Economists’ great expectations over rate rise … with a dash of sadism

Don’t they just hate it. “Rate rise expectations dashed as annual growth comes in at 2.7 per cent.” That’s the one line summary of the inflation figures by those financial market boffins over at Business Spectator. Expectations dashed! What kind of sadists are these financial market types?

I prefer to put a different spin on it every time inflation is below the level the dreaded market expects. Something more like: good economic news as inflation remains under control.

And under control it certainly is.

The All Groups CPI rose 0.4% in the December quarter 2010, compared with a rise of 0.7% in the September quarter 2010. The through the year rise to the December quarter 0f 2.7%, compared with a rise of 2.8% through the year to the September quarter 2010.

And when you take out the contribution to volatile items like the Reserve Bank does with the measures of inflation it takes most notice of in fixing interest rates, things are even better. The weighted mean for the year is down to 2.3% and the trimmed median to 2.2%. We have to go back to the 1990s to find inflationary levels that low.

The good news is that we don’t have to take any notice for a while of all those financial industry economists predicting an interest rate rise anytime soon. The Crikey Interest Rate Indicator puts the chances of the Reserve Bank doing anything at its meeting next month at a low 8%

If in doubt, blame Rupert. It’s something I’m a bit inclined to do myself I have to admit. The most influential media man in the world naturally finds himself in the spotlight. Like this one being shone by Rolling Stone:

Music has been pushed aside this week (although there is still a nice celebration of it being 50 years since Bob Dylan first arrived in New York) to name and shame the dozen political figures most to blame for there being so little action to stop global warming. And there he is, Rupert Murdoch, top of the list of villains.

No one does more to spread dangerous disinformation about global warming than Murdoch. … Murdoch’s entire media empire, it would seem, is set up to deny, deny, deny. The Wall Street Journal routinely dismisses climate change as “an apocalyptic scare,” and Fox News helped gin up a fake controversy by relentlessly hyping the “climategate” scandal — even though independent investigations showed that nothing in the e-mails stolen from British climate researchers undercut scientific conclusions about global warming.

Murdoch knows better. In 2007, he warned that climate change “poses clear, catastrophic threats” and promised to turn News Corp. into a model of carbon neutrality. But at his media outlets, manufacturing doubt about global warming remains official policy. During the 2009 climate summit in Copenhagen, the Washington editor of Fox News ordered the network’s journalists to never mention global warming “without immediately pointing out that such theories are based upon data that critics have called into question.” Murdoch may be striving to go green in his ­office buildings, but on air, the only thing he’s recycling are the lies of Big Coal and Big Oil.

Sometimes, of course, we Murdoch critics can a bit carried away with our conspiracy theories.

I did last Friday when I took The Australian to task for not mentioning the World Meteorological Organisation’s consolidated summary of the reports from the UK Meteorological Office Hadley Centre/Climatic Research Unit (HadCRU), the US National Climatic Data Centre (NCDC), and the US National Aeronautics and Space Administration (NASA) on the temperatures of 2010.

It turns out that that very day saw a report, albeit not exactly a comprehensive one on page nine.

Upholding its grand traditions. The ability to forgive past indiscretions lives on within the Tasmanian Parliamentary Labor Party. Bryan Green is back as Deputy Premier after stepping down from that post in 2006 to face criminal charges of signing an illegal deal with private building accreditor Tasmanian Compliance Corporation (TCC).

Twice there were hung juries, after which the charges were dropped, and the new Premier Lara Giddings yesterday declared:

“Bryan Green is a very experienced member of parliament, he’s been around for quite some time, he does have previous ministerial experience in which he did make a significant mistake. He has apologised to the Tasmanian people. He has had to live with the consequence of that mistake as well. I think he is a changed person from it. We do need to give people a second chance.”

For older Tasmanians like me it brought memories rushing back of Sir Robert Cosgrove who only spent three days in the political wilderness before being re-elected as Party Leader, and hence the Premier, after being acquitted of bribery, corruption and conspiracy charges in 1948. Sir Robert went on to be Premier for another decade. In all he was Premier for a continuous and record term of almost nineteen years with the exception of the couple of months in 1947-48 hiatus for his court room appearance.

For most of these years Sir Robert Cosgrove had the company in the State Parliamentary Labor Party of a rather colourful character named Thomas George De Largie D’Alton who was Deputy Premier in mid-1943 when questions began being asked in parliament about bribery in the Forestry Department of which he was minister. A Federal Labor Government initially came to the rescue and appointed D’Alton high commissioner to New Zealand. As the Australian Dictionary of Biography puts it:

Boasting his ownership of the best diplomatic cellar in Wellington, he was proud of his social successes, but his involvement in a fist-fight at a theatre was embarrassing. When a royal commission was appointed in Tasmania in 1945 to investigate forestry administration, he refused to give evidence on the ground of cost. In May 1946 the commission dismissed two charges of corruption, but found that D’Alton had twice accepted bribes. His New Zealand post had quietly lapsed in March. Although he was acquitted by a criminal-court jury in September, his political career seemed beyond repair, and he spoke privately of taking a touring show to the mainland.

Salvation came through the death on 17 October 1947 of James McDonald, the member for Gordon, a Legislative Council seat based on Queenstown. D’Alton persuaded the heir apparent to step aside and in November was elected with 489 votes. An assiduous local member who was passionately loyal, he was re-elected unopposed in 1952, 1958 and 1964.

In the Legislative Council, where the bribery allegations had been first and most bitterly aired, D’Alton could not even muster the traditional two supporters when he took his seat. Yet he quickly became effective. From early 1948 he was leader for the government in the council; he was to become a champion of the Upper House. In person he disarmed the most unlikely members, and his famous drinking and sometimes questionable associations were regarded as mere marks of a ‘lovable rogue’.

And how could this once young journalist from Hobart forget the day that Dr R.J.D.Turnbull, Cosgrove’s Treasurer, was acquitted by a jury of charges following lottery promoter George Fitzpatrick accusing him of demanding £20,000 for a licence. The good doctor might have been forced out of the Labor Party but he was subsequently returned as an independent first to the State House of Assembly and subsequently to the Senate.