Such could be a headline to do with the exit of Julia Gillard, who of late had been playing her gender cards on her sleeve, while readers from the UK and other less honest jurisdictions might expect a headline about exposed extravagance by the former prime minister. Such would be not on the mark, but not far off point.
Similarly from William Pesek:
The Gillard exit has caused an uproar, the best manifestation of which could be the rant in the Senate by upper house member Michaelia Cash, very much in the mould of Australian rough and tumble politics.
To be sure it is a dramatic story, with Rudd facing a looming challenge to restore order and fight a rapid election campaign. But interestingly there is quite a silence in the media on a far greater issue. In a sense it doesn't matter who is in government, Australia faces a tsunami from China and in two ways. First from the resources pull back. Second from the shockwaves if the Chinese economy collapses.
On the first point there was a good overview piece in the FT which looked at Rudd's challenge and the scale of the slowdown for Australia's golden goose (resource projects worth $150 billion cancelled etc) But more on that kitchen - a nice focal point:
Sitting in a warehouse outside Brisbane airport in Queensland is a kitchen designed to feed up to 2,000 mine workers a day. But it was never delivered to BHP Billiton, the world’s biggest mining company, because the project it was destined for was put on hold. The kitchen is now on the market for A$17m, local media say.
On the second point some pretty direct words of warning:
The above article refers to expert Victor Shih of Northwestern University. A video of him explaining just how many trillions of bad debt are locked up in Chinese banks is here.
The risks are growing that China, which underwrites the Australian economy, will succumb to a financial crisis. This has not sunk in for Australian policymakers, perhaps because the implications are just too large, but it is the view that is forming among a large number of investors and economists who watch the data and investigate ground-level conditions closely.
There are huge uncertainties but, at face value, it looks like China is in the midst of one of history's great credit expansions – bigger than Japan's at the height of its bubble – and all that money is no longer generating growth in gross domestic product. The accelerator is pressed to the floor, the tank is getting low but the wheels are not getting traction like they used to. (here)
Similarly from William Pesek:
Australia has been called many things: Oz, the land Down Under, the lucky country. But the equivalent of a collateralised-debt obligation?
Canberra can't be happy to hear its AAA-rated economy likened to one of the reviled investment vehicles that blew up amid the 2008 global crisis. Yet the comparison is being made by some economists, who see the asset underlying Australia - demand from China - beginning to evaporate. No country is more vulnerable to the much-dreaded slowdown in China than resource-rich Australia. The mining boom that fuelled nearly all of its recent growth is nearing a cliff of economic risk.
“Australia is a leveraged time bomb waiting to blow,” says Albert Edwards, Societe Generale's London-based global strategist. “It is not just a CDO, but a CDO squared. All we have in Australia is, at its simplest, a credit bubble built upon a commodity boom dependent for its sustenance on an even greater credit bubble in China.”
AdvertisementThere's a bit of hyperbole in this view. But highly-advanced Australia is about to pay the price for growing so addicted to a developing nation. Exporting natural resources led to the neglect and atrophying of other critical sectors.