Wry & Dry

Vultures everywhere. Revenge served coaled. Loon pants.

It's a Bumper Issue this week, as Wry & Dry taps the well of two weeks of world issues. 

Greens journey to Neverland

W&D thought it an April Fool's joke.

Leader of the Greens, Senator Di Natale, announced two policies of such breath-taking stupidity that W&D had to check the date of the media release to confirm a 1st April release date.

But, alas, no.  It was 4th April.  And the man person was serious.  The Greens would (a) create a People's Bank to provide low-interest government loans to first home buyers; and (b) introduce a 'Universal Basic Income' scheme, where every citizen would receive a regular, non-means tested wage, without an obligation to work.

As a student of history, W&D fully supports the idea of The People's Bank

Cartoon peoples bank

What better way to dignify Australia's banking landscape than with a successor to State Bank of Victoria, the last government owned bank and which went bust in 1990.  And sees this as the fore-runner to a resurgent of other great People's Institutions, such as a People's Airline (Alitalia), a People's Car (strictly speaking the volks wagon, but the Trabant was an exemplar) or a People's Railway (VicRail).  W&D keenly awaits further details.

The Universal Basic Income scheme would cost we-the-taxpayer between an extra $109 billion and $367 billion each year, independent economist Saul Eslake has just told W&D.  The erudite Saul, always keen to balance the budget, observed that to provide the revenue for the smaller of the two figures the government have to either:

  • raise the GST to 29%; or
  • increase company tax to 70%; or
  • if only the top rate of income tax were to be increased, it would need to go to 100%.

And this to pay for a UBI of 50% of the minimum wage (which is lower than the aged pension).

Small factoids.  But don't let facts get in the way of an idea that Di Natale says, "is being trialed right across the world."

Cartoon Greens UBI

Err, no, it's not.  The Finnish government has commenced a two-year pilot programme involving just 2,000 people.  And the Canadian government's tiny pilot programme is means tested.

Sigh.  Clearly, the Greens are desperate for voters, as the Labor Party moves further left, pushing the Greens into Neverland; where people never grow up.  

S&P 500 suffers a negative quarter.  Oh me miserum [1]. 

Readers will have returned from a restful Easter, digesting either the woes of Australian cricket (see more, below) or too many Easter eggs, only to be assailed with the financial news that the S&P 500 (not a stock car race, but the best index of the performance of the US stock market) had a negative March quarter.  The first since March 2015!

SP quarterly value driven

Man Person the life boats?

Err, no.  But make no mistake, we're not in Kansas anymore [2].  The almost straight line rise in the S&P 500 since March 2016 had to end. 

SP daily up in a line

And so it has.  The US market is down 10% since its peak on 26th January.  By comparison, the Australian market is down 6% since its post GFC high on 9th January.

Cartoon the Trump effect

The experts are blaming the US correction on, in no particular order:

  1. Possible global trade war because of Tsar Trump
  2. Possible NAFTA break by Tsar Trump, over illegal Mexican immigration
  3. Higher US interest rates
  4. Tsar Trump's tirade against Amazon
  5. Facebook's data privacy problems
  6. Another Tsar Trump reason
  7. [Readers: insert your reason here]

W&D's point, and he does have one, is, to repeat ad nauseum, ad infinitum, "an over valued market will always correct, for whatever reason is handy." 

The forward P/E (the current price divided by expected future earnings, or profits) of the S&P 500 is now back to 16.5.  That is still comfortably above its long-term average of 15.7, but well down on its 2018 high of 18.7.  So the market decline is just a correction.

What now for the ASX?

Well, in the short term, who knows?  The Australian market is slightly over-valued.  And pockets of the market remain under-valued.  Readers will know that a well-diversified portfolio can readily be constructed that has a much lower P/E than the market, but has a good yield and strong expected growth over the next three years.  What happens to the market this week doesn't matter.

Vultures.  Vultures everywhere.

Readers will well remember that scene in Mrs W&D's favourite movie Casablanca where the seemingly helpful pickpocket, picks the pocket of the Englishman whilst warning him of: "Vultures.  Vultures everywhere." 

And so W&D is moved to ponder "Cheat.  Cheats everywhere."  Of course, it's been bankers, social media and politicians for years.  Readers know that the cheating of these serial cheats has been getting worse.  And, then in a breathtakingly embarrassing incident: Australian cricket descended to cheating levels normally reserved for Russian Olympic athletes. 

That level is a pernicious triangle of (a) the cheating; (b) the conspiracy to cheat; and (c) cheating by a national team.

But wait!  There's more.  It is now clear to even the most cricket-agnostic that the intellectual shortcomings of the trio of cheating Australian cricketers are possibly only matched by those of the senior executives of Cricket Australia.

Cartoon ball tampering

W&D makes these cricketing comments with a rare measure of deep understanding (and compared to others matters upon which he pontificates).  Modestly, he's still playing, with almost 500 senior games and 15,000 runs to his name.  And add many dropped catches, disagreements with opposing captains; conversations of all sorts with all sorts of umpires and more than a few jars after the game.

Work with W&D on this.  

1. W&D's research of the rules/ laws of major sports shows that cricket and rugby union are the only ones that have anything resembling the 'Spirit' of the game.  That research covered basketball, cricket, football (i.e. soccer), AFL (Australian football), NFL (American football), tennis, netball, field hockey, ice-hockey, sailing, table tennis, rugby league and rugby union.  And rugby union's reference to 'spirit' is shallow, compared to that in the Laws of Cricket.  And the rules of netball do mention playing in 'a sporting and fair manner' (but, having seen netball mums in action.. oh, never mind).   The 'Spirit of Cricket' is cricket's underpinning. 

2. For many years the Australian cricket team has ignored the Spirit of Cricket; and Cricket Australia has condoned that increasingly bad behaviour by inaction.  And all the while hoping that the artificial excitement of such fabrications as Big Bash would obscure the underlying decay, at a senior level, of the Spirit of Cricket.  

3. There can be no satisfaction from winning a game by cheating, unless other motives drive the cheating.  The obvious other motive is the money that comes with the winning.  And there is evidence aplenty that, for example, Warner's desire for, and display of, dosh and all it can bring, is his driver in life. A $450,000 Lamborghini anyone?  As a journalist noted, the bigger question over his now lifetime ban from any leadership position in Australian cricket is why Cricket Australia gave him one in the first place.

4. The unedifying 'monetisation' of every aspect of the game by Cricket Australia has meant that, at a senior level, the focus is on selling a product for as much money as possible.  Winning sells.  But the price of winning is the losing of the Spirit of the game.

5. Cricket Australia's 'Integrity Unit' has demonstrably failed in its objective of "pro-actively protecting Australian cricket from ... activities that may undermine ... the game of cricket."  There has been no evidence of pro-activity.  And plenty of evidence of a clear failure to protect the undermining of the game.

W&D's conclusion: If it's good enough to say that the captain of the Australian cricket team should take responsibility for the actions of his team, it's good enough that the CEO of Cricket Australia take responsibility for the deplorable state of the Spirit of Australian cricket.  The DCM [3] should have been issued some time ago.   

Pain in Paris

For Readers who might get bored with the Commonwealth Games, W&D suggests there is much entertainment to be had in France.

W&D alerted Readers some weeks ago to France's telegenic President M Macron's move to make the French state railways (SNCF) more efficient.   Readers who have used the French railway system will be aware that it's a loss making enterprise of some magnitude.  It has almost €50 billion of debt.  There are losses and there are losses.  But SNCF's main problem is that much of the losses could be considerably reduced if usual French labour practices (as generous as they are) were applied.   The French railway worker has a good life: 28 days of paid annual leave, automatic annual pay increases, lifetime employment, early retirement (from age 52, a decade before the pension age of 62), pension of up to 75% of salary, etc. 

In protesting at proposed reforms, the lads are going on strike: two days in every five for the next three months.  W&D has to dip his lid to the Frenchperson on strike: they really know how to ensure that every other Frenchperson knows they are on strike.  No messing about here.  There are mini riots popping up everywhere; Molotov cocktails [4] have returned; demonstrations have become more exciting.

And all of this more exciting than the synchronised swimming on the Gold Coast. 

Fashion in North Korea

North Korean despot, Kim Jong-un, is not only seeking to lead the world in idiocy, but also in fashion.  Just before last week's trip to China, he held a media conference with members of the North Korean Press Club (the members of which clearly prefer the use of the 1960's Bic biro to devices such as 21st century voice recorders).  Just take a look at his loon pants...

Kim Jong-un’s preference for baggy trousers has sparked amusement

W&D's big worry is that Tsar Trump is so competitive with Kim Jong-Un that he (Trump) will adopt an even racier fashion statement. 

Revenge served coaled

The Triple A A-gaps-in-the-ground (Abbott, Abetz, Andrews) have returned from their Lenten fasting with a new idea to expectorate their hatred of Croesus Turnbull.  And in so doing have again demonstrated both their malevolence and idiocy.

They have formed a group named Monash Forum (the use of Sir John's name has upset his descendants).  And have been joined by three other lunatics from the far-right: Craig Kelly, Barnaby Joyce and George Christensen.  The launch of Monash Forum was announced on Sky TV by Abbott's former Chief-of-Staff, Peta Credlin.  Not that the launch got much traction. Sky News' viewers number about 20,000, across Australia.  But other media picked up the story and it ran like a wind turbine in a South Australian gale.

Monash Forum has called for the government to spend $4 billion building a coal-fired power station in Victoria.

Oh dear, didn't someone tell this sextet of formless, brainless, publicity-seeking indolents that:

1.  It will take about 6 years to build the power station, by which time electricity-generating technology would have marched on to a more efficient, speedier to build and more renewable world;

2.  The absence of any research, data or explanation to explain how the $4 billion cost was derived? Or why LaTrobe Valley?  Or what is the expected cost of its electricity? etc, leaves a somewhat large credibility gap;

3.  Singling out one of the advantages of the policy is that it is different to the Labor Party is correct.   But a policy of building a nuclear power plant in Collins Street is also different to the Labor Party.  Mind you, that might be the next bubble thought;

4.  The coalition party room had already approved of the National Energy Guarantee, and its constituents, and so a fringe group making their own arrangements can rightly have its motives questioned; and

5.  Six members of a combined party room of 106 members is hardly a challenging majority. 

W&D can only conclude that this is nothing more than yet another deliberate ploy to further seek revenge against Croesus Turnbull, and using a seeming credible policy position so to do.  Only a fool would otherwise be fooled.   

Deepak, W&D's Uber driver, was talking about...

...education.  "I have a great deal of trouble understanding all the fuss about government funding of education. What's going on?" he asked.

"Ah," sighed W&D as he slipped into Deepak's new car, "like dogs over a bone, there will always be fights about education funding, with each sector shouting it's been robbed.  And schools will fail, fees go up and there will be rioting in the streets."

Deepak looked alarmed.  "What!  Rioting in Australia?"

"A figure of speech, Deepak," W&D said calmly.  "Nothing more.  But the focus on money misses the point."

"Oh.  What point is that?" Deepak queried.

"The point is that much research has shown that, generally, there is little relationship between educational spending and educational outcomes.  For all the money spent on education in Australia, and there has been a lot, we have been sliding down the international rankings.  Just have a look at PISA."

"I'd like to go to Pisa," responded Deepak enthusiastically.  "Anjali would also love it."

"No, no.  PISA as in the Programme for International Student Assessment.  Not the city in Italy.  It's an OECD run project that compares educational outcomes across the world.   Educational results in maths, science and reading for Australia's 15-year-old students are declining in both absolute and relative terms." 

"So, what can the government do about it?" Deepak looked most concerned.

"Well," W&D began, "not toss billions of more dollars at it is a good start.  And instead, focus on what achieves better outcomes.  Have a look at this chart." W&D showed him the following chart [5].    

Education what works2

"Social Ventures Australia, a philanthropic organisation, has researched and ranked a variety of programmes used in school education.  It ranked by assessing the average educational months gained by students.  And also assessed the cost of each and evidence of the outcomes."

"Very interesting, school uniforms don't make a difference," mused Deepak, as he first looked at the things that don't matter.  "And reducing class sizes, given its comparative cost, is not as good as alternatives."

"In terms of bang for your buck," finalised W&D in terms that Deepak would follows, "teacher feedback, reading strategies, homework and phonics are the four winners."

Cartoon old dogs

"So what about all political fuss?" asked Deepak.

"It's that some people see their needs being met by larger and larger amounts of money.  That approach measures an input.  Surely it's better to measure what works and then finance that."

"Ah ha," exclaimed Deepak triumphantly.  "So I don't need to keep giving Anjali more and more money?"

"A fatal conclusion," W&D muttered as he got out of the Deepak's car. "It's all about keeping her happy.  Let me give you the whisper, it's not about money."

"What is it then?" Deepak yelled, as W&D strode off.  W&D knew the secret [6].

Chinese whispers...

W&D remembers as a child when spruikers of Australia would state that Melbourne's Flinders Street railway station was the busiest in the world.  Or that Australia had more skiable snow that Switzerland.  Or that Australia invented surfing.  Thankfully, Australia seems to have matured, a little.

But it seems that China has along way to go.  Apparently, China invented:

  • high-speed railway
  • on-line shopping
  • mobile payments
  • bike-sharing

Or so it was said at the recent China National People's Congress by Pony Ma, a delegate, China's richest man and also CEO of Tencent, the internet giant.

W&D begs to differ, Sir.  Consider the following:

  • High-speed railway began in Japan, in 1964
  • On-line shopping: was the idea of an Englishman, Michael Aldrich, in 1979
  • Mobile payments: were first made in Finland, in 1997
  • Bike-sharing: was first undertaken by the Dutch ('white bicycle plan') in the 1960s

That's not to say that the Chinese, or their forebears, weren't the first at many things.  There is this large and long wall...

...and it fell back to Earth

Speaking of China, W&D noted that China's defunct Tiangonog-1 (Celestial Palace) space station, now a bus-sized (7.7 tonne) piece of metal, crashed back to Earth on Sunday.  The space junk came back to mother earth somewhere into the South Pacific Ocean.

Readers will remember when America's 70 tonne Skylab crashed into a not-too-remote part of Western Australia in 1979.  Then the US government was fined $400 for littering.  

W&D cannot imagine anyone fining the Chinese government for littering.  But he has yet to hear wails of protest from Greens' leader Richard Di Natale.  Surely a stinging rebuke to the Chinese is required, not only for the environmental damage caused by Tiangong-1 but also the possible damage done to sea-life.  Especially whales.   

Waiting, waiting...

And, to soothe your troubled mind...  

Miscellany 

Last words...

"...an extraordinarily expensive way of seeking to address what may well be a few cracks through which a limited number of people fall." 

-   Saul Eslake, independent economist, commenting the Greens new policy (Universal Basic Income - a non-means tested payment to all citizens).

But cost to we-the-taxpayer has never been a problem to the Greens, as they will never govern.  This is nothing more than a vote maximising policy.

First Samuel client events calendar

Date 

Description

Details

2018 Events  (Invitations not yet sent)

Tue-29-May-18

Eat Street - food & wine fest

Sofitel

Wed-18-Jul-18

NGV Winter Masterpieces Exhibition

Masterworks from Moma (New York)

NGV

Tue-14-Aug-18

Forum - guest speaker TBA

Leonda

Some lightly salted absurdities from all over...

At the extreme left-hand end of the Bell Curve

John Markwick, 24, of Mt Pleasant, Milwaukee, decided that he would steal some booze from the local liquor store.  He grabbed two bottles, opened one and had a gulp and then headed out of the store with his booty (old meaning).  A female customer tried to stop him.  He smacked her in the chest.

So she hit him over head with the bottle she had just bought.  Markwick woke up in time to spit in the face of the arresting policeman.

(fox6now.com)

Markwick is in for a lot of time in the slammer.  That's his 24th offence. 

Guess what happened next

Timothy Felker, 18, was given money by his mother so he could have a tattoo.  What happened next?

a.  Tim had a tattoo of his mother placed on his left buttock;

b.  Tim used the money to buy beer;

c.  Tim used the money to buy drugs; or

d.  Tim used the money to buy an AR-15 rifle and 500 rounds of ammunition.    

Close.  But no cigar.  Tim bought the rifle and ammunition so that he could shoot his classmates at Paul Laurence Dunbar High School in Lexington, Kentucky.

(Rawstroy.com)

The AR-15 is an evolution of the famous the US army's famous M-16 rifle.   It costs about US$1,200.  Soooo, Tim's mom gave him $1,200 for a tattoo? She said in court that he had 'anger management issues.'  

When will this end?

Japan and 'breeding visas'. 

In an attempt to combat its aging population and declining birthrate, Japan will soon introduce 'breeding visas'.  The visas, issued by the Japanese government’s Accelerated Family Bureau (AFB), will allow certain eligible foreign travelers to enter Japan and will be offered similarly to tourist, work, and family visas.  However, breeding visas will have their processing expedited (typically available after one business day) and applicants will receive reimbursement on all travel expenses incurred.

Holders of breeding visas will be required to provide evidence of at least one pregnancy that they helped occur, either in themselves for females by a Japanese male citizen or in a Japanese female citizen for males.  The child must be born in Japan and will have Japanese citizenship. 

Those unable to succeed will have to pay a fine of no less than 50,000 yen (US$476) upon departure.

(Sora News 24) 

Arguable the best April Fool's story of the year.

Have a Wry & Dry weekend. 

Anthony

[1] Woe is me.

[2] From the Wizard of Oz, spoken by Dorothy (played by Judy Garland), when she awakes in a really different land after being knocked out and swept away by a tornado.  Used to mean that "we are no longer in comfortable surroundings".

[3] Don't Come Monday.

[4] Molotov cocktail: a crude incendiary device, consisting of a bottle filled with (usually) petrol and a lighted wick.  On landing the bottle breaks, spreading flaming petrol.  Named for Vyacheslav Molotov, the Soviet Foreign Minister who signed the secret 1939 Nazi-Soviet non-aggression pact; integral to which was the partition of Poland.  Tsar Putin has done his best to erase that chapter of Russian history from the text books.  The Molotov cocktail was first used in the Spanish Civil War (1936-39), but was more widely used against the Soviets when they invaded Finland in 1939.  It were the Finns who gave the device its name.

[5] Readers may wish to learn more.  If so, please visit http://evidenceforlearning.org.au/the-toolkit/full-toolkit, where the research results for 34 possible programmes can be viewed.  

[6] Cuppa tea in the morning.