Fast Forward News #4

Karl FitzgeraldCommentary1 Comment

Creative Commons License photo credit: zoonabar

David Pecotic

Getting Any Logic from the Property Bulls and Spruikers is Almost an Impossible Task
[While the rest of the media and sundry commentariat is busy counting unhatched chickens, Money Morning revisits demand, supply and price and asks why a shortage of bananas is not like a housing shortage.]

Renters:Stop Walking on Egg Shells
[Interesting commentary on recent property trends]

It’s Hard Being a Bear (Part Two)
[Steve Keen continues on his theme: despite “green shoots” and “the recession that we didn’t have,” he similarly is still a bearish because the economists in the optimists camp are relying upon very bad economic theory. Almost everything economists believe is possibly true at the level of an isolated individual, but almost certainly false at the level of an economy.]

Housing recovery hopes dashed
[Case in point: SMH reports that hopes for a recovery in the housing sector have been dashed by fresh data showing new home sales were flat in July.The volume of new home sales increased 0.1 per cent in July, following a 0.5 per cent increase in June, the Housing Industry Association said today. States showed a wide variation in results with house sales dropping 4.4 per cent in Victoria, 11.6 per cent in South Australia and 3.1 per cent in Western Australia. In NSW they increased 9.8 per cent and 10.2 per cent in Queensland.]

Plummeting prices open a rare window in the luxury market
[Prestige homes and apartments in NSW, however, have been discounted by more than 30 per cent.]

Clouds hang low over Sunshine Coast: slow sales
[Compare this story to:]

Coast property reps celebrate
[Another example of fine objective reporting about the same property market – I mean, they were there celebrating at the party, you can’t get closer investigative journalism than that, can you? Not according to Property Week editor Erle Levey, who while there opined: “that’s what this industry is all about – working together.” I wasn’t aware that print media was part of the real estate sector: he must be working undercover …]

Valad to offload assets after $1.5bn hit
[The debt-plagued diversified property company Valad Property Group has limped to the end of the 2009 financial year with a $1.49 billion loss, providing no earnings guidance or assurance of a distribution payment for the future.]

Goodman Group in $1bn loss, capital market conditions easing
[Goodman Group has swung to a full-year a net loss of $1.12 billion after it wrote down the value of its properties. Australia’s largest industrial property trust posted a net profit of $250.7 million a year earlier.]

RAMS Home Loans in funding default warning
[RAMS Home Loans has warned it could default on its current funding commitments, if the group cannot renegotiate looming debt deadlines or sell more of its mortgage book.]

Trinity looks at acting on $1m fee
[Troubled property group Trinity is investigating whether it can take legal action over a secret $1 million success fee paid to Queensland lobbyist Ross Daley – property, payola and politics, the perennial and endemic corruptions of our democracy …]
Rudd’s house of smoke and mirrors
[The federal government has substantially realigned the $42 billion stimulus package in response to warnings that a lack of flexibility leaves the government vulnerable to cost blowouts. There is going to a substantial scaling back of low income social-housing apartments from the grand plans announced by the Rudd government last year.]

Transport plan to put metropolis back on the rails & Schemes to raise the $40b needed for improvements
[Now for a some good news: the SMH reports on the Glazebrook Plan (Intergrated Transport Strategy Mass Transit for CBD and Inner Sydney), 30-year public transport blueprint for Sydney by the urban planner Garry Glazebrook, that reads like a wish list of infrastructure funding through the collection of public value for the public good. Capture of land value uplift? Check. Congestion Pricing? Check. Price-and time-Point pricing for parking? Check.]

Seven top ICT analysts think the NBN will be worth the money spent & Using a public/private company the right move
[Much of it based on the calculation of the prosperity equitable access to high-speed, symmetrical broadband will bring about through “indirect benefits” to the Australian economy – if so, rather than mongrel privatisation, why not take a leaf out of the Dr. Glazebrook’s book and finance it by capturing the simultaneous uplift in land values and other resource rentals (such as , for starters, the electromagnetic spectrum freed up by the switch from analogue to digital TV, the so-called ‘digital dividend’) that will accompany it …?]

Woolies and Coles to pass on import savings? Pull the other one, mate … it plays Waltzing Matilda.
[A blog post by author Sharyn Lilley, over at Saving Aussie Books. This site’s purpose is to let the Australian community know of author/publisher concerns about the Productivity Commission’s recommending Parallel Imports of books into Australia. This is a vexed and seemingly abstract question from the perspective of Geonomics. Free trade is intrinsic to a regime where taxation of labour and capital is replaced by rents from resources, but only on the condition that monopolies are either abolished or tapped for the rent they effectively privatise. As Lilley points out, that our trading partners impose import restrictions is a minor issue; more grave are that what are effectively monopolies and cartels almost entirely dominate the Australian economy. This being the case, any savings made through unrestrained trade will not be passed on to consumers but will be absorbed into corporate profits.]

End culture of racism, says UN inspector
[The UN special rapporteur on indigenous human rights, James Anaya, slammed the compulsory land takeovers, welfare quarantining and forced alcohol and pornography bans of Australia Government’s intervention as a violating international law – just hours after the Aboriginal and Torres Strait Islander Social Justice Commissioner, Tom Calma, revealed modelling for the first representative body for indigenous people since the abolition of ATSIC in 2005.]

Does imprisonment give good value for money?
[Aboriginal and Torres Strait Islander Social Justice Commissioner Tom Calma sounds the alarm about the 27 per cent increase in the Indigenous juvenile detention rate nationally between 2001 to 2007. His answer: the justice reinvestment program that is slowly reducing prison rates and balancing government budgets in places like Texas, Kansas and the United Kingdom. Could Geonomics provide a means not only to fund justice, but to make it self-funding …?]

Jenny Macklin’s housing ultimatum
[The federal government has given the Northern Territory four months to lift its game on Aboriginal housing after confirming $45 million was spent on a housing program without a single house being built.]

The G20’s missed opportunity
[Australia and the west missed an opportunity when they largely ignored a United Nations report on the financial crisis, writes Ross Buckley over at Inside Story.]

An island of hope
[Irony alert: Robert Gottliebsen at the Business Spectator reports, or make that doesn’t report, on the 2009 Australian Davos Connection (ADC) Leadership Retreat at Hayman Island. Since 1996 the ADC has been bringing business leaders, senior cabinet ministers and shadow ministers to Hayman Island, making it the most significant conference on the Australian business calendar. The conference is conducted under the “Chatham House Rule,” which means that no one is quoted. As Gottleibsen writes “The Prime Minister personally gave me permission to use the “we are not out of the woods” quote, but I otherwise would not report even that.” If you want an insight into the minds of the people who didn’t see it coming, believe that transparency as a virtue that applies to someone else and are paid a lot to run the place (i.e., the bipartisan political class), look no further …]

Opposites attract in renewed trans-Tasman friendship
[New Zealanders had once seriously considered joining the Commonwealth, and attended many conferences in the lead up to Federation. With combined Anzac military contingent to domestic travel across the Tasman, to the intensification of the groundbreaking Closer Economic Relations trade pact into a single economic market, with a deadline of 2015, are we going back to the future? Or is it more a question of Australian banks and business protecting their $80bn investment; for example:]

NZ mortgagee sales hit historic high
[Foreclosed homes building as financial commentators claim crisis is over]

Japan’s Yukio Hatoyama and Climate Change; Japan’s new leader, Yukio Hatoyama, aims high
& Opposition sweeps to power in Japan
[Potentially good news for more leadership from Japan in the lead-up to Copenhagen: today’s landslide for the Democratic Party of Japan means that Yukio Hatoyama will be the next prime minister. He has pledged a 25 percent cut in Japan’s greenhouse gas emissions by 2020 (below 1990 levels). However, from the resource rental perspective, Hatoyama has also pledged to cut the gas tax and highway tolls, so it’s a bit of a mixed bag. But he is determined to break the senior bureaucracy’s grip on policy-making – the DPJ has already decided to curb their pre-emptive power by banning the meetings of ministry chiefs that until now have been held twice weekly, ahead of cabinet meetings, to effectively steer government decisions – so we may yet see some innovative solutions emerge. None is more innovative than Geonomics, and it would be the quickest and simplest way to deliver on that and other DPJ election promises, including a $320 a month child allowance, free high school education, and a higher minimum wage.]

Land Act rates to be reviewed
[The Bangkok Post reports that the Thai government is seeking to strengthen the rates it applies to land values. Somchai Sujjapongse, director-general of the Fiscal Policy Office, argues that the the law is aimed at pushing landowners to utilise their land and to bring unused land plots into the market. The office will carefully define “unused land” as many owners try to have unused land categorised as agricultural plots, which qualify for the lowest tax rate. Currently, some landlords try to avoid tax by growing a few trees on a large plot and claiming it as agricultural land or a public park. Developers are urging the office to review the effect this would have on land banks for future development.]

Arnie turns to eBay for budget boost
[Billed as ‘The Great California Garage Sale’, the state is using eBay and Craigslist to sell 6,000 surplus items ranging from cars to coat racks, computers to binoculars and jewellery – and many other states are following suit. Not a good sign; but then again, neither are these:]

US economy beats forecasts, banking troubles remain
[The United States economy shrank less than expected in the three months to June. But 111 lenders have been added to an official list of problem banks, taking the total number to 416. Despite the improvements, 81 banks have failed so far this year.]

Economy Improving…But Banks and FDIC Still in Trouble
[The number of problem banks continues to rise. More worryingly, the FDIC insurance fund has a whopping $10 billion…which doesn’t go too far when you’re insuring $6 trillion in deposits!]

U.S. Homeowners Cut Asking Prices $27.8 Billion, Led by Nevada
[Some of the biggest reductions in Nevada and Florida, states hardest hit by the property slump.]

The New American Dream: Renting
[A brief history of how Walt Whitman came to write: “A man is not a whole and complete man … unless he owns a house and the ground it stands on.” Is it time to accept that home ownership is not a realistic goal for many people and to curtail the enormous government programs fueling this ambition? The better question is: how can we recognise that we are all equally tenants on this planet? Sharing resources rents amongst the community rather than privatising economic rents for the few (banks, that is) could be the answer.]

The troubling side of Ben Bernanke
The Shiva of the global economy – creator and destroyer both … as Samuel Clemens once said: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

The Fed Intervenes in US Dollar Gives Inside Information to Goldman Sachs
[The US Fed is completely private, only reporting to its member banks and to investment banks. Coincidentally, the Fed’s elite constituents are the primary beneficiaries of its interventions …]

Is the U.S. on the Brink of Fascism?
[In a related story, is the US about to commit the political equivalent of jumping the shark …? Based on the work of historian Robert Paxton, the world’s pre-eminent scholar on the subject of how countries turn fascist, who argued that the best way to recognize emerging fascist movements isn’t by their rhetoric, their politics, or their aesthetics. Rather, he said, mature democracies turn fascist by a recognizable process, a set of five stages that may be the most important family resemblance that links all the whole motley collection of 20th Century fascisms together. Sara Robinson, from Campaign for America’s Future, one of the few trained social futurists in North America argues that the tipping, where conservative elites openly throw in with a country’s legions of discontented far right thugs a la Teabags and Birthers, has arrived. Of course, futurists have been known to be wrong …]

UK business spending weakest in 43 years
[Or how all that ‘quantitative easing’ (a.k.a printing money) to enable banks to lend more (while slugging taxpayers for the cost) worked out so well …]

IRELAND: Free higher education to end
[… September 2010. Tuition fees were abolished in the mid-1990s by the Labour Party, on the back of the Celtic Tiger property boom. Could the capture of the unearned income inherent in land value uplift have placed this great democratic ideal beyond the inevitable razors that effect it in every bust?]

Fair Distribution of Wealth
[On the need for both a maximum as well as minimum wage, the Center for the Advancement of the Steady State Economy – although arguably an economy based on raising public revenue through resource rentals would go some way to smoothing out many disparities like this one …]

Overmighty finance levies a tithe on growth
[The estimated $4,000bn of losses in US mortgage-related securities are just the surface of the story. Beneath those losses are real economic costs due to wasted resources: mortgage mis-pricing led the US to build far too many houses. Similar pricing errors in the telecoms bubble a decade ago led to millions of miles of unused fibre-optic cable being laid. The share of all wages and salaries paid by the financial firms and those firms’ share of all profits earned have risen sharply in recent decades. Sounds like a job for Geonomics!]

Study: Oil speculators dominate open interest in oil futures
[A new policy paper by Rice University’s Baker Institute for Public Policy shows a clear increase in the size and influence of noncommercial traders, or “speculators,” in the oil futures market since regulations were eased by the Commodities Futures Modernization Act of 2000. Speculators now constitute about 50 percent of those holding outstanding positions in the U.S. oil futures market, compared with only about 20 percent prior to 2002.]

City of Fees and Services
[On whether paying “aggressively” increased fees and fines for our everyday use of the city – whether this means road tolls and garbage collection fees or suddenly unaffordable parking meters – is the best financial model for a post-taxation metropolis. This would seem to cut to some of the most basic questions of what services constitute a city in the first place: what a government might provide and how it is that we will pay for what it offers. Right up our alley, this one …]

When Web Communities Become Ghost Towns
[The demise of GeoCities points out the difference between commons and “faux commons.”]

The Submarine House | Los Gatos, United States
[And now for something completely different: brings new meaning to the phrase “house under water” …]

One Comment on “Fast Forward News #4”

  1. With the Financial Crisis hitting Our other subprime meltdown is the 4 billion HECS by predatory lenders
    DEWR / Jobservices selling private sector education products to those least able to pay, through unsecured subprime HECS loans, that have no asset value and are totally unsecured, no guaratee of job at the end, and whose mandatory employer repayements suck money $200 a fortnight out of the real economy, and cause postgraduates mortage stress and default forclosures, and at risk of becoming homeless. When did Civic Human rights infer that Government has right to dictate to jobseekers on jobservices ’employement pathways’ jobseeker contracts the consumption of educational products on private HECS debt?, due to market failure, pushing the most vunerable into vices, much like the first home buyers grant, a lovely sweet poison finacial product apple when intrest rates rise.
    Now they do!
    DEWR and jobservices must stop acting like sprukers and salesmen for privitised educational market, and pushing a no choice dictating consumption of edu HECS debt for for benefits is like locking individuals in car salesroom not alowing them to leave untill they sign the bad loan contract

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