23 May 2025
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 First Samuel’s Investment Matters
Portfolio update – the May ‘mini-reporting’ season. During May there are many opportunities for companies to update the market. This week we present some highlights:
- Nufarm
- Seek
- Worley
Clients may have noticed the sharp rebound in the share market in recent weeks, and we would note that the opportunity the sell-off in April provided proved beneficial to returns. We were net buyers, reducing our cash holdings in April, and the sale provides opportunities to add to Oil / Energy and Technology companies. A number of these positions have been handsomely rewarded.
If you wish to go directly to First Samuel’s Investment Matters, click here
Wry & Dry’s musings
The flat-earthers in the National Party have locked Albo into the Lodge until 2037. This week’s great schism1 of the Coalition mirrors the ALP split of 1955. And that sandpit fight kept the ALP out of office for another 17 years,2 until Whitlam gave the treacherous Billy McMahon the DCM in 1972. But by this morning the Gnats might have decided that there was a better chance of winning with the Liberals.
Elsewhere, Trumpster lost America’s last AAA rating, but responds with ZZZ. The EU and UK have done the opposite. Well, sort of; their trade deal is more significant than the details suggest. The Victorian government’s budget has re-labeled the $125bn Suburban Rail Loop project a housing project. Netanyahu wants to turn Gaza into the world’s largest tent city. Australia’s interest rates happily edged downwards.
1 The first Great Schism was that of 1054, when the Eastern Orthodox Church and the Roman Catholic Church parted company. Pope Leo IX sought to ensure that the Roman Catholic pope was the head of all churches. The Patriarch of Constantinople (now Istanbul) disagreed. The divide still exists after 971 years.
2 The ALP split over alleged communist infiltration. The Catholic wing of the party was strongly anti-communist and exited to form the Democratic Labor Party (DLP). The DLP became strongly anti-ALP and in subsequent elections directed in voting preferences to the Coalition.
1. Gnats do the full incompetence reveal
Last week, when writing of Sussan Ley (the new Liberal leader), Wry & Dry identified the ‘flat-earthers in the National Party’ as her greatest challenge. And in a fit of election-losing pique it came to pass that on Tuesday the flat-earthers tossed the toys from the cot.
Their leader made Trumpster-like demands. Better to be proud on the back benches rather than a junior partner on the front benches was their smart thinking.
But Ms. Ley had the spine to stare down the absurd demands from the agrarian socialists. And so the Gnats hopped into their Land Rovers/Cruisers and drove off into Tuesday’s sunset.
But then, as Wednesday dawned on this land of droughts and flooding rains, so did the realisation that by going alone the Gnats will lose two Senate seats at the next election, as there would no longer be a ‘joint Senate ticket’ in two states.
The Gnats leader blinked and went into full reverse. Compromise was in the wind.
The question now is will Ms Ley hold her ground? And ensure that the Gnats realise that holding a gun to her head actually meant shooting themselves in the R.M. Williams.
2. AAA lost. And Trumpster is ZZZ
Last weekend, Moody’s stripped Trumpster’s Empire of its remaining AAA rating. Meanwhile his massive spending and extend tax relief budget (“big, beautiful”) has passed the House.
Only the Senate stands between fiscal sense and debt Armageddon. But Trumpster doesn’t care. He’s a fool.
The yield of US 20-year Treasuries (i.e. US government bonds) leapt over 5% for the first time since 2007 on the combined news. Hello? Is anybody home in the White House?
Source: CNBC
US Treasury Secretary Scott Bessent came out with the most extraordinary comment. “On the Moody’s downgrade, who cares? Qatar. Saudi doesn’t. UAE doesn’t.” In other words, there will always be buyers of US Treasuries.
Good grief. But at what price?
A credit downgrade is bad news. It makes borrowing more expensive. And there’s a lot of US debt out there. In 2021, 9% of the US government revenue was chewed up with interest payments. Currently that figure is 12%. And by 2035, it will be 30%.
Unless Trumpster (and Congress) get a grip on things, the US will have a credit rating lower than that of Victoria.
3. Bre-enter?
It seems like only yesterday that residents of the UK voted to give the EU the DCM (actually, it was in 2016), with effect in January 2020. And here Readers are, a mere four years later, with a new trade agreement being signed between the former belligerents.
Readers might rightly say, “who cares?” And on reading the details of the agreement, it’s a bit ho-hum: fishing rights, free trade on food and agricultural produce and UK access to EU defence projects.
The bigger outcome is that the UK and EU have not remarried. But at least are again dating. The importance is in two areas.
Firstly, defence. Tsar Vlad parking his tanks on Ukraine’s front lawn caused conniptions across the EU. The illusions of (a) the US being Nato’s bodyguard; and (b) the Russian bear remaining hibernated, have both been squashed.
Secondly, trade. Trumpster’s flat-earth (there’s that word again) view on tariffs has compelled both the EU and UK to seek and cement trade agreements with whomever they can.
Readers can expect, over future decades, that the UK will be back in EU in all but name.
4. Bored by Gaza
Trumpster’s boredom with the conflict in Gaza is now apparent.
He is more excited about his family profiteering from the Arab despots he saw last week, who were smart enough to live atop untold fossil fuel wealth. How difficult can it be? Sink a pipe into the sand and pump out gas and oil to the world. And spend the proceeds on hobbies, influence and, aye, looxury.
Trumpster is used to acolytes prostrating themselves before him, licking his boots and doing his bidding. All in exchange for adulation, loyalty and influence.
However, in the Gulf, did he realise that it was he who was prostrating himself to those despots? The despots showed deference and respect. And he loved the flying coloured carpets and all the attention.
But they hold the cards because they have the cash. And they, indirectly, control what goes on in Gaza.
Trumpster has found Gaza all too hard. Did he not realise that Gaza’s problems go back 77 years? And that there is no such thing as a quick fix.
So, he has left Netanyahu to do mostly as he sees fit, as long as Arab despots don’t mind too much.
And not too many Gazans starve.
5. Bored by Ukraine
In Ukraine, Trumpster has claimed that Russia and Ukraine will “immediately” begin negotiations on preparations for peace talks. The sub-text is that he was leaving Moscow and Kyiv to find a deal without the US as a broker.
This is the second exemplar of the Art of the Failed Deal. The key to the Failed Deal is to walk in with big promises and walk away when the going gets tough. And blame someone else.
Trumpster acknowledged this on Monday, when he told European leaders that Tsar Vlad isn’t ready to end the Ukraine war, because he thinks he is winning.
Hello, Trumpster: join the dots on your own comment. Tsar Vlad has no incentive to seek peace. And so has outlasted Trumpster.
It is entirely possible that Trumpster would prefer his family to sign lucrative business deals in Moscow than he agreeing to send material amounts of weaponry to Kiev, to stop Tsar Vlad from winning.
6. Victoria – red ink as far as Mars
In a budget that was even more irresponsible than expected, Victoria’s newbie Treasurer Jaclyn Symes rewrote the received nomenclature of the English language. And described an underground railway project as a housing project.
She said the $35bn Suburban Rail Loop was “Australia’s largest housing project.” She didn’t say that it is also Australia’s largest (a) unfunded infrastructure project (b) without a business-case that will (c) be the primary cause of Victoria’s next credit rating downgrade.
Premier Allen defended spending the state’s GST windfall ($3.7bn), within two months of receipt, on so-called cost-of-living-support. Is it possible that those receiving CoLS will expect the handouts to continue, vote accordingly and the government will continue to oblige, even though inflation is now back within RBA bands and interest rates on the way down?
You betcha!
And one last statistic to ponder. Victoria is now by far the highest property-taxing state. About 43% of the cost of a greenfield’s house and land package is tax, fees and infrastructure charges.
7. Qantas bracing for a $121m hanging, drawing and quartering
Qantas is no longer worried. And would have already written the cheque. A mere $121m penalty for former CEO and ‘Australia’s best CEO’5 Alan Joyce’s decision to give the DCM to 1,800 ground-handlers in 2020. This on top of the $120m as recompense to the sacked workers.
No, Qantas’ fear is the erudite and polite tongue-lashing it will get from Justice Lee, who has presided over the case in the Federal Court. Readers will remember his brilliantly presented decision against the man who, “having escaped the lions’ den, went back for his hat.”
It’s not so much Qantas’ massive DCM decision. It was how it has tried to justify it in court. Justice Lee has reserved his decision. Those Readers who delight in the agile and word-smithed use of the English language will be salivating.
5 An objective assessment by then Qantas Chairman Richard Goyder. It was Goyder who allowed Joyce to line his pockets at the expense of shareholders.
8. How embarrassing
Kim Jong-un had been looking forward to yesterday’s launch of his country’s latest piece of military kit: a 5,000-ton destroyer.
All was ready for the ‘side-launch’ at the eastern port of Chongjin. And the Great Man himself was in attendance. What could possibly go wrong?
Well, something did. And instead of gently sliding into the water, Kim Jong-un’s shiny new ship lost balance and toppled sideways. It is now lying on its side, with the base of the hull crushed.
Which of the following did Kim state after the incident?
- the incident was a “criminal act caused by absolute carelessness;” or
- the accident “brought the dignity and self-respect of our state to a collapse;” or
- the officials would be held accountable for the “irresponsible errors;” or
- “accidents happen” and he forgave those responsible.
Close, but no cigar. The correct answers are a. b. and c. Sadly, the fate of those responsible and that of their families is not known.
PS Meanwhile, yesterday in Scotland, the Duchess of Rothesay (aka Princess of Wales) smashed a bottle of single malt whisky on the hull of an 8,000 tonne frigate, to launch it. HMS Glasgow responded to the whisky, and happily launched.
Snippets from all over
1. Trumpsters bans foreign students at Harvard
The Trump administration is yanking Harvard University’s authorization to enrol foreign students, a major escalation and financial blow in the government’s pressure campaign against the nation’s most prominent university. (Wall Street Journal)
Wry & Dry comments: Off to the Supreme Court, again.
2. Bitcoin record
Bitcoin hit a record high of $109,481 on Wednesday, driven by optimism that the government will soon pass America’s first digital-asset regulations. (The Economist)
Wry & Dry comments: This remains a mystery to Wry & Dry.
- Gift accepted
The Pentagon has formally accepted a $400m luxury jumbo jet gifted by Qatar that will be used as the US president’s plane, despite bipartisan concerns about ethics and security. (Financial Times)
Wry & Dry comments: Not quite free. It will take over $1bn to refit to Air Force One standards.
4. Serious sentences in the UK
Paedophiles will face mandatory chemical castration and killers, rapists and other dangerous criminals will be released after serving only half of their sentences under the biggest shakeup in UK sentencing laws in 30 years. (The Times)
Wry & Dry comments: The proposals come after a review that showed jails in England and Wales came within 80 places of being entirely full.
5. Trumpster’s Golden Dome
The US has selected a design for the futuristic “Golden Dome” missile defence system, says US President Donald Trump, adding that it will be operational by the end of his time in office. (BBC)
Wry & Dry comments: An initial sum of $25bn has been earmarked in a new budget bill, much of which will likely find its way into the pockets of Elon Musk and his partners.
It figures
- 0.25%: Australia. The cut in official interest rates
And to soothe your troubled mind…
“Dr Kevin O’Connor either lied to the American people or he’s incompetent.”
Dr Ronny Jackson, who treated Barack Obama and also Donald Trump during his first term.
Wry & Dry comments: Everyone in the US is now an expert on prostate cancer. And 50% show compassion and 50% want to blame someone.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!
Read this week’s edition of First Samuel’s Investment Matters.
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