Optimism fading. The Crikey Election Indicator on the Queensland election shows that while Labor is still favoured to win, the optimism is fading somewhat. The latest probabilities are Labor a 60% chance to 40% for the Liberal National Party.

Start studying Pyrrhus of Epirus. After achieving a costly victory over the Romans in the battle of Asculum, Pyrrhus of Epirus is reported to have said: “One more such victory will undo me!” That’s an appropriate comment for the Australian spirits industry to contemplate after their victory yesterday in getting the increased excise on pre-mixed spirits defeated in the Senate. This war with the Labor Government is not over and the final solution is clearly going to involve more than a simple price rise for alcopops. To cope with the obstinacy of Family First Senator Steve Fielding, the next attempt will contain even stronger anti-alcohol provisions than those included in the defeated version to appease the Greens and Independent Senator Nick Xenophon. Labor will not go as far as agreeing to ban all alcohol advertising during live sports broadcasts on television, as Senator Fielding wants, for fear of getting the networks off-side, but there are other ways of punishing the spirits industry. It should enjoy its Pyrrhic victory while it can.

Building in some victories. A key part of this year’s budget preparations for the Labor Government will be to build in some victories for the minor party Senators. When you do not have the numbers to do exactly what you want it is important to give those whose numbers you need some things to big note themselves about. So we should expect to find a few proposals in May that Kevin Rudd does not really care about that can be struck down and a few others where Labor knows that amendments will be necessary.

Bearing the merchant banker’s cross. Labor keep plugging away at Malcolm Turnbull’s merchant banker past. In the Senate yesterday, Broadband Minister Stephen Conroy slipped in a pointed reference to the years the Opposition Leader spent running Goldman Sachs in Australia. “I have a question for Goldman Sachs: how much did Goldman Sachs pay to settle Malcolm Turnbull’s deceitful behaviour around HIH?” And then late in the same answer to a question: “Goldman Sachs have just payed a settlement to the HIH liquidator to cover up the member for Wentworth’s behaviour over a simple question: how much?”

More stimulus for printing presses. The United States is now quite clearly on the slippery dip of printing money to try and rescue its economy. They might not call it that but the decision overnight of the Federal Reserve to buy bonds is exactly that. It was a decision that surprised the market and the obvious question is whether the Federal Reserve knows something about the condition of US banks that the rest of us do not. Probably is my answer.

The bad news keeps on coming. No relief this morning from the dismal economic news. ABS figures show housing starts falling 9.9% in the December quarter, seasonally adjusted, and by 19.5%, annually and motor vehicle sales continuing to slump. The February 2009 trend estimate for new motor vehicle sales (74 254) was 1.1% lower than the corresponding estimate for January 2009 and 18.0% lower than the trend estimate 12 months earlier.