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:
This week, First Samuel’s Investment Matters undertakes two deep-dives:
- Lynas Corporation (rare earths)
- Develop Global (copper and zinc)
To read Investment Matters, you can still just click on the link at the bottom of this week’s Wry & Dry. Or here.
Wry & Dry’s musings
Trumpster provides such good and voluminous copy. And this week was no exception. But for him, the news was mostly, well, disappointing. It is possible that Trumpster’s House of Cards is looking wobbly.
Wry & Dry considers his illegal immigration and woke battles have the right direction, but not the right magnitude. But his naive understanding of tariffs and overestimation of his negotiating ability is costing lives and livelihoods.
1. Trumpster goes wacko over TACO I
It’s been a bad week for Trumpster.
When a journalist asked about how he responded to the acronym ‘TACO’ becoming part of the American lexicon, he went nutzo. Nutzo to the max.
Taco is Trump Always Chickens Out.1 It is now used most pejoratively in financial markets for Trumpster’s tariff flip-flops. The memes are a delight. Trumpster’s fury was even better.
Secondly, he continues to be played like a salmon by Tsar Vlad over Ukraine. In another meaningless deadline, he has given Tsar Vlad two weeks to come to the negotiating table. Only Trumpster cannot see that Tsar Vlad has no incentive. Trumpster is impotent when confronted with someone who pushes back against his bluster.
1 TACO was coined by Financial Times columnist Robert Armstrong
2. Trumpster goes wacko over TACO II
Thirdly, Gaza goes from bad to worse. Trumpster has sent a ‘peace proposal’ to Hamas, one to which Israel has agreed. But only Trumpster cannot see that peace in Gaza is not compatible with Hamas’ objective of destroying Israel. His Riviera In The Middle East is going from homes to rubble to tent city. He just cannot manage complex problems.
Fourthly, the US Court of International Trade blocked his so-called reciprocal tariffs. Sobs from Trumpster. But then he obtained a temporary injunction overturning the overturning decision. This will go all the way to the Supreme Court, where some of the justices are more inclined to make decisions based on loyalty to Trumpster than on The Constitution.
Finally, US GDP fell by an annualised 0.2% in the first quarter. Of course, the data was distorted by the pre-tariff surge in imports (imports subtract from GDP). But nonetheless the bad news would prick his already wounded ego.
3. Albo gets on with policy whilst Coalition changes chairs
How dare people accuse Albo of disingenuousness! It was just coincidence that the controversial fossil-fuel versus environment decision was held back until after the election. That decision was to extend the life of Woodside’s north-west shelf gas plant until 2070.
Greens: get a grip. That’s just politics (the announcement delay, that is). And shows that he wants to get on with government, for better or for worse.
Meanwhile, Sussan Ley was re-arranging the chairs. Last week’s hasty separation has been forgotten: the Gnats are again in love with the Liberals. Commonsense and the certain loss of at least two Senate seats caused the Gnat’s return to the matrimonial home.
So, it was down to the usual post-election new-leader appointment of this year’s prefects. Yes, she has rewarded ‘moderates’, as expected. But she has also given the DCM to Jane Hume (who championed Top Gun Pete’s lunatic no-WFH policy), and Sarah Henderson (a popular eviction). A couple of smart free-marketers have been promoted, Teal-killer Tim Wilson and Andrew Bragg.
There remains two problems. Firstly, to ensure that her team actually has a work ethic – a characteristic wanting in TGP’s ministry. Secondly, how to straddle the vexed Coalition problem of to nuclear or not to nuclear. Either way, it doesn’t matter.
Nuclear power in Australia is now in the cemetery of good-ideas-that-were-just-too-hard. Albo is going to be in The Lodge for at least eight years. Who needs nuclear power, when by then every Australian home will have its own windmill and solar panels.
Both built in Australia under Albo’s subsidised Make Australian Manufacturing Great Again policies.
4. Miracle Morrison’s RDS
It was only a matter of time. Wry & Dry is saddened to report that Miracle Morrison has caught RDS.3
This week he presented the world with what he sees as the logical extension of AUKUS (the tri-lateral security partnership between Australia, the UK and the US). AUKUS is currently manifested by a plan for Australia to purchase a fleet of nuclear-powered submarines from, initially the US and then the UK.
Miracle Morrison’s RDS display was to publicise his plan for an extension of AUKUS: an outer space AUKUS. He warned that China was “advancing, especially in satellite manoeuverability, launch and spaceplane tech” (which quite obviously means, err, don’t know), while Russia was “reportedly developing a space-based nuclear anti-satellite weapon.”
Miracle Morrison’s idea seems to be to have outer-space-capable submarines, whilst novel, is certainly worth considering. Of course, they would have to be fitted with extra-long periscopes.
Undaunted at the rude comments of sceptics, he went on to completely mangle the King’s English, stating, in a speech in Sydney on Tuesday, that he wanted to create “a more robust collective space posture that deters aggression.”
Now there’s an idea. A collective space posture. Where are the men in white coats?
3 Relevance Deprivation Syndrome.
5. The King’s French Speech
Wry & Dry has always said that it is useful to have a spare language or two in one’s back pocket. And so King Charles III was able to charm those Canadians whose native tongue is French, when he opened the country’s parliament this week.
Y’see, Charles not only speaks the King’s English, but also French (fluently) and German (passably).
This was always Trumpster’s problem in suggesting that Canada become a state of the Yoo Ess Ay. He, like most Americans, thinks that the world speaks only English, albeit with an American accent.
Had he spoken to Québécois and Québécoises in français québécois, there might have been a more positive reception to Trumpster’s land grab. Of course, he might have called upon his wife to assist. Melania speaks French (and German, Serbian and Slovenian).
But Wry & Dry’s spies in Washington advise that she is not speaking to Trumpster in any language, much less English.
6. Budget repair
Victorians were waiting with breath bated. New Liberal Shadow Treasurer James Newbury was to give his budget-reply speech, in response to the tax-and-spend-even-more budget proffered by the new State Treasurer.
Hopes were high for a firm hand on the putative budget tiller. A plan, any plan, albeit a sketchy plan of intent, to repair the dire fiscal state of the state was needed. Mr. Newbury was a smart fella, he has more degrees than a thermometer. How could anything possibly go wrong?
Well, it did. Mr Newbury presented a tax-less-and-spend-more alternative. Abolish stamp duty for some homeowners and slash $3 billion of state taxes.
Sigh. Plus ça change, plus c’est la même chose.
7. Trumpster and fertility
It’s weird. Trumpster seems to inspire fertility. Well, after all, he does have five children (somewhat anaemic when compared to Borisconi, though).
A naïve analysis published in The Economist found that since he was elected in 2016, the fertility rate of women in Republican-voting (i.e. red counties) counties has leapt, whilst that of Democrat voting (blue) counties has declined.
This was most stark in the 2020 election. The most pro-Biden counties had total fertility rates almost 25% lower than the most pro-Trump counties. Wry & Dry just cannot understand why Sleepy Joe would inspire a more, err, somnolent attitude to procreation.
Doubtless a roundtable of psephologists and demographers would explain why. But one analysis suggested that conservatives tend to have families that have more babies and have them earlier than progressive/liberal voters do. And they tend to marry at higher rates, which boosts their likelihood of having children.
Sources: The Economist, CDC; MIT Election Lab.
And so to the arcane question: does having more babies make a family more conservative. Or does being conservative mean more babies?
8. Super superannuation tax revenue
Any politician will tell Readers that government expenses can be very difficult to predict. And it always seems to be that expenses are higher than planned, never lower.
Just look at the noble NDIS.
The same applies to the revenue side of the balance sheet. Sometimes there are revenue surprises (such as iron ore prices much higher than forecast, which led to higher revenue for mining companies, which meant they paid more company tax), which are never saved, but always spent.
In his last budget, Grim Jim’s budget papers screamed that over the last three years, some $400 billion of ‘surprise’ revenue (i.e. not budgeted e.g. iron ore price underestimation) was spent.
Equally, there are downside revenue surprises. Former Treasurer Wayne Swan forecast his Mining Resources Rent Tax would yield $10.6 billion over three years. In its first year it raised a mere $200m, before Mr Swan’s government was given the DCM.
Which brings Wry & Dry to his point: Grim Jim’s new super superannuation tax. He forecast it would raise $40 billion over the next 10 years. And, of course, the money has already been spent.
The problem is obvious – if the new tax is a revenue dud (as it will be) and the expenses committed; government debt will rise.
Sigh.
9. Danes retiring later
The fine folk of Denmark might go early to bed. But now they will retire much later.
Y’see, Denmark will raise its retirement age to 70, by far the highest in the world.4 by 2040. What happens is that Denmark links its retirement age to life expectancy. That is, the longer a person is expected to live the later should their retirement age be.
Other countries’ retirement ages (i.e. when a government pension can be accessed) include:
In spite of their bad reputation, the French are not the youngest retirers. That honour belongs to Sri Lanka., where age 55 is the start of a more relaxed life.
4 Libya has a retirement of age of 70, but for only workers in state sectors.
10. California Leavin’
You gotta be happy, if you are California’s Governor (i.e. state premier). Last year the state’s population grew at about 0.6%, adding about 250,000 people. But that belies a trend.
The problem is that no sooner do international migrants arrive, than residents pack up their bags and move somewhere else in the US.
Chart source: Wall Street Journal
And it’s mostly about cost. Housing is expensive; there is a state income tax (additional to federal income tax) that ranges from 1% to 12.3% (some states have zero income tax, such as Texas, Florida and Nevada); there are high property taxes; plentiful regulations and high business costs and for those who stay, their birth rate of 1.4 ranks 41st in the country.
There are three other problems: (a) higher income earners are now the highest demographic leaving the state; (b) tighter immigration policies have closed the door that was on the Mexican border; and (c) the state’s mandate to end the sale of fossil fuel powered vehicles by 2035 (other states are more friendly to those vehicles).
All the leaves are brown?
11. Crying wolf?
As if things in Gaza weren’t bad enough.
Last week a United Nations humanitarian official, Tom Fletcher, told the world that “14,000 babies in Gaza will die in the next 48 hours” if Israel failed to facilitate enough aid deliveries to save them. The BBC duly aired the pronouncement.8 The ABC dutifully followed.
But the BBC later passed on a clarification from a source used by the UN: ”About 14,000 cases of severe malnutrition” among Gazan children aged 6 months to 59 months are possible by March 2026 if more aid is not delivered.
Crying wolf?
8 Source: UN humanitarian chief: Thousands of Gazan babies will die without aid
Snippets from all over
1. Phone was on silent as fire raged
The boss of Heathrow slept through the first seven hours of the airport’s shutdown because his phone was switched to silent mode, an internal review has found. (UK Telegraph)
Wry & Dry comments: How embarrassing.
2. Reciprocity remains
EU trade negotiators have acknowledged they are unlikely to overturn US President Donald Trump’s “reciprocal” tariffs. (Financial Times)
Wry & Dry comments: The nett nett is that the EU has to make the unpalatable choice between making concessions or retaliation. Good luck with your projects.
3. Long range
Ukraine’s president, Volodymyr Zelensky, and Germany’s chancellor, Friedrich Merz, said the two countries would produce long-range weapons together as part of broader new joint defence investments. (The Times)
Wry & Dry comments: Just in case Tsar Vlad doesn’t want a ceasefire. Smarter people would have considered that there was never a chance that Tsar Vlad wanted peace.
4. North Korea and that launch
North Korean authorities detained three people accused of being responsible for the botched launch on Wednesday of a new warship. (The Economist)
Wry & Dry comments: Technically, the ship was launched. But is now lying on its side, dockside, covered by a tarpaulin.
5. Borisconi’s fertility
Boris Johnson, the former prime minister, and his wife, Carrie, have welcomed their fourth child. (BBC)
Wry & Dry comments: That makes nine: Lara, Milo, Cassie, Theodore, Stephanie, Wilfred, Romy, Frank, and now Poppy. And current wife Carrie must manage four under the age of five.
It figures
- 2.4%: Australia’s inflation rate in the year to April. Unchanged. But the pundits expected a lower rate.
And to soothe your troubled mind…
“I think a bill can be big or it can be beautiful, but I don’t know if it can be both.”
Elon Musk’s parting words on Trumpster’s reduce-tax-and-spend budget, as he ‘off-boards’ from his pro bono work for the American people.
Wry & Dry comments: Arguably, the smartest words he has ever said.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!