Wry & Dry

Cartier watch this space. Snout in the trough. Archegos what?

Cartier watch this space

When Louis-François Cartier founded his eponymous jewellery company in 1847 [1], he could not have imagined that four of his watches, valued at less $5,000 each, would cause such a fuss.    

But such is the unseemly blend of business, politics and revenge.  Readers might consider:

a)  Christine Holgate, the CEO of one of Australia's largest companies (AusPost) is ambushed about the two-year-old four-watches saga at an unrelated and normal Senate hearing;

b)  the Leader of the Opposition duly calls for her to get the DCM;

c)  PM Jimmy Morrison, rather than tell Mr Albanese to get a sense of proportion, and in a fit of confected outrage, orders her head on a plate, as the four watches gift failed the 'pub test';

cartoon watches

d)  AusPost duly gives Ms Holgate the DCM; and 

e)  the Senate undertakes an inquiry, which allows Ms Holgate to star in a reality-television-show blend of "hell hath no fury..." [2] and "revenge is a dish..." [3] that would have made Opera Windfree blush.

M. Cartier would be pleased with the publicity for his watches.  PM Jimmy Morrison is not.  And Wry & Dry has three questions that seem to have escaped the lips or quills of journalists:

1.  Are any of the four Cartier watches now a collectors' item, worth considerably more than $5,000?  Will each be the new Bitcoin?

2.  Will AusPost give Ms Holgate a Cartier watch as her farewell gift?

3.  Will Ms Holgate give PM Jimmy Morrison a Cartier watch as his resignation gift?

[1]  Cartier is regarded as one of the most prestigious jewellery manufacturers in the world. It is ranked by Forbes as the world's 59th most valuable brand.  King Edward VII referred to Cartier as "the jeweller of kings and the king of jewellers." For his coronation in 1902, Edward VII ordered 27 tiaras.
[2] "Hell hath no fury like a woman scorned (rejected)" - William Congreve, The Mourning Bride (1697).
[3]  "Revenge is a dish best served cold" - a Pashtun (a people residing in north-eastern Afghanistan and Pakistan) proverb. 

Snout in the trough

Dr. Andrew Laming [4], a government MP, agreed to resign at the next election after being found to have, inter alia, harassed women.  He then changed his mind and re-nominated for his safe Brisbane seat.  The Queensland Liberal-National Party Executive rejected his re-nomination.

In re-nominating, did Dr. Laming:

a.  clearly misunderstand the mood of the meeting;

b.  clearly misunderstand the court of public opinion;

c.  clearly misunderstand the Morrison pub test principle; or 

d.  clearly understand the benefits of an involuntary retirement?

Close.  But no cigar.  The correct answer is d.  Under parliamentary rules, a politician who "retires involuntarily" from parliament (e.g. because of dis-endorsement or ill-health) is eligible for a $105,600 'resettlement' payment. 

Cartoon resettlement

Resettlement?  Oink, oink.

[4]  Laming is no fool: He is a medical doctor. He also holds a Diploma in obstetrics and gynaecology, a Master of Public Administration from the John F. Kennedy School of Government of Harvard University, a Master of Public Policy from Charles Darwin University and a Master of Philosophy in Public Health from the University of Sydney.

Archegos what?

Readers will know that archegos is a Greek word that means 'one who leads the way' or 'pioneer'.

Well, Archegos, the family office (family investment company) of squillionaire Bill Hwang certainly led the way; with the world's largest ever margin call [5]: a massive US$20 billion.  Bill lost $20 billion in two days - surely a podium finish in the pantheon of fiscal downfalls.

Cartoon archegos

Bill borrowed funds to invest in shares.  US rules prevent individuals and financial institutions having leverage greater than 1:1 (e.g. $1m borrowed and $1m of capital).  But Bill had leverage of up to 5:1, by leveraging the leverage with different investment banks.

All was well.  Until it wasn't.  Bill had a concentrated portfolio, with the major holding in just nine stocks.  One of these was ViacomCBS, a media conglomerate that has been struggling to keep up with Netflix, HBO, Disney+ and Apple TV.  In late March, the company undertook a capital raising.  In two days, the stock tanked 32%.   

All it took was for one bank (Morgan Stanley) to start selling to raise collateral.  And then the margin call frenzy started, not only in ViacomCBS but across all of Bill's holdings.

Bill wasn't the only loser: banks that loaned dosh to Bill were blown out of the water.  Credit Suisse headed the leader board with losses of $4.7 billion and Nomura $2 billion.

The best thing anyone can say about the Archegos collapse is that it didn’t spark a market meltdown. The worst thing is that it was an entirely preventable disaster made possible by Bill's bankers.  But, dangle brokerage of $100m per annum in front of a banker and you own him/her/it. 

[5] A margin call is when a lender, usually an investor in shares, asks the borrower for more security, as the value of the existing security has fallen.  If the additional security is not forthcoming, the lender sells the existing security.

Archegos what now?

Readers may wish to join the dots:

  • Archegos: massive leverage
  • Greensill: scandal
  • Bitcoin: nine-fold price increase in 12 months
  • Non-Fungible tokens (NFTs): crypto-currency art
  • Tesla: 600% price increase in 12 months
  • SaaS (Software as a Service): valued at 40 times earnings
  • GameStop: price ramping
  • [insert your canary here]

Just sayin'.       

Philip, Prince of Denmark

Readers would want a simpler name.  Really: Prince Philip of Schleswig-Holstein-Sonderburg-Glücksburg.  So much better to flee Corfu in an orange box, and marry a Brit with a castle or two, and become The Prince Philip, Duke of Edinburgh [6].  Which is what he did.  Although the Brits were not sure they could trust a Greek, and didn't give him the title of 'prince' until 1957, a decade after he married Elizabeth. Until then he was a prince of both Greece and Denmark, but not of the UK. His surname changed to Mountbatten in 1947.

Wry & Dry feels that it was this surname ambiguity that caused a streak of refreshing plain speaking, littered with irreverence, wry humour and scant regard for political correctness. Some people were offended. Well, too bad, petals. Take the whole person.

Had he stuck to Schleswig-Holstein-Sonderburg-Glücksburg he surely would have been as boring as that quartet of Germanic geographical expressions.

Much has been written this week about him. Wry & Dry can add nothing, but to quote another Prince of Denmark: “He was a man, take him for all in all, I shall not look upon his like again.” [7]  

[6] The capitalised definite article is otherwise reserved for use only by children of a sovereign. Hence, the tabloid references to, for example, HRH The Princess Diana were wrong for two reasons.
[7] Hamlet, speaking of his late father.  Hamlet, Act 1, Scene 2.  A play about a Prince of Denmark...

Bernie, Prince of Thieves

Just as Readers are digesting the news of the world's largest margin call, comes news of the death of the creator of the world's largest Ponzi scheme.

Bernie Madoff left this mortal coil whilst residing in small room owned by the New York State Department of Corrections.  As he had been sentenced to 150 years in jail, it was sort of inevitable that his demise would occur in such a place.

Bernie lost some $50 billion of clients' funds.  Hall of Fame Legend stuff.  His clients included the usual roll-call of celebrities, this time such as John Malkovich, Kevin Bacon, Zsa Zsa Gabor, Larry King and Steven Spielberg. 

Sadly, and unlike the aforementioned Prince of Denmark (and of Greece and Great Britain), we shall probably look upon his like again.

Unclear on the concept

UK university tutors are being told not to dock marks for spelling mistakes because requiring good English could be seen as “homogenous north European, white, male, elite” (the UK Times).

Cartoon spelling

Ah, the soft bigotry of low expectations.

Wry & Dry is waiting for accurate maths, also clearly a “homogenous north European, white, male, elite” concept [8], to be foregone for the same reason.

[8]  Actually, it's not. It started as a heterogenous Middle Eastern, white, male, elite concept.  The Babylonians had the earliest understanding of mathematics in the first millennium BC.  Babylonian mathematics were written using a sexagesimal (base-60) numeral system. From this derives the modern-day usage of 60 seconds in a minute, 60 minutes in an hour, and 360 (60 × 6) degrees in a circle.  

You cannot make this up

Natasha Darcy stood to inherit $3.5m on the death of her partner.  Trouble was the partner was aged only 42 and in fine fettle.

So, she decided that problem was easily overcome, and "she done him in." [9]

Trouble was, she searched the internet for "how to commit murder" before she gave him the permanent DCM.  Months were spent researching methods of murder, typing questions including "can police see websites you visit" into search engines.

The police provided the answer to the last question.  The trial continues in Sydney's Supreme Court.

[9]  Audrey Hepburn as Eliza Doolittle in My Fair Lady: ELIZA: (In a refined manner throughout) My aunt died of influenza, so they said. But it is my belief that they done the old woman in. LADY BOXINGTON: "Done her in?"

Covid statistics

Almost a quarter of registered Covid deaths in the UK are people who have died with the virus, rather than from it. [10]

Just sayin'.

[10] UK Office of National Statistics.

Goose-step in time

It may have been overlooked by Readers.  But yesterday was the first "National Security Education Day" in Hong Kong. Policemen goose-stepped on parade whilst children were required to raise the Chinese flag and sing national anthems.  Schools across the city held mandatory events promoting the virtues of Chinese rule.

Cartoon twerking

Wry & Dry has read the history of a group in the 1930s whose military goose-stepped as the youth sang Tomorrow Belongs to Me


Chart of the week

Bitcoin: a store of value?  Really?

Chart bitcoin

Chart courtesy of the Financial Times 

Just askin'

Cartoon kryptonite

Snippets from all over 

1.  US inflation leaps

US consumer prices rise by 0.6% in March, the highest in nine years.

Wry & Dry comments: There's a boost from petrol rising 9%, and the so-called base effect (i.e. prices collapsed last year).  But the increase is above expectations.     

2.  Australian business conditions boom

The NAB Business Survey showed all key measures, including employment prospects, forward orders, profitability and trading shot to new highs in March even as major government financial supports started coming to an end.

Wry & Dry comments:  NAB's Business Conditions Index rose 8 points to 25 points, the highest level reached in the survey, which began in 1996.

3.  UK consumer confidence booms

UK consumer confidence has risen to its highest level since August 2018, according to analysis by YouGov, the ­pollster, and the Centre for Economics and Business Research.

Wry & Dry comments:  Perhaps a blend of the end of Brexit worries and the start of the covid vaccine.   

4.  Crypto-currency exchange rousing IPO

Coinbase, a sort-of stock exchange for crypto-currencies, listed on Nasdaq on Wednesday, valuing the company at over US$100 billion.  Founded in 2012, Coinbase became popular among cryptocurrency fans by providing them with an easier way to exchange shares of Bitcoin and other digital currencies. Unlike many newly public companies, Coinbase is profitable — the company estimates it had net income of between $730 million and $800 million in the first quarter.

Wry & Dry comments: The stock rose 32% on its first day of trading. 

5.  Australia - job vacancies boom, unemployment sharply falls

The number of job vacancies in February reached a record high.  And the unemployment rate in March fell to 5.6%.

Wry & Dry comments:  Hats off to Josh.  

Chart jobs

And, to soothe your troubled mind...

Last words...

“I would not.” 

 - Liz Cheney, US Republican Senator and daughter of former US Vice President Dick Chaney, when asked on television "if Donald Trump (a Republican) ran again for President in 2024, would you vote for him?" 

Perfect 10 for an answer.


PS A reminder that the opinions in Wry & Dry do not necessarily represent those of First Samuel, its employees or directors.