Global economic meltdown:

John Goldbaum writes: Re. “Australian media: economic panic mongers” (Friday, item 4). Bernard Keane believes that “equity markets do not equal the real economy”. Unfortunately, they foreshadow the real economy. Firstly, real money has been lost. Secondly, a global deleveraging of debt will only stop when asset values have decreased to bargain prices which people with cash can no longer resist paying or the debt has been repaid from domestic savings, a process which can take a decade or longer. House prices around the world will retain their normal long-term relativities which means Australian house prices will fall much further, a process which will accelerate when job losses and forced sales increase into a market of no buyers and no money.

Job losses occur immediately in the financial sector and are quickly followed by job losses in the services and manufacturing sectors, especially those which cater to discretionary spending. Profits shrink. Credit contraction causes the world economy to slow. Trade slows — both imports and exports. All of a sudden, there is spare capacity in the economy, no infrastructure bottlenecks, no requirement for new power plants and no need to expand our mines. Global warming is no longer a threat.

The bright side is that people will walk and cycle rather than drive, and they will eat less. We’ll no longer have an epidemic of obesity, diabetes, heart disease and hip fractures. Once again, we’ll have spare capacity in our hospitals. Politics will change. Banks will have been nationalised or government sponsored. Private superannuation will be insufficient and government pensions will be meagre. One full-time wage will support the new mortgage, maternity leave and out-of-home childcare will no longer be required. Children will be taken out of private schools and put into public education. The private sector will shrink and the public service will increase.

You can’t dismiss the equity markets. They are pointing us back to the basic needs which are food, clothing, shelter, public health and public education. The only consolation is that Australian households are carrying less debt than American households, Australia’s big companies are less indebted than America’s, and Australia’s federal government is debt-free, unlike Uncle Sam. Unfortunately, our state and local governments are up to their eyeballs in debt, just like America’s. If we are thrifty and take any work on offer, we will be out of debt sooner than the Americans. Then the economy can grow again, based on savings and investment rather than borrowing and speculating.

Colin Cook writes: In cases of mortgage stress the mortgagor should repossess the land only, leaving the occupier still in their home. This way the burden of buying the land is removed being replaced by the lesser burden of a Ground Rent. The Government would then purchase the land from the mortgagor at Local Government Valuation thus acquiring an asset with a guaranteed return. The capital tied up in the land would simply go into circulation. This would not be applicable in all cases but with Land Values being a very large percentage of a House & Land package, it would be a significant proposition in many cases.

It would certainly be a very direct benefit to many working families (that the land has been purchased several times over in many cases — or will be — at great costs to homeowners and great benefit to moneylenders, is worth pondering.) Longer term, the development of a stock of leasehold homes changing hands at prices below freehold ones, would lead to more affordable housing. This plan could also be extended to assist many retirees.

The Government could purchase the land on which their home stands freeing up a good slice of their capital in a much fairer and more acceptable way than these deadly ‘reverse mortgages’ It is surely a politically and economically sounder system than the Government buying bad Debts to save the financiers as proposed in the US. In short, think leasehold to relieve mortgage stress and free up capital presently locked in residential land.

John Taylor writes: Re. “Return of short sellers marks a dangerous moment in US finance” (Friday, item 22). Thanks to Glenn Dyer for pointing out how “staggeringly stupid and self defeating” it is for our fund managers to lend our stock without our knowledge or permission to pricks whose intention is to reduce the price of our shares in order to profit their “hedge” fund. I don’t know when Glenn found out about this practice but most of us only heard of this “staggeringly stupid” arrangement after the Opes debacle. If Glenn knew before that, many of us would wish he had pointed out this “self defeating” arrangement earlier. Apart from that, perhaps Stephen Mayne, “shareholder activist”, should start to rip a few heads off those “staggeringly stupid” fund managers involved in this practice, instead of wasting his time trying to be elected to Boards who won’t have him.

Chris Hunter writes: Re. Friday’s editorial. No one’s above the crisis — we are all in this together. Will the Lucky Country no longer be able to rely on the bulldozer blade and big holes in the ground to top up the national dole cheque that all of us have been relying on for years? Could the gap between rich and poor narrow dramatically? Let’s face it; the working class will survive, psychologically, because they have been ripped off all their lives while watching the fat cats supping all the cream, being paid outrageous sums for seemingly few hours spent. If this financial tsunami is good for one thing it will be good for that — to cleanse western society of the presumptive elite, who have been rubbing it in most our faces for years. Oh I know it will all come back one day — the obscene society — the trendy lisping socialists — the white collar thieves etc. But in the meantime I’m going to savour this great fall.

Roger Mika writes: Re. “No easy way to say it: Aussie market tanking” (Friday, item 1). I think it was about two or three years ago that ABARE forecast oil would reduce to $50 a barrel. Oil rose and rose and ABARE were pilloried. The way things are going they could be on target, did they know something then?

Coal and First Dog:

Peter Logue, Director, External Communications, Australian Coal Association, writes: Re. “First Dog on the Moon” (Friday, item 7). I didn’t mind when it was Dennis Shanahan and then Michael Stutchbury in The Australian; I wasn’t really miffed when it was John Clarke and Brian Dawe on The 7.30 Report, or even The Hollowmen a few weeks ago. I was a bit annoyed when it was repeated by Mark Colvin on PM earlier this year … but I’m desperately upset that First Dog has repeated the myth that Australia sells huge lumps of coal to China. We don’t; in fact it’s less than 2% of our exports and dropping. The Chinese have gigantic buckets of their own coal and indeed export it to places like Japan. (P.S Farren Ray would look good in a miners’ helmet, with a canary on his shoulder.)

Ged Bulmer, Editor of Wheels magazine, writes: Re. “V8 promoters overtake NSW’s L-plate Premier” (2 October, item 12). I thought you should know that V8Supercars Australia media manager Cole Hitchcock last week declined journalist Peter McKay’s application for media accreditation to this year’s Supercheap Auto Bathurst 1000. No reasons were given on the e-mail advice, other than to note that:

This decision has been taken and endorsed by the board of V8 Supercars Australia, including V8 Supercar team representatives Larry Perkins, Paul Morris, Ross Stone and Tim Edwards.” Peter was further advised that: “You are within your right to attend the event as a paying member of the public.

I was copied in on the advice, as Peter’s request for accreditation had been signed by me, in my capacity as editor of Wheels magazine. It’s my understanding that Peter was also declined accreditation to the event in 2005. Although not mentioned in the correspondence, it appears the reason for Peter’s application being declined is his sometimes critical stance in relation to aspects of V8 Supercars Australia’s operations, as alluded to in your Oct 2 story. We are obviously disappointed by any decision to restrict a journalist’s access to a major Australian sporting event and plan to advise V8 Supercar Australia accordingly.

If it’s good enough for Lords..:

Tony Barrell writes: Re. “Rundle 08: McCain is done. Juiced” (Friday, item 3). How can we get the message across to Americans that having an Arab name isn’t necessarily a minus attribute? The cricket tragics amongst Crikey readers will recall that the English establishment went very quietly when it was announced that Nasser Hussein was to be the captain of their national team. Incredible. Bad enough having someone with the same name as the man who led Egypt’s nationalisation of the Suez canal in 1956, but having the dictator of Iraq on his passport should have put him way beyond the pale. But no. The old duffers at Lords were happy to hire someone who could do the job. Perhaps even the beetroot-necked maverick lovers must know that Walnuts and the Palindrone are totally incapable of even the basics?

Juries:

Colin Ross writes: Re. “Crime too complex for trial by jury” (Friday, item 15). Following the quashing of the convictions of the Birmingham Six, a Royal Commission on Criminal Justice in England and Wales was set up in 1991, chaired by W.G.Runciman. The Commission reported in 1993, and the London Review of Books, on 10 November 1994, published an article by Runciman in which he commented on the report. While most of the article deals with the rules of evidence in criminal cases, he makes a forensically incisive point about juries:

If we had always had, in England and Wales, a system whereby serious crimes were tried before an experienced judge and two juniors who were required to give written reasons for their verdict, I doubt that we would be clamouring to replace them with twelve people chosen at random who don’t have to give their reasons at all.

Internet advertising:

Nigel Martin writes: John Taylor (Friday, comments) wrote: “You have had several items in recent days about the demise of newspapers in their printed on paper form. To all those who suggest that reading a computer generated newspaper will replace the old format, I have one question: when have you ever looked at an advertisement on your website newspaper? If anyone says they have I suggest they are gilding the lily. Nobody reads online advertisements and eventually this will be recognised by the adverting industry, who will take their business elsewhere: ‘paper’ papers.”

Hate to burst your “hope” bubble, but seriously, nobody reads online ads? Somebody better tell Google that their $20billion ad revenue isn’t real then … and I guess all their clients are just spending with them because? Let me tell you they don’t just read them, they click on them and they buy stuff, you can budget it, you can target it demographically and geographically and you can measure it accurately and easily. I don’t know whether the print newspaper is dead, but the internet ain’t going away any time soon.

Detention for Irfan:

Daniel Lewis writes: Re. “Professor Google and those left wing academics” (Friday, item 14). Angry ex-Liberal candidate Irfan Yusuf attempts to discredit the Liberal party led review of left-wing bias in Australian universities claiming “the main (if not the only) instrument used by National Young Liberal President Noel McCoy to generate his list of academic leftists was that great scholarly authority Professor Google.”

Utter nonsense and Irfan knows it. There was a widespread call for submissions and many were received, both well researched and referenced leading to a Senate submission demonstrating there clearly is a problem at our Universities. Considering many academics also used blogs to espouse their feral views, it is quite sensible to employ Google as a research tool. Yusuf’s point is tenuous at best, until you come to his main complaint: “It seems the Young Libs are taking a leaf out of the far-Right CampusWatch project”.

What Yusuf doesn’t mention — quite unsurprisingly, is Campus Watch’s Director, Dr Daniel Pipes. Yes, the same Pipes who only a few weeks ago forced a second public apology from Irfan for disgracefully smearing him. Irfan is evidently still seething and “Professor Google” has plenty. Were a university student to omit such an important detail from an essay as Yusuf has from his, they would surely receive in a fail grade. Irfan, see me after class… Actually, don’t.

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Peter Fray

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