Everyday here on SS, THE BLUE AND RED teams argue on what could have, should have and what should have been done to the Australian economy. The reality is that the bankers in Wall St have turned from Capitalism to Corporatism.. They don't gamble on the performance of a business anymore, but amongst each other with trillions of $$$$$$$$$$$$$ of derivatives. Some estimates is the amount in Derivatives is $600 trillion +++. IMO, I believe that when the derivative domino falls at the first bank, the rest will soon follow. Then the world's economy is in deep poo, including Australia. Who will be to blame? The red or the blue team here in Australia? IMO Neither. Australia used to ride on the sheeps back. Now it is the Panda. If China or the USA goes down so too will Australia and it will not make any difference who is in power. Make you and you family safer by being aware that the fiat system with derivatives may well end very soon. Regards Errol 43
Hockey gave AUD$8.8 billion to the RBA in October 2013. The money was so they could buy more foreign currency. AUD$1 was buying USD$0.95 at the time. AUD$1 is buying USD$0.89 at the time of posting. Assuming the RBA blew the lot on USD, they're sitting on a gross profit of $528 million from the trade. The interest bill would be roughly $110 million (assuming a federal government 5 year bond yield of 3.4%, which is a little bit more than it is at the moment) so the net profit would be about $418 million, give or take three million or so. Joe played the Forex market and won.
Maybe,if your assumptions are correct. But the RBA performs open market operations all the time and don't require the government issuing debt to do it. Hopefully Joe is not some kind of closet gambler who enjoys multi-billion dollar flutters in the forex markets. I feel it is more likely the money was required from the government because the issue that needed addressing was not yet covered by the RBAs charter or governance rules. In that case, it would be required to operate under direction rather than going rogue itself, and operating outside its guidelines. I reckon it was a stop gap in the $200B repo/capital guarantee commitments it has over the self-rated, sub-prime, toxic debt the banks have parked on its balance sheet. It doesn't get a charter for that until 2015. So what's more likely, Hockey having a flutter, or him being forced to act to save the banks taking a hit from distressed RMBS sitting at the RBA and the markets being spooked? ( I would bet the knock on effect in the RBMS and subsequently real estate markets would be huge and demanding of the Treasurer's full attention.) I'll happily stand corrected though.
I think it was simply a case of Hockey having a lot of info in front of him saying the AUD was over-valued and was likely to fall sooner or later and he decided to take a punt. Remember that (at the time) he managed to spin it so it looked like recapitalizing the RBA was immediately necessary by saying his predecessor bled it dry. So if you can borrow money at the lowest interest rate ever, your own reserve bank is saying "We reckon this sucker's gonna drop" and you can shift most of the blame onto someone else if you screw it up, why the hell wouldn't you?
I'd guess that Hockey had nothing to do with it, other than rubber stamp it. It's not like the RBA sits around sipping tea and watching the charts until one days its " oops time to buy AUD I think. Give the current fellow a ring and ask him what to do old chap"
And voters know that Labor also serve the "big end of town" - The big unions. It's a matter of which they find the least pallatable. The most recent annual "Trust" trust survey said that there was a 13 percent increase in "trust in the government" sine the Liberal party took office. Labor will not win the next election. They have no leadership and a third of the last cabinet including two prime ministers have had their political careers ended. They all underestimated Tony Abbott and they still haven't learned their lesson. Despite all of the noise and hatred spewing from the left the silent majority will vote Abbot back in for the same reason that Howard was voted back in despite his personal unpopularity. And of course Labor is broke and on the verge of trading while insolvent. They don't have the money to run an effective election campaign in 3 years.
^^ I've certainly noticed that there isn't the tidal wave of daily talking points and photo opportunities flooding the news that was the hallmark of the Labour Party when they were in power. That trust statistic has a lot to do with keeping a lower profile, I reckon. It probably also shows that the politicians know full well that they have lost the trust of the electorate. The clownish thing about Hockey though is that every time he opens his mouth, he contradicts something else he's said in a different setting. Here he is telling the US that they need to support the emerging economies with their policy, while yesterday he said they didn't have to. He's either making mistakes and being corrected by his controllers or is just a loose cannon. http://www.afr.com/videos/national/...ence-from-us-pxmhzqazp4nm9ygfphnek_wbgmi8b--h
Definitely a clown. But he is in a circus called the Australian federal parliament so I wouldn't expect anything less.
Where's my guarantee of a return, Joe? Old Joe reckons its not the government's role to pick winners and losers in our market economy, but wants to sell government assets with guarantees of a return, guarantee Qantas debt in its competition with Virgin, and direct Super Funds to finance government projects. But at least he stands on principle and decides not to fund the car industry or SPC ... at the beginning of the week. :/ But doesn't pick the winners or losers...which way is the wind going to blow tomorrow Joe? Hopefully you can blow it my way, eh? Just a little guarantee of a return, is that too much to ask for, or some extra cheap funding, or some of the punters savings. Geez ...
Gino he didn't bail out the car companies or SPC at the end of the week either. As for the guarantee of return...I wonder who he's saying that to. The gullible or the easilly led whose money would be in their sights. As for QANTAS facing problems which are at their root problems of legislation: I'm glad I don't have to make that decision.
That's right! He is the supreme adherent to principles at all times. But has to make allowance for when exceptionalism is required! Tough job that, being arbitrary an inconsistent.
Hockey is an idiot, Abbott is an idiot, Rudd was an idiot, Gillard was an idiot, Swan was an idiot. Is there a theme running through this thread?
Is their idiocy limited to their time in public office then? The theme is that his rhetoric is inconsistent to his actions. And while that's nothing new for politicians, there is something wrong with his $8.8B gift to the RBA after a week or so in a central banking huddle that pulled the curtain back a crack to let doubt of his authenticity be exposed. He is the highest profile of the government ministers and is clearly not an idiot if you read his bio. I suggested in the thread title that he is either just a clown, out of his depth and careening from one public appointment to the next, or is a policy instrument for the bankers that often overplays the situation to be subsequently brought back into line. Is he just another deceitful politician or worse? Who knows, but we live in precarious times and he has a big influence.
Brisbane December 2014.. We will find out if Joe Hockey is a clown or a ring master. Will he argue for the bank in or will he follow the other clowns and vote for bail ins for all G20 countries. Regards Errol 43
