Wry & Dry: a cynical and irreverent review of the week in politics, economics and life. For intelligent Readers who disdain the trivial.
Ten stories you may have missed…
1. Did Kamala Kamala just lose the election?
She was doing so well. Squillions pouring into the campaign coffers. The Trumpster totally flummoxed as to how to respond to an energetic female and younger competitor. Polls showing her level-pegging with the Trumpster.
What could possibly go wrong?
To put it bluntly in electoral terms, to win the critical ‘swing states’ of Michigan, Pennsylvania and Wisconsin, she needed to appeal to voters who think that Democrats are a bit too lefty but do not like Donald Trump either.
Oops. Kamala Kamala ignored electoral reality. And reverted to type. Her Seek.com search came up with the wrong hire: a vice-presidential ‘running-mate’ who was just what the Republicans wanted.
Tim Walz is a ‘progressive’ leftie. Sure, he is delightfully folksy; witty and disarming. But his record is as left of centre as the Trumpster’s is right of centre and will be meat-and-drink to Republican media attack dogs.
Kamala Kamala has caved in to the Democrat’s far left wing. She ignored capable ‘centrist’ candidates who would appeal to the vacant and fertile middle-ground of American politics deserted by the Trumpster and is lookalike running mate.
Wry & Dry posits that the world has seen peak Kamala Kamala. Melania can recommence measuring up the curtains.
2. He flew too close to the sun. First class, of course.
Former Qantas CEO Alan Joyce is not quite down at Centrelink. But losing almost $10m of his expected bonus will make a dent in his retirement plans.
Qantas announced the result of an external review yesterday. Joyce’s FY-23 compensation will be cut by $9.3m, leaving him with the modest sum of $14.9m.
Joyce’s sins were, inter alia, Qantas selling tickets on flights that didn’t exist (costing the airline $120m to the ACCC), the cancelling of covid frequent flyer travel credits, and the illegal outsourcing of ground handling workers.
But the fiscal penalty on Joyce obscures the weakness of Qantas’ bovine board. And the complicity of its then chairman, Richard Goyder. The external review makes no mention of Goyder, who has left the board, nor of any of the three existing directors who were then part of let’s-cheer-on-Joyce cohort.
If those directors couldn’t then see the problem with Joyce, how do they have the capability to continue to guide Qantas’ future?
If they had any honour, they would give themselves the DCM. But that would mean giving up the directors’ fees and the myriad of attendant perks.
3. Be alert. The world needs more lerts.
Australia’s Chief Spook (aka head of ASIO) has raised the terrorist threat level to ‘probable’ from ‘possible’. With sturdy yeomen on either side (Albo and Attorney-General Mark Dreyfus) for the photo opp, he announced that Australians should be alert, but not alarmed.
Wry & Dry would have asked: Please, sir, but what has changed to give rise to the rise?
Chief Spook: Err, nothing, really. There’s just a lot going on in the Middle East.
Wry & Dry: Please, sir, is there any particular group that might cause trouble?
Spook: Err, no, really. Radicalism is across the board, there’s plenty of anti-Semitism and plenty of Islamophobia out there.
Wry & Dry: Please, sir, have any other countries been told to be alert?
Spook: Err, no, not really. Actually, yes. I hear that Austria has a threat from Islamic State.
Wry & Dry: Please, sir, is there any political group that is inflaming tension?
Albo: Err, no, not really. Okay, it’s the Greens.
Wry & Dry: Please, sir, then what are you doing about it, other than this announcement?
Albo: Conference ends.
4. Which is the best Olympic nation I?
Which is the best Olympic country is a question deeper than who is the best test batsman? Or maybe not. Cricket statistics are often meaningless, as they do not take into account, for a batsman for example, the bowlers against whom the runs were scored or the condition of the wicket.
Equally, for Olympic games rankings, is the simple number of gold, then silver, then bronze medals measure a nation’s success? Or is it medals per capita? Countries with larger populations have a larger pool of athletes from which to draw talent.
Looking at the below chart, the top lines show the ranking on a raw medal count basis for each of Tokyo and Rio, with the USA and China occupying the #1 and #2 places respectively.
But on a medals-per-capita basis (the lower lines), Bahamas (at the Rio games) and San Marino (at the Tokyo games) were ranked #1. Was San Marino the most successful country?
Medals-per-capita basis fails, as it predictably is led by all the smallest-population medal-winners, often with just one medal each (e.g. San Marino). It is not optimal for giving interesting information about relative national success.
So, what will better work? Well, now it starts to get arcane. Wry & Dry became aware of an article in the august Journal of Sports Analytics.
The boffins posit that a better method is to compare what number of medals a country should win (on a probability adjusted basis) to what a country actually won.
At this point, Wry & Dry will refer Readers to the article itself.1 Factors such as relative weight given to gold, silver and bronze medals; country populations, sum of populations of countries participating; number of medals available; number of medals per sport; performance quotas for each sport; etc are included.
1 Journal of Sports Analytics, vol. 10, no. 1, pp. 87-104, 2024.
5. Which is the best Olympic nation II?
Readers clearly want to know the results. Using the analysis described in the article, as at 10am this morning, the top ten nations are in the Paris Olympics are:
The ‘U Index’ is the population-adjusted probability ranking ranks countries by how much evidence they show for high capability at Olympic sports.
At the very bottom of the scale, Emperor Eleven and Swami Modi have a long way to go…
There is just one question remaining. At which post-games celebration event will the Ruddster fly from Washington to appear, to show his support for Australian sportspeople in sports he didn’t know existed?
6. Reserve Bank muscles up
What’s going on? A Chief Teller of the Reserve Bank who speaks plainly.
Treasurer Grim Jim might now be regretting his choice of Michele Bullock. Ms. Bullock has made it clear that the federal government’s (and state governments’) excess spending is inflationary and therefore is making the RBA’s job more difficult. And she is happy to say so.
But wait, there’s more. The RBA’s Chief Economist said on Wednesday that government energy bill rebates were not helping the RBA to get inflation under control, since the policies were temporary. CPI data will be affected only for a short time. The underlying problem is not fixed.
As one wit put it; consider the man who is told by his doctor to lose weight. Instead of cutting back on carbs and sugars, the patient changes his scales.
All of this adds up to Ms. Bullock saying that “near-term interest rate cuts are on not on the agenda.” That means no rate cuts before Christmas.
The opaque and jargon-filled words and accommodating stance of her predecessor are gone.
The world should welcome this breath of fresh air. And the clear statement that responsibility for interest rates not falling soon falls into the lap of Grim Jim.
7. Speaking of appointments
In the same way the Kamala Kamala’s appointment of Viennese Walz shows her aspiration for a nation, so too does the appointment of Hamas’ new leader.
Yahya Sinwar succeeds Ismail Haniyeh, following the latter getting the UDCM2 in Tehran. Sinwar was the architect of Hamas’ sadistic and devastating attack on Israel on 7 October last year. And the subsequent killing of over 30,000 Gazans, which he knew would occur.
Wry & Dry guesses that it was a bit too much to ask that Hamas show a sense of wanting a better world for Gazans. Sinwar’s elevation shows that it is business as usual: no compromise, remain brutal. He is known as a fanatic, and ruthless enemy of Israel’s existence. Revenge has always been his priority.
Perhaps he should recall the Chinese proverb: a person seeking revenge should dig two graves.
2 Ultimate Don’t Come Monday.
8. Future Made in… America
Readers will be aware that Albo’s Future Made in Australia has become a feeding trough for either well connected rent seeking snouts or snouts seeking electoral advantage.
It has also become the dream solution for every problem; past, present or emerging. On Monday, Albo announced that FMIA would drive job creation for indigenous Australians. FMIA is also going to create job in manufacturing, create green jobs, create hi-tech jobs, bolster national security and repair broken supply chains.
For a sense of possible outcomes to FMIA, Readers should look no further than one of Sleepy Joe’s equivalents to FMIA, his Chips Act. This is part of his $280 billion plan to counter China. America’s share of global semiconductor manufacturing has declined to just 10% today, from 37% in 1990, with China and Taiwan taking the share of a booming market.
The plan was to create 10,000 jobs and slingshot America’s chip-making capacity.
In March, Sleepy Joe gave Intel, the former industry leader, almost US$20 billion in grants and loans to finance factories in Ohio, Arizona and New Mexico, making it the largest single-beneficiary of Sleepy Joe’s industrial policy.
The problem, in addition to whether the Chips Act is actually smart policy, is that the greatest risk in industrial policy is putting the saddle on the wrong horse. Which is what Sleepy Joe has done.
Last week, Intel announced a US$1.6 billion net loss in the June quarter; plans to slash 15,000 jobs; suspend its dividend; slash its investment forecasts and foreshadowed much lower expected sales. Its share price fell 26%, a price last passed on the way up, in 2013.
Its share price has now halved this year. Go figure.
Turning to back Australia, Readers will remember the former head of the Productivity Commission, Michael Brennan, said that the risk of industrial policy was not just picking winners but worse; picking winners that everyone else was picking and not being able to compete.
Albo wasn’t listening.
9. Events, dear boy. Events.
The new UK PM has not had time to unpack his suitcases on moving into 10 Downing Street. ‘Events’, as forewarned by a former occupant,3 have taken over.
Blend the ingredients, a:
- brutal killing of three children by a UK born, black but deranged teenager;
- social media framework that exponentiates conspiracies; and
- just-sleeping xenophobic cohort dreaming to awake with violence
…and there is just one outcome. Riots.
PM Starmer has made all the right noises: condemn the violence, demand tough action by the police, hold high level meetings, etc.
The justifiable cry of two-tier policing (that is, the police treat rioters differently, depending on their culture/ background; with the examples of anti-semitic rioters and anti-immigration rioters) is a knee jerk response. It is a comment on the response to the public disorder, not the reasons for the disorder in the first place.
And Wednesday’s massive turnout of ‘anti-racist’ protesters that outnumbered the lads from the far right will provide a much-needed break in the violence.
But it would be folly to not to view the riots as a troubled canary in a coal mine. What is going on in that “green and pleasant land?”
Certainly, the frustration with illegal immigration is not the sole preserve of thuggish far-right bovver boys. But, perhaps it is that the ideal of a multi-cultural society has turned into a multi-tribal society.
The UK is now a collection of enclaves. Enclaves of soulless white poverty; enclaves of black poverty; and enclaves of Muslim traditions have created tribes determined to strengthen their own identity in response to their own circumstances. The green and pleasant land is an enclave that exists in rural UK and any postcode commencing with London W or SW.
3 Harold Macmillan.
10. Musings – parts of Japan to ‘vanish’
Well, it’s not that lumps of Japan will sink into the Pacific. Although that is always a possibility. It just that by 2050, 744 of Japan’s 1,729 municipalities are “likely to vanish” because of a population shortage.
The problem is as plain as the sun rising over Mt Fuji. In 2023, Japan’s population fell by some 860,000 it was announced last week. This is the 15th successive year of decline and the largest.
Similar to other developed countries, Japan’s women are increasingly reluctant to have babies. In 2023, the fertility rate was 1.2, well below the replacement rate 2.1.
In 1973, there were 2 million babies born. In 2023, the number was about 750,000. By definition, the rate of population decline will increase as fewer babies mean fewer mothers in the future.
As Japan does not encourage immigration, the outcome has to be a massive population decline. Demographers state that at the current rate Japan’s population will fall by 30% within 50 years, when 40% of the people will be aged 65 or more.
Which means that about 50% of the population will have to pay-off 100% of Japan’s massive government debt.
Snippets from all over
1. Italy doubles tax on foreigners
Italy has doubled a flat tax on the foreign income of new residents, in a blow to rich expats seeking to flee the prospect of higher levies elsewhere in Europe. (Financial Times)
Wry & Dry comments: The annual levy will now be €200,000. Ouch.
2. BA cuts flights to Beijing
British Airways has become the latest European airline to scale back flights to China as demand weakens and the cost of avoiding Russian airspace reduces the appeal of the route for carriers. (Financial Times)
Wry & Dry comments: European airlines have been banned from crossing Russian airspace. Chinese airlines have no such restriction, and so can use the much shorter great circle route.
3.NHS turns back gender clock
The UK’s National Health Service is to launch its first ever service for transgender patients wanting to return to the gender they were born as. (UK Telegraph)
Wry & Dry comments: The move comes in the wake of an independent report into transgender services, which found that children were being hurried down “affirmative” pathways involving powerful drugs and medical interventions.
4. UN sacks staff over link to Hamas
The UN agency for Palestinian refugees has sacked nine staff members who may have been involved in Hamas’s October 7 attack on Israel that triggered the war in Gaza. (Financial Times)
Wry & Dry comments: No-one is surprised by this. Hamas has its tentacles across every aspect of life in Gaza.
5. RFK’s poll rating collapses
Robert F Kennedy Jr’s poll ratings in the US presidential race have dropped sharply since Kamala Harris entered the fray in July. The independent candidate, who was polling at 15 per cent earlier in 2024, is now supported by just 2 per cent of voters. (UK Telegraph)
Wry & Dry comments: So much for Camelot II.
Data
- Australia: the Chief Teller at the RBA left interest rates unchanged.
- US: unemployment rose to 4.3%
And to soothe your troubled mind…
“I think that in my case, I made a lot of money, I was very successful and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman.”
The Trumpster, explaining why the president (i.e. himself) should have a say in setting interest rates.
Wry & Dry comments: The modesty takes him to Hall of Fame status.
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 Investment Matters.
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