Wednesday, 28 November 2012

The Greatest moment in Australian sport

It was in 1973 when Australia eventually made the World cup.

I saw all the home matches  and watched the away matches on TV
Go to the end and watch Jimmy McKay's magnificent goal.

I was cheering on the streets when we had won.

( This took some finding.)

Second best moment  this....

The main reason to be optimistic on the US

Why should anyone be optimistic on the US economy.

One word. Housing.

The main reason is that the distressing gap will narrow.

Now if Republicans can just regain some sanity!

( yes I agree there is no sanity clause)

Monday, 26 November 2012

Catherine Bell V Stana Katic

I prefer Catherine but my youngest son prefers Stana.

In the end it doesn't matter.  they are both beautiful.

Please note neither are blondes. both have wonderful skin texture. Bell because of her persian origins and Katic because of her eastern european origins.

Know your Subject

A person called Samuel J writes about why the budget should be in surplus here.

Unfortunately neither he nor anyone at that blog have any idea of the subject they are attempting to talk about.

He in essence makes four points.

  1. There is strong employment growth,
  2. There is record Terms of trade
  3. There is strong economic growth and
  4.  he also asserts NAIRU has increased by 0.5 percentage points.

  • Firstly employment growth is not strong. If it was strong unemployment would be falling and the employment to population ratio would be rising.
  • The Terms of trade are not at record levels. Even when they were high taxation never got to levels we saw under the previous government as we has seen before. Obviously Samuel has never looked at a budget or MYEFO paper. As we saw last time tax revenues are at levels we have seen since the early 90s.
  • As we have seen previously it is NOMINAL economic growth that it important to budget numbers not real economic growth. at present real GDP is running above trend but nominal GDP is running below trend.
  • Treasury has not made any statement anywhere that NAIRU has risen.If it had the RBA would not have cash rates where they are.
One might say the writer is the Tahir of blogging on this record but I couldn't possibly comment.

Sunday, 25 November 2012

Blogs on my sidebar

Why do I have the blogs on my sidebar?

Let us go through them in no particular order.

Noah Smith's Noahopinion ( get it?) and David Glasner's Uneasy Money are fantastic for pure intellectual stimulation into areas of economics one sometimes mightn't venture to.

Brad De Long and Paul Krugman are simply too good to miss from a Keynesian perspective.

Mark Thoma's Economist view is also too good to miss. He picks up any interesting article written anywhere. Indeed read this blog first.

I have been following Calculated Risk since the credit crunch. It is a must read if you want to know about US housing.

Econbrowser features Jim Hamilton and Menzies Chin. some good econometric work is always around.

Simon Wren-Lewis writes the Mainly Macro blog and it is good for the UK and Europe.

Macroblog is the blog of the Federal Reserve of Atlanta with Dave Altig  and always proves interesting.

John Quiggin's blog provides commentary mainly on Australia.

Examining Australia then one should read both the Kouk's Market Economics ( sadly too few articles as his wife is suffering from cancer) and Ricardian Equivalence. ( the commenters are of high quality as well.)

Peter Martin is an old mate and a great economic journalist and has a great blog.

Harry Clarke is good for examining environmental economics.

Mumble is a great blog for politics. Simon Jackman is useful for looking at politics from here and afar.

The Pollbludger is great for Australian politics.

Finally Mark the Graph will graph anything he can straight away.

Thursday, 22 November 2012

Fast bowlers

Now this bloke was a fast bowler and I do mean Fast bowler.

By comparison Pattinson or Morkel are medium pacers

Wednesday, 21 November 2012

Public debt

I am astounded by Andrew Robb's latest  proposal.

I will make a number of points in no particular order.

First of all  it appears He has no idea of our obligations under Basel 111 as the Kouk outlines. ( go to his links of previous articles as well.)

He obviously has no idea of the history of this. Peter Costello had the 'brilliant' idea of reducing government bonds. The market very quickly told him they wanted government bonds. It is much better price corporate bonds off government bonds than swaps which is what happened when government bonds became too scarce to do this.

It is impossible to say crowding out is occurring when spreads have narrowed to what they have today.
It is also pertinent to add here that the corporate sector has been reducing debt as quickly as possible since the GFC.

This brings us to the macro-economic problem. if you are attempting to reduce net debt as much as possible then you are saying you will be detracting a lot from GDP. This means nominal GDP will be hit hard and it has been below trend for some time ( unlike real GDP).

This means you are expecting the RBA to take up the slack. It means taking up a lot of slack given the $A propensity to stay well above levels you might expect given where commodity prices are (which is contractionary ).

All in all Andrew Robb hasn't really thought through his thought bubble at all. Also remember he was one of the main men responsible for the irresponsible costings


Australia has a problem with gambling.
The Productivity commission has examined this issue.

I have a personal issue here. My parents lost about $500k due to someone gambling it away on poker machines.

It seems to me that the industry is being contradictory.  if problem gamblers are only a small proportion of people who gamble then revenues will not be affected. if they are a large proportion ,as the PC says they are , then they will affect revenues.

The Industry say that they are a small proportion but also they will affect revenues quite a lot!

Thus I have little sympathy for clubs who say they might be strongly affected by curbs on how much a person can gamble.

This is exacerbated when they claim most of their revenues go to community projects.

This claim will only hold up when this revenue only comes from people who gamble responsibly.

Test Cricket and football

The Second test starts today at Adelaide.
Let's hope we do not hope another road for a wicket like we saw in Brisbane.

We need a contest between bat and ball.

Socceroos looked good against South Korea in a friendly recently.

New young players for the most part looked good. We have too many old players in the team and it shows up in the defence.

Musical Interlude

I saw this as part of a Creedence Clearwater Revival special a long time ago.

A great band which have lost two of their key players. Their drummer and bass guitarist.

Both the Steve Cropper and Donald 'duck' Dunn were part of the Blues Brothers.

Industrial Relations

Every so often you want to write about a subject but then find out someone has beat you to it.

Grog's Gamut has a good article about the fallacies behind the whining on the labour market.

He also has a good article on why the is no wage breakout as all.

Wages are doing little, Industrial disputes have done little and of course NAIRU hasn't thus changed.

Like most of the time the critics of the labour market have no evidence to back up their claims only slogans,

Monday, 19 November 2012

Fiscal Policy

Let us examine fiscal policy again.

Just to be helpful this is what CBA research has come up with.

                                                              12/13  13/14   14/15
                                                                 $b       $b        $b

Budget balance at May budget          1.5      2.0        5.3
changed economic parameters            -1.9    -5.0      -3.9
implied starting point                            -0.4    -3.0       1.4
policy decisions                                      1.4     5.1       1.9
budget balance                                        1.1     2.2       3.3  

So the major problem has been economic parameters changing for the worse. In this we know what it is. Taxation revenues being much lower than one would expect. The government has made policy decisions which have meant the budget would be balanced.
This means fiscal policy has been contractionary for some time now. In other words it is detracting from GDP growth.
The public sector is making way for the private sector as Keynes said they should at this stage.
Moreover it is not detracting too much from economic activity as to produce a slowdown.

It is highly noticeable that most critics of fiscal policy never address this potential problem. Implied in their criticism is that fiscal policy should be much tighter. In some cases very much tighter.

It is not in the nation's interest to create either a slowdown or a recession.

At present cash rates are 3.25% and it appears the RBA is wary of letting them go below 3%. The $A has not fallen to levels one should expect given where commodity prices are.

The world economy is a different place to one would normally expect so tighter fiscal policy other than what has been announced does not seem appropriate at present.

Thursday, 15 November 2012

pot pouri

here are a couple of posts which are interesting

Dave Altig from the Atlanta Fed makes some interesting points about the 'fiscal cliff.

Noah Smith  writes about Macro-economics and freshwater 'thought'

Jonathan Portes writes about bond yields , budget deficits and public debt.

Calculated risk has the latest USA inflation CPI readings

Wednesday, 14 November 2012

Gregory Peck

Gregory Peck starred in three of the best movies I have seen.

To kill a Mocking Bird was a movie based on the law and the court room. It still stands up well today.

Twelve O'Clock high was a thinking man's war movie. Peck changes a US squadron of bombers based in England . He eventually goes nuts though.

A Big Country is the thinking man's western. I couldn't do the movie justice so just watch it and enjoy it.
no gunfights though. Great cast!

Favourite TV Programs

I have four programs I just love and I came to all of them by accident.

They are:
The Virginian,
The Mentalist,
Castle and

If you are curious about any of them then just look up wikipedia.

The Virginian is a Western but a sensible one. The title comes from the foreman of the ranch that the series delves on. We never get to know his name. Other characters in it was Trampas, Steve Hill, Randy Benton, Emmet Ryker ( only character not be to be on the ranch and my favourite).
One thing they had in common was that they were all fast  guns.

The Mentalist is about Patrick Jane a former 'psychic' who assists the CBI by being able to read people and situations. The head of the team is Teresa Lisbon. A gal with a terrific body but a plain face.
The series is all about Patrick Jane (our own Simon Baker). There is no 'love interest at all.

Castle is about a a best selling author ( Richard Castle) helping out the NYPD. The head cop he works with is Kate Beckett. If you do not believe hairstyles can be the difference between a woman being attractive and a babe then check out Stana Katic's hairstyle. Once she has long hair she is absolutely gorgeous.
Naturally Castle and Beckett like each other and eventually fall for each other.

JAG is about lawyers in the US Navy. Sarah McKenzie is front and centre played by Catherine Bell. without doubt she is the most beautiful woman I have seen. She plays a woman who is both tough and vulnerable. The Series ended with her and Harm getting married.

(Catherine Bell is the only female I have seen who looks much better with short hair. Stana Katic is the typical female who looks much better with long hair. They are both beautiful women.)

The Virginian had a bad last season. Called the men of Shiloh it completely changed the emphasis of the series and it wasn't hard to understand why it stopped.

JAG on the other hand had a terrible first series. Once love not sex became the main ingredient for its characters and we saw both investigations and courtroom scenes it got better and so did the scripts.

Not much to say on the other two but they appear to be both near the end.

I only saw the Virginian on early morning on 7 mate before hurrying to work. I taped it after that. I haven't seen all the episodes.

I watched JAG because my wife like it. I like it as well. I have seen all the episodes. Last episode was a bummer.
I caught the Mentalist only by seeing an add for it on TV and since I liked Simon Baker from the Guardian I watched it. My two boys love it.

I caught Castle late one Sunday night and have been taping it ever since. I have to catch up on earlier episodes.

Budgets the cyclical and Structural parts

The budget has two basic parts to it.

The cyclical and structural parts. Both are estimates.

the largest is the cyclical. In good times there is more taxation , less social security etc.

The smallest but most significant is the structural part of the budget. It is this part that plainly either boosts the economy or takes away from it.

Treasury has naturally written on this.

The key part to remember is that changes in the structural part of the budget will effect the cyclical part of the budget.
Done the right way it combines with it. As the economy gets stronger and stronger you need to boost the structural surplus. This means the cyclical surplus will also be large.

What they have done in Europe is the complete opposite.

One little point is the effect of the structural part of the budget will be determined by whether it was deliberate or not.

If, as in Europe or even here, the structural deficit increased because tax  revenues have changed and are considerably less then the effect on GDP will be negligible or even nought. If a Government spends money on infrastructure for example then the impact will be considerable.
The best way to see what way fiscal policy is going is to look whether it is adding or detracting from GDP.
If the structural deficit has increased but the budget is detracting from GDP then you know the structural deficit isn't worth looking at.

Greece is a good example to look at when looking at these two parts of a budget.

I said earlier they are only estimates. Ireland is the best example of what can happen with estimates. Before the GFC hit them Ireland's budget was in surplus and the structural deficit was around 0.5%. In essence it was balanced. (It should have been in surplus.)

After the GFC hit the country that small deficit suddenly rose substantially to  around 6% of GDP.
This was all due to tax revenues or lack thereof.
Yet fiscal policy was detracting from GDP!

Monday, 12 November 2012


Who are the best people to look at when examining polls here in Australia.

I think possum is possibly the best however another good one is  here.

Either way with around one year to go until the next election we do not know with any confidence who will win.

We do know from 'qualitative polling' ( better known as using focus groups) that the hyperbole Tony Abbott used when criticising the ETS is now working against him as he turns out to be quite wrong.

Gillard is getting a bit of a lift but not enough as yet.

Thursday, 8 November 2012

Test Cricket

I love test cricket.

This blog is the best blog about cricket.

Budgets, costings etc

A lot of people say why is there a budget deficit when there is/was a commodity price boom.

These people have never examined budget papers. the latest MYEFO has this for Taxation as a % of GDP


Being very conservative compare the yellow episodes with the blue ones.

If Swan had Costello revenue figures he would have few deficits at all. Costello would have few surpluses if he had Swan's revenues.

What is most important in examining future budget figures is nominal GDP. This has been lower than trend in recent times. Whereas real GDP has been higher than trend.

So the change from deficit to balanced budget has come from expenditure.

Joe Hockey has a bad memory regarding budget costing leaks .

There is nothing wrong with the government getting Treasury to look at Opposition policies.

The Opposition can now use the PBO to cost their policies.There is now no excuse for their costings debacle from the last election.

Wednesday, 7 November 2012

Nate Silver and The US Election

I think Robert Waldeman writes about how we should be quite impressed with Nate Silver the best.

Quite clearly people who do not understand basic statistics and desperately wanted Romney to win, like the crowd at Catallaxy, were shown to be complete imbeciles.

So too the pundits. Just take a peek at Brad De Long on the sidebar.

Republicans now have to decide who is more important. Those that can count or those that cannot!


this is interesting

nuther one.

Grog's Gamut puts an Aussie perspective on the election.

yikes I forgot our own Simon Jackman doing the same stuff Nate Silver did for the New York times with the same accuracy for the Huffington Post

Last comment but this is a must read if you are a wonk on this.

Monday, 5 November 2012

US elections

With regard to economic policy.I agree with Noah Smith.

Four years ago I agreed with Paul Krugman that Obama was being naive in believing he could get Republicans to do anything on a bipartisan basis.
That turned out to be true. I find it amusing to hear Republicans criticising Obama for 'not reaching out' to them.

Obama's mistake was being far too conservative with regard to the economic stimulus he asked for.

One really doesn't know what Romney would do. Would he indulge in 'expansionary austerity' or simply boost the deficit as both Reagan and Bush did in good times. I think probably the latter.

Sunday, 4 November 2012

Roy Buchanan - Hey Joe

I now know how to do this!!  more to come

Who will be the next US Prez?

I cannot be original so I will outsource my thoughts to Paul Krugman.

In essence if the polls are accurate it is another four years for Obama.

Thursday, 1 November 2012

A comparison of Blogs

I will say nothing.

Simply compare this article  by John Quiggin and its responses to this article by Steve Kates and its responses. Please note Peter Whiteford's contributions in both.

Actually I will hint at my thoughts.

Here is Steve Kates writing complete nonsense about polling in the USA.

Compare to say Ezra Klein.

Steve Kates works at RMIT? how does this man have a job?