Wry & Dry

Biffo on Planet Canberra. Hats in the ring. Anniversary: Peace Prize for acquiescence.

The usual suspects ...

... have again provided W&D with much material: I-Wanna-Wall Trump has now declared a national emergency so he can get his wall built; the Brexit process continues to get a spoke in the wheels; China remains unbending on the trade talks with the Yoo Ess Ay; etc.

But just when W&D was reaching for another bottle of 2007 Perrier-Jouët Belle Époque for more domestic literary inspiration, Planet Canberra came to life.  There was a bit of biffo and a bit of vote-buying.

Planet Canberra - biffo

Good grief!  Punches were thrown in Parliament House; between Senator Brian Burston (this week with Clive Palmer's party, last week with Pauline Hanson's) and Ms Hanson's chief-of-staff.  The biffo couldn't possibly stay on the field.  The cameras were rolling, numbers taken and the matter referred directly to the Tribunal.

Cartoon cane toads senate

Readers will know that last year Senator Burston accused Ms Hanson of sexually harassing him, especially at Pauline Hanson's One Nation Party's inaugural AGM at the delightfully named Rooty Hill RSL.

Which suggests that Senator Burston's judgement has withered as much as ... oh, never mind.

Readers will not be surprised to be reminded that Both Senator Burston and Senator Hanson represent the state of Queensland. 

Planet Canberra - vote-buying

There is more to the so-called Medivac Bill than meets W&D's rheumy eyes.  W&D understands the politics but not the substance of the legislation.

The politics is simple.  Call W&D a cynic, but politically central independent politicians want to get re-elected in the upcoming election.  Readers will consider that $200,000 p.a. plus expenses is a good incentive to buy a few votes.

Dr Kerryn Phelps, the new member for Wentworth (succeeding Croesus Turnbull), needs the preferences of the Greens to be sure of retaining her seat.  So she sponsored the legislation, which clearly appealed to the populist progressive-left.

Cartoon doctors without borders

Readers will know that a swing-vote Senator, Derryn Hinch, will struggle to retain his Senate seat (for many reasons not least of which is the increased quota at a normal or 'half' Senate election).  And so needed to widen his electoral appeal.  What better way than to ensure Green preferences.  

Concerning the substance of the legislation, W&D has never understood any of this stuff.  Except to make two observations:

Firstly, if the whole thing is such a good idea for the Labor Party, why didn't Bill Shorten initiate it?

Cartoon boats kevin

Secondly, but if called upon to prevent whomever is about to invade from invading, W&D would man person the battlements, fixed bayonet at the ready.

But it seems obvious that the greatest threat to W&D does not come from folk drifting in on boats clearly inadequate for the prescribed task.  But in fact from an invasion by the Queensland cane toad.[1]

And it is to this threat that W&D urges political parties of all shades to turn their attention.

[1]  Cane toads are arguably the greatest threat to Australia's fauna. Native to South and mainland Middle America, Cane toads were introduced to Australia from Hawaii in June 1935 by the Bureau of Sugar Experiment Stations, now the Sugar Research Australia, in an attempt to control the native grey-backed cane beetle(Dermolepida albohirtum) and French's beetle (Lepidiota frenchi).  There is no evidence that they have affected the cane beetles that they were introduced to prey upon.

Hats in the ring

Readers will be dismayed to know that the next US presidential election will be held as soon as next year.  W&D can already hear Readers calling for either the Valium or the 2007 Perrier-Jouët Belle Époque.  Or both. 

At this stage Republicans are waiting to see if I-Wanna-Wall Trump stumbles.  And hence no wannabee Republican candidates have thrown their topper into the ring.

Not so the Democrats.  There are now 10 major candidates, with Minnesota Senator Amy Klobuchar the latest to toss her cloth-cap into the ring.  And that's without the much-mooted candidates: former VP Joe Biden and the ageing rock-star Bernie Sanders (who probably caused Hilary Clinton to lose last time, by dragging her too far to the left in the primaries) announcing their intentions.

W&D is rooting for Amy.  She's 58, a generation younger than some of her rivals and the incumbent; she's been in the Senate for 12 years (Obama was a Senator for less than four years and look what a hash he made of the top job); she is close to a centrist candidate and is clearly more pragmatic than ideological.  And she is not one of the nuttzo, hairy-chested female Democrat zealots (e.g. Elizabeth Warren), who parrot simplistic slogans (a skill learned from I-Wanna-A-Wall Trump, whose simplistic slogans sound so wonderful to some but whose emptiness reflects that of the brain of the orator.  

And Amy's greatest attraction?  She has an 'F' rating from the National Rifle Association.

At the risk of being serious...

Sometimes it is incumbent upon W&D to warn Readers of economic or market events that are telling.  This week an event in Europe occurred that sent a shudder through the spines of those who invest in bank 'coco' bonds.

Cartoon coco bonds

Work with W&D on this.

In Australia, these are colloquially termed 'hybrids'.  That is, a bank security that initially pays a floating-rate of interest.  And later is the possibility that the bond will be converted into shares of the bank.  This conversion is at the option of the bank (or can be forced by the central bank) and is most likely to happen when the bank can no longer efficaciously afford to pay interest.  It then has no obligation to pay dividends on shares.  And, in any case, the bank can choose to repay the hybrid at any earlier agreed date ('call' date). 

The advantages of these types of securities is that the capital raised helps meet capital adequacy requirements of central banks.   In Europe they are termed contingent convertible bonds, or coco bonds.  

Got that?

Well, the problem is that Santander, Spain's largest bank, this week decided not to call early its €1.5 billion coco bond, against what is seen as a gentleman's agreement in the bond market so to do.  The last time this happened was at the height of the GFC, when Deutsche Bank chose not to call a coco.  Investors are furious with Santander - the price of the coco had risen to close to 100 (as one would expect) as the call date approached.  And then it fell back to 98 with the announcement of no-call.

Why does this matter to Readers?  Well, simply, investors have to read the fine print.  Issuers of hybrid bonds are not bound by any market gentleman's agreement or understanding by bond owners.  A bank is entirely within its rights to exercise its rights under the terms of the hybrid issue.  Even if it means upsetting investors.  Be warned.

Happy Anniversary I

2019 is the 10th anniversary of then President of the Yoo Ess Ay, Barack Obama, being awarded the Nobel Peace Prize.  This Nobel Prize was quite remarkable as President Obama had been in the White House for less than two weeks when he was nominated for the award.

Cartoon Obama Iran for peaceful purposes

Readers will be fully aware of the outworkings of President Obama's, err, peace initiatives.  His words were engaging, compelling and persuasive.   But his acquiescences were reckless and have far-reaching implications: China's occupation of, and erection of military bases on, disputed atolls in the South China Sea; Syria's use of chemical weapons against rebels; Russia's breach of an arms' limitation treaty, etc. 

Not since Chamberlain has the world seen such an appeaser [2]. 

The greatest contribution of Obama's presidency was that of Michelle, not Barack.  She wrote an honest, authentic and delightful autobiography. 

[2]  UK Prime Minister acquiesced and actually agreed to Hitler's occupation of Czechoslovakia in 1938.  This weakness emboldened Hitler to further escalation. 

Happy Anniversary II 

It continues to astound W&D that such a beautiful country as Persia/ Iran, with amazing natural advantages and a history of great intellectual thinking, should have spent much of its history under the scimitar of despots.

2019 is the 40th anniversary of the revolution that overthrew the Shah of Iran (i.e. Mohammad Reza Pahlavi, whose father changed the name of the country to Iran from Persia).  Mohammad Reza did many good things to drag Iran out of the 19th century: economic and socially.  But he lived in an isolated palaced-world of despotism, corruption and indulgence.  The indulgence extended to shipping in meals from Parisian restaurants.  And buying a personal collection of 140 classic and sports cars including a Mercedes-Benz 500K Autobahn cruiser, one of only six ever made.

And hence rudely got the DCM in 1979 [3].

His successor, Ayatollah Khomeini, ruled just as corruptly, brutally and ruthlessly, but under the guise of a benign theocracy.  Much like Lenin returning to Russia from exile in 1917, so did Khomeini return to Iran (after 14 years in exile) in 1979 to wrest control from a provisional government.  Iran's provisional government came to power when the Shah was overthrown in January 1979, and lasted a nano-second after Khomeini's return.  Khomeini led a brutal and repressive theocracy.

Not much has changed since then.  Hopes for the regimes of Khomeini's successors have fallen.   

So W&D is not celebrating the 40th anniversary.

[3] Readers may wish to see the amazing movie "Argo", which is a reasonably accurate representation of the resultant US hostage crisis.  

And the EU is worried about Brexit

In the absence of any meaningful news from W&D's London office about Brexit, W&D thought a chart might exemplify one of the real problems that the EU has.  And why the EU is making such a fuss about Brexit.  That is, to cover up it's massive failing elsewhere.

Chart misery Index 

Snippets from all over 

1.  Australia

On Monday, PM Jimmy Morrison signed an agreement with France to build lots of submarines.  The first sub is expected in service in 2034.  If everything goes right.

Cartoon french submarines

W&D comments: Hang on.  It was in 2009 that a Defence White Paper called for the urgent acquisition of 12 'regionally superior' submarines.  Let's see, 2034 - 2009 = 25 years.  Readers are referred to the facile observation that Australia is a 'hemispherical power' [see previous article from W&D on this].  

2.  They the people of ...

... the UK say, according to the latest YouGov poll, that the Conservatives would be returned to government with an increased majority is an election were held last week.  The Tories would gain 4 seats, with Jezza Corbyn's Labour Party losing 12 seats.  Smaller parties pick up the balance of Labour's losses.

W&D comments: W&D has come to the view that Jezza doesn't really want to be PM, it would mean compromising too much on his principles.  But he is now hanging in there to be the puppet for his shadow Chancellor of the Exchequer (Treasurer), John McDonnell. [4]

[4] McDonnell is from the extreme left of the Labour Party.  In 2006, for example, he said that "Marx, Lenin and Trotsky" were his "most significant" intellectual influences.  Sigh.        

3.  Down at the car wash

Readers would have been aware that Amazon, a somewhat large US retail distribution company, chose New York City as the site of its new HQ.  City and state leaders had agreed to provide about $3 billion in incentives to secure that investment.  But they-the-people raised such a fuss at such a massive incentive that Amazon has now cancelled plans to build in New York.

W&D comments:  Readers will recall that W&D last year suggested that Amazon should choose Nutbush (population 259), that little old town in Tennessee.    

4.  The UK's economy ...

... grew at 1.4% in 2018, the slowest since 2012.   

W&D comments:  But at least its growing.  W&D predicts that the scapegoat for all of the UK's future ills, of whatever complexion, will be Brexit.  For example, if the Poms lose the Ashes.  

5.  Europe

The giant A380 “superjumbo” aircraft will end production after only a quarter of the expected orders came to fruition.  Manufacturer Airbus said yesterday the decision to dump the 544-seat double-decker was “painful” but the planes would continue to fly for years to come.

W&D comments:  This is a tragedy.  The upstairs, sharp end of this aircraft on some airlines has double beds.

Tool of the Week 

Podium finish goes to ... Dr Paul Bauert, the paediatric representative of the Australian Medical Association, who said that asylum-seekers on Manus Island and Nauru are in a worse situation than Jews killed in Nazi gas chambers during World War II.

The doctor was among 10 other doctors who joined activist group GetUp at Parliament House in Canberra to support a change to legislation concerning asylum-seekers.

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

... was nervous when W&D asked, "what news of Anjali.  Has your daughter arrived yet?"

"No," responded Deepak.  "The baby is due today, but Anjali is in good spirits, and just getting on with life.  That is, talking to her mother."

"Well, good luck.  And remember that first babies are always late.  You will need to be patient."

"Patience with Anjali is easy.  It's her mother and her six cousins that are the problem.   Anjali's mother is getting even more bossy.  And the six cousins are now afraid of leaving the house.  Even though they have months to go on their tourist visas, they think they might get arrested. 

"Have they gone to the immigration people to see how they can apply for refugee status?" asked W&D, trying to sound interested.

"No, not yet. They have been speaking to people they have got to know in our local Indian community.  They have discovered that they need to have a well-founded fear of persecution in India to stay here.  The problem for them is that as soon as they seek asylum they will be held in a 'closed immigration detention facility'.  They then seek community detention or to be granted a bridging visa.  And because they came to Australia on a tourist visa and over-stayed, they will not be eligible for any government benefits.  So I will be feeding them when their money runs out!  I'd be better off if they were locked up in a detention facility."     

"Indeed," said W&D carefully, as he unbuckled his seat belt.  "You need your bedroom back.  It must be smelly with seven men in the one room." 

Deepak's gloom deepened.  "Yes, it's like the black hole of Calcutta."  But then his eyes lit up.  "Hang on!  What if I reported Anjali's six cousins to the authorities.  They would take them away to an immigration detention facility.  And I would get my bedroom back!" 

W&D paused and turned.  "Well, that's one possible solution.  But if Anjali finds out it were you who turned her six cousins in, your chances of conjugal happiness will be ended."

But Deepak was still smiling mischievously as W&D strode off.   

And, to soothe your troubled mind ...


Last words ...

"Make no mistake: the next Democratic president will declare national emergencies on guns and climate change and cite the Trump precedent when doing so."

 - Doug Heye, former communications director for the Republican National Committee, on news that I-Wanna-Wall Trump is declaring a national emergency so he can get his wall built.

And that is exactly what the testiculated Nancy Pelosi would push a Democrat President to do.

First Samuel client events calendar

Events for 2019

Special CIO Client Forum

Invitations sent 

26th February 2019 - Leonda, Hawthorn

Eat Street

Invitations not sent

21st May 2019 - The Sofitel Hotel

Contact Jess at responses@firstsamuel.com.au to RSVP

Some lightly salted absurdities from all over ...

At the extreme left-hand end of the Bell Curve

In a tense exchange before the Senate Armed Services Committee this week, the four-star admiral who led the U.S. Navy’s internal review into two deadly collisions in 2017 told members that while two ships had tragic accidents that year, the rest of the fleet was collision-free.

"But the fact of the matter is 280-odd other ships weren’t having collisions,” he said.


So, there were no failures that led to these collisions because, err, there are 280 other ships that didn’t have collisions?   

Guess what happened next?

The home of Karina Gutierrez, of Bridgeport, Connecticut, was blacked out in a thunderstorm.  Karina began to search the house for candles and she found what she thought was a candle in the basement.  She lit the wick.

Sadly, the candle wasn't a candle, but a quarter stick of dynamite.  Which exploded.  She lost part of her left hand, suffered injury to her right eye and permanent scarring of her face, chest and arms as the result of the explosion.  What did he do next?

a.  Install an emergency generator; 

b.  Purchase a pack of candles and leave them in the kitchen;

c.  Clean out the basement and see if there were any other nasties there; or

d.  Lawyer up.       

Close.  But no cigar.  d. is correct.  Karina lawyered up.  And is suing the previous owner, who sold the home to Karina some years previously.    


Reminds W&D of the coyote and the road runner.

It's a weird world