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 this week does a deep dive on AI:
- what a manhole cover in Collins St says about Australia;
- current markets; and
- the massive investment in AI capacity.
To read Investment Matters, you can still just click on the link at the bottom of this week’s Wry & Dry. Or here.
Wry & Dry’s musings…
Uncle Albo went missing just when Grim Jim needed his moral support. The PM didn’t want to be around for such a humiliation. Trumpster shows that posturing is nothing without the use of power. The Liberal party has a new enemy: the Gnats. And Australians are not reproducing themselves, which, aside from Canberra, is a bad thing.
1. Where’s Uncle Albo?
The world was watching, and asked the question: where was Uncle Albo?
The question was not about the absence of Uncle Albo from the impressive list of heads of state and of government that attended the signing of Trumpster’s Nobel Peace Prize Plan (Gaza chapter) on Monday in Egypt.1
Where was Uncle Albo on Monday? This was when Treasurer Grim Jim tried to show humility2 when he undertook the best political backflip/ backdown/ change of mind since events on the road to Damascus about 2,000 years ago.
And told the world that his cherished superannuation tax grab would lose two of its heinous constituents: taxing of unrealised capital gains and an unindexed asset threshold from which an additional 15% would apply.
[Which begs the question, why index the tax threshold for superannuation tax rates but not personal tax rates?]
Normally, a PM would stand behind/ alongside the Treasurer to add weight to the backflip announcement. And to show support for the shrunken man.
Alas, no Uncle Albo. He was, apparently, on vacation, overseas, with his fiancée.
Of course, it is only fair that Uncle Albo needed time to reacquaint himself with his betrothed after his recent travels. The bigger question is, of course, given the significance and gravity of Grim Jim’s backdown, perhaps the backdown announcement might have waited for Uncle Albo’s return.
But no. Uncle Albo wanted zero part of the humiliation. It took a while for the penny to drop that Grim Jim’s superannuation tax policy had ‘major disaster’ written on the label. But when the penny fell, Albo told Grim Jim to fix up the mess. And face the music on his own.
Grim Jim has been shown to be a political dunce.
1 There were attendees from US, Egypt, PA, Qatar, Turkey, France, UK, Germany, Italy, Spain, Saudi Arabia, India, Canada, Jordan, Bahrain, Kuwait, Iraq, Indonesia, Azerbaijan, Greece, Armenia, Hungary, Pakistan, Armenia, Cyprus, UAE, Oman, Japan and Norway. But not from Israel, Hamas or Australia.
2 He failed.
2. Trumpster 1, Appeasers 0
Salespeople love to use a big headline to tell a big story, even if the story is not as big as the headline. Trumpster is a salesman. Just ask him about the size of his feet.
And so Trumpster’s ‘peace in the Middle East’ was the big headline. The reality is different. It’s a ceasefire-hostage release deal. Trumpster and the world may have celebrated too early.
There is much more to do, not least of which is disarming Hamas. Not only is this collective of Jewish hating thugs executing alleged collaborators (which started on the second day of peace), it is also battling for territory and influence against the two other major militant groups of which Wry & Dry wrote last week.
The suffering of Palestinians will continue at the hands of Hamas. Wry & Dry is waiting for the demonstrators to fill the streets in protest against Hamas… Waiting. Waiting.
But hats off to Trumpster for using America’s hard power and his force of will for at least getting the hostages released and the ceasefire in place. Arab states need the US. And so does Israel. It is now clear that recognition of Palestine as a state contributed zero (Uncle Albo’s dreams notwithstanding). As did Greta Thunberg. As did all of the virtue-signalling street demonstrations.
Students of history know that posturing counts for nothing without the use of economic and military power.
For example, consider not the soaring rhetoric but instead the outcomes of former President Obama’s craven and Pollyanna foreign policies. Nil. Other than hundreds of thousands of deaths and the acquiescence to territorial grabs by despots.
Syria’s venal and murderous president Bashar al-Assad crossed Obama’s red line with impunity and used chemical weapons3 in the civil war; so emboldened, Tsar Vlad walked into Crimea; and Emperor Eleven started building military bases on coral atolls in the South China Sea.
And don’t get Wry & Dry started on the pathetic Sleepy Joe.
3 Assad’s regime used chemical weapons over 300 times, including sarin, chlorine, and sulphur mustard.
3. The Liberal enemy within
In a craven attempt to take advantage of the current federal Liberal disarray, the Gnats leader has said that he would welcome “any Liberals defecting” to the National Party.
Readers will know that if seven Liberals turn their coats the Nationals become the dominant party of the Coalition.
Good grief, imagine the rampant agrarian socialism. Not to mention the reprise of Barnaby Joyce’s massive cross-Australia rural road and rail infrastructure projects that would make the cost of Jacinta Andrews’ Great Suburban Rail Loop look like that of a child’s train set.
Gnats most rebellious rebel and pot stirrer Senator Matt Canavan said, “…I can do maths as well as anybody else, so those numbers check out: if seven Liberals came to the National Party, the National Party would be His Majesty’s Opposition.”
In this instance, Senator Canavan has the correct maths’ knowledge, but not constitutional knowledge. His Majesty’s Opposition is the Coalition, not either Liberals or Gnats.
Older Readers will remember the last time Queenslanders tried to control the Coalition. In 1987, there was a dramatic and ultimately unsuccessful political movement, led by Sir Joh Bjelke-Petersen, then Premier of Queensland, to make Sir Joh prime minister. The campaign split the coalition between Liberals and Gnats.
The campaign failed. Labor, led by Bob Hawke, won the 1987 federal election with an increased majority. Hawke was heard to say, “We couldn’t have done it without Joh.”
It is unlikely that seven Liberals will become Quislings. But the turmoil in the federal coalition continues: Sussan Ley has three grumpy backbenchers now augmented by the Gnats leader. Will Uncle Albo be tempted to call an early election? Ah, don’t be silly.
4. Australian couples not coupling enough…
Well, not with a view to the reproduction of the Australian species.
Y’see, Australia’s fertility rate has fallen to its lowest ever: 1.48. As the rate needed to replace the population (assuming zero net immigration) is 2.1, this is bad news. Especially as it’s a dramatic 28% fall from last year.
The fertility rate in Canberra is the lowest in the nation, just 1.27. But, all things considered, that may not be a bad thing.
There is an implicit assumption in economic forecasts that the population will keep increasing. Well, it will have to as the other two drivers of GDP growth are not helping: productivity and workforce participation.
Which means more immigration.
5. Ukraine peace train
Trumpster’s peace train is headed for Ukraine. It is possible that Trumpster will now focus on not being played by Tsar Vlad. Readers will recognise the pattern:
Firstly, show the big stick. The rumours are that he will allow Ukraine to unleash deadly Tomahawk missiles on Tsar Vlad’s front lawn.
Secondly, segue to a colleague for vague threats. Pete Hegseth, the US war secretary, has said that the US and its allies will “impose costs on Russia for its continued aggression” if the war in Ukraine does not come to an end.
Thirdly, place the blame and set a deadline: “This is not a war that started on President Trump’s watch, but it will end on his watch.”
Finally, give the sales pitch: he “called on Nato allies to increase spending on purchases of US weapons for Ukraine.”
Wry & Dry cannot help but wonder that the aim for the US industrial-military complex is to increase its sales.
6. Outsourcing
Jacinta Allen, premier of the bankrupt state of Victoria, has just awarded a contract for $105,000 to an external consultant to prepare presentations to credit ratings’ agencies. The aim is to improve Victoria’s credit rating.
Hold the phone, is there no capability in the Victorian Treasury? And if not, perhaps there is merit in hiring the capability. “Presenting the condition of, and prospects for, the government’s finances in the best possible light is a core skill that you would expect treasury to have,” says independent economist Saul Eslake.
Perhaps the best way to improve Victoria’s credit rating is to actually improve the finances.
7. Victoria’s crime boom
There is data in the below chart.
8. Happy news for Uncle Albo
Uncle Albo would not have missed the good news from the IMF about Australia’s forecast economic growth rate. Compared to India and China, it’s pretty weak, but against developed nations, it’s good.
Admittedly, it has been slightly downgraded to reflect some Trump-led uncertainty. But in a world of relative success, it might be an antidote to Grim Jim’s bad news.
Snippets from all over
1. Trumpster to meet Tsar Vlad in Budapest
Donald Trump on Thursday said he would again meet Russian President Vladimir Putin for talks seeking to end the war in Ukraine. (Financial Times)
Wry & Dry comments (with apologies to Messrs. Lerner and Lowe):
There he was, that hairy hound from Budapest…
Never have I ever known a ruder pest…
Oozing charm from every pore
He oiled his way around the floor.
2. Waymo in London
Waymo, Alphabet’s [i.e. Google’s] self-driving-car unit, said it would begin a trial of its autonomous taxis in London next year—its first expansion into Europe. The cars will initially have human supervisors behind the wheel to ensure safety and gather data. (Economist)
Wry & Dry comments: Good luck with that! Only London cabbies know the streets, the back alleys, the short cuts and the problems. Expect Waymo’s confused taxis to cause traffic constipation.
3. Google building in India
Google said it will spend $15bn over five years to build its largest artificial-intelligence data centre outside America, in India. (The Times)
Wry & Dry comments: From where will the electricity come?
4. Macron’s government caves to left wing
France’s prime minister, Sébastien Lecornu, promised to suspend Emmanuel Macron’s unpopular pensions reform—which would raise the retirement age to 64—until 2027 in order to win support from the left and pass next year’s budget. (Economist)
Wry & Dry comments: Politics, and power, is the art of the possible.
5. Oil hits five-year low
A growing glut of oil and fear of a global economic slowdown have pushed U.S. crude prices to their lowest point since fuel markets were rebounding from the Covid crash. (Wall Street Journal)
Wry & Dry comments: US oil futures dropped to $56.99 a barrel, the lowest since 2021.
It figures
- 4.5%: Australia. Unemployment rate in September, the highest in 4 years.
- $1,000,000: Australia. The approximate cost per job saved by the government’s bailouts of struggling manufacturing plants and smelters.
- 15: Taylor Swift. The number of albums she now has that have reached #1 on the Billboard 200 Chart. Second only to The Beatles (19).
And to soothe your troubled mind…
“There’s a saying in [UK’s] parliament that the Tories get into trouble over sex and Labour get into trouble over money because neither has enough. But Prince Andrew has got into trouble for both.”
A UK journalist, commenting on the latest revelations about the Duke of York’s indiscretions.
Wry & Dry comments: Prince Andrew still remains as befuddled as Mike Gatting after Shane Warne castled him with his (Warne’s) first test ball in the UK. Ritchie Benaud’s comment at the time still applies to the Duke: “…didn’t know what happened…[long pause]. Still doesn’t know.”
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!