WA: Cry me a GST river. CBA under the microscope. Chuck: DCM?
CBA: the dust won't settle
APRA sounds like what Kath & Kim would be watching if they ever went to see Carmen. But it's really the Australian Prudential Regulatory Authority. At its simplest, APRA's aim is to make sure that the banks don't go broke. And meet all of their prudential and compliance requirements.
Not that the CBA is going to go broke. But its seems as though someone at APRA has woken up and thinks it should be doing something because CBA has turned out not to be doing the right thing. And so APRA has launched an investigation into CBA.
'Begun' is perhaps a better word than 'launched', but APRA clearly believes that the investigation needs a sense of urgency and importance - hence their investigation has been 'launched'.
Wry & Dry's view? It's a bit late, pal!
And, of course, CBA 'welcomes the investigation.'
Nuh. They don't. They're just kidding.
Western Australia: cry me a GST river
The bleating from WA about the carve up of GST revenue resurfaced over last weekend following William Shorten's offer to the Sandgropers of a cool $1.5b as compensation for that state's alleged 'unfair GST carve-up'.
Good grief. How stupid is that? Well, actually it's electorally smart. Sort-of like UK Labour Leader pledging free university fees if Labour won the last UK election. Readers know that there is no such thing as a free lunch (in other words, they-the-taxpayer pay). But young voters in the UK fell for it. And almost elected Jezza.
And so it will be in WA. There are up to five seats that Labor might win at the next federal election. And so why not toss fiscal rectitude out the door and go for an election victory? But do the Sandgropers have a genuine complaint?
Actually, no. Work with W&D on this.
Firstly, yes, WA gets a seeming bad deal on the GST carve up. Whether it's 38 cents in every dollar or 48 cents in every dollar (who really knows, but that doesn't stop 38 cents being tossed about) doesn't really matter.
Because, secondly, the Grants Commission (the federal government body tasked with sharing cash between the states) also considers other revenue each state receives. In the case of WA, this has principally been from mining royalties (which are a state-based source of revenue).
So it is grossly misleading to look at the GST carve-up in isolation.
Readers will recall W&D has previously written on this; WA's GST Gambit. Open the link for the long story.
The short story is that as a result of the mining boom, WA has been richer than the rest of Australia by an unprecedented margin: 44% higher than the average of all of the other states. And because of this, it receives a lower share of GST revenue. And what did WA do with all of the mining boom revenue? Well, it wouldn't be a state government if it didn't spend the lot. And WA did.
But wait, there's more. Even with a low GST carve-up, WA will still have at its disposal total state government revenues, including grants from the Commonwealth, of an average of $10,581 per head until 2020. That's more per head than the average of all other states.
But wait, there's even more. WA was the very first state to receive a special grant from the Commonwealth (in 1910). And it was a mendicant for most of the 20th century, being financially supported by taxpayers from the other states (but never Tasmania, and always and mostly NSW and Victoria). And it has only been since the mining boom that WA has been a giver rather than a taker.
As the erudite Saul Eslake put it, "WA has behaved like a pensioner who has won the lottery and starts complaining about no longer being eligible for the pension and having to pay income tax instead. Now it has in effect spent the lottery winnings, it wants its pension back, it wants its income tax payments refunded and to go back on the pension."
But, wait! There's more...
Readers will remember Prince Leonard of the Principality of Hutt River. The Prince, born Leonard Casley, decided in 1970 to secede his farm in WA from Australia because of wheat production quotas. No-one and no government recognise the Principality.
Well, the nutters in the west are at it again. This time over the GST carve-up (see above).
The WA Liberal Party's State President, Norman Moore, is pushing for WA to become 'an independent state within the Commonwealth'. W&D doesn't know exactly what that means. Nor does anyone else. For example, does it mean WA would be independent within 'The Commonwealth of Australia' or the 'British Commonwealth'?
But who gives a continental? The only way for WA to secede would be for it to be put to a national referendum that would need to be approved by 'a majority of voters in a majority of states'.
Supporters of the move also cite as another reason to secede: the Australian Rugby Union's recent decision to axe the Perth based Western Force team from the national competition.
Mind you, put to a referendum whether SA should secede...
Twenty year's on
W&D has recently noticed a bit of media about the anniversary of the death of a 'Princess'.
Much of the media misses the point. Notwithstanding that Diana, Princess of Wales'  was a somewhat naive and in the end manipulative person who caused more headaches than anyone wanted (some for good reason, being married to Chuck would not have been easy), she did add something to the Royal Family that it then needed: youth. Chuck was (and is) a fusty and slightly weird chap. Hence a glamorous young wife, who could be dressed expensively, would give the Royal Family a lift in the eyes of the next generation. And it did, for a while.
W&D's point is not to look on the past but to the future. The younger folk of the United Kingdom, who dearly love HM The Queen, are not going to as thrilled when Chuck takes the throne on her demise. Sure, they will be loyal and dutiful. But Chuck's popularity is effectively confined to the clubs of Mayfair and St James.
Far better, to W&D's equally fusty mind, for Chuck to relinquish all claim to the throne and to allow the Crown to passed to Will, and his Consort. William and Catherine are enormously popular. And a lot more relevant to today and tomorrow than Chuck. There is enough divisiveness in the UK without there being more. Better to avoid the pain.
If HM The Queen lives as long as her mother, Chuck will be 76 when he ascends the throne. Oh, dear.
William and Catherine would then each be 45. Perfect.
Show us the money. And we'll perform. Honest.
Readers will know that W&D is a student of relationships. Err, not between men and women, but between events and circumstances.
An example about what W&D is writing is that the strength of gravity between two objects is inversely related to the square of the distance between them. And so W&D wonders if there is a similar inverse and exponential relationship between the annual salary of an Australian Test cricketer and Test cricket success.
Consider these two facts:
- the Australian cricket team recently won an amazing pay increase, making them not only the wealthiest cricketers on the planet but also the wealthiest sporting team in Australia.
- on Wednesday they were defeated by the hitherto worst cricket team in the world: Bangladesh.
W&D presents the following charts without further comment:
Perhaps there should have been a performance criterion in the compensation contracts.
Captain Cook: false news
W&D has also noticed a bit of fuss recently about Captain Cook and discovering Australia.
Let W&D give Readers the whispers.
Firstly, James Cook was not a Captain when he 'discovered' Australia (his first voyage in command of a Royal Navy ship). He was a lieutenant. Cook wasn't appointed Captain until after his second voyage.
Secondly, James Cook was not the first European to discover Australia. That honour goes to a Dutchman, William Janszoon, in 1606. He didn't like what he saw (north western Australia) and sailed on. Others followed .
Cook's deserves the plaudits for realising the potential of (eastern) Australia and claiming it for the 'Crown'. The Dutch and Spanish had sailed on. And the French were too late.
But for Cook, we'd all be singing La Marseillaise.
Most fatuous headline of the week goes to...
...Australian Financial Review. Again.
'APRA probe risks CBA rating' (Tuesday).
When W&D thinks of a probe, he ponders an investigation of the nether region by what is now commonly termed a 'proctologist.'
Hence his shudder at reading the headline.
And CBA's credit rating is not going to be at risk from this APRA probe. In the scheme of things, this is a small change from a credit risk point of view. That is not to say that there are not some serious internal problems.
W&D ventures that this probe, like a nether region probe, will be a matter of short term discomfort, a little embarrassment and the possibility of some minor corrective action.
Of course, what CBA wouldn't want is ASIC, the corporate Labrador, trying to show that it has teeth.
Guess the outcome:
Serious newspapers around the world had a range of events to place on their front page on Wednesday. Guess which event the Spencer Street Soviet (aka The Melbourne Age, a centre-left tabloid much favoured by smashed-avocado-on-multi-grain types, that W&D reads just for the sports' pages) chose:
a. A nutter in north Asia firing a ballistic missile over a neighbouring country;
b. The global reaction to a nutter in north Asia firing a ballistic missile over a neighbouring country;
c. An analysis of the awful military possibilities following nutter in north Asia firing a ballistic missile over a neighbouring country; or
d. Elite Catholic schools defy church leadership on same-sex marriage.
Close. But no cigar. The correct answer is d.
W&D guesses that when a North Korean missile actually lands on a neighbour's lawn, the Melbourne Age's front page headline will be 'Outrage at the incorrect use of gender-neutral pronouns in elite private schools'.
There have been some amazing media conclusions arising from Hurricane Harvey's devastation of parts of Houston, Texas. Including some stupid comments blaming Houston's oil and gas industry for the hurricane itself.
W&D's view? Weather happens. But, Readers would know that if you have a series of inputs then an outcome is more-or-less certain.
Work with W&D on this.
Build a city:
a) on a flood plain; b) in a region vulnerable to severe rainstorms; c) cover almost the whole city and suburbs with hard surfaces such as concrete; d) leave virtually zero rain-absorbing parks and open spaces; and e) have virtually no planning controls that allows the building of houses in high-risk flood zones.
When it really, really rains then:
Your city is going to get seriously flooded.
Good news for Croesus Turnbull and the besieged government: the government now has the smallest budget deficit since 2013. The government's underlying cash balance is $8 billion better than budgetted.
US GDP grew at an annualised rate of 3% in the June quarter, meeting Tsar Trump's objective. W&D is sure that Tsar Trump was a major contributor. But Canada's GDP grew at 4.5%.
Australian sales of new homes fell to their lowest level in four years in July. And apartment sales dropped almost 16%.
IATA announced that today just six out of every 1,000 airline passengers can expect to be separated from their luggage, an all time low. It was not long ago that W&D and Mrs W&D were two of the six when he and Mrs W&D landed in Moscow. Definition of impossible: trying to explain to a Russian airport bureaucrat, steeped in the traditions of Soviet customer helpfulness, that it's not your fault that his airline lost your bags. Two days later...
A single digit NSW car number plate (number 4) sold for $2.45m last week. Good grief.
Readers who have teenage children, brace yourselves. Apparently, a telephone manufacturing company is going to release its latest telephone (#8) on 12th September.
And, to soothe your troubled mind...
"...it was another off-the-record insider hatchet job."
- Tony Abbott, former Prime Minister, blaming a Liberal-left plot for a media article that said he racked up a travel bill which cost we-the-taxpayer more than $120,000 last year.
Err, no. The data came from the newspaper's analysis of publicly available records of how MPs use taxpayers money. The lad seems a bit touchy since it was revealed that he got so drunk one night in parliament house that he fell asleep on his office couch, and could not be roused for an important 'division' (i.e. vote count in the House).
First Samuel client events calendar
Chief Investment Officer Dinners
|Wed-11-Oct||Donovans, St Kilda||Lunch or dinner - both FULL|
|Wed-22-Nov||Donovans, St Kilda||Lunch or dinner - almost full|
|Wed-29-Nov||Bottega, Melbourne CBD||Filling|
|Tue-24-Oct||Stillwater at Crittenden Estate||Spaces|
Some lightly salted absurdities from all over...
At the extreme left-hand end of the Bell Curve
Whilst he was backing it up, Bob Staub's pick-up truck (i.e. ute) lurched from reverse into park. And so Bob got out, and, as he had done previously, crawled under his ute with a device to force the gear into neutral. He succeeded.
Trouble was the ute was towing a boat trailer, with a boat on board. And it was on the boat ramp. And boat ramps have a slope. And so the ute rolled downhill.
Much like a chock, Bob's head got jammed between the boat ramp and a wheel. Fortunately, his 14-year-old son and two school friends somehow managed to push the ute and trailer up the slope enough to drag Bob out. He lived.
(News Channel 3, Mississippi)
Guess the outcome
Ryanair flight from London Stansted (London's #3 airport) to Ibiza (a Spanish 'party' island). Seven lads looking for a good time. Early morning fight. The lads were a bit far gone when they boarded the flight. And kept on buying and consuming booze on the plane. Guess what next happens:
a. They all fell asleep, and the plane landed in Ibiza without incident;
b. The plane was hijacked and flown to Havana;
c. The movies on the plan were so entertaining that the lads became enthralled and disturbed no-one; or
d. One of the lads started abusing a female flight attendant when she refused to serve him any more drinks.
Close. But no cigar. The correct answer is d. The other lads also started arguing with the flight attendant. The pilot diverts the plane to Bordeaux, where French police get on board and arrest the seven.
Bonus. The lads didn't like being arrested. And started fighting with the French police on the tarmac. Oh, dear. These are not polite London bobbies. Lads, what's French for 'porridge'?
Unhappiness is: towing away a man's car
A man whose car was being possessed and towed away got grumpy.
And as the tow-truck drove away, he did what any thinking American male would do, he leapt onto the back of the tow-truck and yelled at the driver to stop. When the driver wouldn't stop, he did what any thinking American male would do next. He grabbed a crow bar he found on the tray floor and started smashing the truck's rear windows.
Sadly for the angry man, it was all captured on camera, by a tailing motorist. Who also called the police.
(New York Daily News)
Have a wry and dry weekend
 Note: at the risk of being a pedant, she was never Princess Diana. That title was a creation of the media. Only the daughter of a sovereign can be a princess. Her correct title, as wife of Charles, the Prince of Wales, was Diana, Princess of Wales.
 Others that followed were next a Spaniard, Luis Vaz de Torres, also in 1606. Then a series of Dutch sailors, who had discovered that it was quicker to sail to Batavia (Dutch East Indies) via the 'Roaring Forties' (i.e. the strong westerly winds at about 40 degrees south) and thence heading north and using the South Indian Ocean Current. Trouble was, as Readers will know, then there was no reliable way to determine longitude, making Dutch landfalls on the west coast of Australia inevitable. Hence Dirk Hartog and Frederik de Houtman landing at various points. Then came Abel Tasman, from the opposite direction, in 1642. And then an Englishman, William Dampier, in 1688.
Cook was very much down the line, in arriving in 1770. And he just beat the French (1772). The French were again too late in 1788, arriving a couple of months after the First Fleet.