Wry & Dry

Landing on Mars. NAB: not much more than money. Brexit descends into slogans.


Readers will be aware that on Tuesday NASA landed a vehicle of some sort on Mars.  On the same day, the Liberal Party crash landed onto Mars.  Mars is, on average, 225,000,000 kilometres from Earth.  Far from Liberal reality, far from Liberal constituents and close to Liberal obliteration.  The treachery of (now former) Liberal MP Julia Banks caused the final flame-out.

It's a weird thing; today the Liberal party is not far enough to the left for the folk of Victoria and not far enough to the right for the folk of Queensland.  Readers will recall the unity and prosperity when Howard and Costello bestrode the party, and government, like a hybrid of a Colossus [1] and Goldilocks [2].  The blend of Howard's sure-footed management and Costello's skill, wit and vision kept underlying schisms underground. 

But that was yesteryear.  Now, as W&D's quill races across the parchment, Mrs Shorten would be finishing measuring up the curtains in The Lodge (the official Canberra residence of the PM).  Bill is planning serried ranks of solar panels (for Canberra's sunny days); wind turbines (for windy days) and Tesla batteries (for days of no sun and no wind).  And is seeking life-membership of the Royal Canberra Golf Club, because that is for how long he will be living in Canberra.  The RCGC is a stone's throw from Government House and two stone throws from The Lodge.  Perfect.

Speaking of people on different planets...

Tsar Trump has been predictably silent as the US stock market falls into 'correction' phase (i.e. a fall of 10% or more from the previous peak).  Readers will recall his boast of how his presidency had seen the biggest leap in the stock market in a president's first term.  Err, no it hadn't.  TT's was 31%.  Roosevelt had a 96% return.  Nonetheless, it was a big first year for TT.  But wiser heads would not have boasted.

Wiser heads would have counselled that pride cometh before a fall. 

Wall Street makes its own arrangements, so to speak.

Cartoon walking down Wall Street

As Readers can see from the following chart (S&P500, source IRESS), soon after his first anniversary (January 2018, and his boast) the market fell 9.5%.  And has recovered by only 3.8%.

One year anniversary

NAB: not much more than money

The Royal Commission into banking, etc. etc has provided a rich, Netflix-like blend of entertainment: drama, horror, comedy, humiliation, groveling, pathos, etc.  And a number of witnesses have found that appearing before a former High Court justice and being slow-roasted by one of the counsel assisting is not necessarily good for one's career.  One poor fellow collapsed and was taken away on a stretcher.  His business later folded.  And a 'celebrity' adviser from Sydney had his gigs with the AFR and Sky News terminated.   But this week W&D has seen the worst of all performances.  The key concept here was accountability.  Or running away from it.

Cartoon NAB swallowed card etc

Firstly, National Australia Bank's CEO, Andrew Thorburn, happily threw Andrew Haggar, NAB's former Chief Customer Officer (he got the DCM after his appearance at the RC) under the bus about the notorious 'fee for no-service' scandal.  Counsel Hodge was not having a bar of that.

Hodge: "What it seems like is that … you are, to the maximum extent possible, passing responsibility for this to Mr Hagger ... Is that what you are doing?"

And later:

Hodge: "And that you're not recognising that even if Mr Hagger had been responsible … that at least three senior executives who are still at the bank were aware of it and attended the board risk committee meeting which considered it, and they are you and xxx and yyy?" 

Oh, dear.

Secondly, Dr Ken Henry, who has been on the board of NAB for seven years and its Chairman since 2015, said that "Boards can't be held accountable to ensure anything."  Err, so who is accountable to the shareholders and the regulators?

Cartoon NAB will the witness answer the question

Ignoring his rude, dismissive, arrogant and bullying manner (as one commentator put it), all Readers have to do is ask one question.  How was it that, since Henry joined the NAB Board, for every single month, bar one, the NAB's internal compliance risk rating was no better than red (the lowest)?  What was he doing?

Weirdly, he is Chairman of the Board's Nomination and Governance Committee.  Effective governance?

Today is the final day of hearings for the RC.  Senior banking and finance directors and executives will breath a sigh of relief.

But the end of the very public slow-roasting is merely the end of the beginning (to quote WSC).  And the Final Report (due on 1st February 2019) will be just a signpost on the rocky road to years of costs and disruption in the sector.     

How's this for a long-term plan ...

Q.  Would China consider selling its holdings of U.S. Treasuries should trade tensions worsen? 

A.  No.  Cui Tiankai, China's ambassador to the U.S., said on Tuesday, "I don’t think anybody in Beijing is thinking seriously about this. It could backfire. We don't want to cause any financial instability in global markets." 

This is very Sino-smart.  China is the largest foreign holder of U.S. Treasury debt, with $1.15 trillion as of 30th September.  And W&D thinks it will increase, not decrease, its holdings.  And wait until the US defaults on its debts.  And therefore seek some other asset to settle the debt.

W&D suggests Alaska.

Readers will know that the US purchased Alaska from Russia in 1867 for $7.2m [3].  That sum is worth about $115 billion today.  But Alaska would be worth more than that, especially given its mineral reserves and geo-political advantages.  China would jump at the chance to swap its US government debt for Alaska.

But providing that Sarah Palin wasn't part of the deal.

We-the-people ...

… of the Peoples' Democratic Socialist State of Victoria re-elected the incumbent government.  W&D is a resident in one of those Liberal 'heartland' seats that swung 8% to Labor.  And as a psephologist and student of history, can tell Readers the critical election factors and an estimate of the importance of each in such a massive swing.

30%:  Labor's excellent track record, and promises, of infrastructure delivery -  successfully obscuring negatives such as crime, exploding public service numbers and spending $1 billion not to build a road. 

15%:  Labor's outstanding campaign - compared to Liberal's poor campaign.

10%:  Liberal's out-of-depth leadership - perhaps mayor of a regional town might have been more apposite

45%:  Abbottism 

Cartoon Abbott Abbott Abbott

This is more than Tony Abbott.  Work with W&D on this.  Abbottism is the mirror of elite-far-left-progressivism and is the intersection of four paradigms: 

1.  Brook no compromise, even in the face of evidence or majority view to the contrary, regardless of consequences;

2.  The outcomes of religious (or non-religious in the case of the elite-far-left-progressivism) views are not just personal but should be imposed on others;

3.  Pretend to always be acting in the best interest of we-the-people; and 

4.  Revenge is a dish best served, hot or cold.

The trouble is that two Abbottism acolytes in Victoria were automatically pre-selected for the next federal election: Kevin Andrews (in parliament since 1991) and Michael Sukkar (the 'numbers man' for Peter Dutton - say no more).  Neither has displayed talent nor contribution in their parliamentary careers.  But they occupy safe Liberal seats.  And enjoy the benefits of the gig.  Sigh. 

And back to the state election: the risk of Labor's landslide is that Labor in Victoria will see the massive swing as a massive endorsement of its policies, both infrastructure and social. 

W&D fears that there will be over-reach of their mandate. And so wishes to assure Readers that he will continue to tick the 'male' box.

G-20 spot

The G-20 Summit (the world's 19 largest economies plus the EU) is being held in Buenos Aries, Argentina later today (Friday) and Saturday.

Optimistic eyes will be looking for rapprochement between TT and Emperor Xi Jinping (it's about the trade war).

Readers will recall the last time TT met with a despot from the East: Kim Jong-un.   TT gave a speech lauding the successful negotiation of the denuclearisation of the Korean Peninsula.  There was only a little more boasting than that of an Oscar winner.  But he still had space to thank those that had made it possible.  Himself.   

W&D will watch with keen interest the outcome of the Summit.  Err, no he won't.  Mrs W&D is away so he will ... watch Netflix.

W&D Readers heard it here first ...

... that the 78 year-old Nancy Pelosi, a Democrat, will in January be elected as Speaker of the US House of Representatives.  The Speaker is second in US presidential line of succession, after the vice-president. 

Ms Pelosi seems hardly the type to stand up for the impoverished.  Her net worth has been estimated, with some precision, at $101,273,023 [5] - the eight wealthiest member of Congress.

Snippets from all over 

1.  Number one?  For a short time only

Microsoft briefly surpassed Apple on Monday as the world's largest public company, reaching a market cap value of $812.9 billion. Apple's stock has seen phenomenal growth over the past five years, culminating in a $1.0 trillion valuation earlier this year, but investors are concerned about slowing iPhone sales. 

W&D comments:  Apple needs a new product. 

2.  Correctness overwhelms ability

Chairman Dan, fresh from the accolades of electoral victory in the recent Victorian election, has appointed a cabinet that is 50% female. 

Cartoon gender roles Andrews

W&D comments: Oh, dear.  As a nod to political correctness, a very capable male minister has been given the DCM.  Philip Dalidakis is one of the smarter and younger members of the Victorian parliament (okay, that's not a difficult task).  He is also a very sensible Labor politician.  Clearly commonsense and ability count for little in Chairman Dan's world view.  

3.  Meanwhile, back at the Forum

On Sunday, the Italian Deputy Prime Minister suggested that the government would, effectively, bow to the EU Commission's demands for a reduced budget deficit.  But, on Monday the Prime Minister said that the government would stick with its original high spending budget plans.

W&D comments:  The Commission announced the previous Wednesday that Italy was "sleepwalking into instability".  No, the Italians are wide awake.  They know that they are doing.  This is all a negotiating ploy to somehow get dosh from the EU.

4.  Down at the car wash

General Motors, the largest US motor vehicle manufacturer, said it would cease production at seven plants worldwide and lay off thousands of workers.   

W&D comments:  The aim is to save $6 billion by 2020.  However, the austerity plan will cost $3.8 billion is asset write downs, pension charges and employee expenses.  But GM doesn't have the money to make the changes to save money.  The money has to be borrowed because GM blew, wasted, and annihilated $13.9 billion in cash on share buybacks over the past four years

W&D smells another rat.  The austerity expenses will not hit GM's bottom line, they will be 'adjusted out' of EBIT, EPS and free cash flow.  But the cost savings will be fully represented in those three metrics.

5.  They the people ...

... of the UK, aged 18-24, who supported Labour in January numbered 56%.  This week it was 44%.  Jezza is losing his touch. 

W&D comments:  But it looks like the Conservatives have already lost touch.  It has about 17% of the acned age group.

6.  Is Paris burning?

More than 100,000 people took part in about 1,600 protests across France on Saturday, marking the second weekend of "yellow vest" demonstrations.  There was violence in Paris, with protesters throwing stones and setting barricades alight.  M. Macron, France's President, has raised fuel prices to help pay for renewable energy.     

W&D comments: Les citoyens de france want renewable energy, but don't want to pay for it.

Tool of the Week 

Podium finish goes to ... Peta Credlin, some-time journalist, some-time commentator for Sky News, and once-upon-a-time Chief of Staff to former PM Tony Abbott.  Ms Credlin, in a column in The Australian newspaper, wrote thousands of words attempting to explain why the Liberal Party was blown out of the water in Saturday's State election.  Not a word about the federal Liberal Party.  And the role of her former boss and mentor in bring about the change in PM and subsequent fall in federal Liberal polling from 49/51 to 45/55.

Implausible deniability [5].

Deepak, W&D's Uber driver ...

... was talking about Brexit.  "What's going on?" he asked as W&D got into his car.

"It's complicated, as it were," responded W&D.  "But I'll tell you the bare bones."

"Firstly, UK PM Teresa May has secured her Brexit withdrawal deal from Brussels,"  W&D began.  "But now she has to get the backing of the parliament.  And that might be difficult.  The opposition Labour Party, the DUP (the Conservatives' coalition partner from Northern Ireland) and the Scottish National Party have all said they will oppose the deal.  This will be tricky."

"Good grief," Deepak observed.  "Sounds like it won't get passed.  What happens now?"

"Well," responded W&D carefully, "W&D logic says that Mrs May's deal will eventually get through.  Firstly, the alternative of a no-deal Brexit will not proceed as Jezza Corbyn, the Labour leader, has said that he would not allow a no-deal Brexit.  And virtually no-one wants it - it's now too late to adapt the economy to that alternative.  There would not be any time to prepare."   

"And secondly?" asked Deepak, pointedly.

"There are two matters.  Firstly, the deal is now negotiated, the EU will not negotiate any further.  Secondly, if parliament rejects the deal it's not enough to say there is no majority for no-deal; there has to be a majority for something else.  But Brexit is now out of time - there is not enough to negotiate, for example, the 'Norway option'.  I see the choice as Mrs May's deal or Mrs May's deal.  By the way, there is too much hysteria about Mrs May's deal.  It really is a good deal.  Speaking of not-good deals, has your mother-in-law arrived yet?"

"I'm in more trouble than Mrs May.  I have been 'Deepexited' to the second bedroom.  There is no time to negotiate another deal."

"A fateful conclusion," said W&D cheerily as he unbuckled his seat belt.  "Unlike Brexit, there is plenty of time to negotiate.   And did you send your mother-in-law to the movies? 

Deepak's face lit.  "Ah, yes.  I chose Sangam, a 1960's Bollywood movie that lasts almost four hours.  Anjali and I used the time, err, well.  And we didn't talk about money or investments at all."

"Read my lips on this, Deepak.  Anjali will find out sooner or later," observed W&D as he strode off.  "Better get your Bitcoin excuses all lined up.  Otherwise it will be you at the movies, watching Bollywood's best, on your own."  

And, to soothe your troubled mind...  


Last words ...

Monday (to Victorian federal MPs):  "Voters saw the Liberal Party as homophobic, anti-women, climate-change deniers."

Wednesday: (to parliament); "The Liberal Party is the natural government for Australian women."

 -  Kelly O'Dwyer, Federal Minister for Women

Collapse of stout party.

First Samuel client events calendar

All quiet until 2019

Some lightly salted absurdities from all over ...

At the extreme left-hand end of the Bell Curve

A 53-year-old from Athens is serving 10 years in prison for falsifying her primary school diploma to get a public sector job.  The job?  A cleaner. 

An initial court ruling two years ago handed the woman a 15-year prison term for defrauding the public; the sentence was reduced this month, and she has been in Thiva prison in central Greece ever since.

(New York Times)

And the EU is worried about Brexit.

Guess what happened next?

A Bank of America ATM in Harris County in Texas, late on Sunday night, began spitting out $100 notes instead of $20 notes.  What happens next?

a.  The first customer realises the error, cleans out his bank account for five times the balance and walks away;

b.  The first customer realises the error and phones Bank of America, which closes down the ATM;

c.  The first customer realises the error and phones the police; who guard the ATM until the next morning when the bank opened; or

d.  The first customer realises the error, cleans out his bank account for five times the balance and puts his good luck on social media.       

Close.  But no cigar.  d. is correct.  A long queue of bank customers quickly formed, each waiting their turn.  Eventually the police turned up and the crowd fled.


The bank let the customers keep the money!  Move over, Bank of Melbourne.  

Headline in this morning's The Times 

And perhaps lowers the life expectancy of the people concerned.

Have a Wry & Dry weekend. 



[1]  Cassius, in Julius Caesar, by William Shakespeare, speaking of Caesar (Act 1, Scene 2):

"Why, man, he doth bestride the narrow world
Like a Colossus, and we petty men
Walk under his huge legs and peep about
To find ourselves dishonourable graves."

[2]  The fairy tale character who always took the middle course.

[3]  Readers should compare the Alaska Purchase to America's purchase of Louisiana from France in 1803 (the Louisiana Purchase) for $11.25m.  Napoleon was short of dosh for his military ventures.  And so offered to sell 'the Louisiana Territory'.  The Louisiana Territory was much bigger than just today's Louisiana, making about one third of the modern US ex-Alaska, taking part or all of what is now 11 US states and two Canadian provinces.  The area purchased was some 2.14m square kilometres, significantly more than the 1.5m square kilometers for the Alaska Purchase.

[4]  Source: Center for Responsive Politics.

[5]  As distinct to plausible deniability.  See any CIA report or action of Donald Rumsfeld, former US Secretary of Defense.