Tag Archives: stimulus spending

Wayne: OOPS! I Did It Again

6 Aug

You see my problem is this:
I’m dreaming away;
Wishing that heroes, they truly exist.
I cry watching the days.
Can’t you see I’m a fool
In so many ways?
But to lose all my senses…
That is just so typically me.
Baby, oh.

Hands up all those who think yesterday’s bloodbath in global sharemarkets should inspire us with confidence that all is well here in the land of Oz?

Let’s see now … that’ll be Wayne … and his friend Glenn … oh yes, and their new mate Martin … noone else?

Interesting, is it not, how all the same clowns persist in repeating their same tired old lines.

Overwhelming weight of evidence to the contrary be damned.

Here’s our Treasurer Wayne Swan as quoted by AAP (via the Australian):

The Australian share market slumped around 4 per cent this morning following a similar drop on Wall Street over rising fears of another economic downturn and worries Europe’s debt problems will widen.

“Australians should never forget that our economic credentials are among the strongest in the developed world,” the treasurer said.

“Australia has a proven track record of dealing with global economic uncertainty.

Indeed we do.

But “a proven track record of dealing with global economic uncertainty”, and “a proven track record of dealing wisely with global economic uncertainty”, are two very different animals.

What is your track record, Wayne?

“The fact is the share market in Australia is not back to levels prior to the global financial crisis and now we’re being hit by another bout of uncertainty.”

Hold the phone!

I thought you’ve been tirelessly telling us just how well you brought Australia through the GFC?  Now you’re telling us the share market “is not back to levels prior to the GFC”? And it’s getting its a*** kicked again?

But but but … you had me believing that you were our Saviour, Wayne!

Please… say it ‘aint so!?

I think I did it again. I made you believe
We’re more than just friends.
Oh, baby;
It might seem like a crush,
But it doesn’t mean
That I’m serious.
‘Cause to lose all my senses…
That is just so typically me.
Oh, baby; baby.

I’m devastated!

Oh Wayne, I feel so used!!

What … what was that you said again?

Mr Swan insists Australia is in the right part of the world at the right time, as the Asia-Pacific economy remained strong.

Really?

Funny. That’s not what the latest RBA Chart Pack graphs suggest.

Here’s China and India:

Looks to me like Chindia’s GDP growth has been on a downward slide since late 2009 / early 2010, Wayne.  Ever since their GFC Mk1 “stimulus” money began to dry up.  Seems they didn’t get any sustainable bang-for-their-stimulus-bucks either. Both of their economies are now running at lower rates of growth than 6 years ago Wayne … that’s 2005.

Oh look … here’s our second biggest trading partner, Japan:

Oops.

Looks like Japan’s GFC “stimulus” can-kicking exercise has stopped rolling up the road too, Wayne. They’re back to 2001-02 levels of growth.

And our GDP growth chart looks even worse:

Ummmm … Wayne, ol’ son.

That approximate trendline I’ve added to the RBA’s GDP growth chart for the land of Oz looks suspiciously like a long term downward trend to me. And looking pretty ugly at the pointy end.

What was it your mate Glenn was saying just yesterday, about his RBA’s forecast tea-leaf prognostication for GDP growth?

The Reserve Bank has slashed its growth forecasts for the Australian economy while predicting inflation would remain high for longer than expected.

The August statement of monetary policy released today shows the central bank believes the economy will grow by just 2 per cent in 2011, on a yearly average, compared to its earlier call of 3.25 per cent.

The reduced forecasts are greater than economists had expected. It predicts this financial year growth will be 4 per cent down from 4. 5 per cent.

Ummmm.

Not bad.  If your revised prognostication turns out to be right this time – questionable, since you only made the first one a couple of months ago – then you’ll only have screwed up your first guesstimate by a measly 38.5%.

By the way.

A little tip Glenn.

Your own Chart Pack says our GDP is already sitting well below 2%. About half that, actually.

Expecting a surging “recovery” out of the blue red yonder, are we?

Got any other sage comments?

In the statement, the RBA said economic growth would be lower because of a range of domestic and overseas factors.

“Growth over 2011 has been revised downwards due to a slower than expected recovery in coal production and to a lesser extent a downward revision to consumer spending as domestic and international concerns have weighed on sentiment,” the RBA said.

Ruh roh!

The Greens want to shut down the coal industry. Preferably within 10 years, they say.

And you’re saying, Glenn, that the main reason why your original economic growth forecast has been revised within a couple of months by a whopping 38.5%, is due to a “slower than expected recovery in coal production”?!?

Anything else to add Glenn?

“The medium-term outlook continues to be characterised by the significant pipeline of resource sector investment with a number of large projects already underway and by strong growth in resource exports.”

Oh yes. That tired old line.

Sorry Glenn.

Macquarie Research tore that particular ass-umption underpinning all of your “forecasts” into lots of little shreds some time ago.

Back over to you Wayne:

[Swan] said Australia’s fundamentals – low unemployment, robust financial institutions and low public debt – would help protect the economy.

“Robust financial institutions”?!?!

Surely you jest.

“Low public debt”?!?!

Ahhhh … Wayne.

Something isn’t “low”, just because it may be less than others that are huge.

Your total tax revenues are only around $300 billion.

You’ve got us in debt to the tune of nearly $200 billion.

And don’t give me any of that “Net” debt crap.

“Net” debt might sound better (for you) when you’re spruiking, because it’s a lower number than the Gross figure that you really owe.

But presuming others will pay you back what they owe you, is counting your chickens before they’ve hatched.

We owe $200 billion in public debt.  End of story. Versus … at best … $300 billion in taxes this year.

By your own “estimates”, we’re paying $11+ billion per annum in Interest-only.

And you’ve got to run the country with the rest.

And another thing Wayne.

You’re always banging on trying to make out that our “public debt” is “low” compared to basket case “developed” economies abroad.

You remember.  Europe, the UK, the USA. Those “developed” economies.  Hardly a big claim to fame to say our public debt is lower than these paragons of fiscal prudence (/sarc).

But what about our Net Foreign Liabilities, Wayne?

Ummmm.

Wayne.

Net Foreign Liabilities at nearly 60% of GDP?

I had a little look in the RBA’s data, Wayne.  Takes about 20 seconds.

Our Net Foreign Liabilities of nearly 60% of GDP?

In real numbers (not this “% of GDP” nonsense) … that’s $780.57 Billion at March 2011 (RBA Statistics, H5.xls).

Oops!

Wayne … you’ve done it again.

You’ve confirmed your official title, and your legacy for the history books.

World’s Stupidest Treasurer.

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Barnaby: Good On You Wayne, You Are A Genius

5 Aug

Media Release – Senator Barnaby Joyce, 5 August 2011:

Mr Swan is a precise reflection on the Labor Party’s total and utter financial incompetence. Mr Swan has carriage over, and a fascination for, a Climate Change modelling section in Treasury. The reality of course is that it has not a prayer of affecting the climate, but until the wave hit he denied the bleeding obvious about Catastrophic Debt Change.

But the Treasurer has done nothing to prepare Australia for the financial fallout on global sovereign debt, which some of us have been screaming about now for years. Yes, I was talking about this even before my brief tenure in Shadow Finance.

Instead, Swan and Labor have overseen the third largest proportional increase in public sector debt in the world. Ken Rogoff from Harvard will confirm this.[1]  Iceland, Ireland then us; good on you Wayne you are a genius.

Iron ore, coal and wheat saved us from the first GFC not $900 cheques, ceiling insulation and school halls. Heavy floods in Queensland also brought a severe decline in GDP for Australia recently just to remind us of what happens when coal can not get to port.

We have not heard boo on how this nation invests in where we make our money. It was pathetic that even as recent as yesterday they were talking about borrowing another $100 billion to build a not as fast as a plane passenger train.

Now Wayne what will that help us export to pay for your debt?

[1] Reinhart, C. and Rogoff, K. 2011, ‘A Decade of Debt’, Centre for Economic Policy Research Discussion Paper, p. 12, http://www.voxeu.org/sites/default/files/file/DP8310.pdf

Swan: We Created Every Single New Job In The Entire Nation Since We Came To Office … And 10,000 More, That Don’t Even Exist

22 Jun

Goose talking "jobs jobs jobs"

Do you remember Wayne’s pre-budget mantra?

That big red herring about jobs – the one that the entire Australian media corps swallowed hook, line, and sinker?

We created 750,000 jobs since we came to office when other nations shed millions of jobs…

Back in early May, we first debunked Wayne’s Big Lie ( “Behold, Wayne’s Große Lüge” ), simply by comparing his own Final Budget Outcome 2009-10 to the Final Budget Outcome for 2007-08, the year that Labor came to office.

Of course, that simple comparison using government budget documents did not take into account a number of factors. Including what may have happened in the employment trends between the end of financial year 2010, and Wayne’s grand claim in May 2011.

So now, dear reader, we present for your enjoyment the definitive proof. The Australian Bureau of Statistics (ABS) Labour Force data from November 2007 (the month that Rudd won the election) through to May 2011 (the month in which Wayne was frantically waving his “jobs jobs jobs” red herring, to distract from his upcoming record-high budget deficit announcement).

First, here is a chart for Full-time employed persons:

Click to enlarge

That’s a grand total of (8.0271 million – 7.6689 million) 358,200 more Full-time employed persons now, than in November 2007.

Second, here is a chart for Part-time employed persons:

Click to enlarge

That’s a grand total of (3.4135 million – 3.0317 million) 381,800 more Part-time employed persons now, than in November 2007.

For a grand total of … 740,000 more employed persons than in November 2007.

In a nation where the population increased by 1.237 million from September 2007 to September 2010 (the latest data), including a natural increase of 0.5 million (births minus deaths):

Click to enlarge

Now, what was that you said, Wayne?

We created 750,000 jobs since we came to office when other nations shed millions of jobs…

Let’s take a moment to enter an imaginary parallel universe.  A fantasy world where the Australian private sector – that’s every non-government business in the nation – did not create a single new job – full or part-time – in the past 3.5 years. 

Not one.

According to the official ABS data, even if the entire private sector did not create a single new job, and instead, we swallow the patently absurd notion that Labor alone was responsible for creating every single new full-time and part-time job in the entire country over the past 3.5 years, Wayne’s claim would still fall short long.  By 10,000 jobs.

Now, perhaps you are one of the eagle-eyed readers who has spotted the big 80,000 fall in full-time employed persons in April-May.  An ominous collapse, only one-tenth less than the GFC-triggered f/t employed persons plunge in Feb-Mar 2009.

And perhaps you are also quick-witted enough to be thinking, “Hey wait on there mate, Wayne couldn’t have known the May figures in early May, could he?”

And you would be right on both counts.

Doesn’t help our Wayne’s claim though.

Because if you calculate November 2007 through April 2011 instead, you get a grand total of … (380,200 F/t + 352,000 P/t) 732,200 employed persons.

Meaning, his lie was even bigger than you thought.

Be-holed, Wayne’s Große Lüge.

If you are going to lie, make it a Big Lie.

And repeat it often.

If you haven’t dug your fork in to check if this goose is fully cooked yet, then you might also enjoy our debunking of Wayne’s “But wait … there’s more!” free steak knives claim.

That the government “will create half a million more” jobs in the next two years.

A ridiculous lie that is clearly betrayed by the evidence buried in the fine print of his own May Budget documents –

Economic parameter variations are forecast to reduce expenses in 2011‑12 and over the forward estimates … Partly offsetting these reductions … an upwards revision in the estimated number of unemployment benefit recipients is expected to increase expenses in 2011‑12 compared to MYEFO, although this is partly unwound by a reduction in the forecast of the number of unemployment benefit recipients in 2012‑13.

Budget 2011-12 | Budget Paper No. 1, Statement 6, Table 2

Dig your fork in here – “Half A Million Jobs” – Wayne’s Big Lie (Reprise)

Today's Special - Roast Goose

Our Government *Officially* Does Not Know Who Owns More Than 60% Of Australia’s Debt

16 Jun

Who owns our nearly $200 billion public debt?

It’s a question we’ve asked before.

Back on the 14th of March last year (“Who Owns Our Debt?“), we discovered that “expert” SMH economic commentator Ross Gittins was wrong. He had claimed –

You thought the pollies had done little else but spar about deficits and debt? Sorry, different debt. They’ve been arguing about the public debt – the amount the federal government owes (mainly to Australians).

A search through the RBA’s Statistics tables easily proved Gittins wrong.  We found that at September 2009, an estimated 63.3% of public debt was held by non-residents of Australia.

On April 24th this year (Who Owns 73% Of Our Debt?), we checked again. At December 2010, 72.6% of public debt was estimated to be owed to non-residents of Australia.

The RBA’s data has been updated again. According to them, we owed an estimated 73.13% of our $183.794 billion in public debt (at March 2011) to non-residents.

So, just who are these “non-residents”?

Noone knows.

Not even the Australian Office of Financial Management.  That’s the government department that “manages Australian Government debt, cash and financial assets”.

Apparently, they do not know who owns over 60% of our total public debt.  Even though, according to the AOFM’s website:

The [Guarantee of State and Territory Borrowing Appropriation Act 2009] Act requires the AOFM to establish, and publish on its website each quarter, a register recording the beneficial ownership, by country, of all securities issued by the Commonwealth and any securities guaranteed by the Commonwealth that are issued by Australian States or Territories.

What’s the problem then?

In yet another example of incompetent Labor government bungling (or is it?), the Act mentioned …

contains no provisions to compel the provision of information to the AOFM by the beneficial owners of securities or by persons holding securities on their behalf.  This has limited the information available to the AOFM to form an opinion on the beneficial ownership of the securities.

Still, they don’t mind having a guess (emphasis added):

The figures in the tables represent opinions formed by the AOFM based on limited information.  The AOFM does not believe that they provide any indication of the likely distribution by country of the beneficial ownership of securities held by custodian and nominee companies, or are representative of the distribution of the beneficial ownership of the total securities on issue.

To ascertain the country of beneficial ownership of the securities covered by the legislation, the AOFM has reviewed where possible the ownership records of the registry or depository systems in which they are held.  The AOFM has reviewed the name of the accounts which are registered as holding these securities and from this information and knowledge of the business identified sought to form opinions on the country of domicile of the beneficial owners.  However this information is insufficient to ascertain beneficial ownership where securities are listed as held by custodians or nominees.

So, the Guarantee of State and Territory Borrowing Appropriation Act 2009, and the Public Register set up in accordance with it … is utterly useless.

But let us take a look at the Public Register’s most recently updated “information” anyway (click to enlarge):

Source: AOFM Public Register

Source: AOFM Public Register

As you can see, according to the AOFM’s “opinion”, 2.5% of our public debt is held “overseas not identified by country of beneficial ownership”.

And according to their “opinion”, a whopping 58.8 per cent of our public debt is held by “domestic custodian and nominee companies”.

In other words, by locally-registered ‘shelf’ companies with a PO Box address. Companies that exist in name only, and are officially owned by ‘nominees’ on behalf of unnamed, anonymous beneficiaries.

What a joke.

It’s official.

Labor has hocked our nation up to the eyeballs to … God only knows who.

Mind you, it is rather curious that the almighty RBA has somehow managed to “estimate” that 73% of our debt is held by “non-residents”.

How could they know that?

Especially when the AOFM’s official “opinion” (with a big disclaimer) is that they can only identify the country of beneficial ownership of just 38.7% of our debt.

I say that this Labor government, the AOFM, and especially the “independent” RBA, have an awful lot of explaining to do.

An ancient proverb says, “The borrower is the servant to the lender”.

I for one think that the citizens of Australia have the right to know exactly who our government is rendering us as servants to obey.

Why They Are Planning To Steal Our Super, Explained In 4 Simple Charts

11 Jun

* All charts click to enlarge

1. Commonwealth Government auctions of Treasury Bonds (long term debt) –

Source: Australian Office of Financial Management (AOFM)

2. Commonwealth Government auctions of Treasury Notes (short term debt) –

Source: Australian Office of Financial Management (AOFM)

3. Australian Banks’ $15 Trillion in Consolidated Off-Balance Sheet “Business” (92.3% derivatives) versus $2.66 Trillion in On-Balance Sheet “Assets”

$2.66 Trillion in "Assets" versus $15 Trillion in Off-Balance Sheet "Business" (derivatives)

4. Interest-on-debt, versus government headline budget surplus/deficits –

Sources: RBA Statistics; Commonwealth Final Budget Outcomes; Budget 2011-12

A quick, important note about that last chart.

The last 4 sets of columns (year 2010-11 through 2013-14) are only Labor’s “Estimates” (E) and “Projections” (P).

Since Labor came to power, every year their official budget “estimates” and “projections” have ended up, in the Final Budget Outcome, worse than originally “estimated” and “projected”.

For example, their “estimated” and “projected” Interest-on-debt blew out by $5.69 Billion in just 6 months, between the Mid-Year Economic and Fiscal Outlook (MYEFO) report in November 2010, and the recent May Budget 2011-12.

For more detailed information showing why we’ll never get to see all of our super, please read the following:

“Liberal Party’s Sneaky Plan To Steal Your Super To Pay Labor’s Debt”

“No Super For You!!”

“Budget Blowout: Interest-on-debt $1.59m Per Hour”

“How Gillard’s Use Of The Credit Card Makes Rudd’s GFC Spending Spree Look A Model Of Financial Prudence”

“How Wayne ‘Franked’ Another $20 Billion”

“Our New Treasury Secretary Is America’s Mini-me”

“Fresh Evidence Our Banks In ‘Race To The Bottom’ Means You Can Kiss Your Super Goodbye”

“How Australia Will Look When The SHTF”

“Tick Tick Tick – Aussie Banks’ $15 Trillion Time Bomb”

How Wayne “Franked” Another $20 Billion

27 May

It’s long past due time that Wayne Swan formally adopted the name of his alter ego, Frank Spencer.

From ceiling insulation to school halls to “green” loans to computers in schools to set-top boxes, every “investment” that our Treasurer touches, ends up totally ‘Franked’.

From the SMH:

Arrears on mortgage repayments spiked to a record high in the first three months of 2011, as more Australians struggle with rising costs, Fitch ratings agency says.

Arrears on prime residential mortgage-backed securities (RMBS) of 30 days or more hit a record high of 1.79 per cent in the first quarter, from 1.37 in the final quarter of 2010, the group said, as Christmas spending and the Queensland floods forced more Australians to struggle in repaying their mortgages.

RMBS are home loans which are bundled together and sold to institutional investors by banks and mortgage lenders. Misrated RMBS were at the heart of the subprime crisis in the US which lingers to today.

As we have seen previously (How Australia Will Look When The SHTF), Wayne has “invested” $20 billion of borrowed money into Australian RMBS since the GFC, to prop up our housing bubble.

Including an extra $4 Billion which he approved in April – (ie) after the period of increasing arrears that is mentioned in the SMH article.

This news gets much worse though:

The increase in arrears for the most fragile band of mortgage borrowers, low-doc loans, with payment delays of 30 days or more hit 6.74 per cent in the first quarter, up from 5.7 per cent in the final quarter of 2010, a higher level than December 2008 quarter, when the financial crisis hit and the Reserve Bank began rapidly lowering rates.

Low-doc mortgages are written for riskier borrower than prime mortgages, which are written for customers who have a reasonably safe ability to borrow.

Delinquencies of three months or more on conforming low-doc mortgages, which are used by people who are self-employed for example, soared past 5 per cent in the March quarter, from about 3 per cent the December 2010 quarter.

Would our Wayne have “invested” any of that borrowed $20 Billion in low-doc RMBS?  Or, did he stick with “prime” RMBS?

From the AOFM website:

Purchase of RMBS – Program Update

Minimum Eligibility Requirements

* Low documentation loans, that is loans underwritten using alternative income verification procedures, may be included in mortgage pools.

Oooooooooo!

Wayne’s ‘franked’ another $20 Billion.

Some Mothers Do ‘Ave ‘Em

UPDATE:

Another ‘franked’ “stimulus” program from Wayne. Remember the doubled First Home Owners Grant, that also helped to prop up our housing bubble?

The Reserve Bank has warned many first home owners who bought into the market with the help of generous federal government assistance may now be vulnerable to rising interest rates.

RBA deputy governor Ric Battellino said today there were concerns that buyers who bought into the market in 2009, when the federal government grant was increased, may have over-committed themselves.

Are any of those hundreds of thousands of “vulnerable” first home owner mortgages actually “low doc” loans, Wayne?

Are any of them packaged up in the $20 Billion worth of RMBS that you “invested” borrowed money in … Wayne Frank?

Swan Hides Budget Risk

17 May

Well done Michael Stutchbury.

But you’re not forgiven until you retract the smear. And join the chorus now recognising that Barnaby was right about the risk of US debt default.

From The Australian:

The confused reaction to Wayne Swan’s budget stems from its refusal to properly spell out the risks of relying on Australia’s China-fuelled terms of trade remaining close to their 60-year or even 140-year highs.

This commodity price bonanza has delivered eight years of tax cuts, a big expansion in middle-class welfare, billions of dollars of wasteful spending – and this year’s $50 billion budget deficit.

Yet all our previous commodity export price spikes have swiftly reversed, typically ending in double-digit inflation and recession.

A must read.

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