Category: Economy

What Covid Plan? Paul Keating seizes on the “good news” but Australia’s economy is changing for good – Michael West

Coronavirus, Covid-19, GDP, economy

Paul Keating was on Fran Kelly’s ABC radio show on Friday. He’d picked up a peculiar thing from the GDP release. The headline number was horrific. Australia’s economic growth had shrunk by 7%, the largest drop on record, wiping out four years of growth and sinking the nation, officially, into its first recession in 29 years. Keating seized on the bright spot though, or at least what he thought was a bright spot. Buried in the National Accounts data and apparently picked up by nobody, yet, were the figures for GDP per hour worked. It was an increase. Yes, an increase, and not a trifling increase either. Growth in GDP per hour worked was up from 0.6% – the average over four previous quarters – to 4.1%. It represents a fantastical rise in productivity – a seven-fold surge in productivity. Businesses have shed millions of workers so wage costs plummeted by 9.3% and wages are usually the highest cost in a business.

What Covid Plan? Paul Keating seizes on the “good news” but Australia’s economy is changing for good – Michael West

Delusional: Investors are underestimating the economic shock the world is facing

Markets should not be counting on a swift recovery.

Global banks were supposed to be bullet-proof after boosting capital ratios but the regulatory buffers were never stress-tested for such a shock. They risk becoming the “amplifier” of the downturn as rising bad loans force them to pull back, starving the real economy of credit.
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As the day unfolded: Scott Morrison says COVID-19 restrictions could be lifted in four weeks, global cases surpass 2 million, Australian death toll stands at 63
Even if the worst is avoided and there is no secondary financial crisis, there will not be a swift return to normal. Mohamed El-Erian from Allianz said the rescue measures offer liquidity but cannot prevent the slow burn of defaults. Nor can they kick start the economy when companies refuse to invest because they have no idea what is going to happen.

via Delusional: Investors are underestimating the economic shock the world is facing

Saving the economy or lives: The new neoliberal ‘debate’

The Economy is a system of institutionalised patterns of behaviours that have changed over the years. This pandemic has brought out its current inability to serve all Australians and is in need of serious change. People have always been sacrificed for “the economy” it’s time the economy was sacrificed to accommodate all Australians so death isn’t structured to simply serve it. The economy isn’t an Aztec God. The Aged, immune-deficient, Indigenous, homeless addicted and poor aren’t simply expendables. All parents would sacrifice themselves for the children’s future if given the choice. However, all parents don’t have that privilege some are simply systematically made to. America is finding that COVID-19 is shining a light on their Racism. 40% of deaths are Afro-American in areas where they are only 20% of the population. Equality is the myth, the economy its agent of death. (ODT)

Saving the economy or lives: The new neoliberal ‘debate’

Australia’s monopsonistic relationship with Beijing could tip it into recession – Michael West

Australia’s monopsonistic relationship with Beijing could tip it into recession

ALL THE WAY WITH DONALD J SAY MORRISON ECONOMIC MANAGER

Australian two-way trade with China in 2017-2018 was 24.4% ($194.6 billion) of total trade. In contrast, Japan was our second largest trading partner, accounting for 9.7% ($77.6 billion). China was Australia’s largest export destination — with about 27% of all exports, valued at $123.3 billion.

If Australia were a business, it would be marked down for its high risk-profile through its inordinate reliance on one customer — known in economics as monopsony.

In terms of reliance on China, Australia places 11th on the league table, ahead of such “stand-out” economies as North Korea, Mongolia, Turkmenistan, Solomon Islands, Eritrea, Angola, Oman, Myanmar, Mauritania and the Republic of Congo, according to the CIA World Handbook.

The only other significant nation that comes close to Australia’s 27% export figure is South Korea (25%). New Zealand is at (19%), Singapore (12%) and Indonesia (11%). Trading figures fall away after this.

via Australia’s monopsonistic relationship with Beijing could tip it into recession – Michael West

Australia falls to all-time OECD low on jobs but $A rallies against Zambian kwacha – Michael West

Australia falls to all-time OECD low on jobs but $A rallies against Zambian kwacha

Australia’s jobless rate of 5.24 per cent now ranks 75th in the world and 19th in the Organisation for Economic Cooperation and Development (OECD). That’s the club of 36 wealthy, developed mixed capitalist economies with which comparisons can and should be made.

That is the lowest Australia has ranked since records have been kept. In June 2012 and June 2013, Australia ranked eighth. Just 12 months ago, Australia ranked 17th.

via Australia falls to all-time OECD low on jobs but $A rallies against Zambian kwacha – Michael West

Housing market at its slowest in 12 years — but is that about to change? – Politics – ABC News (Australian Broadcasting Corporation)

A For Sale sign with an black flag reading 'auction' flying in the wind, in front of some trees.

Any further drop hasn’t been because of the government. (LNP)

via Housing market at its slowest in 12 years — but is that about to change? – Politics – ABC News (Australian Broadcasting Corporation)

WA credit rating boost to AA1 sees Labor laughing all the way to the bank, and the next election – Analysis; Opinion – ABC News (Australian Broadcasting Corporation)

Mark McGowan and Ben Wyatt smile while holding the 2018 budget, in front of the Australian flag.

Labor does what the LNP can’t in 6 years of trying. Australia had the World’s best Treasurer until the LNP came along.(ODT)

via WA credit rating boost to AA1 sees Labor laughing all the way to the bank, and the next election – Analysis & Opinion – ABC News (Australian Broadcasting Corporation)

Trump’s $4.7 trillion miss: The tax promise that has fallen way short

4 times bankrupt this is why. (ODT)

Corporate America brought $US664.9 billion ($938.3 billion) of offshore profits back to the US last year, falling short of the $US4 trillion ($5.64 trillion) President Donald Trump said would return as a result of the 2017 tax overhaul.

via Trump’s $4.7 trillion miss: The tax promise that has fallen way short

The world is slowing down at an alarming speed

Wall Street fell sharply on Friday as recession fears gathered steam.

Conditions aren’t being helped by the crude trade policies being pursued by the US, which are damaging its major trading partners with flow-on effects to the rest of the world, while hurting segments of its own economy in the process.

Donald Trump's unconventional trade negotiations are having a detrimental effect on US economic conditions.
Donald Trump’s unconventional trade negotiations are having a detrimental effect on US economic conditions.Credit:AP

The Fed has now backed off on its attempt to use what had been benign conditions in the US – where the economy was growing strongly, if perhaps unsustainably, in response to the debt-funded Trump tax cuts and spending – to normalise its policies.

via The world is slowing down at an alarming speed

What the economy really needs more of: trees

According to those environmental planners, shading from strategically placed street trees can lower surrounding temperatures by up to 6 degrees – or up to 20 degrees over roads. Green roofs and walls can naturally cool buildings, substantially lowering demand for air-conditioning.

By contrast, hard surfaces – including concrete, asphalt and stone – increase urban temperature by absorbing heat and radiating it back into the air.
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But though scientists have much evidence that trees and other greenery improve our mood and health, they know less about the actual mechanisms by which this occurs. Japanese research, however, suggests that when we walk through bushland we breathe in three substances: beneficial bacteria, plant-derived essential oils and negatively-charged ions.

We live our lives surrounded by beneficial bacteria, breathing them in and sharing our bodies with them. Gut-dwelling bacteria break down the food we can’t digest and produce substances that benefit us physically and mentally.

via What the economy really needs more of: trees

Privatise and perish – » The Australian Independent Media Network

LNP money management theory PRIVATISE. Driving Australia to the edge of a cliff.(ODT)

Surely there is a point where the contractor performing the ‘government’ work has to charge more than it would cost the government to perform the work themselves. But by the time that occurs, the government has deliberately deskilled itself to the level where it can’t make the correct call and take back the service provision, so it has to pay.

Global warming and its resultant climate change is no longer a theory.

It is a stark reality, as even a casual reader must grasp:

And the list goes on. Already the effects on human health and well being are widespread.

via Privatise and perish – » The Australian Independent Media Network

Wall Street, global sharemarkets falls trade tensions rise, ASX set to fall

“Investors are now beginning to worry that this heated rhetoric is something that will last for a while and could actually lead to disruption of trade,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

via Wall Street, global sharemarkets falls trade tensions rise, ASX set to fall

Veteran investor Jim Rogers says next bear market will be ‘the worst in our lifetime’

American businessman Jim Rogers has a bearish outlook for global markets.

The veteran investor says that’s because even more debt has accumulated in the global economy since the financial crisis, especially in the US.

via Veteran investor Jim Rogers says next bear market will be ‘the worst in our lifetime’

Households forced to abandon luxuries and spend more of the budget on basics | Greg Jericho | Business | The Guardian

With Australian incomes falling over the past two years and stagnant over the past five, who has the money any more?

Source: Households forced to abandon luxuries and spend more of the budget on basics | Greg Jericho | Business | The Guardian

Why help to buy is no help at all to the economy | Jeffrey Frankel | Business | The Guardian

State subsidies to promote home ownership is not always a good thing – it hikes public debt, cuts labour mobility and often boosts prices not ownership levels

Source: Why help to buy is no help at all to the economy | Jeffrey Frankel | Business | The Guardian

Confidence in housing collapses to lowest level in 40 years: survey

Consumer confidence in the Australian housing market has collapsed to its lowest level in 27 years, with the proportion of Australians believing real estate was the wisest place to put savings falling to below 12 per cent, the lowest level since 1974.

Source: Confidence in housing collapses to lowest level in 40 years: survey

Riding on the backs of the poor – » The Australian Independent Media Network

Joe Hockey infamously labelled us all as “lifters or leaners”, he just mixed the labels up. The conservative government has decided it is the poor who will do all the heavy lifting when it comes to budget repair and paying for their obscene defence spending and tax cuts to the wealthy. First up they got…

Source: Riding on the backs of the poor – » The Australian Independent Media Network

Trump’s trade war would wind clock back to Great Depression era

If economists do one day possess an Arnold Schwarzenegger-style Terminator, capable of travelling back in time to alter the future, Australia Day 2017 is shaping up as a pretty good day to pick.

Source: Trump’s trade war would wind clock back to Great Depression era

Government sells debt at all-time record low interest rate in wake of Brexit vote| Andrew Bolt Cheered Brexit Economics

pp-treasury-1-getty.jpg

The Treasury’s Debt Management Office this morning sold debt at a new record low interest rate, underlining the massive appetite from investors for British Government bonds in the wake of the Brexit vote and sparking fresh calls for the Chancellor to take advantage by ramping up its infrastructure investment. The DMO sold £850m of an index-linked Gilt (or bond) that matures in 2036 at a yield of minus 1.72 per cent.

Source: Government sells debt at all-time record low interest rate in wake of Brexit vote

In a nutshell, Australians are becoming poorer – » The Australian Independent Media Network

By Arthur Plottier This week we have in the news the ‘The Household, Income and Labour Dynamics in Australia Survey‘ (the HILDA report) and it does not paint a healthy picture. Despite our recent natural resources boom we are going backwards. Some of the findings in the report are: Households headed by a person aged…

Source: In a nutshell, Australians are becoming poorer – » The Australian Independent Media Network

Low-income Americans spend as much as $400 to get tax refund, report finds | US news | The Guardian

Report finds poorer Americans fall prey to tax preparers who deliberately target low-income areas and jack up prices ahead of 15 April filing deadline

Source: Low-income Americans spend as much as $400 to get tax refund, report finds | US news | The Guardian

Consume more, conserve more: sorry, but we just can’t do both | George Monbiot | Comment is free | The Guardian

Economic growth is tearing the planet apart, and new research suggests that it can’t be reconciled with sustainability

Source: Consume more, conserve more: sorry, but we just can’t do both | George Monbiot | Comment is free | The Guardian

Welcome to Austeria – a nation robbing its poor to pay for the next big crash | Aditya Chakrabortty | Comment is free | The Guardian

It’s clear George Osborne intends to make austerity permanent. Those at the top will benefit, but hard times beckon for everyone else

Source: Welcome to Austeria – a nation robbing its poor to pay for the next big crash | Aditya Chakrabortty | Comment is free | The Guardian

Fact check: Comparing Australia’s income tax take with other OECD countries – Fact Check – ABC News (Australian Broadcasting Corporation)

Scott Morrison says Australia relies more on income tax than all other OECD countries except Denmark. Is this correct? ABC Fact Check investigates.

Source: Fact check: Comparing Australia’s income tax take with other OECD countries – Fact Check – ABC News (Australian Broadcasting Corporation)

Who Is Robbing America? The 1%. And The 99% Don’t Even Know. AnonHQ

Ever wondered how much is spent annually to feed the poor ‘lazy’ Americans? Three main programs needy families depend upon — Temporary Assistance for Needy Families ($17.3 billion), Food Stamps ($74 billion), and Earned Income Tax Credit ($67.2 billion) — cost $158.5 billion a year. …

Source: Who Is Robbing America? The 1%. And The 99% Don’t Even Know. AnonHQ

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Apocalypse now: has the next giant financial crash already begun? | Comment is free | The Guardian

A predicted global meltdown passed without event. But there are enough warning signs to suggest we are sleepwalking into another disaster

Source: Apocalypse now: has the next giant financial crash already begun? | Comment is free | The Guardian

Economy Heading South. No One at the Helm. – » The Australian Independent Media Network

The latest figures on the health of the Australian economy as shown in the June 2015 quarter National Accounts continues to paint a gloomy picture. Meanwhile, the spin that Treasurer Joe Hockey and Finance Minister Mathias Cormann offer, is priceless. It seems the thrust of their argument is that it doesn’t matter how bad the…

Source: Economy Heading South. No One at the Helm. – » The Australian Independent Media Network