Wry & Dry

Peeking under the tree. 2017 Winners & Losers. Bitcoin: a farce in three acts.

The cork has just been eased from...

...the 1985 Perrier-Jouët Belle Époque.  And the Waterford flute gently filled with this magic.  Thus appropriately prepared, Wry & Dry picks up the quill for the last time in 2017.   

2017 in a trice

The inauguration of Tsar Trump saw an increase in expensive vacation-bookings by hitherto out-of-work cartoonists.  Never has so much been owed by so many to... oh, never mind.

The first AFL women's football game is held in Melbourne.  24,536 people with nothing else to do turned up to watch.

A country in northern Asia run by a well-fed nutter successfully tests a ballistic missile.

The same-sex marriage plebiscite was voted upon by the plebeians.  And comfortably passed.

Pauline Hanson goes ballistic with the news that for the first time more than a quarter of Australians were born overseas.   

Paris and Los Angeles were respectively awarded the 2024 and 2028 Summer Olympic Games.  Tsar Vlad already has the lads in the lab working on new and better performance-boosting drugs.

The CBA, Australia's largest laundromat bank, was charged with innumerable breaches of Australia's anti-money laundering terrorism financing laws.  

A nutter fired on a rock concert in Las Vegas, killing 58 and injuring 546.  Sales of personal firearms in the US leapt.  Say no more.    

Catalonia declares independence from Spain.  But the rest-of-the-world turns their collective backs.  Mañana.  Maybe.

Treasurer Morrison declares war on the banks, and imposes a levy on them.  "Cry me a river," was his reasoning.

Lots of federal politicians find they are ineligible to sit in parliament.  Some own up, some resign, some go to the High Court.  Most Australians give up caring.

Tsar Trump finally achieves something, a massive reform of the US tax system.  His head got so big that he had to grow even more hair to cover it. 

This week: Head-shot

What started as a good news' week for the government ended up as "Oops, I shot myself in the head," as the Gnats [1] again signalled it is the most untrustworthy member of a team since Brutus and his mates knifed Julius Caesar.  

The good news, for we-the-taxpayer, was the excellent budget fiscal update.  Those two mostly modest fiscal guardians, Treasurer Jim Morrison and Finance Minister Mathias Cormann, had the grins of Cheshire cats [2] when the Mid-Year Economic and Fiscal Outlook (MYEFO) showed a much improved budgetary outlook (deficit of $23.6 billion, compared to the original budget of $29.4 billion).  Amazingly, government real spending growth is now under 2%, the lowest in 50 years.  Nice work.

Cartoon Turnbull wishing well

But then came the head-shot.  The Leader of the Gnats, newly re-elected Barnaby Joyce, decided to use Croesus Turnbull's cabinet re-shuffle to exact revenge on those Gnats who elected Bridget McKenzie as his (Joyce's) deputy.  Joyce, who decides who in his party gets Cabinet and Ministerial positions, replaced Gnat's Victorian Senator Darren Chester with Queensland (there's that state, again) first-termer David Littleproud.  Joyce has always been a podium-finish nutter.  But this vindictive vengeance enhanced his reputation as a man from a long time ago in a galaxy far, far away.  

Not only has Croesus Turnbull to contend with those opposite him in the House (i.e Shorten et al) but two cabals behind him: Queensland Gnats (Joyce was originally a Queensland Senator) and the triple AAA Right-Wing-Luddites (Abbott, Abetz and Andrews).     

Sigh.

Peeking under the tree

W&D is a long-term investor.  But, like a child peeking under the Christmas tree to see what goodies lie beneath, so W&D peeks at his portfolio to see how it is going.  Well, so far this fiscal year, so good.

Shares fytd

Of course, never send to know for whom...  Oops, wrong warning.  It should be: no-one rings a bell at the top.  

Not that the broad Australian market is significantly overvalued.  It's not: a P/E of 15.3 is only 8% above the long-term trend.  But a correction in the significantly over-valued US market may cause a short-term drop in the ASX.

Tsar Trump's Tax Triumph

Meanwhile, on Planet Washington, Tsar Trump and the Republican Party finally passed massive tax-reform legislation through Congress.  W&D sheepishly admits that he thought that it couldn't be done this year.  And media still cannot believe the Tsar Trump has achieved something.

Cartoon CNN tax cuts

Readers can read the details in other, less august, journals.  Suffice to say that the two headline reforms are the slashing of the company tax rate to 21% from 35% and cutting (until 2026) personal tax rates.

Focusing on the company tax cuts, the US is about to be flooded with foreign direct investment. American companies, meanwhile, are likely to invest more at home and to repatriate money that has been stashed away abroad.

But companies will spend much of the tax-saving on share-buybacks.  As they have done in the past.  Share buy-backs reduce the number of shares on issue and hence increase earnings per share.  Hence boost the share price.

Just look at from where the demand for US stocks has, and is expected to, come:

US equity demand

Readers can see that if the share buy-backs are removed, the demand for US equities has been negative since at least 2015. 

More generally, some of the tax-gift will be competed away in the form of domestic price competition: a once-only anti-inflation affect. 

W&D is concerned that this domestic success will go to Tsar Trump's head.  Well, there's lots of room in there.

Wry & Dry 2017 Winner of the Year 

May, Theresa Mary; 76th Prime Minister of the United Kingdom: for turning back the clock to the reality that effective leadership is not bullying but the art of the possible, as shown in her successful (so far) Brexit negotiations.

May inherited arguably the most difficult task of any UK leader since Henry V led the English troops at Agincourt on St Crispin's Day [3] in 1415.  May didn't vote for Brexit, but some how has to negotiate the transaction to fulfill the referendum's result.  Readers might ponder the trio of negotiating problems: 

Firstly, dealing with the Brussels' elite, which are bent on revenge for a country daring the question the future of the EU.  And determined to extract the highest price.

Cartoon May Waterloo

Secondly, having individual EU countries (each of which has a veto) use Brexit as an opportunity to negotiate other matters, e.g. Spain re Gibraltar; Ireland re Northern Ireland.

Thirdly, dealing with the Remainers in her cabinet and backbench.

And she's not an idealogical Thatcher (like Turnbull she is a centrist).  And she's not a leader, disturbingly for those who wish some Thatcherism/ Churchillianess. 

Instead, May is a manager.   Readers might recall W&D's portrait of her in April 2017: May is practical, earnest and diligent.  And 'gives a strong impression of liking her wider electorate'.  This final quality will mean that she will not betray the Brexit vote.  Moreover, she will not be knocked off course by those behind her - this is probably a characteristic she shares with Thatcher: "This lady's not for turning." 

Wry & Dry 2017 Loser of the Year 

By unanimous W&D vote: Shorten, William Richard, federal Leader of the Opposition and Wannabee Prime Minister: for turning the extraordinary woes of the government into an increase in Labor's federal primary vote of just a one point.

The facts speak for themselves.  The Coalition's primary vote has fallen 6% since the last election.  One Nation's has lifted by 6%.  Labor's boost is a miserable 1%, perhaps at the expense of 'Others'.

Bill Shorten failing

Poor Bill just doesn't get it that he's the problem. 

Cartoon Bill Shorten snake

Readers will remember his double-dealing to ensure that Anthony Albanese didn't win the parliamentary leadership vote, after the rank and file had overwhelming voted for 'Albo'.  And this week he has done something no federal Labor-leader has done since Calwell, and stepped back into the dank dungeon of factional politics at the state level.  This to immerse himself in back-room dealing that he couldn't trust others to do on his behalf: to negotiate with the militant CFMEU to shore up his political supporter base.  He certainly hitches his wagon onto any cause that might get a vote.  His ambition reminds W&D of what caused some Roman Senators to do to a leader [4] whose ambitious knew no bounds. 

But W&D's major problem with Shorten is not his political duplicity, backroom deals or craving for power.  This is, after all, politics.  It is that Shorten implicitly rejects the precious concepts of citizenship, obligation and duty.  He instead emphasises the special statuses individuals might have or acquire.  And turns these into victim-identities, be they gender, sexual orientation, union, ethnicity, body type, disability, student, geographical, etc.  Or those who want a leader as a magician who can shake the money tree, when the leader should know that money trees don't exist.  The outcome is he accentuates these differences not the community of interests. 

And if there isn't a cause or victim out there, Shorten will create one.  As shown in the recent Bennelong by-election, where he overturned bipartisanship on national security matters to present the Chinese community as victims of the new overseas-influence security policy.  

The trouble is that he will be the next Prime Minister, on the back of what will be unfathomable One Nation preferences and internal Coalition treachery.  And lest Reader sense a whiff of left-wing bashing by W&D, yes; guilty.  But W&D has trawled through the archives to see what he has said about Tony Abbott.  Shorten gets off lightly. 

As Laura Tingle, that astute political journalist pointed out today, "The big question for 2018 will be whether Bill Shorten becomes the best thing going for the government."

Wry & Dry 2017 Loser of the Year - dishonourable mentions

Weinstein, Harvey, former American film producer, former husband of Georgina Chapman, former etc, etc: for being the subject of complaints by more than 80 women of sexual harassment, sexual assault, etc.  This dark side of Hollywood was kept secret by women who feared their speaking out would affect their careers and by journalists who should have known better.  Some good will come of this as women will now be emboldened to speak out. 

Hart, Denis, Catholic Archbishop of Melbourne: for stating that the church would not reveal confessions of sexual abuse.  He admitted that if someone revealed their child abuse to him in confessional, he would feel "terribly conflicted" but he would not break the seal.  "The penalty for any priest breaking the seal is excommunication, being cast out of the church, so it's a real, serious, spiritual matter," he said.

So then, your Grace, don't worry about the real, serious, child abuse matter?  W&D is no theologian, but a mere Christian.  This is surely not Christ's teaching. This is man's.  Or rather a group of men.  Confirming in W&D's mind the widening gap between Christianity and 'Big' church.

Pot calling kettle...

W&D has recently reported on the austerity drive by Crown Prince Mohammed bin Salman of Saudi Arabia.  Well, the good prince seems to have spent all that he has saved.  And then some.

Some two years ago he spent some $390m on a Louis XIV-style palace near Versailles.  Earlier this year he bought a $500m yacht.

W&D is thumbing through the Koran see what it says about lavish living.  

Disruptive technology?  Not in my backyard.

"Ceci n’est pas un taxi," Uber has always said.

"Si c’est un taxi," replied the European Court of Justice.  The ECJ ruled on Wednesday that the California-based company is “more than an intermediation service” and should be regulated as a transport provider. The decision makes it easier for national and local authorities in the 28-member bloc to impose rules and restrict Uber’s services.

The effect of the ruling is limited, however, for a variety of reasons.  But it does reflect a typically EU protectionist (of local taxis) attitude. 

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

...was talking about Bitcoin.  Again!  "What's going on?" he asked W&D.  "All my friends back home are buying it.  Or wanting to buy.  They are talking about using futures [4] or ETFs [6]."

Deepak was clearly agitated.  Maybe Anjali had found out about his investment in Riot Blockchain.  MSB is a worrying affliction.  Anyway, W&D pressed on with an update.

Readers, work with W&D on this.  

Cartoon Bitcoin pet rocks

Firstly, CBOE (Chicago Board Options Exchange) started trading Bitcoin futures on 10th December.  The January contract price is trading at more than $1,000 above the spot price, indicating that traders expect the price rally to continue.

Secondly, a Bitcoin ETF is a different kettle of fish.  The problems are (a) that Bitcoin is an asset unregulated by the US SEC (equivalent to Australia's ASIC, but with sharper teeth) and (b) the physical safekeeping of the digital currency.  Deepak had read that recently hackers had made off with $75m of Bitcoin.  This will take some time, but will happen.

Thirdly, W&D reminded Deepak that the people who made money out of the gold rush were the people who made the shovels.  Hence the rush to create trading platforms (CBOE), ETFs, credit facilities (Bitcoin can now be bought on Deepak's Visa card) and trading acceptability.  But the costs are increasing.  The average transaction cost of using Bitcoin is now over $20.  So, Deepak is not going to buy his coffee using Bitcoin.

Fourthly, there are now over 1,350 crypto-currencies.  Bitcoin accounts for about half the total market value (over $300 billion).  W&D noted strongly that Bitcoin is not the most efficient crypto-currency to use, it is also not the most anonymous one, it is simply the first, and the most popular.  

Here are the top 10:

Crypto currencies trading 

Fifthly, it now takes over 4 hours to confirm a Bitcoin transaction.  Too bad if you wish to trade quickly. 

Sixthly, Bitcoin doesn't save the planet.  You can only get Bitcoin by buying it or 'mining' it.  As Anjali wouldn't let Deepak buy Bitcoin, his only hope is mining Bitcoin.  Mining Bitcoin is done by adding to the Bitcoin blockchain.  In order to contribute a block, Deepak has to solve a really difficult algorithmic problem.  The algorithm is designed, intentionally, to be so hard that it requires brute-force computing.  Which means Deepak would have to keep his mainframe computer turned on all the time, running the fan to cool off the hot, overcooked processor. 

"Aggghh," cried, Deepak.  "This is all too confusing."

"Keep the confusion to a minimum," W&D suggested, "Just don't buy Bitcoin."  And W&D noted that Emil Oldenburg, who co-founded Bitcoin.com, one of the world's largest bitcoin sites, announced on Tuesday that he had sold all of his bitcoin.

"But if I don't buy Bitcoin, what will I tell my friends back home?" Deepak wailed.  

"Tell them you've bought Anjali something even more valuable," W&D responded, "a ticket to the Boxing Day Test match."

And, to soothe your troubled mind...  

Miscellany 

Last words...

"I think I have made a contribution."  

-   Jacob Zuma, President of the Republic of South Africa, on losing the Presidency of the ruling African National Congress Party.

Contribution... to his bank account. Zuma will be succeeded by Cyril Ramaphosa, Deputy President of the country and a wealthy businessman, no later than the 2019 elections but more likely before then.

First Samuel client events calendar

Date 

Description

Details

2018 Events  (Invitations not yet sent)

Tue-29-May-18

Eat Street - food & wine fest

Sofitel

Wed-18-Jul-18

NGV Winter Masterpieces Exhibition

Masterworks from Moma (New York)

NGV

Tue-14-Aug-18

Forum - guest speaker TBA

Leonda

Some lightly salted absurdities from all over...

At the extreme left-hand end of the Bell Curve

Nerlins Noel, 23, was a US NBA (basketball) free agent.  On July 1, the Dallas Mavericks offered him a four-year deal worth around $70 million.  He knocked back the deal.  In August he fired his agent.  And replaced him with an agent who promised he could get a better deal.

His new agent got him a $4.1m one-year deal.  

(Bleacherreport.com)  

Now, let's see how that works.  Err, actually, it doesn't.   

Guess what he did next 

Creio Bishop, 21, didn't like it that his girlfriend was a stripper.   So, what does he do:

a.  Help her find a new job;

b.  Offer to pay her not to strip;

c.  Propose marriage and parenthood, as pregnant strippers cannot get work; or

d.  Torch the club for which she works.  

Close.  But no cigar.  The correct answer is d.  He set fire to JB's Gentlemen's Club in Huntington, West Virginia.  Deputies with the Cabell County Sheriff's Department caught up with the suspected arsonist in a Walmart parking lot across the street from the burning strip joint and arrested him.

(Mailonline) 

Arson, criminal damage, etc, etc.  So, he's now in the slammer and she's out of work.  There's a strong sense that Creio came straight down from the nearby Appalachians.  

Guess why he did it 

Man runs into a burning building to save his:

a.  His wife;

b.  His children;

c.  His pets; or

d.  His phone.  

Close.  But no cigar.  The correct answer is d.  The China Hookah Manufacturing Company, in Ningbo of Zhejiang Province, went up in flames.  The man, who was one of the first workers to escape, raced back into the burning building to get his mobile phone.  Have a squiz at the real footage here. 

(Mailonline) 

Special thanks to Patrick Cook, W&D resident cartoonist, for adding images of great humour and perspicacity. 

Whichever child of Abraham you are, may Christ's blessing be with you and your family this Christmas.

Have a wry and dry January.  W&D returns on Fri-Feb-18.

Anthony

[1]  That is, the National Party.

[2]  Whilst the Cheshire cat's grin was popularised in Carroll's Alice's Adventures in Wonderland (1865), its first appearance in literature was in the 18th century. 'A classical dictionary of the vulgar tongue" (1788) by Francis Grose contained: "CHESHIRE CAT. He grins like a Cheshire cat; said of any one who shows his teeth and gums in laughing."  Readers will, of course, know that 'vulgar' in this sense doesn't have the modern meaning of gross or crass, but rather of 'pertaining to ordinary people'.  Hence the Vulgate, the principal Latin version of the Bible, prepared mainly by St Jerome in the late 4th century, and (as revised in 1592) adopted as the official text for the Roman Catholic Church.  W&D begs to observe that today their is little 'vulgar' about Latin.

[3]  On October 25, 1415—St. Crispin’s Day—an exhausted and disease-ridden English army led by King Henry V met a French force at the Battle of Agincourt. Though vastly outnumbered, Henry and his “We few, we happy few, we band of brothers,” as William Shakespeare called them, went on to weather an assault by French knights and score a crushing victory.   

[4]  That is, they knifed Julius Caesar.  

[5]  Futures' contract:  A contract to buy/ sell an item at a date in the future for a price agreed today.  The item can be a commodity (e.g. wheat) or a financial contract (e.g. ASX200).

[6]  EFT; Exchange Traded Fund: a managed fund that is traded on a stock exchange, where the EFT duplicates or replicates an underlying investment.  Has the advantage of ease of buying and selling.  But in a thin market, the price of an ETF may 'gap' sharply.