Et tu ABC?

Et tu ABC? A Saturday morning giggle does you good and The Australian provided it with its story quoting the former Queensland Labor MP Keith de Lacey who has parlayed his former state cabinet post as Treasurer into considerable wealth as chairman of a mining company that digs coal from leases granted by the Queensland government bureaucracy he knows so well.  Of course such a fellow would be objecting to a mining resource tax and suggesting that Prime Minister Kevin Rudd should be replaced by someone amenable to maintaining the taxation status quo. This was a dog bites man story not one where the man bites the dog.

What was news was that the ABC television bulletin on Saturday night saw fit to give prominence to this non-news story as if it was somehow significant. Something strange has happened to the judgment of the national broadcaster when it so avidly follows the nonsense spewed out by the national daily.

A cautious Reserve Bank. Minutes of the last Australian Reserve Bank Board meeting released this morning show a growing concern at the uncertainty about the economic future caused by problems of sovereign debt in Europe. “Developments in the euro area had dominated events in financial markets in the past month,” recorded the minutes. “Sentiment had deteriorated sharply in the period following the previous Board meeting as concerns about the fiscal position of Greece, Spain and Portugal intensified. The poor sentiment led to a marked scaling back of trading in bonds issued by European sovereigns outside Germany.”

The soundness of that judgment leading to leaving our official interest rates untouched was given overnight by the Bank for International Settlements which reported how bailout of the risky countries is very much a bailout of the banks- – especially the banks of Germany and France. The bailout of the risky countries in Europe is very much a bailout of the banks — especially the banks of Germany and France.

As part of its quarterly review, the BIS  estimated the exposures of banks by nationality to the residents of Greece, Ireland, Portugal and Spain:

As of 31 December 2009, banks headquartered in the euro zone accounted for almost two thirds (62%) of all internationally active banks’ exposures to the residents of the euro area countries facing market pressures (Greece, Ireland, Portugal and Spain). Together, they had $727 billion of exposures to Spain, $402 billion to Ireland, $244 billion to Portugal and $206 billion to Greece .

French and German banks were particularly exposed to the residents of Greece, Ireland, Portugal and Spain. At the end of 2009, they had $958 billion of combined exposures ($493 billion and $465 billion, respectively) to the residents of these countries. This amounted to 61% of all reported euro area banks’ exposures to those economies. French and German banks were most exposed to residents of Spain ($248 billion and $202 billion, respectively), although the sectoral compositions of their claims differed substantially. French banks were particularly exposed to the Spanish non-bank private sector ($97 billion), while more than half of German banks’ foreign claims on the country were on Spanish banks ($109 billion). German banks also had large exposures to residents of Ireland ($177 billion), more than two thirds ($126 billion) of which were to the non-bank private sector.

French and German banks were not the only ones with large exposures to residents of euro area countries facing market pressures. Banks headquartered in the United Kingdom had larger exposures to Ireland ($230 billion) than did banks based in any other country. More than half of those ($128 billion) were to the non-bank private sector. UK banks also had sizeable exposures to residents of Spain ($140 billion), mostly to the non-bank private sector ($79 billion). Meanwhile, Spanish banks were the ones with the highest level of exposure to residents of Portugal ($110 billion). Almost two thirds of that exposure ($70 billion) was to the non-bank private sector.

With figures like those it is not hard to imagine another international financial crisis being on the way.

A tweeting debate. The New South Wales Greens are looking forward to a Nine Network initiative to hold what it terms as a “world first election twitter debate.”

Greens MP Lee Rhiannon describes the event thus:

“This world first election twitter debate will demand politicians directly engage with voters, minus intervention from their spin masters. Without the distraction of TV lights, hairdos and scripts the gristle of what Labor, the Coalition and the Greens can offer Penrith is up for scrutiny. Voters are tired of glossy election campaigns where substance has been sidelined. The Twitter debate is a grassroots, democratic approach to electioneering, different to the coiffured campaign debates NSW voters have had to endure in the past. Tomorrow’s Penrith Twitter debate is free, intimate and instant. The Greens hope it will become a fixture.”