Archive for the 'Markets' Category

Newspoll: Labor 54-46, Essential Research: Labor 61-39

Published
by
Kim
1 month ago
in Economics, Markets, Media and Polls
. 14 Comments

The headline numbers of today’s polls are above, and there’s more detail at The Poll Bludger.

For mine, what’s more interesting is some of the questions in the Essential Research poll. In particular, it’s interesting to compare the disapproval ratings of Rudd and Turnbull - 22% (down 8%) and 36%. There’s only a 4 point gap between Turnbull’s disapproval and approval numbers, while Rudd has 44%. That suggests to me - when combined with the 60-19 PPM figure and the 72% approval of the government’s actions in combating the global financial crisis - that Kevin Rudd has occupied the sort of territory John Howard used to - as a strong and safe national leader, but without the negatives. Malcolm Turnbull, by contrast, is dangerously close to numbers which suggest a polarising politics as usual carping oppo leader.

In light of what Mark’s been saying about Turnbull’s strategy on economic management, it’s worth asking if it would have been a much better strategy for the opposition to keep a relatively low profile and stick to the statespersonlike pose thing. Point scoring and politicking are the worst look possible for the Libs at the moment. The problem is they just can’t help themselves.

It might take another election defeat for the primadonnas on the Coalition frontbench to realise they shouldn’t be constantly in the public eye declaiming and condemning. It’s the same thing that benefited Rudd last year - the Howard government providing constant alarums and colour and movement just turned people off - Australians aren’t that interested in the political game and just want the government to govern. Kevin Rudd understands that well. The opposition - and their mates in the meejah - are clueless, and won’t get a clue whilever Malcolm’s ego is on the prowl 24/7.

We’re all rooned!

Published
by
Mark
1 month ago
in Economics, Markets, Media and Sociology
. 36 Comments

Malcolm Turnbull, whose peregrinations around themes on economic management I documented earlier, might actually be revealing some method in his madness. Possibly the regular calls for bipartisanship always follow the beatups and ranting and raving over alleged government incompetence. It may be designed to suggest that he’s always willing to assist, and it’s only the partisan refusal of his expertise by the government that is the root of every conceivable problem. On the other hand, I might be reading a lot more into Turnbull’s frenetic pontificating than is justified - simply by reading too much reportage of his endlessly expressed views. Maybe he’s picking up some bad habits from Twitter?

In any event, it’s been interesting to see some more clarity emerging about the issues surrounding various types of investment funds freezing withdrawals - including the fact that there are 190 000 Australians with such investments. Turnbull has certainly been carrying on as if the problem is of much greater dimensions than that. Bernard Keane raises one salient issue in Crikey:

The demand by cash management funds and mortgage trusts that they also get a government guarantee is one of the more shameless try-ons in an era of particularly refined rent-seeking. Why don’t we guarantee all listed companies while we’re at it? It would be heartlessness of titanic proportions to dismiss the concerns of shareholders about their investments.

It’s also becoming clearer that some of these investment vehicles have been in some trouble for quite some time, though it’s worth noting that in most instances, investors still have access to distributions and dividends even if their capital is temporarily not liquid. But it does look as if the “all the fault of the government and that bank guarantee” narrative is - at best - vastly overstated. Meanwhile, as Keane also observes, the News Limited papers are full of heart-tugging stories about hardship which conveniently support the opposition’s “narrative”. Continue reading ‘We’re all rooned!’

The Reds are coming!

Published
by
Mark
1 month ago
in China, Developing world, Economics, Europe, Foreign Elections, Health, International, Markets, Polls and Sociology
. 27 Comments

I’m not sure if I’m the only one who found the juxtaposition on the news last night of discussion of global regulation at a meeting between Chinese and EU leaders and George W. Bush’s “free markets are great!” remarks rather odd. I suspect two things are at work here - first, the defensive reaction to loudly proclaim your ideological purity even at a time when your actions belie your words, and secondly, the related posturing of the Republicans doing their level best to damn Obama as a socialist (which is also rather strange as John McCain wants to spend $300 billion buying up mortgages). For what it’s worth, it doesn’t look like the red smear is working - unsurprisingly polls are finding that a large majority of US voters don’t mind the idea of higher taxes on those earning more than $250000 a year to fund a healthcare plan. Conjuring up these atavistic spectres (”communism!”, “socialised medicine!”) isn’t spooking too many people.

The GOP might also be a tad influenced by Alan Greenspan’s concession that his ideological predispositions led him into errors which contributed to the global financial crisis, which John Quiggin argues illustrates the bankruptcy of the “efficient markets hypothesis” and demonstrates that financial markets have a tendency towards creating instability, rather than the other way around.

So, I think there’s a bit of projection going on - amidst the ruins of their ideological landscape, the GOP are trying to cast the Democrats in the role of the enemies of market freedoms, whose benefits (in the form in which they existed) are looking quite illusory. Continue reading ‘The Reds are coming!’

The spectre of Hayek haunts the land

Published
by
Mark
1 month, 1 week ago
in Economics, History, Markets, Media, Philosophy and Sociology
. 88 Comments

I kinda wish Kevin Rudd had never put his thoughts on Friedrich Von Hayek on paper, because had he not we’d have been saved some appallingly ill-informed “debates”. Although, if expert psephologist Janet Albrechtsen is right, Rudd’s articles on Howard’s Hayekian “brutopia” won Labor the election, so perhaps I should take back that wish.

My contention throughout the global financial crisis has been that blinkered ideological thinking has been worse than useless in explaining it or proscribing remedies, and that indeed the pressure of events has exposed yawning chasms in the coherence of ideology, and what we might call its fit with reality.

That’s never been more evident than in a truly absurd column today from Alan Wood, which argues that Hayek has a lesson for Rudd in the story of the bank deposit guarantee.

Continue reading ‘The spectre of Hayek haunts the land’

Scrutiny in the Senate: water, markets and censorship

Published
by
tigtog
1 month, 1 week ago
in Authoritarianism, Environment, Government, Markets, Media, Parenting, The Web and Water
. 16 Comments

I sometimes think that if it weren’t for the Senate Estimates Committees we would hardly know anything about our government at all in this country that didn’t come from a press release or a well-timed leak, given that Question Time has largely become a farce. I imagine that the senior public servants and Government Ministers who get grilled don’t enjoy them much though.

The Senators are currently uncovering undisclosed, or at least unpublicised, aspects to many government programs. Of course, the heady whiff of grandstanding is undeniable, but that doesn’t mean that the questions asked are necessarily discredited entirely because they are informed by a partisan agenda. The scrutiny also offers the chance to show how certain plans may be unbalanced in the composition of their beneficiaries or unreliable in delivering the promised benefits at all.

One plan which appears to be unbalanced in its beneficiaries is the Murray-Darling re-adjustment plan: all the money to go to irrigators, none to the towns affected by the flight of farming families?

There is a great deal of concern from Liberal Senators about the economic stimulus package and the unrestricted bank deposits guarantee, and through the committees we discover that there was no formal modelling of the stimulus package, and that there may have not been full consultation with all the regulatory bodies before the plan was announced.

Finally, the plan which appears to not only be unbalanced in its proposed beneficiaries but also questionable about offering benefits at all, while penalising broad swathes of the population at the same time: the Government’s proposed internet filtering plan. Continue reading ‘Scrutiny in the Senate: water, markets and censorship’

A lapse in judgement? Or too many barristers?

Published
by
Mark
1 month, 1 week ago
in Economics, Ethics, Law, Markets and Media
. 47 Comments

The Coalition’s apparent belief that everything that they read in the (Australian) newspaper must be true has got them into all sorts of trouble this week. The bizarre spectacle of a gaggle of Liberal Senators piling on Treasury Secretary Ken Henry in Senate Estimates was quite extraordinary… and all this to score what would have been quite a minor debating point, if there’d been any veracity to the story in the first place. It was quite clear in fact that it was wrong, or w r o n g ! if you prefer, before the inquisition even began, but that didn’t stop Eric Abetz and Helen Coonan from reviving some courtroom tricks. In fact, the spectacle of George Brandis in full flight - declaiming as though the Treasury Secretary were some sort of a hostile witness in a criminal trial - was really quite the thing to behold.

Henry’s testimony led to a most unedifying spectacle where Malcolm Turnbull failed pathetically to dig himself out of his hole on the 7 30 Report. It was - quite seriously - one of the most appalling interviews I’ve seen a political leader give.

Michelle Grattan claims, in a column that - among other things - recites some of Turnbull’s own talking points, that the opposition leader suffers from “periodic bad judgement”. I’d like to ask - quite seriously - if someone can instance for me an example of Malcolm Turnbull exercising good judgement. When are the media going to realise that Turnbull’s not the Messiah, just another arrogant barrister with an inflated ego?

Update: If anyone was wondering about Dennis Shanahan’s “we were right!” stuff in today’s Australian, Bernard Keane puts it to the test and gives it the epic fail.

Malcolm Turnbull haunted by Paul Keating

Published
by
Mark
1 month, 1 week ago
in Economics, Howardia, Markets and Media
. 28 Comments

As I’ve commented before, it’s always a bit difficult to keep track of Malcolm Turnbull’s economic narrative du jour. At least with Emo Man Brendan Nelson, we could always rely on undiluted populism with not even a minimal pretense at making any sense. Turnbull’s supposedly better than that, but in the lead up to the budget we had accusations that Labor were wimping out by not cutting spending aggressively enough, followed in very short order with claims that the surplus was unnecessarily large. We’re being treated to something comparable now, with the switch apparently flicked randomly between solemn appeals for bipartisanship, insinuations that the fiscal stimulus package is too big, loose language - subsequently repeated - about the global financial crisis being “hyped”, and now I think the beginnings of a “don’t spend the surplus” theme.

Jacques Chester, I suspect, has pinged what’s going on with all this:

It’s a lawyerly way of arguing. Pick an argument, any argument, that might be plausible, and throw it at the judge. You never know, it might stick.

There are certainly some straws blowing in the wind over the past few days, which in the way of these things, either represent columnists in The Australian flying kites for the opposition to grasp, or reciting lines fed to them by the Coalition. Continue reading ‘Malcolm Turnbull haunted by Paul Keating’

The state of capitalism today III

Published
by
Mark
1 month, 1 week ago
in Economics, International, Markets, Politics, Sociology and USA
. 24 Comments

I can’t recall where I read this, but someone in one of the many interesting things written about the global financial crisis suggested that “Keynes” (of whom we’ve heard more lately than we’ve heard for a long time) might be a useful heuristic to understand what’s been happening rather than a real source of inspiration for policy responses or analyses. With all the calls for a new Bretton Woods, emanating from Gordon Brown (and Kevin Rudd), what appears to have been overlooked is that Keynes’ proposals at Bretton Woods itself were substantially modified to ensure the effective independence of the US currency from the financial architecture it put in place - something that’s explained quite deftly here. So, even at the height of “Keynesianism”, we never really had the rule-bound constraints on capitalist behaviour which the man himself had wanted to see. Similarly, there’s no great novelty in pump priming as a tool of macro-economic management and it’s better understood as a pragmatic mode of state intervention, which has been adopted as a tactic of governance, rather than as a paradigm shift in economic practice. Again, there are significant differences between Keynes’ own ideas and the “neo-Keynesian synthesis”.

However, I think we can now advance a few hypotheses, however tentative, about what’s occurring - in terms of both political economy and the sociology of knowledge.

Continue reading ‘The state of capitalism today III’

Malcolm Turnbull’s faith based economics

Published
by
Mark
1 month, 1 week ago
in Economics, Markets and Media
. 27 Comments

One of the most puzzling lines Malcolm Turnbull came out with as shadow Treasurer earlier in the year was his claim that Labor had talked inflation into existence. This was part of some sort of complex juggling act which allowed the Coalition to try to claim that all had been going swimmingly until November 24 2007, and that Kevin Rudd and Wayne Swan had been jawboning the Reserve into raising interest rates and/or exaggerating the need for a $22 billion surplus. It was an appalling political theme because it was too confused to be simply communicated, and left Turnbull wide open to charges that he was out of touch with the strains folks felt from higher prices.

Now he’s at it again.

On the news last night, this grab from Turnbull’s appearance on Insiders featured prominently:

And Kevin Rudd has hyped up this crisis or this financial crisis by saying it’s a rolling national security crisis.

If you read the quote in the context of the whole interview, it makes more sense - because Turnbull’s making a reasonable point about accountability to Parliament (which Andrew Bartlett also makes in somewhat different terms). But the politics are just awful - it allowed Wayne Swan to quickly swat Turnbull away, again making him appear as if he was out of touch and disconnected with what voters are feeling and fearing.

Continue reading ‘Malcolm Turnbull’s faith based economics’

The stimulus package and fairness

Published
by
Mark
1 month, 2 weeks ago
in Economics, Howardia, Markets and Poverty
. 61 Comments

Just before last year’s federal election, I read Neal Blewett’s Cabinet Diaries. The book is a good read, but I was also interested in reminding myself - in the dying days of the Howard Era - what a Labor government felt like. One of the things that really jumped out at me was regular discussions around the Cabinet table about assistance for the unemployed, and several of Keating’s measures to stimulate the economy were targeted to people on the dole, among others. Those with longer memories might recall Labor’s opposition to Malcolm Fraser’s “fight inflation first” austerity regime in the late 70s. Mike Steketee has a very good column today which shows just how much things have changed in the era of the deserving poor (and not so poor) and the undeserving poor. He rightly points out that some of the pensioners receiving payments will have substantial assets and incomes of up to $66000, and self-funded retirees with incomes up to $50000 for singles and $80000 for couples will also receive the one off payments. It would be very hard to argue that they are the folks in the community doing it toughest, and as Steketee suggests, there’s no guarantee the money will be spent rather than saved.

What we’re seeing here, I think, is a combination of Kevin Rudd’s very conservative personal values and political calculation.

Continue reading ‘The stimulus package and fairness’

Unlocking the metaphor of frozen interbank lending

Published
by
dk.au
1 month, 2 weeks ago
in Markets, Sociology and Technology
. 13 Comments

Tony Jones asked Will Hutton last night whether the interbank credit market was “run by cowboys or run by reputable people?” But between these two moral poles is enormous material and cultural complexity:

If a bank wants to borrow money, a broker needs quickly to find someone prepared to lend at an attractive rate; if a bank wants to lend, he – it’s a predominantly male profession – needs to find a borrower ready to pay a good rate. So a broker needs continuously to know who wants to borrow, who is prepared to lend, and on what terms. As one of them said to me, a broker might ‘speak to his big clients … have conversations with them maybe twenty-five times a day, which is twenty-five times as often as they speak to their wives’.
A broker needs to pass information to his clients as well as to receive it: that’s a major part of what they want from him, and a good reason to use the voicebox rather than the screen.

Continue reading ‘Unlocking the metaphor of frozen interbank lending’

SMH Death Spiral - Emissions Trading Edition

Published
by
dk.au
1 month, 2 weeks ago
in By-elections, Climate change, Developing world, Howardia, International, Markets and NSW Government
. 32 Comments

Oh dear. Anyone who’s still getting their ‘news’ from SMH needs their head examined:

Subsidy for bulbs wasted:
THE flawed scheme to cut greenhouse gas abatements by giving away lightbulbs has squandered an estimated $60 million of NSW taxpayers’ money, the State Opposition says….

An assessment of the scheme by the Opposition has found that NSW Greenhouse Abatement Credits issued by the Government have been largely wasted. It was claimed initially that as many as 80 per cent of the lightbulbs given away were installed. But later surveys found most households never installed them, and that only four out of 10 of the lightbulbs were ever used.

‘Later’ being the operative word there, rather than ‘recently’. The changes to the installation rate occured after an audit in 2006, sending all the businesses operating under the Demand Side Abatement Rule to the wall. Despite insistent pleas for transitional arrangements until a national scheme could be brokered, none was given and around 1000 people lost their jobs in companies like Neco and Easy Being Green. Some forms of structural adjustment are more equal than others…

The real story here is the upcoming ‘Super Saturday’ of by-elections. (Guy Beres has an excellent analysis). Continue reading ‘SMH Death Spiral - Emissions Trading Edition’

The state of capitalism today II

Published
by
Mark
1 month, 2 weeks ago
in Apocalypse, Disasters, Economics, Europe, Foreign Elections, International, Markets, Media, Nationalism, Politics, Sociology and USA
. 28 Comments

SocProf over at The Global Sociology Blog and I must be reading the same things, and thinking along similar lines, because I had planned to link to precisely the same articles she highlights in an update to my recent post on the state of the global financial crisis.

In The Guardian, Will Hutton explains why measures to halt the cascading crisis have been ineffectual to date. He might have made more explicit the implication that one of the basic structural problems is that action taken at the level of the nation state can be counter-productive given the disseminations and movements of capital, and that there are real domestic political barriers to coordinated action, as well as all the obvious problems of concertation through institutions such as the EU and the G20.

But he does make this point - harmonising with the note I’ve been sounding repeatedly - very clearly indeed:

There was no effective opposition. The left and organised labour collapsed as intellectual, social and political forces; there was no conviction that any alternative to this shareholder value-driven, financial, ’securitised’ capitalism existed, or any political muscle to support it even if there were. Mainstream culture moved away from public purpose and fairness; the new priorities were individual self-fulfilment, personal experience and loyalty to self.

Hutton is perhaps more sanguine than I am, though, about the capacity of state action to turn all this around. Continue reading ‘The state of capitalism today II’

The state of capitalism today

Published
by
Mark
1 month, 3 weeks ago
in Activism, Consumerism, Culture, Economics, Ethics, International, Markets, Media, Politics, Poverty, Sociology and USA
. 89 Comments

Iceland may be a barometer for what’s changing in the world economy. It was only very recently that the Milton Friedman fan club was hailing Iceland as a “Nordic Tiger”, lauding its flat taxes and praising its “economic freedom”. “Economic miracle” was a common phrase. What’s it looking like after the credit crisis?

Iceland right now is apparently in a state of shock and gives a snapshot of what a depression with the Great in it will look like everywhere - “cafes were half-empty, real estate agents sat idle, and retailers reported few sales” says the AP.

This after the government basically took over its banking sector, with Russian money, which as noted in the linked post, has real geopolitical implications.

Meanwhile, the British government is laying out 500 billion pounds to take equity in its banking sector, but basically proposing business as usual. Co-ordinated interest rate cuts are having very little impact on the stock market, and more worryingly, on the liquidity crisis. Paul Krugman writes:

We’re way past the point at which conventional monetary policy has much traction.

In America, in the eye of the economic storm, the Fed has basically become the financial system, but to little avail:

The time for a recession was 2005. At that time simple macroeconomic policy; simply raising interest rates, would have ended the bubbles in credit and housing at the cost of a standard if somewhat nasty recession. Trillions of dollars of intervention would not have been needed. Just standard macro policy. Even in 2006 it might still have worked. The Fed blew it, and they broke the system, and now with the system broken they may have to either buy it all out (and Paulson may be considering that after all) or just become the system. And even if they do that may not work, because, well, who wants to borrow and invest right now?

Bernanke and Greenspan are certainly in the “worst Fed chairman of all time” stakes in a big, big way.

Continue reading ‘The state of capitalism today’

Essential Research Labor 58-42; Interest rates cut by 100 basis points

Published
by
Kim
1 month, 3 weeks ago
in Economics, Markets, Media and Polls
. 10 Comments

As a bit of an update to my post last night, the Essential Research poll is now out, basically showing no change from last time. Possum has more on all the other questions asked. So, we can now be more confident about suggesting that Malcolm Turnbull’s leadership has yet to really shift any of the trends that were evident under Nelson - this also highlights the vast over-inflation of the importance of Preferred PM and Opposition Leader approval ratings in most of the punditariat’s commentary. It will be very interesting to see what the delayed Newspoll says - since this is apparently the only poll the punditariat focus on. Where to now for the famous “media narrative”?

Peter Martin has all the wonky stuff worth reading on the Reserve Bank’s 1% rates cut, which a number of banks and lending institutions have indicated will lead to a .8% cut in their variable mortgage rates. Dennis Atkins, writing at Party Games, thinks that the Reserve has given the Rudd government political breathing space.