Wry & Dry

Bad hair week. China: Arctic power? Barnaby.

Bad hair week

For any vain person who has bad hair all of the time, it must be somewhat hurtful to have a bad hair week on top of bad hair.

Actually, on thinking about it, Virus-What-Virus-Trump wouldn't have noticed either.  But to the rest of the known world, there is increasing and indeed alarming evidence that there are more unknown unknowns about Virus-What-Virus-Trump than hitherto thought possible.

Wry & Dry is now really worried about Melania.  If V-W-V-Trump thinks that injecting corona-virus patients with disinfectants or exposing them to high levels of ultra-violet rays might cure them, what does he do if Melania complains of a headache (Wry & Dry is here writing of a real headache, not a "No.  I've got a headache" headache)?  

Is she forced to drink detergent?  Or perhaps rub snake oil into her scalp.  Wry & Dry's nightmare is waking in a shared ward in a public hospital with a Trump doppelganger named Dr Donald Quack leaning over him, holding a syringe of disinfectant.  And with glassy eyes usually found on a fishmonger's slab and a voice saying, "this will fix all of your problems."

Cartoon dr trump

Time in the market...

...is more important than timing the market.  And no one rings a bell at the bottom.

The ASX200 including dividends rose 9.5% in April.  But, to repeat Wry & Dry's favourite comment, it's too early to tell.  See more, below, in Spot the Difference.

CV-19 bust

It's a disaster in Europe.

France announced yesterday that its GDP fell 5.8% in the March quarter.  The drop is France's worst since records began in 1949.  Mon Dieu!

And it's raining on the plain in Spain.  Its GDP fell 5.2% in the quarter.  Not olé!

The eurozone economy (i.e. all countries that use the euro as its currency) fell by 3.8%, also a record decline.

Europe waits

Wry & Dry still marvels at the front of social justice campaigner (and other campaigns) Tim Costello when he once said, "The whole world is watching..." regarding an issue of which he felt particularly earnest.  But very few others felt the whole world was watching.

Which brings Wry & Dry to the German constitutional court, which on Tuesday meets to decide if the Bundesbank can participate in the ECB's rescue operations of, particularly, Italy.  Some 40% of the ECB's bond buying has been of Italian debt.  This irks many Germans, who consider that the sheer volume of bond purchases by the ECB can no longer be seen as monetary policy.  And that it, in fact, breaches the EU's Treaty Article 123, which, as Readers know, prohibits monetary financing of states.

So, as with Tim Costello's statement, the whole world will not be watching.  But Readers can bet that Italian, Greek and Spanish politicians will be.  And, of course, the Germans. 

Spot the difference

On the left is a construction of how emotions affect the stock market over time.  On the right is the S&P 500 since 2010.

Chart spot the difference

Spot the difference.

It's come to this

How bad can it get?  See below for the headline of the week:

Cartoon Bunnings car park

A Wry & Dry reflection: CV-19 Dystopia

Since Moses led his people to the then promised land, societies have been seeking a sort of compromised Thomas More Utopia [1] but with freedom of choices.  And over the centuries, for a whole lot of reasons, societies have generally fumbled their way to better places.  That is, from poverty & oppression to better living standards & more freedoms.  

But that fumbling forward was regularly interposed with dystopia of all sorts, generally at the hands of tyrants or autocrats.  Examples of societies today that have the makings, more or less, of dystopia, are North Korea and Communist China - societies that are increasingly frightening.

Which brings Wry & Dry to today's seeming trend-to-dystopia.  CV-19 has caused the world to be placed in an induced-economic coma.  And governments are increasingly governing by fiat, more or less.  It's not only the power-crazed Virus-What-Virus-Trump and his barrage of Executive Orders.  Steps taken to alleviate the upcoming economic impact are massive, but will, Wry & Dry senses, do little to lessen the sense of increasing CV-19 Dystopia.  Unless people take the road less travelled.

This CV-19 Dystopia has two aspects.

Firstly, economic, where unemployment will throw millions permanently on the dole.  Readers can think of the 20.5 million American jobs created in the 11 years since the GFC.  Over just the past five weeks, those jobs have evaporated, many forever.

Secondly, societal.  This isn't just the short-term mental health affect of the lock-down.  This is where we increasingly accept greater government intrusion in exchange for less self-reliance.  Wry & Dry meekly admits that, bovine like, and like millions of Australians, he downloaded the Coronavirus app.  On reflection, down what road does that lead.  

Cartoon utopia

Time for people to take the road less travelled.  And... 

[1]  The term utopia was created from the Greek by Sir Thomas More for his 1516 book Utopia, describing a fictional island society in the southern Atlantic Ocean off the coast of South America.  More's utopia was more monastic than otherwise, especially as pre-marital sex was punished by lifetime celibacy.  Essentially, in the same way the left-wing/ right-wing image falsely portrays reality as a straight line when in fact the ideals are in a circle, where the extreme left-wing ideals essentially meet extreme right wing ideals, so too with Utopia and Dystopia.  At their extremes, they are similar.  Is the world of Brave New World utopian or dystopian?

History 101

Readers will be laughing at Victoria's Deputy Chief Health Officer this week, a Dr van Diemen, who commented on the 250th anniversary of Lieutenant Cook landing in what is now Botany Bay.  The good doctor wrote in a tweet:

"Sudden arrival of an invader from another land, decimating populations, creating terror. Forces the population to make enormous sacrifices & completely change how they live in order to survive. COVID19 or Cook 1770?"

Wry & Dry understands that some people may have views about the settlement of folk from the UK not being a good thing.  But Lieutenant Cook was on, well, a Cook's tour.  The settlement of Australia was not decided or undertaken by Cook.  He died at the hands of grumpy Hawaiians in 1779.  It was Captain Phillip who established the colony of New South Wales in 1788.

Wry & Dry hopes that Dr van Diemen's knowledge of medicine is far, far greater than her knowledge of history.

And, of course, had the Dutch followed up Abel Tasman's 1642 landing on what was known as Van Diemen's Land until 1856, Dr van Diemen would have sent her tweet in Dutch.  And lamenting.. "COVID19 or Tasman 1642."  But not realising the irony.

Doing his bit.  Again.

UK PM Borisconi has become a father for the Nth time, where N is a large number.  Wry & Dry wishes Borisconi and soon-to-be-Mrs Borisconi the very best.

Catoon boris zooms the kids

And hopes that they have already saved for Baby Borisconi's school fees.  The other hope is that BB takes after his mother.  Not his father.

Meaningless data

Every day Wry & Dry scans the media for honesty about forecasts.  He finds none.  Economists, statisticians, bankers, investment companies, etc are paid to make forecasts.  Even in times of sunlight uplands this is difficult.  The reality is that the task is actually trying to turn what is essentially an art into a science, i.e. a number that singularly captures all the known and unknown inputs.

But there is an ease about a single number.  And the ease with which the observer unquestioningly takes in the number suggests a sort of laziness.  How much easier is it to just look at the star rating for a new movie than to read the review?

Wry & Dry wishes they would say, "Sorry, I really don't know.  It's an educated guess."

Readers might now consider forecasting in a world of an engineered shut down of economies.  So, for example, are these folk really able to forecast economic activity when activity is currently verboten by decree?  And reduce all of the inputs to an output of a single number?

Or value a company?  If Starhudson's Cafe is closed for three months, quarterly revenues will drop to zero.  Profit is negative.  P/E is infinite.  What is the value of the company on that basis?  

That's the wrong question.

Readers will know that once the economy opens, revenue will return, profit will return and P/E drops from infinity.  The company will have value.

By the way, the correct question is what is the range of those values in two years time?

Wry & Dry urges Readers to ignore the forecasts, as much for a company as an economy.  Does NAB really know what its mortgage defaults are going to be?  Does the IMF really know what economic growth next year is going to be?

No.  But it makes for media content. 

China 1: near-Arctic?

Readers will be aware of China's occupation of other peoples' atolls and islands in the South China Sea and the building, unopposed, of military bases thereon.

Well, consider this unlikely but predictable grab.  China is now making claims to the Arctic.  The Yoo-Ess-Ay, Roosha, Canada, Denmark, Finland, Iceland, Norway and Sweden are all logically members of the Arctic Council.  Readers will know that China's northern most point is as many as 1,448 kilometres from the Arctic Circle.

But China has just unilaterally declared itself as a 'near-Arctic nation'.  And wants to be in the Council.

Cartoon the place for a wet market

Watch out for China to also declare itself to be a 'near-Antarctic nation'.  Being a mere 9,313 kilometres (as the blow flies) from the Antarctic, what could be more compelling?

China 2: debt trap diplomacy

Readers who understand credit analysis know that the only reason one might lend money to someone who cannot repay it is to grab the debt-security that otherwise was not for sale.

Wry & Dry has written at length about China lending funds to countries that, generally, cannot repay.  This is all wrapped up in its massive soft-power grab, accurately called "Belt and Road Initiative."  Because if the debtor country doesn't repay, China takes the initiative and hits the road, as it were, with the security under its belt.

Readers might consider the below (from the august Financial Times).  Take a squiz at some of the credit worthy countries:

 Chart belt and road

Readers shouldn't consider that this massive programme and the funds that go with it are acts of munificence.  It's all about creating dependence and grabbing security. 

Readers will be aware of loans given by China to construct the Hambantota Port in Sri Lanka.  Sri Lanka failed to pay its debt obligations and so China took a free 99-year lease on the port in place of payment.  Debt trap diplomacy at its best.

CV-19 will cripple the ability of many countries to feed their peoples, much less repay interest and principle on these loans.

No, no.  It's not like the EU and Italy & Greece.  Italy and Greece are already part of the EU.  Pakistan is not part of China...

Unclear on the concept

"When will all of the "reporters" who have received Noble Prizes for their work on Russia... be turning back their cherished "Nobles"..."   V-W-V-Trump, on one aspect of his bad hair week.

Err, it's Nobel Prize [2].  And journalists win the Pulitzer Prize [3]. 

[2] Named after Alfred Nobel, the Swedish inventor of dynamite.  His will established the five Nobel prizes in 1895, for Chemistry, Literature, Peace, Physics, and Physiology or Medicine.  In 1968, Sveriges Riksbank, Sweden's central bank, established a prize in Economic Sciences in Memory of Alfred Nobel.   It is now seen to be as prestigious as the original five categories.
[3] Named after Joseph Pulitzer who gave money in his will to Columbia University to launch a journalism school and establish the Prize. It allocated $250,000 to the prize and scholarships. He specified "four awards in journalism, four in letters and drama, one in education, and four traveling scholarships." 

Where's Wally Kim Jong Un? 

Virus-What-Virus-Trump must be worried.  The Supreme Leader of North Korea, Kim Jong Un has been missing for over three weeks now.  Readers know that V-W-V-Trump and the Five Foot Two Korean in Flared Pants are besties.   

Mr Kim, whose proportions suggest success in his weight accretion diet, failed for the first time as leader to attend celebrations marking the birthday of his grandfather and state founder Kim Il Sung.  Where is he?

Well, Wry & Dry's man person incognito in North Korea reports that Mr Kim is not well...

Cartoon kim drinking cleaner

Perhaps he shouldn't have listened to V-W-V-Trump.    

Losing it

"I am not f***ing losing to Joe Biden."  V-W-V-Trump, on being told by his pollsters that he was on track to lose the election.

Lost it

“So what? What do you want me to do?”  Jair Bolsonaro, President of Brazil, when asked about Brazil's alarming CV-19 death toll.

RDS surges again

Sigh.  Just when Wry & Dry thought that The Ruddster had overcome his latest bout of RDS, up pops another episode.  This time splashed across the Spencer Street Soviet The Age.

China's ingrained and world ranking grievance-virus certainly infects individuals.  The Ruddster's years in Beijing, where he worked in the Australian embassy (as a diplomat, he claims, but there is no evidence that he was anything but a functionary), certainly inculcated him with that strain of virus.

And so The Ruddster's RDS resurgence had its core grievance at what Croesus Turnbull wrote in his latest thriller.  Yes, yes, of course Murdoch controls the media in Australia.  But no, the NBN was really properly thought out and costed.  And no, Australia's survival in the GFC was really because of Rudd's policies, etc, etc. 

When will the lad learn that the more he attempts a retrospective reconstruction of his place in history the more people remember his failings.  This inability to self-reflect is a classic cause of RDS. 

Wry & Dry wishes that the gents in white coats who picked him up will look after him.  And that he has a speedy recovery.       

Snippets from all over 

1.  Gold finger

Venezuelan officials loaded some 9 tonnes of gold (worth about $500m) in Tehran-bound planes in April, to pay for Iran's assistance in repairing a key refinery.

Wry & Dry comments:  Travelling at the sharp end, no doubt.  

2.  Shell slashes dividend

Royal Dutch Shell is slashing its quarterly dividend to $0.16, from $0.47 per share, for the first time since the Second World War. 

Wry & Dry comments: Small oil?  

3.  Australian inflation surges

Australian inflation rose at an annual rate of 2.2% in the March quarter, the highest since September 2014.

Wry & Dry comments:  A blend of drought-hit vegetable prices and price-gouged rice, pasta and toilet paper prices more than offset the collapse in fuel prices. 

4.  US GDP collapses

U.S. gross domestic product declined by 4.8% in the first quarter.  This was the worst quarterly contraction since 2008.

Wry & Dry comments:  But it will get worse.  The March quarter was 80% over before CV-19 hit the streets. 

Q: If 20% of something gave a -4.8% rate, what will 100% give? 

A: -24%. 

5.  Detroit: start your engines

Detroit automakers (General Motors, Ford and Fiat Chrysler) have targeted May 18 for a restart of some production at U.S. car factories.

Wry & Dry comments:  Very nice.  But who is going to buy the cars?

And, to soothe your troubled mind ...

Miscellany 

Last words ...

“I treasure the government knowing as little about me as possible." 

 -  Barnaby Joyce, on why he won't download the COVIDSafe app.

Clearly the book, the 60 Minutes interviews, the media interviews, etc were all by another Barnaby Joyce.  

Cartoon barnaby enigma

A lightly salted absurdity ...

Deepak, Wry & Dry's Uber driver ... 

...sighed as Wry & Dry hopped into the backseat of the jalopy.

“What’s the matter, Deepak?” Wry & Dry asked kindly.

“It’s Anjali. I’m being ignored,” Deepak said in a voice of a petulant child.

“A vindaloo drought?” Wry & Dry inquired.

“There is plenty of vindaloo, Anjali is making enough for the whole damned street. It’s this third trimester nesting, very scary times. I’ll be eating vindaloo for the next nine months! And last night she sent me to Bunnings for more cleaning products because she used it wiping down every surface of the house and carport. And, what’s worse, I’m just the help,” Deepak wailed.

“I see. I think you may be catastrophising things,” said Wry & Dry with wisdom on his side.

“All this nesting business means I’m not getting any attention any more…”

“So, you’ve got your nose out of joint,” Wry & Dry finished.

“You could say that, I’m just used to her being devoted...”

“...to your every whim,” Wry & Dry interjected.

“As it should be,” said Deepak matter-of-factly.

Wry & Dry raised an eyebrow, “They say, Deepak, that when choosing a bride, one should always look to their mother."

“And…” said Deepak hoping to draw Wry & Dry out.

“Did you think that Damshi is the type to teach her daughter to, err, manage a husband’s every request for privileges? That’s a fairy-tale.”

“Hmm.  And often fairy tales don’t end well, do they?” pondered Deepak.

“No, unless its Disney.  Press your point, as it were, and you’ll pretty much get poisoned, consumed or metamorphosed,” said Wry & Dry.

“Well I could see that with the Crocodile. You know she had three husbands, don’t you? All died before their time. Such bad luck.”

“If I were you Deepak, I’d be very grateful for the vindaloo. Anjali is only on her first.”

“First what?” Deepak called.

“Husband,” Wry & Dry said flatly.

With that the phone rang. It was Anjali. There seemed to be some commotion in the background. Wry & Dry could hear Damshi telling Deepak to hurry up.

Deepak opened his mouth, but nothing came out, he was pale, and then beads of perspiration appeared.

With that Deepak pulled over with a jerk. “I’ve gotta go!”

Wry & Dry grinned as he tumbled out. “Good luck,” he cried as the jalopy careered around the corner at speed.

 - from the quill of Mrs Wry & Dry. 

 

Cheers

Anthony