Wry & Dry: a cynical and irreverent review of the week in politics, economics and life. For intelligent Readers who disdain the trivial.
Nine stories you may have missed…
- Julian who?
- Nuclear power poll
- Frexit?
- Enlargement
- Qantas’ ranking slides
- Mailbox
- With friends like these…
- Musings – Nvidia
- The Second Coming
Stop Press: Sleepy Joe did stay awake. Just.
The world has just watched the most embarrassing moment in the history of the United States. A sandpit fight between a pair of geriatric wannabee save-the-world superheroes.
Readers will be swamped over the weekend with analysis of every eyebrow move, every utterance, and every deep breath.
How important the debate will be in the end is, to quote someone, ‘too early to tell’. But if the election were to be held next week, Sleepy Joe would get blown out of the water.
Debates are not about policies. They are about emotion.
Sleepy Joe’s sincere, avuncular qualities were lost from his first sentence: a miasma of sad, stumbling, rambling confusion.
Wry & Dry wasn’t aware that Tsar Vlad was going to invade Nepal or that the US unemployment rate was 50% when he took office. It was a good thing that the microphones were switched off after two minutes.
The Trumpster’s list of lying and hyperbole was just as long. The so-called fact-checkers will have a field day. But, at the end of the day, Trump hammered Sleepy Joe on the single issue that matters most to Americans: illegal immigration.
The only hope for the Democrats is for Jill Biden to tap her husband on the shoulder. But he’s a stubborn man.
1. Julian who?
Saipan is an island in the western Pacific from where, in 1945, the Americans sent a B29 bomber to deliver to Japan an atomic bomb. That same island is from where this week the Americans sent a private jet to deliver to Australia a media atomic bomb.
In preparation, Wry & Dry has battened down the hatches. Raised the drawbridge. Lowered the portcullis. And, in fact, has left the country (for a short time).
The release of Julian Assange after 10+ years in porridge (of sorts – conjugal rights are not normally in the prison ‘Guide to Services’ handbook) will be a media circus not seen since Taylor Swift brought a mini-economic boom to Australia.
Whatever Readers feel about the justice or otherwise of Assange’s case, they should be prepared for a narcissistic onslaught exponentiated by a willing media. With the Ruddster riding on the coattails.
This will not end in a hurry. It will be a seemingly endless martyrdom, punctuated by glossy magazine articles, exclusive revelations of his past, a book launch and a Netflix series. Move aside Meghan and Harry.
And, eventually, Assange will be appointed a Companion of the Order of Australia. Yes, it will come to that.
2. Nuclear power poll
Like a child waiting for Christmas, Uncle Fester Dutton had been waiting for the first nuclear power poll. And for the first time ever, he would have smiled at what he read in the Melbourne Age. It’s early days yet, but 41% of people polled1 supported the use of nuclear power, with 37% opposed. Not surprisingly, 22% were undecided.
There is a lot of water to go over the cooling tower on this matter. But the media are loving it, keenly tracking what is now the clear delineation of debate into five groups.
Firstly, the accountants. Nuclear is about cost and trade-offs: endless forecasts, massive spreadsheets, hyperbolic assumptions out to the turn of the millennium, etc.
Secondly, the tradies. Nuclear is about a problem. What is the most practical way to solve it: use decaying coal power sites, reuse existing power lines.
Thirdly, the gurus. Nuclear is about engineering. How will these reactors be built? Do we use French, South Korean, Chinese or US technology?
Fourthly, the passionate. Nuclear is about emotion. This is a rich blend of:
- 1960s anti-nuclear throwback still-angry demonstrators (no nuclear)
- the supercilious, smug elite (no)
- those politicians and their acolytes who have hoisted their flag to another mast (no)
- those businesspeople who have a vested fiscal interest in opposing nuclear (no)
- the anti-anything-proposed-by-a-Labor government cohort (yes to nuclear)
- those who see the environmental folly of solar power and battery storage (yes)
- those who are genuinely excited by Australia showing some muscularity in tackling global warming (yes)
- those who believe that global warming is a hoax, but like the nuclear idea (yes).
- Finally, the Coodabeens. Why didn’t we start using nuclear power thirty years ago? The French have been using it since the 1950s, and there are still no reports of three-eyed fish in the Seine.
1 Resolve Political Monitor, published in the SMH/Age on Monday.
3. Frexit?
French people, be careful for what you wish. Or vote.
Readers will know that French president M Macron has called an early election, (the first round is on Sunday 30 June) on the back of the right’s dominance of the recent EU elections.
It might be a bigger risk than he thought: polls show that Marine Le Pen’s right wing party (Rassemblement National, or RN) has 33% of the vote, well ahead of Macron’s 19%.
Consider some sensible insights Michael Barnier2, the EU’s chief Brexit negotiator. He said that French president M Macron has driven France to the point of Frexit.
Good grief! An EU without France.
The wily negotiator said, “I regret that in my country that this warning has not been listened to… about migration, about security, about authority of the state, and the respect and development of the poorest parts of the country.”
Ah, once again the matter of illegal immigration has reared its head in Europe.
Of course, there will not be a Frexit. France is much stronger for the EU. But a right-wing government brings more than just an immigration policy that seems sensible to many. It will bring populist policies that will drain France’s coffers.
The last time France’s coffers were empty was in 1803. Emperor Napoleon decided to sell the territory of Louisiana to the US government. Napoleon got $15m. The US got 2.24m km2.3
A future and broke French government could always sell Aquitaine back to the UK.4
2 In the Brexit negotiations, Barnier routed UK PM Teresa May and her negotiator David Davis.
3 The 1803 Louisiana Purchase extended US sovereignty west of the Mississippi River, covering all or most of what is now 15 states and a small slice of Canada. In 1845 the Republic of Texas was annexed; in 1846 Oregon, Idaho and Washington state were ceded by the UK; in 1848 what is now California, Nevada, Utah and Arizona were effectively stolen from Mexico; and in 1867 Alaska was purchased from Russia. No-one asked the indigenous peoples.
4Aquitaine was part of England from 1154 until 1453.
4. Enlargement
In some spheres, size does matter. Readers who have an economic interest and are European-watchers will know that the EU is a very large economic bloc.
But the ambitions of Ukraine and Moldova to join the EU are more than about economies of scale.5 Both countries held their first accession talks with the EU on Tuesday.
Tsar Vlad’s invasion of Ukraine has given renewed impetus to enlargement of the EU. In addition to Ukraine and Moldova, six countries in the western Balkans and Georgia wish to join the bloc that the UK only recently left. Successful application by all aspirants would mean the EU membership would increase to 36 countries from the current 27.
Enlargement has not recently been an EU priority. Croatia was the last to join, in 2013.
Joining the EU is only a little more difficult than joining the Melbourne Club. Accession talks take many years. And membership requires not only the adoption of all of the EU’s rules, but also every step in the process requires the concurrence of all members.
The EU is not NATO, but Readers will understand that Tsar Vlad’s paranoia will mean that he will conflate an economic bloc with a military alliance. And that he will do whatever it takes to prevent each of Moldova, Ukraine and Georgia from joining.
He has already moderate control of Georgia’s parliament, has invaded Ukraine and controls the western part of Moldova (Transnistria).
The EU will prevaricate forever. Behind their gilded doors, the EU bureaucrats will be saying to each other (and to paraphrase a former UK PM), “Moldova, Ukraine and Georgia are faraway countries of which we know little.”
5 If a product has a high fixed cost but lower variable costs, then once the fixed costs have been met or managed, then as production increases the lower the cost of each unit sold. Toll roads and nuclear power stations are extreme examples.
5. Qantas’ ranking slides
In an outcome that surprised nobody except former CEO Alan Joyce, Qantas has slid to 24th place in the ranking of the world’s best airlines. Just behind Plummet Airlines.
Qantas’ place in the top ten used to be as certain as rain at the Boxing Day test match.
This is the podium of embarrassment for Australia’s so-called flag carrier. And will cost Qantas’ shareholders plenty.
And those shareholders have just one person to blame: Alan Joyce.
Readers would imagine that the consultant hired by the new Qantas Chairman to determine how much, if any, of Joyce’s final bonus of $14m should be paid will look to all bits of data. And see the ranking as the final vindication of a recommendation of an empty envelope.
By the way, Qatar got the top gig.
6. Mailbox
Wry & Dry always tries to be precise in his quilling. But clearly failed last week. Much to the chagrin of a number of Readers.
His comment about Julius Caesar crossing the Rubicon and how subsequent events turned out was not an implication of big Jule’s failure. Quite the opposite.
The fact that his visit one day to the Senate didn’t end well merely reflected the times – people got assassinated more frequently than cars are stolen in Melbourne by 15-year-old boys.
Big Jules was a great success, not only in defeating Pompey but also in running the Roman Republic. He instituted many far reaching political and economic reforms, and was also a patron of the arts, especially literature.
His also introduced a new calendar, which he modestly named after himself. Previously, the Roman calendar was based on the lunar year and not the solar year.
He is also known as one of the many, err, consorts of Cleopatra, Queen of Egypt.
7. With friends like these…
Just when UK PM thought things couldn’t get any worse, they did.
Idiots in the Conservative Party’s HQ decided to monetise (i.e. make money from) their knowledge of the surprise general election. And make bets on its date. The rotters have been found out.
The uproar from the media, sanctimonious left, rabid left, moderate centre, and embarrassed right was astronomic.
When Conservative PM John Major got the DCM (to pave the way for Tony Blair) it was the ‘sleaze factor’ of some members of his party that pushed the election defeat from an acceptable loss (after 18 years of Conservative rule) to a defeat of biblical proportions.
The current Conservative government’s losing position is already at the biblical proportions level on the standard disaster scale.
It is now entirely possible that Labour will win a greater share of seats in the House of Commons than ever held, exceeding the 85% won by the Conservatives in 1931.
8. Musings – Nvidia
Readers will recall last week’s Wry & Dry article, headed Bubble time? noting that chip designer Nvidia’s share price boom had caused its market cap to exceed that of Microsoft as the world’s most valuable company.
And that it’s P/E6 of 80 was at least double that of wannabe leviathans Microsoft (39), Apple (33) and Google (27).
Well, the US market clearly read of Wry & Dry’s misgivings. Nvidia’s share price has fallen 16% since then.
That’s a $550bn fall in value.
And the end of the absurd battle to be the biggest company. But are Australian investors seeing a similar arcane battle between BHP (market cap $217bn) and CBA ($213bn)?
6 P/E is the ratio of a company’s share price, P, to its profit (i.e. earnings) per share, E. It is the measure the value of a company. The lower the P/E, the better value it is to buy.
9. The Second Coming
The Trumpster has used a marketing technique dating from 33AD. He has compared himself to Christ.
In speaking to evangelical leaders in Washington he has warned that Christianity “would be in tatters” if Sleepy Joe were re-elected. This is a bit rich from a man who found his Christian belief only when he was told there were votes in it. And plenty of them.
The weird part of his speech was…
“If I took this shirt off, you would see a beautiful, beautiful person. But you would see wounds all over, all over me. I have taken a lot of wounds, I can tell you. More than I suspect any president ever.”
Readers should wonder which image was more risible. That of the comparison to Christ (“For all those who exalt themselves will be humbled, and those who humble themselves will be exalted.”).7
Or that of the Trumpster without a shirt.
7 Readers may wish to read Luke 18:10-14.
Snippets from all over
1. Betting to lose
The [UK] Labour party has suspended a parliamentary candidate who wagered he would lose his bid to become an MP. (Financial Times)
Wry & Dry comments: Thereby ensuring that he would win his bet.
2. Boeing…Boeing…
Federal prosecutors in the US have called for the Department of Justice to bring criminal charges against Boeing for violating a deal related to two fatal 737 Max plane crashes. (The Times)
Wry & Dry comments: There is every chance that a backdoor deal will be done: the Dan Andrews ‘no-one was responsible’ outcome.
3. Weight-loss drug boom
Novo Nordisk is investing $4.1bn to expand its US manufacturing and boost production of its blockbuster weight-loss drugs to meet surging demand. (New York Times)
Wry & Dry comments: The company’s Ozempic and Wegovy drugs have been unable to meet massive demand.
4. Barcelona to ban Airbnb
Barcelona’s mayor has promised to drive Airbnb out of the city within five years as part of his efforts to tackle rent increases of 70 per cent and a rising wave of public protest against mass tourism. (The Times)
Wry & Dry comments: Possibly a populist move that will have unhappy unintended consequences for the tourist sector.
US millionaires have signalled their support for Joe Biden’s push to make the wealthiest Americans pay more tax, in a sign that the president’s plan to impose bigger levies on extreme wealth is playing well with the country’s upper-middle class. (Financial Times)
Wry & Dry comments: Some 60% of respondents said they would back increasing the highest marginal tax rate of 37% for people earning more than $100mn. Wry & Dry wonders how many of the 60% earned more than $100mn.
Data
- Australia: Inflation rose by 4%, thereby making it almost certain that interest rates will rise.
- Total household wealth was $16.2 trillion in the March quarter, which was 10.2 per cent ($1.5 trillion) higher than a year ago. Residential land and dwellings was the largest contributor to quarterly growth in household wealth, adding 1.3 percentage points.
Read this week’s Investment Matters.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!