CM appeared on Sky News to discuss the situation with our banks, the potential risks from the recommendations of the Hayne Royal Commission and the issue of mortgage stress.
Nothing like a 77-yo former New York Mayor Mike Bloomberg coming off the top buckle and body-slamming the current list of Democrat primary candidates Hulk Hogan style. So hopeless is the current field running that Bloomberg’s long-time advisor, Howard Wolfson said,
“Mike is increasingly concerned that the current field of candidates is not well-positioned” to defeat Donald Trump.
The question remains whether Bloomberg actually runs. If he doesn’t, he has literally thrown the present lot straight under a bus. Precious thanks to their campaigns. No doubt he will see how the reaction is before committing to the run. He will be 78 if he runs.
Yet, what record did Bloomberg leave behind in NY? Recall current Mayor Bill DeBlasio heaped scorn on Bloomberg for turning the city into one for the haves and the have nots. The argument that when he left office in 2013, 31% of the residents spent more than 50% on rent. That was a higher figure than when he took office.
One thing to bank on if Bloomberg wins the primary and challenges in November 2020, make sure you back up the truck on renewables investment when the polls all point to him doing a Hillary repeat (i.e. coronation) and sell just before the election result because it will be a fully priced sector before that date.
Mike Bloomberg is a climate alarmist of the first order so he’d likely re-sign the Paris Accord. Note that his own company has a dedicated Bloomberg NEF site for all things in clean energy.
ASX listed stocks linked to the renewable space include,
Infigen Energy (IFN) – Wind
Great Cell Solar (DYE) – Solar
Quantum Energy (QTM) – Solar
Solco (SOO) – Solar
M Power Group (MPR) – Solar
Carnegie Clean Energy (CWE) – Wave
ReNu Energy (RNE) – Biogas, Solar
Petratherm (PTR) – Geothermal
Black Rock Mining (BKT) – Graphite used in energy storage
Pacific Energy (PEA) – Biogas
Alterra Ltd (1AG) – Sustainable agriculture
8.46m homes or 13.6% of all dwellings are vacant in Japan in 2018. This is up 3.2% on 2017 according to the Housing & Land Survey. CM wrote about the population exodus from regional areas in Japan in this report.
Vacancy rates in Wakayama, Tokushima, and Kagoshima prefectures stand at 18.8%, 18.6%, and 18.4% respectively, areas suffering population exodus. Tokyo, Kanazawa (Yokohama), Okinawa and Saitama, all experiencing net migration inflows, have the lowest rates of unoccupied houses.
Yubari City in Hokkaido has a campaign poster – “No money but love.”
Yubari is notable for five things. First, it is the region that produces Japan’s most expensive melons, the type you see beautifully encased in a satin-lined pine box with a price label of US$200. Second, it had to declare bankruptcy in 2007. Third, its population has fallen from 117,000 in the 1960s to around 21,000 in the 1990s to less than 8,900 today, falling 19% in the last 5 years alone. Fourth, the average age of the city’s residents is set to hit 65 by 2020. Fifth, taxable income continues to fall with estimates that government coffers will swell by a woozy 25% of the levels seen 20 years ago.
Not a good sign for the regional economies. Japan has a stall speed warning and the government plans to fix it are painfully inadequate.
The real purpose of a local council is to dispose of household waste, keep local parks tidy and ensure toilet paper is installed in public lavatories. Outside of that, there is little local residents require from local councils other than on-street parking permits or onerous red tape when seeking housing renovation approvals. Maybe maintain the local library.
It was reported yesterday that the Ryde Council declared a “climate emergency“. As we can quickly work out, this is nothing more than joining the global Extinction Rebellion style virtue signalling with zero substance. Will Ryde ratepayers be asked to sponsor Greta Thunberg or Al Gore to lecture the council on climate matters?
Referring to the Annual Report 2018 financials section one can see that it spends on what it terms “Environmental Programs” a grand sum of $547,000, down from $556,000 the previous year. To put that in context of budget expenditure, this climate fearing council spends, wait for it, 0.34% of the total annual revenue. Put your money where your mouth is Ryde! Unfortunately, that was down from a slightly less pithy fraction. Nonetheless, it grandstanded with,
“This includes a commitment to divest its investment portfolio from fossil fuel-aligned financial institutions, supporting renewable and clean energy solutions and becoming one of the first councils to phase out single-use plastics.”
Was this requested by ratepayers? Sadly the council will never be able to phase out single-use plastics as the overwhelming majority of household waste is disposed of in single-use plastic bags because the supermarkets caved in allowing residents to reuse plastic shopping bags.
CM shudders to think how huge the investment portfolio of Ryde Council could be? Yet why pick on financial institutions? It sounds as if it believes it carries the might of some massive sovereign wealth fund that can rattle the cages of capitalism via its activism! It is unlikely that even if it sold those investments ‘at market’ that the present liquidity would absorb it in a heartbeat.
In the “Our Vision for Ryde 2028” piece, “climate” is mentioned 7 times. “Emergency” is mentioned zero times. “Sustainable” 18 times. “Environment” 20 times. Run of the mill council stuff. Many of the ‘environment’ words are not actually related to climate in any way. Still, for a 2019 document, where was the climate emergency?
The same report cites under the heading of ‘Climate Change‘, with absolutely no proof to substantiate it,
“Over the coming decade, natural hazards such as heatwaves, increased overnight temperatures and increased “hot” days during the year, as well as the frequency of extreme rainfall events and high-intensity storms are expected to accelerate as the climate changes.”
In a never-ending push to make the local council more relevant, Mayor Jerome Laxale profile of the Annual Report proudly notes, “He also initiated Council’s entry into social media, its partnership with Australia’s Racism it stops with me! campaign led a national push against changes to the Racial Discrimination Act.”
Racism? 19.2% of Ryde’s population is of Chinese ethnicity according to the Census 2016. As a migrant city, 48.5% were born in Australia. So by definition, 51.5% weren’t. Stands to reason that the mayor is chasing a problem that probably doesn’t exist. 12.5% were born in China (excluding HK or Taiwan) which is 4x the NSW average, 3.9% born in Korea (5x the NSW average), 3.6% born in India (2x the NSW average), HK born at 2.4% (4x NSW average).
Did Ryde really require this leftist mayor to push against changes to the Racial Discrimination Act? Was it a burning issue where the majority were born outside the country? Do ratepayers that fork our $83.4m of rates each year want Laxale to focus on this nonsense?
This is just additional part of the growing trend of radicalised councils acting outside of their remits Remember the two councils (Yarra and Darebin) in Melbourne who went out of their way to ask their own activist groups to rig polls to cancel Australia Day. Forgetting the 220,000 residents across the two cities, a handful of people who were bound to give the desired response were targeted. Even then it wasn’t a slam dunk. One mayor said they made the decision because their constituents are too ignorant of history so they were going to educate them without their opinion. When breaking down the composition of the councillors in these two cities it wasn’t a surprise. Both Greens led with a smattering of Labor, Socialist and left-leaning independents. The perfect cocktail for the totalitarian.
Just like those Melbourne local councils banning Australia Day, we now have Ryde looking to join the likes of Newcastle and the Inner West which think they are the axe on climate change based on what one Clr Christopher Gordon said,
“We have scientists telling that us in the next 20 years, we’ll be facing even more extreme climate problems as rising sea levels are estimated to displace tens of millions of people around the world.”
This isn’t self researched conviction but flopping to the cause of activists and their echo chamber. Merely rattling off their empty rhetoric which has in the overwhelming majority of cases found to be false.
Perhaps if Clr Gordon called up those evil fossil-fuel aligned financial institutions he would quickly work out they are still lending to new property sites on the shoreline and that climate refugees are as has long been the case, a figment of their imagination.
The voices of local councils have always been largely irrelevant. Now they are merely an irritant.
We shouldn’t expect less in the final week before an election, but Labor Shadow Treasurer Chris Bowen has come out slamming PM Scott Morrison’s first home buyer subsidy but promising to copy it anyway. Are these really the financial stewards we need running the country?
Either slam it for the bad plan that it is and reject it or endorse it because he has costed it. Sadly Bowen has done neither. Yet more profligacy from the confetti brigade.
For a Conservative party to push a subsidy of up to 20% of the value of a property for first time home buyers shows how bereft of policy it is. When Vic Premier Daniel Andrews raised a similar plan in March 2017 CM trashed it.
Think about it. Home prices have started to fall in major capitals because of a lack of demand thanks to astronomical prices and tapped out borrowers. This is before the Royal Commission puts the brakes on lending.
Why provide a subsidy to first home buyers toward the top of a bubble? It is not the role of the taxpayer to subsidize nor insure the downside risk in the event of the owner going into negative equity. What happened to free market economics?
What will this 20% subsidy do? If a couple go house hunting with a budget of $800,000, they will be able to shoot for a $1mn property. It might end up being the same property, pushed up by the desperate buyer thanks to the subsidy creating a false sense of security. So the reality is the taxpayer and the homeowner may end up in the red the day they move in. What a policy!!
Has ScoMo just called the top of the property market?
It appears President Trump has been bullying the US Federal Reserve to drop rates by 1% and get them to reopen the spigots on QE. What he is failing to grasp is that businesses invest because they see a cycle, not because interest rates fall.
“China is adding great stimulus to its economy while at the same time keeping interest rates low. Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening. We have the potential to go…up like a rocket if we did some lowering of rates, like one point, and some quantitative easing. Yes, we are doing very well at 3.2% GDP, but with our wonderfully low inflation, we could be setting major records &, at the same time, make our National Debt start to look small!”
This is a frightening proposal. Rates are at 2.25~2.50%. Although it masks a more important reality. Can Trump avoid a market calamity ahead of the next election? The real engine of the economy is slowing.
Despite the headline US GDP print of 3.2%, consumer spending and business investment slumped to the lowest levels under his presidency. Business investment spending was dominated by “intellectual capital” (soft) which is a pretty hard metric to put a reliable number next to. Equipment and structures (hard) contribution to business investment was near as makes no difference zero. Personal consumption of durable goods slumped to their lowest reading since 2011. Wholesale inventories (ex-autos/petroleum) surged ahead of sales.
Trump might argue China is adding stimulus. He is right. China’s Aggregate Financing (approximately system Credit growth less government borrowings) jumped 2.860 billion yuan, or $427 billion – during the 31 days of March ($13.8bn/day or $5.0 Trillion annualised (a Japanese GDP)). This was 55% above estimates and a full 80% ahead of March 2018. This pump priming added 8% to the Chinese stock indices but since then the market has been rolling off.
The world does not need more debt to be inflated away to get us out of the current mess we are in. A recession is inevitable. To put it into context, the world, since GFC, has added $140 trillion in debt for a grand total of $20 trillion in global GDP growth. That is right. $7 of debt only got us $1 of GDP. So if the Fed acquiesces President Trump he will probably get even worse metrics.
Then again perhaps we can take the words of a venture capitalist, Chamath Palihapitiya, who said on CNBC that “central banks have created an environment where major downturns and expansions are almost impossible.” It is statements like this that almost guarantee that central banks have lost control. Central banks have one role – ensure that markets maintain “confidence”. Powell’s latest move to cut rates after such a shallow peak tells us that “confidence” is waning.