Monthly Archives: January 2010

Un-Know1ng Benefits

What Precedent?

During the week, Pleiades sent in this link about Alex Proyas’ company getting the Producer off-set for producing ‘Know1ng’. :

IF you were giving somebody a gift of $20 million, the recipient may want to know about it. But in a farcical situation last week, the Australian director and producers of the film Knowing, Alex Proyas and Topher Dow, were unaware that their film had finally qualified for the federal government’s 40 per cent producer offset, a subsidy that could pay for up to $20m of the $55m film.

The Australian contacted their Sydney production office on Friday to ask why federal agency Screen Australia had included Knowing in its annual analysis of Australian films at the box office. The film had previously been denied the offset, presumably because it wasn’t considered Australian enough.

Last year, Proyas had not been quiet about the rejection, saying both publicly and privately he was flummoxed by Screen Australia’s decision, given his thriller – starring Nicolas Cage, Rose Byrne and Ben Mendelsohn – was shot in Melbourne and post-produced here by Australians. Proyas and Dow’s office could “neither confirm or deny” whether the film received the offset on Friday. The truth is, they didn’t know until The Australian called to inform them that Screen Australia had pronounced Knowing the third highest-grossing Australian film of 2009, with takings of $7.6m. It came behind Mao’s Last Dancer ($15m) and Baz Luhrmann’s Australia ($10m in 2009, after its 2008 release).

Knowing had previously not been considered an Australian film. It did not receive Screen Australia investment and was not submitted for any local film awards.

Matters were further confused by Screen Australia in its explanation. It said statistical definitions were “applied independently of the producer offset unit”, and that Knowing qualified as an “unofficial co-production”, meaning that it “satisfies the co-production requirements despite not being made under a treaty or memorandum of understanding with one of the 10 countries [with] which we currently have official agreements.”

Screen Australia analysis of box-office data from the Motion Picture Distributors Association of Australia shows we spent $54.8m on tickets to Australian films last year. The figure represents 5 per cent of the total box office of $1.09 billion.

It was the best domestic share since 2001, a year that produced Moulin Rouge!, Lantana, The Man Who Sued God and Crocodile Dundee in Los Angeles.

After Mao’s Last Dancer, Australia and Knowing, the next highest-grossing local releases of 2009 were the comedy Charlie & Boots ($3.9m) and Warwick Thornton’s acclaimed debut Samson & Delilah ($3.2m).

Without Australia and Knowing, however, the Australian box office would have slumped to $36.6m, or 3.3 per cent of total cinema revenue, down appreciably from the 10-year average of 4.4 per cent. (Happily, new release Bran Nue Dae has already topped $3.6m in receipts in its first two weeks of release.) Proyas was unavailable for comment but said in a statement on Monday: “As producer, co-writer and director of the film, I am extremely pleased at this decision, as the film was made by Australians and shot and post-produced in Australia. The production brought a great deal of work to the local industry and I hope that with this film now qualifying, more projects of its type can be made locally. I feel the Australian film industry will benefit enormously from this decision.”

The case raises or highlights many questions about the new federal incentive for film and television production, ahead of an expected discussion paper and departmental review this year.

First, the privacy provisions surrounding the offset – it is administered under tax law – are of no use to anyone other than perhaps Screen Australia. Government subsidies for other industries are transparent; the financial secrecy regarding the administration of the offset only obscures the means of film financing and hurts the industry’s desire to be treated seriously. Changes to tax legislation heading to parliament will be of minor consequence.

Second, while Proyas did not know his film had received the offset money, no doubt his US studio, Summit Entertainment, did. In many instances, the offset subsidy provided by Australian taxpayers is being swallowed by international studios and financiers. As Luhrmann told The Australian when asked about the rebate available to his film Australia, “Don’t ask me, that’s all handled by Fox!” (Twentieth Century Fox is owned by News Corporation, the parent company of News Limited, publisher of The Australian.)

Malcontents have suggested several other theories. Was Knowing granted the offset in order to boost Australian box-office figures at a testy time in screen politics, ahead of the departmental review and as industry distress with Screen Australia’s management grows?

Or was approval of Knowing kept quiet so as to distance it from a decision to deny the 40 per cent offset to George Miller’s Justice League: Mortal? That film, like Knowing, would have been shot in Australia with a largely Australian cast and crew but had a script written by foreigners.

This leads again to the issue of transparency. Knowing was arguably successful in obtaining the offset because it was developed by Proyas, an Australian director, and – unlike Justice League: Mortal – ownership of intellectual property in the film would be retained in Australia. If the decision becomes a precedent, it will affect international studios and whether they choose to invest in production here. Yet no one knows which criteria Knowing satisfied and what the precedent may be.

At a policy level, transparency is key. Producers are willing to divulge what financing process they use, if not the amount of money raised. If Screen Australia is unwilling to provide clarity on sources and dollar volumes, the public or industry scrutiny of the new incentive scheme is aimless.

Consequently, when Screen Australia announced late last year that the offset had helped screen productions to the tune of $123m since July 2007, there was no way of knowing how much that figure was boosted by the eight-figure sum heading the way of Luhrmann’s Australia. One insider suggested the offset is working “as the government expected”. Unfortunately, as Proyas discovered, that is as precise as film policy gets.

So let’s see now… It’s ‘Australian’ after the fact if it helps boost the bottom line for Screen Australia then? That’s just swell. Not only is it policy by Post-hoc, it’s Ad-hoc.

Leave a comment

Filed under Cinema, Film, Movies

JD Salinger Passing

Symbol In Search Of Meaning

The most extraordinary thing about Salinger might have been the breadth of appeal his most famous book ‘Catcher In The Rye’ possessed. Let’s face it, it inspired David Mark Chapman to murder John Lennon.  Perhaps because of this murder I’ve always had a dim view o the book – and at the time of Lennon’s murder I hadn’t read the damn thing yet. It was a distaste more in line with the sort of distaste a young girl has for foreign cuisine she is yet to taste “Yuck!”

At the time of Lennon’s death, you could read any number of analysis of how the book might have related to the murder or how Chapman may have misunderstood the meaning of the book. It’s always a little weird when a literary work gets dissected by journalists instead of critics because the Who-What-Where-When-How demands of journalism inevitably strips the work of its fine ornamentation. I have to say there’s a side of me that thinks that such condensation and reductio ad absurdum of a text is in of itself interesting.

I finally read the book when it was given to me when I was nineteen. A girl I loved dearly thought I was like Holden Caulfield. Some people might find that flattering. Most of my friends thought it was hilariously wrong. Having read the book I was dismayed. At the time I felt Holden Caulfield as a character was a nonstarter, determined not to start anything meaningful. I was a dude waiting to do a myriad of things with my life. I couldn’t have been more dissimilar to Holden. Suffice to say, she liked Holden, she liked me, and she was projecting Holden on to me – a mot unlikely target – which kind of explains why we busted up.

After my bust up with the said girl, I threw away the book. I’ve never really wanted to read it again out of distaste for the whole experience – Lennon/Chapman and the girl were enough to put me off it for life. But Salinger kept popping up even in fiction.

Ray Kinsella wrote ‘Shoeless Joe’ and he had this to say this week.

“When I was writing the novel I was a fan of Salinger,” said Kinsella, who lives in Canada but earned a master’s degree at the Iowa Writers’ Workshop in 1978. ” ‘Catcher in the Rye’ was the quintessential book of growing up male in North America.”

In Kinsella’s book, the main character – Ray Kinsella – takes Salinger to a baseball game to discover why he was called to build the field of his dreams.

“What if – which is what authors spend their time considering – what if Ray got into this adventure when he goes off to wherever he goes off to,” author Kinsella mused Thursday.

The ball field, today a tourist attraction outside Dyersville, and the movie’s lines (“If you build it, he will come,” “Is this heaven? … It’s Iowa”) are now firmly part of Iowa folklore.
Kinsella said the working title of the book was “The Kidnapping of J.D. Salinger.”

After a name change and publication of “Shoeless Joe,” Salinger’s lawyers wrote Kinsella, outraged about the portrayal of the world-wary author.

“Salinger made a career out of being publicized for not seeking publicity,” Kinsella said. “It was controlled and planned, and it kept his name in the media for 50 years.”

But the lawyers had a warning: “In a legalese way, they basically said we don’t have enough money to sue you but we will (expletive) on your wish to use it in a movie,” Kinsella said. That’s why, in the “Field of Dreams” movie, Ray Kinsella seeks out fictional author Terence Mann.

Of course, the voice of Darth Vader, James Earl Jones would play Terence Mann and deliver that famous speech about baseball. And it has to be said that the transformation the Terence Mann character makes in the movie is a stirring moment in the film, so much so that I liked him better than Salinger who just kept being a recluse. Yes, Ray’s vision about Shoeless Joe and the field in the cornfield and all that is literally corny. Yet if I had to side with Kinsella or Salinger about the dynamic of the American personae, I think I’m in Kinsella’ corner. The impulsive intuitive dynamism of Ray is so much more understandably American (in a Captain Kirk kind of way, I might add) than Salinger’s introverted depressive misanthrope in Holden Caulfield. Is Kinsella a better writer? Probably not. But he’s more on the money about the pulse of the world he lives in; and let’s not forget, he’s not the one who is a recluse.

Quite frankly, most of us men don’t want to be Catchers in the rye. We want to be Thirdbasemn at Yankee stadium; or a Beatle; or an astronaut in space; or something. The fact that so few get there makes life poignant and so interesting. I don’t think not even making a run at it is terribly great or a literary virtue.

Salinger’s most prominent characteristic as a man of letters may just be his reticence to offer anything beyond the book, which makes him the great unknowable. So much has been written about Salinger’s retreat from public life that I guess Salinger himself has become a cultural cipher without much reference other than his book. People are projecting all sorts of things on to him through their experience of his book and the dearth of information on the man has helped create a mythic void in the middle of 20th Century American Literature. He may as well have been dead all these years so it took me by surprise to find out he died, aged 91.

Leave a comment

Filed under General, Literature

From The Mailbox – 24/01/10

Doug Glanville’s View

I’ve refrained from the Mark McGwire castigation on this blog since his apology. It’s because there’s not much that can be done about it now, and because his record-breaking feats were a symptom rather than the disease itself that ate into baseball. I’ve seen enough from Jason Giambi, Andy Pettitte and A-Rod to safely say I didn’t want to go through a dissection of McGwire’s so-called apology. Needless to say, none of it makes me happy.

That being said, Walk-Off HBP sent through this link during the week and I’ve been meaning to post it for a couple of days now.

I knew that what I was seeing was impossible. When you play the game long enough, you develop a sixth sense for the realm of the possible. You learn your body’s limitations (and your opponents’ bodies) in short order, because knowing is integral to your longevity. Sure, limits are pushed, but it doesn’t happen overnight. I played centerfield and had to know that when Chad Kreuter or Todd Zeile hit a ball, there was a good chance it would come off their bats with no spin, making it dance unpredictably while I was trying to catch it in the outfield. I could tell from the angle of Vladimir Guerrero’s bat and the location of the pitch when the ball was going to slice away from me. From bat-ball contact I could tell to a fine degree where a ball would end up long before I got there. As the Phillies announcers always used to say to me, “I knew right away when you had the ball in your sights, and then you would just be there.”

That’s because it was my job to be there — to know the field, the wind, the conditions so well that I could take the ball out of the equation after contact, and get to where it was supposed to be. I had all the data I needed without relying on my eyes exclusively. I could run to the spot and wait for the ball while getting into position to throw to the next base (should a runner be on base).

The first time I questioned those instincts was during a game against the Kinston Indians and Manny Ramirez in 1992. It was my first full minor league season with the Winston-Salem Spirits of the famed Carolina League. I was in centerfield and Manny hit a line drive into the gap in right-center. No problem, I thought. I’ll run at an angle and cut the ball off near the warning track. Even if can’t quite get there to catch it, maybe I can hold him to a double.

Well, the ball hit part-way up the light tower, well over the fence for a home run. I could not believe my eyes. Up until that moment, I’d never seen anyone who could hit a home run to the opposite field, let alone a missile like that. It was stunning. As far as I knew, this was pure hitting ability. Ability that none of my college opponents had possessed.

There you have it. Incredulity as the reason for suspicion. The problem at the time was that even with the professional opinion of a fellow player, the Glanville line of reasoning would not have stood in a court of public opinion. Most of us who suspected, did so on the basis of our incredulity at the feats being accomplished. Those who denied the possibility o steroids demanded proof and gloated behind the absence of testing in baseball.

The Onion’s Take

Which leads me to this other link to The Onion whose headline reads: “Mark McGwire Admits It Was Really Fucking Fun Hitting Baseballs So Far.

“I can’t remember having a better time in all of my life,” McGwire said during an hour-long interview with the MLB Network’s Bob Costas. “Do you have any idea what it’s like knowing instantly that a ball you hit is going to fly—no, soar—over a fence in a major-league stadium? Well, I do. And it’s fucking fantastic.”

“I’m sorry everyone had a problem with it,” McGwire added. “But I was having a blast.”

Though McGwire told Costas there were times he almost regretted taking anabolic steroids, the former Oakland Athletics star said that, considering the tons of fun the performance-enhancing substances allowed him to have, he never thought twice about his decision.

“I was hitting baseballs over 450 feet,” McGwire said. “That’s really far. And high, too. Oh my God, were they high. Towering, in fact. I was, like, crushing these things.”

According to McGwire, he had the most fun during the 1998 season, when he fired off 70 home runs and broke Roger Maris’ single-season long-ball record. McGwire said he had the second-most fun the following year, when he hit 65 home runs, many of which, the giddy slugger proclaimed, “went for miles and miles.”

If that doesn’t illustrate the moral obtuseness of McGwire’s ‘apology’, then this bit mows down the complicity of the MLB and MLBPA:

According to the three-time Silver Slugger Award winner, the fun he was having also seemed to make everyone else—including teammates, fans, and Major League Baseball commissioner Bud Selig—have fun while they watched his at bats.

McGwire said that the main thing he learned in his 16 years as a player was that people tend to be happier when players are hitting the ball really far.

“By their reactions, I just figured they were cool with me taking steroids and having a good time,” McGwire said. “They clearly knew I was taking performance-enhancing drugs, right? I mean, look at me. I look like a fucking monster. Plus, come on—I was hitting the ball really, really fucking far.”

Ouch.

Leave a comment

Filed under Baseball

Cinematographers’ Blues

For Budding Cinematographers

Here’s an article exploring cinematography, post-‘Avatar’.

Every decade of filmmakers feels that it is at the center of a maelstrom. The simple fact is that film, being a technologically driven art form, has always been prone to sudden and disruptive changes. It is one reason there is such a huge turnover in talent, and why so many artists and technicians have shorter rather than longer careers. Yes, it is a stressful business—but the truth is, if you are looking for security and stasis, you should find another career path.

The past decade witnessed the emergence of HD video into mainstream feature film production. Despite the best efforts of some studios to drive a stake through the heart of 35mm. motion picture film, Kodak has continued to improve its signature product and has kept more than a few steps ahead of a quickly pursuing digital raptor:

Sony.com 2K & 4K movies link

Sony.com 4K Digital Cinema link

This nipping at film’s heels has been more than slightly abetted by some of a generation of experienced cinematographers, hell-bent on staying inside the curve of hipdom, who have jumped into the deep end of the digital pool. The irony to this that I see, is that many of the young and emerging cinematographers who were nursed on digital video milk, now are crying to be weaned to the more solid sustenance of motion picture film. Even some directors, who have well-deserved reputations as film stylists, and who, as early adapters, embraced digital video as an auteur’s dream medium, have had to acknowledge that the extended margin of control afforded by a “what you see is what you get” digital camera, can not yet “get” the image subtlety, color, and resolution of motion picture film. Several of these veterans are returning to film for future productions.

Since beginning this blog I have had a lot of communication with young cinematographers and filmmakers, digitally savvy and cognizant of all of digital video’s potential, who, nonetheless, want nothing more than to shoot movies on film. Even more surprising, many of them have expressed a passionate interest in working in the anamorphic format, which was all but given up for dead less than a decade ago. For my part, though I am far from Struss’ or Rosher’s experience level, I have been witness to many of these same changes in technique, style and grammar. I came eagerly to digital photography over a decade ago and have shot feature films and shorts such as The Anniversary Party, Incident at Loch Ness, and The Architect in various digital video formats, with varying degrees of satisfaction. But my abiding love has been, and continues to be, film. I read with interest a statement in a recent American Cinematographer article that Avatar was not only Mauro Fiore’s first 3-D movie but also his first in digital video. What more compelling testimony can you have that it is the artist, not the medium, that is the creative entity?

I’m not so sure that Avatar augurs well for continued use of film. I think it augurs for the likely demise of film as the shooting format. I know cinematographers by dint of their trade are not going into the night without a fight, but if you’re a director working with tighter an tighter budget constraints, I think one of the things you jettison is the fetishistic attachment to 35mm film.

Then there’s this little bit:

I will be the first to admit that movies as I studied them in film school and that for the major part of my career I have been fortunate to photograph, are disappearing. The dramatic, humanist film rooted in real life experience, or some reasonable simulacrum of it, is slowly fading away. Those that are continuing to be made seem more and more to come out of an ever-shrinking indie world or from abroad, especially from developing countries that are still exploring their own poetic myth and identity—and of course, France. I often joke to students that most of the studio films I have photographed the past 30 years would be unlikely to be green lit today by the same studios that had made them. In a vicious spiral ever downward into new levels of mediocrity, the majors have largely abrogated responsibility to produce films for a broad-spectrum audience. The lower the bar is dropped toward the slithering testosterone impacted young male adults that seem to constitute the “target demographic,” the lower they clamor for it to drop; and the digital magicians of CGI visual effects have become ever more adept at manufacturing convincing explosions, car crashes, eviscerations, and gravity-defying punch-ups and shoot outs. Sure, there is room for crap like that; there always has been, even in the days when such fare constituted the bottom half of double bills and when this genre of film only had money enough for cheesey effects. Today, the effects and stunts are the budget. Even sadder, one of these 100 million dollar plus bloated behemoths prevents half a dozen human-scaled, dramatic films from being made. If you think I am exaggerating, talk to the young writer-directors who are being ushered out of studio executive suites with an assurance that their scripts are wonderful, but “too soft” for today’s market.

It is not simply that such mature themed films do not now, and will likely never again, occupy the place of primacy that they did for nearly a century, nor even that of the smaller niche of “art film” that they had during the crazy and heady days of the Nouvelle Vague.

That’s all true. The only way to tell those stories now is to go low budget, which mean abandoning the perforated stuff. I don’t have any easy answers, but I will share my own from another field – music.

It used to be that music production was ponderous and expensive. The arrival of digital temporarily made it even more expensive, but then suddenly the music-making technology became widely available on domestic computers. The subsequent explosion of recorded music that now exists on the web shows that this democratising of the artform has been a grand success. And while I haven’t heard of anybody who has made a lot of money out of their digital music as a result of this development, I have met a lot more satisfied musicians than before the advent of this technology. Overall, it has been good for music.

What this seems to show is that the future of motion picture might be that everybody gets to be a director, but nobody gets to make money – but motion pictures would be the better for it. I don’t mind that future.

Leave a comment

Filed under Cinema, Film, Movies

Binfield For Bankers – 15/01/10

“The Nerve Of The Guy!”

Lloyd Blankfein, head of Goldman Sachs, the leading investment bank that led the markets to the brink in the GFC says he’s sick of apologising for it.

Called to Washington on Wednesday to testify before the Financial Crisis Inquiry Commission, Mr Blankfein made it plain that he was done apologising.

The commission chairman, the former treasurer for California, Phil Angelides, pointed out that some regarded Goldman’s behaviour – in which the firm sold mortgage securities to customers and then placed bets against those same – was ”the most cynical” of practices.

”It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars,” said the chairman.

”That’s what a market is,” Mr Blankfein said.

”I do know what a market is,” Mr Angelides replied sourly. He tried again to get Mr Blankfein to acknowledge that ”excessive risk was being taken”.

”Look, how would you look at the risk of a hurricane?” the man from Goldman retorted.

”Acts of God we’ll exempt,” Mr Angelides said. ”These were acts of men and women.”

What do you do with people like this? I’m surprised there isn’t  vigilante group out to find where he lives and fire bomb his property.Not that I’m advocating it, but you wouldn’t be surprised if it happened.

CBA’s Profit Upgrade

Get this. The CBA has made a huge pile of money in a year of the GFC.They’ve upped their profit forecast by a dirty big margin, sending their shares up 2.31% in the last 15minutes of the trading day.

Key drivers of the result were the solid income growth across the business, good volume growth, disciplined cost management and a decline in impairment expenses, the bank said.

Also helping the result was a positive return of $240 million after tax as equity markets recovered over the six month period.

The profit forecast shows that CBA has rebounded from the slowdown associated with the global financial crisis, and is driving earnings higher with its biggest market share in home loan lending and deposits.

EL&C Baillieu analyst Stewart Oldfield said CBA is just getting stronger.

‘‘They have got the premier retail franchise in the country and it’s a case of the strong getting stronger,’’ Mr Oldfield said. ‘‘In an environment post the GFC the strongest have just gotten stronger.’’

I guess it’s a company that won’t be allowed to fold, so you would buy their shares.  Lots of institutional buyers in that one, judging from the volume. It’s about recaptured its peak from just before the GFC.

So seriously, what exactly the hell was the GFC to Australia? Iceland’s been completely shafted by the GFC and here’s Australia sailing smoothly as if nothing had ever happened. Take this column on unemployment.

Yesterday’s confirmation of labour market strength makes a return to neutral monetary policy a given. It used to be thought that a neutral cash rate was about 5 per cent, but the banks boosting lending rates by more than the RBA’s official increases has lowered that a touch. And with higher personal debt loads, it’s arguable that the RBA doesn’t have to do as much to achieve its desired impact on purses and wallets.

So, pick another number. Maybe neutral now is more like 4.5 per cent, just three more consecutive monthly rate rises of 25 points and we’d be there.

And, as the RBA has reminded us, just because it hasn’t done something before, it doesn’t mean it won’t do it.

Also remember that the unemployment rate is supposed to be a lagging indicator, in which case the extraordinary straight-line employment growth since June is all the more amazing, even while being the sort of performance that naturally has any graph watcher thinking that there must be some sort of pause at some stage.

In other words, if you’re an employer, the labor market is tight, inflation is knocking on the door, the economy is right back to the point where it is about to overheat, as it was in July 2007.  It’s worth asking, what exactly the hell was the GFC and all that drama? Because as of today, it’s looking like it never happened for the big banks.

Leave a comment

Filed under General

Google vs. China

Do No Evil

China’s IT brigade tried hacking Google. In response, Google is going to stop its censoring of content as retaliation. In the mid-term Google is likely to pull out of China.

GOOD FOR Google. The company’s decision to stop censoring its Chinese search engine is more likely to mean the end of its China-based service than a breakdown of Beijing’s political firewall. But more important than the question of whether Google.cn survives is the larger issue that Google has now raised for other Western companies and democratic governments — which is whether China’s gross and growing abuse of the Internet should be quietly tolerated or actively resisted.

Google cited a major instance of that abuse in announcing its policy change: “a highly sophisticated and targeted attack” on Google and more than 20 other large companies aimed at stealing software code. “A primary goal of the attackers,” Google said, was breaking into the Gmail accounts of Chinese human rights activists.

This is shocking but unsurprising. Cyberattacks from China aimed at U.S. businesses, the Pentagon and other government agencies have become commonplace, if not epidemic, in recent years. So have Beijing’s demands that Western companies collaborate in its efforts to censor political content on the Internet and snoop on the private e-mails of its citizens, several of whom have been prosecuted with e-mails supplied by Yahoo. China aims not just at eliminating the free speech and virtual free assembly that are inherent to the Internet, but at turning it into a weapon that can be used against democrats and democratic societies.

They have 24 million marriageable men with no access to internet porn. It’s a powder keg waiting to explode out there! 🙂 It’s really strange how china keeps on making the news with such negative reports so regularly. Maybe not so much surprising – a bit like Mark McGwire’s admissions of steroid use – but strange it’s happening now. We’re suddenly seeing bastards for what they are.

Leave a comment

Filed under General

From The Mailbox – 13/01/10

4-Piles-Of-Dung Policy

The famous 4 pillars policy of Australian banking regulation is a bit of two edged sword. The problem is that it is anti-competitive to only have 4, but anything smaller either was going to get swallowed up or has already been swallowed up. On the other hand, it was anti-competitive enough that they didn’t feel a rush to place bets on sub-prime loans… allegedly. Either way the Australian consumer gets to feel smug and mugged at the same time.  It’s fascinating to see. 🙂

With that said, I want to share with you this link from Pleiades:

Since it became clear to our Government that the local economy could not remain immune from the global downturn, the public largesse handed out to the self proclaimed ‘healthy’ banks has been astounding. We’ve had deposits guaranteed, all overseas borrowings guaranteed (using the Federal Government’s credit rating), car dealer finance has been propped up and former CEO aspirant at the NAB, Ahmed Fahour, is now in charge of the aptly named ‘Ruddbank’ which has been designed to support the commercial property sector (to which the Big Four Banks have over $100bn of loan exposure).

The question which now comes to mind is this – as is the case with A.I.G., do Australian banking executives need to be paid large salaries and bonuses when the ever grateful taxpayer is the one doing all the heavy lifting? As a free marketeer I’m happy for any bank brave enough to wean itself off the public teat to pay its senior people whatever it likes. But while my (and your) money is being used to support their businesses, I say it’s time for banking bonuses to be stopped.

Like I said, it’s pretty interesting to see. It’s a good question indeed to ask, how com our banks get propped up and their top execs get to keep their top pay?

Here’s another link from Pleiades:

Australia is undoubtedly over-banked. The banking regulator, APRA, lists over 190 ADIs (Authorized Deposit-taking Institutions) for which it is responsible, including foreign and domestic banks, credit unions, building societies and various specialists. That works out at one whole bank for every 120,000 Australians (men, women and children). For comparison, the largest bank in the USA, Bank of America, reports almost three times as many customers as the entire population of Australia. Who picks up the bills for all of this duplication and waste in this country – the Australian consumer!

The big banks have long claimed that the Four Pillars policy restricts them from growing, presumably overseas since the local market is saturated. The creation of an OzzieBank would free up the banks to go their own way if they wanted to, although they might find the going a bit tough without an implied government guarantee and the resulting AA credit rating.

But the needs of Australians for basic banking services are changing anyway. Young Internet savvy customers are demanding services delivered instantly and electronically on their iPhones. Ageing baby boomers have less need of traditional banking services but increased demand for superannuation advice – which is why banks are piling into that particular niche, with little evidence that they will do it any better than the incumbents.

I’m actually in the fortunate position to be able to say that my four-pillars bank is quit satisfactory in its performance. But I can imagine it could easily change with a slight tilt of the global financial axis.I guess I should be happy my deposits got guaranteed but at the same time I’m thinking, is this even *right*?

As I look through the shares of the big four, I note that while their bottom line looks fine, I’m still inclined to think their shares are priced way too high.

Leave a comment

Filed under General