Wry & Dry

Rates down. Trying to embarrass the unembarrassable. Brexit: unpack the bags.

US rates' cut

Readers would have seen that the Chief Teller of the US central bank (called the Fed) cut interest rates this week for the third time this year, down by 0.25% points to 1.75%.  This is all about (a) staving off what some people might think is going to be a recession in the Yoo-Ess-Ay; or (b) keeping the stock market suspended in mid-air, rather like the coyote shooting off a cliff in pursuit of the road-runner, before the inevitably of gravity takes over.

The key point of the rate cut is not that interest rates were cut.  At these levels, it doesn't make much difference to the world.  And that is shown by the response of I-Wanna-Lower-Interest-Rates-Trump, who hitherto had furiously tweeted about the need for much lower rates.

This time: total silence. 

Another step to embarrass the unembarrassable

The US House (of Representatives) has voted to start a 'public phase' in the impeachment inquiry.  This means that evidence concerning I-Didn't-Try-To-Pressure-The-President-Of-What's-The-Name-Of-That-Country-Again-Trump will be heard in an open hearing.  This means the House will hold public hearings with witnesses who previously testified in private.

All of this will not change the outcome. I-Didn't-Try-To-Pressure-The-President-Of-What's-The-Name-Of-That-Country-Again-Trump will be impeached (i.e. indicted or charged) by the House.  But the Senate (controlled by Republicans) will not convict him.

Readers will know that two Presidents of the Yoo-Ess-Ay have been impeached: Andrew Johnson in 1868  and Bill Clinton in 1998.  Neither were convicted by the Senate.  Richard Nixon, in the second wisest decision of his presidency, resigned before impeachment proceedings could begin.

This process is all about embarrassing a person who cannot be embarrassed.  He doesn't have a concept of shame.

Qantas: becoming another Virgin?

At what point will flying aeroplanes no longer be the main business of Qantas? 

Readers know that Wry & Dry has a barbell view of Qantas. It has arguably the best media communications people in the country.  How it manages to get its corporate decisions to become news items is worthy of Wry & Dry dipping his lid.  The current example is the excitement about flying from Sydney to New York non-stop.  The choice of aircraft, the experimentation of a trial flight and the seeming breakthrough nature of the project have all become news items.

Good grief, Singapore Airlines' SIN/EWR (New York's other airport) flight is just 30 minutes less flying time than Qantas' JFK/SYD.  And it has gone about that with a minimum of fuss [1].  Wry & Dry guesses because it doesn't have to.

But Qantas is really an indifferent airline: relying on its brand rather than fine service or decent aircraft.  Plus it has a CEO wedded to virtue signalling when it suits his values, but not when profit might be affected.

However, Wry & Dry has to again dip his lid to Qantas. 

It is now going into the car insurance business.  This adds to its travel, health and life insurance white-labelled products. It's all tied up with the second most profitable part of Qantas: its frequent flyer program (domestic travel is its first).

Wry & Dry can see Qantas extending its brand to an even wider range of products.  Readers will recall that Sir Richard Branson, the boss of the original Virgin Airlines, originally started with the Virgin brand being a record store: Virgin Records.  He saw that the brand was Virgin, not a record company.  He then started an airline, a train company, a mobile phone company, and many others, all branded 'Virgin'.  The Virgin Group controls or has branded investments in over 400 companies.

Wry & Dry wonders whether Qantas' CEO is emulating Branson by leveraging the brand to diversify revenue.  Will Readers see Qantas Mobile, Qantas Hotels, Qantas Gyms or Qantas Medical Aids?

Cartoon qantas new products

Wry & Dry's mind boggles.

[1] To borrow the slogan once used by British Airways.

Brexit: unpack the bags

Borisconi was going to "die in a ditch" if the UK didn't Brexit on 31st October, with or without a deal.

Well, it didn't.  And he didn't.  But, as Wry & Dry cunningly observed last week, his ploy for a general election has taken the eyes of the public from Brexit.

And now with the weekend connivance of the EU giving a three-month Brexit deadline delay, Borisconi avoided the ditch.  It's now all about the 12th December general election.

Cartoon boris biff the huns

Readers will know that Borisconi was never going to get the two-thirds majority required in the Commons for an early election [2].  And hence the support of Labour Leader Jezza Corbyn was needed.  For weeks Jezza has illogically opposed going to they-the-people.   But on Tuesday he finally caved in and agreed. 

Q.  Why the change? 

A.  The monument of history.  Wry & Dry believes that Jezza would prefer to end his career embracing the warm socialist bosom of glorious defeat against insurmountable odds, rather than later becoming the victim of an unseemly Left-wing purge and exile to a Labour party gulag.

But he did cause mass hilarity on Monday (when he opposed an early general election) when he told the Commons that calling an election in December would be an act of voter suppression, because it would be dark and students wouldn’t be able to figure out how to vote on their holidays.

Of course.

[2]  Former UK Prime Minister, David Cameron, had to pay a price to form a coalition government with the Liberal Democrats in 2011.  That price was to introduce fixed five year terms of parliament, with early elections only being permissible if two thirds of the Commons agreed (instead of being at the PM's whim).  The worst outcome is, as Readers now see, where there is a minority government that cannot pass legislation but also cannot go the polls to obtain a mandate.  

Headline of the week

"Virgin Galactic lands on NYSE"

What is a virgin galactic?  An inexperienced creature from another galaxy?  And why has it landed on the New York Stock Exchange?

Cartoon trump aliens

Wry & Dry is troubled that this arrival has not made the broader media headlines.  

Pretty useless, but interesting

Wry & Dry knows that women are better drivers than men. And they are rewarded.  Folk at the National Bureau of Economic Research researched some 40 million Uber trips and discover that female drivers receive tips some 10% higher than male drivers.

And the generosity is bestowed almost equally by women and men riders.

What's going on?  Astute Readers might consider the fact that there a direct relationship between the age of the female driver and the female-driver-tipping premium.  By age 65 the FDTP reduces to zero.

Psephologists might be interested in ... 

... the latest opinion polls in the UK.  Which shows that, all other things being equal, Borisconi will win the election with an absolute majority of 44 seats.  The Conservatives would win 364 seats, Labour 189 and Lib Dems 23.

But things are never equal. Wry & Dry considers that the biggest risk to Borisconi is ... Borisconi.  He has 42 days not to put his large feet in his capacious mouth.  Or anything else anywhere else.

Cartoon boris zip the trousers

It's a high risk.

Breakfast at LVMHT's

Readers may have noticed that Tiffany, the famed New York jeweller, is being sought by LVMH (Moet Hennessy Louis Vuitton) for a price of US$14.5 billion.  

Wry & Dry senses that Tiffany's isn't what it used to be.  Generally its stores are where Readers would expect one of the world's leading jewellers located: Fifth Avenue, New York; Old Bond Street, London; Avenue des Champs Elysées, Paris or Ginza, Tokyo.

But in a clear statement of going 'down the curve', the company opened a store in (sharp intake of breath) the Chadstone shopping centre, in outer suburban Melbourne.  'Chaddy' (as it is known to those who also shorten-and-add-y to many words e.g brekky (breakfast), pressie (present), Chrissy (Christmas)) is the epitome of suburban blandness and mediocrity. Hardly the realm of Tiffany's.

Cartoon tiffany

Wry & Dry considers that but for the 'Chaddy' outlet, Tiffany's would bring $5 billion.      

Just when readers thought it was safe ...

Be afraid, be very afraid.  Former First Lady and Presidential candidate Hillary Clinton is pondering a comeback.


The praaablem is that the main Democrat candidates to challenge I-Want-Four-More-Years-Trump (Elizabeth Warren, Bernie Sanders) are moving to the far left of the fish fork.  And the other leading contender, sleepy Joe Biden, doesn't give the image of, well, energy.  In fact, Wry & Dry is not sure that he has a pulse.

Readers know that Wry & Dry's favourite candidate is Amy Klobuchar, the centrist and tough senator from the mid-west.  And she would be by far the best to succeed against Trump.  Amy's only disadvantage is that her surname has more than two syllables.  Only Obama, Kennedy and Roosevelt (x2) since 1897 have saluted the judge with a name longer than most Americans can pronounce.

So, Wry & Dry's man person in Washington, with an ear to the ground and eye to the keyhole, has heard that Mrs Clinton is being sounded out about again standing.

Wry & Dry's advice: read the mood of the meeting, Hillary.  And that mood is: no more pantsuits. 

Cartoon Hillary  

Nazi rising 

Wry & Dry was alarmed when Germany's far right political party, the AfD, won 27% of the vote in a regional election in Saxony earlier this year.  The news gets worse.  In another regional election in Thuringia [3], the AfD won 24% of the vote, coming second to a left wing party, but notably beating Angela Merkel's Christian Democrats (CDU) into third place.

But it gets worse.  The AfD's candidate in Thuringia Björn Höcke is under observation by German intelligence as a possible 'threat to the democratic order'.  During the campaign he was described as a “Nazi” by the regional leader of the CDU, and accused by the German interior minister of personally stoking an atmosphere of anti-Semitism that led to this month’s failed far-Right attack on a synagogue in Halle.   

And the EU is worried about Brexit.   

[3]  Thuringia is a state in east-central Germany, known for its vast forests punctuated with mountain peaks and medieval villages. Its capital is Erfurt, home of 8th-century cathedral Erfurt Cathedral, where Martin Luther, father of the Protestant Reformation, was ordained. 

The last thing needed ...

... by Jezza Corbyn (Leader of the UK Labour Party), was a side issue to distract his task of trying to out-debate Borisconi on the floor of the House of Commons - an impossible task even with a following wind and in the face of a hurricane of hot air from opposite.  But then a side issue emerged: Labour MP Keith Vaz was caught on tape offering to buy cocaine for two male prostitutes, with whom he had what Wry & Dry understands is called a 'three-some'.

Mr Vaz was suspended from parliament for six months.  Not much pain there, as good as a holiday, to Wry & Dry's mind. 

The bigger issue for Mr Vaz will be the pain from his wife of 26 years.  Hell hath no fury like a woman ... embarrassed.

European Union disunity

Readers will be aware that, at the end of the day, Europe is a geographical term for an agglomeration of tribes.  These tribes have much in common, not least of which is as 'western democracies' (exceptionally Russia, the western bit of which resides in Europe) and as heading most country-rankings for health, wealth and happiness.  

But they are tribes, nonetheless.  And within the geographical agglomeration resides a political agglomeration, known as the European Union.  Notwithstanding a brand to the contrary, the EU is just a smaller agglomeration of tribes.

Whilst it is a pleasant outcome that these tribes no longer resort to cudgels to express their tribalism, they choose the next best weapon: money.

It's EU budget time.  And the big member countries are furiously fighting each other and with 'Brussels' (the bureaucratic heart of the EU) over (a) the size of the budget pie; (b) how it is sliced between countries; and (c) how it is spent.

All EU countries understand the logic: the more they contribute to the EU, the less they have to spend at their discretion within their own borders.  And hence local politicians have less dosh with which to bribe their constituents to vote their way. 

The reality is that the EU brand (the blue flag with the circle of stars and the ideal championed by Brussels) represents nothing more than a patchwork of tribes.  The only thing they have in common (other than being democracies) is that they have taken up cudgels against each other for all but 74 of the past 2,500 years.

The EU Brussels' elite is not going to quickly dismantle what has taken 2,426 years to evolve.     

Cup Week in Melbourne

Next week, the social year for many Australians peaks by somehow being associated with 24 horses jogging two miles around a sort-of circular race track in front of 100,000 mostly alcohol-infused spectators, 98,000 of whom attend just the one horse-jogging event each year.  

Wry & Dry plans to avoid the equine chaos and will escape to rural Victoria.  So there will not be a Wry and Dry next Friday 8th November. 

Wry & Dry will resume on Friday 15th November.

Snippets from all over 

1.  Australia: inflation up

Australia's inflation rate rose slightly to an annual rate of 1.7%.

Wry & Dry comments:  that's the end of interest rate cuts. 

2.  Apple: revenue up, profit down

Apple, an American technology company, had its profits fall 3% in the September quarter notwithstanding a 2% increase in revenue.     

Wry & Dry comments:  iPhone sales dropped 9%, but 'wearables' grew 54%.  But Wry & Dry's eyes will be on the success or otherwise of its Apple TV+ subscription service, as the iPhone market matures.  

3.  Google splutters

Alphabet (i.e Google) reported a rare 23% decline in profits and warnings of forex headwinds on Monday that showed costs (like spending on R&D) continuing to rise faster than revenue. 

Wry & Dry comments:  The latest results add to a tricky dance Google must execute as regulation remains an overhang for the company.   

4.  Boeing, Boeing

Boeing reported its September quarter financials last week.  Profit was 30% worse than expected and revenue was down 20% from a year ago.

Wry & Dry comments: But Readers would have seen more importantly that free cash flow came in much worse than expected: negative $2.9 billion, as 42 MAX jets are still built every month without being delivered, compared to positive $4.6 billion in the same quarter last year. 

5.  Exxon hid cost of climate change 

Exxon Mobil has been accused by the Massachusetts attorney general of allegedly hiding its early knowledge of climate change from the public and misleading investors about the future financial impact of global warming. 

Wry & Dry comments:  This is going to get complicated.  And follows a similar lawsuit by the State of New York, which started last week.  In that trial, a lawyer for the state attorney general argued that Exxon Mobil used two sets of books to hide the true cost of climate change regulations from investors, while an attorney for Exxon Mobil blasted the claims as politically motivated.

Readers should note that the trials are not about whether the climate is changing, or what causes it.  But the cost to Exxon Mobil of climate change regulations. 

And, to soothe your troubled mind ...


Last words ...

“Britain under Corbyn would be like Cuba without the sun"

 -  A partner at Goldman Sachs, a US investment bank, speaking in 2017 at the release of Labour's extreme socialist policies. 

A lightly salted absurdity ...

Deepak, Wry & Dry's Uber driver ... 

grinned as Wry & Dry hopped in.

“Been awhile,” Wry & Dry said. “What’s the news?”

Deepak drew in a long breath.

“Mr Wry & Dry, it's been a difficult month. Anjali has had a tummy bug.  And the mother-in-law has returned, and with the horses I’ve taken my eye off the ball when it comes to the Taj Mahal that I’m building out the back for her. You can imagine …”

W&D laughed as he conjured an image of Anjali’s mother, Damshi, her rage unleashed upon an unsuspecting Deepak.  He pictured the granny flat; forlorn and vacant among the weeds of Deepak’s backyard.

Deepak groaned and Wry & Dry sensed the subject at least for now was closed.

“And the horse racing consortium with Anjali’s cousins?” Wry & Dry asked.

“The Templars,” Deepak replied, in a doleful tone.

“That’s the one, and Magic Wand?” Wry & Dry said brightly, sensing he was going to be thankful he had forgotten to place a bet on Magic Wand at Moonee Valley.

“Fourth, but one has to remember she was unable to run at Caulfield due to an injury.  It’s a long-term thing, Mr. Wry & Dry.”

“And Anjali?” Wry & Dry probed.

“Ever since that special Vindaloo she cooked, she hasn’t been feeling herself.  I just can’t imagine what is the matter with her, she missed a lecture last week and called in sick for her tutorial.  I couldn’t even interest her in getting a fascinator for Oaks Day.”

“Ah yes, the great trouble with fascinators,” sighed Wry & Dry, blushing ever so slightly. 

“Yes, anyway it’s all up to the Magic Wand now,” Deepak said, brightening at the thought.

“Yes, that’s usually the way it works,” spluttered Wry & Dry as he alighted.

“Whatever do you mean? You don’t think she is, she is …”  A worried look flashing across his face.

“... with child!” Wry & Dry called from the curb, as Deepak's car suddenly lurched left before righting itself and sped off in the direction of home, in rather an alarming manner.

W&D chuckled, and knew in that moment how much indeed he had missed Deepak.





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"Managing for a Low-Interest Rate Future"

February 2020

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