Rockin’ all over the world

Hypothesis one, from Peter Brent at Mumble: “Canada’s one-term government going for re-election (after only 18 months), amidst world economic turmoil, should provide some clue as to how Rudd & co might fare at the next election.”

Hypothesis two, from Adam in Canberra at this place: “It’s curious that the financial crisis seems to be working in favour of the incumbents in NZ (on the basis of one Morgan poll) and (I think so far) Australia, but against the incumbents in the US and Canada. That would suggest that conservatives are being blamed, not incumbents.”

Let’s do a very quick whiz round to see how things seem to be travelling in various comparable democracies.

United States: Barack Obama opens up 11-point lead over John McCain. “BARACK Obama has opened up an 11-point lead over John McCain in the latest Gallup Poll – his biggest margin of the campaign.”

Germany: Merkel party slumps in poll as financial crisis hits Germany. “The CDU and her sister party, the Christian Social Democrats (CSU), fell four points to 33 percent which is the lowest level since early 2007, according to a survey released jointly by the Hamburg-based Stern news magazine and the commercial RTL broadcasting network.”

New Zealand: New Zealand Election Tightens. “In early October 2008 the New Zealand Roy Morgan Poll shows National Party support at 40.5% (down 7%), a tight lead over the Labour Party 37.5% (up 1%). If the Election were this weekend there would be a hung Parliament in New Zealand with either major party capable of forming a governing coalition.”

United Kingdom: Labour halves Tory lead in opinion poll: “The opposition was ahead of the ruling party by a record 20-points last week. Today, a YouGov poll, commissioned by The Sun, showed the Labour party stood at 31 points – a 10 point gain on the previous gap.”

Canada: Harper keeps sinking in polls. “With Stephen Harper and his Conservatives losing popularity throughout most of the country, the poll-takers yesterday offered the party a gloomy diagnosis: They see few signs of improvement before voting day on Tuesday.”

Though admittedly …

Italy: Berlusconi honeymoon with the Italians. “They call it ‘honeymoon’. This is no romantic movie, though, it’s the nickname that Italian newspapers gave to a new political phenomenon: Berlusconi’s personal degree of favor among the Italians, his popularity has now reached 60%.”.

Italy always was different, I guess. I’m calling it a win for hypothesis two.

Author: William Bowe

William Bowe is a Perth-based election analyst and occasional teacher of political science. His blog, The Poll Bludger, has existed in one form or another since 2004, and is one of the most heavily trafficked websites on Australian politics.

233 comments on “Rockin’ all over the world”

Comments Page 3 of 5
1 2 3 4 5
  1. I’m not sure about that, ruawake, about it being stupid and unnecessary. As Swan has been in meetings with the IMF and presumably others in preparation for the G20 meeting, this may well be something that could interrupt the global freeze on banks being unwilling to lend to each other, if there’s collective agreement. Morover, if they can manouvre a collective response to what is a global economic crisis, they just might be able to something similar with climate change.

  2. Ugh! Guaranteeing bank deposits! The rise of big government is a massive travesty.

    That aside, the taxpayer is unlikely to be exposed a great deal given that our prudential regulation already surpasses the standards of many other countries.

  3. Yes Harry ,I was aware of it.
    That was yesterday’s quote from ruawake.
    He was explaining how dumb Turnbull was to suggest $100,000 guarantee.
    Today it is unlimited.
    All wisdom doesn’t reside in one side of politics.

  4. “That aside, the taxpayer is unlikely to be exposed a great deal given that our prudential regulation already surpasses the standards of many other countries.”

    So the Government is going to make money from this policy, good job Rudd.

  5. In the Australian context it is stupid and unnecessary, if Ireland and Iceland had not done similar things a week or so ago it would not be on the agenda.

    But because some countries have done it, all the rest have to. Or all the money goes to Ireland or Iceland.

    This world action has ensured that people invest their hard earned in bank deposits, earning a Govt guaranteed % rate (my nest egg is still at 8.5%).

    This will drive squillions of dollars into the banks. Depriving other forms of investment of funds.

    You could argue that the banks can now lend people money to make investments – but this is exactly what got us in the mess in the first place.

  6. No 104

    Because the guarantee is extends to 3 years, I would imagine the government would refund the premiums at the conclusion of the guarantee period. But since leftist governments enjoy windfall profits on the back of the taxpayer, we’ll have to wait and see.

  7. GP, if Turnbull and Bishop would stop their demagogic scaremongering, perhaps Rudd wouldn’t feel obliged to make populist gestures to stop the run on the banks which Turnbull is trying to foment.

  8. [You could argue that the banks can now lend people money to make investments]

    ???? Banks have always done this since time immemorial.

    An investment can take many forms, from starting a new business to buying shares. Borrowing in and of itself is not a big deal. The issue is whether the borrower has the capacity to service the debt. The latter is what got the USA into its current mess – banks were nonchalant about issuing loans to people who had no capacity to repay them; then they sold the risk to other institutions. The House of Cards collapsed once loans were recalled.

  9. ruawake, the point is, I think, as far as I understand it, that we can’t think just in the Australian context. Part of what Rudd had to say was that Oz banks are not getting money, even though sound, because other countries had guaranteed their banks, as you noted. There are no doubt others who understand what’s happening better than I do, however, it seems there’s problems of both solvency and liquidity to do be dealt with globally. If the deposits and borrowing need to be guaranteed by the government to ensure liquidity, then so be it.

  10. [Because the guarantee is extends to 3 years, I would imagine the government would refund the premiums at the conclusion of the guarantee period.]

    LOL Name me one insurance company that refunds insurance premiums after the policy has expired. Bah, all those leftist insurance companies, or are they communists?

  11. No 107

    Adam, this has nothing to do with the Liberals. Rudd claims he is acting according to a globally-coordinated effort. You’re effectively calling him a liar.

  12. GP

    The only reason to borrow for investment is if your return is greater than the cost of borrowing.

    If the returns for stuffing your money in the bank are better than anything else (as they most certainly are now) why borrow money to put it back in the bank you borrowed it from in the first place?

  13. No 115

    So what are you arguing ruawake? That the deposit guarantee will stifle investment in other, more risky ventures?

  14. Which means interest rates have to fall, to make alternative investments attractive. I’m guessing high 3s low 4s very soon. Any lower you get the financial scams like CDOs. so I hope thats as low as they go.

    Is the majority of the electorate going to punish Rudd for “record low” interest rates? I doubt it. 🙂

  15. GP 113 – Rudd is quite correctly ignoring Turnbull. I am under no such inhibitions. Turnbull is trying to provoke a run on the banks. He doesn’t care if there is a catastrophic depression so long as he benefits from it.

  16. No 119

    Hmmm. Look, I’m not particularly fond of it myself. Pragmatically, the risk to taxpayers is minimal (given our regulatory standards) and to be honest, what else can be done to sure-up confidence in a morose bear market?

  17. No 121

    Rubbish Adam. Turnbull called for a $100k guarantee; Rudd has gone all out and guaranteed everything but the kitchen sink.

  18. GP wrote:

    [But since leftist governments enjoy windfall profits on the back of the taxpayer…]

    like the Ansett “surcharge” I suppose?

  19. Generic Person @ 123. If that’s the case and they can still post the profits they do, then even more will I be impressed if the government makes a buck out of this action. It’s actually kind of nifty, really. And really, GP, in general, it is possible to operate both domestically and internationally in political and economic senses. I would have thought that is exactly what is required in these days of globalisation. Ignore Turnbull domestically and you deprive him of oxygen, though there are many others who, IMO, give him far too much. You may think this the obvious response from some one of my ilk, but really, I would rather the Libs. did the necessary ‘have a good long hard think about why they lost’ and provide decent opposition, because currently, at the national level, they’re a joke.

  20. Turnbull on climate change:

    [“We’d recommend to the Prime Minister that he … postpone the introduction of any ETS until we are fully informed of the global response which cannot be until the end of next year.”

    Mr Turnbull said the Rudd Government’s plan to introduce emissions trading in 2010 was causing uncertainty in the business community.

    “This ETS, the rushed introduction of it, is causing considerable uncertainty right through the Australian community and particularly with business.” ]

    Methinks that ain’t what is causing “considerable uncertainty” right at the minute.

    Interesting – the opposition is now giving recommendations to the Govenrment – much as does a hired consultant.

    I guess Rudd can now thank Turnbull for his recommendations but say the he prefers to take advice based on evidence, not ego.

  21. […what else can be done to sure-up confidence in a morose bear market?]

    Get people with real money to invest in real businesses that make real profits.

  22. I don’t know about everyone else, but it seems to me that no bank has changed their variable savings deposit rates in line with the 1% cut last week – yet. It seems this is one area of improved competition. If they put their rate down too much, the depositors move to another institution, and the banks lose some cheap funding.

    They don’t necessarily need to lend new money, but they need some money coming in to cover the costs of borrowing globally for five years to offset the old loans they had made.

    I guess Rudd had a tough call. For some Australian savers, who the banking system needs to keep afloat, the offer of limited deposit insurance made people think about moving money above that amount out of the bank because they were not worried about the stability of the banks until the government wanted to guarantee it. I guess guaranteeing it in full prevents that.

  23. This measure has nothing to do with “Australian savers” it has everything to do with cash investments in term deposits. The interest rates on these have fallen since the RBA cut interest rates.

    My parents have close to $1 million in term deposits, while they build a new house, the bank manager increased the interest rate by 0.24% last friday. Cash is king. I expect the big 4 will get close to $100 billion in new deposits by the end of this year.

  24. a good many of the liberals can’t stand the rainmaker and from her article i’d rather think Janet A. is one of them, she seems more keen on slapping rainmaker down rather than praising Rudd, the praise is grudging and forcasts a return to bank bashing after the crisis, Rudd will have to heavy them if they dont pass on all of the cuts after the meltdown is over, we dont need a crystal ball to see that.

  25. Ruawake, I think you just agreed with me (unless I haven’t understood you).

    From where I sit, Australian savers are the people who make cash investments in term deposits.

    Just as an example, the CBA has a cash saver online account, the rate is the same today as it was last month… I think they are scared that people will take their money out.

    But $100bn in new deposits? I guess if everyone completely evacuated the sharemarket, and people decided they didn’t want to own good businesses anymore, that might happen, but I doubt it.

  26. I think the point here is the message it sends – as Wayne Swan said on ‘Insiders’ this morning (before the amount was announced), it basically didn’t matter what the amount was, because they don’t expect the banks to fall over.

    So the message is: you can have confidence in the banks. Your money is safe, there’s no need to panic. We don’t need to put a cap on this, because we’re never going to have to pay out, because we know the banks are stable.

    If you put a cap on it, the unwritten assumption is that there IS a chance the banks will fall over and you can therefore only afford to guarantee so much.

  27. GP 124: It’s not often I get to quote Janet Albrechtson against anyone, so let me savour the moment:

    “Indeed, it is possible the government’s decisions today have rescued the Coalition from the cliff’s edge. The biggest risk for the bank-bashing Malcolm Turnbull was that if a bank struck real trouble, the Government could have and should have pointed the finger at Turnbull and his deputy, Julie Bishop. They have deserved every ounce of criticism for their reckless decision to keep up with the populist ploy of bashing banks when a more responsible position was needed. Isn’t the Coalition meant to be the party of economic responsibility?”

  28. [It’s not often I get to quote Janet Albrechtson against anyone]

    Yep Adam – I’m pretty sure your doing so is one of the signs of the end of days.

  29. GP

    To bring the discussion back to the start, the only place that capital is really safe now, due to the bank guarantee, is in cash deposits in banks.

    That is why I oppose the measure, nothing is gained without taking a risk. The recent failure of risk models does not mean we should set up one risk free investment at the expense of all others. 🙁

  30. This is a co-ordinated act by World Governments to shore up World cash liquidity. It is as simple as that. If Australia didn’t join this action Australian Banks would not be able to borrow cash from OS financial institutions.

  31. No 139

    I understand what you’re saying, but the only way you’ll get a resurgence of confidence (and therefore, investment) is to stem the panic. The government has done this by reassuring investors that their capital is safe.

    The reality is that our banks are not about to collapse. Costello introduced prudential regulation in the aftermath of the 1997 Asian financial crisis and as such we now have financially secure banks that are very well insulated from the US rabble. All Rudd is doing is suring-up confidence so that people will be willing to take risks again.

    Of course, I won’t deny that a lot of money will be lumped into banks. But that’s not exactly a bad thing when a lot of people are living beyond their means and our national savings were dwindling (notwithstanding superannuation).

  32. I know things are a bit grim but did Rudd really need to wear a black suit for the 60 minutes interview? It looks like he’s been to a funeral for the Australian economy.

  33. 144 ruawake – no need to worry about Katich now… and also forget about Michael Clarke now…

    Diogenes, so what was the topic on 60 Minutes? Alcopos? 🙂

  34. Grog, you didnt miss anything re the 60 minutes interview, the questions were pathetic, “how many jobs will be lost Prime Minister, 30,000, 40,000? as if anyone could answer that, i dont know who the reporter was but he spent the whole five minutes trying to wedge Rudd into saying something stupid with his loaded questions, he kept interrupting anyway, looked like he was trying to build up a reputation, he’d have to do better than that with Rudd, loaded questions are fine when they have any meaning but this was just crap.

  35. No 148

    60 Minutes is crap anyway. It’s basically become today-tonight with its frivolous stories. Lately it has become much too fond of telegraphing the woes of severely disabled and retarded children. The sooner this rabble is axed, the better.

  36. [the questions were pathetic, “how many jobs will be lost Prime Minister, 30,000, 40,000? ]

    No doubt that will be Julie Bishop’s first question in QT tomorrow.

Comments Page 3 of 5
1 2 3 4 5

Leave a Reply

Your email address will not be published. Required fields are marked *