Wry & Dry wishes Readers a happy and prosperous new year. And in this bumper issue reminds Readers of what happened whilst they swam, raged or were burned to a crisp over summer (but not if you lived in Melbourne).
Enjoy Wry & Dry: a cynical and irreverent blend of politics, economics and life.
Twenty stories you missed
- Jacinda Ardern gave herself the DCM. Her distinction grade in Compassion 101 couldn’t overcome failure in every other subject in her degree in Country Management. At least she had the guts and smarts to go. Unlike, err, Scott Morrison.
- Sultan Recep Tayyip Erdogan used Turkey’s veto to stop Sweden joining NATO after demonstrators burned a Koran outside the Turkish embassy in Stockholm. Two days later, he announced the bringing-forward of the date of Turkey’s general election. No connection, of course.
- Reading and numeracy results for school students have deteriorated over the past 4 years, in spite of $320 billion special funding arising from the Rudd-Gillard Gonski schools’ programme. And the response from federal and state education ministers: the sound of crickets.
- China’s population fell in 2022 to 1,411,750,000, the first drop since 1962. India is now atop the population podium.
- An Iranian man was jailed for eight years for beheading his 17-year-old wife. She was 12 when they were married, 14 when their son was born. She had fled Iran, but returned on her husband’s promise of safety. Really? Yes, really.
- Germany’s defence minister was given the DCM. She was a blunderer from the off, including responding to Ukraine’s request for armaments with a gift of 5,000 helmets.
- Rupert Murdoch, aged 91 years (father of six, grandfather of 13 and with four ex-wives), has been seen dating a new companion, a lass 25 years his junior. Nice work, if you can get it – for each.
- A search found that Sleepy Joe had highly classified documents in a box under his bed. The search also found three boxes of Lego and two Triang-Hornby train sets, all recently used.
- Two of Australia’s billionaires, Forrest (iron ore) and Cannon-Brookes (IT) had a sandpit fight over management of their ambitious $30 billion, 4,200 kilometre Northern Territory to Singapore solar power cable
white elephantproject. The lesson of Icarus was ignored: back to the drawing board.
- The Trumpster claimed he won the Senior Club Championship (a weekend golf tournament) in Florida. But he didn’t play in the Saturday round (he had to deliver a eulogy in North Carolina). So, he contrived a score he had made earlier in the week, that placed him five points ahead.
- Croesus Turnbull‘s RDS returned, as he tweeted that Australia’s purchase of US submarines would “undermine Australia’s sovereignty”. Err, whereas the purchase of French submarines wouldn’t?
- On New Year’s Day, Croatia became the 20th country to declare the euro as its fiat currency. Expect Chairman Dan to soon announce Victoria’s fiat currency: the Dan Dollar.
- Liquidators to the $32 billion crypto-currency collapse of FTX have discovered there are 134 insolvent entities in 27 jurisdictions, including FTX Zuma, an exchange in rural Nigeria. Bernard Madoff1 must be green with envy in his grave.
- Supporters of ousted Brazilian president and Trumpster-look-alike Jair Bolsonaro protested. And attacked the presidential palace and congress. In local news, the one remaining supporter of ousted Australian PM Scott Morrison protested. And drove a car around Canberra’s parliament house.
- Support for Australia becoming a republic was 39%.
- Princess Harry announced to the world that he lost his virginity when he was aged 17, at the back of a pub. UK tabloids and ABC’s Four Corners have searched in vain for the flower picker.
- A biography of Scott Morrison was published, confirming that the man was a bullying doofus. But it ignored the other culprits: the MPs who voted him in and then cravenly kept him there.
- A teacher was shot by a six-year-old boy. This happened in America.
- Australia’s new ambassador to the US (The Ruddster) showed his diplomatic skill: “America needs to stop throwing its allies under a bus.” Ah, leopards and their spots.
- A Russian oligarch died after falling from a tall building. That makes 23 oligarchic accidents in 18 months. Carelessness?
1 Bernard Madoff was an American fraudster and financier who was the mastermind of the largest Ponzi scheme in history, worth $64.8 billion. He died in jail, predictably, partway through his 150-year sentence.
He was doing so well…
Treasurer Jim Chalmers was making all the right noises. And then he lost it completely. And over the holidays wrote a 6,000 word essay: Capitalism after the Crisis. Wry & Dry puts it down to too much time in the Queensland sun.
The lad is clearly smart, because he has a Doctorate in Philosophy. Readers know that a Ph.D. is only awarded to smart people, with their feet firmly rooted in practical matters.
But it is unlikely that his essay will find its way to becoming a book, much less have sales to rival those of Princess Harry’s magnum opus. The ABC might come to the rescue with a deep and personal interview.
Y’see, Wry & Dry has read Dr Chalmers’ opus. And has lost three hours of his life in so doing, three hours that might have been devoted to more productive enterprises, such as sorting out Wry & Dry’s sock drawer.
It took the good doctor 3,596 words to get to his main point. From the first word to the 3,596th there existed a wasteland of verbiage meandering across a well-worn academic’s second-hand bedsheet of history, economics, politics and faux-journalism. As well as text from his upcoming budget speech.
His eventual main point: that markets should be re-designed for investment in social purposes. Which he calls ‘values-based capitalism’.
This is the pretentious, cuddly sounding stuff Readers might have expected from St Jacinda. But not from the person to whom the government has entrusted the keys to the coffers.
Readers know that it is the role of government to provide for the community, not for companies. Yes, sensibly regulate companies and markets. But Dr Chalmers’ desire for business, investors and superannuation funds to co-invest with government on housing affordability, disability, aged care and healthcare shows one of three things. Or maybe all three.
Firstly, he doesn’t understand the role and operation of government and the role of business.
Secondly, he implicitly acknowledges that his government will run out of money unless it gets dosh from somewhere else. Otherwise, why plead for co-investors in government projects?
Thirdly, he wants to mark his card as the intellectual leader of his party, that will one day make him its supreme leader.
The biggest worry is that he learned his economics at the knee of Wayne Swan. Mr. Swan was famous for stating in his 2012 budget speech, “The four years of budget surpluses I announce tonight…”
Mr. Swan delivered none.
The Royal Australian Navy has to choose between the nuclear-powered submarines from the US or from the UK.
Well, it could now be a one-sub race. One of the Royal Navy’s nuclear submarines had some bolts sheared off during a refurbishment. The fit-it experts were called in. Joe-the-Tradie had a range of solutions. Which did he choose:
a) bore out each broken shaft, buy a new bolt for each from Bunnings and install it;
b) buy grey paint from Bunnings, apply over the shaft-end and pretend that there wasn’t a problem;
c) order a new submarine from the QM; or
d) buy some glue from Bunnings and glue the ends of the bolts back onto the sheared shafts?
Close, but no cigar. The correct answer is d). Joe-the-Tradie was supposed to undertake a). Well, not with glue from Bunnings. UK defence chiefs have ordered an investigation.
Joe-the-Tradie’s employer provided the textbook response: “Safety remains our most important priority.”2
As for which country’s submarine to choose, maybe it won’t matter. By the time they’re delivered, the barbarians will be at the gates.3 Or, rather, landing between the flags.
2Readers should ignore the oxymoron. By definition, as there can be only one priority, there cannot be any other priorities.
3 “Barbarians at the gates” was a pejorative term used by Romans to advise that an invading army was attacking the gates of a walled city. It was also the title of a brilliant book, later a film, that described Wall Street’s first leveraged buy-out, that of RJR Nabisco by Kohlberg Kravis Roberts & Co (the famous KKR).
Speaking of Queenslanders…
…who have spent too much time in the sun, Leader of the Opposition Peter Dutton also spent time in the sun without his topee.
Mr. Dutton has again shown an amazing inability to realise the electoral reality of climate change. That reality is either (a) as Julia Gillard once said, “the science is settled,” or (b) most voters think that the science is settled.
This week, he showed his ability to never miss an opportunity to miss an opportunity. This time, to get a seat at the table to design legislation for the government’s ‘safeguard mechanism’ reforms for use by the Clean Energy Regulator.4 Mr. Dutton and his shadow cabinet have decided to oppose the reforms.
This means that the government will have to rely on the Greens to pass the legislation. The logical outcome of this is that Adam Bandt (Greens’ Dear Leader) will not only be sharpening the knife he plans to plunge into the heart of Australian business, but he will ensure that it is dipped in poison before being plunged. He has vowed to especially harden the mechanism’s treatment of oil and gas companies.
The safeguard mechanism is a child of the previous government; Labor wishes to give it more teeth.
As for Mr. Dutton’s future, he has ensured tenure in the role of Leader of the Opposition.
4 The Safeguard Mechanism requires Australia’s largest greenhouse gas emitters to keep emissions below an emissions limit. The government now wishes to gradually decrease the limit and provide credits for those which emit less than required. And there will be special treatment for emissions-intensive, trade-exposed businesses.
Do the math
There was much excitement when the National Gallery of Australia trumpeted that Jackson Pollock’s Blue Poles5 is now worth $500 million. It was purchased for $1.3m in 1973.
Wow! That’s a 38,361% return. How good is that?
Err, good, but not great. That’s a 12.6% annual return, just a little above the long-term return for the Australian share market.
5 The purchase of Blue Poles (also known as No. 11, 1952) was a courageous and controversial purchase at the time. The PM, Gough Whitlam, delightfully inserted himself into the controversy by having a photo of the painting on his personal 1973 Christmas cards.
Joining the dots
In 2012, then PM Julia Gillard enacted alcohol control legislation called Stronger Futures in the Northern Territory. This was in response to family and local violence in and from Indigenous communities. The legislation had a 10-year sunset clause.
All interested parties knew that the bans were due to be phased out on 30 June, 2022.
In early June 2022, the Central Australian Aboriginal Congress told the federal government about the possibility of increased violence. And it wanted the alcohol bans extended. As did the NT’s peak group for drug and alcohol agencies (AADANT) and the People’s Alcohol Action Coalition. No action was taken.
And here Alice Springs is, seven months later.
Readers can join the dots. And will realise that the alcohol problem is not the actual problem.
Why Russian passivity?
Wry & Dry has long wondered why the average Russian supports Tsar Vlad and the war in Ukraine. He found some clues in an interview with Russian pollster Lev Gudkov (head of Levada, Russia’s leading independent pollster), published in Der Spiegel (online)6 on 5th January. Below are some of his comments.
“People worry almost exclusively about their own country’s military defeat, the chaos in the army, the incompetence of the leadership. For years, they were told that the Russian army was the strongest and had miracle weapons, but that myth has evaporated.”
“The Russians have little compassion for the Ukrainians. Almost no one here talks about the fact that people are being killed in Ukraine.”
“The war has exposed mechanisms in society that have existed since Soviet times. Out of habit, people identify with the state and adopt its rhetoric about their fatherland’s struggle against fascism and Nazism, just like they did in Soviet times, to justify the situation.”
“On the one hand is their [young men] identification with the state; on the other, there is the personal level, the concern for their own lives. They are potentially subject to military service and may be drafted.”
6 “Der Spiegel (online) is a German news website. It is a sister publication to the more widely known hard copy Der Spiegel. Each is known for its investigative journalism.
This is too weird to be true. But it is.
A new crypto currency outfit was launched in January, founded by Su Zhu and Kyle Davies. It’s called GTX and is seeking to raise $25m. So far, so good. Just another chance for investors to get ripped-off in a crypto scam.
But now, read this. Here lies a scam within a scam.
- Su and Davies are the co-founders of the bankrupt crypto hedge fund, Three Arrows Capital (the fund owes investors $3.5 billion).
- Their co-founders in GTX are Mark Lamb and Sudhu Arumugam, the founders of CoinFLEX, an exchange that filed for debt restructuring last year.
- The offering of GTX is to exchange an investor’s claim on bankrupt crypto companies, such as the recently failed FTX ($32 billion evaporated in a week), for a shiny new cryptocurrency called USDG.
- Details on USDG are not yet clear.
What is clear is that Su and Davies are experts in bankruptcy.
And that the crypto world is now fully inhabited by the shysters and the suckers.
For whom the Pell tolls
It’s normally the death of a princess that takes everything else off the front pages. But in mid-January, the death of a cardinal took a princess (Harry) off the front pages.
Forests of trees then gave their lives for the pages of column inches written about Cardinal Pell. With most words sitting at extreme ends of the barbell.
Much of the wider sympathy for Pell arose because of his shameful prosecution for alleged child abuse. The High Court overturning the conviction 7-0 proved the success of the legal system, eventually. The criminal justice system in Victoria was shown to be incompetent. Chairman Dan’s continuing refusal to countenance such a thought is shameful.
Much of the wider loathing of Pell arose from his being the person most associated with child sex abuse within the Catholic Church in Victoria. Sections of the media were delighted with him being charged, ignoring both a presumption of innocence and a need for impartiality. The guilty verdict at first instance was gleefully received, not necessarily on the charges made, but for a desire for the head of a Cardinal to be placed on a platter.
The reality is harder to digest. Pell was wrongly charged, wrongly convicted and rightly acquitted on appeal. And his later work in reforming the corrupt fiscal practices in the Vatican, where his heavy tread was feared, was a great success. But management work in Rome is of little consequence to the victims of his paedophilic colleagues.
Pell’s support for convicted paedophile Ridsdale was scandalous. The child sexual abuse royal commission found that he both knew about child abuse and failed to take proper steps to act upon complaints about dangerous priests. And his structuring of the church’s arrangements for managing recompense for victims of child abuse showed an arrogant disregard for the victims, being designed to limit the damage to the church’s coffers and the church’s reputation.
Readers will choose their epitaph. A man of huge intellect, muscular Catholicism, resolution and articulation. Or a Catholic leader who placed the interests of his church above those of its Christian faith and their children.
Unclear on the concept
China’s newish ambassador to Australia7 launched the new year in an undiplomatic manner: with a blistering attack not on Australia, but on Japan.
“During the Second World War, Japan invaded Australia, bombed Darwin, killed Australians and treated PoWs in a way that is humanly unacceptable. And the Japanese government has not apologised for that up to today…”
This weird outing to portray Japan as Australia’s enemy displays not only ignorance, but also a misunderstanding of history and of the Japanese.
Wry & Dry lived in Japan for two years and began to learn much about its rich history and culture. And also the feelings of its people about the Second World War. There are two realities.
Firstly, a clear recognition of the guilt for the unimaginable suffering that was caused – especially to the Chinese.
Secondly, an unspoken recognition that the dropping of the atomic bombs, not to mention the fire-bombing of Tokyo, was an expiation of the sins that caused all of that suffering.
Perhaps the ambassador might reflect on the unimaginable suffering that a recent Chinese leader caused on his own people. For which he didn’t apologise.
7 Xiao Qian.
Expect the French to riot
French president M. Macron is trying again. And they-the-French-personnes-sur-la-rue-principale are not happy.
Y’see, M. Macron wants to raise the French pension age to 64 from 62. Not that the French are work-shy, but, well, y’know… The relatively low pension age is the general coffers draining. And the coffers are in bad shape: France’s total government debt last year overtook Italy’s to become the third largest in the world after the United States and Japan, both far larger economies.
France’s debt per capita is even higher than Greece’s. Mon Dieu!
Compared to France’s 62, most western countries have a retirement age of 65, many increasing it to 678.
One way to look at the cost of this issue is the government pension payments as a percentage of GDP. The usual suspects top the table:
In Australia, the figure is 4.1%, which shows a sensible self-funded pension regime and a sound economy.
Meanwhile, back in Paris, Readers have seen the usual French reaction to change: mass demonstrations (1.3 million on the streets on Tuesday) and massive strikes that would make British unions green with envy.
And, no mistake; M Macron will back down on reform, as he did in 2018. As did Sarkozy a decade earlier, and Chirac a decade before that. Plus ça change, plus c’est la même chose.
8 Australia’s retirement age will increase to 67 by July this year. Ireland’s will reach 68 years by 2028.
Well, at least one UK company is doing well.
Rolls-Royce sold a record number of cars last year: a mere 6,021. But the average price of €500,000 each makes for a nice little earner. The world’s largest car seller is Toyota, with 10.5m cars sold per annum; for an average price of, well, somewhat less.
Actually, Rolls-Royce Motor Cars Limited is no longer a British company. It has been a wholly owned subsidiary of BMW since 2003. But wait, there’s more. It’s a bit complicated, but Rolls Royce Motor Cars is not the successor to Rolls-Royce branded vehicles made prior to 2003. That company is Bentley Motors Limited.
Bentley is owned by Volkswagen AG.
Both BMW and Volkswagen are German companies. Err, who won the war?
He would say that, wouldn’t he
Readers will be aware that the Tax Practitioners Board deregistered a PwC partner for sharing confidential documents detailing government tax policy plans. That partner shared the confidential information with other PwC personnel, who in turn shared it with clients.
Now, former Assistant Treasurer Michael Sukkar9 has rejected widespread calls for the government to stop consulting PwC on tax policy.
Wry & Dry has undertaken some research. In his three years as Assistant Treasurer, Mr. Sukkar appointed eight PwC partners, former partners and Special Counsel to a string of government bodies.
And Mr. Sukkar worked for PwC in 2005 and 2006.
9 Mr. Sukkar was appointed by Scott Morrison. He holds the Liberal seat of Deakin by the smallest margin in the country.
Unions down to 12.5% of the workforce
Aye. Trouble at mill. Australians are no longer joiners of unions. The below from the ABS was released just before Christmas.
The data is worse than it looks. The young are not joining and the old are, well, dying. Only 5% of the workforce aged 20-24 are unionists, compared to 21% for those aged 60-64.
Which is probably why, inter alia, the Queensland government shared the contact details of 240,000 of its public servants to unions for ongoing marketing campaigns.
Snippets from all over
1. Adani shorted
Adani Enterprises has called off its $2.4bn equity fundraising in the latest blow to Indian billionaire Gautam Adani, who has seen shares in his industrial empire tumble after a short seller made allegations of fraud and stock manipulation. (Financial Times).
Wry & Dry comments: Gautam Adani is not happy: The share crash has caused his wealth to drop by $40 billion.
2. UK the worst
The UK is on course to be the world’s worst-performing big economy this year, according to the International Monetary Fund. (The Times)
Wry & Dry comments: Unlikely that television rights for the coronation will be enough to lift the economy.
3. Taxing the home
Home ownership plays such a large part in Australia’s economy that taxing capital gains made from selling the family home would hit the provision of other services, economists say. (Australian Financial Review)
Wry & Dry comments: The International Monetary Fund has recommended CGT for large gains made on home sales. If CGT is applied, then surely interest payments and capital improvements would be tax deductible.
4. Borisconi’s autobiography envy
Former British prime minister Boris Johnson has signed a deal to write a memoir of his tumultuous time in office. (Le Monde)
Wry & Dry comments: Unlike Princess Harry, Borisconi is a seasoned author. But don’t expect revelations about any of his, err, dalliances.
5. Daughters to inherit peerages?
The “last bastion of constitutional sexism” under which only men can inherit seats in the [UK] House of Lords should be abolished, a Conservative former minister has said. (Bloomberg).
Wry & Dry comments: Which is probably why she is a former minister.
6. Artificial intelligence goes mainstream
The $10bn investment that Microsoft is making in San Francisco-based research outfit OpenAI looks set to become the defining deal for a new era of artificial intelligence. (Financial Times)
Wry & Dry comments: OpenAI recently launched ChatGPT, an AI system that can write essays, tell jokes and answer questions. Time to bring back those three-hour handwritten university exams?
- US Fed raised interest rates by 0.25% points.
- UK consumer confidence rose, for the first time in 15 months.
- China’s GDP grew at 3% in 2022, somewhat under the planned 5.5%.
- Australia’s inflation jumped to 7.8% in 2022, the highest in 32 years.
- US inflation fell to 6.5%, the sixth consecutive month of decline.
- UK inflation fell to 10.5%, the second consecutive month of decline.
And, to soothe your troubled mind…
“Once again, we’re having to resist an aggression of the collective West. It’s impossible to believe but it’s true: once again we are being threatened with German tanks.”
- Tsar Vlad, speaking at a memorial event to mark 80 years since the lifting of the devastating siege of Leningrad (now Volgograd, but renamed Stalingrad for the day).
Surely, the Russian public won’t buy this nonsense. Surely…
PS The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.