Wry & Dry

He would say that... This is nuts. Tsar McVlad.

He wouldn't have said that, would he?

Readers will recall that presidents of the Yoo-Ess-Ay routinely appoint mates and political donors as ambassadors to key countries. Well, it now seems that Robert 'Woody' Johnson IV [1], the owner of the New York Jets National Football League team, donor to Virus-What-Virus-Trump's campaign and V-W-V-Trump appointee as Ambassador to the UK, was asked in early 2018 a big, big favour by V-W-V-Trump.

The favour? To see if the British government could help steer the world-famous (and lucrative) British Open to the Turnberry golf course in Scotland.  Turnberry golf course-cum-resort is owned by (cue drum roll) V-W-V-Trump. 

Apparently, the ambassador’s deputy, Lewis A. Lukens, a career diplomat [2], advised Woody not to do it, warning that it would be an unethical use of the presidency for private gain.  Woody, being Johnno The Fourth, ignored him and raised the idea with the Secretary of State for Scotland.  The idea was scotched for obvious reasons.

Cartoon trump golf

However, yesterday V-W-V-Trump vehemently denied the newspaper report.  But, as Mandy Rice-Davies would have said, "Well, he would say that, wouldn't he."   

Astute Readers will have noted that his Turnberry golf course has just been rated #1 in Great Britain and Ireland by Golf World magazine.  It last held the British Open in 2009.

[1] Readers might wonder where Woody got his wealth.  Well, he was smart enough to inherit a large interest in a company founded by his great-grandfather.  That company was, and is, Johnson & Johnson, the world's 7th largest company.
[2] Mr Luken was fired from his job in January 2019, after making a complimentary reference to former President Obama in two speeches.

This is nuts

It is rare that Wry & Dry ventures into the arcane and speculative world of the stock-market, preferring to leave such indulgences to his colleagues at Investment Matters.  But the current tech stock boom in the US (and in Australia) seems to have all of the hallmarks of the Tech Wreck of the early 2000s.

Consider that this year, Tesla is up 280% (no P/E), Amazon 68% (P/E = 148), Microsoft 34% (37), Apple 33% (31), Google 17% (32) and Facebook 16% (33).  These stocks are 'Big Tech'. The matter is that these companies not only have strong share prices, but they are very, very large companies.  

Nasdaq, the technology stock-market in the US (distinct from the New York Stock Exchange, the old-school stock exchange) has now reached valuation levels not seen since the tech wreck of the early 2000s.  How did it get to this?  Wry & Dry has one answer: FOMO: fear of missing out.  And it's being driven by investment in Big Tech.  Forget the rest.   

Cartoon big tech

All Big Tech companies are listed on Nasdaq.  And, with the exception of Tesla, they make up a large chunk of the S&P 500 Index (essentially, the performance index of the largest 500 stocks listed on stock exchanges in the Yoo-Ess-Ay).  Without Big Tech, the US stock market would look somewhat sick this year...

Chart big tech

Big Tech now makes up 25% of the S&P 500.  And as Tesla announced another quarterly profit [3] this week, thereby meeting the 12-months-of-profitability criteria, it will be eligible to be included in the S&P 500.  If S&P Dow Jones Indices approve its inclusion, two things happen: (a) a boost to Tesla's share price as index funds, including many ETFs (exchange traded funds) are forced to buy; and (b) boost the narrowness of the S&P 500 even more.

Is Big Tech the new black?  Or the next black swan?  Or the canary in the coalmine?  Last night the Nasdaq fell 2.3%.

[3]  Things are not always as they seem.  Some 7% of Tesla's quarterly revenue of $6 billion came from selling 'regulatory credits' i.e. zero-emission credits to other car-makers that need them to avoid penalties.  

Tsar McVlad

Readers may be aware of this week's UK intelligence report that Roosha interferes in UK politics and even tried to influence the outcome of the 2014 Scottish independence referendum, supporting the Scotland breakaway [4].  The proponent of the vote was Alex Salmond, the then First Minister of Scotland.

After giving himself the DCM post the failed referendum, Mr Salmond in 2017 launched his own television show.  But not on BBC Scotland, but on the Tsar Vlad sponsored RT (Russia Today) channel; 30 minutes, once a week. 

Cartoon russia today

The viewers cannot get enough of it - it is watched by as many as 7,000 each week.

Was the quid pro quo for the Russian referendum support a promise from Mr Salmond to boost the ratings of RT in the UK?  Difficult to say:  RT is ranked 175th out of 278 channels.  So it cannot be that. 

What else is going on?  The British tabloids are going nutzo trying to join the dots.

Wry & Dry suggests don't bother.  Tsar Vlad and his cyber-crime cronies are just having fun.  As they are in Libya.

[4]  The report excoriated the British intelligence and civil service over Roosha's interference in UK politics.  Wry & Dry suggests complacency grown from watching too many Bond movies.  One expert, commenting on the report, said, "Putin comes out of it really well - a really competent villain..."  Which is hardly surprising, as Putin worked for the KGB for 16 years, rising to the rank of Lieutenant Colonel.  

The beginning of the end of Arab oil?

Wry & Dry was drawn to an article in this week's Economist.  The article "The end of the Arab world's oil age is nigh" mused whether the current price of oil meant doom for a raft of Arab countries that relied on a high price of oil to finance their extravagant budgets.

Chart middle east oil

But "nigh" is not yet.  Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE have massive reserves, however, these will be exhausted in 13 years, according to the IMF.

Cartoon arabs tesla

Readers know that the gift of oil [5] has bankrolled unproductive economies, invited profligate spending and financed international adventures.  And not to mention invited foreign interference.

Something has to give, otherwise the pain of massive social unrest will spread across the region.  But what will give?  Will the price of oil rise?  Or will these economies quickly adjust. 

Perhaps it's too early to tell.  Maybe this is the end of the beginning. 

[5] The gift of Australia's largest export, iron ore, contributes about 1% of the tax take of the federal government, but some 22% to WA's government's.  

Europe dips in to save itself 

Readers will have noticed that the leaders of the EU have decided that they'd better save Italy from covid-19 after all.  And, well other struggling countries: Greece, Spain, Portugal.  For the first time, the European Commission (i.e. the EU) will borrow on financial markets, a massive €750 billion, and pay it back over 38 years.  €390 billion will be in grants, i.e. no strings attached, the balance in loans. 

This sounds like a lot of money.  But, it will amount to less than 0.6% of the EU's GDP.  None of the grants will be made until 2021.  Not quite emergency funding: too late for the face masks.

Does any Reader really think that these funds are going to help Italy (20% of the loot), Spain (19%), et al out of the fiscal holes they have dug for themselves?  Really?

France's top rooster, M Macron called the deal "historic".  Thereby diverting attention away from the fact that hardly-struggling France gets the third largest share of the pie: 10%.  Seriously struggling Greece gets just 5%.

This is why Brexit happened. 

Netflix, knitting or sock-drawer sorting 

Readers may be surprised at the yawn that greeted Treasurer Jericho Josh's economic update.  But the covid-19 pandemic and the confidence that voters seem to have put in Jimmy Morrison and JJ signified that almost any bad economic projections would be accepted as the price of keeping Australia afloat.

And the fact that the major credit ratings' agencies, Standard & Poors and Moody's, have each reaffirmed Australia's AAA rating meant that we-the-people could reassuringly go back to Netflix, knitting or sock-drawer sorting (Victoria) or the cinema, pubs, bars, restaurants, football, etc (the rest of Australia). 

Hard Brexit?

Brits used to talk about a 'hard Brexit' or a 'soft Brexit' as though Brexit were a type of recycled cheese made in a factory in the Midlands.

Readers will know, however, that a hard Brexit is the UK leaving the EU without a 'deal' and therefore each of Britain and the EU would have to follow the rules of the World Trade Organisation.  A deal must be signed by New Year's Eve.    

The EU's intransigent negotiator, Michel Barnier has said that Britain's current position was "completely unacceptable."  Well, he would say that, wouldn't he.  He is, after all a negotiator.  He is playing to the audience of Europe.

What is M Barnier's main objective?

a.  Get a good deal for French farmers;

b.  Get a good deal for Europe, generally;

c.  Play tough to dissuade any other countries from considering exiting the EU; or

d.  Screw the Brits.

Close, but no cigar.  The correct answer is d.  After all, he is a French career politician.

Cartoon French goodwill

Better book Grace Brothers

A poll by Washington Post/ABC News found that Sleepy Joe Biden has a 15 point lead over Virus-What-Virus-Trump, up from 10 points in late May.  

Snippets from all over 

1.  737 Max may not return this year 

The US Federal Aviation Administration has said that it will not finalise assessing changes to the grounded 737 Max until early November.  Then comes pilot training and maintenance checks.  February 2021?

Wry & Dry comments:  Thereby surprising nobody.

2.  EU to borrow lots

The EU has agreed a covid-19 recovery fund: €750 billion, of which €390 billion will be offered as non-repayable grants (down from €500 billion originally proposed), and the rest in repayable loans.

Wry & Dry comments:   "This agreement sends a concrete signal that Europe is a force for action," tweeted European Council President Charles Michel, to the amusement of anybody who understands history.  The last and only time Europe was a force for action was under Charlemagne, who ruled much of Western Europe from 768 to 814.   

Cartoon europe a place where action

3.  Coca-Cola is not it

Coca-Cola has suffered its biggest drop in quarterly revenue in at least 25 years, down 28%.

Wry & Dry comments:  Coca-Cola, whose biggest shareholder is Warren Buffett’s Berkshire Hathaway, managed the GFC quite well, with revenues rising 11% in 2008 and losing only 3% in 2009. 

4.  WFH

Massive UK bank Royal Bank of Scotland has told 50,000 of its staff to WFH until 2021.

Wry & Dry comments:  That's half the size of the MCG in people.

5.  The House of Mouse

Walt Disney has dramatically cut back on its Facebook advertising spending.  Facebook faces an advertising boycott from companies upset with its handling of hate speech and divisive content. Disney was Facebook's top U.S. advertiser for the first six months of 2020, spending $210m on Facebook ads for Disney+ in the U.S. 

Wry & Dry comments:  Disney will return. By the way, Disney + is Disney's answer to Netflix, Stan, etc. 

And, to soothe your troubled mind ...

Miscellany 

Last words ...

“I say flames, we'll put out the flames. And we'll put out in some cases just burning embers. We also have burning embers. We have embers and we do have flames. Florida became more flame like, but it's -- it's going to be under control.."

 -  Virus-What-Virus Trump, in a television interview.

Danger!  Danger!  Warning!  Warning! Tortured metaphor alert!

A lightly salted absurdity ...

Deepak, Wry & Dry's Uber driver ... 

...grinned happily as Wry & Dry hopped into the jalopy.

“Namaste Deepak! You look reasonably well-slept. Is your father-in-law-to-be out of Hotel Quarantine and your job there as an overnight security guard over, so that mother-in-law Damshi can serve him breakfast legally, as it were…”

“No, but breakfast for two at Hotel Quarantine is off.  My curious wife Anjali found out about it, and went...”

“Nutso” finished Wry & Dry.

“Yup, but there is more, the Sugar Daddy has introduced a bitter aftertaste.”

“Ah huh, no surprises there. Sugar Daddies’ sweetness usually dissolves pretty quickly, one lick and… oh never mind. But that’s good news for you is it not?” asked Wry & Dry suddenly feeling a little tongue-tied.

“The bitter aftertaste is that the Sugar Daddy has produced a pre-nup agreement.” 

“Well, it is the way of the modern world, Deepak. One has to go into these things with eyes wide open, as it were. But it’s all about the timing,” said Wry & Dry.

“According to Anjali there is no such thing as good timing. You either marry and stick all your cards on the table or don’t bother.  And she has told her mother to call it all off, immediately.”

“What?” cried Wry & Dry.

“She was ranting about trust, women’s rights, and other stuff about self-respect.”

“And how did Damshi take it all?” asked Wry & Dry.

“Damshi just laughed, she thought the whole thing rather hilarious. I couldn’t make it out at all,” said Deepak clearly confused. 

“You can’t imagine why? Don’t you remember Damshi has already had three husbands…” prompted Wry & Dry.

“Who died rather hastily!” cried Deepak with sudden enlightenment.

“Ah huh,”

“You don’t think…”

“Well it does make one wonder…” Wry & Dry observed.

Deepak turned white.

“That explains what Damshi said to me after Anjali stormed out,” said Deepak. “She said, "I don’t bother with divorce, it’s too messy. I just kill my husbands.” " [6]  

“And you thought she was joking…” remarked Wry & Dry.

“Got to think, Mr Wry & Dry. It’s food for thought…”

“Speaking of food, do you know why stick insects never get divorced?” asked Wry & Dry.

“No, why is that?” asked Deepak on cue.

“Because the female eats the male after their first wild night of passion,” chortled Wry & Dry.

“That’s a bit, well, inconvenient, isn’t it,” said Deepak dolefully.

“Well yes, but predictability always reduces the legal fees,” Wry & Dry said, brightly.

“Yes, but, what do I do about Damshi and the Sugar Daddy?”

“Nothing, as I suspect this time, Deepak, it may be true lurv after all,” said Wry & Dry as the jalopy pulled into the curb.

“Really?”

“Really, just wait and see,” finished Wry & Dry, bouncing out of the back seat.

Deepak looked puzzled as he slowly drove off, wondering whatever did Wry & Dry mean. 

[6] Also famous words of Australian socialite Enid Lindeman.  Enid managed to 'lose' four husbands.  Oscar Wilde said, "To lose one parent may be regarded as misfortune, to lose both looks like carelessness."  The same could be said for husbands.

 -  From the quill of Mrs Wry & Dry.

 

Cheers

Anthony