Oct 10

Sydney Kings conquer Hawks in Wollongong

Livewire guard Rotnei Clarke’s 30-point haul couldn’t quite save the Hawks in Sunday’s trial against the Sydney Kings at the Snakepit in Wollongong.
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The Hawks fell behind by 25 in the first half before fighting back on Clarke’s red-hot perimeter shooting to pull within three.

But the visitors made enough free throws to clinch a 98-93 victory.

Wollongong finished the pre-season with a 2-5 record and take on titleholders New Zealand in the 2013-14 season-opener on October 10.

Clarke hit 9/13 shots, including 5/8 from three-point range. He was also a perfect 7/7 at the foul line.

Fellow import Durrell Summers threw down three crowd-pleasing dunks and showcased his athleticism on the way to 26 points.

Summers poured in a game-high 28 points and grabbed nine rebounds on debut in Friday night’s double overtime win over the Kings, while Clarke finished with 25 points and six assists.

Absent for the Hawks was centre Larry Davidson. The home team sorely missed the 209-centimetre defensive anchor, particularly inside where Sydney’s A. J. Ogilvy casually racked up 16 first-half points before taking the rest of the night off.

Davidson was rested after turning an ankle in Friday’s clash but doesn’t expect to be sidelined for more than a few days.

“The disappointing thing was that we got totally out worked and their disruption early caused us a lot of problems, and we weren’t smart enough to work our way through it,” Wollongong coach Gordie McLeod said.

“The other thing was that we were closing out [defensively] on the wrong guys and leaving the wrong guys open. We weren’t where we needed to be mentally with what we were doing.”

McLeod was far more impressed with his side’s second-half performance.

“It was a great effort in the second half,” he said.

“We really did a good job of disrupting more, and we made some shots and applied some pressure and made a game of it.

“Obviously we’ve got some work to do, but we’ve made good improvement since our first pre-season game against Cairns.”

Hawks forward Oscar Forman and guard Rhys Martin combined for 15 points, while forward Tim Coenraad had six points and a team-high eight rebounds.

Leading the way for Sydney were Brad Hill and Charles Carmouche, who each scored 23 points.

This story Administrator ready to work first appeared on Nanjing Night Net.

Oct 10

New climate body raises nearly $1m in donations

A social media campaign to fund a replacement for the abolished Climate Commission through private donations has proved a huge success with $900,000 raised in less than a week.
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Amanda McKenzie, from the rebadged Climate Council, said the money was raised largely from small donors, with an average donation of about $50.

The funds were raised from about 20,000 individuals and far exceeded the original targets.

“Initially the councillors aimed to raise $500,000 in a week. That target was met after two days,” she said. “Once we got to $800,000 we upped the aim to $1 million on Facebook”.

Ms McKenzie said most of the donations from the email and social media campaign had come through its Facebook page. “There’s obviously very strong community interest for the community to get the facts.”

As one of its first acts, the newly elected Abbott government fulfilled its pre-election promise to axe the Climate Commission.

A day after being sworn in, Environment Minister Greg Hunt called chief climate commissioner Tim Flannery to say the body would be abolished immediately. The decision will save the government $1.6 million a year.

The commission was set up by the Gillard government to provide public information on global warming. Mr Hunt said it was axed to streamline government processes and that analysis on climate change would be provided by the Environment Department.

Ms McKenzie described the fund-raising method as “Obama style”, a reference to the social media fund-raising strategy of US President Barack Obama, which involved tapping small donors for contributions.

Ms McKenzie said she had not seen all the donations but the bulk were for $5 to $1000. She was yet to see a donation of more than $1000.

She said the new body was yet to decide if it would disclose the identity of large donors. It also wanted to keep raising money but was yet to determine if that would be used to boost the council’s annual budget or stretch its funding over a longer period.

“The capacity to work depends on what the budget is – the greater budget the greater capacity to do work.”

Ms McKenzie said one of its first acts was to provide a summary of the latest Intergovernmental Panel on Climate Change report.

This story Administrator ready to work first appeared on Nanjing Night Net.

Oct 10

Baby animals delight at Mattara

THERE’S a mouse in there and a bedroom as well.
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In fact the whole ‘‘Stuart Little’’ family have moved into the loaf of bread that greets children entering the Baby Animal World at the Mattara festival in Newcastle.

The tiniest of creatures were causing the most amazement on Mondayat the exhibit, which has returned to the festival for its fifth year.

All Animals principal Rhonda Hall said she creates two small windows or indents in the bread and the mice do the rest.

‘‘The mice build two levels out of the bread and a ramp to get between,’’ she said.

Ms Hall said the mice will live happily in their bread house for a couple of weeks before she changes the loaf.

The carer’s Arcadia home in Sydney resemble’s Noah’s ark and she has brought several rescued baby animals to the Camp Shortland site on Newcastle’s foreshore this year.

There’s baby goats (or kids), piglets, ducklings, lambs and guinea pig pups.

Two-year-old Jeydah Rizzoli couldn’t wait to climb the fence to join the animals.

The Waratah youngster has a snake, two lizards, a dog and a bird at home.

‘‘She loves animals and gets on really well with them,’’ Jeydah’s mother Angie said.

The 52nd Mattara festival will run until Monday October 7 and is expected to attract between 10,000 and 15,000 people.

Organiser Kim Hillery said this year’s festival would focus on families and will include a Lego display, indoor cinema and daily karate lessons.

With a budget of $60,000 and no council funding, she said the festival was being run on the generosity of volunteers, local businesses and fund-raising.

A highlight this year will be the Mattara MotoMania day on Sunday October 6.

The day is dedicated to all forms of the motor industry and will feature motocross displays and Ziggy’s Hot Rods.

Mice in a high-top loaf of bread at the Baby Animal World display at the Mattara Festival, Newcastle Foreshore, on Monday. Picture by SIMONE DE PEAK.

Jeydah Rizzoli, aged 2 and a half, with a duckling at the Baby Animal World display at the Mattara Festival, Newcastle Foreshore, on Monday. Picture by SIMONE DE PEAK.

Oct 10

Labor’s friendly leadership contest hits Perth

Anthony Albanese (left) and Bill Shorten after the Labor leadership debate in Sydney. They will face eachother in Perth on Monday night. Photo: Marco Del Grande MDGFederal politics full coverage
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Anthony Albanese and Bill Shorten have both hailed Labor’s forthcoming leadership ballot as a watershed moment in democracy.

Mr Albanese described the vote as “a great experiment in democracy”, while Mr Shorten said the ALP was “making history in this ballot”.

Speaking at a breakfast rally for ALP members in Perth’s Hyde Park, the two candidates were just as keen to talk up Labor’s new approach as they were to underline their own visions for the party.

Mr Albanese said it was crucial for Labor to continue to champion the new policies it had introduced while in power, including Disability Care, the Better Schools funding program, and the carbon pricing legislation.

He said Labor needed a different approach to the one it took when it was cast into opposition by John Howard.

“In 1996 we didn’t defend our legacy,” he said. “When we come up with a good idea we should be prepared to defend it.”

Mr Albanese also focused on Labor’s future, pointing out that for the first time, rank-and-file members will have a say in developing federal policy.

Both he and Mr Shorten shared a platform at the event, in another demonstration of both candidates’ determination to put the ALP’s acrimonious leadership squabbles in the past.

“If Bill is elected leader he will be a great leader and I’ll be happy to work with him, this is a great experiment in democracy,” Mr Albanese said.

In turn, Mr Shorten said he was “determined that ideas will run the Labor Party, not factions”, and spoke of “drawing a line under the past”.

Mr Shorten paid tribute to his opponent’s long parliamentary career, while adding that he was effectively working in opposition to the Howard government while working as a unionist.

He outlined a plan to win back the blue-collar vote, particularly in WA, where he said a mindset had developed that those who work in small business or industry should naturally gravitate towards the Liberal party.

There was a need to distinguish between policies designed to help industrial workers, rather than those that simply benefit their bosses, he said.

Mr Shorten said the ALP was “determined to renew and refresh democracy in this country”, before urging the party to regroup in time to repair what he described as the damage that would be done to Australia by the Abbott government.

“We can make history in one term by making Tony Abbott history,” he said.

Postal ballots were sent out to ALP members on Tuesday. Rank-and-file members have until October 9 to vote, ahead of the party caucus vote on October 10. The two votes will carry equal overall weight in electing the new leader.

Mr Albanese and Mr Shorten will debate each other on the ABC’s Q&A program in Perth on Monday evening. Follow WAtoday on Twitter

This story Administrator ready to work first appeared on Nanjing Night Net.

Oct 10

A housing bust’s biggest loser

Vulnerable … Australia’s housing market Photo: Paul RovereHow to spot a housing bubbleProperty: the boom you can’t mention
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Besides the Melbourne Cup and the footy finals, there are few things that set Australian pulses racing quite like arguments over house prices.

But rather than add to the abundance of analysis and opinion that’s flooded the media recently, let’s consider who has more to lose from a housing bust: Australia’s largest insurer or the world’s most expensive bank.

In the Commonwealth Bank’s annual results presentation, you’ll find a reassuring slide that shows the predicted losses from a three-year stress test.

Assuming property prices eventually fall 32 per cent, unemployment rises to 11.5 per cent and the official cash rate drops to 1 per cent, Commonwealth expects to lose only $1.9 billion from uninsured loans after collecting $2.1 billion of lenders’ mortgage insurance, and that conservatively assumes that all loans 90 days in arrears trigger a claim.

That’s just $4 billion of losses on a $373 billion mortgage book, or just over 1 per cent, and half of that is insured.

This seems a trivial amount for such a big economic dislocation, but let’s look at the two largest players in lenders’ mortgage insurance.

In October 2008 QBE Insurance bought mortgage insurer LMI. QBE LMI reportedly has about 35 per cent of the mortgage insurance market, with Genworth controlling 50 per cent, according to ratings agency Standard & Poor’s.

In Australia, borrowers with deposits of less than 20 per cent of the purchase price of their new home are obliged to take out mortgage insurance, so if they default on their loan mortgage insurers such as QBE LMI are on the hook for any properties sold at a loss by lenders such as Commonwealth Bank.

At this point shareholders of the big banks, who include virtually every Australian through their superannuation portfolios, will be feeling safe and secure. But there’s a problem.

Under the assumed conditions in Commonwealth’s stress test, every other financial institution would be making claims as well. Let’s say the total claim was $7 billion, though it could be far higher.

Now compare that to the $2 billion of shareholders’ equity that Genworth reportedly has, and the roughly $1 billion QBE has invested in LMI, which is itself obliged to meet certain regulatory capital requirements.

Theoretically, the most QBE could lose is the $1 billion because LMI is ring-fenced to ensure that losses from QBE LMI never drag QBE down with it.

Suddenly bank shareholders aren’t sitting so pretty. If QBE LMI is only good for $1 billion and Genworth $2 billion (it also has $1 billion of unearned premiums) who is going to cover the remaining $4 billion or more? If QBE LMI and Genworth don’t have adequate reinsurance policies, it seems losses would be higher than Commonwealth, for example, is anticipating. But who would be worse off?

Even if Commonwealth suffered the full $4 billion ($1.9 billion + $2.1 billion) of losses, if that’s as bad as things got, Commonwealth would get through the period relatively easily. But remember the government had to backstop the big banks’ loans during the global financial crisis, even though there was no real trouble with bad debts.

Perhaps the thought of large losses would cause foreign lenders to withdraw funding, triggering dilutive capital raisings and dividend cuts anyway. Though there’s no guarantee that shareholders would emerge smiling, the big four banks would also probably receive help from the authorities if they got into real trouble.

In contrast, the losses could devour QBE LMI – $1 billion of capital is a drop in the ocean of the $500 billion mortgage insurance market. If QBE chipped in more capital to maintain its reputation, QBE’s already leveraged balance sheet would come into question and also probably trigger a capital raising and a further cut to dividends unless its reinsurance policies paid off.

Bailouts were required during the financial crisis because losses from a US-style property collapse are virtually uninsurable.

The ingredients for a property downturn in Australia are in place: high personal debt, too much reliance on China’s unsustainable economic growth, and high property prices. But there’s no telling how the situation will play out.

Perhaps China will muddle through and income growth will one day catch up to the growth in property prices.

Anything’s possible but the message for investors is pretty clear. If you have a large direct exposure to property, either through your home, investment properties or superannuation, owning bank shares or QBE means all your eggs are in one basket.

This article contains general investment advice only (under AFSL 282288).

Nathan Bell is the research director at Intelligent Investor Share Advisor. You can get access to a free trial to Share Adviser here and follow Share Advisor on Twitter at @value-investing.

This story Administrator ready to work first appeared on Nanjing Night Net.