Wry & Dry

What wedding? Tesla pessimism. Lies, damned lies & politicians.

Wedding? What wedding 1

Apparently there is a wedding in the sleepy English village of Windsor tomorrow.  The big news is that the bride's father cannot make it to the church on time [1].  In fact, not at all.

W&D had dreamed of him walking his daughter down the aisle, as though leading a lamb to slaughter.  And at the altar were waiting the slaughterers: not with knives and butchers' aprons but with pens: the English tabloid press.

Cartoon british media guardsmen

The last second son in the Royal Family to marry found a bride well below the salt.  But that bride had neither the brains nor the wit to avoid stepping in self-created puddles.  The media were delighted, especially when she was photographed wearing not much and having her toe sucked by an also economically clad but well-built financial adviser.  Who clearly promised outstanding personal service and performance.  W&D wonders if he was an AMP financial adviser.  And that her toe was... oh, never mind.

HM was not amused.  In earlier times, Fergie might have gone the way of Anne Boleyn.  And Readers will know that tomorrow’s wedding date, 19th May, is the same date on which the aforesaid Anne Boleyn lost her head.  And she was married to a redhead.  Whose name was also Harry. 


W&D hopes that tomorrow's bride rises above the salt (in this case of coming from a former colony that was rude enough to unilaterally declared independence from Britain) and avoids becoming 'Mergie'.

As for W&D, he will be watching a sport of other sorts, the FA Cup Final.  Go, Chelsea!

Wedding? What wedding 2

The other big wedding news wasn't about the bride's dress or the best-man's speech.  It was about, well, beggars.

The Times, a UK newspaper, reports that "Rough sleepers in Windsor have turned down refuge from a homeless charity because they fear losing lucrative begging opportunities over the royal wedding weekend."

Poor thinking.  The Brits are stingy and the begging bowl would remain empty.  W&D would take the warm bed and the three meals.  

Tesla optimism over

Readers will recall W&D's chat last week with Deepak, his Uber driver, about Tesla, the electric vehicle (EV) manufacturer.  Well it seems that others are also worried about Tesla's share price.

The below chart compares stockbroker Morgan Stanley's target share price to Tesla's actual price.

Morgan Stanley and Tesla

Two things stand out.

Firstly, the aim of stock brokers is to get investors to trade.  And mostly to 'buy'.  Hence the red line (target price) is mostly above the black line (actual).

Secondly, this is the first time that Morgan Stanley has downgraded its share price target for Tesla to below the current share price.  It's all about production delays.

W&D's negative view has a longer term time frame - within four years there will be at least 100 more EV models on the road.  And Tesla's 'first-mover' advantage will have evaporated by then.  W&D is a big bear on Tesla and forecasts a stock price within four years of below USD100.

That's a 55% fall.  And don't say that sort of share price fall cannot happen to a big company.

Seen AMP's share price lately? 

"ASIC chair vows tougher action"

 - headline, Financial Section, The Australian, Fri-18-May

Aside from the image of a Disney-like chair called Asic speaking, W&D is weeping at the possibility of tougher ASIC action.

The problems with financial advisers and commission-led advice did not begin after the GFC, as seemingly assumed by politicians and the media.  The Banking Royal Commission has focused on, as its name suggests, the banks (and AMP).  But the banks were late on the scene.  The corrupt financial advisory industry was thriving twenty years ago.  ASIC was reconstitution in 1998 from the legacy National Companies and Securities Commission.  Its role was "responsibility for consumer protection in superannuation, insurance and deposit taking."

Well, for the past twenty years ASIC didn't look, didn't care and failed miserably to undertake its charter.  What were they doing?

Cartoon ASIC pillows

And the industry shamelessly exploited the pathetically weak regulator.  The Financial Planning Association, a self-serving industry association if ever there were one, was made up of members who thrived on commissions.  And it wasn't going to blow the ethical whistle.  AMP was the King Kong of the industry, but there were a myriad of others, smaller, but just as unethical. 

As W&D said some weeks ago about those who milked the system.  It's too late.  The thieves have scarpered.  

You betcha!

Readers will know that W&D considers some parts of the Opposition's economic plans to be meritorious (e.g. to quash negative-gearing for house lending, except for new homes) and others have yet to be fully explained.  And W&D has respect for Chris Bowen, the Shadow Treasurer.  If nothing else, he is signalling very clearly, and well before an election, that the Labor party is going to increase all sorts of taxes. And that it will have a bigger surplus than that promised by the current government.

But W&D feels moved to mention a possible obstacle.  The Senate (cue tolling bell).

Readers will know that the last election was a double-dissolution election.  And hence a full Senate election.  Senate candidates required half the usual 'quota' to get elected.  The next election, assuming Croesus Turnbull doesn't go nutzo again, will be a half Senate election.  This will mean that the current 11-person Senate crossbench will probably be slashed to just five (as six scraped in because of the lower quota).  And those five will probably not support Labor's tax regime.

So the question on W&D's lips, if Labor gets elected to government and the Senate rejects its increased taxes, will Labor nonetheless go ahead with its expenditure largesse?  And thus blow away the promise of budget surpluses.

Cartoon Shorten and taxes

W&D's view?  You betcha!

Lies, damned lies and politicians

W&D recognises that obfuscation is a tool-of-trade for politicians.  But obfuscation is one thing.  Clear and deliberate misleading of we-the-taxpayer is another.  Consider this excerpt from Mr Shorten's Budget response speech, which probably has the most viewers for him, except for a campaign launch.

"How on earth can it be fair for a nurse on $40,000 to pay the same tax rate as a doctor on $200,000?"

Err, they don't, Mr Shorten.  The average tax rate for someone on a $200,000 salary is 30%.  Someone on $40,000 is 11%.

Mind the gap.  

W&D exclusive leads US State Department

W&D doesn't mean to beat his own drum.  But, well, shucks.  Readers will recall when W&D drew readers attention to China lending funds to poor countries.  Some of these countries may not be able to pay interest, much less repay the principal. 

Well, this week a secret new report commissioned by the US State Department warns its readers of exactly what W&D has been saying.  The report is so secret that its contents were published in the Financial Review. 

Essentially, China is undertaking 'debt-book' diplomacy, a part of which is economic coercion.  The latter becomes a blend of the Mafia and the CFMMEU.  What happens is that China lends infrastructure funds, which cannot be serviced or repaid.  Then, in a debt forgiveness arrangement, obtains economic concessions, military access or similar.  As former Australian Foreign minister Gareth Gareth Evens characterised it, for example, "Laos and Cambodia are wholly owned subsidiaries of China." 

Of course, China is not just causing problems with other peoples' territories.   Consider the once-obscure rocks in the South China Sea that China has turned into fortified islands, as W&D reported some years ago,.  In 2015 China's Emperor-for-Life, Xi Jinping gave assurances that China had no intention of militarising the South China Sea.

Cartoon China debtplomacy

In April, China deployed anti-ship missiles on three what-were-reefs in the South China Sea: Fiery Cross, Mischief and Subi.

W&D won't revisit the debate.  Other than to congratulate the US State Department on its readership of W&D.

A bridge too far

Readers will know that Crimea is that weirdly shaped isthmus that projects south from Ukraine into the Black Sea.  And also recall that in 2014 Tsar-for-Life Vlad sent his troops into Crimea and, well, stole it from Ukraine.  But Ukraine's military was, and is, the size of a boy scout troop and so were powerless.  And the rest of world did nowt, other than apply economic sanctions to Russia.  Not that Tsar Vlad cared about what others thought, as always. 

Cartoon crimea vlad

The key was the Russian navy's massive warm-water naval base, at Sevastopol, which was shared with Ukraine until 2014.  Then came the annexation.  The Ukraine sailors were evicted.  And of the 67 ships of the Ukrainian navy, 54 were stolen by the Russian Navy.  Vlad wanted the land, the navy, as well as boosting his own prestige at home.  And a majority of Crimeans were Russian speakers.   QED [2].

The problem for Tsar Vlad, and the Crimeans, was, of course, that there was no land link between Russia and Crimea.  There was a ferry service, travelling the 20 kilometres across the Kerch Strait.  But that has changed.

On Tuesday, Tsar Vlad opened the new, US$3.7 billion bridge across the Kerch Strait.  He did it in typical Vlad style, he drove the first truck across the bridge.  But with his shirt on. 

Tsar Vlad in a truck

The owner of the bridge's construction company is a certain Arkady Rotenberg.  Rotenberg was Putin’s judo sparring partner.  Not that W&D would accuse Tsar Vlad of impropriety...

Just say'n.

Soar with eagles, or sink with Turkey 

Speaking of Tsar Vlad... he's got to be happy with his mischief-making colleague, Recep Tayyip Erdoğan, Turkey's Sultan-for-Life. 

Turkey's currency, the lire, is falling like a stone.  And taking the pressure off the rouble as the world's currency dog.  (How about that for mixed animalia metaphors?)

Turkish lira

Turkish lira has fallen by 60% versus the US$ in five years

The Sultan's economic problems are many.  Not least of which is inflation.  A 60% fall in the Turkish lira over the last 5 years has now pushed inflation to 10.7% p.a.  And the base interest rate was pushed up to 13.5% in late April.  How're the home loan repayments, Ahmet? 

Turkey's economic problem is the Sultan.  He has an somewhat unorthodox view: that lower interest rates reduce inflation.  In a TV interview on Monday, he went a step further, saying he was ready to interfere with the central bank if it didn’t follow his advice. “It’s those who rule the state who are accountable to the citizen,” he said.  So much for central bank independence, advice of experts, etc.

If he wins the upcoming brought-forward election, he will be Sultan-for-Life. And the long-term economic and democratic decline of Turkey will be writ in stone.

Deepak, W&D's Uber driver, was talking about ICOs...

... and their attractiveness.  "I've heard that Initial Coin Offerings are really hot at the moment  There are now over 1,600.  There has to be money in them," he said, as W&D got into his jalopy.

"There is," responded W&D.  "For the promoters."

"Just remember what ICOs are," continued W&D, warming to his task.  "In exchange for a real currency, such as dollars or euros, you receive a digital 'token'.  And that token can be used to buy a particular service or good at some time in the future.  But that good or service can only be purchased with that particular digital token.  One problem then is that the ICO has created a cartel.  To spend the token you can only buy that good or service, or a small number of them.  The only plausible reason for forcing the use of the token is to hike prices."

Cartoon ICOs gift vouchers

"Okay," responded Deepak.  "But, I'd buy into an ICO for the capital gain.  Think of the killing I would make!"

"You'd be the one killed," W&D responded gently.  "Think about it.  If the price of the token rises above the market value of the good or service being provided, then no-one would buy the token."

"But surely the government regulates ICOs." queried Deepak with a worried look on his face.

"Wrong," retorted W&D.  "Promoters of ICOs do not describe them as securities. And so not one promoter of an ICO has registered the ICO with the US SEC.  But the US regulator does see them as securities.  The wheels of regulation turn slowly, but they do turn."

 "But, there's more," W&D continued, hurriedly.  "A US adviser on ICOs, Satis Group, has said that 81% of ICOs are scams created by 'con-artists, charlatans and swindlers'."

 "Sounds like bank financial planners or AMP," laughed Deepak.

"Maybe," cautioned W&D. "But surely your bigger problem is going to be Anjali."  

"Why?" responded Deepak with a look of alarm across his face.

"Well, she called me yesterday to ask me about ICOs.  It seems as though you left some documents lying around."

Deepak went white.  "Oh, no.  I haven't even bought any ICOs, but even thinking of it will drive her nutzo, as you say.  My happy-finish weekend is gone." 

"A fatal conclusion," W&D muttered as he got out of Deepak's car. "The situation is entirely retrievable.  Tell her you were investigating for a friend.  And then take her out to dinner, somewhere she would like.  Somewhere with linen tablecloths, for example, not like the plastic of last time."

"But this will be expensive," wailed Deepak. 

"As it should be", concluded W&D as he strode off.  "Deepak, get with the programme.  Women want to be wooed.  And if you do, you will be loved even more. You never know your luck in a big city."   

And, to soothe your troubled mind...  


Last words...

"Alan, if we could only bottle your rage this morning, we'd have a new energy source." 

-   Josh Frydenberg, federal Minister for Environment and Energy.'

Thereby rendering Alan Jones, Sydney's radio shock-jock, speechless for the first time.

First Samuel client events calendar




2018 Events  


Eat Street - food & wine fest - Invitations sent



NGV Winter Masterpieces Exhibition

Masterworks from Moma (New York)



Forum - guest speaker TBA


Some lightly salted absurdities from all over...

At the extreme left-hand end of the Bell Curve

Last week a volcano erupted on Hawaii.  The following is roughly how the insurance- arrangement conversation went.  

One year ago:

Homeowners: We want to build houses on this active volcano.

Insurance Co.: Ok, but you won't be covered if it erupts and destroys your house.

Homeowners: Fine with us. What are the odds of that happening?

Last week: volcano destroys houses

Homeowners: Pay me

(USA Today)

And the exclusion wasn't in the fine print.  It was in the BIG PRINT.

Guess what the parents did next 1

Two mums doing afternoon school pick-up found themselves battling for the same car spot.  What did they next do? 

a.  Tossed a coin, with the winner getting the spot;

b.  The SUV driving mum gallantly offered the spot to the driver of a smaller car;

c.  Neither got the spot, as they argued a motor cyclist slipped into it; or

d.  Fight it out.     

Close.  But no cigar.  d. is correct.  They fought it out.  In front of dozens of children. Police were called.


Must have been pre-NAPLAN tension.  See this link for the full video.     

Guess what the parent did next 2

30-year-old Kyrkhult, (Sweden) resident Johanna Sandström went to a local tattoo studio to get the names of her two children inked on her arm. Sandström went home with what she thought was a permanent declaration of love to her kids Nova and Kevin. 

There was just one problem.  The tattooist has mis-spelled Kevin: it had become ‘Kelvin’.  What did she next do? 

a.  Ask for her money back;

b.  Pay to go through the painful process of having the tattoo removed and then replaced, correctly spelled;

c.  Make a joke of it whenever anyone asked; or

d.  Keep the tattoo and change the name of her son to Kelvin.     

Close.  But no cigar.  d. is correct.  Johanna and her husband decided it would be easier to change the name of their son. 


W&D will ask Saul Eslake about... oh, never mind.

Have a Wry & Dry weekend. 



[1]  Apologies to Alfred P Doolittle.

[2]  QED is an initialism of the Latin phrase quod erat demonstrandum meaning "what was to be demonstrated".