Tuesday, 29 July 2014

How is the Government travelling?

Here is:

writing about this topic. I do not intend the reinvent the wheel and they do it far better than I.

Kevin's is the longer and possibly better article.

Monday, 28 July 2014

Work for the dole is very very stupid

We heard yesterday plans for the government that people getting the dole ( to be accurate the dole doesn't exist anymore but you get the point) will need to not only 'work' for it but also show they have gone for 40 jobs during the month.

This is incredibly stupid policy. We already have evidence for this. One of the main reasons for this is that the programs do nothing about improving the skills of the person involved.
Getting a job is a very time consuming job in itself.
I have been lucky in that on the occasions I have been retrenched I have had outplacement facilties given to me.
When you get this the first and possibly only lesson you use is that it is only by using your network that you will gain a new job as the vast majority of jobs are not advertised.
You will drink a lot of coffees as you endeavour to achieve your goal.There are a lot of phone calls involved as well.
As you can see if you are 'working' for the dole then it must mean your chances of gaining that new job diminishes and indeed most studies of work for the dole show this.

In addition if you have to show evidence that you have applied ( and been rejected) for 40 jobs guess who has to do the paperwork. Yep, the business.

This idea is so stupid it could have only come about if Katesy or the Peroxide Princess advocated it!

Special Bonus by the Kouk on will-work-for-the-dole-increase-unemployment

Sunday, 27 July 2014

Israel and Palestine

My eldest son asked me why there are problems with Israel and Palestine.
I replied each denies the humanity of the other. Thus when they murder people they feel no remorse indeed they wish to murder more.

The excuses of either side border on the pathetic.
Hamas fires rockets into Israel which in essence do nothing very much. For this hundreds perhaps thousands of their countrymen will dies if the existing situation is prolonged.

Israel acts as though the country is under threat. It isn't and never was. Yes a response to the firing of rockets must be found however it must be proportionate. Clearly the existing situation is anything but proportionate.

What is the solution?

Accept Hamas as the government and let them govern. This would mean they would have to change. Any increase in growth must come first through greater trade with Israel.
As Growth increases and people become materially better off they want a better standard of living, their own homes etc.

Firing rockets makes thus impossible hence it would stop. Hams would become more conservative and act like a government.
Just look at the IRA and Northern Ireland.

Thursday, 24 July 2014

Around the Traps 26/7/14

It is time for Around the Traps. I will update on Sunday

Northern America

Andrew Gelman ( Mainly but not only Statistics)
Dave Giles (Econometrics)
Dianne Coyle ( Quirky + Book reviews)
Vox Wonk

Wednesday, 23 July 2014

Sinclair Davidson will never change

Sinclair Davidson having gotten badly bruised and battered by the Kouk in the tobacco wars returns to his absurd stagflation prediction today.
First THIS is reasonably okay on the definition and history of stagflation.

Please note there is nothing at present that remotely looks  like the 1970s at present. Also note that one key ingredient of stagflation is the level of wage increases. This both leads to the price and unemployment levels being much higher than  would otherwise be the case.
I let us examine the figures as the RBA views them.in terms of inflation.
In six monthly annualised terms, the path for underlying inflation over the past two years has been: 
H1 2014: 2.5% H2 2013: 3.1% H1 2013: 2.1% H2 2012: 2.7%  ( courtesy of the Kouk).
According to the RBA a rise is rates in unlikely.They said this about the labour market
"Labour market conditions had improved a little since late in the preceding year. The level of employment was around 0.9 per cent higher since then. The unemployment rate had been steady at 5.8 per cent for the third consecutive month, although the participation rate had declined over that period. Employment growth in household services continued to be strong over the past six months, while employment in business services had also picked up. Members observed, however, that total hours worked had not increased for a considerable time. Forward-looking indicators of employment had recently been mixed and while these indicators were higher than at the low points of the previous year, they remained at levels consistent with only moderate growth in employment in the months ahead.
The recent national accounts data indicated that unit labour costs were little changed over the past year, reflecting low growth of wages and above-average growth of productivity. Members noted that while labour productivity had been boosted by a sharp improvement in the mining sector, productivity growth had improved across a wide range of industries in recent years. Business surveys and liaison suggested that wage growth was likely to remain subdued for some time, consistent with the modest improvement in the labour market to date."
how we can have both falling real wages and stagflation is something Davidson talks about!
The market is expecting a rate decrease not an increase. 
So according to Davidson inflation near 3% and unemployment around 6% is stagflation. wow that is some re-writing of the definition.
It is amusing to see Davidson asserting growth in Government spending is the main reason for Stagflation.
If this was the case then how come there wasn't a boom in Wayne Swan's last budget where NOMINAL spending fell not Real spending. This was easily the tightest budget we have ever seen. It decreased GDP whereas for example Hockey's budget was adding to GDP! Remember also Davidson absurdly argued this budget ( Swan's) was expansionary!
On a final note this would be easy to point out on Catallaxy but unfortunately Davidson does not believe in free speech. You rarely if ever get different points of view over there.
So add hypocrite to being ignorant on Budgets, National accounts, CPI figures etal

Tuesday, 22 July 2014

What is Sub-Prime

Calculated Risk has this classic post by the late Doris Dungey better known as Tanta on what was sub-prime loans.

It is a classic.
In 2007 when I was at a very large Funds Manager the man involved with credit research was most impressed with my knowledge of the US housing market.
I soon put him onto this blog and it became a must read. Consequently they never had any dud CDOs on their books.

Monday, 21 July 2014

You know you are old when...

A long time ago I was a member of the Sydney Anglican diocese social issues committee.

Two people who were also on the committee were Margaret Rodgers and John McIntyre.

Margaret was a very easy person to know and to talk to. I was very sad to hear she had dies of a heart attack.  She actually interviewed me for the Anglican magazine. I was in the midst of co-writing a paper on Unemployment and was suddenly made redundant so I gained practical experience on the subject!

John and I were very unlikely friends. We never agreed on anything be it theology , economics or even the 'stolen generations'. However we enjoyed each other's company enormously. when he has made Bishop of Gippsland he told me I must visit him. Unfortunately something always cropped up and I never did.  
He dies recently of respiratory failure. he was only 62!
He found it strange that I was much more conservative than anyone in the Sydney Anglican hierarchy but I would always share a beer with him yet others wouldn't!

I will miss John.