And: Energy abundance… Really? Trumpster laid bare; Borisconi’s days numbered. 17 June 2022
Whilst enjoying your Perrier-Jouët Belle Époque…
The sky is falling
The stock market deflates like a spluttering children’s balloon and the world goes nutzo.
What’s going on? Well…
- This is not GFC déjà vu all over again. The global financial system is not stressed because of banks and others lending squillions to people who couldn’t pay it back, as was the GFC case.
- Readers will have seen stock market declines before. In times like these, emotion overrides reality. The market will recover.
- BHP will sell as much iron ore next week as it did last week.
- Yes, inflation is happening.
- Yes, interest rates will rise.
- The media will somehow blend (a) the stock-market meltdown, (b) the electricity crisis (c) interest rates going up, and (d) sightings of Elvis Presley in imaginative stories to get your attention.
Readers are urged to watch First Samuel’s Chief Investment Officer’s investment update video, to be emailed later today and on its website. Readers should be reassured.
So much for energy abundance
It seems to Wry & Dry that Australia has arguably the world’s most diverse and abundant supply of energy, with the exception of Tsar Vlad’s empire.
But somehow, this abundance has gone pear-shaped this week as most of the east coast was on the brink of power blackouts.
What’s going? And who messed it all up?
Well, Wry & Dry doesn’t know and, reading the media, neither does anyone else. There is much pointing of the bone at the Coalition ex-government (quite right), state governments (which, just as with covid, prefer to take credit for success and avoid responsibility for failures; especially Victoria – with massive untapped onshore gas), power companies, Emperor Xi, Tsar Vlad, and whomever killed John F Kennedy.
The silver bullet1/panacea/manna-from-heaven is renewable energy, apparently. That’s fine, but it’s going to take many years for renewable energy to replace fossil fuel, especially to maintain baseload power. And that notwithstanding grandstanding investment gurus’ Pollyanna-view of how quickly transition can occur.
In 2021, renewable sources contributed just 29% of Australia’s energy generation.2
In the meantime, someone had better get the men in fluro jackets to repair the 25% of Australia’s coal-fired power stations that are currently broken.
1 In folklore, a bullet cast from silver is often one of the few weapons that are effective against a werewolf or witch. The term silver bullet is also a metaphor for a simple, seemingly magical, solution to a difficult problem.
2 Solar 12% of total, wind 10% and hydro 6%.
Trumpster laid bare
Screenwriters at Netflix, and in fact, everywhere, are watching the US House [of Representatives] Select Committee’s investigation of the 6th January riots at the U.S. Capitol3. The movie would be a blend of The West Wing, House of Cards, and The Dirty Dozen4.
Y’see, The Trumpster has got himself into warm water over his maniacal insistence that someone ‘stole’ the 2020 election from him. Part of the maniacalness was encouraging a few lunatics to storm the US Capitol and do dark deeds.
There is a lot to understand in all of this, not least of which is that 40% of Americans believe that someone did steal the election from The Trumpster.
Either way, the US House has set up a committee to investigate the whole 6 January5 affray. There is a long way to go.
It’s one of those events that people ask “So what?” Well, Readers should ignore pollsters, historians and the media frenzy, it comes down to one person: US Attorney General Merrick Garland.
If Garland’s Justice Department decides to charge The Trumpster with electoral fraud, it will need to demonstrate to a jury that Trump intended to commit a crime when he staged an attempted coup — and that he knew what he was doing was wrong.
That The Trumpster knew what he was doing is not in doubt. But would a jury convict?
3That is, the US’ Parliament House.
4Readers will recall the muscular 1967 movie with Lee Marvin, Charles Bronson, Donald Sutherland and other blokey blokes.
5 Now called “1-6” (i.e. 6 January; this is the way that Americans order dates – month, then day), it might become as famous as 9-11 (i.e. 9 September, the crashing of aircraft by terrorists into the World Trade Centre in New York).
Money for nothing
There was much gnashing of teeth with the news that the federal government decided that We-The-Taxpayer should cough up $830m to cancel the submarine contract with De Gaulle Macron.
It’s a fact that the actual break fee for terminating the contract was $130m. The balance was ‘compensation’, that is, payment to assuage De Gaulle Macron’s hurt feelings.
And some perspective: Chairman Dan paid $1.2 billion of We-The-Victorian-Taxpayers’ funds not to build a road.
Borisconi’s days are numbered
Borisconi is having a bad hair month. The steady crescendo of public anger at his “but I’m special so I can break lockdown rules”6 defence finally overwhelmed his backbench. He survived a 24-hour-notice vote of ‘no confidence’ by 211 votes to 148.
That his foes gained 148 votes without even there being a stalking member (such as Heseltine stalked Thatcher) and the usual round of lobbying, arm-twisting and drinks at The Club is a big problem for Borisconi.
And then yesterday his ethics adviser resigned – the second to go in two years. Which suggests more than a few submerged logs are drifting toward 10 Downing Street.
Party members are also unhappy. The UK cabinet has a Louis XIV size about it compared to Australia. But all Readers need do is look for the only cabinet member with a negative net satisfaction rating.
And Ben Elliot, whomever he might be7, will be happy to tell his mum that he is better thought of than Borisconi.
Conservative rules say that Borisconi cannot again be challenged for another 12 months. It won’t come to that.
6 For an interesting exemplar of Borisconi’s self-view of his own exceptionalism, watch this video:
7 Actually, nephew of the Duchess of Cornwall (aka Camilla) and Co-Chairman of the Conservative Party.
Meanwhile, across the la Manche…
… De Gaulle Macron also has a parliamentary battle on his hands.
In France’s lower house elections last Sunday, his centrist Ensemble party won the first round by a bee’s knee over the left-wing “New Ecological and Social People’s Union” – whew, what a name!
Forecasts of the second round of voting (on Sunday) suggest that his alliance might no longer have an absolute majority.
There is no doubt that De Gaulle Macron is on the nose. His ‘presidentialisation’ of France’s government has tinges of Charles De Gaulle. Actually, mirrors De Gaulle. The average Jean-Marc is getting tired of his omnipotent governing style.
And Macron is now worried that the second round of voting will see his party fall short of an absolute majority. As Le Monde8 noted this morning, “…the president is now reduced to doing what he has long criticized: playing political games. In an attempt to awaken centrist and right-wing voters, he is trying to paint Jean-Luc Mélenchon [leader of the left alliance] as someone who threatens France’s republic. By doing so, he is squeezing the far right and some of the left together…”
The danger in Macron not having an absolute majority is overstated, each of De Gaulle (1958-62) and Mitterrand (1988-91) governed quite well with only a relative majority. But each had to negotiate a lot more.
But negotiation is not something that Macron likes doing, unless it is (a) with other heads of government and (b) in the full glare of media publicity.
8 Le Monde is a French daily afternoon newspaper, recognised as one of the world’s leading papers, alongside, for example, the New York Times and the Times. But in contrast with these, Le Monde traditionally focused on offering analysis and opinion, as opposed to being a newspaper of record.
… and in Washington…
Sleepy Joe’s party – the Democrats – is beginning to splinter on its left edge.
Far-left congresswoman Alexandria Ocasio-Cortez and a cohort of others to the left of the oyster fork have refused to back his re-election in 2024.
Readers will know that Sleepy Joe will be 82 by then. This is ageism at its worst. Really.
The trouble for the Democrats is that some now want to disinter the body of Hillary Clinton as a possible successor. After all, she will only be aged 76 in 2024.
Wry & Dry has his money on Californian governor (i.e. state premier) Gavin Newsom (aged 54) as the Democratic candidate. Newsom is a ‘moderate’, relative to an increasing number of Democrat legislators.
Unclear on the concept
What will it take for the hapless Duke of York (Prince Andrew) to realise that the lid on his coffin of public life is closed? And buried under 5 metres of concrete. RIP.
He had polished his shoes and combed his hair ready to parade in the front of the media at the annual Garter Day9 procession at Windsor Castle. Somehow, he had forgotten or perhaps ignored that he was on HM’s No Public Events For Andrew list. It took a word from HM to remind him. Tears in the castle’s unisex toilet, no doubt. With only corgis for company.
And then there was news that he wanted his cherished colonelcy of the Grenadier Guards returned. There will be a two word answer to that from HM.
Actually, in both cases it were probably that the next two kings of the realm gave him the two words.
Wry & Dry has to admire the Duke’s dauntless devotion to never missing an opportunity to miss an opportunity to court disaster, as it were.
Readers should watch for his next breakout, likely at Heathrow, Terminal 5, welcoming home Ghislaine Maxwell10 from her New York prison. An excellent opportunity to reminisce, no doubt.
9 The Most Noble Order of the Garter is one of those quaint British institutions. It is the highest order of British knighthood, founded in 1344. But it ranks behind the Victoria Cross and George Cross in all awards. Outside the Royal Family and foreign royals, the Order has no more than 24 members.
10 Convicted of child sex trafficking and other offences in connection with Prince Andrew’s late buddy, Jeffrey Epstein. She has requested that she serve her upcoming sentence in the UK.
Hong Kong never a British colony?
Chinese governments of all types have recognised that Hong Kong was a British colony for the 99 years before 1997. Even the current communist government. Otherwise why make such a fuss of the ‘handover’ in 1997?
An aside: It’s a technical matter that doesn’t matter other than to historians… but the island of Hong Kong was ceded into perpetuity to Britain in 1842. It was not due to be ‘handed back’ in 1997. Similarly Kowloon Peninsula from 1860. It was only the New Territories that were ‘leased’ for 99 years from 1898.
However, it would have been absurd to hand back just the New Territories in 1997, so in 1984 the UK government agreed with China to also surrender sovereignty of Hong Kong Island and Kowloon Peninsula to China at the end of the lease of the New Territories.
Part of the 1984 agreement was the “Basic Law”, which was to last until 2047. The Basic Law stated, inter alia, that Hong Kong would retain its legislative and judicial systems and people’s rights and freedom. China abrogated the Basic Law in 2019.
Back to 2022: In the same way that the Tiananmen Square massacre11 has been erased from Chinese school books, so now Hong Kong school children are being taught that Hong Kong was never a British colony.
Err, from where did the English language, English courts, Kings’ and Queens’ heads on stamps and coins, etc. come?
11 The Tiananmen Square protests were student-led demonstrations held in Tiananmen Square, Beijing during 1989. Armed troops accompanied by tanks fired at the demonstrators and those trying to block the military’s advance into Tiananmen Square. Estimates of the death toll vary from several hundred to several thousand, with thousands more wounded. The ‘incident’ led to one of the most famous of all phots, that of a student standing in front of and halting a column of tanks.
History: It’s just not cricket
Disney has again won the television broadcast rights to the Indian Premier League cricket (Viacom won the streaming rights; a single IPL game is now worth $13.4m making it the second most lucrative sport on the planet, after US NFL).
Perhaps Disney’s (owner of Marvel Comics) winning reflects the true character of IPL, an entertainment hybrid of overpaid would-be super heroes participating in a bastardised sport for short-attention-span viewers.
Habits: All botoxed in?
Apple (the phone, etc, company) has joined with Google and Microsoft to develop a standard that will eliminate passwords. The aim is to use touch recognition (finger print) or face recognition on one device as the primary authentication device.
There is an obvious concern with using face recognition technology. What if the user has Botoxed to the max (Botomaxed)? Is the technology Botox-proof? Will the phone with the bank’s passwords open?
The law is an ass 1
A California court ruled last week that bees are legally fish.
It’s got to do with the California Endangered Species Act (CESA). Environmental groups that were worried about the declining pollinator population in California found a workaround to expand the legal definition of fish to cover four species of endangered bees.
The court got very excited about the possibilities. And declared that anything without a backbone qualifies as a fish.
Which brings Wry & Dry to consider the species Scottus Morrisonus…
The law is an ass 2
The definition of the “normal use of vehicle” has been extended in… the USA. Where else?
A US insurance company has been ordered to pay $5.2m to a Missouri woman who said she contracted HPV after, err, making intimate arrangements in a car that was insured by the company.
She claimed against her partner’s public liability insurance company as he “negligently caused or contributed to cause to be infected, etc, etc, blah, blah…”
The company argued that its insurance coverage shouldn’t apply for damages that “did not arise out of the normal use of the vehicle.”
Back in the day, the “normal use of a vehicle” was not restricted to transportation, if you follow Wry & Dry.
Snippets from all over
1. European appeasement move grows
Most Europeans are ready to concede territorial losses for Ukraine in return for an end to the war as soon as possible, according to new opinion polling that reflects deep political divisions across Europe. (The Times)
Wry & Dry comments: The appeasement desire is strongest in Italy, France and Germany. Readers should read this article for the full survey results: Peace versus Justice: The coming European split over the war in Ukraine – European Council on Foreign Relations (ecfr.eu)
2. Chocks away
Nine years after Jeff Bezos first floated the concept… Amazon announced that its first drone delivery service would go live in the town of Lockeford, California, later this year. (Various)
Wry & Dry comments: Hold the phone, the US Federal Aviation Authority has yet to give the thumbs up.
3. Scottish independence push. Again.
Nicola Sturgeon (Scotland’s First Minister) has fired the starting gun on a new push for Scotland’s independence, unveiling a study she said showed the country would prosper outside the UK. (Financial Times)
Wry & Dry comments: Ms. Sturgeon’s ‘study’ was ridiculed before the ink was dry. It ignored Scotland’s massive public spending deficit and compared the UK’s economic performance to select countries rather than Scotland’s to all EU countries. It also failed to mention that Scotland’s fiscal deficit of 22.4% of GDP was more than seven times the 3% required for EU membership.
4. Unhappy German automakers
The German auto industry is protesting the decision by the EU to ban the sale of
internal combustion engine (i.e. petrol or diesel) vehicles by 2035, describing it as “against
citizens, against the market, against innovation and against modern technologies.” (Wall Street Journal)
Wry & Dry comments: The EU’s ban is ambitious. And no-one seems to have asked from where will all of the replacement electricity come? Only 13 years to find out.
5. Crypto winter
Bitcoin is down by almost 70% of its value from an all-time high of over $68,000, ethereum is down even further, and the overall crypto-crash accounts for over one trillion dollars of lost value. (Financial Times)
Wry & Dry comments: Crypto winter is, like, when Readers see a bloke in a Hawaiian shirt on the Gold Coast looking kinda sad and, like, you know, he lost a ton of dosh and coz he borrowed $200,000 against the home and invested in Bitcoin and didn’t tell the missus and now the bank wants to talk to him and the property market has crashed and he had quit his job because Bitcoin never goes down.
- Australia’s unemployment rate was unchanged at 3.9%.
- The Fed (US’ central bank) raised interest rates by 0.75% points.
- Australia’s Fair Work Commission increased the national minimum wage by 5.2% and by 4.6% for workers on higher award rates.
- US headline CPI jumped 8.6% y/y. Even ex-food and energy it was up 6%.
- UK economy unexpectedly contracted by 0.3% in April.
- ANZ’ consumer confidence indicator fell to 87, its lowest level since covid days of August 2020.
And, to soothe your troubled mind…
“Many of those people who are on the minimum wage are the heroes of the pandemic. These workers deserve more than our thanks.”
- Prime Minister Anthony Albanese, speaking about the 5.1% increase in the minimum wage announced on Wednesday.
Albo was doing so well. And then he fell into the politician’s mistake of gilding the lily. The heroes of the pandemic were nurses and medicos, who are not on the minimum wage. Not even close. And Albo’s plea for the wage increase was inflation, not thanking people for service who had nothing to do with the service given.
PS The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.