Thursday, 22 March 2018

Around the Traps 23/3/18

It is time again for Around the Traps.

Northern America
Andrew Gelman (mainly stats)
Genial Dave Giles (econometrics)
Dianne Coyle (quirky + book reviews)
Vox Wonk

Wednesday, 21 March 2018

A Couple of Good Shows on the ABC

Unforgotten has come back for a second season and it is terrific.
Very briefly A person is discovered dead and then found to be murdered after a considerable amount of time.
The police team find out whom he or she was 'friendly' with and gradually find out several suspects all  of whom could have been the murderer.
They eventually find the murderer of course. It is well written, well acted. The suspects are particularly good.

I was looking forward to Harrow as I am a great fan of Ion Gruffud. He is a forensic pathologist ( shades of Forever). It is Australian and unfortunately neither the writing nor the acting is as good as Unforgotten however there was a distinct improvement by the second episode.

 Gruffud is the standout in this series and I am hoping the improvement continues.

Monday, 19 March 2018

The Grattan Institute blows the whistle on the ALP's dividend imputation reforms.

The very highly regraded Grattan Institute examines the new ALP policy on dividend imputation .
It exposes the false arguments by the Government and others like Judith Sloan.

I did remark about this not long ago.

Whatever happened to Banks?

Way back when I was a lad Banks had a great reputation. no man was more esteemed than the local bank manager.
Now it is the total reverse.
Why is this so? to my mind it was de-regulation.  This revolution caused by Paul Keating was meant to bring competition to the financial sector. It didn't. But it did bring large profits and  ill though out bonuses.
In the 'old days' the local bank manager went to the company who wanted a loan. They looked at how the company did things. Examined who the customers were , the marketing etc.
These days the local Bank Manager is nothing more than a glorified bank teller. Loans to companies are put on spreadsheets and sent to Head office for approval.

Pressure is put on even the lowly bank teller to sell the customer more products whether they need them or not.

It simply more evidence that if you think the only thing that matters is if a company makes money then you clearly do not understand the capitalist system.

Sunday, 18 March 2018

An ABC rant

Lots to talk about today but after Umpiring yesterday in 39 degree heat I thought a soft touch was warranted.

I thought this show was over-rated previously when Gerard Whateley ran it except when Gideon Haigh was on . The new Host Kelli Underwood has no personality at all. The 'expertsd are not so expert. I ain't taping it again.

I have said previously the 'insiders have no special insights that surprise me at all. however Fran Kelly has seen her day. You do not have to be attractive to be on it but at least you need some understanding of the subject. I am afraid after this many years she still prone to say something is significant if a poll is 1 or 2 points different. I afraid she does not understand the term margin of error. I have said previously Hamish McDonald asks far more penetrating questions when he fills in for her.

Speaking of great talent I caught Chris Bath filling in for Richard Glover. She is terrific. Her personality oozes out of the radio.
The other person who surprises me is Philip Adams. Get on a topic that is of interest and it is great radio.

Thursday, 15 March 2018

Around the Traps 16/3/18

It is time again for Around the Traps.

Northern America
Andrew Gelman (mainly stats)
Genial Dave Giles (econometrics)
Dianne Coyle ( quirky + book reviews)
Vox Wonk

Wednesday, 14 March 2018

Low taxable income is not the same as low income

The ALP's new policy on retirees and franking credits has many people either being misled, confused etc on believing people on low TAXABLE incomes is the same as people on low incomes in retirement.

A similar argument was being made when the ALP, announced their new policy in negative gearing. Scott Morrison often did this. Our old friend Sinclair Davidson was it it as well. As I pointed out at the time Banks lend on actual income not taxable income. To imagine a person on say  $20k could gain a bank loan for a property was fantasy land.

In this instance we have something similar. Peter Costello in possibly the most irresponsible policy change by a Federal government enabled income from a Superannuation fund to be tax free. ( Cutting tax from contributions and earnings made a lot more sense.)

Hence A wealthy person when working who of course has a lot of superannuation can retire a millionaire with little to no taxable income. It is these people the policy is targeted at. such people are not paying any tax and still are getting tax credits from the ATO. It is unsustainable.

My guess is that the ALP will need to tweak the policy to help those who retire on the pension but overall the policy does get a tick. In this I agree with Saul Eslake again.

Tuesday, 13 March 2018

Rex Tillerson gawn

Trump's Secretary of State was fired by Trump by Tweet. The man is a coward. He does not have the guts to sack people in person.
Am I saddened? No really Tillerson was hopeless. He got rid of a lot of corporate knowledge ( something the private sector regularly does for some unfathomable reason).
Just remember when Trump agreed to meet with the North Korean leader he had no-one with expertise in North Korea to utilise at all and only one with expertise in Asia!

It again highlights what a chaotic place the White House is and how poor his cabinet members and advisors are ( where they have been appointed). This is critical when a President is a stupid as the President.

You do not need to be a Rhodes Scholar to understand why north Korea wanted to meet with Trump and never with previous Presidents. He is easily the worst informed  with little knowledge of the key subjects at hand.

Monday, 12 March 2018

The Household Fallacy

How many times have you heard the government has to tighten its belt just like households do.
ROGER FARMER explains in detail why this is fallacious.

Thursday, 8 March 2018

Around the Traps 9/3/18

It is time again for Around The Traps.

Northern America
Andrew Gelman (mainly stats)
Genial Dave Giles (econometrics)
Dianne Coyle (quirky + book reviews)
Vox Wonk

Wednesday, 7 March 2018

A few things on the National Accounts

Okay GDP fell below trend to be at 2.4% ( 2017 was 2.3%).

Productivity growth has been low . We thus have very strong employment growth which would normally imply growth of around 3% not 2.3%. This is a worry.

Business investment on the non-mining side of the economy has picked pretty well in the last 6 months.

Household consumption has held up pretty well considering how stagnant wages have been however unless wages pick up this is unsustainable.

The public sector is giving a stimulus to the economy and will continue to do so given all the infrastructure projects in the pipeline pun intended). Net exports were a drag on growth this quarter but should not be in quarters to come.

Most importantly nominal GDP growth is starting to get a bit of steam up hence the improvement in government revenues we have written about recently.

Normally this would be a plus in political terms however this is a government who is fighting amongst themselves with some wanting them to lose the next election so I think this will be ignored!

Hmm Me thinks Greg Jericho is a tad too bearish.
Ross Gittins seems to be on my side, my guess he has been talking to RBA persons

Tuesday, 6 March 2018

Has Bill Shorten got a bad rap over Adani?

Bill Shorten has copped a lot of criticism over saying one thing to miners and another to voters in the Batman electorate.
Is this true. Everything I have read or seen has Shorten saying he only supported Adani if it stacked up financially. He put that caveat on when speaking to miners some time ago,

He is now saying he is against Adani because everything in the mean time has shown it not to be viable.
Indeed since his 'supportive' statement in Queensland Adani has tried and not found anyone to finance the project. Moreover if it were hoping for government handouts to get the project through that is now dashed.
Shorten has also said he would honour any contracts previous Government have entered into if his party wins the next election. 

Perhaps Journalists simply have not read what he has said over time.

It is somewhat ironic that the greatest criticism that could be directed at Shorten is that he is over-promising ( and will thus under-deliver when in Government.

In this he is imitating Tony Abbott. It could well be like Abbott he does not have a great understanding of what confronts Australia. Again like Abbott he is under-estimating how much the electorate takes into account the implied promises he is making.

If either of the above is correct then again like Abbott he will be Leader for a short time and out political class will take a huge hit. People make take to voting against major parties in the lower house!

Unlike Abbott however Shorten does not have a history that could lead people to easily forecast he would make a poor PM.
At this stage he has been a 'lucky' politician and he has used that luck. That is no bad thing however what worries me is his lack of years as a politician. Being in politics is no different to any other job. you need to be in it for a while to understand it properly.

We shall see because all the portents are showing a change of government at the next election

Monday, 5 March 2018

Trumps idiocy explained

Trump has never been a very intelligent man in office.
His latest foray merely amplifies this.
Here a just a few articles on this:

Just for laughs an article by our old mate Katesy where he essentially says the theory of comparative advantage does not hold any more.

Marc-William Palen 

Sunday, 4 March 2018

Churchill was a highly over-rated politican

Why is Churchill hold in such reverence?

Probably because the allies won war the war as they were always going to.

Churchill was at his peak just before the First World War when he and Lloyd George were formidable adversaries. He was in fact as radical as Lloyd George, He actually advocated Keynesian policies before anyone had heard of them  in Opposition but like Lloyd George quickly came into line with discredited classical economic policies when in government. ( From the end of WW! and the start of the Great Depression UK GDP per capita fell!
He was a very good cabinet minister BEFORE becoming first Lord of the Admiralty. Unlike Lloyd George he was quite emotional ( and not a philanderer) and it was because of this the Gallipolli campaign became unstuck.
He was a disastrous Chancellor of the Exchequer and then went to be an embarrassing backbencher.

He saw immediately the political advantages of exaggerating of Hitler and the eventually he came back into cabinet.

His disastrous foray into Scandinavia was somehow forgotten.
What people forget is two things when talking about Britain against Germany.

Firstly as Adam Tooze shows in The Wages of Destruction Germany were Never going to  win a world war. Indeed they only 'beat France because everything went right. Against the Soviet Union when they did not they got 'beaten.
In retrospect and even at the time ( Roosevelt was advised so) it would have been better not to help the Soviet Union and just let it and Germany fight it out until no-one was left standing and then 'change' both countries.
Secondly as Bonhoeffer tried to change through his british christian network but failed
Churchill said every German was a nazi thereby prolonging the war as the Germans who saw Hitler for what he was gained no support  nor resources from overseas.

After the war Churchill was terrible .He stayed to long, had nothing to offer, fell asleep in cabinet meetings and left Eden to become Prime Minister way too late.
He had no ideology and so did not get rid off Labour's disastrous nationalisation programs.

Thursday, 1 March 2018

Around the Traps 2/3/18

It is time again for Around the Traps

Northern America
Andrew Gelman ( mainly stats)
Genial Dave Giles (econometrics)

Dianne Coyle (quirky + book reviews)
Vox Wonk