Jeor

This Arsenal team are amazing but I'm a bit concerned whether they'll be able to keep the team together. They're all pretty young so you'd expect the core could stay strong for another 5+ years of title challenges, but I think they'll be hard-pressed to keep them all. While living in London, playing in Europe, challenging for the league and having a settled club are great, I suspect the lure of higher wages and bigger profiles at Real, Barca, PSG etc might pull at least one or two of Odegaard, Saka etc away over the next few years. They aren't going to be able to give superstar wage rises to all of them when they hit late 20s.

I actually think United probably will need to stick with Ten Hag for another season. It's a terrible off-season to be looking for a top-line manager with all the other vacancies around, and the DoF structure they're introducing is probably worth a shot with Ten Hag as much as any other manager United is likely to be able to attract. I know Ten Hag's football is absolutely bonkers with zero defensive capability, but you have to think wiser heads will push him in the right direction and expectations are low. Once the structure is in and settled, they can then see what they want to do.

Lehrmann bringing this defamation action has to go down as one of the great self-sabotage acts in recent history. The judge even said it in something akin to escaping the lion's den but then going back for his hat. He'll probably be bankrupt now, and unemployable, but I won't be shedding a tear. To be fair, Lisa Wilkinson and Channel Ten don't come out smelling like roses either. No fact-checking and no opportunity for Lehrmann to respond seems a pretty gross violation of journalistic integrity. And no evidence of a government/political cover-up, which makes the eager politicking of David Sharaz look uncomfortably opportunistic. I don't think there's a winner in any of this case, although I hope for Brittany Higgins it brings some form of closure; while not a criminal trial, and the burden of proof being lower (balance of probabilities), it did at least give her some legal ruling by proxy that essentially establishes the truth of her allegations and Lehrmann's guilt. And the Bondi Junction stabbing was a massive tragedy - hits a bit close to home, only a few weeks ago I was there at Bondi Westfield on a Sunday afternoon dropping my daughter off to a birthday party while my wife, me and our 2 year-old son were ambling around the shops for a couple of hours to kill the time until we picked our daughter up (we live 45m away from Bondi so wasn't worth our going home). Incredibly, incredibly sad for those involved but also some amazing acts of bravery too. Thank goodness we don't have many guns in Australia, it could have been so much worse.

Trump knows enough about shady business schemes to make this a pump and dump operation. And as has been previously mentioned, he doesn't actually need to sell the stock - he can borrow a large amount of cash now using those shares as collateral. While I have no doubt in the long term the share price will start to crater, I don't think that will happen for at least another year or two and I suspect it will only crater if he loses the election. Tesla stock seems to be at a crossroads at the moment. It's taken a bit of a hammering lately and the outlook isn't good. Cheaper EVs from China are flooding the market, Tesla has had to lower prices and destroy its own margin, and the consumer spending outlook still isn't bullish enough to lift what is a discretionary product. I'm not a fan of Elon Mask so I'm enjoying a bit of schadenfreude lately - but I'll enjoy it while it lasts, because the stock defies all reason and the Musk fans will probably push it up again sooner rather than later. The Apple behemoth is also coming off the boil a bit. For years and years people have been talking about how the innovation product line is stalling with no new killer product and it seems the market has reached saturation point on the iPhones. Tim Cook did a good job of milking it while it lasted and squeezing as much margin as he could, but they are surely going to need to really get into AI or self-driving cars or virtual reality or something in a big, mass-market way.

It's only a problem if Trump ends up benefiting from Truth Social by selling out after his 6-month lock-up provision for a massive profit. Which I suspect he will be able to do, as 6 months isn't nearly enough time for a meme stock to crash when there are however many fanatical loyalists who will be retail shareholders in it (and enough cynical stockpickers who don't buy into Trump politically, but feel that there might be some money to be made by riding the wave). It's classic Trump, making money off nothing but a bag of hot air. And you have to admit, he's pretty good at cashing out and leaving others holding the bag. It will be interesting if the Fed's "higher for longer" does end up taking the wind out of stocks. So far there have been remarkably few repercussions to higher interest rates as far as the stock market is concerned. "There is no alternative" was the narrative that supported high stock returns in a low interest rate environment, but now that's gone the market is still levitating. I suspect the fact a lot of banks are holding onto underwater bonds to maturity means that the effect is only happening gradually.

Yes, currently about 50% of my portfolio is now in ETFs. I have one for the ASX200, one for the S&P500 and another Vanguard Global one (which is nevertheless about 70% US). They've all done very well in this first quarter of the year. In a weird way they've become my "growth" stocks in that my actual individual stock picks (telco, health) are largely defensive and my other ones (financial, mining) have only had marginal gains. I am getting more mathematically convinced of ETFs being a bigger part of my portfolio, quite apart from the time/research benefits. Our fixed interest rates (at the rock-bottom 2.09% p.a.!) are about to expire in August this year. Market rates at the moment imply that we're going to jump up to at least 6% on our principal residence and investment property, which will be a blow. Fortunately my wife is back working part-time now and next year our youngest will go into subsidised pre-school, so we will probaby only have to watch things carefully for a few months. In Australia there isn't really a 10 year fixed rate, most mortgages tend to be variable rates and fixed rates go up to about 5 years max. I think we'll take our chances with a variable rate and see them eventually come down maybe at the end of this year or start of next.

Bump! The big rally is starting to lose a bit of steam - time will tell whether this is a blip or start of a larger move downwards. Either way it seems like interest rates aren't going to be coming down quite as fast as everyone thinks (inflation being stickier), and if they do, it's not going to be for a good reason. I've started to go a bit more passive in my investing (more ETFs and not as many individual picks of stocks) partly because of my available time, with work and family life taking a large chunk out of what would have been my research time. It's actually kind of relaxing just watching ETFs gently float up and down - the broad-based ones rarely move more than 1% in a day. Not as much excitement but statistically it's a good bet.

Inflation is a hard beast to tame because it also involves psychology (inflation expectations) which are very hard to control. Economics all runs on incentive, but how to incentivise the right behaviour when inflation is involved is a very hard thing to do. If not interest rates from independent central banks, the only other real way of fighting inflation is through fiscal policy and no government in this era is going to implement austerity measures. Theoretically, the government could depress demand and increase savings rates by a variety of methods, but they are all unpalatable and amount to engineering a downturn. And I think we all know the other method of government intervention, price controls, doesn't work effectively to tamp down inflation as a black market then prospers and supply is withdrawn from the market. It's no surprise that, given this, governments are happy to pass the unpopularity contest over to the central banks.

Yes we need to keep the wages down!! More seriously though, Australia's multi year enterprise bargaining system is probably going to result in a few years of strongly rising wages and I wonder if this will force the RBA to keep rates high. Many sectors are struggling to find workers and in the current cost of living crisis, most industries are going to have to lift wages by at least 5-6% per annum (if not more) for several years in a row. Consider the striking wharfies who just got 23% over 4 years.

I sort of get what you're saying but I struggle with this part of it. Unless you are in some completely self-sufficient economy (and Australia certainly isn't), the exchange rate matters. Proponents of MMT and so forth often forget that virtually no economy runs in a vacuum and that global confidece in a country's currency has a major effect. A government that runs long, systemic deficits will have a falling currency. If the objective is to always create more money to make payments, that currency quickly becomes worthless. Why would an international investor put money into Australia if the Australian government keeps flooding the market with more and more created AUD? An international investor will demand higher yields to offset this, this creates a falling currency, a big rise in the cost of imports, and in the long run, hyperinflation. Then you have a trade crisis like the one that befell Sri Lanka recently, who couldn't pay for imported medicines, fuel, etc. Now, if you had a completely self-sufficient economy that could manage itself, then this would have more of a chance of working, but even so the inflation spiral would start when fiscal discipline gets out of hand and the yields on government bonds keep rising.

I read your earlier post as well as this one, and I'm not quite sure I follow. I get that there is a difference in purpose in how you might view taxation (more as controlling the economy appropriately, rather than trying to pay for spending), but in practice, is this really any different? It seems if you're looking for low taxes and high spending you're inevitably going to run up large government deficits. How would this system deal with large systemic deficits? The USA has run lots of high deficits lately, but they are the world's reserve currency so have not had much trouble financing them. In other countries like Australia, large, continual deficits would push down our exchange rate, make imports much more expensive (hence increase inflation), push up government bonds, and increase the interest rate on the government debt. If the government was seen not to worry about large deficits and hence not be "good" to pay off the debt (or could only pay it off through printing more money), that would lead into a debt spiral, currency crash, and hyperinflation. It sounds like Modern Monetary Theory to me which I must admit I'm not very convinced by.

Yes, for all the criticism of the RBA being behind the 8-ball (and leaving rates lower than the US, UK and NZ), it seems to be working. I expect rates will stay on hold throughout the year and a cut won't come right until the end, not as soon as people are predicting. Cuts only really come if inflation undershoots (highly unlikely) or if the economy crashes (less likely, though still a possibility). There hasn't been a wave of foreclosures, a prolonged period of underinflation, a massive spike in unemployment, or a sudden increase in business failures, so there's no reason for the RBA to drop rates anytime soon unless 2 or more of those things happen.

I don't think Cummins really should be blamed for the declaration. It was a 9th wicket declaration at an opportune moment in the game, and any of the criticism could only come with the benefit of hindsight. As it is, Australia had plenty of other chances to win the game or at least pull ahead and they didn't take them, and they had many other reasons why they did so poorly (batting). So that mutes the issue of a 9th wicket declaration.

Yes, stamp duty is a scourge that should be abolished. The land tax that Perrottet introduced in NSW wasn't a bad idea and would have been much fairer over the long run, not to mention potentially free up mobility. The fundamental problem of tax reform is that no one would ever want less money in their pocket, and no one would ever want lower quality government services or support. Hence the need to tinker around the edges and only hit small segments of the population. I actually think "reform" is more geared towards hitting the rich rather than the poor. America is a weird outlier on this but in a compulsory voting democracy like Australia, the Albo plan of changing Stage 3 was made easier by the fact that only 10% of the population were worse off while 90% were better off. If Albo wants to get rid of negative gearing, now might actually be the time to do it. People are already asking questions. There is a fair bit of support in the electorate for abolishing negative gearing (or at least limiting it to only one property) because, fairly or unfairly, it's seen as a major driver of the housing affordability crisis and he wants to be seen as doing something like that. If he's broken a couple of promises (superannuation, Stage 3), he may as well go the whole hog and go for negative gearing, franking credits, CGT reductions... In other news, the Future Fund now will have Greg Combet as chairman taking over from a retiring Costello. I hope the Fund doesn't become a political warchest to spend on whatever priorities the government of the day has, or is liquidated just to retire government debt. I'd rather have a large asset and a larger liability, rather than no asset and a large liability. At least with an asset you have a chance to grow faster than the debt.

Very happy for the Windies to get that win. It will mean a lot to the players and to the long-suffering fans who've seen some pretty poor displays over the past 20-odd years. Nice to see Brian Lara in the commentary box enjoying the win too.