Wry & Dry

Trump's Farewell Tour? Aggrieved Chinese. David Boon.

Tsar Trump’s Farewell Tour?

Speculation is emerging that Tsar Trump is so aggrieved at opposition to his election promises that he will quit. 

Naturally, W&D has researched the speculation.  And can reveal to Readers, in what can modestly be described as a W&D Exclusive, that Tsar Trump secretly visited Mecca on the Saudi Arabian leg of his Cook’s Tour, that also included Israel and the Vatican City. 

The tour was, in fact, a ‘pilgrimage’ to the sacred sites of the world’s great religions: Mecca for Islam; Jerusalem for Judaism and Christianity.  And Rome just in case the Catholics are right after all.

Cartoon Pope

The purpose of Tsar Trump's pilgrimage remains unclear.  But W&D considers that either (a) he was seeking spiritual help to assist in: 

  1. Persuading Congress to pass his election promises;
  2. Getting his Twitter capacity enlarged so he could send longer tweets; and
  3. Successfully replacing his undetectable hairpiece.

Or (b), in view of him not getting his own way on almost everything he was preparing for an early departure from this mortal coil. 

W&D thinks that, in view of Tsar Trump’s view of his place in the world, rather than preparing himself to meet his Maker, he was preparing God to meet him [1].

Speaking of bowing out...

W&D sadly notes that "the Greatest Show on Earth" has closed.

Ringling Brothers and Barnum & Bailey Circus has had its last show.   The circus, which had its roots in the irrepressible Phineas Taylor Barnum's [2] travelling shows of the 1830s, is closing because of falling attendances since the circus stopped using elephants last year.

Thinking of elephants and circuses... the elephant is the symbol of the Republican Party (the Democrat's is the donkey), only Tsar Trump's circus remains.  For now. 

Back to being aggrieved…

…no-one does aggrieved better than the Chinese.  This was again displayed this week with the reaction to Moody’s (a credit rating agency) downgrading China’s credit rating for the first time in 26 years.

The lads at Moody’s risked eternal damnation from the mandarins in Beijing for their scathing assessment of China’s economic policy making.  W&D will save Readers the torture of reading Moody’s reasoning.  Except to note that essentially Beijing’s refusal to let growth moderate, because of fears it may create social unrest, has meant that the government is forced to borrow massive amounts to keep the economy bubbling.  China’s overall debt levels were likely to rise above the current 256% of GDP.

W&D is not concerned about the rating downgrade, as most of China’s debt is funded domestically and the economy is big enough to absorb economic shocks.  What is laughable is the indignant response for the various organs of state.  For example, the Finance Ministry quickly rejected the downgrade, saying the methodology used was flawed.  And angrier responses came from a range of academics and economists.  

One who didn't go with the flow was Zhu Ning, a finance professor at Tsinghua University in Beijing, who said that "Moody's decision was sensible."  Time for Mr Ning to be re-educated?

No, that’s not quite right…

…the Australian banks get the podium finish for aggrievement.  Their ongoing hysterical reaction to the new bank tax will make no difference to the decision; the Labor Party has said it will support the legislation. 

So why the ongoing media campaign, open letters to shareholders, in depth background briefing to friendly journalists, lobbying of members of parliament, etc? 

Firstly, when the banks eventually have to cut their dividends because of a combination of poor loan growth, higher bad debts and high capital requirements, they will blame the government. 

Secondly, well, it’s rather like someone suing a bank.  No matter how righteous the cause, the banks will make it as difficult as possible for the complainant.  No matter their cost.  This is to dissuade anyone from ever again ‘taking them on’. 

Examples range from the probably $500m the banks wasted in legal fees in the futile defence of the suit brought in the Bell Group case (in which the banks, after 13 years of litigation finally parted with $1.7 billion) [3] to an unhappy customer complaining about financial advice received.

So all the ruckus is not about the current bank tax.  It’s all about ‘don’t mess with me.’ 

Another thing about which to worry

Housing construction in Australia fell at its fastest pace in more than 16 years in the March quarter: a massive 4.7% decline. 

Ouch!  Fewer houses means fewer loans (but don’t cry for the banks) and fewer appliances, furniture, etc to fill the homes (which is more bad news for retailers).

As Jim Fogerty once said, “…there’s a bad moon on the rise”. [4] 

A touchy subject

W&D dismay and anger at the Manchester bombing and the attitude of the Australian elite to such threats is summed by our resident cartoonist, Patrick Cook...

Cartoon Manchester

'nuff said. 

Two First Samuel matters...

A.  New Online Client Portal

First Samuel's amazing new Client Portal has been switched on.  Be excited!

But, clients can only be excited if they have:

  1. agreed to receive most reports online; and
  2. changed their password.

Our old online system has been switched off.  So if clients wish to (i) access their daily, quarterly and annual reports online; or (ii) receive only their annual reports in hard copy, please click the "I consent' button on the email we sent you.

If you are having a "what the ..." moment, please call Joe or Namy on 03 8610 9222, who will walk you through it all.

B.  W&D: winter recess

W&D is taking Mrs W&D away next week.  A bit of London to see PM May, a bit of France to check on how President Macron's wife is enjoying her new role and then a lot of Sicily.  Just to do market research on the critical global companies based on the island.  Of course.

And so W&D will go into winter recess, as it were.  Back in July.

But W&D's sister publication, Investment Matters (IM) will continue to be published.  IM will keep Readers apprised of the important investment issues as Australia heads into the end of FY-17.

Weirdly...

W&D rarely mentions Qantas and sense of humour in the same breath.  But news that there is a massive social-media campaign about Qantas' new aeroplane (a 787-900) that next year will fly Perth to London without stopping for petrol.

The campaign is for the plane to be named the David Boon.  Readers will know that David Boon is a former Australian Test cricketer ("the five foot two Tasmanian in the flaired pants"[5]).  One of his claims to fame is holding the record of the greatest number of VB tinnies consumed on an Australian flight to London (52).  It was for the 1989 Ashes tour.  Boonie was wheeled through UK Customs on a wheelchair pushed by fast bowler Geoff Lawson.

W&D avoids flying Qantas at all costs.  But dips his lid to their marketing/ media communications department.  What a great rumour to spread to publicise next year's inaugural flight.

Although any passenger these days trying to down 52 tinnies in 17 hours...   

And...

...of course, Miscellany to soothe your troubled mind.   

[1]  “I am ready to meet my Maker. Whether my Maker is prepared for the ordeal of meeting me is another matter.”  W. S. Churchill, on the eve of his 75th birthday.   

[2]  P.T. Barnum was also a politician (Connecticut Legislature) and anti-slavery advocate.  And he never said, "There's a sucker born every minute."

[3]  Westpac Banking Corporation & Ors v Bell Group Ltd (In Liq) and Ors (P18/2013)

[4]  'Bad Moon Rising', by John Fogerty, Creedence Clearwater Revival, 1969. The last line of the chorus, "there's a bad moon on the rise", is sometimes misheard as "there's a bathroom on the right". 

[5]  As described by the Twelfth Man.