I tutor two high school students in English and social sciences on a freelance basis.
I never really believed or intended I would become a tutor, I somewhat fell into it. Before arriving in Canberra, I applied online to almost 20 retail jobs in Civic. After receiving nothing back and venting my frustrations to a friend at my hall, he suggested I post an ad online offering high school tutoring. I figured “Why not?”, and within about an hour I had written a Gumtree ad, uploaded a photo and posted it. Within a few days I had received four or five calls, and so far (it’s been about a month) I’ve had close to 20 contacts ask for my help.
This quick and plentiful response meant I could really choose who my students are, what my hours are and what content I teach. I primarily teach high school English and social sciences, for usually around four hours a week, making $30 per hour. One of my students is regular – two hours a week on a schedule. My other student and I have more irregular sessions depending on workload – some weeks I won’t see her; some weeks I will see her for five or six hours.
I hope to maintain this workload, and possibly pick up some additional work in the summer or over the July holidays.
So far, the difficulties I’ve faced have been fairly minimal. Though it’s never fun to try and sell yourself, it comes with the territory of freelance work. I also found, after practice on the phone with tens of parents, it became a developed skill.
The reason I didn’t go through an agency is I wanted complete control of my pay, hours and students. I love the autonomy that my job brings – for example, recently I changed regular Thursday sessions to a Wednesday so I could go to Perth to visit my family. It’s mostly for this reason that I love freelance work. I also like the growth opportunities I get for working for myself; I have the freedom to ask for a pay rise or pick up additional students.
If you had any subjects you were good at in high school and feel like you could teach, post an ad on Gumtree and give it a go. I included my ATAR, the high school subjects I was best at, age range and subjects I’m comfortable teaching, location, travel preferences, a general bio and my rates. You set your own workload, and there’s next to no barriers to entry to become a tutor. The only advice I can give is to post your own ad and get yourself out there, because just taking that leap was a game changer for me.
Got your own side hustle? Let us know at write@woroni.com.au!
Comments Off on FUCK FUCK FUCK: THE ANU SNOWSPORTS STALL WONT TAKE DAD’S AMEX
Dear ANU,
I normally begin my emails with a note saying that I have CC’d Father into our correspondence, and that all future emails will be monitored for any personal threats or defamatory statements which may form the basis for actionable litigation. However, Papa is currently in Macau on a business trip, and as such will be far too busy to review the entirety of this (sure to be lengthy) email chain.
I hope you can forgive what might be considered the blatant naivety of a first year law student, but I am certain that, in this country, we have a constitutional right to engage in free market economics, no? As such, it’s rather ironic that on ANU’s (supposed) ‘market day’ I was unable to tap-and-go my membership for ANU Snowsports. I wonder if you would have so wantonly denied my attempts at joining if you knew about my family’s private lodge – the Ramsay Centre for Anglo-Saxon Physical Activities.
It doesn’t take a second semester law student to spot the issue of your ANU Snowsports stall refusing to accept valid and legal tender in the form of an AMEX (if you earn less than $200K a year, you might know it as American Express) triple-double Black Diamond express card.
The credit limit on this card is close to $100K for a single transaction. As such, I am very curious as to why they so rudely refused my Father’s hard-earned money.
Might this fall into what we in the pre-legal profession call ‘reverse discrimination’?
I look forward to Father taking you for all you’re worth, you upper-middle income slime. By the way, I didn’t even have to type this email. I got my Tuckwell-mandated Personal Assistant to type it out. Eat shit.
Comments Off on Gibson Guitar Corporation: A Eulogy
Gibson, we only knew you for so long. 116 years in the business, and within the top two culturally significant guitar companies for 72 of them. From Al Di Meola to Marty McFly, one iconic Gibson headstock or another has been at the pointy end of so many iconic moments in music. And with almost 100 years from the death of Orville Gibson, it’s concordantly sad to see a string (or six) of stories about your impending bankruptcy when we type your name into Google.
In 1952 you gave us the Les Paul, so much a staple of the electric guitar that, if the legacy of the instrument could be summed up in a few sheets of A4 paper, it would certainly belong in the top left corner. Who can deny that Slash’s “woman tone” is instantly recognisable from the first note of the first solo in November Rain? Surely it was the sound that came immediately to many viewers’ minds upon seeing the abandoned church in the middle of nowhere in the last season of Westworld, straight out of the November Rain music video.
And then the SG, which, as AC/DC’s Angus Young showed us, needed nothing more than a Marshall to give a dirty, attitude-drenched rhythm tone. The Explorer, which in Metallica’s early years gave us James Hetfield’s So What and More Beer twin sisters, both so much more saturated in the studio than the ESP-made Eet Fuk that succeeded them. The self-evident majesty of the Flying V, of course, needs no words. And let’s not forget the P90 pickup, whose cultural popularity has regrettably been eclipsed by the oddly shaped submachinegun of the same name.
But then knockoff Chibsons got better and cheaper, and prospective musicians started looking to newer, shinier genres. You tried being other brands, like Onkyo, Teac, and even Philips, and moreover changed your name from Gibson Guitar to Gibson Brands, but we knew you wouldn’t ever stop being a guitar brand. Your bonds started to mount, your credit rating started to drop – and kept dropping. You tried making cheaper guitars, but that only put you in competition with your subsidiaries. And then you tried selling cheaper guitars at higher prices. You didn’t turn up to NAMM, and you listed a premium guitar with visible chipping on your website: the last stumbles of a company failing to make ends meet. And who approved the Modern Flying V that looks like unintentional Star Trek homage? But, we told ourselves, you’d survived being sold in 1986 – surely there was a chance we’d open our eyes to see you’d returned as the old Gibson we recall?
It’s the Gibson we all remember that, despite every financial nail in the coffin (rosewood, of course), we’ll still have. Your bankruptcy may be inevitable, but so too is your legacy. So thank you, Gibson, for 116 years of highs and lows. Thank you for your indelible mark on rock and roll lore. Thank you for being you.
Rest in peace.
Jeremy teaches guitar, and can’t decide whether he likes his Ibanez or Jackson more.
Comments Off on Tackling the Fake News Epidemic Using Blockchain Technology
1. TRUTH IS A SUBJECTIVE TERM
Truth is a subjective term. Everyone has their own version of it. If – for example – a band of rebels assassinate an emperor, for them it is an act of defiance, and reporting it as such would be correct, and yet the crown prince will report it as a dastardly attack on the empire’s sovereignty. Both are true in their own right. But what if a media outlet reported it as ‘Someone opened fire in a civilian area! The emperor died on scene while 50 others died in a nearby hospital’? The news may be ‘true’ if the assassination genuinely did occur in public and, on average, 50 people die every day in a nearby hospital, but at its core and when taken in context, it is FAKE NEWS!
But how then do we tackle this growing epidemic if all they did is falsely portray ‘facts’? Well, my favourite solution is trust and credibility.
2. NEWS OF OLD
So, what exactly is wrong with the old news media? Why this overhaul? Well nothing is wrong. It is just outdated in today’s world and especially so in tomorrow’s. With the advent of social media, more and more people are seeking their daily share of news online, and, more dangerously, through undocumented and unverifiable sources. This way biased media, with no regards for credibility, can use social media to further their cause. In the olden days, most people got their news from a printed source, a newspaper or a book. In both of these forms of media, there is a well-established feedback loop. If a newspaper prints garbage, the newspaper quickly turns into toilet paper. The same is applicable for books or TV news channels. In the virtual world, this feedback loop is absent. If you ‘share’ garbage, no will really blame you for shovelling some. But, then, how do we bring the news of old to the age of digital media? I say we use Blockchain.
3. COMBATING CONFIRMATION BIAS
I’ve always thought that being lazy makes you more efficient. Consider something silly for example: What would convince you to watch any particular movie? Overlooking the monetary aspect of it, what would make you choose one over another? The answer comes down to trust and credibility in most cases. Trust in the makers/creatives, trust in the concept or the idea and, most importantly, trust in the reviews of friends or colleagues. So, to paraphrase Tocqueville and Becker, why don’t we apply this great experiment called democracy to the problem at hand.
4. SECONDS
In most parliamentary procedures, when trying to bring a motion to the floor, you need a second who is ready to back your ideas. Ideally, that person is vital in garnering support for the motion. Just like parliamentary procedures, I suggest that every article or piece of information need seconds to promote it – and that Blockchain should be used to track these seconds. So say, for example, that I write an article – a sensational, scandalous piece of news. I’m pretty new to the whole journalist circle so I get someone with enough credibility to second my motion, a certain Ms. X. My article now has my own credibility along with the backing of X. X hands a draft of the article to Mr Y, and he decides to back it too. Y passes it to Z, and Z has followers A-G who read it.. (So on and so forth). Now, if this article turns out to be impactful, then not only does my credibility go up, but so does that of everyone who seconded the article. If, on the other hand, I shovelled something smelly, then the credibility score falls proportionally.
Why Blockchain? Well – Y might never have read or backed my article if X hadn’t read it and backed it first. It is, basically, a chain and not a simple summation. Moreover, there’s no stronger accounting and tracking tool in the virtual world than Blockchain.
5. A LACK OF MOTIVATION
After watching ‘The Post’, a friend of mine presented the following question: In the age of freely available, online news, what would motivate journalists to dig in and uncover secrets that the general populous needs to know; secrets which might send them to jail?
Well, I must admit, this question did freak me out pretty severely. Not because I thought that no one would do this anymore – not true – but because for anyone who does do it, the risk is very high and the reward is relatively low. Ashlee Vance’s biographer, Elon (you know who), made an observation. He said that regulators had an unbalanced scale of risk and reward. If the same started happening for news media, there would be an uptick in corruption and bias, I believe. My suggestion is that we return the risk and the reward to the writers themselves.
6. GIVING BACK: RISK AND REWARD
The cool thing about Blockchain is its ability to record things, and secure those records, in real time. In 2016, musical artist Imogen Heap released her song ‘Tiny Human’ using Blockchain. Listeners purchased the song directly from her and then the money went straight to the creators of the song. I say we do the same by establishing a Blockchain of credibility.
Here’s how the whole thing will work: Everyone will get a credibility score. Authors’ credibility will be linked to the articles they write. For every second the article gets, everyone before that person will earn some credibility. Readers of the article will be able to read at a small price or nothing at all. Then, they can either buy into the article or just pass on it. This would enable us to establish a correlation between credibility and other currencies. The chain of credibility will work in a decreasing order of percentage. E.g.: 50 per cent for the author, 25 per cent for the second and 2nd second, 12.5 per cent for the 4th to 8th and so on and so forth.
7. WRAPPING UP
So – to wrap up this tale of starry-eyed innovation and hopeful conjecture, I would like to extend an open invitation. If anyone feels that this is cool, or just that you might like to talk about this idea, the author is always up for a chat.
As you’re sitting at your computer at 7:59 am, sleep deprived, and manically refreshing your Wattle page anticipating that 8 am tutorial sign-up, have you ever wondered how much more sleep you’d get if everyone agreed not to log on until 10 am?
The reason this agreement would most likely fail comes down to the world’s most famous game theory conundrum: The Prisoner’s Dilemma. This theory attempts to explain why individuals often will not cooperate even if it is in their best interests.
This is traditionally presented in a payoff matrix table. Let’s restrict our game to two students, who have the option to ‘Sleep In’ or ‘Sign Up’. If both students sleep in, they’re both better off, so we’ll give this outcome an arbitrary value of 3 for each student (top left square). If Student 2 sleeps in while Student 1 signs up, Student 2 can get more sleep but is disadvantaged because the good tutorial times are most likely taken up, so will be assigned a value of 1. On the other hand, while Student 1 couldn’t sleep in, she is more likely to get her desired tutorial time, so we’ll assign her a value of 4 (top right square). The same applies vice versa (bottom left square). If both students sign up, they don’t get to sleep in and are both worse off, so we’ll assign them each a value of 2 (bottom right square).
Looking at the values, we see that both students will be collectively better off if they slept in and waited for 10 am. However, there remains the temptation for a student to wake up at 8 am to sign up on time as it increases her likelihood of getting that desired time, since everyone else is asleep. Since both students will feel this temptation, and also fear the outcome of waking up at 10 am to find that all the good tutorial classes have already been snapped up, both students will wake up before 8 am to sign up, despite the bleary eyes and throbbing head. They’ll end up in the bottom right corner, collectively worse off. This is the ‘Nash Equilibrium’, which I would highly recommend watching A Beautiful Mind to explore further.
So the next time you’re counting down the seconds and wondering why you’re awake at an ungodly hour, remember that the Prisoner’s Dilemma could explain it all.
August in Australia is ASX reporting season, and what grabs most newspaper headlines outside of the profit of the big four banks, are the CEO salary packages for the top 200 companies. Are the men and women leading our biggest firms worth the big dollars they command?
After the Global Financial Crisis in 2008, the structure and way in which CEO’s are paid has fundamentally changed. Executive remuneration is slanted towards bonuses and share options based on performance as opposed to ordinary salary. For CEO’s amongst ASX100 companies, average fixed pay is at the same level as nine years ago. However, this change has done little to the public perception that CEO’s are grossly over-remunerated.
The fundamental justification for such is high salaries is that it is appropriate compensation for the high risk, pressure and influence that are borne by a CEO. Alan Joyce (CEO of Qantas Group) received an eye-watering pay of $25 million for the 2016-2017, primarily as a result of meeting long-term incentive targets voted by shareholders years previously. Joyce has led a $2 billion restructure of Qantas, which saw extensive cost-cutting and job losses, resulting in heavy criticism of both Qantas and Joyce. However, this restructure led Qantas back to profitability and has seen it’s share price jump from a low of $1.07 in late 2013 to a rate of above $6 today. Is his salary package not a just and fair reward for the pressure and performance he has overseen?
The influence of a CEO becomes increasingly apparent when they are particularly bad! Destructive leaders can cause the workplace culture in their company to plummet, with lower employee engagement and higher levels of staff turnover. Those leaders who make poor short or long-term decisions can see billions wiped off a company’s valuation, with loss of reputation and consumer demand resulting in the CEO overseeing job losses. In August, a money laundering scandal hit Ian Narev the CEO of Commonwealth Bank of Australia (CBA). This has seen the CBA exposed to a potential nine figure fine, enormous brand damage and a ten percent drop in share value. Narev was forced to announce a departure date from the CBA, but will still take $5.5 million for the 16/17 financial year.
Currently, in Australia, transparency regarding CEO pay and how it compares to other employees within the company lags behind the world standard. As it stands, shareholders vote on board recommendations about the amount of the CEO remuneration package yearly. A ‘two-strike rule’ was introduced in 2011, to provide for the re-election of a company board, on the occasion that more than 25 percent of shareholders vote down the remuneration package on multiple occasions.
Unlike the US and UK, Australia does not mandate in company reports a metric which forces companies to compare CEO and executive pay as a ratio to the salary of the average employee within the business. Research has shown that if a company that pays its CEO a lower CEO to the average employee, this often receives little positive benefit. A company that pays a high ratio sees reduced employee engagement and satisfaction and an indirect adverse effect on investment potential.
CEOs are becoming more critical in a distributed business environment, and the strategic decisions they make not only on behalf of investors but also as some employers in the economy affects us all. Good CEOs who get increasingly risky and uncertain decisions right that benefit us all deserve to be remunerated well. However, to bring more public confidence and trust to the system, it’s incumbent on boards to be responsible when deliberating executive packages, mainly to underperforming ones. Governments should also consider legislating ratios into company reports that would increase transparency to all stakeholders.
Comments Off on Seriously, Ten? A Guide to the Events that Saw the Australian Media Landscape Changed Forever
Just weeks after the network went into voluntary administration, it seems there has been another seismic shift in the Australian media landscape. US media company CBS (Columbia Broadcasting System) has bought Network Ten from administrators KordaMentha, marking its official launch into the Australian market. This brings to an end one of Australia’s most intensely fought battles for control of free to air TV. A casual observer of this saga can be forgiven for being oblivious as to how this actually happened and here’s a full recap of the evolution of this story.
It all began a few years ago as Ten Network drifted into decline. The network found itself in an all too familiar place for media companies operating in this age. A combination of the changing nature of content, the rise of online streaming services, falling advertising revenue and a series of expensive broadcasting agreements with US studios, forced the network to declare voluntary administration. This turn of events prompted the ongoing debate about the industry today and the need for it to reform.
Media reform has been on the cards for many years. The rise of Facebook, Apple and Google have not only changed the way content is created and shared, but it has also fundamentally removed geography from markets and placed a higher emphasis on legitimacy and speed. These factors primarily contributed to Channel 10’s cash flow situation in the form of an ongoing downward trend in advertising revenue. This led to consistent deficit spending and an over-reliance on capital from private investors. However, the network’s financial problems run deeper than just its decline in advertising revenue. The network made a strategic expenditure decision to switch its focus to competing with rivals Seven Network and Nine Network, as they did effectively in previous years. Shifting focus away from its usual youth audience, Ten spent big on programs to attract viewers and directly compete with the other two private broadcasters. As the situation failed to improve, the nail in the coffin was a refusal from primary creditors Bruce Gordon, Lachlan Murdoch and James Packer to extend more funds to service its deepening debts. It was a very strategic move from three already formidable media players in the Australian Market to force the network into voluntary administration.
The commercial interests of these three indicate very clearly why they made this move. Bruce Gordon is the owner of Win Corporation which provides a large quantity of regional Australian content. [U1] Holding the largest shareholding in Network Ten, he also owns a stake in Channel Nine. Lachlan Murdoch is a man who needs little introduction. As a member of the well-known media mogul family the Murdoch’s, he has been at the helm of Ten since 2011 serving in a variety of senior executive roles. James Packer, a personal friend of Murdoch’s also comes from a famous media-mogul family. He is a former owner of Channel Nine and currently owns a stake in Channel Ten and a large stake in the Crown Resorts business amongst other investments. Together, these three effectively lent their money as creditors to Ten when times were particularly tough on the network’s balance sheet. As it became clear the network was going to default on its loans, the three confirmed they were unwilling to stake further funding.
Here’s the interesting part; by going into voluntary administration, there are several benefits the network could reap. For one, the costly broadcasting deals with US studios could be renegotiated, saving potentially millions. Moreover, it opens the network up for sale to a private company, individual or individuals. News Corp, CBS and Fairfax already own significant equity of Network Ten, making it ripe for takeover. However, before it became open season [U2] for the media tycoons there were several caveats to be addressed by the Federal Government. Broadcasting legislation would have to be reformed to allow for the sale of the network to Gordon and Murdoch. This is because of the two-out-of-three rule; an ownership rule designed to promote a diversity of media voices and competition by preventing companies owning a television station, radio station and newspaper in a single city[U3] [U4] .
At any other time, the government would have passed the legislation and the network would have been sold to Murdoch and Gordon. However, the week Ten went into voluntary administration, was no ordinary week in Canberra. Discoveries of duel-citizenships, a busy legislative agenda for the government along with the crossbench stalling in the senate meant that the media reforms were placed on the back burner. Then, just when everyone least expected it, one of the other interested parties swooped in and snapped up a majority stake in the network.
US broadcaster CBS launched an all-out bid for complete control of the network which was signalled as the strongest bid so far.
What happens next is all but decided. Gordon and Murdoch continue to fight a battle for ownership of the network after launching costly civil litigation proceedings. The two have continued to appeal to the NSW Supreme Court to have the sale stalled and overturned by suing administrators KordaMentha for misleading creditors. [U5] The grounds behind this suit rise from the lack of consultation CBS had with creditors prior to the sale of Network Ten, which is labelled as discriminatory and misleading by Gordon’s legal team. This has been rebuked by the creditors who have explained that ample time was given to all parties involved. KordaMentha has also reiterated through its legal representation that it remains their statutory duty as a creditor to state a preferred or recommended buyer for the network. All the while, Gordon and Murdoch have tried to return with a more generous offer. While these proceedings are likely to before the courts in a variety of legal avenues for some time, offers for the network continue to be made more generous. At a recent creditor’s meeting in Sydney, CBS returned serve with a revised offer, beating Gordon and Murdoch yet again. The administrators KordaMentha have since agreed to recommend Ten be sold to CBS. The deal will pay out staff, and other creditors wholly, although ordinary shareholders will miss out on the payout.
As the fading media baron’s fruitless attempts at stalling the sale of Ten continues, media industry analysts have been trying to decipher what this will mean for the wider industry. In reality, it means more choice for the consumer choice and market diversity. Pending Foreign Investment Review Board approval, CBS will be a new market entrant on the revamped Australian media scene. It will likely launch its online streaming service down under, bringing what Aussie consumers want most- more online content available on demand.
It also brings what media regulations intended to achieve initially, greater diversity. An Australian media landscape for the many, not the few big players.
Comments Off on Explainer: Much Ado About Inflation
In September, U.S. Federal Reserve Chair Janet Yellen announced a stay of the federal funds rate at a range of one to 1.25 per cent. In her address, Yellen finally conceded the ‘mystery’ of this year’s lower than expected inflation figures, saying, ‘I will not say that the committee clearly understands what the causes are.’
Few could have predicted that, after seven years of an expansionist monetary policy of near-zero interest rates and a massive $4.5 trillion balance sheet, that inflation would be found drifting breezily below its two per cent target. In fact, the Federal Reserve’s (Fed) preferred measure of inflation, currently at 1.4 per cent has been below target for most of the last five years.
In the near-term, this may be worrisome for two reasons: firstly, a central bank that cannot consistently hit its target does not, in principle, make for a very credible bank. If inflation expectations of business and households become less anchored to the central bank’s target, inflation itself becomes more fickle. Secondly, the effect of raising interest rates on prices is not entirely clear. Keep interest rates low, and inflation might suddenly skyrocket due to increased borrowing and overzealous growth, forcing the central bank to raise rates more aggressively in the future and risk tilting the economy into recession. On the other hand, raising rates too high or too fast may quash the long-awaited recovery from the Financial Crisis. Inflation is a worry, but if there’s one thing that’s worse than inflation, it’s deflation. This proves problematic as, in economies where prices are decreasing, people are more likely to save due to the decreasing value of money. This causes a decreased demand for goods, reduced prices and low economic growth-acting in essentially a self-fulfilling cycle.
So, what exactly is happening with inflation?
The Phillips Curve derives from an empirical observation about the inverse relationship between inflation and unemployment. When the economy is booming, unemployment is low, and inflation is relatively high. When the economy contracts, unemployment goes up, and inflation goes down. Given the stubbornly low inflation rate, we would expect the economy to be relatively weak. But the U.S. unemployment rate sits at 4.4 per cent, only modestly below the Fed’s projections of its longer-run normal level. The last time it was that low was in 2007 when interest rates averaged around five per cent. It appears the Phillips Curve is all in a tangle.
Yellen has chalked up previous years’ low inflation figures to temporary phenomena, such as large reductions in energy prices, the large appreciation of the U.S. dollar and slack in the labour market. None of these were significant factors this year – nevertheless, Yellen maintains that the unexpected low inflation is the end, is transitory and she believes that the tightening labour market will eventually push prices up. This is because firms raise wages and consequently prices, to compete for labour.
In contrast, Governor of the Bank of England Mark Carney warned of more permanent forces pushing prices down in a speech at the IMF. He points to growing contestability in global markets and technological change as factors that are deepening trend disinflation in developed economies, including Australia. External demand (demand from the rest of the world) will have greater influence over price-setting behaviour domestically. Conversely, cheap imports make prices intransigent. These forces are hard to control and present a more complex problem to monetary policy-makers tasked with balancing inflation and unemployment.
The ‘gig economy’ – an economy where participants are paid to complete tasks rather than as full-time employees (think Uber) – provides an alternative explanation for the low unemployment, low inflation environment. The high flexibility of labour afforded to employers allows them to hire more people while simultaneously keeping wages relatively low. Meanwhile, economist Larry Summers thinks secular stagnation has something to do with it – a combination of slowing technological growth and an ageing population prompts firms to save excessively, leading to weak demand, weak growth and subdued inflation.
If the forces pushing inflation down are indeed long-term, then the existing monetary framework may need revisiting. For example, some economists have suggested a downward revision of the inflation rate target. This would allow the Fed to normalise interest rates more quickly and mitigate the risks of an overheated economy. This would hedge against firms and households taking excessive risks in the low-interest rate environment, however, may have the unintended effect of leaving the economy uncomfortably close to deflation.
The end of the extraordinary?
In her address, Yellen also finally began the long process of reversing the Fed’s controversial policy of quantitative easing, which describes an unconventional measure involving massive asset purchases to pump money into the economy and stimulate demand. If the measures the Fed took to bring in the global economy from the brink was extraordinary, then the act of unwinding the resultant trillion-dollar balance sheet must surely be a trepidatious affair. And many economists believe that the longer-run neutral interest rate, which is the level of interest rate that is neither expansionary nor contractionary, has lowered since the GFC. This means that in the event of an economic crisis, the Fed will have less of a buffer to reduce interest rates than it did pre-GFC before hitting the so-called ‘zero-lower bound.’ Once interest rates are zero, the Fed cannot stimulate the economy any further with conventional interest rate policy. As Yellen herself suggests, it’s not unforeseeable that the Fed might again have to resort to massive asset purchases to prop up the economy. The extraordinary may yet be the ordinary.
Yellen has been meticulous in preparing the economy for normalisation, signalling gradual rate hikes over the next couple of years. But her stolid approach may be upended in as little as four months’ time when Donald Trump will have the chance to appoint a new Fed Chair, as well as three other already-vacated seats on the Board of Governors. Uncertainty hangs in the air. Meanwhile, U.S. stock markets remain unabashedly bullish, and the economic tea-leaves remain as inscrutable as ever.
ALERT: ATM fees are no more. We are f(r)ee.
Our days of frantically scouring to find our ATM to avoid fees are over. We may now access a range of ATMs and not get a penalty for just being in the wrong place.
This unexpected move was first made by the Commonwealth Bank of Australia to supposedly help Australians save hundreds of millions of dollars (it will save Australians roughly A$500 million per year). By the afternoon all four major banks, too, agreed to cut ATM fees. Though, while the banks are removing fees, the three others (NAB, ANZ and Westpac) won’t be abolishing their fee till next month.
However, as it is with banks, I can’t help but wonder if there is some catch to it. Perhaps the ‘foreign’ ATM fee removal is limited to only the major banks. Perhaps there is another fee they are introducing that you don’t see it.
Why would companies, especially banks, do something to help their consumers?
Well, it isn’t in their interest to continue hurting consumers anymore through the massively hated ATM fees. While it does bring in so much revenue for the banks, it led to a shift toward cashless payments. The revenue from the fees was falling, and as newer transaction technologies emerge, more people would move away from using cash.
For example, a fantastic bright piece of technology coming out of the world of Financial Technology (FinTech) is the New Payments Platform (NPP). Typically, when you pay for something using EFTPOS, it takes a few days for the funds to move from your account to the supplier. NPP makes these transactions instantaneous, so bank transfers take a matter of seconds, thus removing the biggest disadvantage of card payments not being instant.
As consumers move further from the utilisation of cash, it makes very little sense to penalise those that are still using it. However, it still feels as if there is some form of a catch to it.
Certain ATMs such as the BankWest ones will still be charging you ATM fees. After all, there is an entire ATM industry that depends on the fees, and removing it would decimate them. However, it is good to see that the agreement to remove the foreign fee isn’t limited to the big banks but extends to the smaller banks such as St. George, Bank of Melbourne, etc. There is no replacement for the fee either. There doesn’t seem to be too bad of a catch.
In the end, it is a victory for us commonfolk. We are not limited or bound by our geography, instead set free of a terrible curse that afflicted us for aeons. While an iota of the curse persists, we can’t help but smile at the future that awaits.
Comments Off on What Is an ICO and Why Should You Care?
Paris Hilton and Floyd Mayweather have supported one, the world is buzzing about them, but what is an Initial Coin Offering?
Unless you’ve been living under a rock, it’s highly likely you’ve heard of Bitcoin and cryptocurrency in general. Many of you might just see it as deep-web wizardry, the currency of criminals and drug addicts, or even just a stupid fad. But like it or not, the world of cryptocurrency is here to stay, and savvy business people and famous socialites alike are looking to take advantage of that fact.
Back thousands of years ago in the 19th and 20th century, companies wanting to grow and expand would list themselves on the stock exchange and do something called an initial public offering. An initial public offering, more commonly known as an IPO, is basically a big fundraiser: businesses sell pieces of their company to a prospective buyer for a predetermined price. Companies get millions of dollars to fuel their enterprises, and buyers hopefully get profits from owning shares in a company that will rise exponentially in value. IPOs still happen very often; you may have heard of Snapchat recently ‘going public’ and holding an IPO. But lately, a new player has entered the ring, an initial coin offering, or ICO. An ICO is pretty much an IPO, but instead of shares in a company, buyers receive cryptocurrency instead. Entrepreneurs come forth with new ideas or themes for a cryptocurrency and get people to crowdfund it. There have been all sorts of coins, from DogeCoin and WeedCoin to more serious alternatives to Bitcoin like Ethereum and Zcash.
You now know what an ICO is, but that’s not very helpful without knowing what cryptocurrency is as well. Cryptocurrency is unsurprisingly a currency designed to work as a medium of exchange that operates through cryptographic means. The most well-known example of a cryptocurrency is Bitcoin. In 2009, the mysterious and anonymous Satoshi Nakamoto created Bitcoin: the first decentralised cryptocurrency. Bitcoin is a secure and decentralised means of paying anyone in the world anonymously, all you need is an internet connection. The freedom and lack of governmental interference excites many people with libertarian values. People that are disillusioned with the power that banks and governments enjoy, and their role in various economic crises, champion Bitcoin and the blockchain as the way of the future. I’m not going to discuss the blockchain and how it works, but the combination of Bitcoin and the blockchain represent to many the possibility of a more decentralised, equitable and egalitarian society that can function for the most part without excessive bureaucracy and corruption. But to many, this vision of the future doesn’t come close to the allure of the near A$5000 per coin price tag. People who dreamily imagine what it would’ve been like to buy Bitcoin at 10 cents a coin and sell for $5000 hungrily search for the next big cryptocurrency, ICO’s represent the market trying to cater to these voracious buyers.
Many argue that the onslaught of ICO’s are simply ‘get rich quick’ schemes, memes and fads that exploit people who think every new cryptocurrency will be as profitable as Bitcoin. Others argue that they represent something positive, improving awareness of cryptocurrency and fuelling innovation. Whatever your thoughts, right now we are all going to have to look on as Floyd Mayweather tries to get us to buy into the next big thing. Bitcoin and the blockchain are not without its flaws, and ICOs could pave the way for the currency of the future, but I won’t hold my breath over that new currency being pioneered by Paris Hilton.