An urgent and critical situation

Delivered on By Justin Pyvis

Good morning! Australia’s largest company by market capitalisation, BHP, announced a massive $US9.4 billion profit in the second half of calendar 2021 – 58% of its revenue came from iron ore exported from WA – and also made a political statement:

“Everyone, including the WA government, would recognise that at some point things have to return to normal, it’s just a question of when that happens. We believe, as for many others, now is the time for borders to begin opening back up again.”

It seems we’re at a stage where almost everyone – except one Premier in particular – understands that the pandemic emergency is over and certain restrictions are no longer justifiable on health or any other grounds.

Reading the tea leaves

Daily % change







AU Bond



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Brent (bbl)



Gold (oz)



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Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries. The S&P500 is a snapshot 30 minutes before close.

At the time of writing the US S&P500 had regained some of its recent lost ground, adding +1.34% with Big Tech leading the way (Nasdaq +2.20%) after a slight de-escalation in tensions between Russia and Ukraine.

Russian President Vladimir Putin had earlier in the day said he was sending some troops back from the border now that they had completed training drills, although NATO Secretary General Jens Stoltenberg said he had not yet seen “any sign of de-escalation on the ground”.

Locally, the ASX200 fell -0.51% with just under half the major sectors losing ground led by energy (-3.1%) which followed oil prices down from their seven-year highs.

A notable non-mover was BHP (-0.08%), which failed to gain despite impressive first half results after news broke that China’s government might attempt to reign in iron ore prices, sending futures traded on the Singapore Stock Exchange down over 10% during the session.

Food for thought

Does Canada's 'Freedom Convoy 2022' qualify as a national emergency? Justin Trudeau thinks so.
Does Canada's 'Freedom Convoy 2022' qualify as a national emergency? Justin Trudeau thinks so. Source

Canada’s Prime Minister Justin Trudeau invoked Canada’s Emergencies Act yesterday in a belated response to the ongoing ‘Freedom Convoy 2022’ blockade in Ottawa and other parts of the country.

It’s the first time the Act has been used since it was passed in 1988 to replace the War Measures Act, which was itself only used three times: in 1914, 1939 and by Justin Trudeau’s father Pierre in 1970 during the October Crisis, when members of the Front de libération du Québec kidnapped the provincial Deputy Premier and a British diplomat.

So it’s kind of a big deal – it means the federal government believes that there is an “urgent and critical situation” that “seriously endangers the lives, health or safety of Canadians”, and that it “cannot be properly dealt with under any other law”.

Importantly, the Act was invoked under its public order section, which means it will apply across the entire country despite the localised nature of the convoys. Premiers from Quebec, Manitoba, Alberta and Saskatchewan immediately called it unnecessary, pointing out that their provinces are handling the situation with existing powers.

Quebec Premier Francois Legault warned that it would “not help the social climate… We really don’t need to throw oil on the fire”. Manitoba’s Premier Heather Stefanson went further, saying that:

“The sweeping effects and signals associated with the never-before-used Emergencies Act are not constructive here in Manitoba, where caution must be taken against overreach and unintended negative consequences.”

It’s a risky move by Trudeau and it’s unclear if it will pay off or plunge Canada deeper into division. The new powers are extremely broad – for example, insurance can be cancelled at the government’s discretion, towing companies can be compelled to remove vehicles from the blockades and public gatherings can be declared illegal at any location.

But perhaps the most significant power it opens up for Trudeau is the ability to add entities to Canada’s existing anti-money laundering and terrorist financing laws, which the Deputy Prime Minister Chrystia Freeland confirmed would eventually be made permanent.

Not only will that include the ‘bad actors’ themselves, but also payment service providers and crowd funding sites such as GoFundMe, which will be forced to register with Canada’s intelligence service.

In essence, the Canadian government will be able to monitor and freeze digital accounts and payments from anyone, to anyone, without a court order. According to the Deputy PM:

“It’s all about following the money. It’s about putting an end to the funding of these illegal blockades.”

For now, anyway. Canada certainly appears to be in an “urgent and critical situation”, but it’s not because of the blockades.

Bits and bytes

🗣️ WA Premier Mark McGowan announced that he would make another announcement later this month as to when WA’s border reopening will take place. For realsies this time.

✈️ Qantas will continue to fly out of Darwin instead of Perth on its direct flights from Australia to London until at least June 2022 due to “ongoing uncertainty around the reopening of the WA border”.

🤷‍♂️ No one will be fired for this. The NSW government accidentally uploaded 500,000 addresses “including those of defence sites, domestic violence shelters and a missile maintenance unit”.

🧐 The Victorian Ombudsman will “investigate the ‘Red Shirts’ scheme, including the role of the Premier in relation to the scheme”, which involves the “misuse of staff budget entitlements before the 2014 state election”.

📈 Australia’s largest bank, the CBA, updated its “central scenario for the first [RBA] hike in the cash rate target to June 2022 (from August 2022)… [because] underlying inflation data will be a lot stronger than the RBA’s forecast”.

🤔 We need better reporting standards. In NSW, “if you were 22, you had COVID three weeks ago, you recovered from that, fell off your bicycle, broke your arm, and came to hospital, we would count you as a COVID admission”.

🎾 ‘Novax’ Djokovic said he’s not anti-vaccination but is willing to forgo potential trophies before he gets vaccinated because that’s “the price that I’m willing to pay”. Right…

💰 Prince Andrew settled the civil sexual assault lawsuit lodged against him by Virginia Giuffre out-of-court for “an undisclosed sum”, with the duke to make “no admission of liability”.

👩‍⚕️ Thousands of nurses and midwives hit the streets in NSW yesterday “over pay and staffing levels in hospitals”.

😨 Top US banking regulators warned the leveraged loan market was seeing “mounting vulnerabilities across a number of sectors hardest hit by the coronavirus pandemic, including commercial real estate”.

📉 Wages in the UK increased 3.7% between October and December. Sounds great until you subtract it from inflation, which then flips it into a real wage decline of -0.8%. Printing away the government’s debt at the expense of workers…

🍁 From 1 March the Canadian province of Ontario “will no longer require people show proof of vaccination to enter any indoor spaces”.

🦠 So-called “long COVID” might “be caused by lasting damage sustained to one of the most important nerves [vagus] in the human body during initial infection”.

🎬 Netflix refuses to call its recent price increase an increase, claiming it’s actually a “price update” that “will allow us to deliver even more value for your membership”.

🙃 “A Seattle-area school board is defending its decision to offer racially segregated meetings… [because] non-white parents feel more comfortable ‘surrounded by other people similar to them’.”

🎣 “Hudson [Ohio US] Mayor Craig Shubert resigned Monday, less than a week after drawing international attention and ridicule to the upscale Summit County community when he suggested that allowing ice fishing could lead to prostitution.”

🗾Japan’s economy expanded an annualised 5.4% in the December quarter of 2021 although the growth may not be long lived, as “rising raw material costs and a spike in new Omicron variant infections cloud the outlook”.

🦗 Australia won the third and final T20 against Sri Lanka by 6 wickets after an excellent bowling display left Sri Lanka with a well below-par 121 runs to defend.

😷 California no longer requires people vaccinated against COVID-19 to wear masks indoors. However, they will still be required on buses, trains and in schools, hospitals and homeless shelters.