ARCHIVES 1997-2007  --- ARCHIVES 2007 +


The newspapers have revealed that our four big banks have made a profit of about $12 billion, of which
$4.8 billion was account keeping fees.  $1.2 billions of that was penalty fees for overdrawn accounts etc.  Of course most of that can be avoided. 

That rort continues despite the fact that our government has guaranteed all money deposited with those banks in a manner that is detriment to other financial institutions.  My credit union manages to pay a higher interest for online savings account and still does not charge any of those account keeping fees. 

Our government is not going to challenge that profiteering, because those banks have paid (and will continue to pay) huge amounts into the party coffers.  Well, I suppose that is how democracy works.  Until somebody makes a fuss.  It can be 99% guaranteed that any fuss will be about something trivial (like individual parliamentarian's dishonesty, such as in the UK right now) rather than something deep rooted structural like the system of "lobbying" that permits the monopolies and oligopolies that are a hidden tax on all Australians.


Despite the closing of a couple of schools and reporting of around ten cases, most Australians around me seem to be blissfully discounting the danger of the looming pandemic.  That is in part because our government does not appear to be suppressing news for fear of a panic (although conspiracy theorists could easily make a case that information is being managed.)

A quick visit to the WHO site shows alarming figures.  Worldwide on 22nd May there is a cumulative total of 11,034 cases,and 84 deaths.  That figure is misleading, because an unknown proportion of the people who are infected have not yet recovered.  Even if they all recover, that is still an 0.76% CFR (case fatality rate), which is very high for a flu.

The problem is more starkly revealed in Mexico, where the disease started.  3892 infected, 244 dead, giving a CFR of 6.3%.

I find that number to be worrying.


The DJI is not on as strong a bull run as it looks.  Admittedly, the rise in $US terms between 3rd March and about 23th May is of the order of 27%.  However if we calculated the rise in value to Australian investors of that rise by dividing by the $US/$AU exchange rate, the increased value of shares on the US market to an Australian investor would be about 2%, although to a European investor it would be about 14%.

$AU value
EU value
$US rise
DJ/$AU rise
DJ/EU rise

The predatory actions of the Chinese in buying US bonds to keep the Yuan low (so helping Chinese exports) is one of the major forces that brought about the long appreciation of the $US and the consequent trade imbalance.   The US "toxic assets" problem was brought about by that trade imbalance and the Clinton Government's defective investment regulation.

Now the Chinese appear to have begun to invest in minerals.   The price of minerals is holding to strong, while the $US is falling.  With the falling $US, US products will again become competitive and equilibrium will eventually be reached when the US obtains a positive trade balance.

Of course Obama looks to be trying hard to intervene and save union jobs.  Just so long as he does not saddle US industry with pro-union legislation.  For instance, auto workers will have to take a pay cut or lose their jobs.

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