Swedish auto maker Volvo has as a key component of its strategy to gain a competitive advantage by providing a car safer than its rivals' offerings. Volvo reckons people, at least the more affluent ones,will pay more for a car preserving their human capital. Differentiation improves markups. 

In Australia, Rob Taylor tells us in the wall street Journal, the Swedish firm is developing a technology that could help minimize car collisions with kangaroos, a perennial nuisance:

True Blue Video

Fair dinkum Aussie:

Beware: the Aussie Air-to-Phone Drone is on the way: Flirty

Some young Aussies have come up with an aerial device, a sort of drone that looks like a beanie designed by aerospace engineers, that can deliver a package right to where your smart phone is and presumably you are. They have teamed up with a textbook renter, Zookal to provide the service as you can see on this video off the News Corp. Australia site produced courtesy Zookal and the PR Group.


We do have a few questions:

Is it scalable?

Can it deliver indoors?

ANZ: We Are Still Bullish on Natural Resoures

According to the conventional wisdom, if China slows down, Australia will catch a cold.  A natural resources boom has fueled a twenty year expansion in Australia's economy. Does the slowdown in the BRICs, and particularly the "C" (China), mean the end of this Aussie expansion? No says Mike Smith. The chief executive of ANZ discusses his country's and his bank's prospects and plans with FT's Jeremy Grant in this 5:19 minute video.  But Mr Smith does not see everything as rosy in the Lucky Country: he argues the wider Australian economy needs modernization:

Australia Going the Way of Spain? That's a Bit of an exaggeration Mate!

Billionaire Gina Rinehart, Asia’s richest woman, said Australia risked facing a debt crisis similar to European nations because of overspending and a loss of competitiveness.  Bloomberg reports:

The Labor Party Isn't Talking to Itself

Australia's Government Labor (not "Labour") government was thrown into crisis by Kevin Rudd's surprise resignation while on a trip to the U.S. The WSJ's Deborah Kan speaks to reporter Enda Curran (2/22/2012):



Four days later, Julia Gillard won a vote by the Labor parliamentary caucus to stay as Prime Minister. She won the war. Will she win the peace?

The WSJ's Deborah Kan speaks to Enda Curran from Sydney (2/26/2012):

Can the Richest Aussie Sheila Make Even Fairfax Quake?

The WSJ's Deborah Kan talks to Andrew Critchlow, the Journal's Australian correspondent, about Australia's richest woman, Australian mining heiress Gina Rinehart.  This savvy investor is translating her natural resources wealth into the biggest shareholding in Fairfax Media. (2/1/2012.)  Will she who pays the piper call the tune?

The Government Shuts Down Wind Mills and Shell Takes a FL*NG at Sea

The Wind May Blow, But the Power Does Not Flow

Pipelines and/or transmission are the choke point of energy policy. Getting energy from there to here is a big problem. Wind energy is useless if there is no transmission to get it to market. This summer, the Bonneville Power Authority is periodically disconnecting wind power from its grid. (See "Tilting at Windmills" in the Economist.)  Why?  There is so much excess melt water that the Authority is giving away hydro power for free and even paying utilities the cost of getting that power from there to them.  Unfortunately there is not enough transmission to fully share the Pacific Northwest's bounty with the rest of America.  Hence the idle windmills.    Ludwig von Mises's ghost must be experiencing schadenfreude as it mutters "another triumph for socialist planning!"

Getting Natural Gas from There to Here

Natural Gas coming out of the ground does little good unless it can be captured and transported to markets. So what do you do if you find natural gas way out at sea? Your project is in deep water economically and financially (pun intended) and will thus be dead in the water because you can not get the gas to market.  (Sorry.)

John R. Hays, Jr. is fond of reminding me how high tech the oil and gas industry is.  Shell now gives us more evidence of just high tech it is.  Six hundred engineers from around the world have worked on the world's first floating liquefied natural gas facility (FLNG).  Watch the video below to learn about the development phase of the Prelude FLNG Project to define, design and evaluate plans for the facility.  They built a scale model of the FLNG facility and tested it in tanks in artificial marine conditions to see if it would withstand wind and high waves.  The plan is to capture gas from a field far off of Broome, Western Australia, liquify it at sea, and ship the liquified natural gas (LNG) to markets.

The Recovery Is On! Fair Dinkum!

By MarketWatch's Myra P. Saefong reports Australia's gross domestic product is up in the first quarter and in comparison with last year's first quarter.

She writes, "The nation's GDP expanded by seasonally adjusted 0.4% in the first quarter, both in comparison with the same quarter a year ago and with the fourth quarter," citing the Australian Bureau of Statistics.

The All Ordinaries gained 62 points going over 4,000 for the first time since November. Hallelujah!

The Aussie dollar is also up. Ms. Saefong reports "The Australian dollar also strengthened, with one Australian dollar buying 82.26 U.S. cents, up from the previous close of 82.07 U.S. cents."

In the fourth-quarter, Australia's GDP dropped 0.6%, the first drop in eight years. Apparently the Aussie national income accountants do not report growth rates in seasonally adjusted annual rates annualized. It makes the numbers less dramatic.

"The bureau said that growth on the expenditure side over the past four quarters was driven by household spending and by exports, offset by a fall in inventories."

Disclosure: your correspondent has shares in an Aussie closed end fund.

What does it mean?

Australia's economy is tied to Asia. When the Chinese dragon stokes up its furnace, Australia and Brazil feed the beast the inputs that fuel its exuberance. Thus Australia's economic growth and the Aussie dollar are leading indicators of the globalized economy.


This implies that the world economy is recovering. Further dramatic confirmation can be found in the Baltic Dry Index, an indicator of shipping prices. As trade picks up, it costs more to hire a ship to transport it. The index has increased four-fold since December returning to the boom levels of 2004-6 and soaring toward the bubble levels of mid-2008.

Aussie Bonds Look Good: The Reserve Bank Has Guts

Bill Gross manages big money: $120 billion in bonds. He does this on behalf of California-based Pacific Investment Management Co. (PIMCO.) PIMCO's bond fund is the world's largest.

Guess what he likes: Aussie bonds.


According to a report on Bloomberg this morning, "'The Reserve Bank of Australia should be commended for [its] inflation targeting,'' Gross said. 'Australia has some of the most attractive real interest rates in the world.'' In other words, the Reserve Bank of Australia takes seriously its job of maintaining the value of the Australian dollar. The Australian central bank pursues a policy of keeping inflation between two and three percent a year.

Bloomberg News, based on a near unanimous poll of economists, predicts "Australia's central bank Governor Glenn Stevens will raise the benchmark interest rate by a quarter-percentage point to 7.25 percent at the next policy meeting on March 4."

True Blue Growth: The Australia's Economy is Up 4.3% Over a Year Ago

Bloomberg reports that Australia's GDP is grew .9 percent over the first quarter and is up 4.3% from a year ago. The Aussies do not annualize the quarterly growth rates as does the U.S. Commerce Department. I suspect they have it right down under: the gyrations in the seasonally adjusted annual rates we report on GDP growth confuses more than it enlightens.

Australia's expansion is in its sixteenth year. They have been doing well ever since I first arrived in 1991 and continued after I left. (Post hoc, ergo propter hoc?)

Investment spending and exports are leading the parade. The commodity boom and particularly China's insatiable appetite for raw materials is driving growth. The U.S. is no longer the lone leader of the world economy:

Bloomberg reports "The Australian dollar climbed to 82.45 U.S. cents at 1:36 p.m. in Sydney from 82.07 cents immediately before the report."