The US needs a Bailout, not a Sellout!
Filed under: Business, Finance and Investment, International News
Last night, the US Congress correctly rejected the proposed $700 Billion Sellout package for the troubled Financial sector. It is my opinion that American taxpayers simply do not want tax dollars, generated through their own hard work, to be used to absolve greedy financial firms of their irresponsibility and recklessness, without asking for something in return. Anything else would set a bad precedent and allow the problem to recur in the future.
The US Democratic Senator for Ohio, Dennis Kicinich explained his own reasons for rejecting the bailout in an interview with the community media network, Demoracy Now!.
I agree with the need to stabilize the market, but it should be done in a way that is fair to the American public. Just as when a criminal is released on bail, he or she is subject to stringent conditions, so should the corporations being bailed out.
If a corporation wishes to receive some kind of Government assistance, e.g. the Government taking over its bad debts, there is no way that they can be permitted to keep any of the ‘booty’. Possible conditions could include the following:
- NO payouts for executives that choose to resign or retire
- Cancellation of all outstanding stock options issued to executives
- Any stock issued to executives in the last 5 years should be returned to the corporation
- Confiscation of personal assets purchased with bonuses awarded to executives over the last 5 years
This of course should happen independently alongside a comprehensive investigation of all lending and risk management practices with criminal charges laid against those suspected of fraud.
Tribunal Awards $12,500 to Lesbian Women Offended by Anti-Gay Bumper Sticker
The Queensland Anti-Discrimination Tribunal ordered a man named Ron Owen to pay $12,500 in damages to three lesbian women, who lodged a complaint over a bumper sticker displayed on his car.
The bumper sticker read “Gay rights? Under God’s law, the only rights gays have is the right to die.”
I can understand people being offended by the inciteful language on this sticker, but I do not support the awarding of damages to these women, as the message was not directed at them specifically.
In my opinion, the only proper outcome would be an order to remove the bumper sticker, print an apology in a local newspaper and refrain from displaying similar messages in the future.
ASIC Bans all Short Selling in Australia
Filed under: Australian News, Business, Finance and Investment
In a surprise move last night, the Australian Securities and Investments Commission (ASIC) has banned ALL short selling in Australia – both naked short selling and covered short selling. This came as a surprise to many people [including myself] considering their previous statements that expressed their satisfaction with their previous restrictions, which only affected naked short selling.
The ban commences from the start of trading this morning (Monday 22nd September).
In their statement, ASIC expressed concern that short selling bans that have recently been enacted in a number of markets around the world may result in hedge funds moving their activities to Australia and increasing “unwarranted activity” here.
These new restrictions are more extensive than those enacted elsewhere, which have generally only targeted financial stocks.
Short Selling Bans Imposed in UK and USA
Filed under: Business, Finance and Investment, International News, Uncategorized
In response to the recent unprecedented volatility in the financial markets, the US Securities and Exchange Commission (SEC) and the UK Financial Services Authority (FSA) have both imposed temporary bans on the short selling of financial stocks.
For those not in the know, short selling is the act of selling stock one does not own, with the aim of buying it back at a lower price and profiting from the difference. This strategy is used to make money in a falling market, or when one expects a fall in the near future.
Large hedge funds have been blamed for abusing short selling to manipulate the market and contributing to the deterioration of world stock prices.
The US ban applies to 799 stocks, and will initially last for 10 days, but may be extended. The UK ban applies to 32 companies and will last until the beginning of January 2009.
In Australia, our own so-called regulator ASIC has stated that we already have restrictions on short selling. Many people would consider this laughable.
I have an article that’s been sitting on the back-burner concerning my opinion of the role of short selling in the world stockmarket turmoil. It will follow next.
Selling Australian Uranium to India
Filed under: Australian Foreign Policy, Australian News
India is upset with Australia because we refuse to sell them Uranium. We currently have a ban on selling Uranium to all countries that have not signed the Nuclear Non-Proliferation Treaty.
Australian reserves hold 30-40% of the World’s Uranium, so this business is very lucrative for the country.
In principle, I support the sale of Uranium to India – they are a rapidly growing economy and they face huge increases in domestic demand for electricity. They are a democracy and I consider them to be a peace-loving people.
I presume that India is hesistant to sign this treaty due to their ongoing disputes with Pakistan, and as a counterbalance to their large nuclear-capable neighbour China.
The NPT is certainly important, but it should not be the only factor in the decision.
Last year, during the APEC summit, former Prime Minister John Howard signed an agreement with Russian President Vladimir Putin to sell Uranium to Russia. Unlike India, Russia is a signatory to the NPT and under the terms, Australian Uranium would not be used for military purposes or exported to third parties.
BUT as other people astutely pointed out – with Australian Uranium, Russia can divert its own domestically produced Uranium to weapons use, and sell it to hostile countries like Iran, whilst keeping within the terms of the NPT. Is this a desirable outcome?
Perhaps we can negotiate some other sort of agreement with India which would commit them to using Australian Uranium purely for nuclear electricity production, with some sort of Australian supervision. If such a thing can be done, this surely would provide a better outcome for all.
Google News Aggregator Causes $1.14 billion loss
Filed under: Business, Finance and Investment, International News
A deeply concerning post, courtesy of slashdot.org.
Google News erroneously reprinted an old article from 2002 concerning United Airlines, which faced deep financial problems at the time. This caused a run on its NASDAQ-listed stock UAL, leading to its share price falling from $12 to $3, after which the stock was suspended from trading. This caused a drop in its market capitalisation of $1.14 billion. The stock has since recovered to over $10, but its market capitalisation is still down over $300 million from before the old article was published.
Google News regularly searches and indexes online news sites around the world. In turn, many other online news sites grab headline from Google News. The automated nature of this process provides many opportunities for false information to be widely disseminated.
With the growth of Social Bookmarking sites and News Aggregators, people wishing to manipulate the market, or spread any kind of propaganda now have a very powerful tool at their disposal.
Sydney North-West Metro under Axe
In what must be an absolute surprise, the new Premier Nathan Rees stated in an interview with the Fairfax media that he is ‘pulling back’ from the much hyped North-West metro link. in light of the ‘surprise’ $1 billion budget shortfall discovered a few days ago after the cabinet reshuffle.
NSW State Government Turned Upside Down
I really have little more to add to what has been reported in the media, but to recap recent events:
Following John Watkins resignation last Thursday, Premier Morris Iemma sacked Treasurer Michael Costa following the failed power privatisation bid. Iemma then resigned, after being challenged by newcomer Nathan Rees, who was appointed the new premier of NSW.
In one of his first acts as premier, Rees appointed a new cabinet, which resulted in the dumping of the highly unpopular planning minister, Frank Sartor.
All I can add is that I could not think of a more appropriate bunch of people to get rid of.
I do wish Mr Rees luck in his new job as he still has to face some major problems. NSW is in debt with no money to spend on vital infrastructure and its economy is in recession.
An obvious first step is to convince the Federal Government to give NSW its fair share of GST revenue. It has been previously reported in the media that GST revenue raised in NSW is being used to subsidise other states. Anecdotal reports suggest that this could provide up to $2 billion extra annually to the NSW budget.
Watkins does a Carr
Yesterday, the NSW Transport Minister, John Watkins, resigned from office partway into his term. He says he will be leaving politics to spend more time with his family and become the CEO of the Alzheimers Association of NSW.
His tenure will best be known for what he did not do:
- Attempting to make Sydney trains run on time by reducing the frequency of rail services.
- Repeatedly announcing plans for grandiose rail projects, e.g. new rail lines and high speed trains, then cancelling them
- Failing to deliver a new Integrated Ticketing System after many years of delays
- Not dealing with the systematic corruption and inefficiencies in Railcorp and related entities
- Frequent media appearances to apologise for rail disruptions caused by poor maintenance
Good riddance.
