Tag Archives: terry mccrann

When First They Practice To Deceive And Be Very, Very Stupid

14 Dec

Terry McCrann (Herald-Sun, Daily Telegraph) is the only mainstream economics commentator in Australia that I’m aware of, who has consistently called out the Great Global Warming Swindle for what it is.

Seems the pathetically transparent spin from Combet et al following Durban, has inspired Mr McCrann to new heights of excellence … in calling a spade a spade.

Following is a brief excerpt from his brilliant column in yesterday’s Herald-Sun.  Be sure to follow the link to read the whole thing.

I think Mr McCrann is a little bit McCranky about all the BS:

The great climate change gravy train rolls on

The great climate gravy train rolls on and Julia Gillard and Bob Brown’s great big carbon tax just got bigger. Much bigger.

Phew. The dedicated delegates had to sacrifice a weekend, stay up all night and pump out even more carbon dioxide, but they were able to pull victory right out of the jaws of disaster, figuratively at five minutes after midnight.

There they were facing the end of their world, their cosy world of riding the climate gravy train from one annual two-week conference in a resort city, to the next, and all the points through the year in-between.

Always, always, being prepared to make the tough choices: which resort city, and indeed, north or south?

Faced with going down in history as the free-lunchers that betrayed not just this generation of climate change main-chancers, but the next free-lunching generation and indeed the generation after that, they resolutely put their snouts – sorry, their shoulders – to the wheel and ground out a deal.

Success! Simply put, they ensured that the great climate gravy train would NOT come to a shuddering stop in Durban. It was given a new head of steam to roll on to Qatar next year and who knows where else right through to at least 2015.

They’ve done themselves and their peer group proud. It’s perhaps not well understood just how many billions of dollars and how many probably hundreds of thousands of main-chancers ride that gravy train.

It’s not just the billions of dollars that have been rescued for the ten thousand-plus people that most prominently ride the climate gravy train from one conference to the next.

But in the finest example of real trickle-down in action, all the people who feed off the climate hysteria and inanity beneath them.

From people building useless solar panels and wind turbines (sic), to feeding off the exorbitant power subsidies, to all the climate institutes (sic), to those doing research, all the NGOs, etc, etc, etc.

All their dollars were at risk if the gravy train had ground to a stop in Durban…

Combet and Gillard can’t have it both ways. Either we have signed on in Durban to a massive increase in our carbon tax and the virtual and very quick elimination of our cheap coal-fired power stations.

Or the whole thing is a disgraceful and very expensive charade. There won’t be any real deal in 2015 and we will be left with a useless but punitive tax.

What’s that saying? Oh yes. Oh what a tangled web, a prime minister and climate change minister weave, when first they practice to deceive and be very, very, stupid.

The truth need not hurt.

Sometimes, hearing the cold truth can be downright enjoyable.

Thank you Mr McCrann.

An epic column

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McCrann: America Is Now Turning Darker, China Can Crash The Whole Economy

13 Jun

From the Daily Telegraph’s National Finance Writer, economist Terry McCrann:

The good news is that the Reserve Bank didn’t lift its official interest rate at its meeting on Tuesday and there’s now no prospect of a rise at its next meeting in July.

The bad news is that the RBA may – and I stress, may – have to turn to contemplating a rate CUT.

How’s that bad news? Just remember the circumstances when the RBA was last cutting – actually, slashing – rates in 2008. Your super was being shredded and we wondered whether we faced Great Depression Mark II.

How also does that square with my comments last week that Australia was in the middle of a boom? Albeit, a weird one, with many feeling it was more like a recession?

That’s the critical, connecting part. If we thought we were hostage to China for our future prosperity, we are now even more hostage to China to fend off chilling winds coming out of America and another potential meltdown.

We got a taste of that downside in the March quarter when the Queensland floods temporarily cut off coal exports and sent our economy diving at an annual rate of nearly 5 per cent. It is springing back now, right? Right?

Yes, of course. But what if it became a case of China not wanting to buy, rather than we not being able to ship the stuff out?

America is now turning darker. The visible evidence of that is Wall St. It has now fallen for six weeks in a row – something it didn’t do even through the global financial meltdown.

While, the overall fall isn’t anywhere near as big, the problem is that the US Government and the US Fed have fired off all their anti-recession ammunition.

Worse, all the problems caused by, or just revealed by, the GFC are still festering.

The US is running a budget deficit of close to $US1.5 trillion. That would be the equivalent of about $100 billion down here – and we think $50 billion is huge. They have a zero official rate, ours is 4.75 per cent. And the Fed has just finished printing $US600 billion of paper money.

The one thing all that seemed to achieve was to put the stock market up and now it’s going down. And all Fed head Ben Bernanke can say is that economic recovery has been “frustratingly slow”.

That brings us back to China and Martin Place in Sydney. That’s where the RBA resides and your home loan rates are set.

Right now the RBA believes the China boom is the biggest thing in our future. On that basis it believes it’s going to be fighting an inflation problem through 2012 as the money pours in and demand for skilled labour threatens a wages-price breakout.

On that basis it believes it will have to raise rates by at least 50-100 points over the next year and a half. Even if that’s brutal to large parts of the economy.

The initial key will be the June quarter inflation date at the end of July.

A bad number would see it raise at its August meeting.

It will watch events out of the US – and Europe and Japan – very closely. If the US turned seriously dark, if Greece imploded, all rate bets would be off.

It will also be watching China very closely. The US can send our market down as it did in 2008.

China can do it to the whole economy.

We’re toast.

Terry McCrann is right to point to the USA … as Barnaby did nearly 18 months ago … and voice concern that an implosion in America may well mean that China stops buying raw materials from us.

But I fear Mr McCrann is missing the wider dangers in focussing on the USA. Because China may well fold up like a playing card pyramid, all on its own. Without any “help” from America at all.

As we saw yesterday, Nouriel Roubini, the economist who gained the most fame for having predicted the GFC – predictions that RBA Governor Glenn Stevens claims not to have known anything about – has now sounded the alarm bell on China.  On the weekend he predicted a “hard landing” for the Chinese economy in 2013, just two years away. For reasons unrelated to America’s woes.

Moreover, we have our own internal risks to consider.

One could almost be forgiven for thinking that Mr McCrann’s fellow Finance Writer for the same paper, Nick Gardner, has been reading barnabyisright.com, in light of the following article published right above Mr McCrann’s column in The Sunday Telegraph yesterday (sorry, no link):

A bubble market

According to new data from RP-Data Rismark, the housing analysts, property prices have been declining in “real” terms since 2004 – in other words, they have been failing to keep up with inflation.

In terms of capital growth, you’d have been better off stashing your money in the bank than buying a home.

As The Sunday Telegraph reported last February, a quarter of people who bought and sold their properties within the past five years lost money.

The average shortfall was $54,000, but in some areas the losses reached almost $300,000, according to Residex, another property analyst.

Such statistics stand in sharp contrast to the broader public view that house prices have been consistently shooting up, and reveal signs of market weakness that, if continued, could undermine the entire economy.

Although experts are split about the outlook for property, it is clear the Reserve Bank needs to tread carefully.

… it is a delicate balancing act; a hike too far could cause the housing market to crash as it has in the USA and UK.

Shane Oliver, chief economist at AMP Capital, says the housing market is Australia’s “Achilles heel”.

“House prices here are overvalued by about 30 per cent, and it would not take too much to tip them over the edge.” Oliver says.

Overseas, many big institutional investors such as pension funds and hedge funds – which our banks rely on to borrow money which they lend out on mortgages – share Oliver’s concerns.

That’s one reason why the Big Four were downgraded by credit-ratings agency Moody’s from AA1 to AA2 last month.

Trevor Greetham, asset allocation director at Fidelity International in the UK, which has $3.4 Trillion under management, said: “If the global economy recovers strongly, that could push interest rates up a lot. That’s a real risk for Australia, because house prices are becoming an issue.”

The London-based Russell Investments fixed-income portfolio manager Gerard Fitzpatrick said he was more cautious about lending to Australian banks, citing the recent catastrophe in Ireland, where the house-price bubble effectively broke the banking system.

“I’m not saying Australia is the same as Ireland but there are definitely similarities.”

With such powerful voices becoming so worried, a credit crunch in which mortgages are rationed and buyers must put down much bigger deposits remains a possibility. The consequences could be disastrous.

That’s exactly what this blog has been arguing.

Basically, we’re screwed no matter what happens.

“Good” news or “bad” news, is all bad news for us.

If the global economy recovers, then we’re screwed because rising interest rates will crash the housing market (if it hasn’t already), and wipe out our banks. Meaning, the government will come after our super to prop them up.

If the global economy stalls, then we’re screwed because China will suffer the “chilling winds coming out of America”, and crash our economy. Meaning, the government will come after our super to prop up the economy through more ‘stimulus’.

Both sides of politics know they will do that. Both sides of politics are already implementing policies for it.

Barnaby has often warned that we cannot rely on a never-ending China boom to pay down Labor’s never-ending debt. Former Treasury secretary Ken Henry pompously disagreed. Labor and the mainstream media all climbed aboard the “Barnaby is wrong” train.  And Barnaby lost his job as Shadow Finance spokesman

Once again … as always … Time tells.

Barnaby warned of a bigger GFC almost 18 months ago. He said that Australia needed to stop borrowing and wasting billions, and make a “contingency plan” against the very real risk of more trouble hitting our shores from abroad.

Barnaby was right.

Labor’s $50bn Budget Fraud

13 May

Economist Terry McCrann exposes yet more of the same blatant fiddling the books in this year’s Budget from Labor.  $50 Billion worth of “fiddling”.

From the Herald Sun:

Wayne Swan’s budget is built on two great fiddles. Appropriately, the fiddles relate to the Rudd Government’s two great stupidities – the National Broadband Network and the Emissions Trading Scheme.

The fiddles enable the government to hide up to a massive $50 billion of new spending. So much for the claim they’ve pulled the pursestrings tight.

They also enable the government to ‘keep’ the growth in spending in the 2013-14 year to just 1.9 per cent. Without the fiddles, spending would actually have grown by at least 3.5 per cent in that year – shattering the government’s 2 per cent ceiling.

Now yes, the government’s second great stupidity, the ETS, has been ‘deferred’, while the first marches on…

Ditching the ETS enables the government to take up to $30 billion of proposed spending on it out of the budget and replace it – or most of it – by new spending. With, in an exercise of fiscal magic, no increase in the total spending number!

While separately the $26 billion-going-on-$43 billion to be spent on the NBN is just ‘disappeared’ almost completely from the budget! …

So, put the two together – the ditching of the ETS and the “no formal response” to the NBN – and the government has quite probably hidden as much as $50 billion of very real new spending out to 2013-14.

And blown its 2 per cent growth target right out of the very dirty fiscal water.

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