Thursday, 26 December 2013

Thai reform plans but protesters still threaten poll - News and views for Thursday 26 December

News and views noted along the way.
26-12-2013 thaireform
  • Thai PM unveils reform plan but protesters still threaten poll
  • Why Corporations Might Not Mind Moderate Depression
  • China unveils anti-graft plans, focus on protests, reforms
  • Defiant Turkish PM Erdogan in major reshuffle - "Turkish PM Recep Tayyip Erdogan has announced a major cabinet reshuffle after three ministerial resignations over a corruption inquiry... One of those who quit, Environment Minister Erdogan Bayraktar, had urged Mr Erdogan to step down himself. Police are investigating allegations of illicit money transfers to Iran and bribery for construction projects."
  • The NSA on Trial - "Ever since Edward Snowden’s revelation that the National Security Agency was collecting and storing data on every phone call every American makes and every text every American sends, the Obama administration has maintained that the program is fully lawful, and that it has been approved repeatedly by all three branches of government. This defense has always been misleading. Since the program was developed, approved, and applied in secret, it had never been subject to public scrutiny or adversarial judicial testing. Now it has, and it has failed dramatically. As of this week, all three branches have called for substantial reforms of the program, and a federal judge has seriously questioned its constitutionality."

Wednesday, 25 December 2013

Extending life seems ominous- News and views for Wednesday 25 December

News and views noted along the way.
  • The Ukraine-Russia deal - "The Ukraine-Russia deal involves politics as much as economics. This column argues that the economics of the deal will eventually lead to problems for one or both."
  • When I’m Sixty-Four - "More seriously, given limited natural resources, already aging populations, spreading megacities, a dearth of jobs in the developed world, severe strains on health services, disappearing pensions and growing inequality, the idea of radically extending life (initially for the rich, one assumes) seems ominous — even if human adaptability and ingenuity are always underestimated."

Tuesday, 24 December 2013

Bigger governments mean happier people- News and views for Tuesday 24 December

News and views noted along the way.
24-12-2013 happiness

Monday, 23 December 2013

Israel’s racism – News and views for Monday 23 December

News and views noted along the way.
  • The migrants aren’t the problem- Israel’s racism is – “Israeli public opinion is being shaped by a grotesque Knesset member who has become a joke and a former MK whose party didn’t get enough votes to make it into the legislature. If it weren’t so sad, we’d be laughing until we cried. But now our tears should be over the unbelievable fact that these two marginal characters, these clowns, MK Miri Regev (Likud) and Michael Ben Ari, have, with their hateful incitement, succeeded in dictating the national agenda on the issue of African migrants and asylum seekers. From now on we’ll have to choose: Either you support the refugees, or you support the state (and the longtime residents of south Tel Aviv). Who decided that? Regev and Ben Ari.”
  • Bad Times for Big Brother – “Preventing terrorist attacks is a critical and complex job. But as the advisory report rightly emphasizes, a free society must have another kind of security as well: the security of its citizens from the “fear that their conversations and activities are being watched, monitored, questioned, interrogated, or scrutinized.” Without this security, “individual liberty, self-government, economic growth, and basic ideals of citizenship” all are jeopardized.”
  • In No One We Trust – “As the trust deficit persists, a deeper rot takes hold: Attitudes and norms begin to change. When no one is trustworthy, it will be only fools who trust. The concept of fairness itself is eroded. A study published last year by the National Academy of Sciences suggests that the upper classes are more likely to engage in what has traditionally been considered unethical behavior. Perhaps this is the only way for some to reconcile their worldview with their outlandish financial success, often achieved through actions that reveal a kind of moral deprivation. It’s hard to know just how far we’ve gone down the path toward complete trust disintegration, but the evidence is not encouraging.”
  • Real Tree or Artificial Tree? – “But in a holiday season where the focus is often on whether we are naughty or nice, what choice of tree has greater environmental impact?”

Sunday, 22 December 2013

Choosing your barrister and your PR

The wonderful world of litigation continues to fascinate me so I was intrigued by this reference in London’s Sunday Telegraph to some of the sideshow shenanigans surrounding the recent London case of Nigella Lawson, Charles Saatchi and their former servants accused of fraud:
2013-12-22_saatchilegalprThere it was in black and white, the role that PR spinners now play in trying to get favourable coverage for their clients in the reporting of court cases.
It reminded me of my only sortie into this field many years ago when John Elliott, then of Elders and Fosters brewery fame, was facing some kind of charge or whatever after falling a little from financial grace and I offered, and he accepted, my services to him on a success fee only basis only to find the case quickly thrown out before I had any chance to spin my brilliance. That confirmed my suspicion of the whole judicial system but he did buy me a very fine lunch.

Global warming is the most boring subject on earth – News and views for Sunday 27 December

News and views noted along the way.
22-12-2013 sizzle
  • Climate Change Is ‘Bo-Ho-Horing’ – “Has the climate change ‘brand’ been ruined? Scientist-turned-filmmaker Randy Olson says that the problem with trying to raise awareness about global warming is that it’s the most boring subject on earth…  It [Al Gore's documentary] made a ton of money which made some people think that suddenly the topic was unboring. Which produced a spate of climate documentaries that were all boring, and eventually resulted in an Oscar-nominated documentary filmmaker friend saying to me they all blend together — all the same shots of melting glaciers, polar bears, carbon emissions … blah, blah, blah. By 2008 another friend was at a gathering of indy film distributors in which they were saying, “\’no more environmental documentaries!’, there’s no audience for them. And by 2010 a producer friend of mine said, ‘Even the Green Channel doesn’t want ‘green programming’ ‘.”
  • Missing J. D. Salinger - “Phantom evidence for the military and sexual influences on an elusive writer, in a maddening new biography.”
  • Queen Trapping Nut Thieves Among News Corp. Trial Nuggets
  • Turkey’s Erdogan says ‘dark alliances’ behind graft inquiry – “Prime Minister Tayyip Erdogan denounced ‘international groups’ and ‘dark alliances’ on Saturday for entangling Turkey in a corruption scandal that has exposed deep rifts between him and a U.S.-based Muslim cleric who helped him rise to power. Sixteen people, including the sons of two ministers and the head of state-owned Halkbank, were formally arrested on Saturday, local media said, in a corruption inquiry that Erdogan has called a ‘dirty operation’ to undermine his rule.”
  • The civil war within Turkish political Islam – “The increasingly open and dramatic power struggle between Erdogan and the Gulen movement, who were formerly close allies, is an important story, but not one that’s easy to follow, especially since much of it remains shadowy and under-the-surface… On Thursday, in the latest development, Erdogan announced a sweeping purge of the police force, charging that it has been infiltrated by a “criminal gang” engaged in a “political plot” against him, his government, and Turkey. It’s no secret to anyone who this “criminal gang” is supposed to be. Even people with no love for Erdogan have been increasingly alarmed by the way the Gulenists were building up their own version of a Deep State inside the police, the judiciary, and other arms of govenment, as well as education, the mass media, and business.”

Saturday, 21 December 2013

Not such a silly Joe – Blocking ADM

Archer Daniels Midland’s (ADM), whose takeover of Australia’s Graincorp recently was blocked by Treasurer Joe Hockey, this week agreed to pay $54.3m to resolve civil and criminal charges that a subsidiary bribed government officials in Ukraine in return for tax refunds. The Financial Times reports that the deal with US authorities ends an embarrassing chapter for the company, which has sought to polish its image after pleading guilty in a high-profile price-fixing scandal in the 1990s. US authorities accused Alfred C Toepfer International, a Hamburg-based subsidiary, of paying $22m to Ukrainian officials to recover more than $100m in unpaid tax refunds.
In one scheme, Toepfer made payments to a shipping company in the port of Odessa for artificially inflated invoices, a piece of which was passed as bribes to Ukrainian officials, the US Securities and Exchange Commission alleged. One set of disbursements was disguised “as prepayments for feed barley”, its complaint said.
In another, the company drafted fake contracts with an insurance company that included false premiums that were paid to Ukraine officials.
Toepfer’s Ukraine office pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the FCPA and agreed to pay $17.8m in criminal fines, the Department of Justice said Friday.

Kids learning the truth about Santa – News and views for Saturday 21 December

News and views noted along the way.
  • Surprising Academic Data on What Happens When Kids Learn the Truth About Santa
  • The Old King is Dead. Long Live the King! – “It’s time to realize that focusing on the horse race aspect of American presidential politics is precluding actual governance.”
  • Hockey’s massively dishonest budget fiddle – “It’s only in the full light of day, having had the opportunity to consider the full scale of Treasurer Joe Hockey’s, budget dishonesty that its gravity can be understood. Out of his $68 billion in additional accumulated deficits over the next four years, $54 billion comes from his forecasting fiddle and the rest is spending decisions he’s taken since being elected just over three months ago.”
  • Expected to be China’s biggest, Guangdong carbon mkt begins briskly
  • Chinese local government debt hits new high – “Local governments in China have taken on more new debt in 2013 than ever before as they use shadowy bonds to splurge on infrastructure projects, stoking concerns over potential risks to the nation’s financial stability.”
  • Government sees Pacific trade pact talks taking time – “Negotiations on a trade pact between a dozen countries around the Pacific Rim will take whatever time they need as the deal has to be both ambitious and comprehensive, U.S. trade representative Michael Froman said on Saturday.The U.S.-backed deal, which Washington had wanted to conclude this year, aims to establish a free-trade bloc stretching from Vietnam to Chile and Japan, encompassing about 800 million people and almost 40 percent of the global economy. But differences over farm tariffs between the United States and Japan have proved to be one of the major roadblocks and it will now not be finalized this year.”
  • The Terrible Twos Are Actually the Worst - “The rate of violence peaks at 24 months, declines steadily through adolescence and plunges in early adulthood.”

Friday, 20 December 2013

Bankers - they cheat us here, they cheat us there

Headlines from around the world this morning suggest that banks cheat us everywhere.
From Australia's Fairfax papers:
And on the other side the of the world comes this report from the European edition of The Wall Street Journal:

Clipping the ticket of ordinary people's savings appears to have no limit for the money managers.
And now, it seems, the Australian Coalition government is intent on aiding and abetting the robbery. The Assistant Treasurer Arthur Sinodinos today announced plans to undo changes made by the previous Labor government to protect consumers from greedy financial planners. One of the proposed changes would water down a provision obliging financial advisors to always act in the best interests of their clients.
The ABC reports that the Government also wants to remove the "opt-in" requirement, which forces financial advisors to contact fee-paying clients every two years to renew their contacts. It would also scrap rules requiring financial advisors to disclose how much they charge clients in annual fees.
The group representing industry superannuation funds is worried the changes will allow financial planners to once again receive sales commissions, paid for by banks and private super funds.
Industry Super Australia executive manager David Whitely says he particularly concerned about provision requiring advisor's to act the best interest of clients.
"We're very concerned that changes to the best interest test will result in creating loopholes which allow financial planners to once again receive sales commissions, ongoing fees, volume rebates and all sorts of other incentives to sell a product," he said.

The Pope and the magic of the full glass- News and views for Friday 20 December

News and views noted along the way.
  • Pope Francis Rebukes "Marxist" Attack From Rush Limbaugh & Conservative Media - " 'Marxist ideology is wrong. But I have met many Marxists in my life who are good people, so I don't feel offended." He added, "There is nothing in the exhortation that cannot be found in the social doctrine of the church.' The Pope expanded on his critique of 'trickle-down' economics, noting that 'The promise was that when the glass was full, it would overflow, benefitting the poor. But what happens instead, is that when the glass is full, it magically gets bigger nothing ever comes out for the poor'."
  • World Bank president calls corruption 'Public Enemy No. 1' - "The development institution, which long shied away from tackling corruption because it wanted to steer clear of politics, on Thursday said it plans to hire more experts in the rule of law and other governance issues."
  • Is ‘Master Kang’s’ Noodle Cooked? - "He’s been compared to a favorite Chinese snack, has been called a “great tiger,” and has been referred to by the vague-sounding appellation Mister Kang. What he isn’t called, at least on the censored Chinese social web, is his name, Zhou Yongkang. The hated former head of his country’s massive state security apparatus, and formerly one of the most powerful men in China, Zhou may now be in a lot of trouble: On Dec. 11, Reuters reported that he had been placed under virtual house arrest; in early December they reported his son Zhou Bin had been helping with a corruption investigation, possibly against his father. While the story hasn’t been officially confirmed, it does seem very likely that Zhou, who hasn’t been seen in public since October, is under suspicion. If Zhou falls, it will be one of the biggest purges since the Communist Party took power in 1949, with farther reaching consequences than the 2012 unraveling of former Chongqing Party Boss Bo Xilai."
  • The politics of science fiction - "If historians or critics fifty years from now were to read most of our contemporary literary fiction, they might well infer that our main societal problems were issues with our parents, bad relationships, and death."
  • Not Fit for the Next Crisis - Europe's Brittle Banking Union
  • Months After Banning Fracking, France Now Has A Carbon Tax - "The French Parliament on Thursday adopted a budget for 2014 which includes a tax on carbon emissions from gas, heating oil and coal, according to a report in Platts... France’s adoption of a carbon tax is not the first environmentally friendly policy change the country has made recently. In October, France completed its ban on fracking, after a constitutional court upheld a 2011 law prohibiting the practice and canceling all exploration permits."

Thursday, 19 December 2013

The US’s tiny taper – News and views for Thursday 19 December

News and views noted along the way.
  • A Tiny Taper, In 2 Graphs – “In the past five years, the Federal Reserve has created roughly $3 trillion out of thin air. The Fed uses the money it creates out of thin air to buy bonds. The idea is to drive down interest rates, which encourages people and businesses to borrow and spend money. It’s called quantitative easing. The big news today is that the Fed will soon start creating slightly less money out of thin air every month. Starting in Januray, the central bank will go from creating $85 billion every month to creating $75 billion a month. In the context of the roughly $3 trillion the Fed has already created, this change is vanishingly small.
19-12-2013 taper
  • Intelligence Panel Recommends Limits On NSA Surveillance
  • Spying Run Amok - “Whatever we think of Snowden — self-aggrandizing creep or self-sacrificing crusader against creepy government spying or sociopath with stolen documents, as The Wall Street Journal put it, or someone who should ‘swing from a tall oak tree,’ as John Bolton told Fox News — it is absolutely clear that the N.S.A. went wild with technology that allowed it to go wild. These technological toys turn everyone into thieves.”
  • The Man Who Duped Millionaires Into Paying Big Bucks For Fake Wine
  • Tomas Piketty: Capital in the Twenty-First Century/Inequality and Capitalism in the Long Run: The Honest Broker - In his Helsinki lecture, Tomas made six major points:As growth rates decline in the Old World (Europe and Japan), we will once again see the dominance of capital: a greater proportion of the wealth of society will be held in the form of physical and other non-human-skill assets, and inheritance and position will matter more and individual effort and luck less.
    In fact, given relatively high average rates of return on capital and thus a large gap vis-a-vis the growth rate, wealth concentration is likely to reach and then surpass peak levels seen in previous history as the superrich become those who started wealthy and benefitted from compound interest and luck.
    America remains an exceptional puzzle: it looks, however, like it is headed for an even more extreme distribution of wealth than is the Old World.
    Remember, however: the evolution of income and wealth distributions is always political, chaotic, unpredictable–and nation-specific: not global market conditions but national identities rule wealth distributions.
    High wealth inequality is not due to any “market failure”: this is a market success: the more frictionless and distortion-free are capital markets, the higher will wealth inequality become.
    The ideal solution? Progressive global-scale wealth taxes.

Wednesday, 18 December 2013

Miranda forgot that Natasha has got friends in high places


I suppose there comes a time when you have done the Opposition to death and you have to turn on your own lot. Well Miranda certainly did this morning and with quite a vengeance.

Yet the Tele’s fearless columnist forgot one thing. Natasha might once have been a dreaded Australian Democrat who opposed the GST. But, as the Beastie Boys put itI got friends in high places that are keeping me high. She married into the right kind of political family.
I mean, consider the connections. Her husband is described thus on his lobbyist firm’s website:
Ian Smith co-founded Bespoke Approach in July 2008 and since then it has been working with major domestic and international businesses on a range of complex projects across Australia and internationally. One of the company’s founding principle was based on Ian’s belief in the engagement of former senior politicians to assist companies develop corporate strategies.
Ian was a journalist before advising the South Australian Liberal Party from 1990 to 1992 and the Kennett Government in Victoria from 1992 to 1995. He established boutique consultancy Kortlang Melbourne in 1995 before it was acquired by Gavin Anderson & Company. As CEO of Gavin Anderson & Company (Australia) and a part of the company’s global executive board, he developed the largest and one of the most successful public affairs and financial communications companies in Australia.
And who else do we find as a founding owner of Bespoke Approach? Why,  none other than that epitome of the South Australian Liberal Party establishment, Australia’s Minister for Foreign Affairs throughout the term of the Howard Government, from March 1996 until December 2007 and the Leader of the Opposition and Leader of the Parliamentary Liberal Party from May 1994 to January 1995, Alexander Downer.
His network with governments around the world remains unique and he has a reputation for his keen sensitivity to the cultural issues that can create unseen impediments to anyone trying to work across borders.
Who better than this team to help create an Ambassadorial vacancy so that there was a job for one of the girls?

How big banks help the ticket clipping of the poor

From the Washington Post’s Wonkblog:
We usually think of payday lenders, pawn shops, rent-to-own stores and other high-cost loan operations as alternative forms of financing for people who are short of cash. But that’s merely a facade: They couldn’t operate without billions of dollars in cheap capital from the nation’s biggest banks.
Reinvestment Partners, a North Carolina-based non-profit that advocates for the underbanked, put out a report Monday laying out how the system works, and just how much money flows through it — $5.5 billion, to be precise.

Shanahan doctors a devil’s debt number

Don’t let a billion get in the way of a good headline.
Two different versions of the gross debt figure in 10 years time

A ticket clipping update – Which bank?

From this morning’s Fairfax business pages:
An independent expert will investigate Commonwealth Bank’s online broker, CommSec, after the financial regulator found it pooled clients’ money and withdrew funds from client accounts for years without authorisation…
It follows findings by the Australian Securities and Investments Commission that the broker and another CBA subsidiary, Ausiex, was withdrawing client money for daily cash settlements and shifting the bank’s own money into client trust accounts.

Edward Snowden and two great Orwellian truths – News and views for Wednesday 18 December

News and views noted along the way.

  • Orwell in America – “Orwell spent his life loathing intellectuals and state technicians like Edward Snowden. He was sure they would betray the people. Well, Orwell did not always get it right and in this particular matter there can be no doubt that – as the cliché goes – if he was alive today the greatest political commentator of the 20th century would be supporting the young American. For Edward Snowden recognized two great Orwellian truths; first that liberty depends on millions of private lives kept private. As a fully paid-up non-deceived realist, Orwell would have argued the difficult case as to the point at which state secrecy should end and private life begin. Second, Snowden recognized that the War on Terror is no war and the quicker we drop the impossible abstraction of it all the better. Far better that we stick to what is ordinary: ordinary law, ordinary war, ordinary security, ordinary guys. Far better too that we stick to ordinary presidents.”

Tuesday, 17 December 2013

Catfish and the Trans-Pacific Partnership trade agreement.- News and views for Tuesday 17 December 2013

News and views noted along the way.
  • Battle Of The Bottom Feeder: U.S., Vietnam In Catfish Fight – “Negotiators hoped to have the TPP trade deal wrapped up by the end of the year, but that’s not going to happen. There are still many outstanding issues — like catfish — that need to be resolved.”
  • Fed Stimulus Blunted as Software Replaces Hardware
  • Why Inequality Matters – “In my view … the really crucial role of inequality in economic calamity has been political… What do the pre- and postcrisis consensuses have in common? Both were economically destructive: Deregulation helped make the crisis possible, and the premature turn to fiscal austerity has done more than anything else to hobble recovery. Both consensuses, however, corresponded to the interests and prejudices of an economic elite whose political influence had surged along with its wealth.”
  • The Selling of Attention Deficit Disorder – “The Number of Diagnoses Soared Amid a 20-Year Drug Marketing Campaign.”
  • Secular Stagnation: Back to Alvin Hansen – “Here are some words from Hansen’s 1938 speech that ring true to me today: … ‘The problem of our generation is, above all, the problem of inadequate private investment outlets. What we need is not a slowing down in the progress of science and technology, but rather an acceleration of that rate. Of first-rate importance is the development of new industries. … Some small recovery must indeed arise sooner or later merely because of the growing need for capital replacement. But a full-fledged recovery calls for something more than the mere expenditure of depreciation allowances. It requires a large outlay on new investment, and this awaits the development of great new industries and new techniques. But such new developments are not currently available in adequate volume’…”

Monday, 16 December 2013

Baling out university superannuation schemes

Snuck away in today’s Financial Review story on plans for a federal takeover from state governments of the administration of universities is an apparent costly rescue plan for the superannuation scheme for academics. The Fin report says:
The Abbott government is also poised to relieve NSW of the burden of $2 billion of unfunded obligations for superannuation schemes operated by NSW universities. The federal government will take responsibility for 80 per cent of the unfunded obligations of the defined-benefit schemes.
Academics, especially younger ones, should be grateful for the Commonwealth’s largesse for without it their retirement incomes are in big trouble.
16-12-2013 unisuper
The rather sad story of UniSuper is not one that has received much coverage in the mainstream news pages. Superannuation is a complex subject for journalists to cover and the couple of attempts I made to draw attention to the university problem aroused little interest and thus can be included in the “failure” category.
More successful are the efforts of financial consultant Daryl Dixon in his regular columns hidden away on the finance pages of The Canberra Times and The Australian. They are worth a read.

Defined benefit a time bomb

Daryl Dixon September 28, 2013 The Australian (subscription required)
Unisuper has acknowledged that its defined benefit superannuation fund is no longer prepared to pay all the benefits promised to members when they were forced to join this fund. Its latest chief executive, Kevin O’Sullivan, has indicated that a name change, including “target benefit” rather than “defined benefit”, will be considered. For younger members with many years of employment ahead, and nearly 7000 non commutable lifetime pensioners, a more suitable description could well be “uncertain benefits” scheme.

Public servants on steadier ground than academics

Daryl Dixon September 03, 2013 The Canberra Times
Defined-benefit funds CSS and PSS pensioners are highly unlikely to face the uncertainties plaguing UniSuper. A protection for public servants is that a breach of the Commonwealth’s statutory commitments would trash Australia’s credit reputation. Apparently tempted by the extra cash on offer, Australian National University employees have been keen to volunteer for one of the 230 early-retirement packages now on offer.

Uncertainty looms over uni’s staff pensions

Daryl Dixon August 06, 2013 The Canberra Times
Last month, the Australian National University joined other university and public sector employers in announcing it would shed a large number of jobs. The ANU will seek 230 volunteers to accept an early retirement package, offering cash inducements of between six and eight months’ salary depending on the staff’s length of service. These incentives will be paid, subject to Taxation Office approval, not as a tax-free voluntary redundancy pay-out but as an eligible termination payment instead, subject to less generous concessional tax arrangements.

More woes in Unisuper saga

Daryl Dixon June 24, 2013 The Australian (subscription required)
My most recent article highlighting the inadequate regulatory protection for university employees forced to join the UniSuper Defined Benefit Fund provoked a justified response from a reader.

It’s time to bail from UniSuper

Daryl Dixon June 08, 2013 The Australian
Where are the superannuation regulators when investors really need them, as the UniSuper defined benefit fund difficulties continue?

Pension time bomb ticking

Daryl Dixon March 11, 2013 The Australian
The federal government’s unfunded super liability for politicians, judges, public servants and military personnel now totals some $200 billion and continues to increase. This is more than 2.5 times the assets in the Future Fund set up by the Howard government to help fund these liabilities.

Regulators must act to end the UniSuper farce

Daryl Dixon March 05, 2013 The Canberra Times
University pensions authorities must now step in to protect the superannuation savings of university staff.

Our unis are stealing their staff’s futures

Daryl Dixon February 05, 2013 The Canberra Times
UniSuper University staff may lose the retirement benefits that their super fund promised them. The fund is relying on the contributions of new younger members to help fund the larger benefits promised to older members.