Economy

44% of Americans can’t raise $400 in an emergency. It is actually an improvement

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44%. This is actually an improvement on the 2015 survey that said 47% of Americans can’t raise $400 in an emergency without selling something. The consistency is the frightening part. The survey in 2013 showed 50% were under the $400 pressure line. Of the group that could not raise the cash, 45% said they would go further in debt and use a credit card to pay It off over time. while 25% would borrow from friends or family, 27% would forgo the emergency while the balance would turn to selling items or using a payday loan to get by. The report also noted just under a quarter of adults are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to the high cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being largely unprepared, indicating no retirement savings or pension whatsoever. Welcome to a gigantic problem ahead. Not to mention the massive unfunded liabilities in the public pension system which in certain cases has seen staff retire early so they can get a lump sum before it folds.

Comey testimony proves media can’t stop playing the man rather than the ball

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Comey admitted in his testimony that he was never pressured by Trump to end any investigations. Damn and blast. The media has done another collective Rachel Maddow “we’ve got his tax returns” backfire. So insistent on trying to seek revenge they forgot the old Chinese proverb, “before setting out on revenge, first dig two graves.” So eager are they to play the man they overlook basic check sheets to find balance. Trump may well be a loose cannon at times but the media is the pot still calling the kettle black.

While I long argued Trump would win the election I’ve been an advocate of trying to seek balance to the one sided argument against him. It doesn’t mean I think he is ideal.  I disagree with many (not all) things he has done and petty things (like his attitude to Merkel) are certainly not fitting the most powerful office in the world. Trump derangement syndrome is none-the-less real. The media attack dogs never seek to do moral equivalence with their beloved Obama over the same supposed crimes of leaking sensitive info or whatever. I do think Trump is Turnbull-esque in lacking judgement as well as constant cabinet reshuffles but the most twisted irony is that financial markets would seem to want him there using any wobble on the back of an impeachment scenario as an excuse rather than admit the hyper asset bubble blown for 8 years.

The mainstream media now preys on clickbait. Thinking the number of clicks, likes and shares are endorsements and can replace quality content (as much as they self appraise it’s high value added factual). In fact the revenue numbers of media outlets who continually rant  is telling. Fairfax in Australia has had two rounds of layoffs in the space of 12 months and The Guardian is openly begging for donations.

The media is surely going to keep launching salvo after salvo to try get him out of office. As stupid as they keep suggesting the ‘orange baffoon” is he keeps getting their measure. I issue a caution though. The deplorables that voted him in want him to get on with the job. With all these distractions the quest that they hope will get them under the “have not” hole is pushed further into the future. Getting an impeachment to stick and force a resignation is not high on a have not’s priority list. They need help as I argued at the time of the election. Whether Trump can provide it is a moot point but they voted for change and the “haves” ought to be careful how they indirectly impact the “have nots”

The screaming, carrying on and promoting blood sport may end up creating proper civil unrest. It’s simmering but the media as usual is oblivious to it all. In any event the last thing the world needs is instability in the world’s largest economy at this point in a peaking cycle.

Dick Turpin Turnbull will chase away foreign capital

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I was asked by a client this week on what I thought of Australia’s political climate. I said to him, “if you asked me 15-20 years ago I’d safely argue that it was the only country in the region which could boast incredibly stable government, sensible economic policy and a safe place to park your money. Today I can’t say with hand on heart that this is the Australia you are investing in today. What I will say is that you should keep your powder dry because it will become a ‘pound shop’ in the not too distant future with a weaker currency, higher rates and fire sale asset prices.”

He asked if I could elaborate. I replied “we have had 5 prime  ministers in almost as many years. Before that we never saw anything like that. Our political climate is vile and volatile. We now have a government that is seeking to put in place knowingly unsound policies to arrest poll declines rather than try to fix an out of control deficit. What they are failing to see is that bashing big banks (especially for a conservative Coalition government) out of the blue chases off investment (Alan Joyce and Don Argua are right about that). Foreign investors must wonder whether they may fall foul of knee-jerk regulations and decide the risk is not worth it. So in answer to your question the current climate is going to offer some fantastic opportunities down the line because all of the political turmoil will eventually force change and buying into the market leading into that will be your best bet.”

So with our Dick Turpin highwayman robber at the helm we invite unwelcome flight of capital. If you want to create jobs, growth, stability and invite foreign investment you do so by providing a platform that supports it. It isn’t won by bashing industry, cranking up public spending and hiking taxes. It is done by making yourself the safest place to invest and all the while that happens the risk falls meaning capital is not only cheaper but more abundant. This isn’t trickle down economics but sound policy. Sadly talking of net debt isn’t going to save this government and what is worse Opposition leader Bill Shorten wants to outspend a budget that makes the Sultan of Brunei’s giveaways look like Venezuelan austerity measures.

The French voted for their interests, not yours!

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One of the persistent memes, posts and social media commentaries I’ve read in the last few days on Macron’s win feature ‘thank you France’,  ‘you’ve spared another Trump’ or similar prose. The fact that some feel compelled to write in such ways speaks volumes to their self-assessed sense of shared intellectual superiority despite not being citizens. The French democratically elected Macron. Not the foreigner. The end. It is not our moral duty to tell the French or any other country’s citizens how to vote. You can be assured those that voted for him had their own interests in mind, not yours when they cast their ballot. Do you think the Brits thought for a second they might upset the Americans if they didn’t follow Obama’s wise words of ‘Remain‘ leading into Brexit? Not a chance in hell. In fact his comments saw ‘Leave’ polling surge. Do you think the 10.6mn French that voted for Le Pen were thinking of those in Athens, Madrid or Brussels as the ticked her name? Even those French that voted for Macron would roll their eyes in frustration if you butchered their language in your polite attempt to communicate in pidgin-French. So thanking them would be viewed as a VTFF moment.

We shouldn’t forget that 25% of French voters didn’t bother showing up, probably because neither choice fitted their bill.  So Macron’s 66% could actually be less than 50% of total voters. Maybe Le Pen’s 34% was much higher if those non-voters were held at gunpoint? Perhaps lower? We won’t know but only the French get to decide. Our pontifications mean little to the French. If I decide to vote for One Nation or cast a donkey vote in the next Aussie federal election I would not care a jot what anyone else thought. I wouldn’t care for threats of defriending which was a common occurrence during the lead up to the US election. My vote is for me, not you. Your vote is yours not mine. I have no obligation to give you my vote. You have no obligation to vote for my choice.

Listen to the recent protests about rescinding the voting rights of the elderly because they supposedly sold out their grandkids. Name one time your grandparents deliberately acted against your well being? Ice cream and chocolates are excluded. Although that is evidence of blind love so intentionally in your favour. We can take it to the bank that the elderly were acting and will always act, using their multiple decades of experience, in the best interests of their family’s economic and financial future. They haven’t suffered a bout of Alzheimer’s and sought to elect someone that will punish them.

To suggest the French result is a defeat for populism and the far-right couldn’t be more wishful thinking if it tried.  As written several days back I argued it was a massive win for Le Pen, in fact so much so that if Macron is just Hollande-lite that 2022 could be a Le Pen victory. Doubling her father’s achievement is no mean feat. 10.6mn rejecting the EU should be a massive red flag. However in 2022 the French will line up at the ballot box and vote with the party or candidate that will best represent them. They’ll care not for your posturing and posts telling them how to vote.

For a man that plays the EU anthem over La Marseillaise should tell us something about the next 5 years. The 34% will likely be ignored. Potentially a slug of the 25% that didn’t vote may be neglected as well. I won’t be surprised when you write ‘WTF France?’, ‘how could you be so stupid France?‘ If Macron doesn’t look after enough of his citizens they’ll eventually gang up and fire him. Perhaps there is the folly in your tidings of praise – sitting in your comfortable study tapping away salutations missing the plight of the have nots continuing unabated. Thanks for nothing!

No, it was because you thought it was a coronation not an election

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Reading through Hillary Clinton’s comments about ‘why’ she lost in November missed one huge point. She thought it was a coronation, not an election. It was supposed to be an ordained affair. Blaming Comey or Putin misses the point entirely. She conveniently forgets she had the entire mainstream media on her side coming in with poll after poll showing it was a forgone conclusion. Even betting agency Paddy Power paid out on a Clinton victory one month before the election. The DNC backed off the gas. To lose to a pussy-grabbing opponent who looked straight down the camera lens at 10s of millions saying “no one respects women more than I do! None!” after the scandal broke says more than most. She wasn’t a good enough candidate period.

Why did she make Debbie Wasserman-Schulz the head of her campaign strategy when she was forced to resign from the DNC chair for deliberately shafting Bernie Sanders? Accepting leaked questions before the CNN debate thanks to Donna Brazile. With all the dirty tricks leading into the campaign she still lost. Her emails were a matter of poor judgement. She had Obama out at every turn talking about how great his legacy was when an ever growing mass of people weren’t experiencing such happiness in their day to day lives. In fact the opposite was happening as poverty, welfare recipients and those working more than one job kept hitting new highs.

People who read this blog would know I’d been saying that Trump would win since the GOP primaries because he was connecting with the strugglers. No matter how big a BS-artist he maybe, he was visiting the manufacturing wastelands and recognizing their plight. Hillary was too busy entertaining her inner-city mates, ignoring the deplorables. I pointed out that he was growing his Twitter following at twice the rate of Clinton. So no matter how horrid you might think Trump was, is, will be, he still won an election by the rules. Perhaps if the establishment had done a better job over so many decades indeed Mrs Clinton would have been crowned first female POTUS. Then again perhaps identity politics was another reason why Americans were fed up her campaign.

On a slightly different topic, note that Macron has grown his Twitter base around 100,000 since he won the first round. Le Pen is around 60,000 net adds. Twitter growth has been a good predictor of election victories as it captures underlying moods that 1,000 people called at random in a poll can’t help to match.

In any event election success boils down to one line to voters – “it is the economy stupid!”

Are you telling me you wouldn’t accept $400,000/hr?

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It is not often I write about Obama in positive terms but this time I must. $400,000 for a one hour speech to Wall Street is the price they’re willing to pay. If you’re reading this, throw away your prejudices and political affiliation and ask yourself point blank “if I was offered $400k as a speaking fee, would I take it?” I’m guessing most of you would. You can call Obama a sell out or whatever for speaking to those he despised but he is not dissimilar to any other world leader cashing in on the speaker’s circuit. Bill Clinton must be beside himself at being 50% off Obama’s rates or is that there is a bubble in public speaking?

Democrat Senator Elizabeth Warren was outraged at how Obama could be so out of touch with battlers. What a shame the Democrats didn’t figure out the mass increase in poverty, welfare and wealth divide over his 8 years, not to mention previous administrations.  The signs have been there for ages.

The sad fact is that being POTUS gives a huge wealth of opportunities, whether it be wakebording behind Sir Richard Branson’s mega yacht in the Bahamas or generous pay packets after dinner speeches after office.

Why would an investment bank pay $400,000 for Obama? Simple. The bank gets to invite all the top drawer C-level management clients which hopefully leads to multi million dollar transactions.

We can bitch and moan at the levels of hypocrisy or acccept that centuries if not millennia of business practice has been done this way. Influence is everything. Relationships are everything. It’s not what you know but who you know.  Surely kings in ancient times were showered with presents and favours by local lords pressing for greater influence to dominate other lords. In some cultures marrying one’s offspring off to more influential circles was deliberate attempt to gain favour. The Clinton Foundation made an industry out of pay-for-play. Why are we surprised?

I’ll be the first to argue that the gap between the haves and have nots has reached unsustainable levels but do not expect that Obama will worry about that. What worries me is we have a system where too many ‘have nots’ are living like ‘haves’ (e.g. Australia’s housing boom where mortgage debt:GDP is 180%) in this low interest rate world meaning risk is priced at next to nothing when in reality  it should come with a high visibility vest and flashing LEDs warning of its toxicity, flammability and volatility.

How is the imbalance redressed? That is not an overnight affair. With poverty levels around the world at all time highs, debt at record levels, deficits at unsustainable levels and public service jobs growing to hide the fact the establishment has lost control of a supertanker which is ablaze the reset will actually put a growing number of people into this harsh reality. From that we’ll have our hand forced. It will be ugly.

So I ask the question again. If you were offered $400,000 to speak for the sake of protecting your family would you do it? Of course you would but then the most common line I use for people looking for investment  returns is simple – “stop worrying about the return ON your money but the return OF it.”

The best way to insult women is to enforce gender quotas

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What is it with the Australian Human Rights Commission (AHRC) and the plan to enforce gender quotas for private businesses bidding on government projects? What an insult to women. To imply that somehow women are so lacking in quality, intelligence or skill to be selected on their own merit that this quango needs to step up and address gender imbalance. Furthermore it suggests that men are clearly biased in their hiring policies. One of my best bosses was female. She now runs her own company in the UK and is connected better than almost anyone I know. She has never wilted in the face of a man’s world and has a work ethic that would put almost anyone to shame. She has made it by herself without the need for state sponsored free kicks. What is it with the interview  process now that we need to put gender or sexual orientation ahead of ability? Surely any rational company tries to hire the best possible candidate regardless.

I run a business where 50% of my staff are women. Nothing to do with gender but ability. I even pay them more than me. However as an independent business it survives on the ability to execute and I base all hires on that premise. I don’t care if they are LGBT, Muslim, Christian or atheist. Why is the AHRC trying to dictate who I hire for my business? Surely tax payers want the best return on their money so if my business can provide it why should my hiring practices be brought into question? All of a sudden my firm’s profitability may be impacted by having to hire less talented people to fill a pointless quota.

To apply it across industries is also kind of ridiculous. Looking at the table above I would imagine that the AHRC would view Education & Training and Healthcare & Social Assistance, two areas women totally dominate, as fair game. If men were to protest at the  gap in those industries they’d be laughed out of the AHRC offices.

88% of men employed in construction is likely down to the nature of the industry. Chippies, sparkies or brickies tend to be male. It isn’t due to sexism or discrimination rather, once would imagine, interest. Australian Sex Discrimination Commissioner Kate Jenkins on the other hand has told the federal government to take “disruptive action’’ to enforce gender quotas.

Contractors would have to prove that they have “gender-balanced shortlists’’ for job ­interviews. “This means that the gender balance in the organisation would be 40 per cent men and 40 per cent women, with the remaining 20 per cent unallocated to allow for flexibility,’’ Ms Jenkins said.

However we live in a victimhood culture these days meaning we must pander to making everyone a winner regardless of whether they’ve actually made an effort. Every successful woman I’ve ever met got to where she is through her own talent, intelligence and ability.