Wry & Dry

Collude? So what? In both corners: The Goons. Jobs for the boys.

I-Wanna-Trump didn't collude with Russia.  Whaaaat?

W&D just doesn't understand all of the fuss.  For two years some members of the US media and the Democratic party have been working themselves up into a lather of Wagnerian proportions about whether I-Wanna-Trump 'colluded with Russia'.

Cartoon collussion trump

Can a person collude with a whole country?  Lichtenstein, perhaps.  But a country that spans eight time zones.  Nuh.

It's like the whole Democrat focus on Trump's misdemeanors and how they should lead to impeachment.  As the sheriff used to say about the cattle-rustling varmit after he was caught, "Hangin's too good for him."

By the way, successful (if wildly remote) impeachment of I-Wanna-Trump would lead to President Mike Pence.  Which might be worse: he would appoint right-wing judges, ignore climate change, etc, etc.  Why bother?

The American Democrats should get with the programme and focus on how best to win the next election.

Turning to weightier matters ...

W&D saw the following headline in yesterday's Financial Review:

"More sellers than buyers will drag values lower."

Ah, so that explains it.

It's only been X [1] years ... 

... since W&D first railed against banker and bank director remuneration being based on the nefarious 'Total Shareholder Return' (TSR).  TSR is the sum of dividends paid by a company in a year and share price growth in that year.

Any director or senior executive wanting to ramp up his/her bonus is going to do what he/she can to ramp up TSR by the easiest way possible: by ramping up dividends.

Which is exactly what happened in bank stocks in the mid 2010s.  The banks began to pay out higher and higher levels of dividends, thus enhancing TSR.  A side consequence of this was that in a world of falling deposit rates, retail investors started investing in bank stocks - to get the juicy dividends.  Thus also pushing up share prices higher than the growth in profits would suggest.

So executives and directors who had their bonuses based on TSR were laughing all the way to, well, the bank.

Cartoon banks apply for an inside job

At last someone has listened to W&D.  It's the chairman of APRA (the prudential regulator), Wayne Byres.  Mr Byres has told bank boards that the portion of executive pay driven by TSR should fall below 25% to focus management on serving customers.

Management 101, really.

[1]  Where 'X' is a large number.      

Brexit musings: W&D's weekly watch on adults in the sandpit

Q.  What do get if you cross The Goons, Monty Python, Mr Bean and Fawlty Towers?

A.  The UK House of Commons.

Cartoon brexit mob rule inside parliament

My dear fellow.  It was a collective shooting oneself in one's foot.  Patting themselves on the back earlier this week after taking control of the Brexit process from UK PM, Mrs May, they then yesterday emptied their respective Purdey shotguns [2] through their Church's brogues by voting down each of the eight Brexit options upon which they had insisted on voting. 

To help along the process, and also after listening to W&D advice, Mrs May said she would resign after Brexit was agreed upon.  This didn't help the now anarchical MPs.

Perhaps some MPs are now quietly asking themselves, "What would Winston have done?"  W&D's answer to that was epitomised in Patrick Cook's cartoon for W&D from two week's ago:

 Cartoon another PM might have presented a no deal option   

The new Brexit deadline agreed with the EU is 12th April.  If the anarchists in the House of Commons cannot agree, then it's a No-Deal Brexit.

[2] James Purdey & Sons, or simply "Purdey", is a British gun-maker of London, specialising in high-end bespoke sporting shotguns and rifles. Purdey holds three Royal Warrants of appointment as gun and rifle makers to the British and other European royal families.

Meanwhile, across the ditch ...

Fresh from hoodwinking the Italian government into thinking there was a benefit to Italy from China's Belt and Road initiative, Emperor Xi Jinping called in on French President Emmanuel Macron to see if the French were as gullible.

Err, non.  And the same message came from Chancellor Merkel, "Nein!" 

In fact, German Foreign Minister Heiko Mass said, "If some countries believe that they can do clever business with the Chinese, then they will be surprised when they wake up and find themselves dependent."

Cartoon china and italy fortune cookie


But the French, always quick to embarrass someone who has embarrassed them, sent a digital message to I-Wanna-Trump.  M. Macron, with Emperor Xi by his side, announced that Airbus had sold some 300 planes to Chinese Aviation Supplies.  That's about a $34 billion order.

The order included the A320 NEO aircraft, the forerunner and competitor to Boeing's now-grounded 737-MAX.

W&D isn't suggesting for a moment that China's order with Europe's Airbus rather than Yoo Ess Ay's Boeing has something to do with the Sino-American trade war. 

Jobs for the boys.  And girls.

Sigh.  Employment growth in Australia over the past 12 months has been entirely due to hiring in the public-sector.  The private-sector cut staff in every state except NSW and Victoria.

Jobs growth

W&D is biting his tongue.  And will holster his quill, so to speak.  And leave it to Readers to draw their own conclusions.

Budget - who cares

Readers with little to do on Tuesday night other than sort out the sock drawer will watch the Federal budget.  Neophyte Treasurer, Josh Frydenberg will give his maiden budget address. He will do a good job.

Not that it matters.  It is the budget of his opposite number, Chris Bowen, that is important.  Because when the 'money bills' are presented to the House later in the session, it will be Mr Bowen who presents them.

The election will be called next week, probably on the Sunday after the budget, for, W&D predicts, Saturday 11 May.  Cue a silhouette of Tony Abbott against a setting sun.

The sole aim of Mr Frydenberg's budget, then, is to save as many government seats as possible by showing a perspicacious blend of tax cuts, targeted fiscal generosity and, at the same time, fiscal rectitude, all under the shouted umbrella of a 'balanced budget'.

A softer leadership style

W&D was most impressed by the sensitive and clearly natural radiation of caring shown by Jacinda Ardern, the Prime Minister of New Zealand following the Christchurch massacre. 

Which led W&D to wonder about what talents and skills we-the-people should expect from our leaders.  Is it a necessary attribute of a Prime Minister or President to be able to genuinely and obviously share grief?  Is it the role of the country's political leadership to take centre-stage in an outpouring of empathy?

Back in W&D's younger days, this duty fell on the Head of State, not the Head of Government.  The reasons are many, not least of which is the temptation of the Head of Government to use the occasion for political purposes. 

Ms Ardern did what seemed to come naturally to her.  But would Readers have been so impressed had she not had those skills (for which she was not elected).  Many political leaders (mostly men, W&D guesses) would make a hash of it all.  

The tragedy for Ms Ardern would be if her government-leadership skills were now to found wanting.   

Where to fit another 4 million?

Readers will know that W&D has a keen interest in Melbourne's population prospects.  For no other reason than he wants the population to go down.  This will ensure that he gets a seat on the 6.40pm train from Flagstaff station.

But the news is not good.  Melbourne's population will grow by some 4 million souls by 2054, according to the boffins.  Err, so where are we going to fit them all? 

Melbourne 1 by population

But W&D is sure that Chairman Dan Jong-Il's successor, Chairman Dan Jong-un will have it all worked out.  

Snippets from all over 

1.  Down at the dumpling restaurant

China's industrial firms posted their worst slump in profits since late 2011 in the first two months of this year, falling 14% year-on-year, according to the National Bureau of Statistics. 

W&D comments:  Another poor statistic to blame on the Sino-American trade war. 

2.  EU: the times they are a changin' 

The European parliament has voted to scrap the twice-a-year custom of changing the clocks by an hour in spring and autumn by 2021.  Individual countries would then need to choose to be on (a) permanent summer time; (b)permanent winter time; or (c) keep the current twice-yearly switch.

Cartoon EU time zones

W&D comments:  The EU continues to focus on the big issues.  

3.  Cannabis - the bad news   

Regular use of cannabis with a potency greater than 10% increases the risk of developing psychosis five-fold, according to a study published this week by the Lancet.  It also found that using less potent strains daily increased the risk three-fold.

W&D comments: Pass W&D the 2007 Perrier-Jouët Belle Époque: no psychosis there.  

4.  Australia: Record low bond rates

Australia's 10-year bond rate (essentially, the rate at which the government borrows money) yesterday tumbled to a historic record low of 1.73%.  

W&D comments: This is important stuff.  Such a low long-bond rate means that inflationary expectations are low, possibly driven by a sense of a softening economy.  And if the long-bond rate falls below short term rates (called 'an inverted yield curve'), it is often an indicator of an economic downturn.  The RBA Board meets on Tuesday.  Will it hold its nerve and not lower interest rates?  

5.  Best airports

Singapore's Changi Airport has been announced as the world's best airport for the seventh year running.  Tokyo's Haneda and Seoul's Inchon came next.  Brisbane came in at #18, Sydney at #21 and Melbourne at #23.  The best American airport was Denver at #32.

W&D comments:  Making America Great Again clearly doesn't include its airports.  Or its airlines for that matter. 

Tool of the Week 

Podium finish goes to ... Pauline Hanson, Leader of One Nation, who said that she was "shocked and disgusted" at a television programme that her political right-hand men were caught on tape seeking $20m from the US gun lobby.  Her chief-of-staff James Ashby and her Queensland state leader Steve Dickson went to the US and connected with the National Rifle Association.

Cartoon one nation and guns

She was not "shocked and disgusted" that the two put out the One Nation begging bowl to the NRA.  But instead "shocked and disgusted" that a Qatari news organisation had "targeted an Australian political party", by having one of its journalists pose as a gun lobbyist to assist them in their fundraising efforts.  And, as some journalists are want to do, turned the sting into a major story.

Good to have Pauline back in the headlines.  She is now approaching Tool of the Week Hall of Fame status.    

Deepak, W&D's Uber driver' was asking about Apple. 

"I hear Apple is moving out of mobile phones and into credit cards," he asked as W&D got into his car.  "What's going on?"

"Well, hello, Deepak," W&D responded.  "Before we talk about Apple, where have you been?  Is everything okay?"

"Do you mean in addition to my usual problems of grumpy mother-in-law, Bitcoin, 6 refugee-cousins, sleepless baby, MSB and my now-famous pilot brother who gets all the attention?  Well, yes, this car got stolen last week.  I've only just got it back."   

Not wanting to hear of all of Deepak's woes, W&D steered the conversation.  "Well, I'm sorry to hear all about that.  And turning to Apple, in one fell swoop, it has announced that it is taking on banks, Hollywood and other tech giants."

"What!" exclaimed Deepak. 

"Well, not quite all at once, and not quite in all their markets," W&D replied calmly.  "It's a classic exhibition of 'cash cow' management."

"Cash cows?"  Deepak seemed excited.  "Are these sacred cash cows?"

"No," answered W&D sharply.  "It's got nothing to do with India's sacred cows.  It's a management term for a product or service that has 'achieved market leader status', provides positive cash flows and a return on assets that exceeds the market growth rate.  In Apple's case, it is its iPhone."

"Ah, I see," said Deepak.  But W&D wasn't sure. 

W&D continued: "Apple has been aware for a few years that its iPhone was a 'cash cow'.  And has been searching for ways both to keep milking the cow and to leverage the revenue it produces to enter new, more prospective markets.  And so, on Monday, announced it was entering or massively increasing investment in 'services': video streaming, news, games and credit cards."

"Wow,"  Deepak was astonished. "But how is it going to take on the banks, Netflix, etc?"   

"Well, consider this, Deepak.  Apple has three huge advantages."

"Firstly, there are 900 million iPhones worldwide.  Which is, for example, more than six times as many as Netflix has subscribers.  So, it has customer relationships."

"Secondly, it has an amazing brand, well recognised for quality and innovation.  According to Forbes, a business magazine, Apple is the world's most valuable brand."

"Thirdly, and importantly, Apple has the cash to invest: it has reserves of $245,000,000,000."

"Wow," repeated Deepak.

"But for now, Deepak," said W&D as he unbuckled his seat belt, "I suggest you focus on Anjali and your daughter.  And think of how you are going to repay the loan you took out to invest in Bitcoin."

Deepak went white.  "How did you know about that?"

"Anjali told me," replied W&D as he strode off.  "She emailed me when you were in India." 

And, to soothe your troubled mind ...


Last words ...

"I'm a compliance nerd and I think that compliance is sexy."

 -  Jane Couchman, CBA's executive general manager for compliance, speaking at a banking conference.   

These days only a woman could get away with saying that.  And she did, to much laughter.  Such a sentence reveals as much about the speakers as the subject itself.  Reminiscent of Ambrose Bierce [1].

[1] Ambrose Bierce (1842 – 1914) was an American short story writer, journalist, poet, and Civil War veteran.  His book The Devil's Dictionary, of which W&D is a devotee, was named as one of "The 100 Greatest Masterpieces of American Literature" by the American Revolution Bicentennial Administration.
The mid 19th century was a weird period for children's names.  Bierce was the tenth of thirteen children, all of whom were given names by their father (Marcus) beginning with the letter "A": in order of birth, the Bierce siblings were Abigail, Amelia, Ann, Addison, Aurelius, Augustus, Almeda, Andrew, Albert, Ambrose, Arthur, Adelia, and Aurelia.  

First Samuel client events calendar

Events for 2019

Eat Street

Invitations not yet sent

21st May 2019 - The Sofitel Hotel

NGV Viewing and Cocktail Night

Invitations not yet sent

25th June 2019 - NGV 

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

Ex-Bosnian Serb leader Radovan Karadzic thought that the 40-year jail sentence for the Srebrenica massacre in the 1992-95 Bosnian war was excessive.

So he appealed. 

But United Nations appeals judges threw out his request. 

But, wait.  There's more!  They then said that his original jail term was too light given the gravity of his crimes and the weight of his responsibility.  They extended his sentence to 'the term of his natural life'.


No downside in the appeal, though.  He is 75.

Guess what happened next?

Michael Walters, 52, of Ocean County, New Jersey, organised and ran the fundraiser for the boys' baseball team of which he was manager.  Suspicions were raised when Walters was unable to pay one of the team's fundraising winners.  And police contacted.  But the next day, Walters fronts the local police station with cash to pay the winners.

What had happened?

a.  Walters had it all the time - he just forgot where he put it; 

b.  Walters had spent the money, but replaced it by borrowing from his wife;

c.  Walters had spent the money, but replaced it by borrowing from his bank; or

d.  Walters had spent the money, but replaced it by robbing from his bank.      

Close.  But no cigar.  d. is correct.  He drove to the local Santander Bank, parked out the front, walked in, put on a mask, demanded dosh, was given dosh and fled in his car.  A surveillance video picked up the car's number plate, the police picked up Walters.            

(New Jersey 101.5)  

Pro tip

If you've been charged with assault, it's probably not a good idea to slug your defence lawyer in court.  And in front of the judge.  And on camera.  (see the clip here).

But that is what William Green did in the Broward County bond court (Florida) on Wednesday.

Judge Jackie Powell called a recess as bailiffs tackled Green to the floor and carried him out.

Green's chances were not helped by his lawyer being female.  She was bruised, but okay.