Saturday, March 29, 2008

Sydney and Plans

I had my first success in getting a letter published in the SMH for quite a while toda; Don't mess with the heart and soul of this great city. (You have to dig a bit.)

It was editted from the original which I share with you below.

It is remarkable the faith people have in the mythical Ability of planners to write wrongs. Supposedly in the city of Sydney those wrongs include the “chaos” created by the unplanned environment of the 50s and 60s.

It is fascinating that the same Premier who planned to give us an Opera House planned to give us the Cahill expressway. Fascinating that the citizenry continues to complain about The Toaster without reflecting how much more open the Opera House is now than it was with the original collection of East Circular Quay buildings.

And the politicians and media get seduced by the nice clean lines of the impressions of the new designs, without looking at the pieces of the impression that are areas that don’t change. The bulk of the improvement is like fashion magazine “before and after” shots, though in this case the after shot is the one improved by not colouring it all in.

Cities grow like organisms, their functions change and morph. Sydney is no longer a bustling wharf town to the disappointment of sum. But messy railways, aerial freeways and busy ferry wharves are visual expressions of the vibrancy of the city. It is not some airbrushed picture postcard of sentimentality. Please Clover and everyone else, let Sydney quietly evolve and banish your sterile visions.

The editted version really missed the bit about how misleading all the artists drawings of the "future" city look. I'll save that for another day.

Gans and Housing

Unfortunately I can't link to Australian Financial Review stories but I thought I'd share this with my few loyal readers. The following was a letter submitted to the AFR Thursday that might I suppose still get a run.

The proposal by Joshua Gans and Christopher Joyce for the creation of an ‘AussieMac’ (“Home loans need an AussieMac” AFR 27 March) is based on the false assumption that mortgage lending is “as safe as houses”. The creation of a AAA rated credit pool to create competition in home lending makes sense if the asset, residential mortgages, really are that secure an investment.

The unfortunate reality is that house prices can be subject to price bubbles like any other asset. Once the bubble goes too far prices will fall, and frequently (or very frequently as now occurring in the US) the owner has negative equity, and the securitised mortgages contain more risk than ever envisioned. The problem with an AussieMac is that it compounds the problem by introducing moral hazard; no one really cares about the quality of the underlying loans if they are using Government guaranteed credit.

The way to stop bubbles is to increase the funding cost to acquire the asset, but in general raising interest rates is a very blunt instrument as it suppresses productive as well as speculative investment. If all housing finance was derived from deposit taking institutions one way to control housing price bubbles would be to reduce the 100% risk weighting given to residential mortgages in calculations of capital adequacy. This is not only effective, but logical, as it reflects the fact that prices now might not match prices in the future.

Securitised mortgages while increasing competition took away the effectiveness of the strategy. A Government backed securitised mortgage market may be worthwhile if it could also include a similar mechanism for dealing with housing price inflation.

Of course I'm jealous that Joshua got an invite to Australia 2020 - but I'm glad he is there, as is John Quiggin. A couple of economists who usually (not always) make sense. Meanwhile poor Malcolm Turnbull and the Liberals are relying on Henry Ergas for their economic advice. I guess he and Malcolm both know how to turn a quid from building and then selling advisory businesses - the search party is still out trying to locate Ergas' other expertise.

Friday, March 28, 2008

A Funny Thing Happened on the Way to the Forum

A classic 60s slapstick-style comedy - but my blog is about Australia 2020.

You see I was vain enough to nominate for one of the committees, disappointed that I didn't receive a letter of invitation and then stunned when the final list was released today.

You see I nominated for what was announced on 3 February as "Economic infrastructure, the digital economy and the future of our cities". With the announcement of the steering committee on 26 February it was announced that Warwick Smith would chair the committee - on "Economic infrastructure, the digital economy and the future of our cities". And that was certainly the name of the committee in the on-line form I completed.

I was a bit concerned when the first twenty members were announced on 23 March, because none were listed for the committee on the digital economy, though at the bottom of the release it still said "Economic infrastructure, the digital economy and the future of our cities" was one of the ten critical areas for discussion at the summit.

But with the final release of the full 1000 participants today the first item "Future directions for the Australian economy – including education, skills, training, science and innovation as part of the nation’s productivity agenda" in all the earlier lists was morphed into two separate committees of 100 - one on the "Future directions for the Australian economy" and a separate one on "The Productivity Agenda (education, skills, training, science and innovation)". On the official lists Warwick Smith is now shown to be chairing this.

What we don't know is whether the original committee was dropped because of lack of interest from potential participants, or it was thought to be too diverse a group of topics (though I can easily link the three), or whether it was because the weight on nominations for the big headline "future directions of the economy" resulted in a need to find a way to accomodate them all.

But in the process the whole "critical area" has simply disappeared. So there is no explicit reference to economic infrastructure - it hasn't been added to one of the other economic lists. There is a whole committee to talk about the minority of Australians who don't live in cities - and no committee for those who do. And meanwhile - the digital economy doesn't exist - and it hasn't even been explicitly added to the 'productivity agenda".

I haven't had the time to go through the list in detail - but I do note the media coverage that James Packer has been added. That might be good because Packer and Lachlan Murdoch together perhaps equals one synapse. But heavens he's on the committee to talk about future directions for the Australian economy. We know his answer - gambling - or, as they call it down on the farm, "Prosperity through Probability" - a great slogan for the side of the barn.

To paraphrase the Bill Clinton 1992 election slogan "It's D-Economy, stupid." So much for Kevin Rudd "getting it" as his Minister for the Digital Economy keeps telling us.

(Note: It is also interesting to note how the order of the committees has changed - with health being top of the list now whereas the economy was originally. Was this designed to make it harder to note the change, or just playing to the warm inner glow of talking about health.)

A Bubble of Blood

Hope that got your attention.

This is an eye update. I had a one week check-up yesterday, and had a nervous morning because I started to get enough vision back in the eye that I noticed that I again had a dark view at the bottom of my eye - but this time like a straight line, unlike the arc of the detatched retina. I also noticed the line moved up and down as I tilted my head but still no idea.

The doctor explained that there has been a little post operative bleeding and this has gathered at the bottom of the eye. The line stays as a horizon even if I tilt my head to the side. Discovered today that I can see it sloshing around when I walk!

So that is all good. The detatchment was, as they say in the trade, macula off, but so far it is going well. Still another week before the gas bubble dissipates and we really see how it is going.

Sunday, March 23, 2008

One-eyed Tahs Supporter

Please read on - this isn't about football.

On Monday 10 March the vision in my left eye was incredibly blurry. This was very strange because the Friday before I'd picked up new reading glasses and had a visual field test, and the Friday before that I had the eye test to get a new prescription and was advised I had no pressure problems (glaucoma), no catarats and they even took nice pictures of my retinas. I do have large optic nerve attacments but I have had for a while, and they aren't getting worse (that's why you have the field test), I also had slightly large veins in the eye. The optometrist asked if I had hypertension and I replied that my blood pressure was good.

On the Monday I made an appointment with my GP but didn't think it was an emergency, so the earliest I could get in was Monday 17 March. When I saw the GP that afternoon I also mentioned my blocked nose and the GP decided we should check to see if there was a sinus infection that could be causing the vision problem, this required a sinus CT scan The GP thought I'd be struggling to get booked in but that I had to insist, and made another appointment for me at 6:15 Thursday, which was of course the day before Good Friday. At this stage all I had was very blurry vision, so that seemed OK. By the time I left the surgery it was too late to call the Radiology place, but when I rang first thing Tuesday they said I could get in straight away.

I went about life as normal on Tuesday but on Wednesday morning I woke to have a green shadow circle segment in the lower right corner of my left eye. As this didn't clear I rang the GPs office - but he doesn't work Wednesday. By Wednesday night it was black and almost filling the whole of the eye.

So Thursday morning I rang to ask for an earlier appointment and got one for 11:15 am. As soon as I sat down and talked about the symptoms he realised something more was wrong (he simply thought a bleed) and booked me in to see an opthalmologist straight away. So down I went to the specialist and saw him at about 12:30 - on first examination he looked at my eye and said "yes you have a problem" then put more drops in my eye to dilate my pupil and sent me out for half an hour. Not a great wait I must say.

Then when I go back in after looking again he tells me I have a torn and detatched retina which is not good. He only sees two a year. I will need to see a retina guy, but they have one right there (and I discover later he only works there Thursday). They squeezed me in to his already busy schedule - plus gave me some more drops to further dilate the pupil.

While waiting they take pictures of my retinas - and wow - it really is ugly. About half the retina is detatched and it is masking the rest of the retina so it looks blurry. When I get to see the retina guy he tells me officially the bad news - and for some reason (possibly contributed to by not having eaten since breakfast, a high level of stress and having looked at the world through one eye) I start feeling incredibly dizzzy - so I lie on the floor and get the rest of the news lieing on my back. He tells me that I actually do have cataracts forming, which is sort of good because the surgery to fix the retina results in cataracts so it is less of a concern if I was geting them anyway. The surgery could be done at the Eye Hospital but Thursday night might be a problem because it is also the hand hospital and there is a five hour operation about to start to reattach a guys fingers. They can't tell what has happened to the macula and if it hadn't yet detatched then getting the retina back on would be better for recovery. I convinced the guy we should try for Thursday night.

It is now about 3:30pm and he tells me I should aim to be at the Hospital by 5 and present to Eye Emergency. He encourages me to take the train but I want my iPod so need to go home first and we figure driving will be just as fast. We very nearly made it except for a guy who just double parked in Hospital Rd and who took exception to us tooting - what part of he was blocking access to emergency didn't he understand.

Because we'd missed 5pm eye emergency was shut, so we went to ordinary emergency. Ordinary emergency didn't understand that while the hospital was expecting me I wasn't really booked in - they sent me up to the first floor who wanted to send us back down. I didn't move till she called her supervisor who was brilliant, took me back downstairs and explained to the triage sister what to do. It was still a long process to get admitted.

At 10pm the retinal guy and I remet in theatre, he'd been home had dinner and a bit of a sleep. Surgery was under a local anaesthetic but quite frankly I don't remember a thing (the good eye was covered and the optic nerve of the dud eye blocked by the anaesthetic).

Back to the ward at about midnight. Text to Marg to tell her I was OK - then try to sleep on my stomach with my face down. Out of hospital at about 10:00am the next day. Now my eye is full of gas, I can't catch a plane for a couple of weeks, have no vision out of the eye and have to wait to see if I'm one of the 90% for whom the retina reattaches.

All this trouble to become a one-eyed Waratah's fan and they still lost miserably to the Crusaders.

Thursday, March 06, 2008

Telstra's Big Loss

The High Court today gave its decision in Telstra's case challenging the validity of the telecommunications access regime.

It wasn't just a loss for Telstra though, it was really a big loss. The court ultimately had to decide whether the cutting over of local loops to competitors for the purpose of providing ULLS and LSS services was an acquisition of property, and if so whether the so-called "historic shipwrecks" provisions of the Act were sufficient to preserve the validity of the access regime.

Telstra lost on the very first limb, the acquisition of property. But they lost not on the technicality that was argued in the case of whether Telstra did or did not still have the ability to use the copper. They lost on the grounds that their property right to the copper had always been encumbered by the legislative framework, that when they acquired the PSTN it as acquired under a legislative regime that included the requirement to provide access. The Court didn't further dwell on the fact that any other asset invested in since the vesting was equally covered by the provisions of the act.

In an earlier post I said "Those who are resorting to property rights arguments might find out they have less than they ever imagined." This is certainly what has now happened to Telstra. There are some futher interesting questions about what the management and Board have been representing to shareholders in terms of the assets they own, and their probably could be some "good faith" defence. I know the Commonwealth was always very careful as vendor to state that in the sale process it was not changing any element of policy.

As a side benefit, the Court also ruled that had their been an acquisition, the historic shipwrecks provisions would have been sufficient to save the regime, though Telstra could still mount a challenge that the compensation wasn't just in the Federal Court. But that route is now eliminated.

This is a deceptively big decision, one that I think many corporations will have wished Telstra hadn't ever brought. It will certainly lify a veil of uncertainty over the scope of the legislative arrangements for telecommunications and could even further embolden Government.