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:
- Interest rate cuts in the US – will Australia follow?
- Newmont mining – new research
- Emeco – reporting season review
To read Investment Matters, just click on the link at the bottom of this week’s Wry & Dry.
State of the art assassinations
If one wishes to simultaneously give the ultimate DCM to some 3,000 warriors, a knife won’t do the job. Unless it’s done one at a time. Even then it’s inefficient. Julius Caesar had at least seven Senators plunge their knives into him a total of 23 times.1 That’s poor productivity.
Mass poisoning is also possible. It was popular back in the day. But, again, inefficient. A food-taster, in a reluctant but doubtless well-paid profession with good superannuation, had to be dealt with. Claudius’ taster must have had an RDO as his wife piled the toxic mushrooms on his plate.2
A rifle is difficult to hide. Although from a hidden position, for example a grassy knoll or 6th floor window, such as where John Kennedy’s pleasant drive though Dallas ended badly, it can be useful for single deeds.
Similarly, the pistol presented a whole new opportunity for assassins to ply their craft. This device could be readily concealed, and no experience was necessary for use. But it was useless for multiple targets.
Crude devices as bombs and drones were indiscriminate and even then, difficult to deploy.
Which brings Wry & Dry to the state-of-the-art assassin’s devices: the humble pager and walkie talkie.
These hand-held wireless devices have all requirements: targeted (as they are carried by the target), can be detonated simultaneously, are proportionate and psychologically harmful.
They have one drawback. Their use on a grumpy and well-funded group of targets runs a significant risk of massive over-retaliation. And not because of the causalities caused.
But because it highlights the ultimate fear of terrorists and their leaders: global humiliation.
Once the applause for the audacity and brilliance of the Hezbollah truncation dies, the reality of deep revenge emerges.
1 Thus giving a new meaning to the term a ‘chiselled body.’
2 Claudius, reigned 41-54 AD, was murdered by his wife (who was also his niece) Agrippina. Her son, Nero succeeded the throne. Claudius was great-great-grandnephew of Julius Caesar. Nasty times, in Rome.
Interest rates fall… in the US
Where did the RBA go wrong?
Instead of shock therapy like other central banks, the RBA, under its then timid Chief Teller, tried to keep everybody happy. Especially politicians. He took too long to start raising rates and then only did so in a most gentlemanly manner.
In the US, interest rates went from zero to 5.4% in quick time. Brutal, but effective. Australia’s went from 0.1% (so cute not to get to zero – or maybe the RBA had a problem with a zero; their own Y2K problem) to the current 4.35%. Most unhurried.
So, and aided by a spendthrift government, Australia now has stubbornly high inflation. And a new and stubborn Chief Teller of the RBA. She will keep rates high to kill inflation.
Meanwhile, ten key central banks are merrily lowering interest rates. The US (-0.5% points) joined the decagon on Wednesday, following Canada (-0.75%), the UK (-0.25%), the ECB (-0.5%), et al.
[Readers are encouraged to read Craig Shepherd’s (First Samuel’s CIO) comments on the rate rise in this week’s Investment Matters].
February is now the foreshadowed month for the RBA to make life easier for borrowers.
No, Minister
Emeritus Chairman Dan’s underground railway bubble-thought has now morphed into a certainty to obtain Legend Status in the Global Fiscal Folly Hall of Fame.
Consider two announcements yesterday.
The Suburban Rail Loop Minister, Mr. Danny Pearson, said that he hasn’t provided critical information about the $125bn project to the federal government for two years because it wasn’t appropriate for him to do so whilst an audit was underway. When the audit is complete, “we’ll be providing the report…so those funds ($9bn) can be released, and we can invest in this project, because this project just stacks up, right?”
No, Minister. It doesn’t. Y’see, also yesterday, Victoria’s Parliamentary Budget Office said that the east and north sections of the Suburban Rail Loop would lose 30% of every dollar invested.
Minister Pearson is not really worried, though. Compared to Chairman Dan’s other follies: e.g. the cancelled road linking the Eastern and Tullamarine freeways that cost over $1 billion for a zero investment. That was a reverse Ponzi scheme: investors didn’t put any money in and yet lost $1bn.
Yes, Minister, the SLR stacks up for one thing: massive debt for Victoria. Right?
Ottawa, we have a problem
Some weeks ago, Wry & Dry pondered the future of Woke Trudeau, the now deeply unpopular prime minister of Canada, as he somersaulted the country’s immigration policy in response to massive public pressure. He read the polling entrails. But too late.
Since then, his minority-government partner gave itself the DCM from government.
And then on Monday his Liberal (i.e. centre-left) Party lost a parliamentary seat that it had held for decades, in a 20% swing. The Bloc Québécois, a national party that supports independence for Quebec, narrowly won the race that was held on Monday, according to final results released early on Tuesday morning. It was the Liberal’s second stunning election loss in three months.
The cry of they-the-people is now familiar: high immigration, high cost of living and housing shortage.
A general election must be held late in 2025. He might get the DCM before then.
Will Australia follow Europe to the bottom? Part I
The elite of Europe (bankers, economists, politicians and hangers-on) recently gathered at Villa d’Este3 on the shores of Lake Como for their bi-annual blame-someone-else-for-Europe’s-problems conference.
They were reminded that the EU is becoming globally less important:
- 1990 global GDP: EU (then 12 states) 26.5%. USA: 26%.
- 2024 global GDP: EU (now 27 states) 16.1%. USA: 26%
Why is it so? The gathering was reminded of how another famous person put it: “America innovates. China replicates. Europe regulates.”4
And last week, Mario Draghi, former head of the ECB, released a damning report: The Future of European Competitiveness. His words were simple: “If Europe cannot become more productive, we will be forced to choose [between a being technological leader, a beacon of climate responsibility, an independent world player and financing our social model].”
The below chart shows that the EU pumps out stuff at about 80% the efficiency of the US.
Source: The Economist
Amongst many matters, he points out that only four of the world’s top 50 tech companies are European.
3A glorious hotel, one of Italy’s gems.
4 No-one knows who first said this.
Will Australia follow Europe to the bottom? Part II
Now Readers might consider what former Secretary of the ACTU and architect of Australia’s retirement system, Bill Kelty, recently said:5 the Albanese government is, “mired in mediocrity.” His withering comments make for interesting reading, especially for anyone politically to the right of centre.
But those to the right of centre shouldn’t bask in the sunshine of a Labor legend beating up Labor. The Coalition governments of Abbott, Turnbull and Morrison were not only mired in incompetence, with rare exception, but also extraordinary internecine fighting. Readers will remember that Malcolm Turnbull stated that the reason he challenged Tony Abbott for the top job was that he (Abbott) has lost 30 Newspolls in succession. As soon as Turnbull lost 30 polls himself the sharks were circling. And he’s still moaning.
Albo inherited a stagnant economy with appalling productivity growth. He also inherited a Coalition mindset: a blend of Nelson (“I see no ships”), Nero (“Fire? What fire?”) and Marie Antionette (“Let them eat cake”). But he has made it worse, with policies that will strangle productivity growth.
And reform? Albo in a speech this week pushed back against any thought that he was too timid to embark upon genuine economic reform, citing the government’s two budget surpluses, its NDIS savings and its aged care plan.
Hold the phone! The first back-to-back budget surpluses in 16 years were not delivered by economic reform but through $70 billion in royalties and taxes paid by Australia’s mining sector. The NDIS savings were not reform but good housekeeping. The aged care plan was a sensible micro rehabilitation.
Albo should apply for Australia to join the EU. And then Australia can be added as an elonge5: America innovates. China replicates. Europe regulates. Australia procrastinates.
5On 6 September, at a small business dinner. That is, the dinner was small. Not that the businesses there were small.
6 An elonge is an addition to a bill of exchange (a sort of tradable hard copy IOU), where every purchaser became liable if the drawer/ acceptor defaulted. All purchasers sign the back of the bill. The elonge was a paper addition to the bill when the back of the bill had no room for subsequent purchasers to sign. It was taped on.
Unclear on the concept
“The idea that there’s political violence or violence in America like this is just unheard of,” Sleepy Joe said after a gunman hit Donald Trump’s ear with a small, rapidly moving missile on 13 July.
Once again, Sleepy Joe doesn’t understand the future and fails to know the past. Four of the forty-five US presidents have been murdered in office. And 16 more have faced direct assassination attempts.
Then last weekend, an unknown nutter tried to give America’s second most famous nutter7 the ultimate DCM. And then America’s most famous nutter8 wrote on his social media platform “Why they want to kill Donald Trump? And no one is even trying to assassinate Biden-Kamala.”
This is America’s pass time.
And it’s not just presidents. In 2020, one Anthony King was shot because he was a Democrat.
There have been 213 cases of political violence identified since the 6 January 2021 attack by supporters of former President Donald Trump on the U.S. Capitol.
Why the violence? In a Reuters/Ipsos poll of nearly 4,500 registered US voters in May, roughly 20% of both Democratic and Republican respondents called violence “acceptable” if committed “to achieve my idea of a better society.”
How much more evidence does Sleepy Joe need?
7 The Trumpster.
8 Elon Musk.
Get out of jail free?
Imran Khan, former captain of the Pakistan cricket team9, former Prime Minister of Pakistan and more recently inmate of Adiala Jail in Rawalpindi, is punting on a unique way to get out of jail. Get elected as Chancellor of Oxford University, from where he graduated in 1975.
Khan has experience at the gig. From 2005 to 2014 he was Chancellor of the University of Bradford, the first Chancellor of which was former UK Prime Minister Harold Wilson.
Khan faces two problems.
Firstly, some 250,000 alumni and former staff members will cast their ballots on-line on 28 October. But Khan is not the only pebble on the beach. He will be up against former Conservative Party Leader William Hague; a Church of England minister whose campaign is ‘anti-woke and anti-establishment’; and a plethora of titled wannabes.
A list of former Chancellors suggests that Oxford folk prefer to vote for men (there is yet to be a female Chancellor) with titles, connections and an unsullied past. Oliver Cromwell might be an exception. Khan’s past has more potholes than the road to Lahore.
Secondly, he is locked in a 2.1m x 2.4m cell. Houdini cannot help. But this is Pakistan: rupees might.
9 He was one of the game’s great players. He lies third on the ICC’s All-Time Test Bowling Rankings, behind Barnes and Lohmann and ahead of Muralidaran, McGrath and Cummins. His cousin Majid Khan, one of the most elegant batsmen, also captained Pakistan.
Snippets from all over
1. Source of Australia’s population growth
Net overseas migration drove 83% of Australia’s population growth in the year to March. (AFR)
Wry & Dry Comments: At this rate, Australia will… oh, never mind.
2. Parisian workers prefer meat to vegetables
Mayor of Paris Anne Hidalgo’s plan to feed the city’s council workers vegetarian meals in the name of ecology has split the French left. (The Times)
Wry & Dry comments: The workers are demanding a return of the meat dishes that have been removed from council canteen menus on Wednesday and Friday.
3. Norwegians drive electrically
Electric cars now outnumber petrol vehicles in Norway, according to data published by the country’s Road Federation. (BBC)
Wry & Dry comments: Tesla has 18% of the total market, followed by VW, Skoda and Toyota.
4. Back to work at Amazon
Amazon is to make its white-collar workers turn up at the office five days a week, as tech giants increasingly try to cajole workers back to the office. (UK Telegraph)
Wry & Dry comments: Another horse has already bolted.
5. Titanic builder sinks
Harland and Wolff, the builder of the Titanic, announced its insolvency. (Economist)
Wry & Dry comments: Lucky to survive this long.
It figures
- 4.2%: Australia – Unemployment rate. Unchanged. Interest rates unlikely to soon fall.
- -0.2%: New Zealand – GDP growth to end June. Better than the expected -0.5%.
- 0.1%: US – retail sales in August. Better than the expected -0.2%.
And to soothe your troubled mind…
“Harris has unleashed a unifying force, unlike anything we’ve seen in politics in a very long time.”
Opera Winfrey, a US television hostess, commenting on Kamala Kamala’s progress so far.
Wry & Dry comments: “Unifying force…” Really? The US remains the most bifurcated country in the Western world.
Next week: Wry & Dry will be taking a break. It’s also a holiday in Melbourne for Grand Final Eve.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!