- Recorded Wed Nov 5th

1 million people watching him at midnite!
Yes We Can

Housing demand in a nosedive

Darn we didn’t get to mention this!

About 50 out of 100 houses sold at auction in Melbourne on the traditionally slow Cup weekend, while in Sydney the auction clearance rate crept up slightly from last weekend’s 12-month low to 43%.

According to Australian Property Monitors, Adelaide fared even worse, with only 35% of homes finding a buyer, while Brisbane recorded an abysmal 27% sales rate.

That could be good news for first home buyers - vendors desperate for a sale before Christmas could lower their prices.

But still they try this…!

Australand Victorian residential division head Robert Pradolin had also noticed an increase in inquiries in the past fortnight. He said the issue now was to make sure enough zoned land wads available when inquiries were converted into sales.

We blogged on this issue yesterday

Join our growing list of Podcasters listening to us as they do the dishes/ garden or commute

Land release not the house price problem

IT WAS one of the most pernicious of the myths peddled during the 2007 federal election campaign - that state Labor governments were largely to blame for the record low levels of housing affordability and all they needed to do to ease the problem was to release more land.

Yes, excessive taxation, development levies and restrictive planning policies- especially in cities such as Sydney - added to the problem of affordability and discouraged development. But the idea that there was a government-manufactured land shortage was short on hard evidence.

Murky statistics cloud slump in house prices

The Bureau of Statistics reports that Australian capital city house prices fell 1.8% in the September quarter compared to the June quarter of this year - the biggest slide since its reports began. Melbourne prices slid 1.9%.

Swan says growth to slow to 2% in 2008/09 as budget bears full force of global crisis

“There’s no point in trying to sugarcoat these figures.”
Mr Swan said tax receipts would be about $40 billion lower than expected,

He repeated that while Australia was not immune from the effects of the global financial crisis and the global downturn, it was better placed than most other countries to withstand the fallout.

*** ???? really with housing at record highs????

What’s the CBA’s game with rates, ABC and Allco?
Glenn Dyer writes:

So what’s the link between the Reserve Bank rate cut of 0.75%, the Commonwealth Bank’s stingy cut of 0.58% and the failure of Allco Finance and the impending collapse of ABC Learning Centres?

Well, those two companies have combined debts of well over $2 billion and can’t meet them; they’ve been kept alive by their banks extending repayment deadlines. That charity has finally been exhausted.

Nightmares at hyper-speed
By The Mogambo Guru

Doug Noland’s Credit Bubble Bulletin was still on my computer, and there, big as life, I read not only that “Federal Reserve Credit expanded another $63.2 billion to a record $1,803 billion”, but that this latest whopping glop of credit from the Fed has reached “a historic six-week increase of $915 billion.”

My brain is staggered! In six lousy weeks, all of the total credit in the banking system created by the Fed since 1913 was almost instantly (poof!) doubled!

Bush’s Last 100 Days the Ones to Watch
by Jesse Jackson

About 90 new rules are in the works, and at least nine are considered “economically significant” because they would impose costs or promote societal benefits that exceed $100 million annually. Many will make changes that the new administration will find it hard to reverse for years to come.

Now it appears that banks plan to hoard the cash, to use it to help pay for mergers with other healthy banks (not weak ones), or to pay out dividends and bonuses.

Smoking, the Credit Crunch and Global Warming

The experts saw this coming. Warren Buffet got out of the credit-swapping business years ago, calling them ‘financial weapons of mass destruction’. A new international banking agreement had been waiting in the wings since 2001, the New Basel Accord. It eliminates double gearing.

It’s been twenty years since Margaret Thatcher announced to the UN General Assembly that climate change represented the greatest threat to civilization.

The credit crisis meant the whole world tried to de-leverage overnight. But it turns out our economy needs credit. Our panicked response led to a frozen banking system. We are experiencing a hard landing.

We can’t de-carbon our economy overnight either. A defining event will eventually come - the mother of all hurricanes, an unending drought in the Prairies - but it will be too late. Our economy is more addicted to coal and oil than it is to cheap credit. That addiction will be harder to break.

Ignoring well known but long term effects of behaviour is to ignore reality. We learned our lesson from medicine and have legislated smoking to the margins. We will surely learn something from the credit crisis.

What remains to be seen is whether we learn a larger lesson. The transition to a low-carbon economy must start today.

Brown Mountain

Brown Mountain, an area of high conservation value that was promised protection by the state government is now being logged.

Logging commenced on Monday 27 October.

WHAT YOU CAN DO

Write to the premier John Brumby and environment minister Gavin Jennings.
But a mention of forests as critical carbon stores and soaks, biodiversity store houses, water makers (Snowy catchment) and huge tourism potential might be good.

gavin.jennings@parliament.vic.gov.au
john.brumby@parliament.vic.gov.au

Filter to cause World Wide Wait

Another we didn’t get time to mention: INTERNET speeds could slow by 30 per cent under the Government’s proposed web filtering scheme, even though it will do little to block illegal content.

Music

Obama and his friends - Will.I.Am
Olmecha Supreme

photo credit: jorel314

Ben Schneiders hit out at the IPA/ Costello push for land supply forever in this cunning article:

IT WAS one of the most pernicious of the myths peddled during the 2007 federal election campaign - that state Labor governments were largely to blame for the record low levels of housing affordability and all they needed to do to ease the problem was to release more land.

He goes further:

Data compiled by The Age in 2007 showed that, rather than there being a shortage of land, big developers were swimming in it and the top six listed players were aggressively acquiring it. Their land banks - the number of lots on their books - had risen nearly 20% in a year. Some of the biggest players, such as Stockland, had more than tripled in the previous five years.

Of course, the Costello/IPA “argument” to release more land, would be great for developers, which could stake a claim on great swathes of Melbourne’s paddocks and the outskirts of Australia’s other big cities.

Recent moves in WA and China to cut property taxes will see this trend increase. This will enable fat cat landlords to be even lazier. With clearance rates plummeting last weekend from 50% in Melbourne (when we were averaging in the 80’s this time last year) to a gob smacking 27% in Adelaide, a rising tide of property is backing up.

This can only be good news for first home buyers. Hold off! Over the next 3 - 4 months we will see a severe drop in house prices as people realise the price they paid is not reflective of the earning capacity of the average aussie. The market will be flooded with houses as speculators try to bail out before the market well and truly tanks. Our own credit crisis will set in similar to what America has gone through.

However, policymakers worldwide are doing their best to bail out baby boomers and force those generations who will have to clean up the climate mess with a lifetime of record rents. Rudd implies that we should be paying 50% of our income on rent with his policy decisions so far. Outrageous.

The cutting of holding charges on land will only prolong the pain. Housing prices should be encouraged to fall as quickly as possible so that small business can find cheap rental property to start-up.

photo credit: daviddesign

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Show Notes

Recorded on Wed 29th October

There’s only so much news 1 can watch, the murders, the deceit, the pillaging, the profits…before 1 is compelled to ask why?

Have a laugh

Lex Wotton - International Day Of Action November 7th
Stand in Solidarity an show your disgust about the continuing racist treatment of Lex and Aboriginal Peoples in Australia. Also, there is a protest rally on this Saturday starting at the Melbourne GPO.

Last Friday an all white jury found Lex Wotton, an Aboriginal man from Palm Island, guilty of ‘rioting with destruction’ for his involvement in the 2004 Palm Island uprising. On November 26th 2004 the people of Palm Island set fire to the local police station, court house and police barracks after a pathologist’s report claimed that the death of Mulrunji Doomadgee, a 36 year old local, in police custody a week earlier was an ‘accident’. Mulrunji died in a police cell, one hour after he had been arrested for being drunk. He suffered massive internal injuries, including a ruptured spleen, four broken ribs and a
‘liver that had been ‘almost cleaved in two’ from a huge compressive force.’

The officer who arrested him, Senior Sergeant Chris Hurley, claimed that Mulrunji had fallen on stairs. A coroner’s inquest found that Senior Sergeant Chris Hurley was responsible for Mulrunji’s death, as the injuries were consistent with a beating. However, a court found Hurley not guilty for manslaughter. He has since been promoted and is an Inspector on the Gold Coast.

In comparison Lex Wotton is now facing a life sentence in prison. He is being held in prison until his next court appearance ( for sentencing) in the Townsville District Court on November 7.

Credit Focus Masks Deeper Issue

FURNITURE and electrical retailer Harvey Norman says trading conditions were still tight three weeks after the Reserve bank delivered a surprise 1 per cent cut to official interest rates.

The company said yesterday that written sales at its Australian franchise stores fell 3.6 per cent over the four weeks ended October 26 compared to the same period a year earlier.

West Bank land prices skyrocket

The price of property in the West Bank has surged beyond the reach of most Palestinians, the World Bank has said.

The findings come less than a year after international donors pledged more than $7bn over three years in the hope of boosting progress towards a Palestinian state.

Foreign aid, the World Bank said, “has succeeded in doing little more than slowing down the deterioration of the economy, despite ever larger volumes”.

Home repossessions and arrears rise as borrowers struggle

The number of properties repossessed by lenders in the second quarter of this year was up 71% on the same period last year, figures showed today.

What about the effects of this on renters?

No Foreclosure Relief for Renters

Almost 15 million renters, or 40 percent of all renters, live in single-family homes, townhouses, condos or duplexes, according to Census data. While there are no national figures on foreclosure-related evictions, these types of rental properties have been vulnerable to foreclosure because they tend to be owned by small investors.

Laws protecting tenant’s rights vary state to state, but most do not require a minimum notice prior to enforcing foreclosure evictions. As a result, renters often receive little or no notice that their property owner has defaulted before they are forced to leave. Only a few states- like California, Ohio, and Illinois - require 30 to 90 days minimum notification

New Greenhouse Gas 17,000 Times More Potent than CO2

Nitrogen trifluoride, known as NF3, is “17,000 times more potent a greenhouse gas than carbon dioxide, and it is far more prevalent in the atmosphere than previously estimated,” according to Environment News Service .

Nature’s Numbers Podcast

Listen (above) to Folkestone Development CEO John Lincoln says they have acquired 15 habitable acres - worth a lot when it’s $1 million for a habitable hectare - speculating on Victoria’s Native Veg Net Gain Accounting is possible under 2 dimensional economics. Is this good for the wider community?

The Plug - Karl’s article in The Age - Single Workers Miss Out on the PM’s Lifeboat

Music

Finally we got to play another Blank Blue track!
Blank Blue - Some What
Marco Paul - Starshine
Thanks again to Dublab for sourcing the best in sounds.

Presented by Dr Gavin Putland

Thursday November 6th, 6.45pm

As the panic sets in and discussions about a new financial framework at the Bretton Woods 2 meeting grow, Dr Putland will measure up the trends that continue to lead us into asset bubbles.

What can be done to avoid them? What should the G20 countries be focusing on?

What can we do to build a knowledgebase so that it doesn’t happen again?

Gold coin donation to cover drinks, nibbles.
Venue: Level 1, 27 Hardware Lane, Melbourne

RSVP essential

photo credit: TheeErin

Some A$2 trillion has been pumped into banks globally. Last night saw a record amount of commercial paper sold in the US, with the Fed buying some US$60 billion in debt. A record day in the US sharemarket followed. How many more days like that will last until the Fed’s kitty needs to be replenished?

The Republican administration has ensured that banks worldwide are cashed up. But what do small businessmen think? Will they borrow all this cash to keep investing? Or are their expectations different to the short term political aspirations of politicians?

Business will be hesitant to invest when property prices are expected to drop, but yet policymakers do all they can to avoid this occurring. The resultant hesitation will delay the true market corrections needed.

David Hirst comments on how women are doing the straight talking needed, with the Federal Deposit Insurance Corporation’s Sheila Bair saying:

“We’re attacking it (the crisis) at the institution level as opposed to the borrower level, and it’s the borrowers that are defaulting. That is what’s causing the distress at the institution level … So why not tackle the borrower problem?”

Whilst banks are propped up, copying Enron style accounting by keeping assets marked up beyond their market value, the latest commentary on retail sales figures vindicates our probing. The people’s sentiment is reflected in sales. No matter how well cashed up banks are, they won’t be able to help retail sales.

FURNITURE and electrical retailer Harvey Norman says trading conditions were still tight three weeks after the Reserve bank delivered a surprise 1 per cent cut to official interest rates.

The company said yesterday that written sales at its Australian franchise stores fell 3.6 per cent over the four weeks ended October 26 compared to the same period a year earlier.

Retail sales will only improve when we are spending less on rent. Land and property prices must fall. It will be ugly. The easy profits land speculation delivers led to over-investment.

The government’s of the world are engaged in a blame game, diverting attention away form the prime issue.  Bankers know the real cause. Perhaps deregulation is partly to blame. However, the much bigger issue at stake is the Government’s failure to capture the economic rent delivered to prime locations. This led to the frothing-at-the mouth over investment in land.

We challenge the first banker to stand up and call it as it is!

www.brokershandsontheirfacesblog - every day a new photo appears!

And in preparation for tomorrow…

hinting at how the economy relies on the environment:

Marking the 79th anniversary of the stock market crash that caused the Great Depression, artist collaborators Ligorano/Reese will stage a literal meltdown of the economy on October 29, 2008.

And if you want to read an article on why Single Renters are paying double the rent other generations have, we’re happy to say that we made The Age on Saturday - p2 of the Business section, keeping the biz community thinking as always.

photo credit: purpleye photography

Join our growing list of renegades by downloading the podcast.

Show Notes R59

Recorded Wed Oct 22nd

The End of Industrial Capitalism - Professor Michael Hudson slates the US political hierarchy and the bankers bailout. Alice and Karl bounce off this with evidence from WA & China and how lower property taxes will deepen the ditch we’re heading into. Ahh some ecological positives to finish us off.

Imagine if you were a hairdresser/ massuer
How lucky would you feel if you got paid more and more money for your service, but yet you didn’t even have to cut someone’s hair. You could sit back and earn money in your sleep, not even having to open your shop.

Then you realised that the taxes your imaginary clients paid made your business more valuable. You could charge more because they could get to your shop easier, find it easier etc. Competition we hear you say. Well there is none in this field (analogy)……..

This is the market system we work under. Not for hairdressers but for land speculators.

Hear Prof Michael Hudson’s interview in full and read about the dangers of the tax changes in this post

WA Tax cuts
Chinese property tax cuts

Permablitz News - ahh photosynthesis + land = independence!

Democracy Challenged…again

A proposed law before the State Parliament will clip the wings of any active citizen who runs for local council, by making it a ‘conflict of interest’ to vote on any matter on which they previously made a submission.

Music

We thank the musical talents of:
Filastine
Salmonella Dub - Cycle

Please note - it takes a few days for the podcast to go online, often the following Monday.

photo credit: Sepperer Markus | www.weltraumsepp.blogspot.com

We don’t think so. And neither does Dr Michael Hudson in this riveting interview (thanks to Guns and Butter, KPFA radio). Please listen. Forward this on. Hudson sums up the issues behind the credit crunch and the mystery behind the details of the bankers bailout in a damagingly direct manner. The world is at a crisis point. A new economic order is being thrust upon us.

In Australia we have a growing confidence returning to the market. But with Chinese demand slowing, our resource boom is under threat. Reading a Bushite economic advisor one understands why we are in today’s mess. David Hale tells us today that China will grow at 8% because domestic demand is strong. All the world needs is lower taxes.

However in the next paragraph he concedes that housing is in slowdown mode. Can we reflect on that for a second. If apartment prices are dropping by 25% in Guangdong, this flows through to the bank’s balance sheet, where they have to write down the value of their mortgages This infers they have less credit to offer. China’s domestic economy is victim to the same speculative excesses in housing as Australia, China and the rest of the western world. They will follow the US.

Whilst the political system prioritises the bankers over the wider community, land and housing prices will be propped up, meaning we the people have less to spend on food or to save. This prolongs the pain.

We are presently in the eye of the speculative storm. The bankers have been shaken around. They have sped to the front of the neo-handout queue. Soon the effects of high rents will crimp more and more business, sending them to the wall. Unemployment will rise and the people will try to join the neo-handout queue. This trend is increasing daily in America. Soon it will be occurring in China and then Australia.

A dangerous trend is developing. Again policy makers are doing exactly opposite to what the wider community requires.

The Irish Times reports: China acts to boost property sector as figures show sharp drop in growth

The government said yesterday that taxes on house purchases would be reduced and value added tax rebates would be increased for exporters of textiles and machinery.

Thankfully Forbes reveals:

However, the report cited a survey by Sina.com as saying that more than 84 pct of Internet users oppose governments’ efforts to revive the market as they believe such measures will benefit real estate developers by driving prices higher.

Keep thinking beyond the press like the everyday Chinese are.

Unfortunately the new West Australian Liberal government is pandering to the richest people in the nation by cutting Land Taxes. This dangerous reduction in taxes will automatically be pocketed by the land monopolising speculator. Economic law dictates this and will ensure that the looming recession is deeper and longer because we are spending too much on housing and business on commercial property. But hey, the banks love it.

photo credit: TheTruthAbout…

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Show Notes R58

Recorded Wed Oct 15th

Aussie Knowhow - an interview with Agent John, telling it as it is from the street. John is one of the many self taught political economists concerned about the continuing plight of our policy makers and politicians. Have a laugh! Also covered is the staggering $2 - 5 trillion lost p.a from de-forestation…and more on the bailout.

Rudd wealth gap bailout – 1.5bn on FHOG, $14K on new homes built, $7k on existing homes. Will only lead to a subsidy for those who already own land, making housing more unaffordable!!!

The reckless stimulus package we didn’t need – S Mayne (Crikey 15/10)
What contingencies are in place if house prices plunge by 30%, our banks need to be recapitalised and the dollar crashes below US50c? The government only has $30 billion in foreign reserves, which is way below the Asian average, and has now recklessly distributed $10 billion before we really know the full implications of the meltdown.

Landlords ‘must cut rents’

“Many pay up to 50 per cent or more of their take-home income on rent,” QCOSS president Karyn Walsh said. “Reducing their rents will put more food on the table for disadvantaged families in Queensland.

She said many owners of investment properties with average loans would see their repayments reduced by $200 or more each month.

Nature loss ‘dwarfs bank crisis’
By Richard Black

“So whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today’s rate we are losing natural capital at least between $2-$5 trillion every year.”

A new dawn for Iran
By Chris Cook

Exponential economic growth required by the mathematics of compound interest on a money supply based on money as debt must always run up eventually against the finite nature of Earth’s resources - particularly carbon-based energy.

The problem - ‘peak credit’. The dollar-based global financial system is continuing a slow, and irreversible, collapse from the point - I call it “peak credit” - in August 2007 when the unsustainable US property price “bubble” finally burst.

Music

Thanks to the following artists for their inspiring work:
LAL - Alarm Interlude (feat Kamau)
Rio En Medio - Heartless