Wry & Dry

Overcrowded Bankers' Graveyard. Emperor Xi: what election? Bloomberg decides, sort of.

The overcrowded Bankers' Graveyard

Wry & Dry always wondered what it would take for the weekly headlines not to include some or all of: I'm-A-Headline-Trump, Brexit, Borisconi, Jezza, Barnaby, a Tsar, an Emperor, a Sultan or even a (Wayne) Swan.

But in the ultimate victory of the bizarre, this week it's about a ... bank.  Australia's oldest: Westpac.

Good grief!

The court of public opinion is not to be ignored.  It's opinion is rarely founded upon reason.  Or justification.  It's just about the emotion of the day.  The mob wanted a Westpac head on a spike at the gates.

Cartoon westpac rolf harris

Had the eminently logical, calm and sensible Chairman Lindsay Maxsted listened to Wry & Dry and given his woke CEO Brian Hartzer the DCM on the spot, he might well have kept his own seat.  

But, no.  And so both join that now very over-crowded place: the Bankers' Graveyard.  

A Wry & Dry aside

Wry & Dry still remains perplexed at the want of media focus on the former CEO, Gail Kelly.  This Austrac mess was well underway in her tenure.  But, let the record show, she has scarpered.  

Emperor Xi: what election?

Wry & Dry had a listening device inside Emperor Xi's office in Zhongnanhai [1], which picked up the following conversation on Monday morning.  It explains Emperor Xi's cunning plan to regain control over Hong Kong: garbage.  

Lackey: Coffee, majesty?

Emperor Xi: No, English Breakfast Tea.  The Brits at least got that right. 

Lackey:  Certainly, majesty.  Bad news about Hong Kong, majesty.

Emperor Xi: What, has the stock market fallen?  Am I worth less?

Lackey:  No, majesty.  It's the elections' result.

Emperor Xi (angrily):  Elections?  What is an election?  I know of no such word.

Lackey (patiently): Majesty: an election is a process whereby people vote for other people to do what you tell them to do.  

Cartoon guided democracy election Xi

Emperor Xi: So, what's this got to do with me?

Lackey:  Majesty, it was the Hong Kong local council elections.  The capitalist pro-democracy running-dogs gained control of 17 of the 18 local councils.  It's a disaster for Comrade Carrie Lam, your Hong Kong puppet, err, equivalent.

Emperor Xi: What do local councils do?

Lackey:  Arrange garbage collections, mostly, majesty.

Emperor Xi:  Perfect.  I need them to fail in this task.  Order our Hong Kong Black Operations Team to go around every garbage night and turn over all of the rubbish bins in those 17 council districts.  And to keep doing this until the next election.  By then the voters would have had enough and they will vote out those pro-democracy capitalist running-dog traitors.

Lackey: But, majesty, the next elections are not until 2023.

Emperor Xi:  Perfect.  The stench will be amazing.   The pro-democracy capitalist running-dog traitors will spend so much time fixing up the rubbish collections they won't have time to demonstrate.

[1] Zhongnanhai is a compound next to the forbidden City in Beijing, that serves as the headquarters for the Communist Party of China.  It is roughly equivalent to the White House.

Bloomberg decides, sort of

Many Readers are probably wondering who is Michael Bloomberg?  Allow Wry & Dry to observe that he is the Nth Democrat, where N is a large number, to put up a hand to run against I-Want-Four-More-Years-Trump.

But Mr Bloomberg has a seriously special quality.  He is as rich as Croesus, with some US$58 billion in his piggy bank.  But he is also the thrice elected Republican mayor of New Yoik.  

His membership of both the Republican party (2001-2007) and Democrat party (before 2001, 2018 to present) as well as a sea-change stint as an independent (2007 to 2018) makes him the quintessential centrist candidate.  He has a mere 77 years on the clock - the Age of Indecision. 

Wry & Dry welcomes his candidacy.  The world needs more uncertainty.  And suggests that he leverage this uncertainty and morph his multi-party past to multi-party present.  And stand for both the Republicans and the Democrats.  

Search-for-yield get ridiculous

Readers know that interest rates are at all-time lows.  In the US stocks pay dividends at most half of what they are in Australia.  And so other places to obtain a decent interest rate are keenly sought, to the point of the ridiculous: car loans.

Retail investors are pouring into sub-prime auto asset-backed securities (ABS).  These ABS are bundles of loans to people to buy cars or trucks.  And the demand is such that the rate of return is just 0.9% higher than the rate at which the government of the Yoo-Ess-Ay can borrow.  Wry & Dry says again: these are sub-prime loans.

The delinquency rate (loans more than 90 days' late) is 4.8% and growing.  At the peak of the GFC, that rate was 5.2%.

Cartoon how it all started car loans

Wry & Dry is not raising the red flag.  Yet.

Unclear on the concept 

South Africa’s state-owned flag carrier is on the brink of financial collapse after it paid only half of staff salaries this month and struggled to secure funds to survive.

Earlier in November SAA's flights were grounded as a result of a strike by unions, protesting at job cuts.  So, how many job cuts do you really want?  100%?

Focusing on the big issues

I'm-in-Charge-Of-Everything-Trump decided to overrule a military decision to demote and de-signify a Navy Seal (the Seals are the elite branch of the US military, roughly equivalent to the SAS or SBS).  And he fired the US Navy Secretary for having the temerity to proceed with the demotion, etc.   

The Tweet said it all: “The Navy will NOT be taking away Warfighter and Navy Seal Eddie Gallagher’s Trident Pin.  This case was handled very badly from the beginning. Get back to business!”  

Wry & Dry wonders who should get back to business?  And 'Warfighter'?  Really?

Cartoon warfighter

Just askin'. 

Pretty useless, but interesting

A Wry & Dry family member is in the manufacturing business.  And had a complaint from a customer.  The customer was really, really aggrieved.  And said he would take the company to Consumer Affairs.

Family member: "But we have dealt with all of the issues that you complained about.  And made that clear in the email."

Grumpy customer: "But in the email you did not address my hurt feelings."

Sigh.

Wry & Dry is offering a trip for two to London for the first Reader to correctly name the generation of the complainer:

a.  Baby Boomer (born 1944-1964)

b.  Generation X (1965-79)

c.  Millennial (Generation Y 1980-94)

d.  Generation Z (1995-)

Cartoon milennials

Not that anyone's afraid of a UK Labour government, but...

...two leading UK energy firms have moved ownership of their UK operations overseas to protect investors from Jezza Corbyn's nationalisation plans.  National Grid has opened offshore holding companies in Hong Kong and Luxembourg and SSE in Switzerland. The companies together own Britain’s entire gas and electricity transmission spine. 

Readers will know that the moves will not stop the nationalistion of the businesses, but because Switzerland, Luxembourg and Hong Kong have bilateral investment treaties with the UK, investors will be paid properly in the event of nationalisation.

Wry & Dry understands full well that this is a corporate response to Jezza, and it won't be the last.  Moreover, somewhat below the radar, Wry & Dry's man person in London advises that some billions of pounds of investment assets have already left the sceptr'd isle for other jurisdictions.

Cartoon uk election fleeing to HK

A sad note

Wry & Dry sadly notes the passing of one of Australia's greatest exports: Clive James.  Best known for his dry and piercing wit, James was a rare creature in his sphere, a self-effacing gentleman.  He described his writing talent as merely, "All I can do is turn a phrase until it catches light."

His autobiographical works: Unreliable Memoirs, Falling Toward England, May Week Was in June, North Face of Soho and Blaze of Obscurity, are expositions of wordsmithing rarely found in modern times. 

But Wry & Dry found deeper pleasure in his deeper works: specifically his Cultural Amnesia, a collection of essays on 106 interesting people, ranging from Louis Armstrong and Tony Curtis to Camus and Proust.

His word-craft was of Gower batting, with the subtlety of Mozart's clarinet concerto and the use of words as a 19th century impressionist might use patterns of light.  

Iran v. Iraq

A couple of weeks ago Wry & Dry alerted Readers to the increased unhappiness of a range of folk in the Near East about Iran's external meddling and internal brutality.  The unhappy folk were in Yemen, Syria and Iraq, and Iranians themselves.

Well, yesterday protesters burned down an Iranian consulate in southern Iraq: another example of popular anger over Tehran’s alleged interference in Iraqi life. This is the second Iranian consulate that has been targeted during weeks of anti-government demonstrations.  

Déjà vu all over again?

Love conquers all

Wry & Dry loves a love story.  And knows that love conquers all.  Which explains why a picturesque 17th-century convent in the Tuscan hills has had to shut its doors.  The reason for the sudden closure is reported to be because a 40-year-old nun fell in love with a local gent, and was obliged to leave the convent.  This left too few nuns (3) to run the convent.

Wry & Dry isn't sure what the Tuscan Workplace Occupational Health & Safety regulations require, but to run the place (see picture) with even four nuns would seem a tall order.  

 The former Cappucini convent near Arezzo had been assigned to the Benedettine Olivetane in 2015

With its gorgeous location and views, Wry & Dry wonders if an international hotel chain might purchase the site.  Although there doesn't seem to be much room for the 'Trump Convent' sign.

Snippets from all over 

1.  Global trade slow down hits EU

The global trade slowdown is hitting the EU the hardest, according to new OECD data.  Exports and imports declined across all major EU economies, with falls of 3.6% and 1.7% respectively in France, and of 0.4% and 1.8% in Germany. In Italy trade dropped for the sixth straight quarter: exports decreased 1.2% and imports slipped 1%.

Wry & Dry comments:  And they are worried about Brexit.

2.  US economic growth revised up

The US economy expanded at a 2.1% annualised rate in the September Quarter, which is up from the initial estimate of 1.9%.

Wry & Dry comments:  Make hay.   

3.  US consumer confidence is down

US consumer confidence dipped in November to 125.5 from 126.1, falling again during a period that includes part of the critical holiday shopping season.  It was the fourth straight monthly decline.

Wry & Dry comments:  Another canary in the coal mine?

4.  Bitcoin crash

Bitcoin euphoria is wearing off fast as the currency plunged another 10% overnight to below US$6,600 on concerns about a crackdown on crypto operations by China. 

Wry & Dry comments: The Peoples' Bank of China (China's central bank) is warning investors not to conflate the technology with crypto-currencies. 

5.  Uber Brexit?

Shares of the ride-hailing giant declined 6.4% after the company lost its license to operate in London for the second time in two years. While its services won't immediately be blocked, it is a major blow to Uber, which must now appeal the decision and prove its safety record.

Wry & Dry comments:  Do battle with the London cabbie at your peril.   

And, to soothe your troubled mind ...

Miscellany 

Last words ...

President Trump has very little understanding of the military, does not know how to fight ethically and cannot be governed by a uniform set of rules and practices."

 -  Richard Spencer, until being given the DCM by Trump earlier this week Secretary of the US Navy, commenting on the President's interference in a military matter.

No surprises there. 

A lightly salted absurdity ...

Deepak, Wry & Dry's Uber driver ... 

... sent Wry & Dry a text message:

Dear Mr Wry & Dry,
Unable to drive today.  Anjali is terribly ill with morning sickness, so I am at home looking after Amulya.  I have some exciting news, and you may have had a point last week about my mother-in-law and the bricks….  I’ll explain next week.  Kind regards,  Deepak

 

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