Wry & Dry: a cynical and irreverent review of the week in politics, economics and life. For intelligent Readers who disdain the trivial.
Investment Matters
Craig Shepherd is taking a break from Investment Matters this week.
Wry & Dry’s musings…
… are somewhat measured this week. The widespread conflating of the joy of the hostages’ release with Trumpster’s Nobel Peace Prize Plan (Gaza Chapter) is disappointing. There are at least three submerged logs. Meanwhile, Liberal wannabe prime minister Hastie continues to focus on the future, his own. To the cheering of the far-right echo chamber. And France’s government stumbles like a giraffe on roller skates on ice.
1. So far, so good I
Trumpster’s Nobel Peace Prize Plan (Gaza Chapter) should be given every chance of success. To end the war, that is, not for him to win a Nobel Prize. And, so far, so good – hats off to Trumpster.
But, and there is a but, Trumpster’s Nobel Peace Prize Plan and his yesterday’s declaration of “peace in the Middle East” are based on three assumptions.
Firstly, that silence from Iran means consent. Unless Trumpster has done a hitherto unannounced real estate deal in Tehran to benefit the Ayatollah, Iran’s desire for the destruction of Israel will re-emerge.
Plus ça change, plus c’est la même chose.1
Secondly, that Trumpster’s knowledge of geography is reality. It’s not. ‘Middle East peace’, for which he will claim responsibility, must surely include the West Bank. But Trumpster’s Nobel Peace Prize Plan doesn’t. Currently, Netanyahu is seeking to gradually divide, then occupy, then annexe the West Bank. Trumpster has previously said he is opposed to annexation.
Trumpster will move on to other things once he gets his gong. But Netanyahu won’t. Move on, that is.
1 The more things change, the more they stay the same.
2. So far, so good II
Thirdly, that peace in Gaza is an Israel versus Hamas matter. It’s not.
Y’see, Hamas is not the only belligerent in Gaza. It is just the largest. There are two other large paramilitary groups in Gaza. Readers should consider…
Palestinian Islamic Jihad (PIJ) is the second-largest militant group in Gaza. It is strongly backed by Iran, with leadership based abroad and is ideologically similar to Hamas but more focused on armed resistance than governance.
Popular Resistance Committees (PRC) is the third-largest militant group in Gaza. It was formed by defectors from Hamas, Fatah, and other factions. It is more radical than Hamas, focused solely on armed struggle. It is also supported by Iran.
Neither of these groups is a participant or stakeholder in Trumpster’s Nobel Peace Prize Plan. Both are not interested in peace, only the destruction of Israel. Wry & Dry fears that it will be only a matter of time before Gazan rockets start being lobbed onto Tel Aviv. That will be the end of the penny section.
And what if there is peace for a time and Trumpster gets the gong he craves. And then in say, two years’ time war resumes. Will Trumpster hand back his gong?
3. Hasty Hastie
Some weeks ago, Wry & Dry wrote that Andrew Hastie was the most ambitious politician since Julius Caesar. So it came to pass that Hastie could wait no longer. And last weekend quit the Liberal Party front bench.
He swore blind that his decision had nothing to do with the Sussan Ley’s leadership. Really?
Hastie’s views on immigration (“slash it”) and climate change (“the climate has been changing for millions of years”) are well known. Of lesser awareness is his view that Australia should have a car manufacturing industry. Holey moley!
Yes, the wannabe prime minister wants to wind back the clock to the days when the government subsidised those needy companies: Ford, General Motors and Toyota. Billions were spent propping up those inefficient industries. Until the Liberal government scrapped the nonsense in 2017.
The car companies loved the subsidies – they could make a profit by asking the government to subside them based on their costs of production. So, there was no incentive to become more efficient.
Watch out for more populist rantings now that Hastie is on the back bench, where he will be encouraged by the right-wing echo chamber. Yesterday’s Australian newspaper is a case in point.
By the way, Monday’s Newspoll had Labor leading the Coalition 58/42.
4. “To lose four is carelessness”
Younger Readers will remember the video of the statue of Iraq’s Saddam Hussein being tugged over at the end of the American invasion in 2006. It tilted slowly, a little bit. Then a little bit more. And a little more. But it were assuredly destined to eventually fall. Which it did.
Which is what is happening to M. Macron’s French government. He has lost his fourth PM in just over a year. At the risk of again paraphrasing Oscar Wilde: “To lose one prime minister, M. Macron, may be regarded as a misfortune, to lose four looks like carelessness.”2
Macron will probably not celebrate another record of his presidency. Sebastian Lecornu’s 27-day tenure was the shortest for a prime minister since the Fifth Republic began in 1959.
Macron’s centrist party does not have a majority. His foes are, essentially, extreme left wing and extreme right wing. And the extreme wings will not agree to a sensible budget, each happy that the chaos might cause an election at which the electoral fortunes of each are hoped to improve.
France’s debt load scoots ahead of its peers…
Chart source: Financial Times
The above chart doesn’t represent the problem, it’s just the outcome. The real problem is productivity:
… it’s real problem is productivity
Chart source: UK Telegraph
The political issue in all of this, aside from the average French person’s belief that there is no cost to government spending and that productivity doesn’t matter, is that Macron is President until April 2027. He must somehow run a government over which he has little control.
It’s peak schadenfreude for the Brits and Italians.
2 “To lose one parent, Mr. Worthing, may be regarded as a misfortune; to lose both looks like carelessness.” Oscar Wilde, The Importance of Being Earnest, said by Lady Bracknell.
5. Uncle Albo cannot resist the bailouts
There is no better time to ask for a government bailout than just before an election. And so it came to pass that South Australian Whyalla Steelworks went publicly pear-shaped in February 2025. It was bailed out with a $2.4bn package by Uncle Albo. The election was in May.
The business was a basket case, not to mention that even if it worked effectively, it wasn’t internationally competitive.
But the precedent was set. And now the begging bowl is at Uncle Albo’s feet. In August it was $135m for Netherlands-based Nyrstar’s lead and zinc melters in South Australia and Tasmania. And this week $600m for Swiss giant Glencore’s Mt Isa copper smelter. Next will be Rio Tinto’s Tomago aluminium smelter.
Smelters are energy-hungry creatures. And would always struggle with the failure in Australian government energy policy.
Uncle Albo tosses out the old canards to justify the burning of we-the-taxpayers’ dosh: regional jobs and sovereign capability. Err, the latter is difficult to argue as copper is globally traded and readily available.
The point is that the government has failed to define Australia’s competitive advantages, a task made more difficult by Australia’s loss of its low-cost energy advantage: i.e. from coal and gas.
The policy of attempting to build an internationally competitive manufacturing industry is doomed to be massively expensive and a massive waste of labour and intellectual resources.
6. Trumpster’s tariffs – a case study in failure
Trumpsters touted the merits of tariffs. Wry & Dry brings an example:
- Before Trumpster 1.0: China bought 60% of America’s soybean crop
- Trumpster 1.0: China responds to Trumpster’s tariffs, buys 20% less of America’s crop. Farmers bailed out with $23bn.
- Trumpster 2.0: Trumpsters adds 20% tariffs on Chinese imports. China responds by adding 23% tariff on America’s soybeans.
- 2024: America exported 985 million bushels of soybeans to China
- 2025: January to August America exported 218 million bushels to China
- 2025: June, July, August America shipped zero soybeans to China, an historic low.
Outcome: the US government will now again bailout US soybean farmers, with at least $10 billion.
Trumpster’s tariffs are beginning to hurt Americans.
7. Trumpster’s border wars – success as he defines
There is information in the below chart.
8. Japan’s first
In a move that has shaken Tokyo’s equivalent to the gentlemen’s clubs of London, Japan is about to have its first female prime minister. This for a country that is rated 145th in the World Economic Forum’s global gender gap (UK is 4th, Australia 13th, US 42nd).
Sanae Takaichi is expected to be confirmed in the role on 15 October. She is a tough cookie and models herself on former UK PM Thatcher (in toughness). On social issues she is certainly a conservative politician, but not on budget balancing.
She has a hard row to plough, initially to try to renegotiate Japan’s tariff agreement with Trumpster. Then there is the perennial problem of inflation, and stagnant wages. Her bias is for a stimulatory economic policy and an assertive foreign policy.
Wry & Dry assesses that she will be good for Australia.
9. “Told you so…”
Last week, Wry & Dry opined on Trumpster’s desire for revenge against political adversaries. As exemplified by his pursuit of the former FBI Director. And that others would follow.
Yesterday, the US secured an indictment against New York Attorney General Letitia James following an investigation into mortgage fraud allegations. As New York Attorney General, Letitia James previously led a successful civil fraud case against Trumpster and the Trumpster’s companies, resulting in a massive financial judgment exceeding $500 million.
Who will be next?
10. He would say that, wouldn’t he?3
News last week was that the cost of the Snowy Hydro 2.0 renewable energy project4 was now somewhat ahead of the original $2 billion. The latest figure is $12 billion! And will possibly go to $20 billion.
This puts the project right up there with the whimsical Chairman Dan + Jacinta Allen Melbourne Suburban Rail Loop Model For Extravaganza. There was no analysis whatsoever of the benefit, much less cost, of this Thomas The Tank Engine thought bubble.
The initiator and champion of the Snowy project was former Liberal PM Croesus Turnbull. The project was undertaken in a rush without any independent assessment. It was a political imperative for Croesus to get quick runs on the board that drove the decision. Not a sober analysis.
He said on Monday that the project was “worth the rise in cost.” No-one asked him at what point the cost wouldn’t be worth it.
3 Famously said by Mandy Rice-Davies when giving evidence in the trial of Stephen Ward, during UK’s Profumo Scandal. When told that Lord Astor denied having an affair with her, she famously replied: “Well he would, wouldn’t he?” The charges against Ward were outrageous, and designed to take the heat off the Conservative government. Ward committed suicide. The Conservatives got the DCM just months later.
4 The project is, in essence, a giant battery. Solar is used during the day to pump water back up the mountain, when renewable power is in excess. Hydro power is generated at night or when electricity demand is high. The theory is that it is closed loop, water is constantly being re-cycled.
11. Emperor Eleven’s empire breaks its wine duck
China earned it first ‘best-in-show’ wine medals this week, at the Decanter World Wine Awards held in London. It is the planet’s premier wine tasting event.
Judges couldn’t go past the Changyu Noble Dragon N188 2022 or the Dongfang Yuxing Geruihong Yeguangbei 2022, principally because they could pronounce the names. These wines come from the Ningxia region, an area near the Gobi Desert. It is on the same latitude as Napa Valley.
France won 14 best-in-show awards, Italy six, Spain and Portugal five each and then Australia and Greece with four each. The Australian winners were:
- Wirra Wirra The 12th Man Chardonnay, Adelaide Hills 2024
- Xanadu Reserve Cabernet Sauvignon, Margaret River 2022
- Barossa Old Vine Company Shiraz, Barossa Valley 2022
- Trentham Estate Reserve Shiraz, Heathcote 2023.
Wry & Dry will always keep Readers up to date with the critical international news.
12. US FY-25 government financial outcomes
The US Congressional Budget Office on Wednesday released the government’s fiscal outcome for FY-25 (which ends on 30 September). Highlights were:
- Trumpster’s tariffs brought in $195bn. The tariff ramp up started in April.
- Net interest on federal debt topped $1tn. For every $5 collected in taxes, $1 went to pay interest.
- Elon Musk’s Department of Government Efficiency failed. Some grants were cancelled, and probationary employees got the DCM, but the needle moved nowhere near the $2bn promised.
- The deficit was virtually unchanged from FY-24 at $1.8tn, about 6% of GDP, down from 6.4%.
13. Scotus agenda
The Supreme Court of the United States (Scotus) began its new term last Monday. It will be busy term, courtesy of Trumpster. Consider…
- the legality of his sweeping tariffs
- a challenge to a precedent that shields independent agency heads from arbitrary dismissal
- his bid to replace Lisa Cook at the Federal Reserve
- his attempt to abolish birthright citizenship
- conversion therapy for minors
- racial gerrymandering
- campaign-finance limits
- the death penalty and police searches
Yee ha! Boom time for lawyers, courtesy of Trumpster.
Snippets from all over
1. Tsar Vlad propaganda film flops
A Kremlin-backed propaganda film about the supposed horrors of life in the West flopped at the Russian box office, earning less than £1,000 before it was pulled from cinemas after just three weeks. (The Times)
Wry & Dry comments: It was watched by just 192 people on its opening weekend.
2. Gold, gold, gold
The price of gold futures hit $4,000 per troy ounce for the first time. The yellow metal’s price has risen by more than 50% this year, as Donald Trump’s erratic trade policies shook investors’ confidence in the dollar and Treasuries. (Wall Street Journal)
Wry & Dry comments: Nice work, if you can get it.
3. Peruvian appetite
A Peruvian bishop accused of having 17 secret mistresses has been exposed after some of the women found out about each other and nearly came to blows. (The Times)
Wry & Dry comments: The Pope has given him the DCM, but no news on a nun who was one of the 17.
4. UK Greens want to abolish landlords
The UK Green Party has committed itself to “abolishing landlords”. Party members at its conference in Bournemouth on Sunday passed a motion that makes seeking the “effective abolition of private landlordism” official policy. (UK Telegraph)
Wry & Dry comments: In classic far-left speak, landlords were described as adding “no positive value to the economy or society” in the motion, which also said the “relationship between landlord and tenant is inherently and intrinsically extractive and exploitative”.
5. Syria, the slow march to democracy
Syria is holding indirect elections to choose its first parliament since former president Bashar al-Assad was toppled last year, offering a litmus test of the interim government’s commitment to an inclusive political transition. (Financial Times)
Wry & Dry comments: The journey will be difficult, but at least the torturing has stopped.
It figures
-4.3%: Germany, industrial production in August, back to 2005 levels, driven by an 18.5% collapse in motor vehicle manufacturing.
And to soothe your troubled mind…
“The reason our housing affordability problem won’t be solved, is because our politicians all know that a very large majority of voters don’t want it to be solved.”
Saul Eslake, independent economist, speaking of Uncle Albo’s new First Home Buyers’ Scheme, and noting that there are fewer than one million aspiring first home buyers compared to 12 million people who already own at least one home and who want prices to rise.
Wry & Dry comments: Eslake added, “Even the dumbest of our politicians can do the math.”
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!
PS Investment Matters is not published this week