Thursday, March 24, 2011

regional economics and employment shocks.

Two of the world's most prominent economists, Mankiw and Krugman, have welcomed the free public release of The Brookings Papers on Economic Activity journal archives. Krugman points to a paper on Regional Evolutions as influential to his thinking on the importance of labour mobility to regional economic adjustment in currency zones.

The paper (need to skim through the wonkish bits) does actually provide a useful framework for thinking through issues related to regional economics here and adverse shocks to employment as experienced in the Cairns regional economy in recent years.

Friday, March 18, 2011

February Unemployment

The volatile Far North regional ABS employment data has spiked up to a 13% unemployment rate in February. Cyclones and flooding rains have been fingered as the main culprits in the Cairns Post.

The ABS stats estimate a fall of 3,400 in the total employed in the Far North. However, that is in the context of a fall of 22,000 in total employed in Qld for the month. The national stats released last week provide a more detailed break down not included in the regional stats.

Peter Martin posted commentary on the national stats with particular note employment falls mostly in part-time employment, and also weak youth employmment.


Wednesday, March 16, 2011

Tinkerbell's CEC Connections?

Bryan Frith, in The Australian, has taken some issues with the ASIC response to breaches by Ray Catelan. Who? Ray was the founder of property data firm RP Data. Until recently he was also a substantial holder in CEC having bought his stake  from  Tom Hedley. The transactions discussed by Frith relate to CMI. Frith has previously written on the antics of Catelan at CMI which have also been noted in the Courier-Mail.
Catelan already had a substantial stake in CMI when his daughter took a stake via Tinkerbell Enterprises Pty Ltd atf Leanne Catalan Family Trust. Tinkerbell's substantial holder notice for CMI reveal accumulation over time then a large acquisition 23 November 2010.  The ASX substantial holder notice was 26 November. On 26 November Ray Catelan coincidentally lodged notice that he had ceased to be a substantial holder in CEC after offloading his entire 5% holding, presumably related to the gift to his daughter for her acquisition.

Catelan had acquired his holding in CEC from Hedley in June 2008. That transaction itself included a regulatory breach in that Hedley had failed to adequately notify of his own substantial holder position previously.
Catelan and his daughter were associates and consequently in breach of takeover corporations provisions.  Frith is correct to question whether the penalty is appropriate given that apparently Catalan has prior form: "It is not the first time that Catelan has suffered an unacceptable declaration from the panel."
Catelan acquired his CEC holding from Hedley for more than $1million. He got just $188k back when he sold on November 26. There was no other substantial holder notification on the other side of this off-market transaction. So it looks like the reason for the CEC sale could have been part of a shuffle to fund his daughters stake in CMI?
P.S. Frith has also previously posted on Tom Hedley and his shennanigans at NLG before his collapse, and also Tricom.  

Tuesday, March 15, 2011

further CEC delays

CEC announcement last night that accounts will be delayed for possibly as long as the end of this month, so will remain suspended from ASX. Note this announcement refers to 'material accounting issues to be determined'. The previous delay announcement on Feb 28 only referred to Yasi and flooding.
 
ASX ANNOUNCEMENT 14 March 2011
Further to the announcement on 28 February 2011, CEC Group Limited (ASX: CEG) wishes to inform the market that it will not be lodging its Appendix 4D until sometime after 14 March 2011 but is expected to be lodged prior to 31 March 2011.
Recent events such as cyclone Yasi and flooding had disrupted completion of the accounts and audit and there remain material accounting issues to be determined.
The company is making every effort to complete the Appendix 4D and audit in an expedient manner and remains conscious of its continuous disclosure obligations. The company will provide further guidance to the market on or before 31 March 2011.
ENDS

Non-Lodgment of the Appendix 4D for the six months ended 31st December 2010

Sunday, March 13, 2011

Should we lose sleep over the Japanese earthquake?

Don Arthur at Club Troppo has done what I think a great post on Japan's earthquake and the moral response.

"If 18th century philosopher Adam Smith is right, you probably slept just fine. In his book, The Theory of Moral Sentiments he imagined what would happen if the whole nation of China was swallowed up up by an earthquake. How would "a man of humanity" in Europe respond? According to Smith, he might express great sorrow, reflect on the precariousness of human life, speculate how the disaster might affect trade and then go happily about his business ..........
 
So is Smith saying it’s OK to just ignore other people’s suffering and do nothing to help? No he isn’t. What he’s arguing is that in situations where there is something practical we can do to help, moral behaviour doesn’t depend on strong feelings of sympathy. We don’t need to respond more strongly to other people’s suffering than we do to our own to do the right thing. If there is something we can do to prevent or ease other people’s suffering, most of us won’t sit by and do nothing."

Many confine Adam Smith to a naively narrow economic view. Entirely disregarding The Theory of Moral Sentiments and preferring to focus on a reference to the 'invisible hand' in The Wealth of Nations as a fundamental ideology. Which it was not.
 
Update: Peter Martin gives a good economic summary of A human, more than an economic tragedy.
 

Wednesday, March 9, 2011

China aviation deal

Have I missed something? Maybe the Cairns Post got in fast and had it in their print edition yesterday? Maybe the ABC broadcast it but not on their web site?
 
Anyway as far as I am aware the release from Federal Minister Albanese dated 7th March and apparently released yesterday morning I would have expected to qualify as lead story in the Wednesday business section of the Cairns Post and i got the print edition and nothing (note: they have still also not reported more than a week later the suspension of CEC yet again from ASX?). There is a good post yesterday at Crikey from Ben Sandilands describing  "awesome implications". Sandilands  is an aviation journalist and previously aviation correspondent for the Financial Review.  Plane Talking with Ben Sandilands
 
Essentially the expanded deal provides additional seats if airlines on the China-Australia route come via Cairns, Darwin or Broome enroute. Critically it also allows the passengers to break in Cairns and the international airline to still then carry them on to a further domestic destination rather than being forced onto domestic flights.
 
Also gives rights for flights to then link out of China to destinations beyond providing another route into/from Cairns to possibly Europe etc for improved business and tourism links. No restrictions to freight on flights.
 
I would have thought it one of the more significant policy outcomes for Cairns in recent years? So why is this just not only NOT the leading business story in our media today but almost unreported?