Wry & Dry

Nightmare on William St. Barnaby's back. Tesla going private?

Nightmare on William Street

The blood that is dripping onto the bluestone pavers at 305 William Street, Melbourne, can be traced to the Banking Royal Commission Courtroom in the Commonwealth Law Courts Building.  Readers would find on the floor the dismembered corpse of the National Bank's superannuation trustee company.  

In a four-day masterpersonclass of excoriation,  NAB's representative and its QC-enobled barrister suffered death-by-a-thousand cuts [1] at the hands of each of the Commissioner of and Counsel assisting the Royal Commission.  W&D won't excite Readers imaginations by listing the extraordinary actions and non-actions undertaken by the NAB company to prioritise the interests of NAB and its profits ahead of the interests of the super fund members.  The headlines in the more intelligent daily media has done that.

Cartoon banks Ill mind your lunches...

Except to note that there were two breathtaking incidents.

Firstly, in a question that caused each director of NAB to pick up his/ her/ its iPhoneX and call the NAB Helpline to check on their public liability insurance, Commissioner Kenneth Hayne asked of the NAB representative, "Did you think to yourself that taking money to which there was no entitlement raised a question in criminal law?"

She went white and answered in the negative.  Well, she would, wouldn't she, as Mandy Rice-Davies would say [2].  But the exchange was enough for the Chief Teller of the NAB, Andrew Thorburn, to yesterday undertake a soothing video broadcast to all NAB employees and for a massive media blitz.  "(What's happened) sounds really serious, but it's not about fraud - it concern potential breaches of the Corporations Act."  And that's not enough?

Secondly, NAB's counsel, Neil Young, QC, sought to suppress documents that showed ASIC has accused NAB of more than 100 potentially criminal breaches of the law over a scandal in which it charged customers fees without providing any service. 

The Commissioner was having none of that.  Mr Young is clearly not a manperson adept at reading the tea leaves.  Taking on the Commissioner is like prodding a hungover grizzly bear.  And the bear responded, with a verbal evisceration.  Mr Young was last seen being taken away by menpeople in white coats.

But, all of this doesn't really matter.  Other than to again confirm W&D's long-held view of the extraordinary unethical and corrupt behaviour of banks.

cartoon banks mice cat

It doesn't matter, because the banks will cover their tracks, make their apologies, sell their embarrassed businesses, etc, etc.  And wash their hands.

And in a year then pretend it was all a nightmare from which they have woken.

Nightmare from Canberra, coming to a bookshop near you

W&D was forced to considers that, with rare exception, politicians will never make the pantheon of literary excellence.  Yes, Churchill won the Nobel Prize for literature.  And Roy Jenkins' biography of Churchill ranks among the finest.

But, closer to home, and more recently, autobiographical writings of Australian politicians fail at every hurdle (W&D doesn't like the man, but Bob Carr's Diary was an exception: with self-deprecation, a dry humour and attractive wordsmithing).  And much like cricketers' or footballers' published scratchings, within three months the sharp price-discounting of the alleged 'best-seller' begins.

Which brings W&D to former Deputy PM and current political outcast, Barnaby Joyce.  Mr Joyce's tell-all book, Weatherboard and Iron, has hit the bookshops.  

Cartoon Joyce weatherboard iron

W&D has read some excerpts.  And will save Readers the trouble of the Big Decision: "Do I buy now and stockpile for Christmas?"

No.  This man is a disgrace.  He is attempting to masquerade profit from wanton actions that caused incredible distress to his wife and four daughters as some form of public rehabilitation.

Bonus:  In marketing his magnum opus on television, Joyce confused viewers by referring to "the Weatherboard nine."  His elocution matches his ethics.      

Magic Carpet Ride

Goings on in Turkey remind W&D of a line in the 1968 cult song, Magic Carpet Ride, by Steppenwolf: "Fantasy will set you free." [3]

And it is fantasy that Turkish Sultan, Recep Tayyip Erdogan, hopes will set him free.  Err, no.  The Turkish lira, the benchmark for his incompetence, fell to a new low last night, losing 4% against the US dollar.  "What's going on?" W&D hears Readers ask.

Well, essentially, Turkey has recently prospered, partly due to ultra-loose monetary policy in the US and Europe, which encouraged investors to seek higher returns in Turkey.  The Sultan took credit for the booming economy.  But US dollar and euro interest rates are now rising, the Turkish economy is overheating (inflation is over 15%) and the government, as directed the Sultan, is not taking a hard line on inflation. 

International confidence is waning.  The Sultan is now blaming others for the economic woes.

A sure sign of the disaster that is looming, the new Finance Minister and son-in-law of the Sultan, Berat Albayrak, will announce later today that there would be 'a new economic model for Turkey.'

W&D sees it as nothing more that the Sultan taking his people on a magic carpet ride. 

Oh, dear.     

Chinese creativity

Readers know that China tightly controls its peoples' access to the internet.  Censorship is pervasive, invasive and broadly effective.

And so China's 'MeToo' movement has found difficulty in getting traction, although China's Twitter-like platform, Weibo, has published stories of sexual harassment by Beijing's top literati and leaders of non-government organisations.

To circumvent censorship, some activists have taken to using #RiceBunny.  Readers will know that 'rice bunny' is pronounced 'mi tu' in Mandarin.

Fiendishly clever.         

Greens say something intelligent

W&D sits with mouth agape.  It's taken since 1992 for at last the Greens to say something intelligent. 

In a blend of photo-opportunity (outside the Banking Royal Commission) and policy innovation (well, sort of), Greens primus inter pares, Richard Di Natale announced a policy that, unhappily, won't get far.

That is, to restrict financial service companies to just one of four services:

1.  Deposit taking and lending;

2.  Asset management;

3.  Insurance services; or

4.  Investment banking.

Readers will see that it's a bit of throw-back to the infamous US Glass Steagall-Act of 1933, which forced banks to split their banking and investment banking businesses.  That arose because of the 1929 Wall Street Crash and the amazing conflicts that occurred.

We now live in a vastly different world, with the digital economy moving all aspects of financial services very quickly.  And it is also clear that it is well nigh impossible to regulate the financial services industry without strangulating it.  Readers just don't see the labyrinth of regulations - and those have done little to protect consumers.

What is happening now is that the regulators, principally ASIC and APRA have totally failed in their roles.  The various parts of the industry have either ignored them or found ways around the rules.

Cartoon victoria police ASIC

If you want inaction, there's always the Victoria police

Rather than expensively and fruitlessly increasing regulation even more, it would be far easier to give more freedom to each of the four separate branches of the industry, but not allow the inevitable conflicts to arise.

Yes, yes, yes.  W&D knows that people will say, for example, broken-up banks would be smaller and possibly less able to raise funds as cheaply for lending, especially home loans.  That might be nonsense.  Consider at the moment that the investment banking arms of the banks, especially Macquarie, use the implicit government guarantee and their mortgage lending assets to provide capital backing for their profitable investment banking businesses.  A smaller, but pure deposit and lending balance sheet would be able raise funds more efficaciously than one encumbered by investment banking assets and volatility.

There is lots more that could be said about this.  But, well, it's Friday.

Snippets from all over 

1.  CBA profit report - gloom

W&D suggested the whole world wouldn't be watching.  And it wasn't.  But those who were noticed a 5% fall in profit and a rise in dividend of a mere 0.67%

W&D comments:  Readers will do no better than to read Investment Matters (below), where Fleur Graves, First Samuel's gun research analyst, peels back the CBA onion.  It will bring a tear to Readers' eyes.

2.  North Korea: Agreement to dismantle?  What agreement to dismantle?

US National Security Adviser, John Bolton said that it is now obvious that North Korea is still (a) producing plutonium; and (b) developing ICBM capability.  

Cartoon north korea I wonder if theyre suspected

W&D comments:  Tarzan Trump's eyes are still popping from the flashlight-bulb-exposure in Singapore, when he announced agreement by his good friend, Kim Jong-Un to stop (a) producing plutonium; and (b) developing ICBM capability.

Trump 0  Kim Jong-Un 4.    

3.  Doctor No Women

Tokyo Medical University has admitted that it altered entrance exam scores for years to limit the number of female doctors and ensure more men became doctors.

W&D comments:  There is a tiny streak of results' fabrication across most aspects of Japanese life, be it quality of steel, air-bags or exam results. But their trains run on time.    

4.  RBA does...

... nothing.  The Head Teller of the RBA announced that the cash rate remains unchanged for a record 24 months, at 1.5%.

W&D comments: W&D smells an interest rate rise in the air.  But it's only a sniff.    

5.  Meanwhile, over in Iran...

... Tarzan Trump swung from his tree and imposed tough unilateral economic and business sanctions on Iran.  It's all got to do with the nuclear accord signed by his predecessor, President Obama, with UK, France and Germany, which the US has now repudiated.  UK, France and Germany will not follow the US.    

W&D comments: This is one of the (very) few times W&D supports Tarzan Trump.  Iran finances and exports terrorism, especially against Israel.  But its theocracy is hated by the Iranian-on-the-street, especially the young.  Corruption is rampart and the economy weak. The leadership is not to be trusted.  

Tool of the Week 

Podium finish goes to ... Justin Trudeau, Canada's telegenic, but increasingly unpopular Prime Minister.

In an effort to restore voter support, he got Canada's Foreign Minister to publicly call for the release of Samar Badawi, a prominent women's rights activist in Saudi Arabia, who has distant relatives in Canada.

It's an asymmetrical payoff (see also this morning's media about Transport Minister in the Peoples' Socialist Republic of Victoria):

Possibly win more public support from voters who probably support you anyway: and

Certainly upset a seriously important trade and government partner.

As to possible upside: W&D hasn't read the latest opinion polling in Canada.

As to certain downside: the Saudi central bank and state pension funds have been instructed to dispose of their billions of Canadian equities, bonds and cash holdings "no matter the cost." 

Cartoon Canada

But, wait!  There's more.  The Saudi government has:

  • expelled Canada's ambassador
  • frozen new trade and investment with Canada
  • suspended a student exchange programme 
  • halted Saudi Arabian Airlines flights to Canada
  • ended Saudi medical treatment programmes in Canada

Perhaps, just perhaps, someone in Canada had a brain fade.             

Deepak, W&D's Uber driver, was wanting to...

... talk about Tesla.  "I read that the CEO of Tesla wants to 'take Tesla private'.  What's going on?" he asked.

"Well, it's all about his ego, it seems." replied W&D has he buckled up his seat belt.  "The company is losing hundreds of millions of dollars and its stock is the most shorted in the share-market.  He's just not selling enough electric cars."

"Remind me what 'shorting' is.  I hear it a lot from the other Uber drivers at the tea-house."

"It's simply the opposite to buying shares because you believe the stock will go up in price.  'Shorting' is selling shares because you believe that a stock will go down in price.  But to sell the shares on the market, you first need to borrow them.  And when the share price goes down, you buy the shares back from the market and then repay them to the lender."

"It sounds risky," Deepak commented, looking worried.  "What if you 'short' a stock and it goes up in price?"

"Ah, that's the problem," replied W&D.  "Sooner or later you have to pay back the borrowed shares.  After all, you are paying interest on the borrowing.  And to pay back the shares, you need to buy them on the market.  If the price has gone up, you lose."

"What's that got to do with Tesla?"  Deepak was not convinced.

"Well, Elon Musk, the Tesla CEO is one weird dude, said W&D warming to the story. 

Cartoon Elon musk

"And it takes a special kind of weirdness to disrupt one of the largest and laziest industries on earth: motor vehicle manufacturing.  But he has done it, with his amazing 100% electric cars.  But Tesla has negative 'free-cash flow'.  This means that it burns cash.  It has never made a profit.  But it has a market capitalisation of about US$60 billion, which is bigger than that of General Motors, America's largest auto company."

"So why does he want to 'take it private?' "

"Well, he's got a glass jaw.  That's a figure of speech, Deepak.  It means he cannot handle criticism.  He has got grumpy with all the naysayers (including W&D) and those who have 'shorted' Tesla stock.  He says he has secured funding for the deal.  I don't believe him.  Neither does the SEC, the US regulator.  Funding a $50 billion plus buyout for a negative free-cash-flow business is going to be difficult.  Speaking of difficulty, how is your mother-in-law?"

"Just the same," said Deepak sullenly.  But then he brightened, "But we've had the first scan." 

"Wow!  What's the news?"

"All is well.  It's just over 12 weeks.  And my son is fine," glowed Deepak.

"Son?  Deepak, it's a 12-week scan.  It's too early to say," said W&D as he stepped out of Deepak's car.  "You won't be able to tell the sex of your child for another eight weeks."

"I'm sure I saw something on the scan that looked, err, masculine."

"A fatal conclusion," said W&D as he strode off. "That was probably a leg. I suggest you focus on your own arrangements, rather than your baby's."  

And, to soothe your troubled mind...  


Last words...

"He has paid no meaningful child support since separation."

 - Angelina Jolie, American actressperson, speaking of her ex-husband, Bradly Pitt, also an actressperson.

Ms Jolie's net worth is estimated at US$160 million.  'Ardship.   

First Samuel client events calendar




2018 Events  


Annual Forum and Cocktail Party

"Who is giving whom ... the coal shoulder?"

Hear Tony Sennitt, CEO of Diamond Energy, discuss the opportunity for renewables

Guests are invited to come with an open mind, either way!

Some places still available.  Contact Jess.



Chief Investment Officer Dinners

FY-18 was a Year of Harvest and Sowing Seeds for the Next Five Years

Invitations have been sent


Some lightly salted absurdities from all over ...

At the extreme left-hand end of the Bell Curve

Headline on Monday's New York Times:

'Face Tattoos Go Mainstream'.  And below were photos of people with their faces well covered in ink.

W&D's forecast of New York Times' headline in 6 month:

'Face-tattooed, unemployable idiots complain that they are being judged solely on appearance'.  And not for their stupendously poor decision making skills.

(New York Times and W&D)

Must have been a slow news day at the NYT.

Guess what happened next?

Berlin's Schnefeld Airport was partially closed on Tuesday  This was because routine X-Rays of luggage found what?

a.  Guns;

b.  Drugs;

c.  A bomb; or

d.  Sex toys.       

Close.  But no cigar.  d. is correct.  A scan of a passenger's luggage showed 'suspicious contents.'  An alert was issued shortly before 11 a.m., resulting in the closure of the airport's D terminal while police investigated the suspicious items.

The owner of the bag was called over the airport speaker system and eventually talked to police about his luggage.  However, he was reluctant to properly explain the contents of the bag, possibly because of embarrassment, according to a federal police spokesperson, saying instead that his luggage contained "technical stuff."

After an hour-long investigation involving a bomb squad, authorities eventually determined that the items were sex toys.


The Sergeant Schultz defence didn't work.  

"I thought it was a puddle"...

... said Vincent McCue, as he drove through the water across the road.

Err, no.  It was a just-happened sink hole.  And down his truck went, nose first.  And he was still behind the wheel.


Luckily, he had his window down and climbed out the gap.  


Have a Wry & Dry weekend. 




[1]  Readers will know that 'death by a thousand cuts' was a form of torture and execution used in China from roughly 900 AD until it was banned in 1905. In this form of execution, a knife was used to methodically remove portions of the body over an extended period of time, eventually resulting in death.

[2]  Mandy Rice-Davies was an English prostitute giving evidence in the infamous Profumo scandal in the early 1960s.  It was put to her by counsel for Lord Astor, that he, Lord Astor, denied ever having an affair with her.  Her response was "Well, he would say that, wouldn't he?"

[3]  Readers will recall the apposite words in the song:

Last night I hold Aladdin's lamp
So I wished that I could stay
Before the thing could answer me
Well, someone came and took the lamp away.

Someone has taken the Sultan's lamp away.