Share trading will be just for the brave this week.

The lead from Wall Street could hardly be worse.

The Dow Jones industrial index continued to fall Friday, US time, after its plunge on Thursday.

It finished the week no less than 4.2 per cent down.

That happened as oil prices continued to test new highs.

The Australian market performed relatively well, on Friday, Australian time.

It fell, but not by as much as Wall Street had, the night before.

Oil futures have been trading at levels close to $US143 a barrel.

But while the US economy is dangerously close to recession, Australia is looking at a commodities boom.

However Australia still has its problems.

Business and consumer confidence are both down.

Inflation and interest rates are high.

And no-one expects either to ease, anytime soon.

Company profits have been slashed.

And investors know that the local company collapses, that have already occurred, won’t be the last.

Petrol prices, too, are creating havoc.

There is, as always, money to be made at this time.

But faint hearts will fail.

Australia will start to get an idea of where it is going on climate change, later this week.

That will happen when Professor Ross Garnaut’s draft report on the nation’s options is published.

It will be published on Friday.

Professor Garnaut’s final report won’t be released until September.

Garnaut is making no secret of the fact that climate change science is still far from mature.

But he is  also saying that the costs of waiting until it is will, almost certainly, be higher than those of starting to act now.

He compares the state of public knowledge now with that which existed, when Columbus sailed west, several centuries ago, searching for China.

Garnaut admitted, too, that even the best climate change scientists we have now differ, even with each other, on important points.

He concedes, too, that Galileo’s case shows that one person can be right, when many others are wrong.

But he says uncertainty is no excuse for inaction.

And Garnaut warns that, in current circumstances, the “business as usual” option must be rated as “high risk.”

“This has no close precedent,” he said.

The professor’s draft report, though, is expected to provide the first real guide to the approach to climate change, that the Rudd government is likely to take.

This will be a rough – and expensive – ride.

The Gippsland by-election result will buy a little more time for Brendan Nelson, but probably not much more than that.

The swing of more than 6 per cent against the government was a set-back for Kevin Rudd. The Prime Minister, himself, has virtually admitted that.

And with petrol prices still testing record heights, the government still has more hurdles ahead.

Brendan Nelson’s prediction last week, that Labor might win in Gippsland, was misplaced.

Nobody, though, is likely to blame him for that, or, indeed, even to remember that prediction.

That’s politics.

Labor, though, is citing the obvious in its defence.

The electorate is in National Party heartland. It stayed that way.

Both Rudd and his Treasurer, Wayne Swan, have been saying, too, that with inflation high, the government has been taking the necessary tough measures, to prevent it getting worse. Looking out, in fact, for “the long term.”

That might be right.

But it won’t be popular.

And, as the great economist, John Maynard Keynes once said:-”In the long run, we are all dead.”

Rising petrol prices bite even harder in rural areas, than they do in Australia’s capitals.

There is little, if any, public transport in the bush.

So Brendan Nelson’s repeated argument that the Rudd government needs to “do something” about petrol prices has extra resonance there.

But all he is offering to do, himself, is to cut the Federal government’s fuel excise by 5 cents a litre.

As fuel prices have already risen by more than 30 cents a litre this year, that’s not going to make a noticeable difference to family budgets, either in the cities or in the bush.

Rudd keeps telling Labor MPs that their lead, in the polls, is not as great as some might think.

The Gippsland by-election result will emphasise that message.

But the Coalition is still a long way from winning back government.

And Nelson’s hold on the Liberal leadership is still weak.

Voters are still looking for firm, clear leadership from the conservatives.

And Nelson isn’t supplying it.

The Australian share market will get off to a bad start today, after Wall Street plunged overnight.

The Dow Jones industrial index was almost 300 points down, just minutes before the close, as oil futures had, once again, soared above $US140 a barrel.

It finished even lower. The Dow lost 358.41 points on the day to close at 11,453.42.

All 30 components of the Dow fell.

The blues gripped Wall Street traders after oil prices soared, US interest rates were kept on hold and Goldman Sachs downgraded US brokers.

Oil futures rose $US5.25 overnight and closed slightly below the $US140 mark, at $US139.80. It had touched $US140.39 earlier.

The S&P 500 closed 38.82 points down at 1,283.15.

And the tech heavy NASDAQ composite index tumbled 79.89 points to 2,321.37.

General Motors led the blue chip stocks down.

Falling stocks outnumbered rising ones by more than 6 to one on the day.

There had been good news on the US economy, though.

GDP in the first quarter grew by a slightly better than expected 1 per cent, on an annualised basis.

Home sales data, too, was better than expected.

But none of that mattered, as fear gripped the US market.

Brendan Nelson’s leadership of the Liberal party will be tested in the Gippsland by-election tomorrow.

If Labor should win the seat, for the first time ever, Dr Nelson’s hold on his job will be severely weakened.

And he has predicted, himself, that Labor could win.

This might be seen as Dr Nelson’s medical training at work.

Doctors have an interest in exaggerating a patient’s illness.

So if the patient dies, it wasn’t the doctor’s fault.

But if the patient recovers, that is a glorious victory for the doctor.

As parliament rose last night for its long winter break, it was clear that Dr Nelson had made some progress with voters.

He had offered the public some relief from the global fuel crisis, by offering to cut the Federal government’s fuel levy by 5 cents a litre.

At least one voter, in the electorate, was attracted by that.

She told ABC radio that, with four children, including a disabled son, she was heavily dependent on her car.

And the government had “done nothing” to cut petrol prices, this voter said.

She certainly won’t be alone.

The by-election has been precipitated by the resignation of the sitting National Party member, Peter McGauran.

The Nationals, the successors to the old Country Party, have held the seat since 1922.

A Queensland National, Barnaby Joyce, was more optimistic than Dr Nelson.

“I think we’ll win it,” Senator Joyce said.

The Labor party’s, probably slim, chance of victory rests, overwhelmingly, on coal workers in the electorate.

Watch your cash flows.

Getting on with your work, without doing that, is a recipe for financial failure.

Figures just released show that inadequate cash flow, or high cash use, account for almost 40 per cent of business failures in Australia.

Poor strategic management accounts for a similar proportion.

And the number of business failures is rising.

The Australian Securities and Investments Commission reported that 7,562 business failures were reported in Australia last financial year.

That was up from 6,745 the previous year.

And the challenges facing Australian businesses have risen sharply this year.

Both consumer and business confidence have fallen sharply, as shock waves from the US credit crunch hit Australian shores.

Credit has become scarce – and dearer than it was.

And soaring fuel prices are eroding both shoppers’ spending power and corporate earnings.

In these tough times, the path to bankruptcy is wider and shorter than ever.

The number of job vacancies in Australia has risen sharply over the past year, even though business and consumer confidence have both fallen over recent months.

The Australian Bureau of Statistics reported today that the nation had a total of 183,600 vacancies at the end of May, a rise of 9 per cent, in trend terms,  over the previous 12 months.

Despite the Rudd government’s cost cutting, public sector vacancies have risen more steeply over that time than those in the private sector.

The number of public sector job vacancies throughout Australia leapt by 10 per cent in the 12 months to the end of May.

However, the bureau’s figures do reflect some slowing in the rate of job vacancy growth, over recent months.

The total number of job vacancies open rose by just 1.1  per cent on trend figures between February and May this year.

Other figures, released by the Australian Securities and Investments Commission today also reflect a substantial rise in company failures.

ASIC noted that there were 7,562 insolvencies reported in 2006-07.

That compares with 6,745 in the previous 12 months.

Wall Street rallied briefly overnight, Australian time, after the US Federal Reserve kept America’s official interest rates on hold, at 2 per cent, as expected.

The Dow Jones industrial index initially rose 100 points on that news.

But it eased later, to close just 4.4 points up at 11,811.83 points.

US authorities also signalled overnight that they are tightening their focus on inflation.

The S&P 500 closed points 7.68 points up at 1,321.97.

And the tech heavy NASDAQ composite index closed 32.98 points up at 2,401.26.

Oil futures eased overnight falling $US2.44 to $US134.56.

The Fed admitted, in a statement overnight, that it fears that rising fuel prices could boost US inflation, as the American economy recovers.

The small fall in oil futures followed news that US oil inventories had risen for the first time in six weeks.

Credit Suisse economists said the Fed’s statement virtually ruled out any potential rate rise in the US until a new president is elected in November.

And a new poll, published by CNN, said Barack Obama has now opened up a 12 point lead over his Republican rival, John McCain.

Australia did not ratify the Kyoto treaty until December last year.

Kevin Rudd had promised to do so, before last November’s elections.

John Howard had repeatedly refused to do so.

Now Australia’s politicians want to know how that ratification affects you.

That step certainly was significant.

The government now wants to cut emmissions of greenhouse gases by 60 per cent, over the next 42 years.

It is also planning to establish an emmissions trading scheme by 2010.

Parliament’s Joint Standing Committee on Treaties is now planning to examine the implications of the Kyoto agreement.

It is calling for public submissions on :-

• the position Australia should be taking on future negotiations on the treaty
• the opportunities and obligations arising from it and
• the present and future impacts of global warming.

If you would like to know more go to www.aph.gov.au/isct

Present gaps in our knowledge of the terrorist organisation, Jemaah Islamiyah must be systematically plugged if Australia is country is to be safe, according to a new report.

The Australian Strategic Policy lnstitute which produced the report, says this is essential.

“The nature and the evolution of the regional terrorist threat remains high on the list of Australia’s national priorities,” the report said.

It said JI continues to represent a significant threat to both Australian and regional security.

JI was responsible for the Bali bombings in 2002 and 2005 and the bombing of the Australian embassy in Jakarta in 2004.

The report recalled that Australia or Australian interests had been subjected to planned, conducted, or aborted terrorist attacks each year from 1999 to 2005.

“It is essential, therefore, that Australian and South East Asian governments remain vigilant, ” the report adds.

The report said that although much research had already been carried out, the “precise nature” of the islamist militancy in South East Asia had “still to be mapped out.”

“It is important that any gaps in understanding are addressed,” the report said.

“A thorough grasp of the current organisational and operational dynamics of local terrorist groups and the extent to which they are (or are not) gravitating towards pan regional designs will allow for a more informed and nuanced debate on how best to mitigate the challenge from Muslim extremists based in South East Asia,” the report said.

Wall Street provided no clear lead for Australian traders overnight, with the Dow Jones index closing 34.93 points down, after a day of erratic trading.

The index ended at 11,807.43 points.

Oil futures were little changed.
They fell just 22US cents to $US136.96.

The S&P 500 index fell 3.71 points to 1,314.29.

And the tech heavy NASDAQ composite index fell 17.46 points to 2,368.28.

Consumer confidence in the United States is now at a 16 year low.

It has been damaged by reports that the US housing slump is even worse than previously thought.

And the Fed, which meets this week, is not expected to ease US rates again.
But there was still money to be made in the market, in the old Inca currency of cocoa.

Cocoa futures hit a 24 year high overnight.

Dry weather has hit the world’s main cocoa producing areas.

It affected both West Africa, the world’s biggest cocoa producer and Australia’s neighbour, Indonesia,  which is now the world’s third biggest producer.

Population pressures are still rising rapidly.

Indeed, last year the nation’s population grew at 1.6 per cent, its highest rate since 1988.

Australia now has an extra 331,900 people to accommodate.

Immigration was high.

The Australian Bureau of Statistics reports that, on average, 1,100 new migrants arrived in Australia each day, during 2007.

But natural increase was high, too.

Births exceeded deaths by 147,000 last year.

That meant that 44 per cent of the increase in Australia’s population last year was natural.

Immigration and natural increase left the nation with a population of 21,181,000.

The booming resource States, Western Australia and Queensland, experienced the highest population growth rates, of 2.4 and 2.3 per cent respectively.

But the Northern Territory matched the best, also with 2.4 per cent growth.

The so-called rust belt States of Tasmania and South Australia did worst, with growth rates of 0.8 and 1 per cent.

Population growth in New South Wales was only barely above that at 1.1 per cent, while Victoria was right on the national average with 1.6 per cent growth.

What, though, do all these figures actually mean?

One thing we can say, quite safely, is that once interest rates ease, house prices will start to rise again, particularly in the high population growth areas.

And – even before that – rents will remain firm, at least.

The ACT saw its population grow by 1.3 per cent last year.

Australian men die young at much higher rates than the nation’s women.

This is confirmed in a new report on the state of the nation’s health.

The report, produced by the Australian Institute of Health and Welfare, shows that the death rate for men aged  25 to 34 is almost 100 per 100,000.

For women of the same age, the rate is about 30 per 100,000.

The prime causes of death for men in this age group are “intentional self harm” and “land transport accidents.”

Together, these causes account for almost 43 per cent of male deaths, in this age group.

They also cause almost 30 per cents of deaths among women in the same age group.

Coronary heart disease, though, remains the leading killer of both Australian men , in the much broader 25-64 year age group. It accounts for 15.7 per cent of these deaths.

Breast cancer, though, is the leading cause of death for women in the same broad age group, accounting for 14.5 per cent of deaths.

Coronary heart disease accounts for only 6.5 per cent of deaths, among Australian women aged 25-64.

The report also notes that while the health of Australians is improving on most indicators, obesity is becoming an even bigger problem.

It notes, too, that health standards, among Aborigines are much lower than those of other Australians.

Wall Street traders were subdued overnight, as oil prices rose again.

The Dow Jones industrial index finished 0.33 points down on the day’s trade at 11,842.36.

Oil futures moved back towards previous record prices, rising $US1.89 a barrel to $US137.25.

And the tech heavy NASDAQ composite index fell 20.35 points to 2,385.74.

But the S&P 500 gained 0.07 points to close at 1,318.00.

Market news was mostly lacklustre.

The industrial giant, General Motors, cut truck production as sales slumped.

And most financial stocks retreated, as worries about credit persisted.

The sector was hit hard by reports of lay-offs. in the investment banking sectors of Citigroup and Goldman Sachs.

Oil prices, too, depressed spirits.

Traders were not prepared to take risks ahead of a meeting of the Federal Open Markets Committee.

That meeting, which ends Wednesday, US time, is likely to keep America’s official interest rates on hold.

However, US monetary authorities are also expected to toughen their anti-inflationary stance.

The Federal government is facing a dilemma.

How does it manage a two speed economy?

The question is as old as the nation itself.

It appeared, first, in the heady days of the 19th Century gold rushes.

The price of essential agricultural tools, such as spades and picks, soared, in those times, when the miners would pay anything for them.

Australia faces a similar situation now.

It’s resource industries are booming.

Even agriculture is bouncing back, after the nation’s long drought.

The government’s forecaster, the Australian Bureau of Agricultural and Resource Economics, is saying that the value of the nation’s mineral and agricultural exports will leap by 40 per cent next year.

The real rise might well be even higher than that.

ABARE’s economists would not have taken the disastrous floods, in the United States, into account.

And they have wiped out much of the US corn crop, depriving the US of the bulk of its industrial grain and  animal feed, for the year ahead.

That must have repercussions on world grain prices, over the coming year.

So the prospects for Australian wheat farmers are bright.

Even though those who  came to Canberra yesterday, to noisily protest the government’s decision to bring single desk wheat selling to an end, failed in their mission.

Why, though, should any-one worry about a 40 per cent boost to Australia’s export returns?

Isn’t that a good thing?

It certainly is.

But it does have potentially troublesome implications.

At 4.2 per cent, Australia’s inflation is already running at a 16 year high.

And all that extra money, sloshing about in the economy, over the next year or so, isn’t going to make curbing inflation any easier.

High interest rates, soaring petrol prices, and high food prices are already making life difficult for millions of Australians.

And that is not likely to ease, in the immediate future.

Indeed, our good fortune might well make economic management even tighter.