We’d like to make a community announcement. There is a scourge sweeping our society. One that must be dealt with. More on that below. But first, financial matters.
Yesterday we asked whether Australia can remain an island of prosperity while Europe and the US stay in the doldrums. The short answer is no. That’s because we’ve got our own problems.
For example, Brisbane’s office vacancy hit an all-time record of 15.4% in the last quarter of 2013. Australia as a whole was at its highest since 1997. And in another bad sign for business, Investa Property Group CEO Campbell Hanan notes that office space is being converted to residential.
The really interesting part is that demand for large spaces is doing just fine. At least Grocon and DEXUS executives said so. BHP, the big law firms and other large companies continue to do just fine. It’s demand for the smaller spaces that is struggling.
The thing is, economic growth and vitality tends to come from growth in small, young companies. Especially when it comes to jobs. Small business only produces a third of Aussie economic output, but employs half of our workers. These companies are also more exposed to the economy than larger companies. So the health of small companies relative to large ones is a sort of leading economic indicator. One that doesn’t bode well for Australia at the moment, judging by the reports on office space.
Speaking of indicators, three key manufacturing indicators will be out today around the globe. The US, China and the Eurozone will all release PMI numbers. And the US will add on other economic data. So you can expect a bit of volatility over the next few days.
Santos, the company we look to for keeping track of Australia’s gas boom, will release quarterly production data and update the market on progress at its LNG operations. After Shell and Arrow wound down their expected investments recently, watching Santos could be crucial to get a measure of future potential.
So small business, commercial property and resources could all be in for trouble. The wild card is banking. Our story on LAF manipulation is likely to get an award for the slowest viral story ever. If you don’t remember, mortgage brokers and bankers have been manipulating people’s Loan Application Forms. They put a ‘1’ in front of your income when you apply for the loan, turning $50,000 in to $150,000. And that makes the $500,000 loan affordable.
Nobody knows how common this is for sure. But the little evidence there is tells us that it’s big enough to cause a financial crisis in Australia. If the story gets out, that is. That’s because, in Australia, unlike in the US, Europe, and UK, borrowers who take on the banks can end up with a house and no mortgage. The banks have to book the loss on the entire loan because the lender should never have approved it. They don’t even get access to the mortgaged house they thought they had as collateral.
News.com.au and the Australian Financial Review picked up on the story today. They reported on the mortgage brokers going to jail and ASIC’s investigations. The story included the whopping lie that the banks don’t know this is happening. The truth, according to the whistle-blower who has personally cancelled more than 200 mortgages because of LAF manipulation, is that the banks teach the brokers how to manipulate the LAFs to get loans past lending standards. The British inquiry into the financial system found that this had happened in the UK.
If somebody in the mainstream media realises that a good chunk of Australia’s mortgages could be wiped off bank balance sheets, there could be interesting ramifications. A lot of Super funds and investor brokerage accounts hold a lot of bank shares.
In short, Australia has just about all the risks a country headed for trouble might have. If you don’t feel like sticking around for a crash in the stock market, whether it’s caused by Australia’s secret sub-prime crisis or something else, we have a solution for you. It’s the secret to never having to worry about a crash in the stock market again.
What about our community announcement? First, we need to inform you of the scourge sweeping our streets and nightclubs. At least 236 victims of it needlessly ended up in hospital in Victoria alone. Only 175 of those had themselves to blame. The rest were assaulted by those afflicted.
It’s taking the young in particular. Those aged 20-24 are especially prone. And mostly during the summer months.
The cost to our medical system is staggering. And the permanent disability that can result is severe. Worst of all, the estimated number affected could be far higher as many are too ashamed to declare the true cause of their injuries.
Many victims turn up at the hospital a full 12 hours after doing severe damage to themselves. That’s why doctors, nurses and specialists are facing a wave of unnecessary patients each Sunday – the morning after. Of course, that only counts those who make it as far as the hospital.
You’re right. A community announcement isn’t enough. We need to take action. So we’ve decided to write a draft bill to be submitted to parliament. It’s called the Save Our Ankles Act (2014). We’re hoping politician Tanya Plibersek will introduce it.
The act will ban the device used to inflict such damage on those who use it. That should also prevent so called ‘second hand impalings’ of innocent bystanders.
The act will likely face intense lobbying from those dealing in these devices. These dealers are often known under strange pseudonyms such as Mafia Boss Tony Bianco, notorious pimp Alexander Wang, and Jimmy ‘the Shoe’ Choo.
Their product, or should we say contraband, is now available across Australia. Even young children, who thankfully represent a small but heartbreaking proportion of injuries, are able to purchase them unobstructed.
If you haven’t guessed it yet, the item which is doing Australia and the world so much damage is of course the high heeled shoe.
A study in the Journal of Foot and Ankle Research, which uncovered the above findings, could be the evidence that so many of us hoping to eradicate this scourge have been hoping for. The study doesn’t address the psychological trauma of victims, such as embarrassment, inferiority complexes and lost economic growth from relationships that never took place because of artificial height differentials.
The Save Our Ankles Act‘s preamble will note those sectors of society we have deemed righteous to protect by government intervention so far. Smokers, drug users, shareholders, property investors, and many other members of our community. Why should short men, those standing next to people in high heels and those who have shoes swung at their heads be any different?
Can we count on your support?
Of course, an outright ban may not be politically viable…at first. We don’t want the money illegally spent on high heeled shoes ending up in Hezbollah’s hands, as it does with drugs in Australia according to a money laundering probe. So we might have to settle for plain packaging instead. Grey high heeled shoes only. And then introduce a tax. Around $32.70 a centimetre we reckon. The money could go to improving the ambience of our paths and walkways by paving them in cobblestones.
Next up on the ‘things to ban’ list is makeup, which can be used to disguise bank robbers.
for The Daily Reckoning Australia