Wry & Dry: a cynical and irreverent review of the week in politics, economics and life. For intelligent Readers who disdain the trivial.
But firstly, a snapshot of this week’s Investment Matters:
The semi-annual company reporting season continues. Several companies our clients hold have reported: it’s been another good week. This week we provide comments on key stocks:
- BlueScope Steel
- Reliance Worldwide
- Seek Limited
To read Investment Matters, just click on the link at the bottom of this week’s Wry & Dry. Or here.
1. Tsar Vlad measuring up the Iron Curtains
Any doubt that Trumpster is stark raving bonkers has been dispelled. His claim that Ukraine started the war has not only given yet another bargaining chip to Tsar Vlad, but it has also destroyed any pretense that a sentient adult is in charge of the White House.
Next, he will claim that it will be Taiwan’s fault if Emperor Eleven invades.
Trumpster, in his haste to deliver on his promise to quickly end the Ukraine war, has lost his marbles to the patience of Tsar Vlad. He is willing to abandon Ukraine for the applause of negotiating a deal.
So far, he has failed every success step in Negotiating 101: he conceded four negotiating points1; he concurred with Tsar Vlad that Ukraine’s president had to get the DCM; he sided with Tsar Vlad by blaming Ukraine for starting the war; and he said that Tsar Vlad was no longer an existential threat to Europe.
In domestic US politics, Trumpster can say one thing one day and reverse it the next; no-one worries. But negotiating to end a war with a wily and experienced combatant is different. He cannot put his scattered marbles back into his now empty brain and reverse his surrendered advantage. Tsar Vlad now has the whip hand.
This was confirmed yesterday when Tsar Vlad’s negotiators in Riyadh demanded that Nato forces in eastern Europe (specifically Romania) be withdrawn.
But wait, there’s more. With his demand for 50% of Ukraine’s minerals and/or repayment of $500bn for $175bn of American aid, Trumpster wants to partition Ukraine: give the eastern bit to Tsar Vlad and take for the US the minerals in the rest.
This is déjà vu all over again: Hitler and Stalin agreeing to partition Poland in 1939. See article 8 for more.
Next will be the Baltic States and Poland. See article 12 (Vietnam: déjà vu all over again?) for more.
Tsar Vlad is measuring up the Iron Curtains. It’s just a question of where he hangs them.
1 1. Negotiating directly with Tsar Vlad, 2. Ukraine would never regain all of its territory, 3. Ukraine would never join NATO, 4. Russia could rejoin G7.
2. $2.4bn for ‘green steel’. Really?
The premier of South Australia and Albo have successfully carried out a pretense that the ‘rescue’ of the Whyalla steel works is a hastily cobbled and win-win deal.
Nuh. Certainly, Albo has shown himself happy to splosh about we-the-taxpayers’-money. But $2.4bn to rescue, resurrect and rebuild a failed company doesn’t happen quickly. No mistake, this has been in Albo’s secret bunker for many weeks.
It achieves Albo’s aim to continue to build his credentials as a builder of a Future Built in Australia. Importantly, it helps bolster his left flank against the Greens; the attraction of ‘green hydrogen’ being used to make ‘green steel’ will be front and centre in corflute posters in threatened seats.
Of course, the fact that Albo is paying $2.4bn for something worth zero doesn’t matter. And that green hydrogen in the foreseeable future is a pipedream doesn’t matter. The election will soon be over.
3. More economic ignorance from Uncle Fester
Last week, Wry & Dry opined that Uncle Fester Dutton needed to act more like a prime minister than a leader of the opposition. This on top of a plea for some serious economic or other policies.
Wry & Dry’s view clearly resonated with They-The-Voters-Of-Australia. For all of the failings and demonstrable incompetence of Albo and his band of merry women and men; and all of Uncle Fester’s huffing and puffing, Uncle Fester hasn’t moved the needle in the Newspoll.
Last Monday, it was stuck on 51:49, his way. But that’s not enough to get the keys to The Lodge. At this stage in the last election cycle Albo was leading Miracle Morrison 54:46. Does this mean that Albo then, was much better than Uncle Fester today?
But, wait. It gets worse. In an incomprehensible and populist thought bubble, Uncle Fester now wants to break up insurance companies as “customers are being ripped off in the insurance market.”
Good grief. What doofus is advising him? Whomever it is has no understanding of how insurance works. Nor of the fact that state government taxes and charges add some $7 billion to premiums.
So, please tell us, Uncle Fester, how breaking up insurance companies is going to lower premiums?
4. One less problem
Albo can scratch one election problem from his list.
But it is clear that the Chief Teller of the RBA reduced interest rates to ensure global happiness. Well, happiness in The Lodge.
Y’see, her comment, “Today’s decision does not imply that further rate cuts along the lines suggested by the market are coming,” could not be more direct. And she went further, promising to raise rates if inflation re-ignited.
But unless there is a massive spike in inflation or significantly adverse economic events it is most unlikely that the Chief Teller will reverse the increase before the election.
Albo can now turn to a fistful of other election problems.
5. Humour returns
In a world that is crying out for humour, humour duly arrives.
Y’see, Clive Palmer is back. The former head of the former United Australia Party, the former Clive Palmer’s United Australia Party and the former Palmer United Party has formed a new party.
[Cue drum roll] The Trumpet of Patriots Party is here. The aim? To make Australia great again. That’s original.
The well-upholstered Mr. Palmer wants to stand candidates in all House seats and in the Senate. And in a surge of optimism that would make Trumpster blush, he has nominated his candidate in the House seat of Hunter to be the next prime minister. He just needs 75 more successful candidates.
Readers will know that Mr. Palmer’s earlier creation, United Australia Party, had only one successful candidate in the 2022 election, and that was in the Senate, in Victoria. With 3.98% of the primary vote. Senator Babet rose without trace and is halfway through his six-year term. Senator Babet’s world exists at the very far right end of the political spectrum.
6. Pardon me, I’m lawyering-up
It was only a matter of time before lawyers for some of those pardoned by Trumpster for the 6 January 2021 misdeeds the US Capitol worked through the opportunity.
Essentially, when is a pardon a pardon?
And so, for example, Edward Kelley, pardoned by Trumpster, has been subsequently convicted of conspiracy to murder the Federal Bureau of Investigation agents who investigated his 6 January participation.
Mr Kelley did what any American would do. He lawyered-up (again). Anything flowing from the events of 6 January is subject to the pardon, his lawyer claimed in a straight-faced submission. The fact that the conspiracy to murder happened many months after 6 January is irrelevant.
Not so fast, said the department of justice. “As both parties made explicitly clear to the Court and jury throughout litigation in this Court, this case is not about Jan. 6 … This case is about the defendant’s entirely independent criminal conduct in Tennessee, in late 2022, more than 500 miles away from the Capitol: threatening, soliciting, and conspiring to murder agents, officers, and employees of the FBI, Tennessee Bureau of Investigation, Tennessee Highway Patrol, Maryville Police Department, Blount County Sheriff’s Office, and Clinton Police Department.”
Decision pending. Lawyers yet to send their bill.
7. Thin blue line2
There’s lots more gnashing of teeth in the Bankrupt State of Victoria. This week it’s about the state’s ‘thin blue line’ i.e. the police force.
Readers will know that a crime tsunami has swamped the state. Its cause is:
- weak bail laws;
- insufficient police numbers;
- police unsure of whether they are 1960s flower children or tough police;
- the ‘lockdown cohort’ of pre-pubescent children four years’ later turning into thrill-seeking teenagers; or
- magistrates preferring offenders ‘rights’ over victims’ rights.
Close, but no cigar. The correct answer is all of the above.
Premier Allen’s response was to heed a vote by the members of the Police Association that the Chief Commissioner of Police was no longer their preferred boss. And so she gave the DCM to the top cop.
This two weeks after her Police Minister publicly voiced support for him.
Err, hold the phone. This looks very similar to the US, where local judges, prosecutors, sheriffs, etc are all elected. It’s all about popularity.
Hold the phone for a longer moment. Ms. Allen is no longer the state’s preferred premier. Should she give herself the DCM?
2 The ‘thin [insert colour here] line’ has its origins during the Crimean War (1854). In the incident, around 500 men of the 93rd Sutherland Highlanders formed a line of fire against charging Russian cavalry. With too few men to ‘form square’, a line two men deep was ordered. After two volleys, the Russian cavalry turned away. The Times correspondent, William H. Russell, wrote that he could see nothing but … “thin red streak tipped with a line of steel.” In his later accounts, he changed the phrase to “thin red line.”
8. Reparations greater than imposed on Germany
Before he lost all of his marbles, Trumpster leapt off the deep end. He has demanded a ‘payback’ of $500bn from Ukraine and/or 50% of Ukraine’s natural resources.
His demands would amount to a higher share of Ukrainian GDP than reparations imposed on Germany at the Versailles Treaty. He said that US had spent $300bn on the war so far, adding that it would be “stupid” to hand over any more.
In fact, the five packages agreed by Congress total $175bn, of which $70bn was spent in the US on weapons production.
As one journalist described it: “The terms of the contract that landed at Volodymyr Zelensky’s office a week ago amount to the US economic colonisation of Ukraine, in legal perpetuity. It implies a burden of reparations that cannot possibly be achieved.”
It remains to be seen how all of this fits into Trumpster’s negotiations with Tsar Vlad.
But all of that sidesteps the question: is it honourable to treat a victim nation in this fashion after it has held the battle line for the liberal democracies at enormous sacrifice for three years?
9. Another Muskovite
Wry & Dry remains in awe of Elon Musk, Trumpster’s bestie. In addition to his role as chief fiscal toe-cutter in Trumpster’s administration, he also runs three not insignificant companies: X, Tesla and SpaceX.
And this week it was announced that he has sired his 13th child. Good grief! The mother is a 26-year-old ‘right-wing writer’. His earlier 12 children have three mothers.
Imagine the number of his offspring had he held just one day job.
Wry & Dry assumes that the child is named XIII.
10. Data: ranking movies, universities and MBA schools
Readers would be aware of the global film industry’s annual biting-of-fingernails-time as it awaits the outcomes of the various awards’ ceremonies. The Golden Globes, Oscars and BAFTA are familiar vanities to Readers.
Of greater interest to a wider group is the annual ranking of universities and business schools (i.e. MBA institutions). The reputable rankers are, respectively, The Times and the Financial Times. Universities and business schools live and die by their ranking. It’s about attracting the brightest students, of course. Prestige has nothing to with it, of course.
Concerning universities, Australia’s top five are Melbourne (47th globally), Sydney (60th), Monash 63rd), Queensland (78th) and ANU (86th).
Globally, the top five are Harvard, Oxford, MIT, Stanford and Cambridge. No surprises there.
The bad news for Australia is our business schools are not worth a pile of beans. Relatively. Which may explain our lamentable businesses.
Only the AGSM at the University of NSW Business School made it into the top 100. And that at credible ranking of 67.
Curiously, only four US schools made the top 10 (Wharton, Columbia, Sloan and Kellogg). Schools from France (Instead, HEC), Spain (IESE, Esade), Italy (SDA Bocconi) and the UK (London Business School) rounded out the top decile.
Some well-known schools were below the fold: Harvard (13th), IMD (22nd), and Oxford Saïd (26th). Teeth will be gnashed.
11. Free speech
James (J.D.) Vance’s speech last weekend to assembled Eurocratic elites caused much discombobulation. Many missed the irony in his comment that “free speech was in decline across Europe.”
This after Trumpster banned Associated Press reporters from presidential briefings because AP still calls the Gulf of Mexico the Gulf of Mexico.
Update: “Dozens of major news organizations, including CNN, The Washington Post and Fox News, wrote to the White House this week urging the Trump administration to immediately lift its ban on The Associated Press, which had been prohibited from attending a number of official press events over the past week.” (New York Times)
12. Vietnam: déjà vu all over again?
The world seems to have forgotten that the issue is not getting a belligerent to a negotiating table. It’s getting him to honour an agreement.
Readers will remember that in January 1973 a peace deal to end the Vietnam War was forced on South Vietnamese President Nguyen Van Thieu. His main sticking point was that it allowed North Vietnamese troops to remain in South Vietnam. But Nixon and Kissinger got their way.2 The war was over.
In October 1973, Kissinger and North Vietnam’s Le Duc Tho were jointly awarded the Nobel Peace Prize (though Tho refused it).
In April 30 1975, North Vietnamese tanks rolled into Saigon and South Vietnam was no more. The next day Kissinger tried to return his Nobel Prize. The Nobel committee turned him down.
Which brings Wry & Dry to Trumpster, Tsar Vlad and Ukraine.
Tsar Vlad objects to any deal the provisions of which are necessary to guarantee peace, such as NATO troops in Ukraine or other security guarantees.
If Trumpster conjures a deal without security provisions for Ukraine, then how is anyone going to hold Tsar Vad to an agreement?
Remember that Trumpster is focussing on delivering his promise to end the war quickly. It is not on constraining or deterring Tsar Vlad in the future.
Tsar Vlad wants to break Ukraine and then NATO. Trumpsters wants a deal as soon as possible.
But it will all be okay. Before Tsar Vlad’s tanks roll into Kyiv, he and Trumpster will have their Nobel Prizes.
2 And in so doing effectively gave away Taiwan to mainland China. It’s a longer story, but essentially Mao Zedong would only agree to force North Vietnam to the negotiating table if the US recognised Taiwan as part of China.
Snippets from all over
1. Trumpster’s deadline
Mr Trump’s administration said that America’s schools and universities have less than two weeks to end all diversity initiatives, or risk losing federal funding. (Economist)
Wry & Dry comments: On Monday America’s government cut $600m in funding to groups that train teachers on concepts like DEI.
2. Porsche cuts employees
Porsche is set to cut 1,900 jobs by 2029 as it grapples with stagnant demand for its electric models. (Financial Times)
Wry & Dry comments: The cuts are focused on the all-electric Taycan and some R&D capability.
3. Don’t cry for me
Argentina’s main stock index fell by 4% after Javier Milei, the country’s libertarian president, became embroiled in a scandal over $LIBRA. The memecoin’s value plummeted after Mr Milei promoted it on social media on Friday. (Economist)
Wry & Dry comments: The token soared in value on Milei’s boosterism, from almost zero at the time of its launch to nearly $5, before plummeting to under $1.
4. Cross border biffo
Three fights broke out within nine seconds of an ice hockey match between the US and Canada after choruses of anti-Donald Trump booing. (UK Telegraph)
Wry & Dry comments: Fighting is an established tradition in North American ice hockey. Players escape serious punishment so long as they drop their sticks so as not to use them as a weapon.
5. Virgin on top
Virgin Australia overtook Qantas Airways Ltd to become Australia’s largest and most reliable airline at the end of last year, sending a warning to the marquee carrier and supporting a potential return to the stock market. (Bloomberg)
Wry & Dry comments: Virgin had 35% market share, ahead of Qantas’ 34.6% and Jetstar’s 29%.
It figures
- 4.1%: Australia – unemployment rate, up from 4%.
- 2.8%: Japan – GDP growth in 12 months to December. Wait to see the effect of Trump’s tariffs.
- 3.0%: UK -inflation in 12 months to January, up from 2.5% in December. Rate cuts will pause.
And to soothe your troubled mind…
“America was moving from a force for “moral legitimacy” to something closer to a landlord seeking rent.”
Ng Eng Hen, Singapore’s defence minister, speaking of Trumpster’s recent foreign policy initiatives.
Wry & Dry comments: Trumpster’s first job was collecting rent for his father, landlord of slum apartments in New York. Readers should watch “The Apprentice,” a recently released movie about Trumpster’s early business career.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!