Archive for January 30, 2012

EYE-BALL’s Herman on: Democrazy Part XIII – Thought Broker Conference – Battle of the Think Tanks

January 30, 2012 5 comments
Herman O'Hermitage
Democrazy Part XIII –
Thought Broker Conference – Battle of the Think Tanks.
By: Herman O’Hermitage
Herman O'HermitageOn September 13, 2011 I posted the article 2012 Overture A Crappy New Year linked here.

As we end the first month of 2012 it is interesting to review.

Qld is now committed to holding a state election on March 24, 2012. The USA is desperately seeking anyone to hold a candle to the incumbent president, just a flicker of hope. China has decreased the helter skelter pace of economic growth, but in the Australian mining industry you would not know it. Australia’s Federal Government is looking for a miracle, wanting to highlight the Australian economic story, rather than deal with the real hardships of every day Australians. The Christmas sales and post Christmas sales numbers slowly filter out showing little prospect of employment growth in the retail sector,more like contraction, while both headline employment and job ads are in reverse, and the resultant drop in CPI is seen as hope for further rate cuts in official interest rates.

In the previous post I highlighted how the Australian mining industry has a history of getting in front of itself. The rapacious need to extract the resource and sell as fast as possible, is at the essence of this. No real value added for the Australian community.

Early last December I met with a director of a recruitment firm, an old friend. He was telling me how the European banks based in Australia, are simply not hiring at all. They have critical specialist roles to fill, but as their appetite for risk, is nil, those positions remain unfilled. The Australian banks are saying only rationalisation can maintain their growth targets and profit share and lending figures and building stats are up marginally from relatively low bases. Auction stats are simply miserable, with real estate agents promoting price stability as a good time to upgrade, downsize etc. Tightly focused only on volumes.

In USA politics, the republican contenders are now down to 3. Romney, Gringrich and possibly Paull. Never in American history has the incumbent won a second term with such woeful economic stats against them. But this year, it looks like it will happen. Obama has achieved so little, yet the opposition have simply lost the plot. They can not find a representative of middle America amongst them.

In Australia, it is the governments who have no traction. Campbell Newman only needs to wait 54 sleeps until he is announced the new Member for Ashgrove, and the first LNP Premier of QLD. It looks like a re run of the NSW state election last March. It doesn’t really matter if Campbell is good for the job, he is the only other candidate against Anna Bligh. All attempts at trying to show Campbell as authoritarian or not transparent, do not catch such is the need to affect change. Anna Bligh can add to her resume the first Australian elected female Premier and then also elected out.

At the Federal level, Julia Gillard has similar problems, however she doesn’t go back to the polls for beyond 18 months, despite what the electorate might think or feel. The odds are against the PM being in that job when the next Federal election comes around. The Murdoch press is constantly highlighting the low popularity of Ms Gillard, and if the source was credible, of course it is a natural conclusion.

The 2 biggest stories of the last fortnight tell enough. Firstly the back-flip on mandatory pre commitment and loss of support of the government by Andrew Wilkie and the the sacking and investigation of Prime Ministerial press secretary Tony Hodges. The government has no vision, accuses the opposition of negativity, and uses only opinion polls to make policy decisions. As things stand, the opposition will have a majority of at least 40 in the House of Reps after the next election. They will struggle to get anything through the upper house. What hope is there? Another parliamentary term of playing the man and not the ball.

Anthony Albanese plagiarising a speech from a Michael Douglas movie simply sums it all up. What was I saying about dud plots? At university any student caught plagiarising so badly would receive a 6 month suspension from university for their cheating.

I have barely mentioned Europe. Nothing has really changed since last June when we saw the first civil disobedience in Athens. Germany with their Scandinavian allies will save the Union when there is a commitment to a European Government.

All of this culminates in continued excessive volatlity in financial markets. Firstly currencies suffer, then the individual stocks, that comprise the various indices. The Australian mining houses and the 4 major banks have particularly attractive price to earnings ratios on an historical basis. Moreover I wouldn’t need to look hard to find another dozen. But the uncertainty simply does not go away. What happens if the Greens get their way and a super tax is imposed on the Australian banking sector. Maybe the miracle the Prime Minister needs is widening the tax base of the mining royalty resource tax.

Today on radio there was comment on going back to the gold standard. It won’t happen because of the power imbalance that occurs between Moscow and Washington. The new standard could be capping government debt at 50% of national GDP.

Recently the Murdoch press ran a headline quoting the PM, “lend me your ideas”. Could the contributors to this web site start something special?

Believing in sanity is insanity itself.


Herman …

Categories: The EYE-BALL Opinion
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