Monday, January 21, 2013

The death of a thousand cuts: using multiple tactics to overwhelm your opponents - Aidan Ricketts

The death of a thousand cuts: using multiple tactics to overwhelm your opponents - Aidan Ricketts:
Buy The Activists Handbook by Aidan RickettsThe message here, is to be very resourceful in taking stock of what tactics are available to you, and do not be too quick to discard possible options. Corporate players can sometimes be pushed to make a commercial decision to withdraw rather than face the escalating costs of fighting an unpredictable and damaging public interest battle on multiple fronts; politicians similarly may end up realising that the fight is becoming too damaging for them.

A golden rule for activists is to remember is that power holders are the ones who have everything to lose. This understanding helps turn your relative powerlessness into a form of power in itself. Usually the worst that can happen to you is that you lose your fight, which was going to happen anyway if you didn’t fight.

Tactics are like the fireworks of your campaign, they can be fun, attract a lot of attention and if you are lucky they may make a sizeable bang.


  1. All is not well with shale and fracking.

    Shale gas flow report disappoints investors

    INVESTORS sold off stocks exploring for shale gas in the Cooper Basin on Monday after Beach Energy reported a disappointing flow rate from its Moonta well there.

    There are hopes that Australia can replicate the shale gas boom in the US, with the amount of recoverable shale gas in the Cooper Basin estimated at 85 trillion cubic feet by the US Energy Information Administration, but development has so far been slow.

    Late on Friday afternoon Beach reported that the Moonta-1 unconventional vertical well had flowed gas at a maximum controlled rate of 2.6 million square feet per day (MMscfd) and was currently flowing at 1.6 MMscfd.

    The disappointing rate fell short of expectations of up to 4 MMscfd, according to Macquarie analyst Kirit Hira, based on Beach's two earlier Cooper Basin shale gas wells Encounter and Holdfast.

    Beach shares fell by 9 per cent on Friday, or 12.5¢, to $1.33, while partner Icon Energy fell more than 6 per cent to 22¢ and both Drillsearch and Senex Energy fell 4 per cent, to $1.41 and 70¢ respectively.

    Last year Santos announced the first commercial production of shale gas from the Cooper Basin, at the Moomba-191 well, which is still flowing at 2.5 MMscfd indicating flow rates will halve each year - a better decline rate than the US.

    But Wilson HTM analyst John Young said the Beach result was ''reasonable''. ''I don't think this one well result means the whole [Cooper Basin shale play] won't work,'' he said. ''We're only three wells into an 11-well program. The actual flow rate was better than the two prior wells.''


    Domestic buyers punt on cheap gas and lose

    COAL seam gas producers say growing calls for gas-reservation policies are the result of punts gone wrong by domestic users who failed to lock in long-term contracts because they thought prices would fall.

    Former Arrow Energy chief Shaun Scott told The Australian the company could not get the support of domestic gas users in the early years of Queensland CSG production, so LNG was pursued instead.

    Santos' head of eastern Australia operations, James Baulderstone, said that in the past five years domestic gas users had been unwilling to lock in long-term contracts because they bet there would be excess CSG in the early years of the Gladstone LNG projects.

    Calls for east coast reservation policies - to set aside an amount of gas production for domestic users - come amid a looming shortage of gas caused by the start-up of CSG export plants at Gladstone over the next three years. This will triple east coast gas demand and send prices beyond 2015 as high as $9 a gigajoule - three times current prices.

    Mr Scott said early CSG players tried to get long-term sales contracts at $3 a gigajoule to create a viable domestic gas market. "Nearly all of them turned us down, in many cases arguing that there was so much gas they would just wait and get it cheaper," he said.

    "Ultimately we saw that the only way to create a viable industry was to link into the big markets of Asia via LNG, which is what we did."

    Expectations of cheaper gas were at the time driven by a now-abandoned plan to pipe gas from Papua New Guinea.


  2. Move to safeguard gas supply

    THE Northern Territory government has refused to rule out intervention in the gas market as it struggles to offset the billion-dollar risk associated with a plan to save Rio Tinto's aluminium refinery in Arnhem Land.

    The Territory has a rapidly growing gas industry, and after winning power in August, Chief Minister Terry Mills pledged to continue the former Labor government's policy of not intervening in the market.

    However, if the crisis surrounding the NT's largest private enterprise continued, a new policy of reserving a portion of gas for government use might have to be considered. "If we can't resolve this (then) that certainly could activate those decisions about reserving gas," he said yesterday.

    The gas industry has long opposed any reserve policy, arguing that markets alone should set prices and determine allocation.

    Struggling manufacturers would like to see reserve policies widespread.

    Concerns have begun to emerge that eastern Australia could soon run short of gas because so much is being sold for export. The NT and federal governments, Rio-owned Pacific Aluminium and suppliers have been locked in negotiations since Pacific Aluminium announced a review of operations at its plant on the Gove peninsula in October.

    Mr Mills said yesterday that to suggest Rio had the federal and NT governments over a barrel was "not an unreasonable observation".

    The refinery and bauxite mine is believed to be losing more than $200 million a year, in large part due to the high cost of heavy-diesel power generation. Downsizing to mining only would halve the size of the nearby town of Nhulunbuy, the NT's fourth-largest settlement, according to modelling seen by The Australian.


    BARNETT eyeing this saga,could be thinking,"here's my chance to get one back for them stealing Inpex.
    Give Rio a real sweet deal on the Mitchell Plateau bauxite,el cheapo JPP gas,yeah,we might have them here!"

    Let them dozers roll,raw deal yeeeahhh.

  3. All is not well with our trading partners.


    Japan's economic revolution rocks the world

    So, Japan may not slide into genteel oblivion after all. To the surprise of the Japanese, their country is smack in the middle of two riveting dramas that threaten to upturn the global strategic landscape in short order.

    We all watch with disbelief as China and Japan rattle sabres over the Senkaku-Diaoyu islands, so like events that drew Europe’s alliance systems into conflict from 1911 onwards.

    Both graduated to fighter jets last week: Japan sending in F-15s; China deploying J-10s, and mobilising the East China Sea fleet for live ammo drills. China’s purpose is to test Washington’s willingness to get behind its Asian allies at the risk of conflict. That is courting fate.

    Against this, Japan’s economic policy revolution seems tame. Yet forces are being unleashed that could rock the world’s asset markets and trading system. Premier Shinzo Abe has vowed an all-out assault on deflation, going for broke on every front with fiscal, monetary, and exchange stimulus.

    Monetarists say Japan’s mistake over the past 20 years has been to launch one spending spree after another without monetary backing. The result has been to push net public debt to 145 per cent of GDP this year (or gross debt of 245 per cent) without reaching ‘‘escape velocity’’.

    The BoJ sat of on its hands for a decade. Only later did it buy bonds, but in dribs and drabs, on short maturities, from banks instead of the public, in a half-hearted spirit.

    Mr Abe has lost patience. This time the BoJ will do what it is told. The next governor must be a soulmate ‘‘with the will and ability to pull the nation out of deflation’’, he said. Leaks suggest that the BoJ will set an inflation target of 2pc this week, backed by unlimited bond purchases.

    The liquidity effects of this by the world’s top external creditor could be large enough to leak into everything from New Zealand bonds, to Brazilian equities, and Chelsea property, a ‘‘carry trade’’ on steroids.

    On the fiscal side, Mr Abe will launch stimulus worth 20 trillion yen, or 4.4 per cent of GDP. No matter that the budget deficit is already 10 per cent of GDP, or that financing needs are 60 per cent of GDP this year.

    The IMF advises Japan not to push its luck, warning that the country has reached the point where even a ‘‘relatively small’’ rise in borrowing costs could set off havoc.


    ‘‘Europe offers a cautionary tale. Once market confidence is lost, regaining it becomes very difficult,’’ it said.

    Mr Abe cares not a wit about such opinions, yet he is taking a huge gamble. Japan is losing its safety buffers one by one. The trade surplus has evaporated. The work force is shrinking every year. The state pension fund has become a net seller of government bonds. Japan’s banks have become the buyers or last resort instead, pushing their holdings to 85 per cent of GDP, but that diverts lending away from small firms.

    Former UK rate-setter Adam Posen says fiscal stimulus ceased to be any help years ago and is now counter-productive. The risk is not that Japan’s debt trajectory will fly out of control. The damage is insidious.

    ‘‘When a large country with its own currency reaches its fiscal limit, growth ends not with a bang but a whimper,’’ he said


    Huge issues are at play. The world’s trade system is fragile. A record global savings rate of 24 per cent is acting like a wasting disease, leaving too little demand to go around. Everybody wants a weaker currency.

    Japan’s adventure cuts both ways for the rest of us: stimulus helps lift the global economy, but yen manipulation snatches market share and takes us into the brave new world of ‘‘actively managed exchange rates’’, as Sir Mervyn King puts it.

    We will find out soon which is the more powerful effect.

  4. All is not well with our trading partners.


    The great China corruption fire sale

    Thousands of Chinese communist officials have been panicked into a fire sale of their illicit properties and billions of pounds have been smuggled overseas as the country's new leaders intensify a campaign to root out corruption.

    Luxurious properties are being dumped on the market in Beijing, Shanghai and Guangzhou for anyone able to pay in cash as officials try to cover their tracks. A report by the party's anti-corruption unit, the Central Commission for Discipline Inspection, said "a wave of luxury home sales began last November and has accelerated since December".

    It said the volume of deals had intensified by "a hundred times" after Xi Jinping, the incoming Chinese president, warned that corruption could kill the party and put one of the country's most vigorous and resolute politicians, Wang Qishan, in charge of stamping out graft.


    Fu Zongmo, an estate agent in Sanya, Hainan, said his colleagues had sold two houses recently for government officials. In recent years, the tropical beaches and golf courses of Sanya have attracted plenty of speculators but recently the market has stalled.

    "They never register the houses in their own names and they use a string of agents to do the deals," said Mr Fu. He said one company had bribed an official by buying him a property at the Mountain Water International Complex. "The property was put in the name of the official's relative. After six months, it was sold for two million yuan ($302,000), around the same amount it cost. Then the official could cash out.

    "The officials often use a special mobile number and when the deal closes they invite us for dinner to end the relationship. Then they throw away the number so we cannot contact them," he added.

    The CDIC report, which was obtained by the Economic Observer newspaper, suggested that nearly 10,000 luxurious homes had been sold by officials in Guangzhou and Shanghai last year. It also claimed that $US 1 trillion, equivalent to 40 per cent of Britain's annual gross domestic product, had been smuggled out of China illegally in 2012. Economists and experts cast doubt on the figure, but said the flow of money was dramatic. Li Chengyan, a professor at Peking University, suggested that about 10,000 officials had absconded from China with as much as pounds $US100 billion.


    Marco Pearman-Parish at Corporation China, a company in Beijing that helps clients find properties abroad, said there had been a strong rise in clients looking for homes in the Cayman Islands. "In Beijing, half our clients are government officials," he said. "Nine out of 10 claim to be businessmen, but it emerges over the course of the deal that they have government jobs."

    The CDIC said 1,100 government officials had fled China during last year's national holidays in October and that 714 had been successful in getting away. In the United States, the National Association of Realtors said properties worth more than $US7 billion had been bought by Chinese in the US last year. Some high-end homes were now built for rich Chinese, with ponds for koi carp and a second kitchen for pungent cooking


    Jiang Ming'an, a professor at Peking University Law School and an anti-corruption adviser, said: "The government has been setting up a housing registration system and that may have scared some of the officials with too many houses. People will not take to the streets now because the economy is good. But when it slows down in the future, as the old saying goes, the fire cannot be covered with paper forever."


  5. What happens to all this if there is another shock?

    Australian housing 'severely unaffordable'

    Australia still has the most unaffordable housing markets in the world despite two years’ of stagnant or falling house prices, according to the latest Demographia International Housing Affordability Survey.

    Ahead of New Zealand, United Kingdom, Ireland and Canada, Australia has the largest number of housing markets, including both Melbourne and Sydney, that are classified as ‘‘severely or seriously unaffordable,’’ the ninth annual survey of its kind reveals.

    The survey shows Sydney is the third most expensive major housing market in the world with a median multiple of 8.3 followed by Vancouver in Canada with a multiple of 9.5, and, most expensive, Hong Kong where the multiple is 13.5.

    Melbourne is ranked as the seventh most unaffordable major housing market with a multiple of 7.5 after London and San Francisco and San Jose in California.

    The Demographia survey ranks the affordability of housing in the US, Canada, Britain, Australia, New Zealand, Ireland and Hong Kong by dividing the median house price with the median household gross annual income before tax.

    A multiple of three or less is seen as affordable.


    The measure, widely used for evaluating urban markets, is recommended by the World Bank and United Nations and used by the Harvard University Joint Center on Housing.

    Historically, the median multiple has been remarkably similar in Australia, Canada, Ireland, New Zealand, Britain and the US, the survey said.

    But restrictive land supply policies have seen the median balloon in the last decade resulting in many more severely unaffordable markets, particularly in Australia and New Zealand, it said.

    The most affordable major housing market was Detroit in the US, which had a median multiple of 1.5 reflecting the depressed state of its economy.


    Outside the US, the most affordable markets were Edmonton in Canada (3.5), Dublin (3.6) and Ottawa-Gatineau (3.7).

    The affordability of Australia’s major housing markets has improved, however, from a median multiple of 6.7 to 6.5 over the past year.

    In the past year, Australia has moved down the ranking with 8 out of the 20 most expensive housing markets. Only four of those were in the top ten most expensive as opposed to five in last year’s survey.


    ‘‘However, each of the five major markets continues to be severely unaffordable, reflecting vastly overpriced housing,’’ the survey noted.


    The last time Australia’s housing markets were classified as affordable was in the 1980s.

    The country’s least expensive housing markets were in Shepparton and Mildura in Victoria.