Wry & Dry: a cynical and irreverent review of the week in politics, economics and life. For intelligent Readers who disdain the trivial.
But first, a snapshot of this week’s Investment Matters:
- Special report: The end of globalisation: who now wins?
- Company update: Bega Cheese
- Company update: Nanosonics
…and more.
To read Investment Matters, click on the link at the bottom of this week’s Wry & Dry. Or here.
And now, nine matters in which readers might be interested…
1. The Trumpster’s worm-in-the-brain
This was reality television at its best. It was like watching one of those teppanyaki chefs in action. Don’t worry about either person evading questions, this was a debate. Kamala Kamala brought the tools: sharp knives. And she sliced the Trumpster like wagyu on the hotplate.
But Kamala Kamala’s victory isn’t going to move the election needle very much, if at all. The American voter has made up his/ her mind. It’s a question of voter turnout.
That will be driven by who first shoots themselves in the foot; by their brain going nutzo. That battle Kamala Kamala started after Sleepy Joe was given the DCM, when she put an it’s-possible-that-I-might-lose whispering worm inside the Trumpster’s head.
In the debate, the worm grew. And the part of the Trumpster’s brain where rationality and logic exist, small as it is, was shouted down by the worm whispering “you might lose, you might lose.”
What was left was the large part of the Trumpster’s brain that controls emotion. And phrases emerged such as, “they’re eating the dogs. The people that came in — they’re eating the cats. They’re eating the pets of the people that live there…”
Really?
The Trumpster wants to win by landing big punches. But a candidate cannot run a presidential campaign based punching big and missing the target, leaving only emotive responses to unexpected issues or questions. No less than they might run a country.
So far, the Trumpster has failed to get inside Kamala Kamala’s brain. Is he smart enough to?
2. Revolting Melbourne
It’s shameful that one of the world’s most liveable cities descends into violent demonstrations.
The media and N – 1 political parties, where N is the number of all political parties, have condemned in the strongest terms the actions of anti-war demonstrators at the Melbourne Convention Centre this week.
The outlier political party is the Greens, the federal leaders of which have refused to condemn the demonstrators.
Wry & Dry has previously noted that the Greens have strayed from the virtuous environmental party of Bob Brown1 to be a far left-wing anti-Semitic cohort. Prima facie, it has been taken over by more extreme supporters. The environmental message of the Greens has been diluted by the stench of radical politics.
As shown by Greens senator David Shoebridge, speaking to today’s demonstrators, refusing to denounce violent protesters.
And the irony that anti-war protesters were throwing missiles would be lost on them. Or that no-one likes a warrior until the barbarians are at the gate.
1 Bob Brown was a senator and the parliamentary leader of the Australian Greens. While serving in the Tasmanian parliament, Brown successfully campaigned for a large increase in the protected wilderness areas. Brown led the Australian Greens from the party’s foundation in 1992 until April 2012.
3. Oil – good news and bad news
The price of oil is now at its lowest since 2021. What’s going on?
Well, firstly, China’s demand for oil has declined as both (a) the economy is not growing as fast as it might and (b) its electrification of the transport sector is proceeding at a pace faster than thought possible.
Secondly, the US’ oil production has leapt to 13 million barrels per day, up from 11.3 million in 2023. And OPEC has delayed its planned production cuts.
Economics 101: oil demand is declining and supply is increasing. Ergo, an oil price of under US$70…
This is a double-sided coin. Motorists will love the lower prices. But producer countries rely on a minimum oil price to meet their annual government expenditure.
Currently, only two of the major exporting countries have breakeven oil prices below the current price. That is, the other nine countries will need to either dip into reserves or borrow to balance their budgets.
Currently, only Russia, Saudi Arabia and UAE have decent foreign currency reserves on which to draw. Although some 50% of Tsar Vlad’s reserves are frozen.
A sustained decline in the price of oil will bring fiscal pain. Iran is most vulnerable.
4. Emperor Eleven has a problem
Emperor Eleven’s somewhat extreme covid-lockdown policies (just ahead of Victoria’s) have had a stubborn downside:
Readers know that consumption expenditure is critical to GDP growth (just ask Treasurer Grim Jim). And that an ingredient of consumption expenditure is consumer confidence.
Emperor Eleven’s Empire is in a funk. But it gets worse: Foreign direct investment (FDI) slumped to minus $14.8bn in the second quarter of this year, the worst figure on record. Any dollars ploughed in were comfortably outweighed by foreign investors selling stakes, collecting loan repayments or repatriating earnings.
How is Emperor Eleven reacting? At a meeting of the Politburo in July, they urged cadres to “sing the bright future of China’s economy”. How inspiring!
Perhaps Albo’s Cabinet can urge like-minded cadres to “sing the bright future of Australia’s interest rates and inflation.”
This could be the new economic black. Or is that red?
5. A plague of locusts. Well, two.
One pest is a problem. Two is a plague. And it’s now clear that there’s a plague in the National Party. A plague of stoopidity.
Wry & Dry always thought that the Gnats had room for just one nutter: Barnaby Joyce. But somehow, the Gnats’ nutters, like locusts, reproduce themselves. Enter Senator Bridget McKenzie, opposition transport spokesperson.
Her suggestion on Monday morning that Qantas be forced to divest Plummet Airways Jetstar to “increase competition” displayed breathtaking business ignorance and political stoopidity.
All of this on top of the Gnat’s leader’s and Uncle Fester Dutton’s dream desire to have ‘divestiture powers’ to breakup Woolworths and Coles and Bunnings. All in the name of competition.
Really? Anti-competitive behaviour is in the wheelhouse of the Australian Competition and Consumer Commission. No further action required.
Uncle Fester didn’t support the Senator. And on Monday morning was quick to tell the Gnat’s Leader to squash Senator McKenzie. Which he did. The Senator then pleaded that she was misunderstood. By Monday afternoon not even Senator McKenzie was supporting Senator McKenzie.
6. The legacy Joyce left
It’s sort of strange that about 22% of an airline’s profitability comes from not flying planes. Well, that’s the way it is with Qantas.
And it’s easy to see why. Its Frequent Flyer programme is a shocker for customers, but good for the company.
The world’s first independent analysis of more than 60 airline loyalty programmes has ranked Qantas’ as 24th, with a score of 38.9%. So much for the oft-cited praise that its programme was the gold standard. Or did that comment mean the gold standard for the airline’s profitability?
Qantas ranked badly on number of points needed to fly, penalties for cancellations, flexibility and service. This would not be news to Qantas flyers.
It rated well for ease of earning points (so what, if a flyer cannot easily use them) and partner airline availability.
Air France and KLM topped the rankings with 93.1%, followed by Air Canada, United, BA and Virgin Atlantic. Each well above Qantas. Singapore and Cathay also struggled, with each with a ranking of 51.4%.
By the way, Roy Morgan Research today released survey news that Qantas is Australia’s most distrusted brand. Ouch.
7. UK investors don’t like the UK
“Gad, sir, have you no patriotism?”
“Yes, I have no patriotism. There’s no money in patriotism. My job is to make money.”
UK pension schemes (i.e. superannuation funds) have deserted the London Stock Exchange. Home-market investment is just on 4%, much less than the global average of about 10%.
But the bigger issue is how conservative the Brits are. Until 2007 the decline in home country equity investing was more-or-less matched by an increase in offshore equities. But clearly the GFC spooked the Brits and since then equities has continued to slide as a percentage of total assets.
And since 2010, the succession of Conservative governments has produced a more conservative investment regime. And the unintended consequences of Borisconi are yet to fully emerge.
8. Dynasties
Prince Andrew is probably very jealous of his older brother. After all, Charles is now Charles the Third.
How can Andrew become Andrew the First, or Second, or something? That would be a fine thing.
The bad news for Andrew is that there will soon be a third for him: the third television representation of his relationship with that nasty paedophile Jeffrey Epstein.
The Andrew the First was real: his actual BBC interview of November 2019, when his attempt to “get ahead of the story” cemented his reputation as arrogant, spoilt, brainless and uncaring. And, unlike Kamala Kamala’s slicing of the Trumpster this week, in that interview Prince Andrew was slowly roasted over an increasingly hot fire. But he didn’t realise it.
HM the Queen gave Andrew another gong a few days later: the DCM.2 He was now unemployed.
The Andrew the Second, called Scoops, was a 60-minute television 2024 re-enactment of that interview and the events leading up to it. All the memories of Andrew the First resurfaced. (Watch on Netflix).
Now comes Andrew the Third, called A Very Royal Scandal, to be released later this month on Amazon Prime. It’s a three-part series. Andrew is portrayed as pompous, deluded and deeply unpleasant. Of course, most of the events and dialogue is fictitious. And in true English television manner will be billed as ‘based on true events’, with the now standard small print disclaimer: “some scenes have been adapted or fictionalised and adapted for dramatic purposes.” You betcha.
The problem for Andrew is not the latest figurative placing of his head on a spike at the city gate. But rather the movie will remind the Brits that he is a bludger. His brother is financially supporting his non-working brother at the very lavish Royal Lodge, the vast estate that costs Charles more than £5 million a year for security and other living expenses.
But Andrew, deaf to reason, refuses to leave Royal Lodge for a more modest arrangement. As one royal aide put it, in a very British way: “It can be done tidily or untidily. It can be done with grace and dignity, or it can be forced upon him… The only question now is when he will realise that he has become a prisoner of his own pride.”
2 Don’t Come Monday.
9. Tasmania sinks
Some weeks ago, Wry & Dry reported on a report by independent economist Saul Eslake on the state of Tasmania’s finances. His thorough analysis was dry and wry: Hobart, you’ve got a problem.
Well, yesterday, the size of the problem became public. The minority Liberal government will more than double the state’s debt and the return to surplus will be delayed until FY-30.
Wry & Dry bets that Australia will get nuclear powered submarines before Tasmania’s budget returns to surplus.
Snippets from all over
1. Apple bitten
Apple has suffered a significant defeat after the EU’s top court ruled the iPhone maker must pay €13bn in back taxes to Ireland, overturning an earlier decision in the Big Tech group’s favour. (Financial Times)
Wry & Dry comments: Apple will pay the taxes from the petty cash tin. Ireland doesn’t really need the cash, it expects a budget surplus this year of €8.6bn.
2. Crude
Brent crude, the global oil price benchmark, dipped below $70 a barrel for the first time since December 2021. (The Times)
Wry & Dry comments: Nothing to do with the world using more renewables, it’s a slowing global economy, especially China.
3. Russian drones
Sweden is investigating a drone incident that forced the closure of the country’s biggest airport just hours after Russian drones crashed on the territory of fellow Nato members, Romania and Latvia. (The Times)
Wry & Dry comments: Tsar Vlad’s remote control device went nutzo.
4. Germany tightens borders
Germany will extend temporary controls to all of its land borders in an effort to crack down on illegal migration. (Financial Times)
Wry & Dry comments: The horse has already bolted.
5. Changi expands
Singapore’s prime minister, Lawrence Wong, said that work would begin next year on a fifth “mega terminal” at Changi airport. (Economist)
Wry & Dry comments: Soon, all of Singapore will be an airport. Except for Raffles.
It figures
- 2.2%: Eurozone – Inflation in the year to August. Good news – interest rates were cut
- 2.5%: US – Inflation in the year to August. Good news – possible rate cut
- 0.6%: China – Inflation in the year to June. Bad news – deflation
- 13.3%: UK – Youth unemployment in July. Bad news – the problem is for now and for tomorrow
And to soothe your troubled mind…
“Trump was fired by 81 million Americans.”
Wannabe US president Kamala Kamala Harris, in a television debate, applying the line the Trumpster used in his television show (The Apprentice) to his 2020 election loss.
Wry & Dry comments: The Trumpster was, momentarily, speechless.
“It’s, like, four sentences. Run, Spot, run.”
Wannabe US president the Trumpster, on Kamala Kamala’s economic plan for the US.
Wry & Dry comments: Oh, dear. Not only couldn’t distinguish a sentence from a word, but also cannot count.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!