Thoughts - Dealing with the Problem of AGW

Whether its Anthropogenic Global Warming or Anti-Global Warming (although, I mean the former), there's a lot currently riding on solutions resulting in turmoil within the Libs (horray) but other issues as well.

Personally, I'm uncertain about a CPRS or the ETS being a solution to AGW. Why? Because we still lack true leadership on the issue. You see, AGW (and its solution) are going to be long-term - we're talking 20, 50, 100 year timeframes. We really aren't going to see the long-term impact of AGW for many years to come. Remember, we're talking global climate - this is a massive beast with its own momentum - it heats slowly and, thus, will take equally long to cool. But it's that slow increase in temperature that's going to do us in - problem is, it's unlikely that many from this generation will wear the consequence of it - my daughter's generation probably will and certainly her children - but I suspect mine and those before me never really will. Yes, we'll have the occasional freakish event (e.g. Bushfires, Droughts, etc), but they will continue to ebb and flow as they have done for millenia. What seems irriffutable, however, is that warming IS occuring and at a rate much faster than normal. Yes, we're seeing the occasional variation - but only before people remain focused on the short-term.

And this comes to the crux of the problem. Like the current arguments (and both camps are equally guilty of this) of focusing on short-term events (like over attributing a bushfire to AGW or showing that for a couple of years, temps have been lower) - the approach remains coupled to the political cycle. There is NO long-term vision in ANY of this stuff (well, except, I'd argue, from Climate Scientists who, if I've listened correctly, continually pour water over short-term events).

So my concern for the ETS are as follows:

Firstly, as each year brings little change (the old frog being boiled), punters will increasingly grow to HATE the ETS - "nothing is changing - why are we having to pay?". So through each political cycle, there will be an increasingly beligerent move against such systems.

Secondly, I don't think people's behavour will change. Polluters will continue to pollute as consumers continue to drive their cars, build and live in crap houses and we'll buy all that crap we don't need. Yes, we'll pay more for it, but like all things - people adjust.

Another concern is that, as demand for pollutants (like coal) go down thanks to the ETS, it will continue to drive up its affordability as a source of energy - so the market ends up acting against itself.

However, I suspect my biggest concern is that business LOVES the ETS - they are rabid for it and they want it (or some do at least). Carbon is set to become the new CDO of the next decade - and likely lead us into another boom/bust cycle.

What we have here is a classic "let the markets fix the problem" solution - and the problem with this is that Greed tends to overcome Good.

But what of solutions?

For mind, the solution has just past us by - we missed it (ok, Howard missed it). The last decade saw immense wealth created - particularly in public circles. And what did we do with it? We blew it on wars, media, pop tarts, subsidising baby production and waste. At a time when we could've seen massive public expenditure on solar/wind/geothermal/tidal energy systems - we pissed it up against the wall (or saved it so we could bounce ourselves out of the GFC).

And this is our problem - we blew that once in a lifetime opportunity and it may never come again (or at least, not in time). So instead, we're forced to tax ourselves in an attempt to create an artifical market for alternatives. Of couse, all that really means is building Nuclear Plants (as business refuses to touch renewables (how on earth do they make money out of nothing?)) and leading us into the abyss that is nuclear proliferation.

Leadership

For me, this has been a classic failure of leadership - not just currently, but for decades - and on BOTH sides of government. Because this issue will outlive ANY government, it's solution MUST be bipartisan and reaffirmed in the public's mind. It's no good Turnbull et al now backing solutions when they failed to speak out under Howard - they look like they'd jumping the fence and acting out of character. This sudden awakening (even though we now know it isn't) only confirms fears in punters that this is a political issue, not a people issue - and they're untrusting as a result.

Turnbull and Hockey (and those who believe) should've been out trumpetting AGW years ago - even under Howard - and selling it positively like they've done with the Republic. But we haven't seen that so we're now screwed.

Young Home Owner Drop - You Don't Know Why?

Interesting news from the Reserve Bank today that the level of Young Home Owners (under 35yo) has dropped notably in the last 10-15 years.

Lots of pontification as to the cause - young people staying home, time take to save a deposit - but I would've thought it plainly obvious?

Most poor sods leaving Uni these days exit with a $30K debt and any idiot knows that this goes against you when trying to secure a loan. Is it unsurprising then, that young people aren't able to get a loan with this burden hanging over their heads - and even the timing is perfect - 10-15 years - pretty well marries up with the increase in HECS over the years!

Thoughts - Aussie Sporting Lowdom

I've pondered recently how we've become such poor sports in recent years - mainly dominated by the Australian Cricket Team, but often matched by others.

Most recently this came up in Australia's remarkable win over India in the 5th ODI. It was remarkable not for our win, but for the remarkable feat of Sachin Tendulkar's wonderful 175 - that brought India within 3 runs of victory - and chasing 350, that's nothing short of incredible.

Unfortunately, the Aussies seemed incapable of recognising this feat and instead, focused (as usual) on themselves:

'I don't think we did a lot wrong in the game,'' Ponting said. ''Sachin's innings would've been something that would've stolen the game from us. We did enough right in the game to win, and we got across the line at the very end. I can tell you now that the guys, even though we probably fought our way out of jail a little in the last half of the game, we were as excited out there and back in the rooms as we have been for any win that we've had.''

You know, I'm getting kinda tired of hearing about how wonderful we are - would be nice if we at least recognised and praised the efforts of our opposition. Is that asking too much?

Thoughts - Music Piracy - More Narcissism?

Lily Allen recently headlined a campaign AGAINST music piracy and, to her surprise, received quite a significant backlash from her "base" decrying her position.

Whilst I feel for Lily's position, I equally support some of the "justifications" often made in favour of piracy. However, I see those arguments in the light of a Gen-X mentality and is formed around the opinion that I want my music my way - so stop trying to shove overpriced CDs down my throat.

Problem is, I'm not sure Lily's base sees this in the same light. Much has been said about the narcissism of Gen-Y and, I'd argue, that the type of piracy that Lily is writing about comes from this "I don't give a shit about you, just give me my free music" mentality. I'd be very surprised if the majority of Gen-Y's have a position on anything that didn't involve themselves - so the usual arguments about "give us better access" or "stop with the crap CDs" won't cut it.

So, the question in my mind is - how does Lily (and the industry) stop this? I would've thought it was pretty obvious - you need to make it about them. Stop talking about all the musicians they're hurting - to be honest, they don't give a flying fuck if Lily goes down tomorrow - their attention span is too small to care. However, would you be better arguing that they're killing off their own ambitions to become muso's? Mmm, probably not a big enough audience on that one.

What about punishment? Threats haven't worked before and trying to nail people doing it is bloody hard - and look at the backlash it yields on the label/artist who tries to prosectute.

No, I suspect the only thing you can do is either:

• Accept the change (and find other ways of growing your revenue base outside of selling "units" or
• Fight back - whenever you find a song listed, start injecting shit into the torrents making them useless. Use technology to fight the technology. It's probably a loosing battle, but at least you'd get some revenge.

Ok, perhaps they're both silly - so here's my real suggestion. Stop selling narcissism in your music, your image and ... well, pretty well everything you do. You see, if anyone says narcissim, it has to be Lily Allen. The "I don't give a shit" persona could well be an epitaph for Gen-Y. Which is unfortunate because her lyrics don't seem to sell the attitude - if anything they speak the opposite. Makes you wonder if she's being sold a particular way?

Anyhow, if people want a different reaction from their punters - then try selling it through the messages they portray in their songs. Get angry about it. Sell different ideals to their people who are attracted to them. God, I'm starting to sound like a religious zealot.

Still, the problem remains that the industry is still stuck in the 60's in respect to how to sells music. Perhaps if artists actually made decent albums? Perhaps if we stopped packaging "Hits Of" albums and forcing people to digest and artists album than selectively picking the pieces they like? Perhaps just writing good songs and selling them differently? How about not producing any CDs (in hard form) but offering electronic copies from shops at a much reduced cost - and any album be they current or old. The capability exists - if I want Led Zepplin 1 - I should be able to walk into any music store and buy it. The problem comes from when it's not there.

Of course, the problem the industry has is, like newspapers, punters have moved on. Either you need to win us back or change.

Theory - Vista is WinME all over again!

I've been touting this for a while so about time I put it in writing.

I can't help thinking that Micro$oft has gone back to the future and is using a tried and tested method of moving money out of a sleeping giant. When Windows ME shipped in the late part of the 90's/early 00's, Microsoft knew they'd be facing a tide of resistence from users who had grown accustomed to the "safe ship" they had in Windows 98. It took some time, but now that it was stable, no-one was going anywhere.

It was a lesson learned from previous versions of Office - why move when the current version works fine thanks very much.

So, how do you move this lumbering beast? By releasing a flawed, crappy and useless piece of software. The howls of derision were long and lasting and within 12 months, lo and behold, we had Windows XP - a stable platform. Perhaps unsurprisingly, people moved in droves.

Roll forward to 2009 and we're about to see Windows 7 released to great fanfare. It's hot on the heals of the latest "Windows ME" - Vista - which was soundly rounded on for it's failings. Windows 7 has, of course, redeemed Microsoft and the pronouncement of it being a new stable platform has resonated widely.

From my own experiences, most businesses found the move to Windows XP a massive cost burden - and trust me, they were never going to consider Vista as a viable upgrade. They were happy on XP and were staying put - the howls about it's stability just gave them final support to go nowhere.

Now that Windows 7 is about to be released, it'll be interesting to see how many now make the move...

GFC - Blame for Toxic Mortgages

I've heard a lot of people bagging consumers for their choice in crappy mortgages as the prime reason for the GFC and whilst they have some blame to share, it's been clear that the banks hold a responsibility - and this piece in the Economist with Robert Reich sumed it up perfectly:

DIA: In America, there's a lot of anger aimed at corporate executives, especially in the finance industry. But by buying houses they couldn't afford, weren't American consumers complicit in fomenting this crisis?

Mr Reich: Yes. But the important question to ask, in terms of avoiding a repeat of this fiasco in the future, is which of these parties -- financial executives and mortgage lenders, or american consumers who took out over-sized loans -- were in the best position to know the risks involved and to avoid them. Many consumers had no idea what they were getting into. Mortgage lenders and the financial industry behind them had every reason to know.

One has to wonder how much impact the trend to on-sell mortgages had in this problem as many of the retail banks no longer maintained an on-going interest in the mortgages they granted. In fact, there's some talk that banks ONLY interest in the mortgage was for the $800-odd in fees levied at the start of the loan - everything after that was on-sold to a third (or as we've discovered, 3rd, 4th, 5th, 6th ...) party.

Thoughts - Higher Ed

A recent thread on LP discussed Andrew Morton's critique of Universities Australia's economic argument RE: the benefit of a University Education. The basic line was that Uni's are good because of the economic benefit they bring so we need more funding.

Of course, such a narrow focus for establishing credibility was always going to bring about a pile of criticism and as one LP commenter noted:

Education is also about intellectual enlightenment and personal empowerment.

which leads me to my gripe, namely the problem with our faux University system.

Since the late 80's when all the CAE's were converted to Universities, we've seen a gradually watering down of the role of our uni's from leaders in academia to churn factories for voc. ed. and in doing so, the old 2 year diploma's have been converted into watered down, 3 year degrees. In the process, the cost of education has gone up impacting on both Uni's and thus students.

Isn't about time we acknowledged that the majority of our uni's are no longer focused on academia and are instead producing viable fodder for industry? If we did that, then surely we'd be better returning to the CAE model where students wishing to gain pure employment could simply study a 2 year diploma - focused on their area of expertise - which would cost less to provide and thus burden the student less in the long run?

This would leave a small number of institutions to return their focus to what they did best - research (or prepare students for a life in academia). Yes, a lot of these students will go on to lead productive life in business, but unless the focus remains preparing students for research instead of preparing them for a job then, alas, I think we're all doomed (or at least, the quality of our education system and the future of pure science is).

Thoughts: A Time for Infrastructure

At a time of growing unemployment, resources prices falling and interest rates at near record lows, it beggars belief that anyone wouldn't agree with MASSIVE infrastructure spending ... NOW.

Cheap labour costs, affordable materials and a return on investment second to none - why haven't we seen/heard calls for substantial, nation building infrastructure projects? Some obvious suggestions:

• Stand Gauge Rail ACROSS Australia
• High Speed Rail between Capitals
• Massive Solar/Renewable Energy Generation Projects
• Hydro Plant on Burdekin Dam

These need to be on a grand scale with a 20-30 year payback on them but in doing so, not only would they instil confidence in business and ensure future productivity, but they'd also fill most with a sense of national pride (a la Snowy Mountains Scheme) which would further lift us out of the doldrums.

Thoughts: Internet's Impact on Newspapers

There's been a lot of commentary recently about how newspapers across the US are being forced to close down due to a lack of revenue. The most likely culprit they see for this is the internet.

Now, whilst I do agree that the internet WILL steal some revenue potential, it's the lack in readership that's the biggest cause and, I'd argue, that's got NOTHING to do with the Internet. No, I'd offer that it has been the media's obsession with faux news, gossip mongering and news by media release that has led to their demise. You see, there's only so much of this shite that you can take so what do people do to find real news about real events that hasn't been spun by someone.

You guessed it, the Internet.

If the media dropped this guise that they're presenting news rather than selling it, then perhaps they'd see the real problem here. Get rid of the Today Tonights, A Current Affair, Fox News, "The Sun" - shit, even 60 minutes is full of tripe these days - and return to proper journalism then we'd all be the better for it.

Problem is, I suspect they've all probably too late - we've found a better medium and getting us back will be near to impossible.

UPDATE: A great article posted by ex-ABC journo, Chris Masters, argues a similar case to mine - that only NEWS done properly will solve the financial problems of the trade.

Talking Points - Student "Unionism"

I'm so tired of the constant bullshit that the right comes out with about student unionism at Universities. In an unsurprising move, Labor has moved to reintroduce a "Student Fee" which has unleashed the gates of hell - well in people's eyes.

So, I thought it was time to look at their common arguments against CSU and why they're bollocks:

"It's all about Freedom of Association"

There's this common belief that, somehow, money paid into a Student Union somehow lands into the Labor party. That by some feat of magic, the Union is stacked by with left-wing loonies. What a lot of nonsense.

Firstly, the composition the Union representative comes from a ballot of students. So ultimately, you get who you vote for - which is no differnet from what happens anywhere else in ... a democracy.

"Another fees is more burden"

This was Howard's masterplan. By making HECS incredibly expensive, ANY fee (even the pitiful student association fees) seemed like "the straw that broke the camels back". Remeber, we're talking $250 at at time when students are paying $6000 pa for an education (so what, 4%)!

"So people who don't go to Uni should have their taxes directed towards paying for the education of others who will (usually) ultimately end up on a higher salary than them?

Doesn't sound fair to the average worker to me!"

As the next commenter points out:

"They also pay higher taxes Alan - thus pay it back later"

This the same old argument that was trotted out when HECS was first introduced. It was largely bollocks then and it's certainly bollocks now. Most trade based workers are receiving significantly more for their services than the majority of uni trained workers. Yes, there are exceptions (as there are elsewhere in the community), but that's why we have a sliding tax scale (instead of a fixed tax rate). The more you earn, the more you pay back to society.

"Student fees are a joke. If you don't use them, why should you be forced to pay so others can? It's not like taxes, here!"

"If these "services" being provided are so important, why can't the people that use them pay for them?"

Well, if that's your thinking, you're welcome to disassocate yourself from society and go and live in the hills with the rest of the loonies. Puh-lease. If you live anywhere in Australia you pay some form of rates (even if you're renting - it's included in the rent folks) - which subsidies heaps of services in your community. Yet, where are the calls to refuse payment because you never use the library, or ask for a rebate because you never use the dump.

Why haven't we banned taxation because, if I ride a bike, why should I be subsidising roads?

No, this is a stupid argument and harks back to the looniest shit that came out of Hansonism.

"How can anyone justify forced membership of any organisation in a free and democratic Australia?"

Gads, this makes it sounds like you've been forced to become a signed up member of the Labor party - what nonsense!!! You are a member of a community - and like any community, services are provided, etc. How this is funded is probably another argument (actually, see below).

"Only a small number of students, voted in by a small number of students actually had control of the money, and these students had any experience in handling this kind of money. The student unions could hardly claim to represent the majority of students, only a majority of those who voted."

Aagggghhhh!!!! What is it that these people don't get? YOU GET WHAT YOU VOTE FOR!!! This is no different to what happens with every federal/state/local election. If you want control, participate!!!

As a student of a University, you are a member of a community and like all communities, there are groups with power. You have the Uni Administration, the Faculty Staff and the Government. All of these groups have an interest in the University and, thanks to an income/funding source, have power. Is it not right then to expect that, as a significant component of the university, you too should have a voice? To me, that's part of what we're talking about here - having a voice at the University. At time when fees are so high, who is holding Administration's to account? When I was studying a block subject recently outside of the normal "academic year", there were howls of complaints about lack of services (i.e. no computer labs open, no copier services, etc) - so who do you complain to? This is the role of the Student Association.

Question is - how should it be funded and what control should it have over funds raised? Well, this is obviously the vexing issue. To have a voice, the Student Association MUST have power. To gain power, it argues it needs to have associations OUTSIDE of the Uni (and thus we have the NUS). So, how do we get to a point where:

The Student Association limits its power to the University and
Greater scruitiny is made over where funding allocations are made.

Well, like all big problems, the solution is actually remarkably simple - and it's the same solution that we have today in the wider community (how many of us complain about what out governments are doing with "your money"?).

The answer is PARTICIPATION. Yep, it's as simple as that. My suggestion - make voting COMPULSORY for Student Association elections (as we do for all other forms of representation). I suspect the current non-compulsory voting favours the left - so lets give EVERYONE a voice by forcing all to vote. Secondly, give the Student Association real representation on the University Boards - that way we know we have a voice that can be heard. Thirdly, broaden the methods of association - provide a voice within each faculty thus making the student association more accessible. And finally, we need to look at the funding model. I have no easy solutions for this one - you either hand money to the Uni and risk it being swallowed up for non-student activities (like pretty new admin blocks) or relinquish it to the association and risk them blowing it on Lesbian Supporters of Falun Gong. I dunno - maybe a swiss style of referenda on funding needs to happen? Maybe it's a simple as balancing the money between the two?

I suppose the ultimate question comes back to power and how to concentrate that in the interests of ALL students on campus. As consumers, our best voice is to "shop elsewhere" - but is this a viable thing for some students (e.g. Townsville has only 1 University)? So how else do we give students a voice in an area where they're ulimately without one? Well, that's a question for another time...

Prediction - House of Cards

Well, the trigger was wrong but are, as predicted, facing an economic meltdown in Q3/4 of 2008. We're seeing lots of bold predictions about how Australia should rise above this - and to a degree, I have to agree.

What I don't agree on, however, is that we'll be left "untouched". Whether we like it or not, housing prices in OZ are ridiculous. They do not represent "true value" or are sustainable at their current levels. Shit, on "Two in the Top End" last week, in the middle of nowhere we saw 3 bedroom shitboxes selling for $550,000 and higher. In Townsville, we're seeing 4 bedroom houses in the middle of a bog-standard estate asking over $1m.

No, on this count, I have to agree with Marc Faber that we're in a bubble and it WILL burst. Nay, it MUST burst. The downsteam consequence of this is not good - but it needs to happen.

What also worries me is the leveraged leverage that has been sold as a "sound investment" by some in recent years. We've been to a couple of these in recent years and it goes like this:

1. You have equity in your house - you can leverage that to buy shares
2. When your shares go up in value (and they will), you can leverage that equity and buy more shares
3. Repeat, rinse, spin

Of course, this is a fantastic system in a market going upwards. But in a declining system, it's a house of cards. All this debt is layered on asset values that no longer exist and at some point, it all has to come home to roost. My guess, the trigger point will be job losses. When some people start getting laid off or stood down, we'll have another run on shares and, worse, property - and it will all come tumbling down.

So, the next questions are "when" and "by how much"? When is a hard one. I suspect it'll actually come out of the resources sector first as the folks working in this game have leveraged the most (so have more to loose). We've already heard about delays to contracts for steel going into China - so once that comes back, it'll be on for young and old again. There was a report last nite that Woodside have already announced they will begin a freezing on new hiring - so that's not a great start. And, as expected, some of the newer entrants - who rely on inflated commodity prices to survive - are feeling the pinch. There will also be a swayth of mining ventures that are not viable at a more "sustainable" commodity price.

So, all we need now is for China to slow down a big, commodities to fall further and ... well, we'll all be fucked!

What The - Labelling for Outrage

There's been a rash of coverage about the poor gent who, in an attempt to make the Darwin Awards, decided to drag in his crab pots from the banks of a Crocodile infested river in FNQ.

Whilst his decision was a poor one, it irks me more that the media persists with their "labelling" of this, rather ill-informed, gent.

That this recent snap from the Courier Mail (now 2 weeks after the event):

THE remains of Vietnam veteran Arthur Booker, who disappeared in far north Queensland two weeks ago, have been found in a 4.5m crocodile.

Erm, what difference does it make that this guy was a Veteran? He's still an idiot for doing what he's done. If it was a silly European backpacker, we'd have all sorts of stories about how they shouldn't be so silly - but the respectability given to this guy has been over the top.

And that, I suspect, is the intention. This isn't about Mr Booker - this is about Croc Culling. By presenting Mr Booker as a decent, upstanding citizen - we turn the Croc into a criminal and, as a result (like all minorities), we need to fear and punish them.

No, this ISN'T a campaign to ensure Mr Booker is given the respect he deserves - this is about currying favour for a massive Croc Cull.

Thoughts: Local News Content

There was some media today concerning Win News' decision to cut back on local news staff in the Qld Regions. This decision isn't a huge problem (the real disaster occurred years ago when we lost local production) but it coincidentially ties in with another "major news" story that I think highlights the problem.

Like Katrina before it, Hurricane Ike (like all major systems that hit populated areas) MUST have immense learnings for communities all along the northern Queensland coastline. Yet, where is all the analysis in our local press? What lessons can WE learn? What mistakes are being made there that we MUSTN'T repeat here? Yes, there is coverage in the national media, but as these events are never likely to hit anywhere south of Rocky, there's no detailed analysis.

You can be sure that, if this was something that Sydney could endure, we'd have media all over the place running comparisons, etc. But not for us. And there's very little coverage (other than what they take off the news wires) about how these events might affect us.

Would local news production make any difference? Possibly not - the Townsville Bulletin IS locally produced yet still has feable coverage - but surely it would create enough content for a local production to at least be viable.

It also staggers me that in a city of over 180K people and in a region of over 600K people - that somehow we do not qualify for "local content"! Oh, the joys of capitalism eh?

Prediction - Anti-Plastic Bag Campaign ... By Retailers

With the price of oil set to stay high and keep going up in coming years, expect to see increasing interest from retailers in campaigns to "ban the plastic bag". It'll be dressed up as environmental concerns but has more to do with their bottom lines than anything.

Plastic, which is a derivative of oil, will becoming increasingly expensive in years to come. Shit, in the last 5-6 years alone, the price of their bags MUST have doubled (at least), so you could imagine their impact in coming years.

This may also explain why, in recent weeks, each time I've visited Woolies in their "express checkouts", that I've been asked "do you want to buy a green bag today sir?".

Oh well, I can't complain - any reason is a good reason I suppose...

Prediction - Global Collapse Q3/4 2008

Yesterday we had a prediction that, of all things, property prices would INCREASE (yes, go up) over the next three years. This despite the credit crunch, etc, etc, etc.

The only logical conclusion for this is that "the world demand will continue to grow" (okay, that's my thinking anyhow) - which I think is bollocks. My prediction is that China is about to turn off the tap. It won't be completely shut off, but compared to now, it will be a trickle.

It seems obvious to me that the resurgence of China is largely off the back of the Olympics and the desire of the regime to "look good" before a worldwide audience. But what happens after August of this year? Once the spotlight has moved, why would they keep this up? We already know that they're facing a problem with inflation and they've mooted trying to curtail their rampant growth (back to 7-8% down from it's current level of 13-15%). That's a halving of current growth.

On the flipside, there's only so much of an increase in resource costs that China can stomach. It has no choice at present because they've got a deadline to meet - but once August 2008 has been and done, there will be nothing stopping them.

So, my (rather bold) prediction, is that China WILL start ramping back in the 3rd and 4th quarters of 2008 and that pull back will put the fear of god into the resources sector (which will already had started suffering thanks to global restraint thanks to the oil price) and prices will start to tumble. My guess is that we'll even see Oil come back to "sane" levels - but by then the rot will have set in. Confidence will spiral out of control, the resource sector will start shutting down "inviable" operations and places like Mackay, Perth, nay even Townsville will feel the effect.

Thousands will loose their homes and the damage to the economy will be unrelenting. So by the time resource prices are "affordable", the rest of the economy will be so scarred that it'll lie dormant for many years.

I still don't understand why EVERYONE seems so convinced that China will continue to act like a capitalist economy. How ANYONE can predict what they will do is beyond me - let alone speak with confidence that "they'll grow forever". I'm sorry, but it just doesn't happen like that. China MUST take a breather or they'll hurt their own economy and at 7% it's still "booming" - but when everyone expects growth to keep going up and up, well, we all know how well markets take that sort of news.

So, lets bring it on. Time has come to burst this bubble so we can all get back to normality (well, once we've all experienced the pain that is)...

Thoughts: Commodification of ... Everything

A recent blog on Larvatus Prodeo got me stirred up about a long held whinge RE: how the move to "franching" everything led to team names I had no association with.

Rugby Union lost me as “growing market” when the Super-12’s went “franchise” mode and they became SO obsessed with “branding” that I could never work out who was playing who.

Gone are the days of Queensland vs NSW - we now have “the Blues vs the Crusaders”. I keep expecting to see NSW playing against … well, actually I still have no idea who the Crusaders are. I used to think the Highlanders were from South Africa (instead of NZ) because I kept picturing Tabletop Mountain in Jo-burg (etc, etc, etc).

The same was true of the “Sheffield Shield” (sorry, Pura Cup - geez, what a crappy name for a competition) and the use of idiot names for the State Teams. I still hardly know who’s playing who in these matches as well.

Unless you’re a rabid supporter, these names mean nothing to Joe Public and rather than drag me in, they tend to frustrate me and turn me off them…

Prediction - Solution to Housing Affordability is ...

... a forced crash of the market.

Yes, I hate to say it, but the only real solution to housing affordability is that ALL housing becomes cheaper and the only way that will happen if we have a massive crash in prices.

Hey, we all know it to be true. Affordability needs to be $100-200K cheaper than it currently is. How do you get there? Well, almost ALL options have the same affect - they force down prices EVERYWHERE.

If you flood the market with cheap land, what happens? Everyone goes and buys the cheap stuff, forcing it higher but in doing so, they desert the current market, forcing it lower. So, we all KNOW that govts WON'T provide cheap land because they'll be accused of causing the crash.

So, all I can assume is that they're simply waiting for it to implode - which is true of any market (govt doesn't go in and buy shares to keep the stock market happy) - no, the market will correct on its own, and I suspect that's what we're seeing know - encouraged by govt. We'll soon hit a tipping point, we'll have our own sub-prime, the economy will slow, China will stop spending, the US will collapse. Whatever the cause, it will trigger a huge problem in housing and the market will collapse.

Actually, that creates an interesting problem. If people start baling out of mortgages, they still need a roof over their heads - so they rent. But the rental market is already saturated and some probably can't afford the rents. So that will either force some investment properties to become fragile or banks will be forced into the property management market to recoup SOME income on their failed investments. Each event will spiral down on the other.

Fun, fun, fun...

Gender Bias

On RN's "Australia Talks" yesterday, the discussion was on domestic violence but what seemed to bubble to the surface was gender bias. The same is true for raising children and things like maternity leave - i.e. this is an issue for females.

Bollocks. If anything's clear from the discussion, its that there we shouldn't stereotype these issues and every case is different. Let me give an example. Say a mother wants to actively pursue her career and has a supporting husband who would be happy to play caregiver. Why aren't we arguing equally for his right to be paid to stay at home? Similarly, women are just as good at domestic violence - not so much physically, but mental abuse.

The point is, there are problems and they need to be addressed. By giving them a gender bias, you tend to alienate the other side (particularly those with a conservative bias - poor bastards) which then turns the issue into a hot potato. The resultant affect of that - nothing gets done.

So please, take out the emotive gender language and focus on the problem. Violence against partners be they male, female, same sex, etc. Providing care for our children be it home care from a parent or family member, a home care "mum", child care, etc. We should value the decision of others and ensure their interests are looked after.

Prediction - Return to Social Politics

Here's my boldest prediction for a while.

We're about to implode! All Western economies are about to have a MASSIVE crash (driven by god know how many potential bombs - Housing Deflation, CDO's, Sub-Prime Markets, Chinese "Recession", Resources Bust) - whatever the trigger, the knock on consequence to most western societies will be massive.

• Thousands will loose their homes
• Unemployment will skyrocket
• Housing prices will plummet

I think you can see where this is heading - who's going to suffer the pain? You and me.

Thus the prediction AWAY from selfish politics and individualism. There will be a massive loss of confidence in business and people will wake up to the realisation of socialism.

My only concern - we go too far left. We've already swung too far to the right and see where it's taken us - so lets hope the backlash isn't as severe.

So, when will it happen? Well, lets offer some suggestions/triggers:

• Nov/Dec 2007 - Sub-prime Crisis in US extends it's TRUE reach
• Aug 2008 - China shuts down spending after "best ever Olympics"
• Oct 2008 - US Invades Iran to prop up US republicans

It's coming folks - batten down the hatches...

Thoughts - Housing Affordability

I've had this in my mind for a while, but a recent article on the ABC website finally pushed me to write something.

So, why are houses so unaffordable?

I think there are some obvious reasons:

• Greed (those who can borrow are buying up big time) - which means,
• Negative Gearing is part of the problem
• Personal Expectation - we all want McMansion's and not happy with something smaller
• (Historically) Low interest rates
• Greed(=Debt) is Good

It's these last two that I suspect are our biggest concerns. Why? Well, when interest rates go up (and they will eventually), the debt load currently in place will prove to be unsustainable and the resultant collapse will be horrific.

So, is there a solution? Well, perhaps Negative Gearing has had it's day? Problem with this is that there still appears to be a supply problem (i.e. there are still plenty of people wanting to rent) - so killing off one problem would probably just create another. Oh, and the impact it would have on house prices would be a precipitous as higher interest rates.

So what else? The article mentioned "Densification" and the pushback against it from the likes of "Save Our Suburbs". The solution they say is to allow growth on the urban fringe (where it will eventually be uninhabitably thanks to rising fuel prices) - but what gets me is this is classic Nimbyism. I've got my nirvana - go make a mess somewhere else.

We're experiencing a degree of inner city development in Townsville, but NONE of it has been affordable - but why? What's driving these developments into ridiculous dollars? Maybe we need more of it (and increase supply) - there's certainly plenty of demand. Another problem, I'll suggest, is design. Many of the unit designs are shockers (make poor use of the land), 6-packs are part of that problem (historically), but even half-decent developments are problematic because the block next door can look completely different. Why's this a problem? Well, after a while it looks like a dogs breakfast. Take a look at some of the industrial developments in Townsville (e.g. Garbutt). Every building is different and if an epileptic drove through there, they'd have a fit.

Compare that to European cities where ENTIRE blocks are moulded out of the same design. Yes, I know that can be stifling, but any measure of higher-density must surely meet this criteria.

So, what I'd like to see is more of a "suburban block based vision" established where density is completely redesigned across a larger area.

Okay, I'm starting to ramble on this one. More ideas later...