Category Archives: Australia

China Attacks Oz Banks for Laundering Flight Capital

Yves here. China is cracking down on flight capital, starting with Australian banks. As the most casual readers of the business press know, the international wealthy, particularly Russians and Chinese, have been using residential real estate in “world cities” as their favorite lockbox. As we’ve written, it’s stunning to see how much real estate has been hoarded in London. Mayfair was depopulated during the petrodollar recycling of the 1970s; now much of Belgravia, Chelsea near Sloan Square, and Kensington are visibly underpopulated. Vancouver has been bid to the sky by Chinese flight capital. New York is a big destination for Russian and Chinese investors, and Chinese money has been pouring into Australian real estate.

The Chinese move may be an admission of stress on the financial system.

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Murdoch’s Other Hacking Scandal: A Review of “Murdoch’s Pirates” by Neil Chenoweth

Back in the late 1980’s, Rupert Murdoch’s latest fiendish plan for world media domination (there’s a new one every decade or so) centred on pay TV. But as the 1990s rolled in, the media baron focused on a new world to conquer: crypto.

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Has the Developed World Hit “Peak Car Use”?

Yves here. While this piece provides a solid overview of the fallen status of cars, it misses an obvious contributor to the lack of enthusiasm for them among the young: with weak incomes and in many cases, heavy student debt loads, an automobile is too large an expense relative to what they get out of it.

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How a British Carbon Credit Pusher Got a Listing on a Danish Stock Exchange, Brokered by a New Zealand Financial Company Run by an Australian Residing in Switzerland

How a British Carbon Credit Pusher Got a Listing on a Danish Stock Exchange, Brokered by a New Zealand Financial Company Run by an Australian Residing in Switzerland

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Governments Need to Take the Reins Back From Central Banks and Deal with Economic Imbalances

Macrobusiness flagged a short interview with Ann Pettifor, a highly-regarded international finance expert who is the Director of Policy Research for Macroeconomics on the ABC program The Business. Pettifor argues that economists are responsible for the bias today to over-rely on monetary policy to solve problems that can only be addressed by government spending. Leaning too heavily on monetary policy to try to address weak growth simply generates asset bubbles.

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It’s Time to Levy the Land

Yves here. While some of the concerns in this post are specific to Australia, they can be readily translated to other property regimes. The part that is missing, however, is that the US relies on “real estate taxes” which includes the value of the buildings on the land. Michael Hudson has advocated taxing land much more heavily, since unlike taxing capital or labor, it does not burden the economy with higher costs . As he explains in a 2009 interview:

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Vale David Hirst

Yves here. Steve Keen sent this note along with his post:

The journalist David Hirst was both one of the few to warn of the crisis, and someone who became a good friend. He died last week, as a long term consequence of internal injuries sustained about ten years ago in the USA, when he tried to stop a woman being bashed.

His spouse asked me to see if I could get the attached published on NC, which was one of his favourite sites.

If you know David’s writing, you’ll understand what a loss this is. And if you missed his prescient and incisive commentary before and during the crisis, I hope you’ll sample his work below and get a sense of what a talent he was. Either way, I trust you’ll join me in sending condolences to David’s widow and his family, as well as to Steve.

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Steve Keen: How Krugman Lost Equilibrium (Part 2)

Dave here. Big apologies, apparently I cross-posted the wrong post. This is going to get me thrown out of guest-posting school!

This article is the second half of a two-part series. To see the first half, click here. Cross-posted from Business Spectator.

Krugman’s explanation of our crisis today is straight from the pages of John Hicks’s 1937 explanation of the Great Depression (though curiously, Hicks himself didn’t mention the actual state of the global economy at all in his 1937 paper, which attempted to explain the relationship between interest rates, and real output in goods and services and money markets.

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Crime and Punishment in Australian Business (as in the Former is on the Rise, and Wondering if They Will Ever See the Latter)

Yves here. This is Lambert’s pick, but since I still remember my two years in Sydney fondly, I thought I would comment. Australia is often stereotyped as being 20 years behind the US in a good way: it has a commitment to collective good, a sense of community, and a robust middle class, things that are increasingly wanting in the US. And it has those qualities along with better broadband and first class, cheap healthcare (the offsets are getting used to the seasons being the reverse of up North, having to adopt a footie team, dealing with the onerous documentation requirements of their tax authority, and having most movies get there after you can see them on international flights).

The interesting quality of this article by Houses and Holes is its sense of consternation about what looks like rising corruption in Australia. I don’t mean to sound condescending, but being in a country so much further along in this ugly process, there’s an underlying trust in authorities and process evident in this piece, while those sentiments are in tatters in the US.

Most societies have a level of crooked behavior that they tolerate; the assumption seems to be that these dirty backchannels are sometimes the only efficient way to work around obstacles, and that enough bad guys will be caught and punished to keep the dubious dealing at a manageable level. You can see here a quiet sense of horror, as if someone in a movie sees their hand suddenly changing into something they don’t recognize as human and realize they may be undergoing a fundamental, chthonic transformation.

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Tell University of Western Sydney They are Dopes for Planning to Dump Steve Keen

The Australian press is giving raspberries to a plan by the University of Western Sydney to pretty much eliminate its economics department, which would result in Steve Keen and other instructors being fired. Keen is a well known and respected heterodox economist, so this move looks particularly misguided.

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