The Prime Minister, John Howard, says he does not like the interest rate rise any more than any borrower.

ABC News.

I am always amused when the Prime Minstrel makes any attempt to draw himself alongside the ordinary ‘battler’ in Australian society. The man doesn’t even have a home mortgage, let alone a job which pays a pittance and falls subject to punative industrial relations legislation. Yet he sings as if he does, and is.

Amid the lowest world oil prices in 20 months, an investigation has found petrol retailers have not passed any of the relief on to consumers.

Herald Sun.

Bannerman is stunned, nay, shocked to read that oil majors haven’t been treating consumers honestly these last several months….years….decades. 

The company says it is relocating because it cannot compete with low-cost imports.

ABC News.

And this despite being the recipient of millions in taxpayer-funded government support. Bannerman wonders why, with all those millions in support, the company simply doesn’t lay off a few workers and slap AWA’s in front of the remainder. That’s the Workchoices solution, isn’t it?

The United States ambassador to the Asia-Pacific Economic Cooperation (APEC) forum says America must be included in any Asia-Pacific free trade agreement.

ABC News.

In a parody of the Monty Python sketch, Spanish Inquisition, it seems that absolutely nothing is to be permitted to take place on the face of the globe unless the United States is included. The US is demanding to be included in any Asia-Pacific FTA, and if it eventually is, just watch the rubbery mask come off. Thing is though, everyone expects the United States. To whinge and bitch about not getting their own way when it comes to trade negotiations, that is.

Bannerman says, Fuck ‘em! East Asia is most definitely NOT the Washington ring road.

Minutes after Australia's consumer watchdog declared oil companies had done the right thing by cutting the cost of petrol to appropriate levels, they thumbed their noses at motorists by ratcheting bowser prices up 12c yesterday.

NEWS.com.au.

Bannerman asks a question. Why is there a “normal weekly price cycle” which decrees that oil refiners make more profits at some points in the week than at others? If the Tapis market rate is trending downward, surely the retail price should do exactly the same?

Bannerman thinks something is very rotten in the state of our fuel economy.

Bannerman just finished watching the much awaited ’debate’ between Mister Millionaire, Malcolm Turnbull and Mister Greenie, Peter Garrett on 7:30 Report.

The transcript won’t be available until tomorrow morning, however one thing about the interaction stood out clearly to the Bannerman. As eloquent as Turnbull appears to be, and as well armed with notes as he clearly was, Garrett never once stooped to character assassination of his opponent as Turnbull did on at least two occasions. Bannerman also noted that while Turnbull constantly referred to notes of what Garrett allegedly said at nameless interviews with the media, Garrett issued forth with facts, figures and a well defined stand on where he and his party stand on issues such as carbon trading, climate change and alternate energies.

Less than thirty minutes spent discussing an enormously broad-ranging set of issues such as Turnbull and Garrett represent for their respective parties is hardly indicative of the strength of the proponent’s arguments or the individual’s ability to support it respectively. However, it is clear to the Bannerman just what the tactics of both are in this face-to-face style of presentation. It’s also clear just which one has the more powerful presence.

"Nick Minchin has let the cat out of the bag this morning, he’s admitted that the Future Fund will comfortably meet its target by 2020, well ahead of schedule" - Wayne Swan
ABC News Online

Well, maybe Nick did and maybe he didn’t allow the feline freedom. This is politics at it’s most desperate. It’s "he said", "no I didn’t" type of stuff you’d normally hear in a junior school yard.

So, the RBA has left interest rates alone. For the time being. Was it the right decision for today's economy, where disposible income is almost entirely absorbed in debt maintenance? Where a balance of trade deficit continues to exist despite a supposedly booming economy?

"We're not about winning elections in a year, we're about winning debates over a decade. The conservative ideas experiment has been tried and it's failed. They've left Australia with fragile prosperity based on a boom, far too many kids left behind, a changing climate, a divided culture and knee-jerk responses to real security threats." - Michael Cooney, Policy Director, Per Capita Thinktank

PM credits IR laws for jobs surge - National - smh.com.au

"I do believe, after a year - and a year in which 276,000 new jobs have been created - it is reasonable to assert that one of the contributions made to this spectacular growth in employment has been the removal of the unfair-dismissal provisions under Work Choices," - Little Johnny Howler

Support for Labor IR plans

"It is not possible to see how any of the major announcements are a forward step for jobs or productivity from where we are today,"

According to today's Fin Review, yet another property development and investment entity is poised to go under.

In a word....unimpressed. That's my impression of Peter Costello's 12th budget delivery.

Watching the ABC production 'Bastard Boys' last night, I couldn't help but wonder at the timing of the screening.

Are you wondering, as I'm wondering, just why the price of petrol at the bowser keeps going up & up, while politicians continue to tell us how strong our economy is?

Mortgage repayments Hit New Record High
As someone who works within the Australian finance industry, I'm always alert to news and events which appear in my morning mail alert from Plugger.

The Labor push on groceries follows campaigns on a range of hip-pocket themes, including the high costs of fuel and childcare.

(via News from Australia and around the world online | NEWS.com.au)

Populism? Yes, probably, but consider this. Wages demands are just around the corner especially with cost of living increases escalating as they are currently doing.

Mr McFarlane does not believe regulation is needed in Australia, saying competition will bring the fees down.

(via ABC Online)

"What I know is, we’re up against a very clever politician, a very cunning politician," - Kevin Rudd on John Howard
Poll-driven PM’s ’given up governing’: Rudd - National - theage.com.au

Reserve Bank Governor, Glenn Stevens, announced this morning that the board of the Reserve Bank of Australia believed they'd held off on raising interest rates long enough, and intimated that they were quite concerned at the potential in the Australian economy for a fall in growth to negative returns.

RBA Governor Glenn Stevens said he had no reservations about tightening monetary policy following its August Board meeting, despite the recent escalation in financial market volatility. Indeed, the key phrase from the opening statement in our view was this:

Roll up! Roll up!
You want uranium? Well, buddy....do we have a deal for you!

Remember what I wrote earlier this week in regard to the finance industry's non-conforming lenders?

John Symons, CEO of Aussie Home Loans, stated earlier this week that in the shadow of the US sub-prime mortgage meltdown, some re-pricing of risk in the Australian, if not the world financial marketplace would result.

Live for today, people! That's the general message being touted by financial institutions and so-called financial advisors, according to this site I came across in the morning news mail. I'll be bookmarking this site as it seems to have some interesting commentary on matter fiscal.

Over the fold is a brief I received via email from the Senior Economist, Macquarie Bank. A new turn of events in regard to the RBA's domestic lending activities, and a sound indicator that alert bells, while not stridently ringing yet, are starting to tinkle. Recession is still not out of Australia's future.

Great word that, isn't it? Pusillanimity. Perfectly describes the current attitude by fuel companies to price structures while the ACCC Public Inquiry into the Price of Unleaded Petrol is running.

What are petrol prices doing in your neck of the woods? In mine, unleaded fuel hasn't moved awhisker for well over a week now. I filled last Tuesday at 105.9¢/l and noted this morning it's exactly the same. It's been that price now since last Sunday, as I recall. Mind you, Distillate is going through the roof, but there's no public inquiry into distillate pricing, is there?

Better get in for your chop, dearest reader, before the public hearings end. Ballarat is the last one, this coming Thursday. You can bet your bippy that once the public face of the inquiry vanishes, so will the inertia of unleaded fuel prices. Results won't be made public until October 15, and I'll bet my lefty nothing untoward will be found.

Remember, earlier this week, I warned about the strange absence of the so-called fuel cycle? Fuel prices in Queensland leapt $0.20/l on Wednesday and haven't budged a cent since then. How absolutely coincidental that third semester school vacations start tomorrow.

ACCC? Who or what is that, exactly?

There's a very interesting post on Troppo by Nicholas Gruen which is attracting some equally interesting commentary. It's a boring subject. Money, and the administration of it by supposed predatory lenders.

Let's take a gander at just what Glenn Stevens had to say on behalf of the Reserve Bank of Australia board yesterday.
over the fold...

As a subscribed member of Getup!, that relatively newly created think-tank and public activism group, I've received a couple of emails promoting a program of public submission to Treasury to do with just how I'd like to see my taxes spent by government.

It’s a play on words, a political mechanism, and hopefully a means of Government actually achieving something positive in policy direction for the longer term benefit of Australia.

Political opportunist, Steven Fielding, has come out claiming

"it's about time the Rudd Government really got a handle on this issue by cutting petrol tax"

The expected norm when the Reserve Bank of Australia exercises monetary policy is for banking houses to mirror the increased cost of funds by raising appropriate retail lending rates. That's 'mirror', which means to pass on whatever the rise was to customers through their contracted interest rates. Of course, anyone who has ever read a loan agreement will realise that lenders in Australia can lawfully charge whatever they please in interest rate terms. The simple fact that we expect only to bear the RBA rise in rates, doesn't mean we actually get the RBA rise in rates.

Today's rise in housing rates by the Commonfilth Bank departs from the expected norm in a somewhat troublesome manner. Clearly, what this 0.05% higher rise than that decided upon by the RBA says that the CBA under-estimated their losses during the October-November period of 2007, when the first tranche of sub-prime mortgage losses were felt by lenders in Australia, and the 0.10% increase applied by the CBA in January wasn't sufficient to recoup those losses. The question which arises is this. Is it ethical of the bank to adopt a bloody-minded attitude which says, "fuck you, borrower.....read your loan agreement!"?

The cure for such attitudes is regulation, and I seriously doubt whether any government of any persuasion would ever head down that road. The other option, which remains open to all borrowers at any time, be they business, commercial or retail home borrowers, is to fixed their lending interest rates. I did, several months ago. If you're smart, especially on a home loan, you'll do the same. Leaving one's self open to the whims and fancies of the financial marketplace is a prime example of caveat emptor.

This is an interesting article and harkens back to past posts I've made on the credit crunch and finance industry in Australia.

Another twenty-five basis points today added to the 'cash rate' by which the RBA monitors Australia's economic need to grow or slow.

Today's editorial in the Oz highlights, for me, a couple of things.

Is the JSF, F-35, which Australia has already committed some A$16m to as an international partner along with 8 other countries, going to wind up being another long-winded, expensive F-111 exercise?

Anyone who believes that supermarket chains are in the petrol game for any other reason than to boost bottom line profits, must also believe that politicians never tell lies and Santa Claus is real.

Stagflation. Coined in 1965 by the British Chancellor of the Exchequer, intended to describe an economic phenomenon whereby inflation rises while economic growth stagnates, or even recedes.

Today, Honda Motor Company announced, what I believe, will be the next generation after fossil fuel powered road transport. The hydrogen fuel cell powered motor vehicle, which in it's current incarnation, Honda call FCX Clarity.

Apropos of yesterday's post on alternatively powered motor vehicles, I thought I'd make a point about something which rolled into my Inbox today, courtesy of one of my brokers.

"Fuelwatch is about empowering the consumer. If there's going to be a price hike tomorrow, you will know about it ... and you will know where to buy petrol and how to avoid the price hike" - Graeme Samuel from this article in today's Fin Review.

Nothing much in the news today, so it's back to banging on about the price of petrol

I spotted this in the Oz today, just before beetling off to the grindstone.

Actually, the title is a little misleading, because I understand what the government's proposed ETS is, but I am in the dark - as are all Australians at this point - as to just how it will end up working.

I like the following from the Fair Pay Commission's Chairman, Professor Ian Harper.

“Wages paid to the 1.3 million Australians who rely directly on the Commission’s decision comprise only a small percentage of the economy’s total wage bill. Furthermore, the impact on employment and unemployment will be relatively minor in the context of current economic circumstances.”

These surely are desperate times. Malcolm Turnbull trying desperately to draw a link between the alcopops tax and a rise in inflation by 0.3% for the quarter ended June 2008. That's despite the fact that while the alcopops tax may well be regulation based, the legislation hasn't passed 'go' yet. Never the less, it seems scads of binge-drinking teenie-boppers are splurging the money they don't have on bottles of spirits as opposed to bottles of lollie-water. Malcolm is completely certain of it. Despite not being able to produce any categorical evidence. Yes, a definite flow-on impact which is costing us all dearly!

He goes on to claim ...

"How can you be fighting inflation when you're putting up the price of alcohol, putting up the price of health insurance, putting up the price of motor cars?"

Desperate straits, for sure and certain. Still, I don't recall the price of alcohol going up across the board, health insurance premiums increasing, or rampant rises in the price of cars? Am I missing something? Is the alcopops tax causing these destructive CPI impacts? Bloody teeny binge drinkers!!!

Meanwhile in other news, no economist interviewed by any player in the mainstream media has expressed any fears of the Reserve Bank taking drastic action - like raising interest rates further. It's okay people! Nothing to see here. Just a crazy man trying to get some attention. Move along! Move along!

Oh .... before I forget. Word in the marketplace is that the NAB are about to announce a home loan product launch sans early repayment penalties. Very big move for one of the four pillars not known for being a leader. I wonder if there's any connection between this snippet, last week's across-the-board rise in rates from the Big Four of between 0.15% and 0.20%, and a fall in the 90 day bank bill swap rate over the past quarter of nine basis points? Oh, and there's the House Standing Committee inquiry into competition in the banking and non-banking sectors, which closed to submissions 11 July. I reckon I can draw a better parallel between the NAB's 'new' product, last weeks rate rises and the Parliamentary inquiry than Turnbull can to alcopops and inflation.

Is the mainstream media deliberately spreading doom and gloom in reporting statistics such as those in this article or is it simply reporting the news of the day?

By any other definition, the four-yearly global contest in sport can only be described as adversarial battle between nation-states, some of whom would dearly love to have at each other with real weapons of destruction.

Let's look back at the fiscal events of the past 12 months.

Selling short is now banned across the board on Australian stock markets.

An article by Anthony Klan in The Australian of 22 September, quoting Aussie Home Loans principal, John Symond, as sounding the death knell of ‘Low-Doc’ home loans is more than a little sensationalist. It could also be due to the fact that Symond no longer has a total say in what his business does by way of Low-Doc lending.

My employer has subscription access to a number of economic and financial commentary sites, which he copies us into on articles worth a read. One that's not subscription oriented, and gives accurate summations of events is Business Spectator. The following article by Alan Kohler appeared there today. It deals with the harder times which Kohler warns are definitely ahead unless something is done to ease liquidity, and done now. It also explains a lot about what might happen, if nothing is done. If the world isn't in recession now, it's going to be very shortly.

Well, what a swifty the RBA pull today, eh? 100 basis points and Devil take the hindmost. Whack that up yer kilts, all you snake-oil salespersons. Only goes to prove my belief that economists know diddly-squat about what the central bank may or may not do in relation to any given economic circumstances.

The acronym, W.I.I.F.M., is based on an ethos which lies at the root of human nature. It stands for What’s In It For Me. Let’s be honest, and admit that it pervades our daily lives in practically every aspect. Why should I do something for someone, if there’s nothing in that ‘doing’ for me? Altruism, as much as we’d like to think otherwise, doesn’t figure largely in the human psyche.

It's as well that Prime Minister, Kevin Rudd, has guaranteed all monies in Australian Bank deposit accounts, not just to ease concerns of average Australians, but to allay any fears of foreign investors dealing with Australian domestic banks.

Alan Greenspan believes in being 'partially wrong'. He must also, by direct inference, believe in being partially pregnant, not quite guilty, the Easter Bunny and Santa Clause.

Yes, I can feel a certain sympathy for self-funded retiree, Greg Russell, however what he does or doesn't choose to do with his business or his investments can hardly be laid at the feet of the government.

... but didn't want to admit to ignorance?

That most prolific of Troppodillian bloggers, Nicholas Gruen, made an 'appearance' on ABC radio this morning in relation to an Open Letter to the PM which he and seven other economists have penned.

Parliament is once again in session. We have the benefit of seven sitting days in the next fortnight, a week break then four more days for the lower House. Eleven sitting days out of twenty working days. Nice work if you can get it. Senators have it even easier with seven sitting days out of twenty. Just thought I'd point that out to anyone wishing to say pollies work hard.

It's come to my attention, through membership of a discussion forum on a wide range of topics, that a dedicated cadre of conservatism still exists despite the rejection of that ideology across the globe.

Political spin aside, I think it's a refreshing change to see a government embracing technology as a tool to keep the populace informed, especially in these difficult economic times. There's little in the first issue of 'Treasurer's Note' which one can't pick up from Business Spectator, but it's still a giant step forward from the previous regime which did it's utmost to keep the electorate in the dark on the big picture stuff.

This is disturbing, and displays graphically the purchasing power within the fuel marketplace now held by the two grocery giants.

I’ve just read through Kevin Rudd’s latest essay. My second exposure to the statistically prolific Rudd in writing – well, third if you count his recent blog on Climate Change. I have to admit that as with his February essay in The Monthly, I skimmed the final two ‘chapters’ having been worn down by the rhetoric, self-promotion and simple overload of data.

You really have to wonder at either the gullibility of Conservative politicians, or their political opportunism.

"Several sources said party director Brian Loughnane told the meeting that when interviewers explained the implications of an ETS to survey respondents, they were negative about the proposed scheme."

That John Howard has much to answer for is a self-evident truth.

So, the government wants us to work longer because Australia's population is ageing.

Here's an interesting quandry for those so inclined. Have a gander at the graphed stats for crude oil and MOPS95 - Singapore Unleaded Petrol - and see of you can spot the inconsistency. Here's a hint:
The A$ last week was at US$0.92, today it's at US$0.8907. Why then is the price of unleaded petrol at my local up to 6 cents/litre cheaper today than last week? I'm allowing for the furphy which is the so-called 'weekly cycle'. Yet more evidence that the consumer is being played for a mug? I reckon.

It's patently clear from reading through Tony Makin's Op-Ed in the Oz today, that as a supposed economic Professor at Griffith University he is most definitely NOT in the Keynesian camp.

There's an excellent article in Business Spectator today, extolling the virtues and inevitable rise of the electric vehicle for consumers.

Here's a truly bizarre story from the land of the truly bizarre. The current American administration wants banks - a very broad term in US parlance - to reduce or even negate mortgage payments for people who are unemployed.

To someone who has lived, eaten and breathed mortgage finance all his working life, this is unheard of, even more so for a capitalistic culture which supposedly prides itself on a reliance on free market dynamics as the cornerstone of its existence. But let's back up a moment, and recall that the American usury culture has never been truly capitalistic. Had it been so, instances of so-called 'jingle mail', where a borrower in distress simply drops the keys to their home in the mail addressed to their mortgagee, and lights out for parts unknown, would not exist. Equally, instances of so-called bankruptcy protection - a misnomer is ever there was one - where a financially distressed borrower can declare bankruptcy, have liabilities virtually forgiven then go right back to doing whatever they were doing prior the mortgage distress occurring, would not exist under a properly regulated and prudently managed financial system.

Further, had capitalism truly relied, stood or fallen on the basis of a genuine free market system, the need to bailout Goldman-Sachs would never have been contemplated let alone enacted. This latest in a line of seemingly desperation measures by the Obama administration are not anti-capitalistic or *GASP* socialist measures designed to change forever the fabric of the United States of America. These measures are efforts to undo the laisse faire capitalism which has existed in the US since the end of the first world war, fostered by and benefited from to a great degree by defence contractors and providors.

I don't see drip-feeding banks that comply with administration demands to go easy on borrowers as a cure-all for US fiscal system woes. Some serious financial regulation needs to be formulated, put into place and monitored for regularity. It's such restrictions on Australian financial markets which has allowed this country to sail through the GFC almost unmarked. In the post-GFC world, banks globally will be required to hold far more capital than is presently the case, and be regulated much more stringently. This is going to mean higher margins on lending, credit will be harder to get and risk will be scrutinised much more closely. Such moves are going to really upset the 'laisse faire' proponents, and we're likely to see a similar angst arise in the US, just as we've seen over the Health Care debate. I'm left to wonder whether the wingnut looney fringe in the US will be able to cope with another government intervention into what they will doubtless see as some form of freedom to default, or be a bankrupt. They're a weird mob living in a weird culture, operating under a wide variety of weird and utterly unfettered systems. I reckon I'd be confused if I lived there, for which I'm eternally grateful that I don't.

I listened in to this fellow in RN Breakfast this morning, and frankly, didn't like anything he had to say and don't believe it's relevant to Australian society anyway.

Steve Keen, economics commentator and contributor to Business Spectator, is suffering the ignominy of having lost a punt he felt certain would come off in his favour.

There's a couple of very 'doom_and_gloom' articles on Business Spectator today by Messrs Kohler and Gottliebsen in relation to the Rudd government's attempt to rape and pillage the resources sector. Some of the articles I agree with, such as Gottliebsen's postulation that a capital strike will be enacted by the big miners, but seriously, I had to laugh at Kohler's piece. Is Alan Kohler seriously that naive, or does he honestly believe the voters are so gullible as to not appreciate where in the political cycle we are right now? It's an election year, for fuck sake! Of course the politicians will be showing their true colours. It's time for the hand-outs, the grand-standing, the ensuring of a budgetary surplus, spending on health, etcetera, etcetera.

Let's be perfectly clear, dear reader. We get the politicians we deserve and sure as little daisies will spring from the graves of those who lose their seats in the coming election, we've wound up with the pollies we deserve this time around as well. A bunch of seemingly inept pretenders bent on staying in power who've realised at this late stage in the game that there is a game to be played and they stand an excellent chance of losing. Will Labor lose this coming election? I don't believe so, but I'm seriously coming to believe that it will be a close run thing.

Robert Gottleibsen is clearly anti-government, and dare I say it, anti-Labor to boot.