Australian Financial Review

“[A]s the federal government and opposition squabbled over who could claim responsibility for the record trade deal,” Australian Financial Review (page 7)

Dontcha just love ‘em!

But while the schoolboys and girls in Canberra and Perth argue over who can claim credit for the deal, we’ll see if we can help them out.

We wonder if it’s crossed their mind that it’s actually Chevron, ExxonMobil and Shell who should take the credit. After all, it is they who will be forking out $65 billion to develop the project.

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We know that on the surface it may not seem like a big deal, but it should give you reason to pause for some thought about the global banking system.

Last week we wrote about Commonwealth Bank’s online Netbank service being offline intermittently for two days.

But perhaps more than anything this electronic stuff-up should get you thinking about where your money is.

We all know that when you deposit $100 cash into your bank account it doesn’t sit in the vault waiting for you to collect it. You pay the cash over the counter, the teller frantically clicks a few buttons and there you have it, your balance increases by $100.

The $100 cash goes into the cashier’s drawer.

After your account has been credited with the $100, and the $100 note is in the cashier’s drawer, another customer enters the bank and is given the $100 note that you just handed over.

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What noise does a stock market crash make? Something like “Kerplaap” we think.

Over the last twenty-odd years there have been a few so we should all have got used to the noise by now.

The warning signs are unmistakable. Lots of frenzy and excitement. Lots of claims that the market can never fall because of, well any number of reasons. Most of them emotional rather than logical.

Heck, your editor even fell for it. We thought the ‘China effect’ would provide some cushion for the resources market over the last year. We were wrong. The transition from the US economy dominating consumer spending to Asia taking over clearly isn’t a seamless transition.

Despite that, if it was possible to buy or sell shares in an entire economy, right now we’d be ’short’ USA and ‘long’ China.

And Australia? That’s much harder to work out. For the entire economy we’d have to say it’s no better than neutral.

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A change of plan this morning. As pointed out in yesterday’s Money Morning, I had intended on covering some old ground on government spending. Largely thanks to an email we received from an actuary that implied the amount of debt didn’t matter as long as the money was spent for the “public good.”

But a couple of other items have cropped up that’s caused us to push that idea back into the lap of Money Weekend which you’ll get tomorrow.

Now, before we continue with today’s Money Morning, let’s go through a quick recap of what we’ve covered this week. Especially as we’ve been offline for the last three days due to ‘technical problems.’

So, here’s a brief summary of what you’ve missed and what you can catch up on…

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