26 thoughts on “Monday Message Board”

  1. John, it seems like Barry O’Farrell in his Budget Reply Speech 2009/10 is ‘out of touch’ with just about everyone including business, Sydney Council and the public when it comes to building the $5 billion Rozelle Metro. For according to Lord Mayor Clover Moore it is a ‘world class public transport service that includes excellence in urban design, public domain works and transport integration and is backed up by Patricia Forsythe, the head of the Sydney Chamber of Commerce who argues that ‘Building the new metro station under the town square will not only provide the CBD with a vibrant new open space but will reduce congestion on one of Sydney’s busiest stations’. Thumbs up for Labor.

  2. In the past month the NSW Labour government sided with the loons from the NSW Shooters Party and Fred Nile to defeat a bill to prevent BHP-Billiton mining the Liverpool Plains, NSW’s premier agricultural belt and wheat growing area. Last week they decided to sell licenses to allow the continued suicidal extraction of water from the Great Artesian Basin. With the Murray-Darling system now stuffed for all time and climate change permanently reducing agricultural production in NSW, metropolitan transport fantasies are the go, forget long term food security, lets stuff the state completely!

  3. The so-called suicidal extraction of water that supposedly stuffed for all time the Murray Darling and that supposedly represents forgetting food security, was in fact developed by capitalist farming corporations and cotton mega enterprises.

    Its not much use wailing about licences without looking at the licensees.

    Its the corporations that are stuffing the state. NSW Labor is only associated with this to the extent they are in bed with these corporations.

    If you can solve the corporations problem, the Labor problem will, to some extent, disappear.

  4. The border tax adjustments and emissions trading debate continues. Joe Romm reviews Obama’s arguments and Krugman’s arguments here. Not much discussion on the fine print of Waxman-Markey yet.

  6. yes gerard it is certainly an interesting one to watch eh?

    also coming at the same time as matt taibbi blames Goldman for every disaster in finance for a century

    it ties in pretty neatly with comments from Sen. Dick Durbin recently,
    “And the banks – hard to believe in a time when we’re facing a banking crisis that many of the banks created – are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

  7. John,
    Can you explain the retail price of milk vs. the farm gate price. I remember promises of cheaper milk with deregulation. Have we got that? Was the bankrupcy of dairy farmers one of the aims? I’ve noticed stories from the US about farm gate prices falling as well as Australia. What’s going on?

  8. on the Goldman computerised trading technology theft

    The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways

    not that goldman do that obviously, ha ha ha

  9. David Allen @ #7
    “July 7th, 2009 at 12:33 | #7 Reply | Quote John,
    Can you explain the retail price of milk vs. the farm gate price. I remember promises of cheaper milk with deregulation.”

    Well in SA there was no such promise. An inference, suggestion, subtle nod in that direction maybe.
    But according to a radio interview with a milk corporation bigwig after deregulation here who claimed the industry never said milk prices would be lowered.
    They just allowed people to think that and then pocketed the extra cash afterwards.
    [He didn’t say that last sentence.]

    Sorry no source for that other than my absolutely reliable [?] memory, so apply as much salt as you wish.

  10. What utter cronies the Fair Pay OverPaid Commissioners must be.

    It is now clear who will have to pay the most for the global fiasco.

    There is absolutely no basis for denying minimum wage workers at least one adjustment each year particularly when the fair Pay Commission’s own Monitoring report for July – December 2008, stated that CPI had increased by 3.7% on an annual basis.

    Under the WRA Act, the Fair Pay Commission is to take into account:

    the capacity for the unemployed and low paid to obtain and remain in employment;

    employment and competitiveness across the economy;

    providing a safety net for the low paid; and

    minimum wages for junior employees, employees to whom training arrangements apply and employees with disabilities that ensure those employees are competitive in the labour market.

    You do not have a safety net if minimum wages do not get even CPI increases. This is a direct route to individual penury and social decay and disintegration.

    It signals very clearly to workers about the real motives behind such tribunals and bureaucratic mechanisms.

    This decision will damage the economy as every business relying on the domestic market needs a sufficient flow of funds through wages to maintain business incomes through ongoing purchases of goods and services.

    But the real bloody-minded criminals in this farce are all the Commissioners and parliamentarians who waltz up to the deluxe “Remuneration tribunal” for their wage hikes, and where the above 4 conditions never apply.

    Which Bank is expected to assess the above 4 conditions when it sets its interest rates and multiple fees? None.

    Every worker needs to remember this decision for a very long time to come. Who let Maggie thatcher into Australia?

    One rule for capital and the rich, another for minimum wage workers.

    Anyway that is the last we will see of Howard’s Fair Pay trap. Under Labor we have a new Minimum Wage Panel, which has extra criteria for wage settings. It adds in the concepts of “social inclusion”, “relative living standards”, equal pay for equal work” all of which have been jeopardised by this latest pro-kapo decision.

    the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth, and

    promoting social inclusion through increased workforce participation, and

    relative living standards and the needs of the low paid, and

    the principle of equal remuneration for work of equal or comparable value, and

    providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.

    But how can minimum wage workers survive in the meantime? How can they stop their phone, electricity, gas and petrol prices rising?

    This irresponsible decision will increase household debt and personal bankruptcies.

  11. fred #9 that’s pretty much how I remember it too. Free market ideology, of which deregulation is a part, was designed specifically to increase profits to big business, which means the processors and retailers. The fact that it was sold as something else, by deceit, is typical of the lack of ethics in big business.

  12. Those who have supported an increase in the supply of labour (ie mass immigration and baby bonuses) relative to demand, are those who have shafted minimum wage workers.

  13. David and Fred. The farm gate price is what the producer can get for his milk from the processor, co-op or company. These days most of the co-ops have been flogged off by their former farmer owners to large food corporations. The processors control supply by ‘booking’ a farmer to supply milk. The current gate price in Northern NSW is 45c per litre to the processor. Retail price at my local shop $3.90 for two litre container, that’s $1.45 on the top to cover processing, transport to market and the profit of the reseller. Currently in Northern NSW the processors are pushing out farm suppliers and not accepting any new suppliers due to a fall off in demand (they claim). Who makes the money? not the farmer at the moment.

  14. My poor comment on “China, Me Old China” has been trying to find a home for four months now. Will someone with administrative powers please post it before History ends?

  16. Michael of Summer Hill Says:

    John, it seems like Barry O’Farrell in his Budget Reply Speech 2009/10 is ‘out of touch’ with just about everyone including business, Sydney Council and the public when it comes to building the $5 billion Rozelle Metro. For according to Lord Mayor Clover Moore it is a ‘world class public transport service that includes excellence in urban design, public domain works and transport integration and is backed up by Patricia Forsythe, the head of the Sydney Chamber of Commerce who argues that ‘Building the new metro station under the town square will not only provide the CBD with a vibrant new open space but will reduce congestion on one of Sydney’s busiest stations’. Thumbs up for Labor.

    This is incorrect or misleading for several reasons. What Clover Moore said was:

    I support a world class public transport service that includes excellence in urban design, public domain works and transport integration. I hope that CBD Metro will enable the City to progress its plan for a public square at Town Hall as well as significantly decrease traffic congestion (particularly the number of buses coming into the City), and help revitalise the City.

    She wants:

    a) “a world class public transport service”, and well, who wouldn’t? But she’s not saying that the CBD Metro will deliver it.

    b) a public square at town hall. The CBD Metro project didn’t include this until last week, and it’s obviously just been announced to buy off Clover Moore.

    The economics of the CBD Metro never made any sense, and they still don’t, regardless of anything Clover Moore says.

    The current NSW government is insanely inept and probably corrupt. Fatty O’Barrel’s team don’t show any signs of being potentially any better, though, so NSW is basically stuffed.

  17. John, if I may reply to SJ by saying it has been in the pipeline for sometime and forms an integral part of the city’s Sustainable Sydney 2030 vision

  19. Derivation of a general portfolio effect from a statement of risk aversion

    This is something I came up with a few years ago but never took it beyond applying in a couple of working paper. I’d be grateful for any feedback and especially pointers if anyone has seen it before.

    This portfolio effect is general in that it requires no assumption about the form of the distribution of returns on the assets (i.e. they do not have to be gaussian).

    Risk averse investor: U(p1.R1+p2.R2+…pn.Rn) > p1.U(R1)+p2.U(R2)+…+pn.U(Rn)

    where p1.R1…pn.Rn is the distribution of returns on an asset and U(Rx) is the utility of return Rx

    Now substitute in w1.R1a …wn.Rna where wy is the weighting of asset y in a portfolio and Rya is the return on asset y in state of the world a. This works because p1+p2+…+pn = 1 and w1+w2+…+wn=1.

    This now gives U(w1.R1a+w2.R2a+…wn.Rna) > w1.U(R1a)+w2.U(R2a)+…+wn.U(Rna)

    It follows that in any state of the world, for a risk averse investor, the utility of the return on a given portfolio of assets is greater than the expected utility of the return on those assets individually.

    This is a portfolio effect. It has some interesting consequences, including a portfolio effect where you have a portfolio of one risky and one risk free asset. It also shows clearly the negative portfolio effect for a risk seeking investor and absence of portfolio effect for a risk neutral investor. But things really get interesting when you start considering investors with different levels of risk tolerance, and you get a clear refutation of the Separation Theorem/CAPM.

    Working papers here, with numerical examples.

    http://869789182725854870-a-loanmkts-com-s-sites.googlegroups.com/a/loanmkts.com/www/Home/assettransform3.pdf?attredirects=0&auth=ANoY7cpAelr7eboIe2ttXk1ZAXLy_b9a2UtycuiSKDcMPe3ECudEH_1EnXvsVeZHM2fMFQrPRPR56fgVjvsBODkFg8lSL5NwIAzg2EalXnLHZiQTdPtV8LK3S0wO9iUdkT_d4eW6D6z3LcHbJF-YWGHG0xIOOhPtqx9B7Y2VoQQYQzeiWkQSCpmSItyKF04hhZL5WGcOXgeDLh6-rCCjRDdM1JySm_QdGQ%3D%3D

    Click to access No.%20206%20-%20Wild.pdf

  20. John, some good and bad news has come out of G8 meeting in Italy. Albeit China and India, the rest of the developed world which accounts for some 80% of greenhouse gases being emittted into the atmosphere have more or less agreed to to limiting world temperature rises to 2 Degrees Celsius above pre-industrial levels. As for India and China maybe it’s time to give them the option of either coming on board or face a stiff carbon tax penalty on goods & services coming out of the respective countries.

  21. @melaleuca

    “The sociologist Mark Bahnisch is once again pushing the idea that an increase in the minimum wage will not increase unemployment…”

    Well, it doesn’t, in all circumstances. It tends to, if done by a simple government fiat – but see this work of mine for some discussion of an alternative approach that doesn’t have that disadvantage. That has links to related work by Professor Kim Swales and Nobel winner Professor Edmund Phelps, too.

  22. John, the recent success of an aircraft powered solely by hydrogen fuel cells in Germany might be the catalyst needed to stimulate new green shoots and economic growth.

  23. SJ- Fatty has lost weight now…he uses on the treadmill. Notwithstanding we seriously need a third alternative because if Fatty does what the electorate actually want and need his party will get out the long knives..

  24. You’re right Alice. The Murdoch press already don’t like him, saying that he’s “unprincipled”, meaning that he’s not as stupidly right-wing as they’d like.

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