Monthly Archives: February 2010

Mr. Toyoda Goes To Washington

They Should’a Had Me There (But They Didn’t)

The Toyota hearings happened in Washington DC where they ‘summoned’ Akio Toyoda to front for the company that bears his family name.

In his opening remarks, Toyoda said that “I love cars as much as anyone” and that he is a “trained test driver” able to expertly evaluate cars. He said the company’s mottoes have always been “Safety, quality and quantity” but during the past decade of the company’s rapid growth, “these got confused”. He promised a return to the basics.

In Japan, when there are product safety or quality problems, the head of the company will take full responsibility and apologize (which Toyoda did several times today) and that’s the end of it. The company moves on, consumers make their decisions about the product, but it’s almost unheard of for authorities to dig into the company until some cover-up or mistake or purposeful action which caused the problem is found.

A questioner revealed during the hearing that NY’s Attorney General Andrew Cuomo has brokered a deal where Toyota dealers will go to owners’ homes to pick-up recalled cars and trucks, fix them and deliver them back to the owner, with Toyota reimbursing the owner for any rental or train or taxi costs incurred while the car was out of service. When Inaba and Toyota were asked if this program will be made national, it was obvious either they were avoiding the question or knew absolutely nothing about it (hard to believe).

When one member tried to find out if the new brake override software will be installed in all affected Toyota vehicles in the US, Toyoda just said, “I don’t know”.

When another representative talked about how much she likes her Toyota Camry hybrid but doesn’t trust it now, Inaba jumped with, “You have an American car!”

Inaba was just trying to promote the fact that Toyota employs 200,000 people in the US (which Toyoda mentioned twice in the first minute of his opening statement) but the exchange was terribly confused and became hostile.

Many members did not like the answers they got today, and had no reluctance telling Toyoda and Inaba just that. One member, trying to be friendly, jokingly told Toyoda, “You can brag about this at home. You’ve been questioned by a congressional committee!”, but it was obvious Toyoda didn’t know what to make of that statement.

And so it goes, and so it went.

For one, as a long-time working interpreter between Japan and the Anglo-phone world, I wished I was there to pinch hit for these poor guys, because being bi-lingual and bi-cultural, I would have had a few things to say to these American law makers.

Number 1 on my list would have been that the US government is now a major shareholder of Toyota’s rivals, GM, and Chrysler. Whether they like it or not, they are today; and as such they are in a conflict of interest if they are trying to present themselves as on some kind of higher moral ground. Quite frankly, from an outside third party, this all looks like an attempt by the US government to scare people out of Toyotas and into GM and Chryslers. Clearly this conflict of interest leads Toyota to believe this is a kangaroo court.

Number 2 on my list is that if they really thought the Toyota handling of the crisis was as lax as they claim to believe, then they should by all means explain what exactly are the laws in America that cover such things. The recall of vehicles by any company actually happens as a voluntary action to fix something. If indeed Toyota had not done any recalls, then there might be a case for insinuating there was something criminal. Seeing that Toyota is recalling vehicles voluntarily, which part of this act shows Toyota *isn’t* taking responsibility for its products?

Number 3 on the list would be, at which point does the US Government require legislation and regulation to do with recalls that *it* would find satisfactory? Without such guidelines – and they do not exist – isn’t it the case that the utter lack of regulation is to blame? And seeing that there isn’t and blame-throwing is the game, isn’t the Senate indulging in a bit of grandstanding at Toyota’s reputation’s expense? How does the US Government propose to repay damages?  

Number 4 on my list would be the fact that Toyota has built factories in the USA and used parts in the USA. If it’s the Senate’s collective wisdom to say that this has been unwelcome, and clearly,  the tone of questioning in the room strongly suggests that it is, then perhaps Toyota were gravely mistake in the American system of capitalism. Perhaps the US government has two sets of rules, one for companies they feel are domestic, and another for foreign companies that found factories. Is Toyota to understand that the US Government in practice endorses this double standard, without writing it down? Isn’t this how racism and sexism works in America? How can Toyota not be sure that the US government isn’t targeting Toyota not because our vehicles are unsafe but because it helps you buy votes to demonise the Japanese as you have done in your history so often?

Number 5 on my list would be how much campaign contribution has been paid into their respective Senators’ coffers by GM and Chrysler and Ford? And just how much would it take for the senators to back off and apply the separate domestic rule? Because people at Toyota and in Japan in general believe that this whole Senate hearing is a scapegoating process that can only help Toyota’s rivals in the market place. What assurances can you give Toyota that your  individual campaign funding does not include and has never included monies from GM, Chrysler and Ford?

Number 6 would be to lay down the implicit threat of shutting American factories. If Toyota is so unwelcome in the American market place, it is willing to move its factories to Canada or Mexico – countries under the NAFTA agreement – and close those factories and with them the 200,000 direct jobs. Toyota understands that the USA has a 10% unemployment rate, so maybe we won’t find growth in this country any more. Certainly by the un-conciliatory tone of this hearing leads us to believe we should do this as soon as possible.

But no, none of this got mentioned. So I’m writing it here instead and I doubt anybody in Japan’s going to read it, and I sure as hell won’t be asked to be the interpreter for Toyota, so that’s that. All in all, I strongly felt I should’ve been there, even though I have absolutely nothing to do with Toyota; which, I really don’t.

The whole thing pisses me off endless. It’s a good thing I’m not the Governor of the Bank of Japan, Toshihiko Fukui, because I’d be busily dumping US treasury bonds as fast as I can.

Leave a comment

Filed under General

Courage And Funds (But Mostly Funds)

Really Helps If Your Wife Works For The Funding Body

Here’s Tom Zubrycki in the SMH going on about how governments need to spend more money to support film makers like… him. Last I checked, he seemed to get a nice chunk of change out of the funding bodies at a semi-regular rate that would make most film makers in this country, well, envious.

The state agencies have a key role, so do the public broadcasters. They should set aside their fixation about ratings and be proactive in supporting and nourishing a vibrant documentary sector. One idea would be to reinstate the half-hour documentary slot – perhaps along the lines of Inside Australia, axed by SBS but which produced many memorable documentaries and gave many filmmakers a break.

At the other end of the spectrum there is the feature documentary. It hurts to make cut-downs to suit requirements of schedulers and sales agents, when these films are sold-out at festivals. My plea is for flexibility from schedulers to allow for the occasional feature-length documentary slot at prime time.

Recently the ABC screened Australian feature films, such as Samson & Delilah, on a weekend evening. Would it not be a good idea to feature documentaries in similar slots?

I recall a meeting at Paddington Town Hall of independent filmmakers many years ago; it must have been the late ’70s or early ’80s. I remember it as noisy, fiery and passionate. We voiced our indignation that apart from a couple of exceptions, our films were not picked up by television. We could get our films screened at the Sydney Filmmakers Co-op cinema in Kings Cross, and even the Opera House for a while. The tide of protest worked and the ABC opened its doors.

None of us expected, however, the ABC and SBS would gradually set the agenda for the documentary sector as a whole and leave filmmakers with fewer options to get our films commissioned. This is still the case, with new pay channels such as National Geographic.

Don’t get me wrong. We are pleased public broadcasters are commissioning our ideas but is this concentration of decision-making good for the industry, for diversity?

Dude, do we even care? Somebody’s always footing the bill. Better the commercial bodies than the Screen Australia mob who seem to preferentially fund Tom.

But there’s more:

It’s here that agencies such as Screen Australia have a vital role to play. We must radically expand the special documentary fund. Without its support, it is extremely difficult to produce documentary work unconstrained by the imperatives of the broadcasters. Ironically, many films supported through this ”back door” end up being sold back to the broadcasters that rejected them in the first place.

The fund is one of the few places filmmakers can get support for projects largely shot overseas with no obvious Australian connection.

As filmmakers, we’ve been good at holding up a mirror to our own society but increasingly we’re driven by a curiosity about what’s happening outside our borders.

It’s all very self-serving but I guess that’s the nature of speeches given when they hand out an award. Pardon me if I find this much less than courageous.

Leave a comment

Filed under Cinema, Film, Movies

Commercial Whaling Proposal

Negotiating An End To Scientific Whaling

The long standing bone of contention between Australia and Japan might shift into a new gear as of this proposal.

The draft deal would lift the ban on commercial whaling, while reducing the total number of whales killed each year by ending so-called “scientific” whaling.

There are indications key nations support the deal and it could succeed.

Conservation groups are angry and want Australia to use its position to fight against the proposal.

The deal has been issued by a “small working group” of the International Whaling Commission (IWC), which includes Australia and Japan.

It is a draft deal which has not yet been approved; it is understood Australia will not support it.

Currently, commercial whaling is banned but countries can hunt whales in the name of science. Up to 1900 whales are killed each year.

The proposal would lift the commercial ban. Japan would legally be able to hunt whales without relying on the “science” justification.

The pay-off is that the proposal says the number of whales hunted would be significantly reduced from current levels.

The new deal would appear to allow for the hunting of minke whales, fin and humpback whales in the southern hemisphere.

It would come into force on November 1 this year.

Last week, Prime Minister Kevin Rudd announced his government would take international legal action against Japan if it did not agree, by November, to end whaling in the Southern Ocean.

The federal government appears to have left open the option of a deal which would see Japan phase out whaling, which could see the practice continue for some years.

Sources say the proposal is gaining support internationally, with the US and New Zealand disposed to support it.

Environment Minister Peter Garrett met conservation groups in Canberra on Tuesday to discuss the issue. Australia is due to make an alternative proposal to the IWC within days.

One dreads to think what Australia is going to offer in exchange.

Here’s a more detailed article.

The draft, released by International Whaling Commission support group chairman Cristian Maquieira, said: “This effort represents a paradigm shift in the way the Commission will carry out its mandate. The commission will establish caps of takes that are within sustainable levels for a 10-year period.”

The IWC proposal said its aim was to reduce the number of whales culled under the scientific loophole which it admits has led to an increase rather than a reduction in the number of whales killed since the moratorium was put into place in 1986.

<edit>

The draft proposals, drawn up by an IWC working group that included Japan and Iceland describes as “critical” the quota limits for commercial hunting.

“Since the imposition of the commercial whaling moratorium in 1985/86, over 33,000 whales have been killed by whaling under objection, reservation and special permit – whaling over which IWC has no control,” it said.

“These takes have been increasing each year. In 1990, just over 300 whales were taken; in 1995 there were around 750 whales taken; in 2000 they were around 1,000 whales; and over the last five years takes have been between 1,700 and 1,900 whales,” it said.

The proposal will go next month to an IWC working group meeting in Florida and, if approved, will be voted on at the annual meeting in June. If it is passed with at least a 75 percent majority, the proposals will becothe regime for over-seeing whaling and whale conservation.

So in other words, the IWC is going back to its proper mission of brokering numbers.

Basically, you have 2 groups with mutually exclusive ends, fighting it out on the IWC each year. The Anti-Whaling lobby has taken the agenda to the extreme and basically won’t let any commercial whaling resume, so nations interested in whaling have to come up with legitimate excuses to go whaling. South Korea says each year it plans on having more accidents where they hit whales. Iceland is threatening to leave the IWC, as is Norway. Russia is quiet but still goes on campaigns for whaling. And then there’s Japan, the nation that seems to attract the most vitriol because clearly its claims of scientific whaling’ seem the most unlikely – Although I don’t see how it’s any less unscientific than planning to have more accidents, but nobody gets on South Korea’s case about their accidental whaling program.

Hence you have the crazy folks of Sea Shpherd chasing the Japanese scientific whaling fleet and throwing smoke bombs and stink bombs and getting hosed and getting run over by whaling boats and what have you. It’s pretty unomcompromising on the anti-whaling lobby side. They’re saying zero and nothing else, and they’re staked to that as a moral position.

Then the whaling nations ave their claims too – mainly on the basis of cultural practice, but also because the International Whaling Commission has effectively turned itself into the International Anti-Whaling Commission that nothing can get negotiated beyond whether it’s possible to even contemplate commercial whaling.

It’s getting mightily sticky as a diplomatic topic too because now Kevin Rudd is saying he will sue Japan in some international court over the scientific whaling, although on the basis of just what international law remains to be seen. The Japanese are doing ‘scientific’ whaling under the provisions for such things under the IWC agreement so they’re not exactly breaking rules there. Australia’s insistence that the whaling is happening in Australia’s territorial waters is just as dodgy because Australia’s claim over the territorial waters is just a claim.

Meanwhile the popular claims that whaling is bad because it’s cruel is fraught with problems. I doubt Australia’s beef industry would like it if say, India came in hard with claims that cows are sacred and therefore should not be eaten. You can see just how far that argument would fly in Australia, so people really ought to get off the cruelty-to-animals line as the basis of anti-whaling arguments. If you think that’s spurious, then let me tell you the Japanese think the anti-whaling arguments are just as spurious.  Maybe that’s what the Japanese should do: Pay India to complain about the beef industry in Australia. God knows they have a few *ahem* beefs with Australia already.

At this point in time it’s clear that the 4-6 nations that want to undertake commercial whaling:

  • will seek to undertake whaling no matter what
  • don’t care how anti-whalers feel about it
  • are not persuaded by moral/ethical/fluffy-emotional arguments
  • have their own data and stats to support their case for whaling
  • but will abide by proper agreements.

Unless Australia’s really going to war with these countries over whaling, then maybe it should negotiate *something*. So what could that something be? It seems that it’s a plan to let whaling go back to being legit in exchange for strictly controlled numbers. In other words, both parties give up something. The anti-whalers have to give up their demand for zero as the number, and the whalers have to reduce the number towards zero.

People who are not willing to make any compromises won’t like it, but there’s enough political realism to the notion that allows all the nations involved to come to a detente. It’s certainly better than the stupid annual stoush that is the IWC meeting in May each year. Ideals are fine, but if there are people who are diametrically opposed to your ideals, then it’s time to get a little real.

Leave a comment

Filed under General, Science

News That’s Fit To Punt – 23/02/10

China As The Next Dubai

Here’s a joyful little article.

The township of Huaxi in the Yangtze River Delta is a proud symbol of how Chinese communists embraced capitalism to lift 300 million people out of poverty during the past three decades.

Its leaders took a farm community with bamboo huts and ox carts in the 1970s and transformed it into an industrial and commercial powerhouse where today many of its 30,000 residents live in mansions and most have a car. Per-capita income of 80,000 yuan ($13,000) – almost four times the national average – allows Huaxi to claim it’s China’s richest village.

Huaxi is also emblematic of the country’s construction and real estate boom. Communist Party officials there are building one of the world’s 30 tallest buildings, a 2.5 billion yuan, 328-metre tower. The revolving restaurant atop the so-called New Village in the Sky offers sweeping views of paddy fields, fish ponds and orchards.

Marc Faber, publisher of the Gloom, Boom & Doom Report, says China is overdoing it. “It does not make sense for China to build more empty buildings and add to capacities in industries where you already have overcapacity,” Faber told Bloomberg Television. “I think the Chinese economy will decelerate very substantially in 2010 and could even crash.”

Huaxi has an even more ambitious project coming up: a 6 billion yuan, 538-metre skyscraper that would today rank as the world’s second tallest. The only loftier building is the new Burj Khalifa in Dubai.

The rest of the article explores how China’s economy is a bubble that’s waiting to burst. When it bursts, you can bet your bottom dollar and the fair few above it that the commodities market will collapse and with it, Australia’s shares, and then property and then its much-vaunted banking system. There’s a chain reaction waiting to burst Australia’s property bubble right there. Mightn’t be such a bad thing if it didn’t come with massive loss of jobs and all the ugliness that would entail. One thinks the current situation is merely a prelude to the dam walls bursting and this time Australia’s right in the way of the on-coming flood. Oh joy.

Although this column flies in the face of this article in the same paper here.

The central bank has already got a head start on inflation, lifting its key cash rate by 75 basis points late last year while most developed nations held their rates at record lows. RBA Governor Glenn Stevens last week made it clear rates had further to rise this year should the economy strengthen as he expected.

Indeed, mining is a major reason for the RBA’s upbeat economic outlook as insatiable demand for Australian commodities from China and India fuels a surge in investment.

In today’s speech on “Mining Booms and the Australian Economy,” Mr Battellino said past booms had not lasted more than 15 years before petering out. He dated the start of the current boom to 2005 but said this episode could last longer.

“On this occasion, the growth potential of countries such as China and India suggests that the expansion in resource demand could continue for an extended period, though this will depend at least to some extent on the economic management skills of the authorities in these countries, not to mention our own,” he said.

He noted that mining investment as a share of gross domestic product was much higher in this boom than in the past and that the boost to Australia’s terms of trade had been much larger. Both the price and volume of Australian exports, like iron ore and coal, had risen strongly during the current upswing.

So, until the wheels fall off China, we stand to make a lot of money, I guess.

More Fear And Loathing In China

Here’s an interesting article.

China has so far survived the global economic downturn with hardly any of the agitation many once feared it might cause among unemployed workers or jobless university graduates. The economy grew at a very robust-sounding 8.7% last year and is predicted by many to be on course for similar growth in 2010.

Sweeping changes are due in the senior leadership in 2012 and 2013, including the replacement of President Hu Jintao and of the prime minister, Wen Jiabao. But if a struggle is brewing, signs of it are hard to spot. An unusually high-profile campaign against organised crime by the party chief of Chongqing municipality, Bo Xilai, has raised eyebrows. Some speculate that it is part of a bid by Mr Bo, who is a Politburo member, to whip up popular support for his promotion to the Politburo’s all-powerful Standing Committee in 2012. An online poll by an official website chose Mr Bo as the “most inspiring voice” of 2009.

But Andrew Nathan of Columbia University in New York does not see this as a challenge to the expected shoo-in for Xi Jinping, the vice-president, as China’s next leader, despite Mr Xi’s failure last year to garner the leading military post analysts thought would form part of his grooming. Li Keqiang, a deputy prime minister, still looks set to take over from Mr Wen in 2013.

Against this backdrop of political stability and economic growth, the most credible interpretation of the government’s recent hard line is that the forces pushing its leaders towards greater liberalisation at home and sympathetic engagement with the West are weaker than had been hoped. Nor is there any sign that the next generation of leaders see their mission differently. As Russell Leigh Moses, a Beijing-based political analyst, puts it: “The argument in policy-making circles where reform is concerned is ‘how much more authoritarian should we be?’ not ‘how do we embark on Western-style democracy?’”

Hmmm. It really comes down to control and China’s Communists are trying to retain their Totalitarian stance on civics while trying to go capitalist on the finance which is inevitably leading to these kinds of issues. It would be nice if China could come off the ledge a bit and be more tractable but the Communist Party is essentially using the threat of the West to keep its control going which in turn means it benefits greatly from being intractable.

I guess it’s a kind of massive irony that the free market world has come to depend so much on what is essentially a 1930s-style totalitarian regime.

Climate Change Articles

Another cool entry in The Economist.

Phil Jones did not say there had been no global warming since 1995; he said the opposite. He said the world had been warming at 0.12°C per decade since 1995. However, over that time frame, he could not quite rule out at the traditional 95% confidence level that the warming since 1995 had not been a random fluke.

Anyone who has even a passing high-school familiarity with statistics should understand the difference between these two statements. At a longer time interval, say 30 or 50 or 100 years, Mr Jones could obviously demonstrate that global warming is a statistically significant trend. In the interview he stated that the warming since 1975 is statistically significant. Everyone, even climate-change sceptics, agrees that the earth has experienced a warming trend since the late 19th century. But if you take any short sample out of that trend (say, 1930-45 or 1960-75), you might not be able to guarantee that the particular warming observed in those years was not a statistical fluke. This is a simple truth about statistics: if you measure just ten children, the relationship between age and height might be a fluke. But obviously the fact remains that older children tend to be taller than younger ones, and if you measure 100 of them, you’ll find the relationship quite statistically significant indeed.

What’s truly infuriating about this episode of journalistic malpractice is that, once again, it illustrates the reasons why the East Anglia scientists adopted an adversarial attitude towards information management with regard to outsiders and the media. They were afraid that any data they allowed to be characterised by non-climate scientists would be vulnerable to propagandistic distortion. And they were right.

There’s this really cool one in the SMH.

If there were a typo in The Origin of Species by Charles Darwin, would that nullify the theory of evolution? If an email were stolen from one lung cancer specialist that showed frustration with tobacco lobbyists, would this prove that all cancer specialists around the world were in a conspiracy to destroy cigarette companies? If a tennis ball is filmed only after it bounces and is moving upwards, does this disprove the law of gravity?

Obviously the answer is no, no and no. Yet the deniers of climate science desperately hang on to a few drops of so-called proof to claim the entire ocean of evidence is flawed.

These minor errors do not invalidate the work of scientists from around the world who are screaming from their combined rooftop that human activity is warming the planet. Hundreds of scientists from more than

100 countries whose work is peer-reviewed by hundreds more are apparently all in a global conspiracy to make us pay more for electricity. The insects they study that are migrating earlier or travelling higher up mountains due to enhanced global warming must be in on the conspiracy, too.

Do people who question climate change science do so in other areas of their lives? Do they refuse a doctor’s advice when seriously ill? Do they question aeronautical engineers before they board a plane? Or do they mistrust science only when it points to global catastrophe?

Witty dude, this guy.

Cate Blanchett Says…

… The arts is more than just another industry. Here’s the link.

Anyway, what else do we know, and have studied and measured? We know that countries with strong cultural identities demonstrate greater social cohesion and on and on and on. Basically, all sorts of studies have been done, key-performance indicators, measured and indeed graphed.

But there is more. We do more than all that. We must remember the arts do more than just that. We process experience and make experience available and understandable. We change people’s lives, at the risk of our own. We change countries, governments, history, gravity. After gravity, culture is the thing that holds humanity in place, in an otherwise constantly shifting and, let’s face it, tiny outcrop in the middle of an infinity of nowhere.

What I’m saying I don’t think anyone would deny, and yet no one seems prepared to constantly value that we give people the chance to make sense of the experience of their lives, their brief lives, and the tool to communicate that unique sense in another person or people.

This insistence on the importance of experience itself is a feature of these witnessing books and these witnessing lives, an insistence that history is not a concept or a force, but the brief, limited, unimportant lives of ordinary men and women involved in the business of just getting from one day to the next, just this, repeated a million times over.

Nice shot, Cate, but it isn’t terribly convincing.

This country is about growing stuff and selling it, or digging stuff up and selling it or about building houses and living in it while we keep jobs to do with growing, digging or building. The rest of Australia is just servicing these simple needs. Anything above and beyond that, like a cultural industry is for wankers and should not be tolerated. Such pretensions are considered part of the old world and are considered part of the evils of the class system and more toffee-nosed wankers getting by without doing a hard-day’s work growing or digging or building. That’s the Australia I know, and that’s the way most people want to keep it as far as I can tell; so Cate, your observations are falling on deaf bogan ears.

You’re lucky you don’t get killed like you were some stray dog in Leichhardt, like this poor sod.

Leave a comment

Filed under General

Money Blues

Greenback As Reserve Currency
Here’s a cool column about money.

The all-pervasive US dollar is essentially the world’s pricing marker for all leading goods, commodities and trade.

Given that, it can be argued that the world’s currencies in effect derive their pricing by and large from the US dollar.

They are “de-facto derivatives” of the US dollar.

In this light, it is difficult to see how any of these currencies can usurp the underlying US dollar reserve in the foreseeable future, if at all.

Interestingly, none of the proponents are offering any notion of “sound” money as an alternative, but rather a redistribution of the current currency pie.

In effect the same game but a different split of the spoils.

But herein lies the dilemma: all the fiat currencies rest on essentially the same operating model.

An argument that the US dollar is doomed is an argument that the fiat currency model is doomed.

Instead, these non-reserve currencies are likely to face collapse first. The US dollar will be the last to go; a US dollar collapse would drag all into the abyss.

Maybe the real argument being presented by the pundits is whether imminent doom is awaiting the fiat currency system.

On this question, history is not very kind. It teaches us that all fiat currencies eventually reach their intrinsic value, zero. Some sooner than others, but the same fate awaits all.

So perhaps it is time to actually question and debate the nature of the money we currently use. One thing is for sure, the debate will eventually occur.

Yes. But it seems everybody who says fiat money is bad wants to tie currencies to something – most often gold – that you get the feeling that it’s gold pundits wanting their assets to inflate in value in some proportion to the scarcity of gold.

Of course in the mean time, the Chinese are selling of US bonds.

CHINA sold $US34 billion ($38 billion) worth of US government bonds in December, raising fears that Beijing is using its financial muscle to signal that it has lost confidence in American economic policy.

Figures from December show that, following the sale, China is no longer the largest overseas holder of US treasury bonds. Beijing ended the year with $US755.4 billion worth of US government debt, compared to Japan’s $US768.8 billion.

Since the subprime crisis that began in the US grew to engulf the global economy, China’s leaders have repeatedly expressed concerns about US policy. December’s $US34 billion sell-off made only a tiny dent in Beijing’s total holdings of US assets, which amount to well in excess of $US1 trillion when stakes in American companies, as well as treasury bills, are taken into account.

But the news intensified concerns about China’s appetite for bankrolling ever-widening American deficits. The Premier, Wen Jiabao, told reporters last year: ”We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried.”

When Timothy Geithner, the US treasury secretary, visited China last June, he sought to reassure his hosts. ”The US is committed to a strong and stable international financial system,” he told them. The Obama administration fully recognises that the US has a special responsibility to play in this regard, and we fully appreciate that exercising this special responsibility begins at home.”

But Allan Meltzer, an economics professor at Carnegie Mellon University in Pittsburgh, said China’s bond sales should be a wake-up call for Washington. ”The Chinese are worried that we have unsustainable debt levels, and we do not have a policy for dealing with it,” he said.

China’s sales contributed to a record drop in foreign holdings of short-term debt in December. Net overseas holdings of short-term bills fell by $US53 billion.

So doesn’t this mean that China is actually not a believer in the Greenback? It’s been said fr years that the day the Japanese sold their US bonds was the day a lot of this system was going to unravel. Japan for its part has held on to their US Bonds essentially to keep the whole mess going, even when it’s put a big hole in its own economy to do so. The smart thing would have been to sell those bonds in the early 1990s. That would have burst quite a few bubbles around the planet along the way. By not doing so, Japan really played nice and is paying the price now.

You can see why China would want to sell out while it could… but what are they going to hold instead?

1 Comment

Filed under General

Let The Bubble Burst?

Property Bubble Talk

I expect banking shares to be in trouble when the property bubble bursts. Here’s an article that says the Australian property bubble is looking to burst at some point.

Yet on Wednesday one of the unpalatable and less obvious side-effects of Australia’s inflating house prices – now deemed by the Economist magazine to be overvalued by 50 per cent – became clearer. The rise in the number of Australian households who are in so much difficulty with their mortgage repayments that they are facing selling up – or being sold up – is continuing its ascent beyond the 200,000 mark reached in November. By this year’s end, some 270,000 Australian households will be in severe mortgage stress.

Defaults on mortgage repayments will rise to 35,500 by December – considerably above the present yearly total of about 28,000 households.

All in all, the report produced by the Sydney consultants Fujitsu predicts that by the end of this year some 637,000 Australian households will be under some form of mortgage stress.

No one knows how Australia’s housing asset bubble will end. But new American research points to an unexpected and unnerving phenomenon for banks caused by a wave of more belligerent borrowers caught in a property bubble burst.

Many are now more likely to lose their emotional attachment to their homes and walk away, tossing the keys to the bank, even if they have the capacity to keep making mortgage repayments. One published estimate found that 17 per cent of all Americans who default on their mortgage repayments no longer choose to try and tough it out – they walk off.

Except in Australia, you sort of wonder if the terms of the mortgages allow people to walk off. I thought I was being a little bearish when I last read some papers that indicated that the Sydney real estate prices could fall 40%. If The Economist thinks it’s over valued by 50%, then it could easily be a 33% drop. So expect it to go down 33-40%.

Most of the people who bought properties this side of 1998 are going to be quite peeved when the bubble bursts. If they got locked into unrealistic mortgages to support unrealistic house prices they bought into, the backlash and recriminations and blame-throwing is going to be something fierce. Which explains not only how the First Home Owners’ Grant helped to shore up prices, but why they couched the policy in such a way so as to help the Baby Boomers keep their property values up through the early part of the GFC. Now that those policies are being wound down and the stimulus is being wound down, things could get interesting.

I’m actually not looking forward to seeing this one shake out. The way it shook out in Japan was totally ugly.

Leave a comment

Filed under General

Rubbishing Pop

Crap For Consumption

Here’s a corker.

Stravinsky famously noted that “most art is bad”. He didn’t go on to point out that this is the almost inescapable consequence of its genesis, for art – real art – is not about rehashing the tried and true, but rather of smashing the rules and creating something never seen before, most examples of which must inevitably fail.

The new new is not the last new improved. No painter today would be congratulated for painting an impressionist masterpiece. This is not to try to invert our sense of success. Failure is failure, and true artists are excruciatingly aware of their mistakes and miscalculations.

These same observations cannot be made of what is sometimes referred to as popular culture, the sort of thing you find when you turn on the television or radio, or turn up at the local leagues club. While art is the province of the unexpected and the challenging, and likely to provoke incredulity and even rage, popular culture is the domain of the familiar, the mawkish, the sentimental and the trite and bears the same relationship to culture in general as a McDonald’s hamburger does to food.

You might think I’m trying to draw a distinction between high and low art, but I’m not, because there is no low art, there’s just rubbish. Rubbish with its own stars and award ceremonies, rubbish with a sense of its own importance even, but rubbish nevertheless, being foisted on the rest of us in all the myriad ways people working for the great corporations of the world can come up with to flog us their crap.

..and so it goes, on a true tirade against the populist entertainment branch of culture. It’s a great read. The blistering attacks on the middle ground are merciless. It feesl great to read, even though um, I do my work in entertainment.

Such snobbery, such dismissive contempt can only come from somebody who works in theatre as opposed to say, cinema. It’s easier to be snobby about the arts when you live at the rarefied end eating mist and living on fog. It’s easier to diss pop music if you’re a classical musician; It’s easier to diss comic books if you’re a painter; It’s easy to diss jazz ballet if you’re a classically trained ballet dancer; and so the list goes for the canonised artforms we are willing to accept as authoritative epicentres of our culture.

Then again, pop culture doesn’t help itself. Take Television. TV is always made for the demographic and everybody has to admit before they write anything that in Australia, the median demographic consists of 14year old girls living in the outer suburbs of our major cities. She is ignorant and not terribly bright, but she has hours to burn and so she watches the most TV of anybody. And so most things on TV are made to please her; and you have to admit it would be a losing proposition to try and win over her viewership with something cultural.

Equally, radio has the same issue and so we get …Kyle Sandilands. Need we say more? Yet this phenomenon stretches across all the arts.

If an artist wants to make a living out of their art, they have to win a portion of a market that is spending money and this is why the market may not ever get the best out of the artist – they’re busy trying to please somebody, most likely not you. It’s a tough proposition. So this bit was very interesting:

Must art be relevant? Topical? Educative? Uncomfortable? Perhaps not, but when it cannot be any of those things because the sponsor won’t like it, then we’re in trouble. And we are in trouble. The dumbing down process we have been experiencing now for many decades has been successful, as is clear in everything from the inability of people to retain more than a couple of soundbites to guide them through the intricacies of democracy to the complete ignorance of the scientific process recently demonstrated in the so-called climategate scandal.

People read less, understand less and retain less than they did even 20 years ago. The mindless pap of undemanding popular culture is as responsible for this as the fast food industry is for the obesity epidemic. We are becoming a culture of fat, stupid know-nothings bombing the rest of the world into submission in wars we only understand in the comic book morality of Kiefer Sutherland’s 24.

It’s a little sad that what started as a great aesthetic slap across the face devolves to an argument about morality. I would contend that the arts have naught to do with bloody morality. The claim that society’s dumbing down is at fault is also disingenuous. The market is what it is. If somebody spend money on something for entertainment, they are right to expect to be entertained. The truth is that society has become stingy about art – especially the high-falutin’ variety – simply because it doesn’t deliver the expected service.

Let’s face it, I love Glenn Gould, but not everybody who plays Bach is Gould. I love modernist painting, but not everybody who attempts it is Picasso. So, it’s a brash, brave argument but ultimate faulty. The punters do get a say in what gets made for good reason. Even the crap of American/Australian Idol has some meaning in it – even if I can’t spot what it is either. Heck, even McDonalds has utility.

Leave a comment

Filed under Cinema, Film, Jazz, Literature, Movies, Pop, Prog Rock, Rock, Television