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The Australian Prime Minister announced yesterday that the Government would guarantee all deposits in Australian Banks, Building Societies and Credit Unions. Right move. The previous cap was $20,000 and it only applied to banks.

I don’t have hard figures, but I heard the word “cash hording” on the ABC last week in an Australian context, so although there may not have been a run on the banks, some people were obviously taking cash out. Our current term deposit is coming up, and we were thinking of taking at least some of it out in cash as well, just in case, particularly given it’s invested with a credit union and didn’t have Government support until now.

The scheme though doesn’t seem to extend to other institutions that take money, for example finance companies (the motoring associations for example offer investments to raise money for lending), so we’re still going to see a cash deficit in non bank lenders to some extent.

The second part was $4 billion acquiring Residential Mortgage Backed Securities. This at least props up some of the non-bank mortgage market, so it’s a good move.

There’s also this line “The Australian Government will also guarantee wholesale term funding of Australian incorporated banks and other authorised deposit-taking institutions,” which the press and PM’s office is saying will help banks raise capital. Good move.

The announcement addresses some of the bigger problems facing the Australian market: cash deposits, and mortgages, but it seemingly ignores two areas: non-mortgage finance and non-bank finance. Backing up deposits means that there won’t be a drain on cash at hand to lend, but it doesn’t fully address the roll-over issues facing banks on external debt instruments used for domestic borrowing (the wholesale funding guarantee does in part), and it doesn’t address to a large extent business finance. We’ve got to presume that borrowing capacity will reduce, and the flow on to that will be lower business growth. Maybe the Government’s largess is incapable of going that far.

Australian Prime Minister Kevin Rudd today told the nation that aside from super (401ks in American) taking a massive hit, everything else was a.o.k. Our banks are solid he says. We’ll weather the storm etc…

So why did the dollar hit 67cents exactly?

News.com.au says its because London hedge funds think they’ll be a downturn in commodities, the bread and butter of Australia’s exports. And yet, does that really fully explain a drop from near parity at the beginning of the year, to 67c? (at the time of writing, it had gone back to 69c). It was around the 85-89c range when I was in the US late August.

What am I missing in Australia’s financials that our politicians aren’t telling us, probably to prevent panic locally? Something the market knows about, but the media either hasn’t picked up on yet, or isn’t in the loop.

Could it be debt exposure? True that Australian banks are more reliant on depositor funds for lending than those outside Australia, but from a figure I saw earlier this week (possibly in Crikey) 30% of lending capacity comes from inter-bank lending, most of it external, and the big four all have serious roll over issues ahead of them for existing credit lines (roll overs that simply won’t happen because they won’t be able to borrow more money), that will likely restrict their ability to lend. Could this be the pandora’s box we’re not hearing about, but the market is factoring in? that not only could our banks end up in some strife (maybe not terminal), but with a serious reduction in their capacity to lend that will result in a massive decrease in growth in this country, worst still perhaps a recession?

I’m not qualified to answer this question, but she who must be obeyed, who despite working in PR actually has a degree in economics can’t work it out either. It’s like a jigsaw puzzle where you don’t have all the pieces, and without those pieces, you cant work out what the real picture is.

But I do know something: we definitely aren’t being told everything. If things are as great and rosy compared to the US that the media and Government is saying, explain the dollar. Surely if we were in such a great position, and the US was as screwed as everyone is saying it is, then our dollar wouldn’t be plummeting against the greenback, at least as much as it is.

Two episodes in, and it looks like Top Gear Australia is in some serious trouble, dropping 250,000 viewers to come in a 674,000 viewers and last in its time slot.

It may be an SBS show, but this is an SBS that does advertising now, and it relies on viewers to work that; low viewers, high production costs = not going to last.

So what’s wrong with Top Gear Australia? The answer is quite simple: it’s just a car show.

The original and best Top Gear out of the UK is a car show as well…but it’s also entertaining, and it’s also great to watch visually. I’m not a “car person” as such, I don’t follow motorsports, I don’t have a big or flash car, and my technical knowledge of cars is limited, but I watch every single episode of Top Gear.

There’s the entertainment angle. I know the Australian producers didn’t want to copy the UK format and have their own Jeremy Clarkson, but it’s the character narrative that makes Top Gear UK so special. From Clarkson’s buffoonery, through to the interaction with May and Hammond, and even their own characters, playing on their own strengths and weaknesses that just works. The Australian hosts don’t have the same chemistry, nor are they nearly as entertaining.

Then there’s the visuals. Top Gear UK is visual porn. Beautiful cars, beautiful and interesting scenery, often combined with some fun challenges as well. It’s part travel show, part personal diary (side stories around the key story). It’s also the editing as well: the way the visuals are presented, mixed, and with the music and voices overs added. Even if you hate cars, there’s something in Top Gear UK you will enjoy every episode. Top Gear Australia tries hard, but it doesn’t come close visually.

There’s also the content side. Top Gear Australia just did Ford vs Holden, a giant yawn for me, but something rev heads would have loved. On other cars the focus in on the tech specs, the functionality, typical of people heavily into cars, but not quite as interesting to others. Top Gear UK provides a full narrative, from Clarkson’s humorous comparisons, through to practical use cases. You do get the specs, but its part of a broad picture, that is more accessible to more people, even those who might not fully get the value of the specs provided. You don’t have to be a brain surgeon to know that 1000hp is powerful for example, but you don’t need full discourse on how that’s important to rev heads.

My only compliant: I wish Top Gear UK wouldn’t take such a long summer break…I need a Clarkson hit 🙂

On September 8 I wrote a post observing a noticeable difference in Australian politics of late: that voters were sick and tired of negative politics, are were looking for positives, and this showed in recent election results. I put the question to the American test, noting that Obama was running a far more positive campaign than McCain, asking “Have voters in Western democracies had enough of the politics of old?”

The ultimate judge of that will be the November US Presidential election, but along the way, something interesting is happening.

After watching the first US Presidential debate live (I still find it amazing that these are being showed live here…on more than one channel…although naturally I streamed it) I called the debate for McCain by a nose on the grounds that he, in my opinion, delivered key points more decisively, and that after the debate I could recall more of McCain’s key points than Obama’s. Obama spoke less in sound bites, and spoke in more depth about the issues, and he presented a more positive take on what he’d do, vs McCain’s preference towards negatives. I recall someone on FriendFeed saying that Obama came across like a Professor, and that Americans don’t vote for intellectuals.

Everything I’ve learnt from years in politics, both as a two (and a bit) times staffer, a one time campaign manager, and serving numerous other times on campaign committees, writing propaganda and the occasional speech, along with some reasonable experience in marketing (including a degree in the subject) told me that McCain won that debate.

I was wrong. Every poll showed that Obama won. It was a triumph of substance over style, of a positive message trumping a more negative one.

Today we had the VP debate. Anything other than Sarah Palin breaking down and blubbering Alaska Alaksa for an hour was going to be a positive for a candidate who a growing chorus of pundits on both sides of politics have labeled unfit for the role. She did good. In fact, in terms of establishing herself as not being completely clueless it was a good win.

Some are arguing that Palin won the debate. The right is arguing that she connected with voters, that her key messages struck home, and that her “folksy” appeal defined her as someone people could connect with, even if her grasp of the English language is at times lacking.

Biden on the other hand came over as solid, articulate, and perhaps at times too academic. His delivery of key points was at times great, but at other times he let the finer points get in the way, and some of his arguments were too academic for the audience. If Obama looked like a Professor, Biden looked like the 90 year old Dean of the University.

This debate I called for Biden. If it had been held 3 months ago, I would have called it the other way.

The polls, Fox aside, support the notion.

The electorate is changing.

At a time of economic crisis, and with wars on several fronts, the American people are looking past the politics of old, the politics of negative spin and sound bites, and want something more. It can be the only explanation for Obama and Biden winning both debates among swinging/ undecided voters in particular. Intelligence and a deep understanding of the issues are less of a crime in 2008.

There’s also the defeat of narrative + negativity over positives and intellect. Notice how McCain in the first debate referred to his experience in Vietnam, and how Palin said that only McCain knows how to fight and win. Being in a POW camp deserves respect, but it doesn’t give you a special ability to run the free world over your opponent. Notice Palin’s constant references to Alaska, and hockey moms, and her disabled child, having 5 children, running a small community etc etc…great narrative that may connect on some levels, but it’s no longer a vote winner over what you are capable of delivering and what your policies are.

Change starts from the ground up. If the polls continue, and Obama wins in a landslide (or something close to it), the people of the United States will join others in Australia and the United Kingdom in finally rejecting the negative politics that became the defining factor of all three in the late 90s and into the first decade of the 21st century. We’ll only know in November.

Worst Ruddy speech ever?

September 26, 2008 — 3 Comments

Apparently the PM spoke at the UN yesterday. The Oz has the full transcript here. The takeaway: look at the sound bites. One line statements after one line statements. Waffles McRudd. Soundbite over substance. Worst Ruddy speech ever. Howard may not have been perfect, but he at least understood that delivering a speech required substance..any substance at all.

WaMu gets siezed and sold in a fire sale, the $700billion bail out hasn’t passed yet, there are no large investment banks left on Wall Street, China has either completely cut off funds to the US, or in part depending on the report. I even read on FriendFeed that the Saudi’s were holding back money as well.

No matter the outcome, history in the making.

Lets ask David Gray 🙂

If things really get bad, there’s always REM

Game Over.

September 25, 2008 — 11 Comments

Chinese banks have been told to immediately stop lending money to the United States, according to Reuters.

Game over.

No. 1 lender of finance to the United States: China. According to AFP, China is the world’s biggest holder of foreign reserves and second biggest holder of US treasury bils. Take Chinese money off the table, $700 billion is likely not enough.

The takeaway line?Ǭ†from “New America Media:

“In times of hardship, China and the United States seem to have traded places. The United States seems to be moving closer to a Communist economy in the wake of the financial implosion, while officially Communist China is hurtling towards capitalism.”

Brilliant Politics

September 25, 2008 — 6 Comments

So your poll numbers are tanking so badly that even FoxNews gives Obama a 9pt lead. Your strategy of hiding Caribou Barbie from the evil liberal press has backfired by taking her out of the spotlight, resulting in the positive buzz shifting away from her. You’ve got a serious case of foot in mouth, making one mistake after another. Things are looking grim, and as the economic crisis continues, Obama looks more the man, so what do you do?

You suspend your campaign, and you spin it as a being a statesman like decision for the good of the country, days out from the first debate. You then call on your opponent to do the same, shifting the spotlight back on him, and hope that if he refuses, you look like you’re putting your country before the election.

Brilliant politics.

The only question now though is will voters buy it? McCain had to try something, and this is a bold gambit. If it works the way they hope it’s going to work, Obama looks bad and McCain gets a boost.

However….people might see through the ploy in a campaign that has been thick with lies and deception. But then again, while some might see through it, it’s the swinging voters in battleground states that count. Only time will tell.

Jim Cramer on MSNBC calls end of the world if the $700 billion bailout isn’t approved. (via Donklephant). Still, bailing out the industry doesn’t fix the problem, it prolongs it. No one wants a great depression, but likewise the concept of bailing out private enterprise from their own muck doesn’t sit right.

Hurricane Ike

September 13, 2008 — Leave a comment

While waiting for the obligatory “global warming is to blame” commentary, we’ve got the storm covered at The Inquisitr: Hurricane Ike Live.