Dec 19, 2016

50 isn’t the new 40: It’s a sticky wicket once you get past fifty

In a little over a fortnight, I’ll be turning 50. And let’s be clear about this — 50 is not the new 40, or the new 30, or this season’s orange or the new black. Fifty is just 50, and it sucks. Half a century, the big five-o, call it what you will, the plain fact of the matter is, barring exceptional genetics and some luck, your life is way more than half over and there’s not much to look forward to except a long slow slide into decrepitude, forgetfulness and aching in the places where you used to play.
More people you know, and more of your heroes, start dying. You talk about the television shows and movies you grew up with, and get blank stares from younger folk (call yourself a millennial and I’ll punch you on the nose). You might still feel 21 inside, but you get out of a taxi in slow motion and you have become strangely invisible to the opposite sex (unless you are turning 50 and a squillionaire, in which case, party on, Bruce Wayne).
You stop going to bars and clubs, because everyone is younger and better looking and you can’t understand a damned thing they are saying anyway, even if you could hear them. It’s pointless going to restaurants because you can’t read the menu, and by the time the waiter deigns to notice you, you’ve forgotten what you wanted to order.
All your friends are married, often several times over, and are becoming grandparents at a rate of knots (or dealing with their daughter’s puberty and their wife’s menopause at the same time). If, like me, you find yourself a swinging single at 50 (well, parts of you that never used to now keep swinging after the music stops) you face a terrifying new world of dating apps, where Snapchat is the new chat-up, Tinder isn’t something you use to start a fire and Grindr isn’t just the reason you need false teeth.
Slim-fit jeans are no longer an option, a Michelin Man roll of lard settles around your middle that simply won’t be shifted, and putting on socks becomes a physical challenge, involving grunts, groans, torn hamstrings and wrecked backs. (Pro tip: lie back on the bed, feet in the air, and apply sockage, to avoid hamstring and back injuries. There may still be grunts and groans.)
You consider buying a belt-maker’s leather punch so you can put that extra hole in your belt without skewering your finger on the pointy end of your scissors. You know you have to exercise — and let’s not forget, procrastination is a form of exercise, like denial is a river in Egypt — but you no longer bother with macho pursuits like running marathons, kiteboarding or surfing, and instead opt for walking, cycling, lawn bowls or sports involving carts with someone to do the heavy lifting and tell you when it’s cocktail hour. Aching limbs take longer to stop aching, and the hangovers get exponentially more brutal.
You are strolling down the street in good spirits when you see some bent and wrinkled old fart — and realise you went to school with them. Worse, you catch your reflection in a shop window, and it takes you a minute to realise the bent and wrinkled old fart is you. The end is nigh when younger folks start calling you “sir’’ or “ma’am” and stand up for you on the bus or train.
Your thatch may be silvered and thinning, but there’s plenty of new hair growth to deal with, on your back, up your nose and in your ears. Fifty Shades of Grey isn’t some risible cinematic sex romp but a backyard barbecue with your mates.
Old age and treachery may beat youth and exuberance, and youth may be wasted on the young, but then so is your codgerly wisdom and sage advice. Although there may be nuggets to glean from your contemporaries — never waste an erection, always take the opportunity to pee and be extra careful when you fart was the sum total of hard-won knowledge imparted by one
50-something friend. Take half a Viagra … so you don’t pee on your shoes, advised another.
But perhaps the worst thing about turning 50 is a creeping lassitude and a growing sense of weltschmerz with a light sprinkling of ennui. You stop worrying about all the things you were going to do by 50 and just think, bugger it. Your personal too-hard basket gets bigger and easier to put things in. For example, this column was to be 50 Reasons it Sucks to Be Turning 50. Instead, I give you a handful of half-baked reasons and some grumpy old man rambling 

Dec 17, 2016

NSW family burned in boat explosion

Three family members have suffered burns in an explosion aboard their boat on the NSW Central Coast.

The 35-year-old man, 34-year-old woman and their two sons, eight and seven, had just left the wharf when the blast occurred.

The woman, who suffered serious burns to her arms, legs and torso jumped into the water with the eight-year-old, who was burned on his legs.

The man received burns to his arms and legs. 

 A passing boatie helped get them back to shore before paramedics arrived.

The woman was airlifted to Westmead Hospital in a serious condition while the man and two children were taken by road.

The seven-year-old escaped injury but was treated for shock.

Officers from the NSW Police Marine Area Command have been tasked with determining the cause of the explosion.

Dec 5, 2016

Josh Frydenberg on who will pick up the battery storage tab |

Energy rules need to be changed to ensure households that don't embrace new technologies such as battery storage and solar photovoltaic systems are not left picking up the bill, federal Energy Minister Josh Frydenberg says.

As state and federal leaders prepare to discuss energy issues at next week's Council of Australian Governments meeting, Mr Frydenberg said the National Electricity Market had to change to adapt to the influx of new technologies such as wind and solar.

But he said while battery storage and PV systems were being embraced by some households and businesses, governments had an obligation to make sure non-solar/battery households were not slugged with the bill.

"While solar PV and battery storage can offer significant benefits to households and the network as a whole, it is important to get the pricing framework right, otherwise some households will be unfairly forced to pick up the tab for other people's choices," Mr Frydenberg said in a speech to the Australian National University's Energy Change Institute in Canberra on Tuesday.

Generous state feed-in tariffs for rooftop solar PV systems over the past decade – where solar households were subsidised to sell energy back into the grid – led to spike in electricity prices as network charges were passed on to non-solar households in the form of higher power bills. This led to state governments closing solar schemes or limiting them to new entrants.

Creating challenges

Mr Frydenberg said while consumers were "hungry" for new and more affordable technologies – such as battery storage or "neighbour to neighbour trading" – they were changing the way the NEM operated.

"This is creating challenges for fairly sharing the costs of supplying electricity," he said.

Mr Frydenberg said the state-wide black out in South Australian in September showed the challenges facing the NEM and the need to ensure the move towards renewables did not affect energy security.

While other countries around the world also faced the move from fossil fuels to lower emissions technologies, Australia's geographic isolation made it even more challenging, he said.

Other countries such as Germany, where wind and solar accounted for 20 per cent of the nation's energy needs, could tap into the wider European grid when the intermittent power was not operating at full capacity.

"This allows them to overcome some of the security and reliability challenges arising from a higher mix of intermittent renewables in the electricity system," Mr Frydenberg said.

Energy security

"Where Germany has far more options to manage its electricity supply through a wider European grid, the NEM is isolated. In Australia the challenge of balancing differing loads from the integration of intermittent renewable generation has to be managed much more closely and with fewer options."

The Finkel review into energy security, chaired by chief scientist Alan Finkel, is looking into how non-synchronous generation such as wind and solar can provide stable electricity supply, including the 50 hertz required for proper frequency, in the NEM.

A preliminary report from the Finkel review will be delivered to next week's COAG meeting, with the final report due in the first half of 2017.

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Dec 1, 2016

More Than 1 Million Google Accounts Breached by Gooligan | Check Point Blog

As a result of a lot of hard work done by our security research teams, we revealed today a new and alarming malware campaign. The attack campaign, named Gooligan, breached the security of over one million Google accounts. The number continues to rise at an additional 13,000 breached devices each day.

Our research exposes how the malware roots infected devices and steals authentication tokens that can be used to access data from Google Play, Gmail, Google Photos, Google Docs, G Suite, Google Drive, and more.

Gooligan is a new variant of the Android malware campaign found by our researchers in the SnapPea app last year.

Check Point reached out to the Google Security team immediately with information on this campaign. Our researchers are working closely with Google to investigate the source of the Gooligan campaign.


“We’re appreciative of both Check Point’s research and their partnership as we’ve worked together to understand these issues,” said Adrian Ludwig, Google’s director of Android security. “As part of our ongoing efforts to protect users from the Ghost Push family of malware, we’ve taken numerous steps to protect our users and improve the security of the Android ecosystem overall.”

Click here to read Adrian Ludwig’s complete statement on Gooligan.
We are very encouraged by the statement Google shared with us addressing the issue. We have chosen to join forces to continue the investigation around Gooligan. Google also stated that they are taking numerous steps including proactively notifying affected accounts, revoking affected tokens and deploying SafetyNet improvements to protect users from these apps in the future.

In the following sections, we provide more answers regarding the campaign.

Who is affected?

Gooligan potentially affects devices on Android 4 (Jelly Bean, KitKat) and 5 (Lollipop), which is over 74% of in-market devices today. About 57% of these devices are located in Asia and about 9% are in Europe.


In our research we identified tens of fake applications that were infected with this malware. If you’ve downloaded one of the apps listed in Appendix A, below, you might be infected. You may review your application list in “Settings -> Apps”, if you find one of this applications, please consider downloading an antivirus product such as Check Point ZoneAlarm to check if you are indeed infected.

We have noticed that hundreds of the email addresses are associated with enterprise accounts worldwide.

How do you know if your Google account is breached?

You can check if your account is compromised by accessing the following web site that we created:

If your account has been breached, the following steps are required:

A clean installation of an operating system on your mobile device is required (a process called “flashing”). As this is a complex process, we recommend powering off your device and approaching a certified technician, or your mobile service provider, to request that your device be “re-flashed.”
Change your Google account passwords immediately after this process.
How do Android devices become infected?

We found traces of the Gooligan malware code in dozens of legitimate-looking apps on third-party Android app stores. These stores are an attractive alternative to Google Play because many of their apps are free, or offer free versions of paid apps. However, the security of these stores and the apps they sell aren’t always verified. Gooligan-infected apps can also be installed using phishing scams where attackers broadcast links to infected apps to unsuspecting users via SMS or other messaging services.

How did Gooligan emerge?

Our researchers first encountered Gooligan’s code in the malicious SnapPea app last year. At the time this malware was reported by several security vendors, and attributed to different malware families like Ghostpush, MonkeyTest, and Xinyinhe. By late 2015, the malware’s creators had gone mostly silent until the summer of 2016 when the malware reappeared with a more complex architecture that injects malicious code into Android system processes.


The change in the way the malware works today may be to help finance the campaign through fraudulent ad activity. The malware simulates clicks on app advertisements provided by legitimate ad networks and forces the app to install on a device. An attacker is paid by the network when one of these apps is installed successfully.

Logs collected by Check Point researchers show that every day Gooligan installs at least 30,000 apps fraudulently on breached devices or over 2 million apps since the campaign began.

How does Gooligan work?

The infection begins when a user downloads and installs a Gooligan-infected app on a vulnerable Android device. Our research team has found infected apps on third-party app stores, but they could also be downloaded by Android users directly by tapping malicious links in phishing attack messages. After an infected app is installed, it sends data about the device to the campaign’s Command and Control (C&C) server.

Gooligan then downloads a rootkit from the C&C server that takes advantage of multiple Android 4 and 5 exploits including the well-known VROOT (CVE-2013-6282) and Towelroot (CVE-2014-3153). These exploits still plague many devices today because security patches that fix them may not be available for some versions of Android, or the patches were never installed by the user. If rooting is successful, the attacker has full control of the device and can execute privileged commands remotely.

After achieving root access, Gooligan downloads a new, malicious module from the C&C server and installs it on the infected device. This module injects code into running Google Play or GMS (Google Mobile Services) to mimic user behavior so Gooligan can avoid detection, a technique first seen with the mobile malware HummingBad. The module allows Gooligan to:

Steal a user’s Google email account and authentication token information
Install apps from Google Play and rate them to raise their reputation
Install adware to generate revenue
Ad servers, which don’t know whether an app using its service is malicious or not, send Gooligan the names of the apps to download from Google Play. After an app is installed, the ad service pays the attacker. Then the malware leaves a positive review and a high rating on Google Play using content it receives from the C&C server.

Our research team was able to identify several instances of this activity by cross-referencing data from breached devices with Google Play app reviews. This is another reminder of why users shouldn’t rely on ratings alone to decide whether to trust an app.


Two examples of reviews left by users who were also found on the attacker’s records as victims.


An example of fake reviews and comments to one of the fraudulent applications.


The same user discovered two different fraudulent apps were installed on his device, without his knowledge.

Similar to HummingBad, the malware also fakes device identification information, such as IMEI and IMSI, to download an app twice while seeming like the installation is happening on a different device, thereby doubling the potential revenue.


One of the apps downloaded from Google Play by Gooligan.

What are Google authorization tokens?

A Google authorization token is a way to access the Google account and the related services of a user. It is issued by Google once a user successfully logged into this account.

When an authorization token is stolen by a hacker, they can use this token to access all the Google services related to the user, including Google Play, Gmail, Google Docs, Google Drive, and Google Photos.

While Google implemented multiple mechanisms, like two-factor-authentication, to prevent hackers from compromising Google accounts, a stolen authorization token bypasses this mechanism and allows hackers the desired access as the user is perceived as already logged in.


Gooligan has breached over a million Google accounts. We believe that it is the largest Google account breach to date, and we are working with Google to continue the investigation. We encourage Android users to validate whether their accounts have been breached.

Appendix A: List of fake apps infected by Gooligan

Perfect Cleaner
WiFi Enhancer
Html5 Games
memory booster
Flashlight Free
memory booste
Touch Beauty
Small Blue Point

Nov 28, 2016

Federal World Vision funding ‘went to Hamas’

The Australian government has been one of the biggest funders of the Hamas terror organisation in Gaza over the past seven years, Israe­li authorities allege.
In August, the head of World Vision Gaza, Mohammad El Halabi, was charged with infiltrating the charity in 2010 on behalf of Hamas. The Israeli government alleges he funnelled $US43 million to the proscribed terror outfit in that time.
The Australian can reveal that since 2010, the Australian government has been the world’s single biggest donor to World Vision in Jerusalem, the West Bank and Gaza (JWG), through AusAID and the Department of Foreign Affairs and Trade. World Vision Australia bids for funding from the federal government for the organisation’s projects overseas.
According to the Jerusalem-based NGO Monitor, its analysis of World Vision’s accounts between 2010, when Mr Halabi became World Vision’s Gaza head, and 2014 shows Australia contributed $27.9m to World Vision JWG, followed by the US which gave $US16.8m ($22.5m), Canada with $US15.4m ($20.7m) and Britain with $US724,000 ($973,000).
The Israeli arm of World Vision­, World Vision Israel, known as an “amuta” or non-profit organisation, has been threatened with being wound up by an arm of Israel’s Ministry of Justice for repeatedly failing to file financial documents for almost two years.
In August, Tim Costello, then World Vision Australia chief executive, said he was “profoundly shocked” by the “very explosive allegations”. However, he said he had “no reason to believe” the allegations against Mr Halabi were true.
Sources from Israel’s state security agency Shin Bet previously have told The New York Times there is no evidence World Vision management was aware of the alleged major fraud, but that it had occurred because of very lax financial oversight at the organisation.
World Vision has strenuously denied this, saying it has extremely well-audited programs, and that all its accounts are audited by international accountancy firm PricewaterhouseCoopers.
It said it had also engaged a separate international forensic accountancy firm to audit World Vision­’s operations in Gaza.
Shin Bet has said the alleged World Vision siphoning of cash and materials was the biggest known fraud involving a non-­government organisation’s funds flowing to Hamas, and that the money had been used to build tunnels from Gaza to Israel with a view to conducting terror attacks.
Shin Bet also has alleged World Vision donations were used to build a Hamas military base, and food packages intended for families in need instead went to Hamas military battalions.
Hamas has controlled Gaza since 2007.
However, despite the Israeli government’s claims that Mr Halabi siphoned about $US43m from World Vision to Hamas — about 60 per cent of World Vision’s Gaza funding at that time — it is understood Mr Halabi’s charge sheet makes no reference to that figure and has few specific allegations.
Some other Jerusalem-based aid organisations The Australian has spoken with are very sceptical of the allegations and see them as a cynical move by Israel to crack down on aid funding to Gaza.
They point out Mr Halabi was arrested on June 15 but was not charged until August 4; that the charge sheet contains only very limited specific allegations; and that Mr Halabi has a very good reputation in the aid community.
“To date we are yet to see any substantive evidence to support the charges made by the Israeli authorities,” a World Vision spokeswoman said yesterday.
Following Mr Halabi’s arrest, World Vision suspended its operations in Gaza. The day after he was charged, on August 5, Australia’s Department of Foreign Affair­s and Trade froze all funding to the group.
Australia’s ambassador to Israel, Dave Sharma, described the allegati­ons against Mr Halabi as “deeply troubling” and said the suspension would continue pending the outcome of a DFAT review. Late last week, a DFAT spokeswoman said the investigation and freeze continued.
The Australian has obtained, via NGO Monitor, documents filed with the Israeli Registrar of Non-Profits.
The documents show the registrar, with the assistance of an external accountancy firm, began an audit of World Vision Israel in August 2014 and requested the Jerusalem-registered entity provide documents detailing the “finan­cial, administrative and other records for the group” within 18 days.
Despite six further letters and warnings from the registrar and the accounting firm over the 16 months to December last year, World Vision Israel failed to produce the documents, and later provided documents that were incomplete or not in an appropriate format.
On June 26, the registrar sent another letter to World Vision Israel, warning the entity would be dissolved if it continued to fail to meet the registrar’s requests.
The relevant documents since had been filed with the registrar, a World Vision spokeswoman said. Neither World Vision Israel, nor any other World Vision entities in the region, had been dissolved at any stage, she said.

Nov 24, 2016

China trade, and mortality among white middle-aged men

New research has found a link between rising imports from China and a wave of suicides and drug-related deaths across the US.
The study, by Federal Reserve economist Justin Pierce and Peter Schott of Yale University, adds a new piece to the puzzle of rising mortality among middle-aged white men in many parts of the US, as well as the surge of antitrade rhetoric during the presidential election.
It finds a “statistically significant relative increase in suicide…concentrated among white males” from 2000, a year that saw Congress grant China permanent normal trade relations, which helped codify China’s status as a rising trade power. Since then Chinese imports to the US have surged around fivefold to $US483 billion ($654.7bn) last year.
The authors investigated how suicide and drug-related death rates changed across US counties from 2000. They found those counties with workers whose jobs were relatively more vulnerable to Chinese competition—as measured by employment-weighted implied tariff cuts their industries experienced—saw increases in death rates that couldn’t be explained by other factors.
The authors were motivated by recent research by Anne Case and Nobel laureate Angus Deaton that showed rising mortality rates for white US men ages 45 to 54.
“The thing about that paper that we noticed was that the trend started in 2000, when you see a big jump in US imports from China and a huge loss in manufacturing jobs,” Mr Schott said.
Around half of the decline in total US manufacturing employment, which fell around three million over the five years from 2000, has been linked to rising Chinese imports.
The authors found that the most affected counties were in the Southeast. Around a quarter were barely affected at all, as they contained little manufacturing or agriculture, sectors more susceptible to trade competition. Counties with an average level of exposure to Chinese competition experienced roughly a 3.5 per cent increase in their suicide rate and a 24 per cent jump in accidental poisoning. Those levels imply a few thousands extra deaths a year across the country. The effects appeared to be lasting.
“Suicides could lead to more suicides or new economic consequences could take time to push people over the edge,” Mr Schott said.
Mr Schott and his co-author also demonstrated a tight link between counties more exposed to tariff reductions and increases in joblessness, which leads to lower income and reduced quality of life. A county whose unemployment rate increased by one percentage point experienced an 11 per cent increase in the suicide rate.
Mr Schott said shutting down trade liberalisation was the wrong lesson to take from the paper. “That hurts everyone, and we want the increases in productivity and reductions in prices that trade brings,” he said. “We need to care about the workers, not the jobs.”
He advocated greater spending on programs to re-skill workers and help them to move into growing sectors of the economy.
The research pointed out that freer trade could improve health outcomes in other areas that enjoyed cheaper goods and services.
Wall Street Journal

Nov 22, 2016

'Truth Decay' Makes Facts Subjective and Polarization More Extreme | RAND

A decade ago, “truthiness” and fact-checker ratings like “Four Pinocchios” and “Pants on Fire” weren't part of the political vernacular. Disagreements over policy have always existed—but disagreements over basic facts have not.

It's a phenomenon that RAND CEO Michael Rich calls “truth decay.” And it's been on his mind since long before the election results brought the topic into sharp relief, he told the audience Friday night as part of a Politics Aside discussion called Erosion of Truth.

 “This is to me really a dangerous and unusual time in history. Because Americans not only feel entitled to their opinions—and rightly so—but many of them, a growing number of them, frankly, across the political spectrum also feel entitled to cherry pick facts to support their opinion, or even commission up new 'facts' if necessary,” Rich said. “…When everyone has their own facts, then nobody really has any facts at all.”

Truth decay is a threat to a research organization like RAND, whose very existence is based on facts and objectivity, he said, but more importantly it's a threat to society.

 It pushes political polarization to even greater extremes and prevents policymakers from reaching consensus on solutions to the nation's biggest challenges.

Polarization inflamed by truth decay is the gravest threat facing America.

“Polarization inflamed by truth decay is the gravest threat facing America,” Rich said. “And that's because virtually no important problem can be solved, virtually no bold initiative can be completed, in the span of a single two-year Congress or even a four-year presidential administration.”

Rich recalled how nearly 30 years ago the U.S. Senate was debating the international treaty that phased out chlorofluorocarbons—organic compounds used as aerosol propellants, refrigerants, and solvents—that researchers said were depleting the ozone layer.

Similar to today's battles over climate change, some policymakers were skeptical, and scientists acknowledged they couldn't prove that human activity was to blame for the deteriorating ozone layer.

RAND analysis, relying on the best available evidence, helped break the stalemate by framing the issue in a new way—based on probabilities, not certainty—and the Senate ratified the treaty. Unanimously. “How many of us can imagine our elected leaders in Washington doing the same today on any important issue?” Rich asked.

Spirited public debate is part of the political process, Rich concluded, but policymaking itself must be rooted in rigorous research and analysis of the facts.

“The distinction is this: A policy debate featuring different interpretations of the same facts, that's healthy. It promotes compromise and consensus. But a policy debate featuring opinions about opinions? Without an agreed-upon common set of facts? That's a recipe for gridlock.”

— Melissa Bauman

Nov 4, 2016

Hazelwood closure bad news for Victoria warns Josh Frydenberg

Malcolm Turnbull says the demise of the Hazelwood power station in Victoria’s Latrobe Valley will improve the business case for a second Basslink interconnector between Victoria and Tasmania.
Speaking on Tasmanian radio station LAFM, the Prime Minister said the closure of Hazelwood was likely to see Victoria go from being a net exporter of electricity to a net importer.
“That would improve the economic viability, the business case for the second connector,” he said.
Former state minister Warwick Smith has been commissioned by the federal government to investigate the viability of a second connector.
“It would certainly improve the economics because there would be more demand for Tasmanian electricity across Bass Strait.No doubt about that,” Mr Turnbull said.
“If as has been forecast Victoria becomes a net importer of electricity, the opportunities are essentially New South Wales and Tasmania and South Australia, although South Australia’s had its own as you know energy security problems, occasioned by the state government’s mismanagement of their energy security.
“I think the opportunities for exporting electricity will be increased and that should, all other things being equal, improve the business case for a second connector.”

Andrews adds $222m in support

Victorian Premier Daniel Andrews has announced an extra $222 million to support the Latrobe Valley community cope with the closure of the Hazelwood coal-fired power plant.

But the opposition has dubbed the move “bastardry disguised as charity” given the Andrews government’s recent tripling of the brown coal royalty.

The announcement adds to $42m already promised yesterday, bringing the state government’s total commitment to $266m.

Speaking in Morwell, Mr Andrews said the package would help to establish a Latrobe Valley Authority, provide $22m to help workers retrain and get financial and personal counselling, $50 million to attract businesses by cutting the cost of relocation to the Latrobe Valley, and provide $174m for important local infrastructure projects.

“Normally, I would be able to run through for you a long list, adding up to exactly $174m,” he said.

“But instead, my colleagues and I, having listened to this local community, we’re going to do something a little bit different and we’re going to listen to this community and continue to engage about the infrastructure projects that are most important to the Latrobe Valley.”

Mr Andrews said the spending would include rail and road, schools and sporting and community facilities.

Victorian Shadow Treasurer Michael O’Brien said the announcement scarcely made up for $252m the Andrews government would be receiving in extra taxes from January 1 as a result of its decision to triple the brown coal royalty.

“In this year’s budget Daniel Andrews ripped $252m in new taxes out of the Latrobe Valley but now he wants credit for giving some back,” Mr O’Brien said.

“This is bastardry disguised as charity.

“With other Latrobe Valley power stations under economic pressure, Daniel Andrews should immediately put this massive tax hike on hold.”

Mr O’Brien said the Andrews government’s “ideologically driven” 40 per cent renewable energy target was also designed to make Latrobe Valley generators uncompetitive.

Hazelwood ‘bad for Victoria’

Earlier, Energy Minister Josh Frydenberg said the closure of the Hazelwood power station in the Latrobe Valley will result in Victoria going from being a net exporter of electricity to other states, to a net importer, Environment and Energy Minister Josh Frydenberg says.

French company Engie, which owns the plant, announced yesterday that it would be closing the coal fired plant in March, leaving up to 1000 people in the Gippsland valley without a job.

Mr Frydenberg said Australia could not afford the closure of another Hazelwood in the near term, and accused the state Labor government of driving Engie out of town in a bid to win green votes in inner city electorates.

“Already I’m being told by the Australian Energy Market Operator that supply is very tight,” Mr Frydenberg told ABC radio.

“As a result of this decision to close Hazelwood, Victoria will go from being a net energy exporter — it already provides about 14 per cent of South Australia’s energy and about six per cent of New South Wales’ and six per cent of Tasmania’s ... to an importer of energy.

“That’s not good news for Victorians.”

Mr Frydenberg said Hazelwood represented 22 per cent of Victoria’s electricity supply and around four per cent of the national electricity market.

“You take out of the equation the cheaper brown coal fired power, and you put in its place gas, renewables, or indeed the importation of black coal fired power from New South Wales, and you will get higher prices and you will invite more instability into the system,” he said.

Mr Frydenberg said the estimated four to eight per cent price increase the loss of Hazelwood would deliver to Victorians was significant.

“That’s $86 a year, and it won’t just be in the first year, it will also increase in subsequent years,” he said.

“That’s about $1.65 a week, and if you’re a single mum with three kids at home and you’re heading into a hot summer or a cold winter and you need to use your heating or your cooling, that will impact on you.”

Mr Frydenberg said that while the Coalition understood the importance of a lower emissions future, the highest priority was energy security.

“That’s in stark contrast with the Labor Party, who have pursued an ideological approach which has meant that they have traded away blue collar jobs in the regions to win green votes in the city,” he said.
Mr Frydenberg also accused the Andrews Labor government in Victoria of driving Engie out of town, by tripling the coal royalties the company was required to pay the state, and setting an “unrealistic” 40 per cent state based renewable energy target.
Shadow Industry Minister Kim Carr said that while the government’s announcement yesterday of $43 million to help the Latrobe Valley community recover from the closure was welcome, it was a “stop-gap” measure, and would not have the necessary long term impact.
“This is a situation that requires more than fine sentiments of collaborations and consultations,” he told the ABC. 
“It actually requires the resources to be put behind job creation.
“We can train people all we like, but unless there’s jobs for people to go to, then there is inevitably going to be frustration as people fail to secure the economic prosperity of their families. It’s worth noting that in the budget of 2014, this government actually cut $9.6 million out of the Latrobe Valley economic diversification program.”
Engie Australian chief executive Alex Keisser said the company had been in talks with the Turnbull and Andrews governments for several weeks, and had come to an ultimate decision earlier this week.
“This is not a decision to take lightly,” he told ABC radio.
“It is very terrible for the region and for all of our employees.”
Mr Keisser conceded the need for long term stability in energy policy had played a part in the decision.

Nov 3, 2016

A digital crack in banking’s business model

arly a decade after the global financial crisis, the capital markets and investment banking (CMIB) industry remains under pressure amid weak profits, high costs, and lingering strategic uncertainty. The inescapable reality is that the industry’s restructuring efforts to date have failed to produce sustainable performance. A more fundamental change is required, based on the realization that for most banks, the traditional model of global capital markets and investment banking is no longer an option.
Globally, the average return on equity (ROE) for the industry in 2015 was around 10 percent, unchanged from 2014. US banks outperformed, with the biggest banks generating an average ROE double that of their European peers (10 percent versus 5 percent). The top ten global CMIB banks posted declining revenues for the third straight year (exhibit). This decline was driven by fixed income. Equities and investment banking actually experienced some revenue growth in the last three years. Many national and regional banks were notable outperformers, winning clients and taking a bigger share of industry revenues.
ROE for top ten CMIB banks was a disappointing seven percent in 2015.
For global banks saddled with high operating costs and complexity, the macro environment is particularly challenging, with persistently low interest rates and slow economic growth undermining returns. The key fixed income, currency and commodities sector (FICC) is under particular pressure in terms of revenues, capital charges, and costs, and FICC accounted for just 46 percent of revenues for the top ten banks in 2015, compared with 61 percent in 2010. Across the industry, the FICC price-to-book ratio was about 0.6x at the end of 2015, implying value destruction of $105 billion based on the book value of equity allocated to the business.
In the face of adversity, many banks have retrenched, scaling back some businesses and exiting others, which has led to liquidity concerns in some asset classes. Nonetheless, high costs continue to undermine performance.
New technologies remain underutilized, and many banks are struggling to make fundamental changes in their operating models and embrace the potential benefits of digitization. Moreover, CMIB clients are challenging the value added by banks today, with many reporting that they feel overserved by sales in an electronic/flow products world, and that banks are struggling to provide critical liquidity in products when it really matters.
Clients are increasingly unbundling their decision making and selecting the best provider in each product and region. Persistent and formidable headwinds continue to hinder CMIB performance, including lackluster revenue growth, relentless waves of regulation, entrenched product complexity, new competition, and increased uncertainty following the UK’s vote to leave the European Union. Nonetheless, McKinsey sees some encouraging tailwinds beginning to develop.
These include a growing digital toolkit, the emergence of specialized fintech players with which the industry can collaborate, and new industry utilities that are poised to drive economies of scale. In addition, fines and litigation costs have fallen over the past year and may be set to decline further.
Based on proprietary data sources, including McKinsey’s CMIB Revenue and Profit Pools, the most comprehensive data set in the industry encompassing 175 banks, and on interviews with 200 industry leaders, McKinsey sees a new market structure emerging for CMIB over the next three to five years. Four business models are likely to succeed as economic, regulatory, and technological trends play out:
  • Global full-service players at scale across products and services (three to five banks)
  • Focused global players with scale in chosen product bundles (eight to twelve banks)
  • National and regional commercial banks with strong corporate franchises and CMIB product factories
  • Non-bank competitors starting out in specific areas and then expanding into related businesses
Many banks will need to undergo transformative change to transition to a successful operating model, scaling back their aspirations for their CMIB businesses, and reducing their product set, client mix, and regional footprint, accompanied by a commensurate change in their cost structure. Hard decisions must be made, particularly with regard to costs and banks’ commitment to the CMIB business. Amid increased price competition, banks must differentiate themselves based on value propositions that meet segmented client needs. Part of the solution is to make better use of data and analytics, along with financial technology and electronic execution and distribution.
There are eight key initiatives bank leaders need to implement regardless of which of the four operating models they choose to pursue:
  • Defining the long-term business portfolio; for many players this means canceling the call option on revenue growth
  • Optimizing the balance sheet, leveraging integrated tools to address multiple constraints simultaneously
  • Developing a clear client value proposition and allocating scarce resources to clients that are willing to pay for them
  • Implementing a new cost framework, fully leveraging digital technology across the organization
  • Participating in industry utilities, including distributed ledgers (blockchains)
  • Leveraging advanced analytics, machine learning and robotics
  • Upgrading management skills and winning the war for talent
  • Addressing conduct risk, risk culture and incentives
These eight areas together provide a framework for action, with implementation based on banks’ individual resources and strategic purpose. The road to a sustainable future remains open for CMIB banks, but only if they make tough choices and take bold actions now.

Nov 2, 2016

Forget the FBI cache; the Podesta emails show how America is run | Thomas Frank | Opinion | The Guardian

The emails currently roiling the US presidential campaign are part of some unknown digital collection amassed by the troublesome Anthony Weiner, but if your purpose is to understand the clique of people who dominate Washington today, the emails that really matter are the ones being slowly released by WikiLeaks from the hacked account of Hillary Clinton’s campaign chair John Podesta. They are last week’s scandal in a year running over with scandals, but in truth their significance goes far beyond mere scandal: they are a window into the soul of the Democratic party and into the dreams and thoughts of the class to whom the party answers.
The class to which I refer is not rising in angry protest; they are by and large pretty satisfied, pretty contented. Nobody takes road trips to exotic West Virginia to see what the members of this class looks like or how they live; on the contrary, they are the ones for whom such stories are written. This bunch doesn’t have to make do with a comb-over TV mountebank for a leader; for this class, the choices are always pretty good, and this year they happen to be excellent.
They are the comfortable and well-educated mainstay of our modern Democratic party. They are also the grandees of our national media; the architects of our software; the designers of our streets; the high officials of our banking system; the authors of just about every plan to fix social security or fine-tune the Middle East with precision droning. They are, they think, not a class at all but rather the enlightened ones, the people who must be answered to but who need never explain themselves.
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Let us turn the magnifying glass on them for a change, by sorting through the hacked personal emails of John Podesta, who has been a Washington power broker for decades. I admit that I feel uncomfortable digging through this hoard; stealing someone’s email is a crime, after all, and it is outrageous that people’s personal information has been exposed, since WikiLeaks doesn’t seem to have redacted the emails in any way. There is also the issue of authenticity to contend with: we don’t know absolutely and for sure that these emails were not tampered with by whoever stole them from John Podesta. The supposed authors of the messages are refusing to confirm or deny their authenticity, and though they seem to be real, there is a small possibility they aren’t.
With all that taken into consideration, I think the WikiLeaks releases furnish us with an opportunity to observe the upper reaches of the American status hierarchy in all its righteousness and majesty.
The dramatis personae of the liberal class are all present in this amazing body of work: financial innovators. High-achieving colleagues attempting to get jobs for their high-achieving children. Foundation executives doing fine and noble things. Prizes, of course, and high academic achievement.
Certain industries loom large and virtuous here. Hillary’s ingratiating speeches to Wall Street are well known of course, but what is remarkable is that, in the party of Jackson and Bryan and Roosevelt, smiling financiers now seem to stand on every corner, constantly proffering advice about this and that. In one now-famous email chain, for example, the reader can watch current US trade representative Michael Froman, writing from a Citibank email address in 2008, appear to namePresident Obama’s cabinet even before the great hope-and-change election was decided (incidentally, an important clue to understanding why that greatest of zombie banks was never put out of its misery).
The far-sighted innovators of Silicon Valley are also here in force, interacting all the time with the leaders of the party of the people. We watch as Podesta appears to email Sheryl Sandberg. He makes plans to visit Mark Zuckerberg (who, according to one missive, wants to “learn more about next steps for his philanthropy and social action”). Podesta exchanges emails with an entrepreneur about an ugly race now unfolding for Silicon Valley’s seat in Congress; this man, in turn, appears to forward to Podesta the remarks of yet another Silicon Valley grandee, who complains that one of the Democratic combatants in that fight was criticizing billionaires who give to Democrats. Specifically, the miscreant Dem in question was said to be:
“… spinning (and attacking) donors who have supported Democrats. John Arnold and Marc Leder have both given to Cory Booker, Joe Kennedy, and others. He is also attacking every billionaire that donates to [Congressional candidate] Ro [Khanna], many whom support other Democrats as well.”
Attacking billionaires! In the year 2015! It was, one of the correspondents appears to write, “madness and political malpractice of the party to allow this to continue”.
There are wonderful things to be found in this treasure trove when you search the gilded words “Davos” or “Tahoe”. But it is when you search “Vineyard” on the WikiLeaks dump that you realize these people truly inhabit a different world from the rest of us. By “vineyard”, of course, they mean Martha’s Vineyard, the ritzy vacation resort island off the coast of Massachusetts where presidents Clinton and Obama spent most of their summer vacations. The Vineyard is a place for the very, very rich to unwind, yes, but as we learn from these emails, it is also a place of high idealism; a land of enlightened liberal commitment far beyond anything ordinary citizens can ever achieve.
Consider, for example, the 2015 email from a foundation executive to a retired mortgage banker (who then seems to have forwarded the note on to Podesta, and thus into history) expressing concern that “Hillary’s image is being torn apart in the media and there’s not enough effective push back”. The public eavesdrops as yet another financier invites Podesta to a dinner featuring “food produced exclusively by the island’s farmers and fishermen which will be matched with specially selected wines”. We learn how a Hillary campaign aide recommendedthat a policy statement appear on a certain day so that “It wont get in the way of any other news we are trying to make – but far enough ahead of Hamptons and Vineyard money events”. We even read the pleadings of a man who wants to be invited to a state dinner at the White House and who offers, as one of several exhibits in his favor, the fact that he “joined the DSCC Majority Trust in Martha’s Vineyard (contributing over $32,400 to Democratic senators) in July 2014”.
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How does the US electoral college work?
(Hilariously, in another email chain, the Clinton team appears to scheme to “hit” Bernie Sanders for attending “DSCC retreats on Martha’s Vineyard with lobbyists”.)
Then there is the apparent nepotism, the dozens if not hundreds of mundane emails in which petitioners for this or that plum Washington job or high-profile academic appointment politely appeal to Podesta – the ward-heeler of the meritocratic elite – for a solicitous word whispered in the ear of a powerful crony.
This genre of Podesta email, in which people try to arrange jobs for themselves or their kids, points us toward the most fundamental thing we know about the people at the top of this class: their loyalty to one another and the way it overrides everything else. Of course Hillary Clinton staffed her state department with investment bankers and then did speaking engagements for investment banks as soon as she was done at the state department. Of course she appears to think that any kind of bank reform should “come from the industry itself”. And of course no elite bankers were ever prosecuted by the Obama administration. Read these emails and you understand, with a start, that the people at the top tier of American life all know each other. They are all engaged in promoting one another’s careers, constantly.
Everything blurs into everything else in this world. The state department, the banks, Silicon Valley, the nonprofits, the “Global CEO Advisory Firm” that appearsto have solicited donations for the Clinton Foundation. Executives here go from foundation to government to thinktank to startup. There are honors. Venture capital. Foundation grants. Endowed chairs. Advanced degrees. For them the door revolves. The friends all succeed. They break every boundary.
But the One Big Boundary remains. Yes, it’s all supposed to be a meritocracy. But if you aren’t part of this happy, prosperous in-group – if you don’t have John Podesta’s email address – you’re out.