ARCHIVES 1997-2007  --- ARCHIVES 2007 +

AUGUST  2009.


Last month China arrested RioTinto executive Hu.  They perhaps did not realize that Australians prize their citizenship, and regardless of the background of a citizen, will publicly censure any foreign interference with their liberty.

Quite possible Chinese authorities do not fully comprehend the desperation of journalists in our culture.  Journalists are largely independent agents, and journalism is one of the paths to power.  Media people can become media stars, who in many cases have greater influence on public opinion than most politicians.   And an influence on public opinion (in case you hadn't noticed) translates to enormous political power.  (Think of media stars Ronald Reagan, or Arnold Schwartzenegger, or Rush Limbaugh).

 Journalists are quite desperate to heat up a story, and by not very clearly limiting the extent of the charges against Hu at the earliest possible moment, Chinese authorities permitted our journalists to speculate the worst.

Another problem is the incredible wealth of western corporate executives.  Salaries in the millions of dollars are commonplace.  In China I would speculate the equivalent executives would be getting less than 1/100th of that pay.  So to bribe our executives would cost tens of millions of dollars, while Chinese executives of similar moral fiber could be purchased by gifts equivalent to a fortnight's holiday at a luxury hotel in New York while (nominally) discussing business.

So what might be considered as the extension of common courtesy (in Western business terms) would be seen as a magnificent bribe in Chinese eyes, and repayment could well be offered in the form of offering vital manufacturing data.

Of course, Hu (being Chinese born and bred) would be aware of those fine nuances, and would have known that, while what he was doing was most unethical, it would not be considered culpable in western business circles.

As for the Uigars.  China has long suffered at the hands of the Dalai Lama.  They have been trying to prevent a repeat performance with Rebiya Kadeer
.    Unfortunately, as with the Hu case, they do not understand the motivation and power of our journalists.  As a result their efforts have been quite counterproductive.

Which still leaves the looming world depression and the consequent loss of the "Mandate of Heaven" problem.

I would recommend that the Chinese authorities consider purchasing the exclusive services of a very expensive media management corporation.


October is a bad month for equities.  The 1929 crash happened in October.  Even in good times, bad things frequently happen to stock markets in October.

October is when the Rudd government ceases to pay first home buyers assistance.

By October, the reserve bank has threatened that interest rates will rise.

Have you noticed how much local road work is being done?  That is federal money keeping those builders in work.  Without that infrastructure expenditure, a lot more Australian families would be in trouble.  That money will run out soon.

The recent "green shoots" in the US economy will wither quickly enough in the money drought of further bank failures.  And although Australia appears to be decoupled from the US economy, nobody in business is forecasting boom times.  China is doing it just as tough, if not tougher than everybody else.  It is smoke and mirrors, and October will see the drought bite US markets again.

October is the month before the double dissolution trigger can be activated.

In Australia, the Federal government has a few months of flexibility in calling elections, which must happen at no more than three year intervals, but not less than (I think) two year and six month intervals.  Unless the Senate twice refuses to pass a bill that has been sent by the lower house.  Then the government can call for a (double) dissolution of both houses.

So after covering his nether regions by calling for dialogue, Turnbull has refused the ET (Carbon trading) bill.  My guess is that if the above foreshadowed events happen, he will refuse again in November.

And my guess is that (given the first six paragraphs) Rudd will prefer the certainty of another year in power to the rapidly failing likelihood of winning a double dissolution.  But he seems to make a point of unpredictability, and he might again surprise me.

Rupert Murdoch is the wild card.

Rupert is on hard times, with the double whammy to newspapers.  (Lost share of advertising revenue to Google, global financial crash).  So he will be very amenable to any kindness extended to Bay Books.  Like the current review of Oz book importing.  I guess we won't be getting cheaper books for a few more years, and as a consequence can predict that the Murdoch press will be backing a return of the Rudd government at the next election...


The recent bull run seems to be restoring journalist speculation that the "worst recession since 1929" has ended.

Banks are well known to have great fear of any talk of their insolvency.  That is because a bank borrows your money and lends it out to other people.  Anything that causes depositors to withdraw their deposits en masse (otherwise termed a "run on the bank") can lead to a very well run and quite solvent bank closing it's doors and going out of business.  So if an important person, (say the head of the Federal Reserve) said publicly that "The XXX bank is likely to be insolvent in the next week or so" then that would act as a self fulfilling prophecy, as depositors would rush to transfer funds out of XXX, sending it bankrupt.  It then becomes a moot point as to whether the prediction was justified on the book keeper facts.

There is no reason to believe that "self fulfilling prophecies" should not act in the reverse manner, at least in the short term.  If a responsible person talks up the market, then that is what happens.  Witness the market jump after the recent Benanke optimism.

Unfortunately, a prediction that boosts the equities market does not cause a permanent change in market fundamentals.  Near bankrupt businesses are still near bankrupt, and have no way of meeting their financial obligations.  Bad mortgages are still bad because unemployed people can't pay them off.

Congratulations to Ben Benanke on his recently announced reappointment to another four year term.


Since the time of the Pericles the known failing of Democracy has been corruption.

In the UK the terrorist convicted of the Lockerbie bombing has been released "on humanitarian grounds".  The US complained, just about everybody complained, especially those who had lost near and dear, however the Scottish PM and Gordon Brown pushed it through.  He was going to die anyhow of cancer within three months, we were assured.

I wonder how many people have been enriched.  Gadaffi was in the wilderness for decades over Lockerbie.  It cost him billions in "blood money" to restore international relations with the USA.  Blood money is an Arab tradition stretching back to before the time of Mahommed.  Gadaffi paid about $1,000,000 to each "near and dear" to restore international relations with the USA, and allowed the extradition of the culprit.  I can only wonder how mush baksheesh was paid to various British government officials to obtain this convicted terrorist's release.

I also suspect that the doctor might have misdiagnosed the case.  What odds that there will be a "spontaneous remission" or like "we got his tissue file mixed up with Jack Smiths".  With Gadaffi $billions already in the kitty, who cares (except the recipients) about the odd millions to crooked politicians and diagnostic service doctors?  In the Arab world, this release will be seen as Gadaffi keeping faith with his constituency.

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