Monthly Archives: June 2014

Crimson ProjeKCt @ The Hi-Fi – Sydney 27/Jun/2014

21st Century Touring Band

King Crimson have had so many member changes there have even been off-shoot bands that play King Crimson material but in a different vernacular such as the Crimson Jazz Trio. It shouldn’t be surprising to see Adrian Belew fronting a band that features Tony Levin and Pat Mastelotto playing King Crimson numbers. Rumour has it that founding patriarch Robert Fripp never wants to tour Australia so this is about as close to seeing King Crimson live in Australia we’re ever going to get. The other 3 members Julie Slick, Tobias Ralph and Markus Reuter round out the formidable sextet and the rest is prog rock, loud and raw. Beware the dinosaurs.

This is the first time I know of that some incarnation of King Crimson are playing their numbers in Australia. I have waited for this for over 30years. Kind of goes to show Australia is still a cultural backwater.

What’s Good About It

King Crimson have so many different phases to match the number of personnel who have come and gone. This band does not feature any of the members from the the pre-1974 bust up that prompted Robert Fripp to leave the business for 2 years and then move to New York, and yet their renditions of the 70s classic numbers such as ‘Larks Tongues in Aspic Part I’ and ‘Red’ are played immaculately. The post 90s double-trio numbers get a good working out as well, but the real meat and potatoes of the King Crimson material lies in the tricolour albums ‘Discipline’, ‘Beat’ and ‘Three of a Perfect Pair’. Having missed all of King Crimson’s live phases and career,  this is about as good as it gets, and it’s pretty damn good fare.

What’s amazing about this incarnation of Crimson and its repertoire is that they play it with such gusto and for something like 3 hours, you certainly get your money’s worth. You come to realise that the recorded version of the music is just a shadow of this roaring red-blooded rock act. The music played live is far less mannered and much more rudely energetic and in your face. The performance bristles with energy.

The jaw dropping chops, the astounding array of sound and technology, the astonishing artistic choices, the tight control that gives way to sonic abandon, the abstraction, the integration of arrangements, is all entirely mesmerising. You sure don’t notice the three hours fly by.

What’s Bad About It

Musically, nothing.

The venue lighting guys were terrible. They didn’t light the front of the stage properly so we watched Adrian Belew in silhouette, back lit from the stage lights above and back, all night long. It was ridiculous. It was like some high school revue effort and I’m pretty sure there are some high school revues that are lit better than that.

What’s Interesting About It

The twin drumming by Pat Mastelotto and Toby Ralph was a revelation. It made me wonder what it might have been like with the B’boom era double trio setup with Bill Bruford, but in most part Mr. Bruford wasn’t missed. The polyrhythms, the syncopation, the dialogic interaction, the experimentation with sounds and extended spaces all built to a tremendous sonic punch. You don’t see bands with two drummers often but when you do, it changes the perception of rock music. It’s a testament to their musical nous and intelligence that the drum interactions come over so well.

The night had a few surprising moments. Tony Levin and the Stick Men half of the double trio played ‘Breathless’ off Robert Fripp’s solo album ‘Exposure’ (a touch stone for gonzo guitar as well as punk metal, musique concrete and Frippertronics). Amazingly, it sounded very much like the recorded version. Tony Levin was doing the Robert Fripp bits on the Stick and Markus Reuter was doing the Tony Levin bits from the album. Pat Mastelotto was doing a great interpretation of Jerry Marotta.

The encore decidedly wasn’t ’21st Century Schizoid Man’. The band opted to go with ‘Elephant Talk’, and ‘Thela Hun Ginjeet’.

Adrian Belew – Guitar Rhinoceros, Twang-bar King

I had the exquisite pleasure of standing right in front of Adrian Belew all night long, so I got a close quarter look at how he goes about doing his thing. The most extraordinary thing – amongst many extraordinary things – is how well his guitar keeps tune because he rides the whammy bar hard. He rides it with his palm, he taps it with his ring finger and pinky, he gently shimmies with it and dives right down so the knob hits the neck pickup. It’s like what you imagine Hendrix to have been like with the whammy, but it’s more. More of everything, all rolled into his musical expression and style. He elicits overtones and harmonics from very different places to where other more conventional players elicit them and he bangs and whallops and bends the body and to get the whole guitar to resonate. It’s avant-garde guitar. It’s what Pete Townshend probably wanted to do but couldn’t so he opted to smash his guitars instead.

It’s not just the whammy bar thing. It’s the loops, the effects, the abstracted shards of noise, the piano sounds off the guitar synth, the brutal distortion tone that comes and goes with a tap of his foot, the seemingly infinite array of tones coming from the Parker Fly, and then there’s the actual playing technique that has to be seen to be believed. It’s like he’s the jester in the Court of the Crimson King as he foot taps and finger taps and twiddle knobs in between playing complicated phrases, all with gusto and panache. He’s one of those people who just invent things and it’s perfect. It’s like how only John McEnroe plays tennis like John McEnroe. Only Adrian Belew plays guitar like this. I’ve seen Andy Summers at equally close quarters and Adrian left Andy for dead.

…and he sounds just like on the records. People use the word ‘awesome’ way too lightly to the point it has lost deeper meaning, and that’s a shame. Adrian Belew live on stage is the proper true definition of ‘awesome’.

Tony Levin – Stick Monster

I have a personal pantheon of bass heroes. A lot of them are prog rock guys from England that I natter on and on about – Squire, Entwistle, Wetton, Karn… The big exception is Tony Levin who is just about dead centre in my pantheon but I don’t talk about him much because I can’t begin to emulate what he does. I can come at the other guys because they play bass guitar as a lower register extension of guitars. Tony Levin plays the Chapman Stick – tapping away furiously – and when he plays a normal(-ish) bass, he plays the strings with percussive extensions on his index and middle fingers. I’m not sure what those extensions are made of, and how he goes about getting that tone he gets, but it’s a monster tone.

Seeing him live is a revelation. Especially because I’ve been reading his name on my fave album covers for most of my listening-collecting life starting at ‘Double Fantasy’ by John Lennon. Yes, he’s the bass player there. He’s on Peter Gabriel’s solo albums; Pink Floyd’s ‘Momentary Lapse of Reason’;  and he’s even on ‘Anderson Wakeman Bruford Howe’ – if you can’t wrangle Chris Squire, you get Tony Levin! – not to mention the 1980 onwards King Crimson albums; and he sounds different every time out on all those records. There is no particular Tony Levin sound you can nail him to (unlike say Chris Squire who can be honed in on with a Rickenbacker 4001 bass) or a Tony Levin style except the aesthetic surprise you get when you hear his sound. And all the while, you can sort of play his bass lines on a normal bass guitar to a point but it’s just not like anything anybody else does. It’s completely original and unique.

So yeah, I finally got to see Tony Levin live, got totally blown away, and walked away with very few hints on how to do that stuff.

The Adrian Belew Power Trio

Which brings me to Julie Slick on bass over on stage right; She seems to know exactly what to do to emulate Tony Levin. At one point Tony got his Stick caught in his belt and so he sort of stopped playing and adjusted his belt mid-song while Julie Slick kept the bottom end engine room going. It was seamless.

Adrian Belew’s half of the double trio played a few non-Crimson numbers and were wild.  They are ecstatic players. But if you can play like that you’d be ecstatic too.

Random Thoughts

Adrian Belew is a gentleman. They say “never meet your heroes”, but every gonzo guitar player should have the joy and pleasure of meeting Adrian Belew.

Tony Levin looks like Walter White. Just much nicer and more approachable.

Julie Slick wore these really funky shoes with one foot blue and the other yellow, adorned by dogs.  They were cool.

No Robert Fripp? No Problem. Markus Reuter had those chops down. He even looked a little like Robert Fripp with the glasses.

Pat Mastelotto looked a lot more imposing in person than in photos. He has a lot of power.

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Today’s WTF Moment

The Clive Palmer & Al Gore Double Act (Is-This-Even-Allowed?-Edition)

Man, this is really weird. Al Gore, he of the uncomfortable truth, is in Canberra, standing should to shoulder with none other than windbag millionaire Clive Palmer selling an ETS. Clive Palmer’s pitch is pretty whacked out and boils down to 2 things: PUP will voe to repeal the carbon tax if the energy producers are mandated to return that money to households. PUP will then want an ETS in place to replace the carbon price, and this ETS should be contingent upon other nations namely America and China undertaking a version of their own.

It’s creepy because  Clive Palmer is essentially using Al Gore’s post-VP star to cast his repealing in a climate-friendly direction. It’s very odd because I can’t imagine the flipside scenario where say, Paul Keating would stand shoulder to shoulder with Nancy Pelosi in the US Congress, talking about things in the US polity. Doesn’t this sort of break a bunch of diplomatic protocols? How do we know the CIA isn’t trying to influence Clive (or that they already haven’t) who we know is given to conspiracy theories that feature the CIA? You also sort of wonder where Al Gore’s head is at, making this appearance. Since when is he a friend of the crackpot wing of Australian politics?

Pardon me while I try to wrap my head around this bizarre spectacle.

The PUP leader said the government’s Direct Action policy was “a waste of money, at a time when families, pensioners, young Australians, stay at home mums and single parents and indigenous communities are facing unfair measures in the budget, to increase excise and indexation is not the answer”.

Climate change was a global problem, he said, and Australia had to play its part.

He said the Palmer United senators would move, while supporting the repeal of the carbon tax, to establish an emissions trading scheme.

The scheme would only come into effect when Australia’s major trading partners established similar schemes.

“This measure cannot be defined as a financial measure, it will have a carbon price [of] zero,” he said.

A price on carbon would then be introduced down the track.

Mr Gore said Mr Palmer’s announcement was an “extraordinary moment in which Australia, the US and the rest of the world is finally beginning to confront the climate crisis in a meaningful way”.

He cited President Barack Obama’s recent moves to reduce emissions in the US and pilot programs of cap and trade schemes in China as evidence the world was moving to tackle climate change.

“All of these developments add up to the world moving to solve the climate crisis and that is why it is so significant that Clive Palmer has announced that his party will support the continuation of the renewable energy target, and the continuation of the Clean Energy Finance Corporation,” he said.

“While I will be disappointed if the immediate price on carbon is removed because it is a policy which I believe to be ultimately critical to solving the climate crisis, I am extremely hopeful that Australia will continue to play a global leadership role on this most pressing issue.”

The event comes ahead of Mr Palmer’s meeting with the Prime Minister on Thursday morning.

Well, that’s pretty nutty, but a good kind of nutty. Like a Marvel comic book movie moment when two unlikely characters turn to one another and work for the common good. The villain in all this is now Tony Abbott, he of the abysmal popular support. He can’t possibly be enjoying this turn of events. 1st of July is going to bring in a bunch of people who are going to toe this Palmer United Party line, endorsed by Al Gore. If Tony Abbott’s going to get to keep his promise of ‘repealing the Carbon Tax’ (just typing that makes my eyes hurt), it’s going to cost him a pound of flesh from inside his skull. He can no longer count on the conspiracy-nut Palmer to play along with the climate change sceptic script. It turns out Palmer is a conservative nutbar, but clearly not the same brand of conservative nutbar as those in the Coalition government.

What worries me is how the SMH editor (yes, that fool) is busily talking up the Palmer United position. It can’t be that good if it impresses that little mind.

These Guys Can’t Do Diplomacy Either

That sucking, gurgler sound you’re hearing from Canberra, that would be the Abbott government just sucking up the joint.

A few weeks ago, The Abbott government started disputing the terminology ‘occupied’ in reference to East Jerusalem. It’s hard to fathom why the Australian Government would want to break ranks with the rest of the world and come down hard in favour of Israel and against the Palestinians, but that’s what they did. And the world heard about it – especially the Arab speaking world – and took notice.

Pleiades gave me a heads up and it seems Bob Ellis seems to think that the jailing of the Australian Journalist Peter Greste was a reprisal for this moving of the terms by Australia. No wonder our pleas to have Greste released ave fallen on deaf ears- and our government is too stupid to understand just what has happened.

What’s amazing is that just as with the budget, this government has kicked an own goal in the diplomacy stakes; and the joke is on us because they weren’t even asked to offer up an opinion. They just blurted out something that has ended up boomeranging right back.

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Equal Opportunity Rhetoric Is A Bit Rich

 Anything To Make Themselves Look Good To Thesmelves

One of the more illogical things from this Abbott Government – and there are many illogical things about this government, but bear with me a little – is this notion that it wants equal opportunity but it’s not interested in equal outcomes. The apparent reasoning goes equal opportunity is good because everybody is different and everybody is talented to different levels so if the opportunity is equal then the outcome would be different in proportion to the talents and efforts of the participants. This in turn justifies the notion that outcomes from equal opportunity may still be unequal, but that’s okay because the government delivered the front end of the process. If there’s a bit of inequality around, that’s because some are more hard-working than others and some are more talented than others and so the rhetoric goes.

Equal outcomes on the other hand are evil because it takes the incentive away from the talented or hardworking or the talented-and-hardworking (often they insert their narcissistic self-image here) and holds them back to put them at the same outcome as the lazy dole-bludging scumbucket commie youth (and this is where they insert a an old image of the Paxton brothers). This rhetorical flourish has been going on for some time now and nobody in the ALP ranks has actually gotten up to say “if you want equal opportunity by that account, there should be 100% death duties” because that would be the ultimate in a level playing field.

Or they should abolish Private Schools. Or they should abolish family trusts. All these things would bring things much closer to equal opportunity. As it is, the rich get to have so many ways to make opportunities unequal, and the Coalition is in favour of all those things. Yet, there’s no logical way this coalition government can truly be standing by its own rhetoric covering equal opportunity. Furthermore, because nobody on either side of politics is willing to pursue the reductio ad absurdum of creching all the children born in our society like say, the ancient Spartans did,  we can safely say that the Coalition don’t (and won’t and can’t) even believe in equal opportunity the way they describe it, any more than the ALP is pushing communism. That is to say equality of anything is not really on the agenda for the Coalition. Everything they say about equality is a flat out lie to cover up what they want to do which is to entrench privilege. Let’s not forget George Orwell called this rhetorical double-cross Doublespeak.

Inequality in our society is rising quickly partly because we keep going back to these same tired, illogical rhetorical cliches about equality in our society. If John Hewson is willing to say the gap is too big to be papered over by the rhetoric of equality of opportunity and not outcomes, then we can safely say there’s something pretty unequal going on.

But the former Treasury economist, IMF adviser and investment banker does find the Abbott government guilty of serious unfairness: “They raised expectations that the budget would be fair, but it it’s very inequitable. They said everyone would share the burden, but they clearly didn’t except for the cosmetic 2 per cent levy” on people earning more than $180,000 a year.

“That’s 1 per cent of the income for a higher earner, but they’ve made sizeable cuts of 10 per cent to 15 per cent for people on low incomes” through welfare changes. “It’s a significant hit to people on low incomes,” he says.

About two-thirds of the adult population agrees with Hewson’s charge of unfairness, according to the polls. But what of Joe Hockey’s rejoinder to the complaint that the budget is unfair? He’s said that government isn’t supposed to deliver equality of outcomes, but should aim for fairness of opportunities.

“There’s too big a gap between equality of opportunity and equality of outcomes,” replies Hewson.

 It’s a weird moment in history when you find yourself agreeing with John Hewson, having vehemently voted against him back in 1993.


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Politics As Quackery

Moneyball This, Mr. Beane

Politics in Australia is detestable. It’s pretty detestable in many parts of the world so even wasting one’s breath about it is nauseating, but the problem with politics is that it is the problem that won’t go away. The rise of the political class makes you wonder if we’re even going about it the right way. After all, if the point of politics is a career, much like a profession like Medicine or Law, then it’s already anti-democratic. It means not anybody can run for office and get in. Of course we find the system is rigged so most anybody can’t gate crash the important discussions that set policy.

It takes years and years of toiling in the system and inching one’s way up the greasy pole. That’s how all of them get there, and woe betide the blowfly who does manage to stumble into the room.

The reason I mention this is because Ricky Muir – he of the roo poo throwing – gets a really bad press. There’s no way Ricky Muir is going to get good press because just as Pauline Hanson before him, he is an unpolished media performer with nary an education worth squat. His opinions (and yes he’s entitled to have them even in office) are ill-informed and ill-formed by most standards. But the problem is, what exactly are these standards? They’re standards created by the expectation of media performance. The media would say it’s the standard we as the people demand, but on some level I’m very sceptical about this. For the most part,  I would be interested in Mr.Muir’s opinions should he care to express them coherently.

What makes it worse is that our basis for comparison is the long list of politicians we see every day. On ay given week during rating season we’re shown the idiotic media spin competition that is ‘Q&A’ where political hacks take a swing at gently lobbed questions from a neutered audience. We make bad infotainment out of these things and we think proper discussion has taken place. The fact of the matter is months upon months of episodes of ‘Q&A’ failed uncover what exactly the Coalition had in mind when it came to power, prior to the election. This would suggest we should really disabuse ourselves of this idiotic notion that the media is here to contribute to our democracy when in fact we can point at season upon season of ‘Q&A’ as vivid proof it does no such thing.

Truth of the matter is, we don’t have any way of assessing how ‘good’/effective these politicians are at doing their jobs. We have no basis for comparison, no tangible way of measuring efficacy, no way of knowing anything. It is like we’re watching actors in an improvised avant garde play with no discernible script or direction – but we think we know what a good performance or a bad performance is on the basis of having watched lots of these performances by other actors. What passes for talent might be no different from things that get actresses cast on the basis of their ‘fuckability’. Hence, Ricky Muir presents us with an unique opportunity to find out just what is the replacement level politician. The day Ricky Muir starts looking polished we’ll know one thing for sure, anybody can be in politics, and what these politicians do is no great shakes at all.

I’m not writing this to defend Mr. Muir – who sounds just stupid enough to vote with Palmer United to repeal the Carbon Tax and the Mining Tax, but to point out just how abstracted our expectations have become for politicians. We’re displeased by the blowfly who got into to parliament because he’s no better than the yobbo down at the shopping mall. But we’re equally displeased with the politicians who give good media performances as they dismantle what is important to us in our democracy. It seems to me that we’d better start getting our priorities straight.

Kevin Rudd was a polished media performer but he turned out to be a chaotic Prime Minister who lost support from his own party within a term. Julia Gillard was nowhere near as good a media performer, and somehow let the single-minded fatuous Tony Abbott beat her about the head with broken promises. We put it down to the ALP not being able to communicate their message, but maybe there was something even deeper wrong with us, the electorate. After all, we voted in Tony Abbott and his  ideologically unhinged Coalition. Clearly there’s something deeply wrong with the way we’re picking our politicians. Otherwise we wouldn’t be beset with the feeling that we’re not being given real choices when we stand in the ballot booth at every election.

Lobbyists Are Frontrunners

Imagine you could listen to the legislation passing before anybody and talk to people passing the legislation before anybody, and could tell them you represent a block of the economy that is x% of the economy and you could wield influence. Then you have ordinary citizen Joe and Josephine Blogs with their one vote and the ability to go visit their MP and have whinge about the $5 fluctuation in some Centrelink payment. realistically speaking, who do you think is going to influence the course of democracy more? Now imagine a whole bunch of these lobbyists traveling in packs and invading Parliament House to pitch their positions. It wouldn’t be long before what they’re asking for passes for policy – because we certainly know that Liberal Party can’t seem to formulate ideas on their own – and ends up hurting the majority to help the few.

The Lobbyists aren’t only corporate lobbies. The ACTU and the trade union movement that funds and backs the ALP is essentially a lobby as well – ad Julia Gillard’s great loyalty to them saw to it that they had special access to the highest elected office in the land. When some of these union bosses turn out to be like the people who ran the Health Services Union (like Craig Thomson), it’s hard to take the line that the Labor Party is somehow here for the greater good. The credibility gap essentially killed Gillard’s tenure as Prime Minister; and by the same token, the closeness of Tony Abbott to his corporate supporters essentially sinks Abbott’s credibility.

Still, it has been going on for many a year and it will go on for many a year more, so we probably should just get used to it, but all the same, one of the most anti-democratic forces in this country are the lobbyists. It’s just amazing to see a government that gleefully gives in to the lobbyists at every turn.


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What The MP Writes To Us

Craig Laundy, Federal Member Of Reid

The Federal budget has been such bad politics, the MPs have been asked to go stump for it in their electorates, trying to explain the extraordinary political stink bomb let off by Tony Abbott and Joe Hockey.

Laundy LetterIn the cover letter, Laundy insists that there is a budget emergency. He cites in his letter that Australia’s debt – Federal government debt – is 200billion for which we are putting ourselves further into debt at the rate of 1billion more to pay the interest rate on the 200billion. Just looking at the numbers, it seems he is saying we’re paying 12billion a year on 200billion which is about 6%.p.a. This can’t possibly be right because the RBA has its rate at 2.5% – the lowest in the history of the RBA – so even the numbers don’t stack up in first glance. Australian Treasury Two-year note yield rose significantly today and was 3.74% today. So either Laundy can’t do the maths or the people who ghost wrote the letter for him can’t do maths.

It’s almost as if these people want to cut the budget because not only do they know they’re no good at maths, but also that they want to do away with complicated compound interest rate calculations from budgets forever, and that’s the only reason a surplus looks so-o-o-o attractive to these munchkins. It’s not for their mendacity (which they are mendacious, but we’ll let that slide for a moment) but their willful stupidity and fearlessness in admitting it, that they even mount their position in this way.

Debt – bad. Surplus – good. D’uh. Complicated compound interest calculations – bad. Surplus – good. D’uh and double D’uh. The worrying thing is that just because they insist it’s 6% doesn’t make it 6%.

And you worry about people who want to shortchange you 2.26% even in a hypothetical discussion. That’s a 60.43% inflation in the interest rate right  there. Leaving the total dodginess of the sums aside, economists have determined that running a budget surplus is going to be a 1% drag on the GDP growth, so the assumption that surpluses are good for economic growth is completely stupid.

Laundy then argues that the people who argue that there is no emergency are “engaging in political spin”. It’s a firm assertion, but most sensible people would see it the other way around – that it is Mr. Laundy and the Coalition who are busily “engaging in political spin” to somehow force-feed us the unpalatable budget they have concocted. After all, if it weren’t such a shitty budget, why would they have to come up with a super glossy A3 brochure as well as this cruddy letter?

The sentence which follows is even more strained:

What use is having the lowest mortgage in your street if you not only can’t afford the repayments, but have to ask the bank to borrow more money to pay the interest on your loan?

In a way, perhaps yes, it’s interesting they picked that as a metaphor. First of all, likening government debt to being underwater with a mortgage is deeply suspect. We’re not all working to pay off Parliament House – we’re paying taxes so the government can do things. That’s not a small difference. That’s a big difference. You worry about people who conflate their arguments – especially straight after they’ve tried to con you out of 60.43% of the interest rate return. After which he insists for the third time “be in no doubt this is a budget emergency and it is clearly unsustainable.”

I understand that the Abbott government is doing its best to overstate the dramatic need for cutbacks but coming up with stupid metaphors isn’t exactly persuasive. The letter says “something has to be done”. Well, even if that were true, the case certainly hasn’t been made that something should be what the Coalition is proposing in its budget.

Glossy But Crappy

Glossy Brochure Of Slogans

The chinless wonder with the gerbil charm in the bottom left is our local honorable Federal Member for Reid. Enough to make your knees weak with the fear that a rodent may be gaffer taped and inserted into one of your orifices by this man.

The Coalition never really sent out what their exact policies were, prior to the September election. They were going to stop the boats and repeal “the Mining Tax” and “the Carbon Tax”. They repeatedly told us there would be no cuts to health or education. So what does the glossy brochure tell us?

1 We’ve secured Australia’s borders

2. We’re fixing Labor’s debt and deficit mess

3. We’re laying down a strong foundation to grow the economy and create more jobs

Well. I. Never. Would’ve – in my wildest dreams – thought they would do such things. Not only did they not have policies worth writing about – they had handy slogans instead – they’ve lied about what they would do. They’ve raised taxes, cut health and education and they’ve gone bananas in trying to shut down science and technology development in this country, not to mention done their best to shut down agencies dealing with climate change. That bit was predictable.

What was not predictable was that they would then send out a glossy brochure that hurls even more slogans off the page.

The problem with democracy is that we are always held hostage by the lowest common denominator of intellect. The dumb-and-ignorant, amassed in numbers will always beat the individual thinkers with their puny one vote each. And thus sloganeering has replaced proper discussions of policy. It’s as it is with Gresham’s law where bad currency rids us of good currency, bad ideas have rid us of good ideas and bad thinkers have rid us of good thinkers. What’s remaining is the media spectacle that is the Abbott government and their flunky right wing nutjob media commentators. You never would have thought Australia would sink this low, but … it has. Let the gerbil-baiting begin!





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Where QE Has Taken Us

The Central Bank Conundrum

In the past week, Mario Draghi put through the policy of negative interest rates. He said the idea was to push savings out and into investment. This has had scribes scribbling around the world as to exactly what it means, but parsing through the writing it appears the most dreaded thing for central banks is asset deflation. It appears that we’ve hit a point in history where we just can’t let asset prices fall because too many things are tied into the prices as they stand, even if they are bubble prices. In other words, the whole Zero Interest – and now Negative Interest policy has been a desperate attempt to keep everything in their leveraged positions.

To this end, central banks around the world have been running what amounts to a price-keeping-operation, partly through printing money, partly through bluff, but also by buying equities. It turns out central banks have bought 29trillion in equities around the globe. ‘Abenomics’ in Japan has been running a gambit where pension funds have been buying equities at the behest of the government. 29 trillion is a lot of money when you consider the size of the US economy is 17trillion. No wonder investors around the world have looked at prices of shares and said a bust is due. Yet amazingly share prices of blue chips have kept soaring. Well,they would if Central Banks are buying them with printed money.

Now I’m not one of those people that bangs on about the failing of the fiat currency but any way you look at that situation and you have to ask, should equities be a one-way bet? But the Central Banks do this because they need share prices to stay high.

Zero Interest rates have been in place for many countries and the effect of that has been to amplify the carry trade where the US Dollar has surged out to ’emerging economies’ in search of yield as well as re-inflate the property bubble in places like California and London. Once again, asset prices are getting supported over just about any other consideration. So much so that a hypothetical interest rate rise of 0.5%would jeopardise US$13trillion worth of derivative products. Again, we’re not talking chump change here.

The problems of falling asset prices would be the banks being unable to cover all the positions. Take Deutsche Bank, which has  200trillion dollars worth of exposure to derivatives as an example. If asset prices deflate even a little, there will be massive movements in those derivatives and would easily wipe out Deutsche Bank. And if Deutsche Bank should fail, the fallout form that would be a whole bunch of banks going down with it.

And so we’re stuck with Central Banks busily trying to re-inflate asset prices whether they be shares or property or bonds. They’re printing money to do it, which means inflation is going on pretty hard out there somewhere. The proper analytical explanation of inflation is going to be too much money chasing around too few things. If you print enough money there are too few things by definition. If the printed money is then used to buy the share market, it seems the inflationary effect will be amplified. Similarly if money is  printed to buy the bad debt derivatives from the subprime loans crisis, there will be too much money chasing around too few proper investment vehicles. What happens i the things that are affected the most are not houses and fancy commodities but things like grain and foodstuff? Doesn’t that sort of destroy the purchasing power of people living in the third world? Won’t this bring massive social stability around the globe? And still the Central Bankers are trying to re-inflate the asset bubbles.

It’s not the speculation that is the problem; it’s the process of simultaneously destroying value while preserving prices.

When the GFC came about, there was much discussion about moral hazard and the US TARP bill which was an emergency loan to banks to shore up their bottom lines. We threw precaution to the wind and supported TARP because without it, our banking and our  superannuation accounts would have been shot. Since then banks have received the mos support from Central Banks in order to set their books straight. The bankers even drew up  Basel II and Basel III agreements so that banks could be held to a standard to lessen systemic risk – or so the argument went. And yet the net effect of all this has bee the destruction of the middle class in America (with the possibility looming for Australia yet), with the super-rich getting ever richer. The guy on Main Street got taught a lesson moral hazard at his own expense, after having his life savings taken hostage. The guy on Wall Street simply got a green light to continue doing the stupid things that got all of us into such a sticky strait.

So 6years-going-on-7, I think it’s a good time as any to ask just how well all of this is working out. The debt of the world combined sits at 720trillion dollars. The world economy combined is somewhere around 70trillion. We’re not easily going to pay off that mountain any time soon. That being the case you wonder how long the whole charade is going to go on. We might have kicked the can down the road nicely back in 2008, but we’re running out of road.

Discounting Inflation

One of the more pernicious things that has happened since sometime in the 1970s is that governments have changed the way they measure inflation. The net result of doing so has been to under-measure the real inflation out in the market place and claim inflation has been tamed. Again, this was particularly true in Clintonian America of the 1990s, where they invented some strange practices, which have since been adopted by the rest of the world as a ‘standard’. The basket of goods used to measure CPI has changed so much since the 1970s that it really bears no relationship to the figures that have come before. It’s been made to look more palatable by adding in luxury goods as well as items imported from overseas instead of items produced in the first world, which of course means we’re importing the deflationary pressure from the third world.

Obviously it works out much better for Central Banks and governments if they can turn around and point at lower inflation figures. The problem is that we are printing money in an awful hurry in many parts of the world, and at the same time China is running out of cheap labour which meas there won’t be a whole lot more deflationary force to be imported from China, the world’s second largest economy. In fact the Australian Financial Review had a headline in the last week saying just that; that the RBA has erred on the side of too low an official interest rate.

This is of course kind of ironic because on the one hand central banks the world over are fighting to have more inflation and no deflation on asset prices. If they simply went back to measuring the CPI the old way, they can probably see just how much inflation there exist sin the current system. Also, by under-measuring inflation, they’re setting themselves up for lower interest rates and thus looser monetary policy which of course does lead to more inflation. The longer the low interest rate regime runs, in a sense we’re making real a greater inflation without having the means to measure it. We’re already way too comfortable with the low interest rates. Even without the discussion on moral hazards, you’d think the central banks have got to figure they have one on their hands.

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‘X-Men: Days Of Future Past’

1.7 Gigawatts And It’s Back to …1973!

The X-men franchise is getting on a bit. It’s always been pretty good,what with the original crew headed up by Hugh Jackman bearing the standard. Some of the entries across the 7 or so films have been less interesting than the others, but overall, the X-men movies are the movies that keep delivering for Fox.

Spoiler alert. Don’t proceed if spoilers would ruin it for you.

What’s Good About It

1973. Come on, you thought I wouldn’t say so? It’s a little bit like ‘X-men does American Hustle’. It even features Jennifer Lawrence who was quite convincing as a denizen of the 1970s in ‘American Hustle’. The scenes of a very hairy Wolverine and Charles Xavier driving around in a Cadillac and wearing brown leather jackets, sporting sideburns was quite fitting. The mimesis of the film is Part ‘French Connection’, part ‘Twelve Monkeys’, part ‘Dick’, but also part ret-conning the ‘X-men First Class’ movie on to the older X-men movies, this one has some interesting moments of character interplay. And really, it helps a comic book movie greatly if the characters give you something more than just smashing through stuff.

What’s Bad About It

I’m not sure the movie makes sense by its own logic. There’s something of the story that leaves you a bit miffed when at the climax the bad future fades and disappears. Only Wolverine and Charles Xavier know what happened but there’s no real objective evidence for it having happened. In that sense it shares the problems of “it was all a bad dream” ending.

What’s Interesting About It

I undersold this movie in the introduction above. It’s actually a great sentimental movie, pulsing with the love for these characters. It’s downright melodrama, but there’s enough of an edge to it to let you forget how melodramatic the story is. The best bits of the film are things like the scene where Wolverine makes the young Charles promise he will put together the X-men and find Jane Gray, Scott and Storm. If we didn’t know how important that was – having seen the  earlier films – then how could we ever weigh up the importance of Wolverine’s plea?

Some people won’t like the sentimentalism of this nature, but after 6 other X-men movies it seems acceptable to have one rendition where everybody is being brought together for great stakes, and for once we get to see past the comic book superhero facade. It’s interesting that after 5 films and 1 cameo, Hugh Jackman is exerting such moral authority with his Wolverine character. It’s interesting when the young and old Charles Xavier talk. It’s interesting when Magneto takes matters into his own hands twice, once as an old man and once as a young man and each time he fails.

The Suffering Of Magneto

Magneto is actually the emblematic character in the X-men movies. The whole cycle of movies started way back when with a beginning rooted in Auschwitz, where we first saw the mutant powers of a Jewish boy who could magnetically manipulate metals, remotely. Having survived the Holocaust, Magneto is hyper-motivated not to suffer the same fate of being on the end of an extermination campaign just because he is a mutant.

Effectively he is facing a pogrom for the second time in his life when the film starts, so in some ways his determination to fight for his cause is far more understandable. As villains go, Magneto’s motivation is possibly the most sympathetic. The irony is that he himself is some kind of Nietstzchean superman, so when he decides to take matters into his own hands, he has essentially given in to the inner fascist implanted into him in his childhood. It’s totally tragic, because it’s almost the moral mirror image of ‘Schindler’s List’ – to survive, he thinks he has to put together a list of people who have to die.

As with all the installments, it is Charles Xavier who has to appeal to his compassion and sense of justness to rein in the runaway fury, but no matter how many times I go back to these X-men movies I can’t but help think that may be Charles is fundamentally wrong about the universe he inhabits. If there were mutants with such powers, there may well be a struggle for survival and Magneto would be entirely justified in being as radical as he is. It’s a scary thought that puts me in the shoes of Peter Dinklage’s character Bolivar Trask. It’s actually quite uncomfortable to watch at times.

Tolerance And Takei

On a tangential note, the film has had mixed press about its racial politics. The film kicks off with a multi-cultural, multi-racial bunch of mutants in the future, but they give way to the same old heroic white people in the middle where it counts. I get the criticism for this sort of critique but on another level, it’s not like it’s the only film that’s guilty of populating the important story arc with heroic white people. It’s probably some progress Hollywood wants to do things this way than not at all.

Importantly, the film references the original series of Star Trek, which must have been the grand-daddy of all tolerance texts in the history of American screen culture. We see Captain Kirk babbling on about a time travel scenario, and it cuts to George Takei as Mr. Sulu. Mr. Sulu and Lt. Uhura broke huge ground for non-white actors, and consequently the position on tolerance in American society itself. Not only has George Takei stood up for the Asian community, he’s been a vocal activist for the LGBT cause, so it’s very evocative to see the ‘Star Trek’ cuts in this film, and reflect on the distance traveled since 1973.

“Dickie’s Such An Asshole”

Inevitably, the film features a fictional Richard Nixon. This portrayal of Nixon doesn’t have the punch of other portrayals; he’s barely there. The gag of the tape recorder in the drawer getting turned off was funny, but otherwise it was a very odd portrait of Nixon, largely untainted by Watergate. I guess we need to be tolerant of a President in history full of interesting foibles too.

The more interesting aspect of going back to 1973 probably is the fact that the last years of the Nixon administration were the years in which faith in the American government was destroyed. not only did America lose the Vietnam war – which is of course touched upon in the story of this film, Nixon ending the gold standard essentially cut the world’s currencies adrift, and with it unleashed a multitude of valuation and therefore moral relativism. Part of the reason why the 70s hangs so heavy over this film as well as ‘Captain America: Winter Soldier’ has its roots in the disintegrating trust in the public institutions that ensued.

The end of the monolithic government started with Richard Nixon and Watergate and really has culminated with Wikileaks and Snowden-in-exile. Is this all Nixon’s fault? Most definitely not, but it is an interesting thing to see both Captain America and X-men round in on the Nixon administration as a cornerstone of its re-tellings of history. In that sense, it has a great deal in common with ‘The Watchmen’ where the reign of Nixon’s Presidency does not end and goes into the 1980s. On one level, it arguably did.


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