Ten stories you may have missed…
- Trumpster: not a Swiftie
- Communicator: at last RBA has one
- Holding your breath: two state solution
- Memories: VEDC
- Memories: Sleepy Joe’s
- Management: Trumpster’s remote control
- China: deflation takes hold
- Tax: negative gearing
- Ireland: united?
- Olympics: the Chairman Dan option
1. Trumpster: not a Swiftie
Wry & Dry’s man in Mar-a-Lago reports that the Trumpster and his MAGA acolytes now believe that his enemy is not Sleepy Joe. Or Nikki Haley. But, in fact, Taylor Swift.
Not that Ms. Swift has gone out of her way to get under his skin, as Ms. Haley has done. All Ms. Swift has done is be more popular than he.
It’s also got a little to do with Ms. Swift’s relationship with a sportsman who is playing in an event on Sunday called the Super Bowl. This event is the acme of a sport named American football. In this contest the average game lasts 3 hours and 12 minutes, but time when the ball is in play is about 11 minutes.
Anyway, Ms. Swift’s paramour, Travis Kelce, is a star ‘tight end’ player (a mind-boggling name of a position) in this highly viewed event1 and has a status akin to a Greek god. Well, in America.
Add to this that Ms. Swift once (in 2018) endorsed a Democrat for the Senate (boos from Republicans) and Mr. Kelce appeared in ads for a covid vaccine (more boos). Readers can understand why the Trumpster and the MAGA masses have gone nutzo at Ms. Swift.
It’s got to the stage where the online MAGA nutters, of which there are many, angrily posit that Ms. Swift’s extraordinary popularity isn’t the outcome of the talent and appeal of a superstar. No, it’s a social media hypnotic outcome engineered by The Deep State in order to benefit Sleepy Joe. And that her relationship with Mr. Kelce is a fake, Deep State invented hoax to also support Sleepy Joe.
The MAGA nutters now feel that celebrity has no place in American politics.
Conveniently forgetting that Ronald Reagan was a movie star. And the Trumpster himself a reality television celebrity.
1 The FIFA World Cup final is the most watched single sporting event (as distinct from events held over a number of days such as the Tour de France, or a once only event such as the Ali v Spinks fight in 1978), followed by the Cricket World Cup Final, the Rugby World Cup Final, UEFA Champions League Final and then the Super Bowl.
2. Communicator: At last the RBA has one
There was much joy for mortgage holders this week. The Chief Teller of the RBA left interest rates unchanged.
But not for three populist state premiers, who last week formed their own little lobby group and very publicly advised her to lower interest rates (got a problem with your state’s debt, lads and lass?). It was clear from her media conference after the RBA meeting that she is her own woman.
She was direct and jargon free.
When asked how she factored in market expectations, she replied, “We don’t think about market pricing as being a forecast of our own cash rate. What’s really important for us is looking at market data.”
And she sat delightfully on the fence when asked about when rates would fall. “We’re not ruling anything in or out…” And she made it clear “that there is more work to be done” to bring down inflation.
Readers shouldn’t uncork the bottle. Yet. But plain speakers can rejoice.
3. Holding your breath: Two state solution?
With the news that the PM of Israel has rejected Hamas’ latest risible ceasefire proposal, it is worth remembering that the history of the conflict between Israel and the Palestinian peoples did not start on 7 October 2023. Neither did the trauma and mistrust. And only a fool would try to solve the problem without an understanding of a history that in the late 19th century picked up the threads that commenced thousands of years ago.
And there are plenty of fools out there. The path to a ‘two-state’ solution is, indeed, a Gordian Knot2. But one that cannot be solved as simply as using the Alexander the Great method.
Wry & Dry posits that a two-state solution is a dream, at least for a generation. And a hasty, advocate-pleasing, but kick-the-actual-can-down-the road deal, as is being actively pushed by Sleepy Joe (“Folks, I want this wrapped up before the election”), will unravel quicker than the thread on Yasser Arafat’s keffiyeh.
Look at it this way. “If the Arabs put down their weapons today, there would be no more violence. If the Jews put down their weapons today, there would be no more Israel.”3 And that is the issue. There is no unifying Arab/Palestinian voice that wants all Palestinians and other sympathetic Arabs to put down their weapons. So, it’s all very well for a purported Palestinian leader agreeing to peace, if less than 100% of Palestinians and Iran want peace.
The world remembers the Oslo Accords4, to which Arafat signed-up but many of his henchmen didn’t.
It’s not only Hamas that doesn’t want peace. It’s also ISIS (not widely known as being well entrenched in Gaza), Hezbollah and any number of self-serving wannabe Palestinian heroes on the West Bank. These fragmented groups make up, say, 10% of Palestinians in Gaza and the West Bank.
Does anyone really think that Hamas cares about the welfare of the people in Gaza? It has spent hundreds of millions of dollars on almost 800 kilometres of tunnels, many with access under schools and hospitals. Really, just ponder where Hamas’ interests lie. It is not about setting up the infrastructure for a sovereign state – or building a nation.
Does anyone seriously think that Israel is going to agree to a sovereign state existing on two separate borders that has occupants who have no interest in peace, or governing their peoples? Only to destroy Israel? Really?
2 The cutting of the Gordian Knot is an Ancient Greek legend associated with Alexander the Great, regarding a complex knot that tied an oxcart. Reputedly, whoever could untie it would be destined to rule all of Asia. In 333 BC Alexander was challenged to untie the knot. Instead of untangling it laboriously as expected, he dramatically cut through it with his sword. He ended up ruling as much of Asia as was then known.
3 Former Israeli Prime Minister Golda Meir.
4 A pair of interim agreements between Israel and the Palestine Liberation Organization (PLO) signed in 1993 and 1995. The process ended after the failure of the Camp David Summit in 2000 and the outbreak of the Second Intifada (a fragmented but costly terrorist uprising in Gaza and the West Bank).
4. Memories: Victorian Economic Development Corporation
Older Readers will remember the Victorian Economic Development Corporation, which went bust in 1989, with a negative net worth of $79 million (“a lot of money in those days”). The VEDC was the final nail in the economic coffin of the disastrous Cain/Kirner Labor government. It was a government funded venture-capital fund that tried to pick business winners. But, alas, and inevitably, failed.
Fast forward. In 2019, Chairman Dan established the Victorian Business Growth Fund, with funding from the government coffers and big superannuation funds. The aim is “to support long‑term growth opportunities for businesses and boost employment and economic development across the State.”
State Treasury’s website on the Fund says it will provide “support to businesses… that are having difficulty accessing capital….” and it will “back permanent, high-skilled jobs in priority areas of the economy; jobs that improve workforce diversity, jobs for people that have been unemployed or have a harder time gaining employment and jobs for people trying to reskill and for apprentices.”
That woolly objective flatly contradicts a statement three paragraphs down concerning the investment process: “All investment decisions will be made… based on a commercial assessment about the potential growth and return profile for the business.”
It all sounds too familiar. Exhibit A: Pacific Metal Group. In October 2022, state treasurer Tim Pallas announced the investment as a “win for everyone.” Tragically the investment was not a win for the Fund; its $10m investment has turned to custard. Nor for the CBA, whose $15m loan will likely not be repaid. Nor the 50 or so employees. And trade creditors. etc.
But wait! There’s more. Think about the investment and objectives of the Fund. So, scrap metal is a priority area that provides highly skilled jobs? Really?”
Ah, the memories.
5. Memories: Sleepy Joe’s
Oh, dear.
The Special Counsel investigating Sleepy Joe’s holding of classified material after leaving the vice-presidency said last night that “no criminal charges are warranted.”
That’s the good news. The bad news is that he also said that Sleepy Joe had “wilfully retained and disclosed some sensitive material.” But it gets worse.
He said that, “Mr. Biden would likely present himself to a jury, as he did during our interview with him, as a sympathetic, well-meaning, elderly man with a poor memory.” But it gets worse.
The classified document discovered in Mr. Biden’s Delaware garage in a “badly damaged box surrounded by household detritus” indicated he simply may have forgotten he had it over the years, rather than intentionally breaking the law.
Sleepy Joe’s press-conference-in-response confirmed what the Special Counsel reported: the man has lost it.
The Trumpster’s campaign team is already designing the advertising campaign.
Sleepy Joe’s campaign team members are now looking for other work.
6. Management: Trumpster’s remote control
If the world thought that the Trumpster lost power when Sleepy Joe gave him the DCM in 2020, they are mistaken.
This week, he ordered his acolytes in Congress to sabotage their own policies in order to wound Sleepy Joe. And in so doing aided Tsar Vlad’s malevolence in Ukraine.
Firstly, Ukraine desperately needs US cash and arms to repel Tsar Vlad. Why should the US stump up? It’s an easy win for America – no US soldiers risked, Tsar Vlad’s imperial ambitions thwarted, and other potential aggressors elsewhere (e.g. Emperor Eleven) put on notice that the US is serious about its role in the world.
Secondly, Sleepy Joe wants to give more cash and arms to Ukraine, but the Republicans do not; unless their demands for more cash and action to stem illegal immigration are met.
A bipartisan group of Senators worked on a compromise that broadly met what the Republicans in the House wanted. When the news of the deal hit the Trumpster’s desk, he hit the phones and Twitter, telling everyone the deal should be rejected. Y’see, he wants to keep immigration as a live issue for the presidential election (he also wants his mate, Tsar Vlad, to have a win in Ukraine).
The Republican Senators then changed their minds and did as they were bid.
The outcomes:
- Ukraine’s defensive capability is considerably weakened;
- America’s immigration crisis is worsened;
- The Trumpster’s imperial control over Congress is confirmed;
- America’s security guarantees in the Baltic, to Taiwan and the Middle East are compromised;
- Congressional Republicans are now more laughable than before; and
- Sleepy Joe has a hard task ahead to fund Ukraine, and manage the immigration chaos.
What a shambles.
7. China: deflation takes hold
Just as we-the-Australian-consumers are battling high inflation, Emperor Eleven is doing the opposite.
China’s consumer prices fell in the year ended January at the fastest rate in 15 years. That’s a minus 0.8% outcome. Good grief.
So what? Well, the problem with deflation is that it increases the real value of debt, making it more difficult to repay.
The other side of the coin is that China is exporting its deflation. Which is good for the prices Australians pay for Chinese goods.
But the other problem for China is that not only are its exports’ prices falling sharply, but they are significantly lower than its imports’ prices. This means China’s ‘terms of trade’ are less than 100. Hence, capital is flowing out of the economy: its import expenses exceed that of its export revenue generated.
Sustained terms of trade less than 100 is not a good thing for an economy.
This is on top of the extended property slump and a stock market meltdown (the benchmark MSCI China index is down more than 60% from its peak in early 2021).
Is Emperor Eleven having trouble sleeping?
8. Tax: negative gearing
Alert Readers would have read that this week Albo said that he was comfortable with the current negative gearing regime.5 He said this is because it was a positive factor in encouraging the supply of houses into the rental market.
Err, wrong.
His assertion might be true only if the investment is made into new dwellings.
If the investment is made into existing dwellings the supply/ demand balance is unchanged, but the investment purchase might assist in driving up prices.
Sigh.
5 That is, the interest cost of debt used to purchase an investment (especially residential property) is tax deductible not only against income arising from the investment, but also against ‘personal exertion income’ (i.e. normal wages or salary). Many investments are structured this way to reduce personal income tax. The scheme is only successful if the after-tax capital gain on the investment in future plus the income tax deduction advantage exceeds the accumulated after-tax losses on the investment.
9. Ireland: united?
The new First Minister of Northern Ireland (Michelle O’Neill – a Sinn Fein member) on Monday said that a poll on uniting Ireland and Northern Ireland could be held within 10 years.
Tell her she’s dreamin’.
Whilst a united Ireland makes a lot of sense, a successful poll of people in the north and south would be meaningless.
This is because the government of Ireland (i.e. the south) couldn’t afford to take on Northern Ireland. Northern Island is an economic basket case. It is subsidised by ‘transfers’ from London to the tune of over US$18 billion equivalent each year.
Looked at another way, Ireland has GDP per capita of about US$97,000 (ppp), compared to Northern Ireland’s US$34,000.
Would the emotional desire for a union overcome the fiscal folly?
10. Olympics: the Chairman Dan option?
The news that the Queensland government has wasted the last three years of planning and building for the 2032 Olympic Games is a not a surprise.
No more than the original forecast cost of the entire games of $1 billion ballooning to $2.7 billion. And that’s with nine years to run.
The Queensland government put a rebuild of the Gabba as the infrastructure cornerstone of the project. That plan and the implied relocation issues upset both the AFL and Queensland Cricket, not to mention local residents.
Come on down John Coates, former International Olympic Committee powerbroker. He has just come out saying that the proposal had lost all support and was dead.
Ouch.
Wry & Dry recommends that the Queensland Government follow the leadership of Chairman Dan. And wait until just after the next state election and then cancel the Games.
Snippets from all over
1. Italians to slow down
Bologna has become the first major Italian city to impose a speed limit of 30 kph on most streets, citing safety and livability. (The Economist)
Wry & Dry comments: Fat chance in enforcing the limit. After all, Bologna is the capital of a region that is home to the makers of Ferrari and Lamborghini.
2. Trumpster not immune
A court in Washington, DC, ruled that Donald Trump is not immune from being prosecuted for plotting to overturn the results of the 2020 election. (Economist)
Wry & Dry comments: He has already lawyered-up, and will appeal to the Supreme Court.
3. Haley muscles-up
Republican presidential candidate Nikki Haley has applied for Secret Service protection because of increasing threats she has received as Donald Trump’s last major opponent for the 2024 GOP nomination. (Wall Street Journal)
Wry & Dry comments: What is surprising is that she hasn’t, so far, been assaulted.
4. EV company once valued at $13 billion goes to custard
A British electric van maker once valued at $13bn (£10bn) has gone into administration after burning through $1.5bn without having sold a vehicle. (UK Telegraph)
Wry & Dry comments: Being a vehicle manufacturer and not selling one vehicle is always a problem. Arrival’s Nasdaq flotation in 2021 was the biggest ever for a British company. Its share price has fallen by 99.98%.
5. Weight-loss drug maker surprised
Danish drugmaker Novo Nordisk has been “surprised” by the readiness of European consumers to pay for weight-loss drugs from their own pockets, as the region’s largest company invests in new supply to meet runaway demand. (Financial Times)
Wry & Dry comments: Probably the only ones on the planet to be surprised.
Data
- Australia: the RBA left interest rates unchanged.
And, to soothe your troubled mind…
“The King remains wholly positive about his treatment….”
- Media release from Buckingham Palace to announce that Charles III has a cancer of some sort.
“Wholly positive…” Really? One imagines that one can be either positive or negative. Can one be partially positive? Wry & Dry is wholly positive that this is just the news filler that the media wished.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!
Anthony Starkins