28 January 2008


Padraic McGuinness died yesterday. For the last few decades he was by a wide margin the best journalist in Australia. (those people on electronic media like Adams and Laws are entertainers, and some ABC and SBS shows occasionally reach a standard that might (by stretching the imagination) be called journalism.To commemorate, the Sydney Morning Herald" published a "Vintage Paddy" column circa 2004 from which I will paraphrase. This article was obviously chosen as a response to Rudd's recent proposal that we should rectify the situation that there are about the 100,000 homeless (including 10,000 children) in Australia.

Padraic points out that the poor and disadvantaged are poor and disadvantaged because they mis-spend the generally adequate supply of money given them by social security payments. They buy alcohol and cigarettes and gamble and eat junk food and watch TV (not even the ABC) . He then suggests that perhaps we should "assign social workers and other workers to tell them what to do and what to eat and above all not give them money without strings". Like the mother's $3,000 payment, which is just causing 14 yo to go out and get preggers.

Paddy was and will continue to be missed.

btw, Kevin, if you want to solve that homeless problem, just provide accommodation as part of the pension. If anybody is found on the street and homeless (and without adequate funds) then they should be put in federal accommodation. Basic "no frills" accommodation could be provided to the Federal Government under contract for around $10-$20 per person per night, and occupants could have that amount subtracted from the fortnightly pension cheque.

Ideally, a pension would be a package which included accommodation, or if the pensioner could establish that accommodation was secured, then the pensioner would get a "rent assistance" amount.

Germaine Greer has a lot to say about various celebrities, (Princess Di, Steve Irwin) and a lot of it is spot on. Trouble is, she usually seems to say it after they are dead. In future, could I suggest to her that if she is asked for her recollection about somebody who has recently become deceased, she should refer the reporter to an earlier published opinion, rather than regurgitate. (I assume that she made similar comments pre said celebrity's current post mortem situation.)

Of course such an approach might not suit her style, as it would probably not attract scandalized headlines.


Nearly a fortnight ago I wrote a column on the market crash in progress. Less respected economists are currently predicting that it has reached perigee.

My own take is that the Fed (i.e. Benanke) can stop further catastrophic falls, but only at the cost of pumping up inflation. That cure would take a long time (measured in tens of months) which means that inflation could get to double digits, however interest rates would have to stay down (because that is what is stopping a catastrophic {deflation driven} crash.)

So financial advice? Convert holdings into money inflation proof items. Gold, (now) real estate (careful purchases at mortgagee sales over the next year), and selected equities. In the 1929 recession movie theatres were a booming business, so was alcohol. So look to equities in businesses that provide escape from reality.

Get out of cash. Your government will provide plenty of that.

And those mining shares? Gold is good, but the rest are probably between risky to doomed within 6-12 months.

And really watch those inflation rates in comparison to interest rates. If they cross, or even look like crossing, buy what real estate you can (preferably at a mortgagee auction).

22 January 2008


Last week I was caught in a locked room. No way out, no mobile phone, nobody likely to hear me call out, nobody knew where I was.

Here is how it happened.

I parked in the parking station under my local integrated mall. It was after 4.30PM, and the parking station was still crowded. I found a parking spot quite far down on level 2.

From where I was parked to where I wanted to go was practically straight up. I could have detoured about 80-100 meters to an elevator, but there was a fire escape nearby and I was in a hurry. The fire escape (as it was labeled) went up only one floor (from level 2 to level 3 of the parking station) and level 3 was the lowest floor that the nearby elevator serviced. I had some years previously explored this staircase, checked that the doors were not kept locked. It was literally a concrete room containing two solid steel fireproof doors, a stair from the lower door to the upper door, a fire hydrant and a couple of lights.

When I reached the top I discovered that the door was locked. Oops, so back down. The bottom was also locked.

There was no way out. I didn't even have a book to read. The locks were modern, and none of the keys I had would even fit in. The hinges were sealed. Banging on the door didn't attract attention, even from within I could hardly hear myself banging on the door. I thought of fusing the lights, but figured somebody might not notice for weeks, and I would be without light.

After about 20 minutes I solved the problem. Can you figure out how?

I turned on the fire hydrant on the upper floor. It was about 4 inch (100 mm) and produced quite a stream of water. The water went out under the door on the upper level, and started to fill the lower room.

Then I waited. It seemed to take forever, but was probably about fifteen minutes. Someone opened the top door, got splashed, then closed it quickly. I immediately turned off the water. The water must have stopped flowing out, because they opened it again, and I pushed out.


The person who opened the door sounded foreign and seemed to be a passerby.

The next people on the scene were the security and maintenance staff. I explained the situation of the locked doors. They were quite annoyed. "You done a lotta damage" and "bloody terrorist/Vandal/…". I yelled back "OK, you try being in a locked room. Get the police."

Those security and maintenance people kept at me while they called the police and management. I enthused "Yes, I want to talk to the police about all those locked doors."

They demanded my name, I said "Stuff you. Get the police, I will tell them". I calmed down, and remembered that I had to buy something, so said "I am off to buy my thing, I will be back in a few minutes". One of the security guys said "you wait here or we will arrest you". "Huh!" I said "Please do", and continued towards the lift. They sent a bloke to accompany me. However another bloke came in and asked me in a very civil manner to wait for just a minute more, so I relented and stepped out of the lift.

The next bloke was obviously in a pay grade to deal with the matter. He listened to my story, went into the fire escape with an offsider, went downstairs and tried, then unlocked the lower door. He then came back up and spoke to me.

"I don't think I would have thought of that way out. That was quite clever." Smart man. Then in an aside to the minions who were, in the background asking "where are the police" he said "I don't think we need the police here", and directed his attention back to me.

After he had defused my shock and terror for another minute or so, I said "The one thing I want is to know for certain that that this trap be eliminated."

He responded "It will be." Seeing the doubt in my eyes, he said "I am the manager of the whole place. The final authority. The big Kahuna. What I say, that's what happens."

We shook hands and I left to make my purchases.

When I got home, my neighbour who drove up as I was parking told me the story about how some vandal had flooded four floors of the local parking station. "That was me, and it was only three", I said, and told her the story.

Three days later I checked the locked fire doors. The locks had been removed. I checked level one. The floor was still wet.

18 January 2008



I have railed against copyright in the past. It seems that the recording industry (both music and video) is in deep shit. There has been a steady fall in music albums sold since 2000, and the fall in singles has been catastrophic. Musicians are dumping the music recording companies and beginning to make an honest living in the old fashioned way, which is to say by charging admission to a performance.

Those US writers who are on strike should get real and stop striking. The era of big movies is ended. My suggestion to the industry is that they obtain sponsorship up front to produce a film, and that the film should contain the sponsors' messages. If that sounds too abstract, well ask the boys at Google what I mean.

Over at effectmeasure, Revere also objects (mostly to drug patents and copyright held by publishers over scientific papers), The Europeans are also having a shot at drug companies for conspiring to defacto extend the term of drug patents.

And my own personal gripe is about software copyright. The biggest offender is Bill Gates. I have gotten so irate with his shoddy windows system that I peeked at the current UNIX/LINUX offering. After a few hours fooling around, I got the feeling that Gates got out from under just about the peak penetration of windows OS in the world market for OS. (in percentage terms). To anybody else who feels similarly I recommend UBUNTU. It is actually better than XP at recognizing the hardware, and (crossed fingers) virii are not a worry…

The whole problem stems from our political system. If music copyrights hadn't become impossible to police, our music industry would still be supporting truckloads of (recording industry) leeches, because those leeches had the money to buy the best legislation that is available (from the political leeches) to protect their income.


A while ago a friend asked me over to fix his internet connection. Turned out he had switched providers when he subscribed to Foxtel, not realizing that he was not buying their internet, and cancelled his bundled internet connection.

So I talked to Telstra, and could not believe the prices they charged. For $30 you get around 500MB per month at 256kbs. The overcharge per MB was scandalous (about 10c I think). Telstra charged around $80 to get over 10GB/month. I asked for any deals but they weren't worth s**t. I advised him to go back to his old provider, who charged about $40 for around 10GB at 256kbs.

I have had other problems with Telstra's recharge on prepaid dialup. The incredible dorks in their tech section kept telling me that something I had was faulty. Afetr half a dozen letters somebody who actually understood software admitted the fault was theirs, but showed no inclination to repair the fault.

I originally thought Sol Trujillo was going to be good for Australia. I was wrong. Giving the monopoly to Trujillo without ACCC oversight would be a big mistake.


According to reports, the Australian stock market is down about 147 billion dollars (around 20%) since January 1 2008. That is about $7,500 for each man, woman and child. You might say so what? It's not my money.

Do you have superannuation? Since compulsory super contributions, now at 9% of salary became law in Australia back in about 1990, (Labour Prime Minister Keating's time), you probably do. So take your contributions together with interest earned (say 10% of your current wage, multiply that number by the number of years you have worked). Your superannuation fund has probably lost about 20% of that money since Kevin Rudd took power about 2 months ago.

Your money is probably in the custody of a nerdy MBA who thinks he knows what he is doing, but really doesn't have a clue, because even his professors were probably klutzes (losers).

Once again, it is the politicians who are to blame. Those superannuation contributions effectively raised our national savings rate which is money available for investment. Unfortunately, this created greater liquidity, and those MBAs entrusted with your money by the Federal Government took what it is now clear were excessive risks in chasing a profit (and their own bonuses).

In the worst case, there will be no safer haven than under the mattress. One thing that the government should urgently do is create cash M1 accounts for everybody on the electoral roll. These accounts would allow the individual a safe haven for his cash, and also access to his cash through any ATM. This would be a cheap option, and could be contracted out to one (or a consortium of) the big banks. If the government does not do this, then I suspect that the supply of M0 (cash) might well disappear under mattresses. There will also be a lot of angry citizens who have lost their savings because they were deposited with an unsafe financial institution (which could turn out to be a bank.)

Finance people in the USA think a recession is either there, or on the way. Optimists in Australia claim we will be mostly untouched by events in the USA. "China" they argue "uses Australian minerals for mostly home market Chinese use".

I am afraid that I do not share their optimism.

3 January 2008


Two political parties have dominated Australian politics since Ming (aka R.G.Menzies). Those are the ALP (Australian Labour Party) and the LCP (Liberal - Country Party).

The ALP looks after unionists including the registered professionals (lawyers, doctors, nurses, teachers etc). Consequently the ALP favours by legislation the interests of registered professional bodies and the large corporations (that employ most union members). To do this the ALP makes laws that favour trade protection, price regulation & compulsory unionism.

The LCP is the party for entrepeneurs, and tends to favour small businesses and individual enterprises such as farmers, "for hire" tradesmen, truckies. Consequently the LCP enacts laws that favour a lassaize faire economy, such as removal or attenuation of those laws that protect union and corporate monopolies, reduction of import taxes, removal of price controls and removal of monopoly protection.

Following Robert Menzies 18 year term as Liberal leader, many political hacks speculated that the people of Australia had come to accept that the LCP (i.e. the conservative side of politics) were the legitimate owners of the federal treasury bench. This suspicion has not been resoundingly contradicted by election results since.

After Ming we appointed three liberals as PM (Holt, Gorton, McMahon) then (not particularly liking McMahon, perhaps because of perceived gay tendencies) we switched to the ALP (Whitlam). Three years of Whitlam's arrogance was sufficient for the electorate, so we appointed LCP Frazer. Frazer turned out to be an arrogant prig but not as bad as Whitlam, and the ALP offering at the time sucked. Then along came Hawke. Hawke was charismatic. He moved into the top position in the ALP after leaving his position as head of the union movement. He was a great communicator, and a good blend of conservative and innovative. We would probably have left Hawke in power forever, if it hadn't been for Keating (the mouth), who whiteanted Hawke from within. Nobody in the electorate liked Keating very much, the only reason he won even one election was that the incredible idiot who was leader of the LCP Party tried to win an election by proposing a new (10% GST) tax.

Then Howard got in, and faced with a string of radical intransigent ALP leaders, held power for nearly 12 years.

He lost the last election for three reasons. (a) he had made a promise that he would resign in favour of treasurer Costello after a couple of years, (b) he was faced with chameleon Rudd, who very carefully chose his battles. (c) He had introduced laws that attacked the foundation of union power.

These reasons effected the loss because: (a) Costello was not popular. (b) Rudd is not a union man, (I anticipate that he will have difficulty controlling the majority unionists in his democratically controlled by peers party.) (c) The Unions responded to the attack on their powerbase by spending up big in support of the ALP. There was one report that Union spending in the 12 months before the election exceeded the expenditure of both parties together.

So what is my near term prediction? A lot of ALP promises will turn out to be "non core promises". Inflation will rise, unemployment will rise, there will be an increase in union industrial action, and economic conditions will worsen. The ALP will blame their predecessors for those problems. That will not sit well because Rudd has endorsed most LCP policies.

Longer term (2-4 years?) Rudd may well lose control of the party to the union movement. As a consequence (especially if Rudd does a Disraeli) the ALP will likely lose power at the following election.

And the Australian electorate will again confirm it's belief that the LCP (or is that the Liberal Nationals nowadays) is the legitimate owner of treasury benches.


  1. I couldn;t disagree more - we got rid of Howard because Australia was sick of all the lies. He lied about Tampa, he lied about immigration, he was old, dated and frankly stale, hell he lied even about inflation. And of course, if inflation does go up there are two causes, 1. World issues (completely out of our control for the most) 2. Fiscal policy made years ago, believe it or not, policy doesn't usually directly effect inflation, usually its policy made years back that does - ha, a reason Howard got so lucky with inflation because of the work of his labour predecessors :)

    Comment by No, I don't give my name to foundationless blogs — 10 January 2008

  2. Howard was sacked because he was a liar? It just doesn't wash, as the old joke goes Q: "How do you know when a politician is lying?" A: "when he opens his mouth". Gogh, Keating, Frazer, they all lied. As for Howard being "old" well the best loved US president in recent years was Regan, and he was probably older than Howard.

    I agree that overseas events affect inflation, and also agree that policy affects inflation, although I am dubious of your (implied) assertion that it takes more than ten years to do so. In fact, even the threat of enactment of policy will sometimes affect inflation rate. (e.g. when the reserve threatens to increase or diminish rates, that will affect inflation).

    The only reason that I ask for email is that I can allow your future comments to post unmoderated.

    Comment by barvennon — 10 January 2008

  3. I saw similar post three month ago. Topicality of this post sucks. Dude, you have to keep up to date.

    Comment by linemasta92 — 11 April 2008

  4. What a coincidence! This post has been up for about 3 months.

    Comment by barvennon — 11 April 2008

mail comment