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 old saw that “an over-valued market (stock) will always correct, eventually, for whatever reason” was on display this week. Sometimes the trigger is economic (e.g. oil-price shock), medical (covid) or political (election of a disruptive government). Or it could be the capricious imposition of tariffs.
And so Trumpster’s tariffs were the trigger for the large falls, led vy the crazily over-valued big tech stocks such as Nvidia. In Australia it was the crazily over-valued banks, led by CBA.
But not all stocks are over-valued, and hence didn’t fall so much, if at all. Which is why First Samuel clients should be happy.
To read Investment Matters, just click on the link at the bottom of this week’s Wry & Dry. Or here.
Wry & Dry’s rant
This week has had more action than a Marvel movie. On what to focus? Well, Wry & Dry will not comment this week on the evolving Tsar Vlad/Trumpster game-of-chicken ceasefire talks. Too much is changing, too quickly.
This also applies to the escalating tennis-like Trumpster tariff battle, with lobs and volleys being exchanged in a seeming endless rally. Other than to note that the two major US stock markets seem a little beaten up by Trumpster’s whims.
But Wry & Dry will note the domestic level of support enjoyed by President Zelensky. In that extraordinary public verbal assault, Trumpster said that he, Zelensky, had virtually no support from the people of Ukraine. Well, it seems that Zelensky has much more support than Trumpster’s fake news. In fact, an approval rating of some 68%.
1. Go ahead, Mr Trump. Make my day.
Fresh from a photo-opp-a-day-content-made-in-heaven of Cyclone Alfred, Albo had another chance to go the full hyperbole. Trumpster’s tariffs on Australian steel and aluminium landed. The sky is falling!
Having been silent on the possibility for a month, Albo put on his hairy chest of righteous outrage. And equally absurdly, Top Gun Pete said that had he been in Albo’s shoes, Trumpster would have exempted Australia from the tariffs. Really?
Then came the headline that confirmed the success of Albo’s hairy-chestedness: “Albanese rules out retaliatory action against the US” screamed Wednesday’s media’s leaders.
Thus, hinting that (a) Trumpster should be grateful for such magnanimity; and (b) that somehow Australia has economic muscles to flex.
Err, no. Having spent the benefit of years of massive income from exports of iron ore to China on baked-in social spending, Australia is now an economic beggar at the king’s table, waiting for the crumbs to fall. No muscles to flex.
Not that Albo should sit on his hands. He might consider:
- Sending an effigy of Croesus Turnbull to Trumpster, with which Trumpster can do as he wishes
- Sending a flotilla of Australia’s working warships (currently three, the rest are in dry dock) to lie offshore off Mar-A-Largo, Florida, to threaten Trumpster
- Placing a 50% tariff on imports of Teslas (striking deeply at the wealth Trumpster’s bestie)
- Sending Senator Clive Palmer to negotiate with Trumpster
Albo and Top Gun Pete should stop screaming. Each should remember that Trumpster’s tariffs affect just 0.2% of Australia’s exports.
2. RDS epidemic possible
It was only matter of time when. But never in doubt as to whom.
Croesus Turnbull had an extraordinary attack of Relevance Deprivation Syndrome (RDS) on Monday. This was probably his most severe attack to date. And he’s had some doozies.
Y’see, just as Australia’s key people were at the table with Trumpster’s, seeking an exemption to Trumpster’s tariffs on Australian steel and aluminium, Croesus was speaking on late night US television. Suddenly, without warning, RDS hit Croesus.
And he launched into an anti-Trumpster spray, of biblical proportions.
“Where Trump is chaotic, he (President Xi i.e. Emperor Eleven) will be consistent. Where Trump is rude and abrasive, he’ll be respectful.” And he went on. And on. And on.
It took Trumpster 12 minutes to respond on social media. “I always thought that he [Croesus] was a weak and ineffectual leader and, obviously, Australians agreed with me!!!”
Clearly, Trumpster had more important and weighty matters to manage in those 12 minutes. Such as deciding not to exclude Australia from his tariffs on steel and aluminium.
Who’s the smartest guy in the room?
3. Meanwhile, on the road to Damascus…
New UK PM, Sir Kier Starmer, is a child of the Labour Party. He romped into office on the back of 12 years of Conservative (i.e. centre-right) patronising and incompetent government. The left from shades of red to green were delirious.
Business and farming taxes have risen, private school fees have been slugged with a 20% VAT (i.e. GST), net zero policies have been confirmed as sacrosanct, etc.
And then came the epiphany.
He abolished public service DEI (diversity, equality, inclusion) initiatives, cuddled up to Trumpster, slashed foreign aid, increased defence spending, and wants to slash welfare spending.
And yesterday, the biggest move to date: abolishing NHS England, the quango that manages the funds for the National Health Service.
NHS England started small (as quangos do) and ended up duplicating much of what the Department of Health does. It is the world’s largest quango – it employs 10,000 civil servants, all of whom will get the DCM over the next two years.
Wry & Dry doubt that either Albo or Top Gun Pete would have the gonads to take a walk on the road to Damascus.
4. Too big to succeed?
Wry & Dry has four pet peeves: big government, big companies, big unions and big church. The point of his antipathy is that the larger an organisation, the further it becomes from its clients/customers/members. Within the big organisations, administrative and bureaucratic layers overwhelm any service proposition.
The seeming benefit of a cheap price seems poor value when things go pear-shaped. Readers will recall their own stories of trying to resolve a mobile phone issue. Or an airline complaint. Or bank error, which is never in their favour.
Which brings him to discuss industry superannuation funds, effectively big companies.
Y’see, ASIC, Australia’s corporate Labrador watchdog is beginning to show some teeth. And has taken Australia’s largest industry superannuation fund to court. The crime? Failing to process almost 7,000 death benefit claims ‘efficiently, honestly and fairly’ between July 2019 and October 2024.
In one case, it took more than four years to pay a claim to a relative of a dead superannuation fund member.
Certainly, one of the outcomes of covid was excess deaths, and hence excess death benefits needing to be paid. Hence a backlog of claims. But the problem was bigger than administrative failure. It was that the board of trustees knew of the problem in November 2020, but it wasn’t until September 2022 that action was taken.
Err, slight problem of governance. As pointed out by ASIC’s chairman: “At the heart of this issue is leadership that doesn’t have a grip on the fund’s data, systems and processes – and the customers who suffer for it.” Ouch.
The issue now with large industry superannuation funds follows that some years ago of the banks (remember the royal commission).
And the issue is that it is very difficult if not impossible to get acceptable client service from such massive organisations, especially when things go wrong.
Small is the new black.
5. Charlemagne who?
Charlemagne has a sound of champagne about it. But Charlemagne was a 9th century Frankish king who united most of Western and Central Europe. He was crowned by Pope Leo III as the first Holy Roman Emperor, a title and empire that lived for over 1,000 years.1
Charlemagne’s name is given to a prize for persons who have done outstanding work towards the unification of Europe.
There is zero chance that Trumpster will win the Nobel Peace Prize (much less the Nobel Economics Prize). But he must be a shoo-in for the Charlemagne Prize. Western and Central Europe has not been as united since 800.2
Y’see, Europeans, like many others, do not like threats to their peace and security. And seem united in their dislike for Trumpster.
1 The title and its empire were dissolved by Emperor Francis II in 1806, after a devastating defeat by Napoleon at the Battle of Austerlitz. But the dynasty continues. Karl von Habsburg is the current head of the House of Habsburg-Lorraine. Voltaire quipped that “the Holy Roman Empire was neither holy, Roman nor an empire.”
2 Although Napoleon’s French Empire (1812-14) had a footprint as large as Charlemagne’s, it might be argued that he didn’t really unite Europe, just trampled over it.
6. Irony
Readers will know that the COP30 Climate Summit will be held in the Brazilian city of Belém in November. Over 50,000 souls will attend.
To ease traffic in the city, the state government is building a new four-lane highway through tens of thousands of acres of protected Amazon rainforest.
Go figure.
7. Top Gun on the way to a crash landing
Top Gun Pete might as well concede the election today.
MPs often background journalists against the Leader during the early mid-life of a parliament (Croesus Turnbull, Miracle Morrison: come on down). But so doing during a (faux) election campaign is the canary in the coalmine of discontent.
Or is that a dead parrot?
Y’see, it seems that several Coalition MPs are openly complaining about the lack of serious economic policies from Top Gun Pete. Wry & Dry would add that it’s about the lack of any serious policies (except a nuclear power station near you), not just economic ones.
And claiming that he would meet with Trumpster and save Australia from all nasty things is not a policy.
Yesterday he back-pedalled on his Trumpster-look-alike thought bubble that there would be no WFH for federal public servants.
This follows from his comment on Tuesday that it was “completely unacceptable” that in parts of Australia, people either could not get insurance or faced “astronomical premiums.”
And the solution is obviously… Err. Umm. Breaking up insurance companies (as he has previously proposed) wouldn’t change the situation. Which leaves… a government subsidised insurance scheme.
This has Queensland agrarian socialism written all over it.
8. Want to build a new home?
Everyone is bleating about the high cost of housing. And that is not interest rates. It’s the cost of the bricks and mortar.
But wait! There’s more. At least 37% and as high as 49% of the costs of a new home is taxes, regulatory costs and infrastructure costs.
Say no more.
9. Meanwhile, in Greenland
Trumpster’s plan to somehow annex Greenland has been tossed into the Arctic.
On Wednesday, Greenland’s new Prime Minister, Jens-Frederik Nielsen, said, “We don’t want to be Americans. No, we don’t want to be Danes. We want to be Greenlanders, and we want our own independence in the future.”
On Thursday, Trumpster told Nato Secretary-General that he was confident that the US takeover “will happen.”
Wry & Dry wonders what leverage he will have?
Snippets from all over
1. Muskovite’s failure
a. Elon Musk’s hyperactive efficiency drive failed to prevent US federal spending from rising to a record $603bn last month. (Financial Times)
b. A federal judge has ordered the Trump administration to rehire tens of thousands of government employees sacked in recent weeks, in one of the biggest legal setbacks to Elon Musk’s aggressive cost-cutting drive. (Financial Times)
Wry & Dry comments: The Muskovite’s so-called Department of Government Efficiency hasn’t moved the needle.
2. DEI given DCM in UK
Britain’s financial regulators scrapped plans to impose stricter diversity, equity and inclusion rules on firms, citing concerns over costs. (Financial Times)
Wry & Dry comments: The government is pressuring such agencies to prioritise economic growth.
3. Meanwhile, north of the border
Bank of Canada cut interest rates by a quarter of a percentage point, to 2.75%, while warning that Mr Trump’s tariffs had caused a “new crisis”. The central bank, which has eased rates seven times in nine months, said that uncertainty was already hurting investment. (Times)
Wry & Dry comments: Things in Canada will get worse before they get better.
4. Covid sourced in Wuhan lab
German intelligence found 80 to 95pc probability that Covid-19 came from the Wuhan lab accident – but Chancellor Merkel ‘buried findings’. (UK Telegraph)
Wry & Dry comments: But Emperor Eleven has already decided that covid came from bats in caves in Yunnan. And that’s the end of it. In the same way that the Tiananmen Square demonstrations never occurred.
5. UK: underperforming civil servants given incentives to leave
Britain’s government outlined plans to reform the civil service. Pat McFadden, a cabinet minister, told the BBC that under-performing officials would be given incentives to leave and performance-related pay will be introduced. (Economist)
Wry & Dry comments: Hold the phone. Surely, surely underperforming employees should be given the DCM?
It figures
- 2.8%: US. Inflation in year to end February. But expectations of rate cuts will be tempered by possible tariff induced inflation.
- -6 points: Australia. Business confidence in February.
- -0.7%: China. Inflation in the year to end February.
And to soothe your troubled mind…
“Take a baby crocodile. See how you go.”
Anthony Albanese, speaking after a US ‘influencer’ captured a wombat joey and published the filming on her social media platform. She quickly returned the joey to the wild. And quickly took the next flight out of Oz.
Wry & Dry comments: Yup. Albo focusing on the big issues. As was Home Affairs Minister Burke, who will investigate.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!