Sunday, 30 April 2017

Hydro vs Basslink episode 23

Little is publicly disclosed about the latest dispute between Hydro Tasmania (HT) and Basslink Pty Ltd (BL) following the six month cable outage from December 2015 to June 2016. BL has just revealed a little more with the lodgement of its 2016 Financial Statements and Report with Australian Securities and Investment Commission (ASIC).

We knew HT has not been paying the monthly facility fee to BL  since September 2016 but that it has been making good faith payments. However these are considerably less than the facility fees otherwise payable. The amount in dispute between the parties could get out of hand?

Saturday, 15 April 2017

Reforming banking

Economist Nicholas Gruen has posted a couple of interesting articles recently about reforming banking. Our central bank, the Reserve Bank RBA, lies at the heart of the banking system. Rethinking and adapting its role more in line with the internet age could easily put thousands of dollars into the pockets of Australian households and billions into government coffers he argues.

Wednesday, 12 April 2017

Budget challenges: Money debt & other myths

This is an address to a breakfast meeting of the Burnie Chamber of Commerce & Industry on 12th April 2017.

I’d like to advance the proposition that most of what is commonly believed about money, government spending and debt is wrong. Seriously wrong....and it’s stopping us from sensibly moving forward.

You may remember the Queen in 2008 going to the London School of Economics to open a building as I recall. Referring to the GFC (global financial crisis).... Lehman Bros had just collapsed....she was famously captured on camera saying "Why did nobody notice it?" Their models were wrong that’s why. Money wasn’t in the models. Banks were assumed to be passive intermediaries lending funds from patient savers to willing borrowers. That may have been the situation pre 1971 before President Nixon abandoned the 1944 Bretton Woods agreement which incorporated the gold standard and underpinned bank lending practices. The world changed after that .....and economics didn’t keep up.

Put simply...a lot of economists don’t understand accounting.

Tuesday, 11 April 2017

Housing bubble now official

Great post by Matt Ellis , the Rational Radical.

“Our three economic regulators have finally revealed themselves as the three witches busy tending their poisonous brew while chanting “Bubble, bubble, toil and trouble!” to a nation of tone-deaf property speculators and commentators-come-experts. The architects of our dreaded housing and economic Frankenstein are among the last to formally recognise the monster of their own creation for what it is – a hideous creature that defies all reason, logic, decency, ethics and ultimately, any ability to survive.

Such is the well documented exceptionalism and wilful blindness of the collective Australian bubble psychology, that bubble believers and sceptics alike have come to the physics defying conclusion that Australia has invented an actual perpetual motion machine. The problem with perpetual motion machines? They don’t exist. Can’t you just feel the growing friction rubbing up against the bloated sack of housing hot air? I am amazed at how tenacious the belief is that exponentially growing imbalances can go on forever, when every fibre of the economy must be sacrificed at the altar of housing speculation in ever more dramatic interventions just to keep the damned thing afloat for another few months or years. For just one more election cycle.”

Read the full blog at HERE

Friday, 7 April 2017

Cable car hype

Just a little more info that was omitted from the previous blog to satisfy the space constraints of a tabloid blog.  

Mount Wellington Cableway Company Pty Limited (MWCC) draws attention to itself by its use of hyperbole and alternative facts. And that what gives the show a Mickey Mouse flavour.

Thursday, 6 April 2017

Cable car conflicts

Premier Hodgman was dismissive of concerns about State Growth Minister Groom’s close relationship with Adrian Bold, proponent of the Mount Wellington cable car project, as revealed on social media.

“There are a lot of things that require my attention ---- Matt Groom’s Facebook page isn’t one of those”, he said.

What if the chair of Tourism Tasmania was a 50 per cent owner of a company which is the largest shareholder, apart from Mr Bold, in the cable car venture? Would that appear on the Premier’s radar? After all he is Minister for Tourism as well.