The Art of the Self-Inflicted Deal. From Buckley’s to None. The rate rise that stopped a nation.

Wry & Dry’s ponderings…

Trumpster: now the flightless peacock. From Buckley’s to none. The rate rise that stopped a nation. All roads lead to Rome. China’s hurt feelings. The Fonzi scheme. Russia House. Reparations.

The Art of the Self-Inflicted Deal

Trumpster is now a flightless peacock, forlornly pecking for crumbs left by Elon Musk. His once glorious and mostly orange plumage has been reduced to a tattered, spindly and grey memorial to his narcissistic reign.

Noting the aged and broken orange peacock, two younger and aggressive peacocks, JD Vance and Rubio, are already displaying their array of colourful feathers. Although there are two more years before they will be judged, already the punters are punting whose plumage will be best:¹

In the meantime, as he wanders aimlessly, Trumpster is trying to work out how the deal fell apart. Naturally, he has found the culprits: everyone else. Never mind that he personally gift-wrapped Texas, that once redoubt of Republicanism, to the Democrats. He dumped a safe senator, John Cornyn, for being insufficiently loyal and instead backed Ken Paxton, whose resumé reads like a charge sheet. Texas promptly elected its first Democratic senator since 1988. Loyalty, it turns out, is not a campaign policy.

As Readers know, Trumpster’s policy record was no better. Tariffs raised prices for the farmers who had voted for him. A war with Iran pushed up petrol prices, and nobody, the commander-in-chief (i.e. Trumpster himself) included, seems to know what winning it would look like.

Meanwhile, he busied himself with ballroom designing, arch building and family wealth accumulation.

His closing pitch to voters was $5,000 a head if Republicans held Congress. American voters, showing rare fiscal discipline, declined the bribe.

Now Trump vows to work with Democrats. He’ll find them very busy, mostly with subpoenas.

PS. Historical note: President George W. Bush gave the DCM to his defence secretary, Donald Rumsfeld, the day after suffering big midterm losses in 2006. Is Peter Hegseth sleeping well?

¹ Jon Ossoff is a young Senator from Georgia, who has been compared to O’Bama. His mother is Australian. His surname might lend itself to, err, ridicule.

From Buckley’s to None

Venerable upmarket department store David Jones has entered administration after 188 years. That’s a long innings, though nobody seems to have checked the scoreboard since about 2014.

That was when Woolworths South Africa paid $2.1bn for it, sold the land under the flagships and filled the floors with its own home brand. It then flogged the lot to a ‘private equity’ company for $100 million. Even DJ’s famous stocktake sales never managed a 95% markdown.

Melbourne has a particular stake. David Jones’ Bourke Street flagship began as Buckley & Nunn, founded in 1851 by Mars Buckley, an Irishman who made his money on the goldfields and opened a drapery in a rented wooden building. David Jones bought the business in 1982, and the site is Melbourne’s longest continuously operating shop.

Local legend links the store to the old phrase for a hopeless chance: Buckley’s and none. DJ’s administrators will be hoping it’s only folklore.

Readers might not know that former PM Paul Keating was given the DCM from David Jones in 1967 as “apparently a surly 22-year-old”. What’s that about leopards and spots?

The rate rise that stopped a nation

On Tuesday afternoon, while the rest of Australia was watching horses, the Chief Teller of the RBA wasn’t. She had turned down the telly volume and turned up the cash rate, to 4.85%. That’s the fifth rise this year and to the highest level since 2008.

Punters lost money on the Cup, and mortgage holders lost it with the RBA. At least the punters had a choice.

Uncle Albo calls rate rises a “blunt instrument”, which is true, and also convenient. He knows that the RBA has exactly one instrument to control inflation. He also knows that his government has the other two, enhancing productivity and reducing spending. He has left both in the shed.

Increased productivity remains Australia’s most reliably forecast non-event. And one that Grim Jim thinks will magically happen all by itself. Which is why he explicitly excluded tax and workplace relations from the Productivity Commission’s inquiry into productivity.

The draft report, released yesterday, said that “many inquiry participants identified tax and workplace relations as important influencers on business dynamism” but they could not include recommendations for improvement. Instead, the report focusses on the burden of red tape.

Meanwhile, government spending keeps rising with the serene confidence of a government that knows it will be long gone before someone else has to clean up.

Grim Jim insists his budgets aren’t adding to inflation, and he says it so fluently you almost forget the numbers. Interest on debt is now the budget’s fastest-growing item.

His blame goes, as ever, to Ukraine, Iran, oil and the Coalition, a rotating roster of alibis. Borrowers, meanwhile, carry the weight alone, like the topweight in the Cup. The difference is that the horse gets a rest afterwards.

All roads lead to Rome, but now there’s an exit toll

For a decade Italy rolled out the red carpet for the rich: sunshine, Milan, and a flat tax so generous it practically came with a complimentary Aperol. Now PM Giorgia Meloni has spotted a flaw in the plan. The rich can leave.

Her solution is an exit tax of 26% on unrealised profits, for anyone holding €800,000 who has stayed six years. La dolce vita now comes with a cancellation fee. You can check out any time you like, but you can never leave… without paying.

The expected haul is €3.7 million next year, roughly what eleven newcomers pay in flat tax. That’s not a revenue measure. That’s a tip.

Naturally, the tax design is borrowed from France, the very country whose millionaires Italy spent years poaching.

But there’s an election in 2027, and nothing plays better with voters than taxing people already halfway out the door. Californians, meanwhile, just rejected their billionaire tax. Apparently, the rich are only fair game once they’ve checked-out.

Hurt feelings from a superpower

China wants to be taken seriously as a superpower. It would help if it stopped behaving like a toddler who’s been told “no” at the supermarket checkout.

Y’see, when doing a television interview, Real Madrid football gun Kylian Mbappé said he laughed at a meme, "the one where they put my face on a Chinese dictator". As he speaks, a meme appears with his face superimposed on an image resembling Mao.

The whole of China spat the dummy, which was later found on the moon. Within days, several Chinese brands had dropped him as an endorser, state television had pulled the entire Spanish league, and the foreign ministry was solemnly defending “the feelings of the Chinese people”.

Beijing then demanded apologies from Mbappé, La Liga and Real Madrid as an “absolute prerequisite”, like a headmaster keeping the whole class in over one rude note.

They all obliged. Mbappé even said sorry in three languages. CCTV replied that it would be watching what he next does. Kindergarten teachers say the same thing, only more warmly.

The best touch was a Chinese football site saying it was “unable to translate” the offending words. Among other unspeakable actions, Mao’s famine killed tens of millions. A 27-year-old footballer’s giggle, apparently, is the unspeakable part.

Wolf-warrior diplomacy has finally met its match: a meme.

Fonzi scheme

Turkey has named its $20bn financial scandal the Fonzi (a portmanteau of the Turkish word for fund and Ponzi), which is fitting. Like the Fonz, it was cool, it jumped the shark, and nobody in charge could bring themselves to say, “I was wrong.”

The trick was simple. Funds bought up thinly traded shares, pushed the prices to the moon and advertised returns of 4,233%. The regulators noticed. So did the finance minister, and so did MSCI. Nobody acted. A former financial-crimes official who did ask questions was detained for spreading “misleading information”, which is one way to treat a whistleblower: as the leak.

Sultan Erdoğan now promises a clean-up with “a surgeon’s precision”. Presumably the surgeon operates on everything except the head. More than 400 people face proceedings, among them a former presidential adviser and a deputy party chair who sold her shares just before the crash.

Meanwhile, prosecutors want up to 19 years in the Istanbul slammer for journalists who covered the scandal. In Sultan Erdoğan’s Turkey, reporting a fraud is apparently the more serious offence. Happy Days in Turkey.

Russia house

After nearly five years of watching Ukraine, NATO has made a startling discovery: if someone keeps throwing rocks at your house, a taller fence is less effective than a visit to their quarry.

The alliance has held its first-ever Deep Strike Symposium, a name that sounds like a yoga retreat but involves cruise missiles. Its top commander, General Grynkewich, now has a “theory of victory”: block, blunt and break. Translated from Pentagonese, that means stop the tanks, then flatten the depots, factories and fuel that keep them coming.

It isn’t quite a bomb on Tsar Vlads’s front lawn. It’s more his garage, his shed and his petrol station.

There is one small snag. NATO has announced 48 cheap cruise-missile projects, and few will arrive this decade. For now, its deterrent is a PowerPoint deck with very good fonts.

And then there are the politicians, many of whom still think defence means a drone wall and a strongly worded communiqué.

Reparations

Dealing with a recalcitrant younger brother is bad enough. But, at the Commonwealth Heads of Government Meeting in Antigua, being thrust forward to express an apology on behalf of a country for the sins of some of its forebears of 300 years ago is another.

And being more attuned to historical reality than his current and keen PM, the still newbie-PM Andy Burnham, King Charles did no such thing. He was merely offering “profound personal sorrow” over the slave trade.

Caribbean nations have replied, in effect, that sorrow is lovely but that cheque doesn’t clear at the bank. They say any dialogue that leaves reparations outside the room is incomplete. Translation: the apology is the deposit, and the invoice follows.

Curiously, the queue stops at Britain’s door.² Where are the demands on France, Spain, Portugal and the Netherlands? Or on the Arab traders who ran slave routes for a millennium, or the West African kingdoms that sold the captives? Rome and Athens seem to have got off scot-free. As has Iran, which abolished slavery in only 1929.

And the United States, where cotton turned slavery into a fortune, barely gets a mention.

² Curiously, part of the deal to abolish the slave trade was to compensate colonial slave owners for their loss of income. Some 40,000 slave owners were paid approximately £20 million in compensation. Payment was either in cash or 4% ‘undated’ gilts (i.e. UK government bond). In 2015, the UK government finally redeemed the gilts.

Snippets from all over

France protests

Riot police in France fired tear gas at protesters in Lyon as trade unions and students staged further nationwide demonstrations and a public-sector strike over the cost of living and the state of public services and education. (Economist 6 November)

Wry & Dry comments: The decline of the French Fifth Republic is beginning.

Brexit beginning to be untangled

The [UK] taxpayer has spent billions of pounds preparing Britain for post-Brexit food checks that are to be scrapped as part of Labour’s reset with the European Union. (The Times 4 November)

Wry & Dry comments: Brenter begins.

Big tech election spend fails

Silicon Valley billionaires who courted Donald Trump and donated more than $600mn to Republican candidates suffered heavy losses in the US midterm elections, as voters anxious about the rise of AI and Big Tech helped Democrats win large majorities in both houses of Congress. (Financial Times 5 November)

Wry & Dry comments: Musk put in $224m into Texas alone!

Tsar Vlad speaks…

The Kremlin said it hoped Mr. Trump’s drubbing would not affect his “peacemaking efforts”, meaning the trilateral talks between America, Russia and Ukraine. (Wall Street Journal 5 November).

Wry & Dry comments: There’s a deal to be had… for Russia and US.

Apple’s bigger pie.

Apple’s quarterly revenues surpassed expectations, rising 12% year on year to $114.5bn. (The Times, 4 November).

Wry & Dry comments: Sales in China, however, disappointed.

Anthropic’s almost one trillion dollar bet

Anthropic committed to spending $895bn on AI infrastructure, according to a regulatory filing ahead of its planned IPO. (The Economist, 4 November).

Wry & Dry comments: Anthropic’s IPO will be one of the largest ever. Unlike many AI-related start-ups, the company has already reached profitability.

It figures

1. Australia: 4.85%; new RBA cash rate, up 0.25% points.

And to soothe your troubled mind…

“These were not students coming to have their demands heard but individuals coming to terrorise, pillage and burn. And they managed to do that. They wanted to destroy everything.”

A school teacher at Lycée Françoise in Tournefeuille, near Toulouse, whose school was damaged yesterday as part of a nation-wide demonstration.

Wry & Dry comments: The hard-left Confédération Générale du Travail union put the number of demonstrators at 1.6 million. Sophie Binet, the general secretary, proclaimed the day a “success.”

Disclaimer

The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.

Cheers!