway through their term that they will switch camps and represent another view of politics. This is dishonest and it should be stopped. If they want to change they should resign, be replaced by a representative of the same party and put their hand up for their new party at the next regular election. It happens in all parties and is worse than the member being elected and then suddenly deciding to quit early in their term. Why does this not get more publicity?

Obama’s manly storm will engulf McCain:

John Taylor writes: Re. “Rundle 08: Guitar shaped pools and Grand Ole Opry country” (yesterday, item 3). Guy Rundle says Pat Buchanan is predicting 35 to 40 states for Obama. If my faltering memory serves me correctly, Barry Goldwater lost back whenever it was, 49 to 1. I predict McCain won’t do as well as Goldwater. Manly beat Melbourne 40 to 0. Try Obama v. McCain 50 to 0.

Rugby league, primitive?

Steve Johnson writes: Re. “The biggest NRL grand final trouncing of them all” (Monday, item 16). At the risk of turning Crikey into a mirror of Rugby League Week’s letters page, I have been a vague Melbourne supporter since their inception, mainly because of their Queensland connections. I haven’t had a single discussion where anyone has disagreed with Cameron Smith’s two week suspension, or with the fine imposed by the NRL on the Storm for Bellamy’s and Waldron’s unjustified outbursts. Frankly, Brisbane were improving with every game and Melbourne were dead lucky to get past them in Week 2.

What stinks is watching those aggressive and unnecessary grapple tackles used on Brisbane, but the penalties inflicted on Cameron Smith and Jeremy Smith were for the benefit of …. no, not Brisbane. The teams they played the following week, and Manly, get the benefit, while Brisbane is left wondering “what if?”. Most footy codes work the same way, and it is a ridiculous scenario that Manly can gain such a significant advantage in the Grand Final for a penalty that was incurred against Brisbane.

The fact is, Manly may have faced a very different Melbourne with C. Smith in the team, though its hard to argue that they would not have prevailed. Frankly, the whole penalty system is primitive.

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

Save 50% on a year of Crikey and The Atlantic.

The US election is in a little over a month. It seems that there’s a ridiculous twist in the story, almost every day.

Luckily for new Crikey subscribers, we’ve teamed up with one of America’s best publications, The Atlantic for the election race. Subscribe now to make sense of it all, and you’ll get a year of Crikey (usually $199) and a year’s digital subscription to The Atlantic (usually $70AUD), BOTH for just $129.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW