Wry & Dry

Westpac - head on a spike. Trump TV. It's just not cricket.

Remember, remember 12th December

Wry & Dry is looking excitedly ahead to Thursday 12th December.  It will be a momentous day for voters, in two countries.

Readers might be scratching their heads, pondering what else is going on, other than the Borisconi v Jezza UK election. 

Allow Wry & Dry to alert Readers to high drama earlier that day at the International (aren't they all) Convention Centre in Sydney.  Because at 10am, the ball is bounced at Annual General Meeting of Westpac Bank.  Wry & Dry expects there to be an interim CEO on the top table.  And a head on a spike at the gates. 

How so?  Readers might have read that Westpac Bank has a small problem.  Wry & Dry won't go into the details of the Austrac [1] mess - it is as well spread across the global media as Vegemite across a child's face.

Actually, the problem is a large one.  And the problem is not the $1 billion penalty, give or take, that it will have to cough up for these most egregious breaches.  Westpac has deep pockets - it's shareholders'.

The problem is the words 'child exploitation' said in the same breath as Westpac.   

Which is why CEO Brian Hartzer has to be given the DCM, if for nothing else other than, rightly or wrongly, the public wish for a head on a spike.  Readers will know that Westpac's board is probably the least sensitive to public opinion of all the banks.  They will fight every battle.  But, well, enough is enough. 

Chairman Lindsay Maxsted should take a leaf from HM the Queen's book.  The Queen was quick to see that her second son had made a right ass of himself and her dynasty by his profoundly stupid BBC interview.  She fired him from all royal duties two days later.  "If it were done when 'tis done, then 'twere well it were done quickly". [2]  And it was.

Cartoon prince andrew

Wry & Dry advises Mr Maxsted to act as quickly.  The CEO's head must roll. 

[1] Austrac is the Australian government agency that attempts to stop money laundering, terrorism financing and other serious crime.
[2]  Shakespeare: Macbeth, Act 1, Scene 7 

A Wry & Dry aside

Wry & Dry's curiosity is why almost 100% of the blame for the Westpac debacle is being sheeted at the current CEO?  Westpac's Austrac problems began in 2013, under former CEO Gail Kelly.  Readers will remember that Ms Kelly, a bit of a Teflon banker with a persona similar to that political clothes horse, Julie Bishop, gave away $100m of shareholders' funds for an educational scholarship fund.  Noble stuff, indeed.  And the photos were nice.  

Perhaps had she paid more attention to her real job, and spent the $100m (and then some) on internal compliance measures then Mr Hartzer wouldn't have inherited the mess he did.  Not only the current Austrac debacle, but also the Royal Commission issues.

Frydenberg was right

A few weeks ago, federal treasurer Josh Frydenberg was lambasted in the media by big business for suggesting that companies should invest more in their businesses, and not pay out so much in dividends.  Dare Wry & Dry observe that is exactly what he (Wry & Dry) has been harping on about for years, about the banks.

The gushing of dividends from banks appeased shareholders looking for an alternative to low deposit rates, pushed up banks' share prices and made bank executives a squillion from their various compensation schemes.

Last year Westpac had a dividend payout ratio of 88%. 

Wry & Dry bets that Westpac is now regretting not investing more in its systems and controls over the past decade.

Trump TV

It's ironic that the media that first brought Where-Actually-Is-Ukraine-Trump to the attention of most folk in the Yoo-Ess-Ay [3] is the same media that is now beaming his impeachment trial to televisions in homes, offices, caravan parks and hospitals all around the globe.  And possibly further.

And the pity is that he is not on the show.  This is compelling stuff.

Politics being politics, many people thought the impeachment process would lead to a pre-determined outcome (i.e. impeachment), regardless of the merits of the case.  Err, no.  The evidence on Wednesday night from the Yoo-Ess-Ay ambassador to the EU Gordon Sondland seems to show that an impeachment outcome is entirely justifiable.   

Cartoon trump golf

The other irony is that Mr Sondland was named ambassador to the EU by Where-Actually-Is-Ukraine-Trump after donating $1,000,000 to the president's Inauguration fund.

Nice work.  If you can get it. 

[3]  In the reality television show The Apprentice.

Does China want Hong Kong chaos?

Wry & Dry's ever-balancing mind is teetering on the Hong Kong question. 

A.  Invade.  Does Emperor Xi Jinping want the demonstrations to get worse, so he has an excuse to impose sooner than planned China-sourced military-based controls?  

Or

B.  Concede.   Does Emperor Xi want to solve the problem by yielding to the 'Five Demands' of the demonstrators?

Of the Five Demands, one has occurred (withdrawal of the Extradition Bill) and three are symbolic (recharacterisation of 'riots'; release of imprisoned rioters; establishment of inquiry into police conduct).  The final Demand is the most significant: Resignation of Carrie Lam and implementation of universal suffrage. 

Firstly, some matters Readers might ponder:

a.  Emperor Xi has had 'Xi Jinping Thought' written into the Chinese constitution.  Anyone with an ego like that doesn't like to have thousand-year-old-egg-on-face.  

b.  Humility doesn't become emperors, tsars, sultans, dictators or Trumps.

c.  Emperor Xi has to consider Taiwan, that pesky island caught in sovereignty no-man's land. He desperately wants it back in the total control of Beijing.  If he cannot control Hong Kong, how can he control Taiwan?

d.  Millions of Hong Kongers have zero loyalty to Beijing; their ethnicity comes at best second to justifiable concerns about life under the Beijing yoke.  The following chart clearly shows some differences.  Readers will note the widest gap is Personal Freedom.

Hong Kong better place to live2

Now, what will Emperor Xi do?  

Wry & Dry senses he will do what emperors, tsars, sultans, dictators or Trumps always do: never concede.  There will come a bigger show of strength.  This will end in tears.

Repent and redress

Wry & Dry notes that two government MPs were due to go on a China Study Tour.  But because of their nasty comments about China's human rights record, the Chinese government has uninvited them.  And will only invite them again if each "repent and redress".

Cartoon repent china

Readers will remember Henry II's repentance for acquiescing to the murder of Thomas a Becket ("will no one rid me of this meddlesome priest?"): he walked to Canterbury Cathedral in sackcloth and ashes and allowed himself to be flogged by the monks there.

Wry & Dry wonders what form of repentance the Chinese government would find acceptable for the two MPs?  MPs are rarely up to walking great distances; wearing sackcloth will be most uncomfortable for their soft skins.  But Wry & Dry is sure that a good flogging has potential enough even for the Chinese.   

Tsar egg-on-face

It must be embarrassing.  But if it is Tsar Vlad hasn't shown it.  Well, perhaps that's because not many Russians know about it.

'It' involves Russia's new Vostochny space centre, a pet project of Tsar Vlad.  

The Vostochny space center, located in Russia’s far east, some 500 miles north of Vladivostok, is a “key part of Russia’s effort to re-establish itself as a space-faring superpower,” Wry & Dry's man person at the Royal United Services Institute reported. 

Readers will remember the old Baikonur launch site [4], built by the Soviet Union in neighboring Kazakhstan in the 1950s.  Well, it's past its use-by-date.  Hence the billions of roubles poured into Vostochny.  Russia has grand ambitions for the new launch site, the first it has built since the collapse of the Soviet Union, with aims to send crewed missions to the moon by 2030.

Well, Vostochny has lost at least 11 billion roubles (US$172m) through theft.  Some 58 people have been sent to the local slammer.

Cartoon russia westpac

Tsar Vlad is said to be furious.  The clear issue is that the workers were taking more bribes than they're entitled to.

[4] Both Sputnik 1, the first artificial satellite, and Vostok 1, the first human spaceflight, were launched from Baikonur. The launch pad used for both missions was renamed Gagarin's Start in honor of Russian Soviet cosmonaut Yuri Gagarin, pilot of Vostok 1 and first human in space.

Join the dots

Not that Wry & Dry is alarmist...  But a couple of snippets caught his rheumy eye:

The world economy is growing at the slowest pace since the financial crisis, according to new estimates from the OECD, which cut GDP growth to 2.9% this year and next (from 3% in 2020).

Capital-raising in 2019 is running at its lowest level since 2012 as a series of notorious pulled deals (like WeWork) and soggy floats (think Uber and Lyft) added to an overpriced market.

Just sayin'.

Pretty useless, but interesting

UK magazine Country Life has published what it believes are the 39 characteristics of a gentlemen.  Curious Gentleman Readers, or Lady Readers curious to see if their man is a gentleman, can go to this website.  And also take the test.

For those without time on their hands, they may consider that a gentleman (selected items) ...

4.  is aware that facial hair is temporary, but a tattoo is permanent

6.  wears his learning lightly

21. is not a vegetarian

30. has read Pride and Prejudice

31. can tie his own bow tie

39. knows that there is always an exception to a rule

PS Item 19 is one best answered by a gentleman's lady.

Cartoon tips the fox

It's not only Hong Kongers who are grumpy ...

It seems that there is a pot simmering away in Iran.  Wry & Dry had the impression that the mullahs had the populace under their collective thumbs.  But no.

Over 100 Iranians have now been killed in riots across the country this week.  The riots are in protest at the Iranian government raising the price of state-subsidised petrol by 50% (to about $0.53 per litre - 'ardship).  That price rise is in response to the draining of the coffers because what goes out: funds to pay for arming Houthis in Yemen, Hezbollah in Syria and Shia militias in Iraq is not matched by fund coming in from oil sales (because of a combination of the low oil price and the economic sanctions). 

Readers will know that Iran interferes with governments in both Iraq and Lebanon.  And in each country, there have been protests against Iran.  Now it seems that the even locals are getting grumpy.  Tehran's mullahs are under pressure. 

Of course, the demonstrations will not be long lasting: the theocracy will trample them.  There will not be a Tiananmen Square 'Tank Man' diverting a tank.  In Iran, the tank will just run over whomever is in the way.

But before sending in tanks to support the troops, Tehran did what any autocracy/ theocracy would do.  It shut down the internet.

"Well, he would say that, wouldn't he" I   [4]

Specifically asked whether he would have delivered the Coalition a victory at the May election, ousted Prime Minister Malcolm Turnbull said: “Oh yeah, absolutely. There’s not many people that doubt it.”

Wry & Dry is raising his hand as a doubter.  He may not be alone.

Just guessin'.

[4] The famous quip of Mandy Rice-Davies, a call-girl and key player in the famous 1963 Promfumo affair that effectively  brought down the UK McMillan government.  When giving evidence at the trial of her alleged pimp, it was pointed out that a certain Lord Astor denied having sex with her or even having met her, she dismissed the denial by stating, "Well (giggle), he would say that, wouldn't he."    

"Well, he would say that, wouldn't he" II

Specifically asked whether he would have had sex with the then 17-year-old Virginia Roberts-Giuffre, a sometime a frequenter of 'events' (broadly defined) held by convicted pedophile Jeffrey Epstein, the Duke of York, His Royal Highness Prince Andrew said: “No, I'd spent the day in a Pizza Express in Woking.” [2] 

Wry & Dry always thought it weird that HRH Prince Andrew had married Sarah Ferguson, a woman as close to a society space cadet as the British upper class could provide.  As a biographer noted: "She did not shine academically but showed talent in swimming and tennis.  After finishing a course at Queen's Secretarial College at the age of eighteen, Sarah went to work for an art gallery."  

It would seem to Wry & Dry that their joint IQ would struggle to reach double figures.  

Just sayin'.

PS A YouGov Survey said that just 6% of Brits believe Prince Andrew's account of his friendship with Jeffrey Epstein.

PPS  Prince Andrew has been given the DCM by his mother.  But, unlike others who lose their job, Prince Andrew will keep all of the benefits, salary, ski lodge, housing, cars, people, etc.  Like his ex-wife, he is unemployable. 

[2]  Woking is just 24 minutes from Waterloo station.  It has been home to such as Alec Bedser, John Paul Getty and Alan Turing.  And ... the Spice Girls started their careers in Woking.

It's just not cricket

Readers may have heard of Cricket Australia, the commercial body that runs cricket in Australia in a manner akin to a blend of the commerciality of Facebook and the autocracy of the Mullahs in Iran.

Cartoon cricket australia

Well, Emily Smith, a young cricketer playing in the WBBL has been suspended from cricket for 12 months for jokingly posting on social media the batting line-up of her team, one hour before the prescribed time.  On a day when the match was washed out.

Her sin: providing material information to the public.  This might be information useful to a bookmaker.

Whaaaat!  Aside from the obvious fact that batting orders can change, Wry & Dry cannot see how a batting order is going to be of interest to a bookmaker.  Especially when the match is washed out.  And then there is the severity of the penalty for what is a trivial offence.

This woman has been hung out to dry because a power-seeking bureaucrat in Cricket Australia decided that an example needed to be made.  And the woman felt too tired and intimidated to fight the charge.  She is apparently distraught.  It was an easy win for CA's anti-corruption stance.

Readers will know that Wry & Dry has been playing senior cricket almost as long as W.G.  And can state that he has forgotten more about cricket than the turkeys in CA will ever know.  And he never has seen an injustice like this.  It's a bloody disgrace.

Snippets from all over 

1.  Electric ute

Tesla's long-awaited electric pickup truck (i.e. a big ute), called Cybertruck, will be unveiled today in Los Angeles.

Wry & Dry comments:  Tell someone who cares.

2.  Australia's record household debt

Australia's household debt as a per cent of annual household income has leapt to a record 202%.    

Wry & Dry comments:  Funny, isn't it?  The RBA Chief Teller keeps on lowering interest rates and people keep borrowing more.  

3.  IPO record for Aramco

Saudi Arabia has set Aramco's preliminary valuation at $1.6 trillion to $1.71 trillion, below the $2 trillion level previously targeted by Crown Prince Mohammed bin Salman. 

Wry & Dry comments:  Readers will recall that Wry & Dry advised Aramco to either reduce the valuation or increase the dividend.  

The state-owned oil giant is seeking to raise between $24 billion and $25.6 billion by selling a 1.5% stake, putting it close to the world's largest IPO - Alibaba's $25 billion deal in 2014.

4.  EU axes carbon projects

Cutting €2 billion of yearly investments, the European Union will stop funding oil, natural gas and coal projects at the end of 2021, as it aims to become the first climate-neutral continent.

Wry & Dry comments: ... after Antarctica.  Of course. 

5.  Mustang 

Ford Motor Company is transposing its Mustang name on to its new electric sport utility vehicle, which up until now referred to a line of sporty coupes associated with the 1960s muscle car era.  The Mustang Mach-E debuted at an event in Los Angeles last Sunday.

Wry & Dry comments:  It is sort of oxymoronic to have a Ford Mustang that is silent.   

And, to soothe your troubled mind ...

Miscellany 

Last words ...

“The only true thing Prince Andrew said in the entire interview was that he never pays for drinks."

 -  Craig Murray, former UK diplomat, speaking of Prince Andrew's interview on BBC television.

Harsh. 

A lightly salted absurdity ...

Deepak, Wry & Dry's Uber driver ... 

... was sullen as Wry & Dry opened the door of the jalopy.

He grunted in the direction of Wry & Dry and pulled out into the traffic abruptly.

“Should I ask?” Wry & Dry prodded carefully.

 “No,” said Deepak, sharply.

But then in a flurry, hands waving madly, he let forth.

“It’s my mother-in-law, you’d think after I rescued her from that Delhi prison that she’d be nice for a change.”

“What is Damshi up to now? Isn’t she excited about the baby?” inquired Wry & Dry, a glint in his eye.

“She’s excited alright. And now she is demanding that if she is not in the Taj Mahal I have been building for her in our back garden by Christmas, she will tell Anjali everything.”

“Christmas?  Isn’t she Hindu?” Wry & Dry spluttered, suppressing a giggle.

“No, apparently she has converted, to how do you say, Ecumenicalism. I’d never heard of it before.  She likes it because they celebrate everything.”

 “I see” said Wry & Dry sagely. “What else is there?” he asked, his mind wandering over the over the recent history of Deepak’s disasters and indiscretions.

“Well, Anjali told me I can’t gamble anymore, no more horses she said. And I got talking to the plumber who loves a bet, and he said, don’t worry mate, I’ll just add it to the invoice. You see, then Anjali will never know.”

“And” W&D prompted.

“The mother-in-law suddenly appears from behind a twin-cab and she says, do you know my favourite Hindi saying Deepak? I say no. And she says, whoever owns the lathi owns the buffalo.”

“What is a lathi?” Wry & Dry asked with anticipation.

“A big stick!” muttered Deepak.

“Well, playing with big sticks can lead to all sorts of trouble” said Wry & Dry considering a variety of wooden implements, from the trusty wooden spoon, hairbrushes, feather dusters and of course that rather underwhelming Melbourne Cup favourite, and Deepak’s pick, Magic Wand.

“Let me guess, Damshi heard your deal with the plumber”

“The whole lot, and now of course, she has the big stick.”

“It could be worse,” announced Wry & Dry as he unbuckled his seat belt.

“How?” Deepak squeaked as Wry & Dry alighted.

“The bricks," W&D replied as he strode off, "The bricks." 

Deepak paused, trying to understand about the bricks.  Then a terrifying image of Damshi emerged in his mind’s eye, two bricks raised above her head, clashing them happily, as she looked just below his belt.

Deepak went white.  It’s tough, he thought, being a man.

 

Cheers.  

Anthony 

 

First Samuel client events calendar

EVENTS FOR 2020

First Samuel Chief Investment Officer Events

"Managing for a Low-Interest Rate Future"

February 2020
Invitations are to be sent early December

11th Feb - ARIA, Sydney

12th Feb – Elyros, Camberwell

13th Feb – Hellenic Republic, Kew

25th Feb – Chin Chin, Melbourne CBD

27th Feb – The Botanical, South Yarra
(Lunch & Dinner)

28th Feb – Stillwater, Dromana