Sandy Weill takes credit for putting the final nail in the coffin of Glass-Steagall. Weill parlayed ownership of a two-man brokerage into a position atop Citigroup. As chairman and CEO of Citigroup, he commanded the towering heights of American finance. He was the man who who invented the 'financial supermarket,' incorporating commercial banking, investment banking, securities trade, and life and general insurance. Now he says it was a mistake and that commercial banking and investment banking should be separate.
Sanford I Weill was born in Brooklyn, one of New York City's five boroughs, the son of two Polish-Jewish immigrants. The 'I' doesn't stand for anything. His mother though he could add something to it later in life. When he started dealing on the New York Stock Exchange, the only customers he had at first were family members. Eventually, through years of furious deal making, he controlled the second largest brokerage on the exchange. But further expansion was thwarted by Glass-Steagall.
Glass-Steagall is more properly known as the Banking Act of 1933. When mention is made of Glass- Steagall, it usually refers to the sections of the Act that forbid combining investment banking, including insurance, and commercial banking. The aim was to separate the trading functions of investment banks from the deposit taking functions of commercial banks. Investment banks are typically highly leveraged, often 30 or 40 times. This is more or less the equivalent of going to the races and betting with someone else's money. The idea was that Main Street would have somewhere safe to put its money while Wall Street could get on with the more risky trading and deal making.
Weill's aim was to create the first financial supermarket by backing his Traveler's group into Citibank. This model is also referred to as 'bankassurance'. The idea is that synergies will be gained through cross-selling. For example, if someone gets a loan for a property, you sell them an insurance policy. Anyway, it didn't work. Citigroup was dismembered.
However, by that time, through the combined efforts of Wall Street's bankers, led by Sandy Weill, Glass Steagall was repealed and replaced by the Gramm-Leach-Bliley Act, which was signed into law by President Bill Clinton in 1999. This allowed firms to combine both investment banking and commercial banking activities. It meant highly leveraged firms which were gambling on the markets were also the custodians of Main Street's savings. Firms no longer bothered to pretend they were mere order takers and began a massive move into 'prop trading' or proprietary trading on the firm's account.
Sandy Weill proposes unscrambling the omlette. Could Glass-Steagall be reinstated? Doubtful. Even Paul Volcker, the former chairman of the Federal Reserve Board, with has massive political and market authority hasn't been able to separate prop trading from commercial banking. Are the Citigroups of the American finance too big to fail? Probably. When Lehmann Brothers went to the wall it almost took the world's financial markets with it. Not an experience American regulators would like to repeat. It would be a very brave man who introduced a bill to break up Citigroup. Unscrambling this omlette is going to take a lot more resolution than America's lawmakers have shown so far.
Saturday 28 July 2012
Tuesday 24 July 2012
Gillard slipping from her Throne of Blood
Lady Macbeth is one of Shakespeare's more fully realised female characters. Of course, Macbeth becomes king but it is Lady Macbeth's reckless conspiring that drives him to commit acts of shameful disloyalty. As far Julia Gillard is concerned, she should be aware that the snake is 'scotched but not kill'd.' In other words, Kevin Rudd is badly hurt but he is still alive and capable of striking back. With Labor at a rock bottom low of 28 percent in the polls, Julia is slipping from her Throne of Blood.
I still think that Labor would be insane to replace the Ranga with Kevin. How any mentally competent person could vote for Rudd is beyond me. At least half the caucus think he is raving mad. The only real choice is Bob Carr. After a few initial wobbles, he is proving to be a very competent Foreign Minister. He expresses himself well -- he was, after all, a professional journalist -- and he governed New South Wales, Australia's most populous State, for ten years. Carr has been a reluctant leader before. Here, his job would be to 'smooth the dying pillow' as Daisy Bates said of the Aborigines. Labor must not make do with more of the same. They need a circuit breaker. The only person who can fill that role is Bob Carr. The role of the new leader will be to hold some of the 'at risk' marginals. It's inevitable that the ALP will be decimated in the next election. The best they can hope for is to hold the line if some of their better seats. If I was a backbencher, I would be very, very nervous.
Of course, Julia is no stranger to a bit of 'wet work,' as a friend of mine who is a senior public servant puts it. One can well imagine her wandering distractedly through the arid corridors of new Parliament House, rubbing her hands, dementedly muttering 'Out damned spot,' trying to clean away the blood on her hands from knifing Kevin Rudd.
Julia could well be in some very bad trouble. Whatever you think of Alan Jones, he's got guts, as shown by his interview with former policeman and radio host Michael Smith on 2GB Talk Back Radio on 20 July, 2012. Smith was sacked by 2UE just before airing a story about Julia's four-year romantic involvement with a dodgy Australian Workers Union (AWU) heavy, Bruce Wilson. 'The Australian's' Glenn Milne was sacked for a similar offense. Wilson's offense was improperly dealing with AWU money.
After the matter first came to public attention in 1995, Gillard told 'The Australian' 'I am still a partner with Slater and Gordon, and I have no intention of going anywhere.' Soon after that story broke, she was gone, her desk was cleaned out. She has never practiced law since. She was without a job, as I understand it, for six months, until Joan Kirner arranged a role for her as chief of staff with John Brumby. Wilson was never charged.'
The AWA is the most powerful union in Australia. It is Bill Shorten's union. I am an old AWU man. The AWU is also notoriously corrupt. The AWU, which wanted to be the One Big Union, has the widest coverage of any union in Australia. It has always been on the Right. During Bill Kelty's wave of union amalgamations in the 1990s, the AWU amalgamated in a shogun marriage with Laurie Short's Federated Ironworkers union. The Ironworkers were a 'clean' union associated with the Groupers in during the ALP Split in the 1950s. .When Gillard's problems with her union boyfriend arose, elements of the AWU hierarchy campaigned for a Royal Commission. You can imagine how popular that would have been? It could have dragged up anything. The AWU paid out people who had been stiffed by Gillard's beau. New South Wales Right hard man Laurie Brereton, then minister in charge of industrial relations, didn't see his way clear to recommend a Royal Commission. A very wise move from the ALP's point of view, one would have to say.
Why all this come up now? Maybe it's just because I'm naturally cynical. Rather, I think, it is because I have been around politicians for a very long time. I see a connection between Lady Macbeth sitting uneasily on her Throne of Blood and the ALP's disastrous poll figures. According to Hedley Thomas (Australian, 14 July, 2012) the revival of this 17 year old case 'was seen by Labor figures, the federal opposition and commentators as a deliberate bid to prompt new questions and scrutiny, potentially destabilizing Ms Gillard at a crucial time amid speculation of a comeback by Kevin Rudd.'
Macbeth is notoriously unlucky. It's usually dubbed 'the Scottish play' by superstitious theatrical folk. Kate Mulvaney did a great job as Lady Macbeth with Bell Shakespeare. I can't see any way the Ranga can be saved.. As for the grinning little dolly man who would be our savior, just remember the billions he wasted on bodgy school halls and self igniting insulation. We've had the most favourable terms of trade in 100 years and neither Rudd nor Gillard could get the Budget out of deficit. Let's bring on Bob Carr.
By the way, 'Throne of Blood' is Akira Kurosawa's movie adaptation of Macbeth to medieval Japan, made more effective by the fact that betraying his lord is was the most heinous crime a samurai could commit. Asked why he looked so terrified in the final scene, leading man Toshira Mifune said 'they were shooting real arrows at me.'
I still think that Labor would be insane to replace the Ranga with Kevin. How any mentally competent person could vote for Rudd is beyond me. At least half the caucus think he is raving mad. The only real choice is Bob Carr. After a few initial wobbles, he is proving to be a very competent Foreign Minister. He expresses himself well -- he was, after all, a professional journalist -- and he governed New South Wales, Australia's most populous State, for ten years. Carr has been a reluctant leader before. Here, his job would be to 'smooth the dying pillow' as Daisy Bates said of the Aborigines. Labor must not make do with more of the same. They need a circuit breaker. The only person who can fill that role is Bob Carr. The role of the new leader will be to hold some of the 'at risk' marginals. It's inevitable that the ALP will be decimated in the next election. The best they can hope for is to hold the line if some of their better seats. If I was a backbencher, I would be very, very nervous.
Of course, Julia is no stranger to a bit of 'wet work,' as a friend of mine who is a senior public servant puts it. One can well imagine her wandering distractedly through the arid corridors of new Parliament House, rubbing her hands, dementedly muttering 'Out damned spot,' trying to clean away the blood on her hands from knifing Kevin Rudd.
Julia could well be in some very bad trouble. Whatever you think of Alan Jones, he's got guts, as shown by his interview with former policeman and radio host Michael Smith on 2GB Talk Back Radio on 20 July, 2012. Smith was sacked by 2UE just before airing a story about Julia's four-year romantic involvement with a dodgy Australian Workers Union (AWU) heavy, Bruce Wilson. 'The Australian's' Glenn Milne was sacked for a similar offense. Wilson's offense was improperly dealing with AWU money.
After the matter first came to public attention in 1995, Gillard told 'The Australian' 'I am still a partner with Slater and Gordon, and I have no intention of going anywhere.' Soon after that story broke, she was gone, her desk was cleaned out. She has never practiced law since. She was without a job, as I understand it, for six months, until Joan Kirner arranged a role for her as chief of staff with John Brumby. Wilson was never charged.'
The AWA is the most powerful union in Australia. It is Bill Shorten's union. I am an old AWU man. The AWU is also notoriously corrupt. The AWU, which wanted to be the One Big Union, has the widest coverage of any union in Australia. It has always been on the Right. During Bill Kelty's wave of union amalgamations in the 1990s, the AWU amalgamated in a shogun marriage with Laurie Short's Federated Ironworkers union. The Ironworkers were a 'clean' union associated with the Groupers in during the ALP Split in the 1950s. .When Gillard's problems with her union boyfriend arose, elements of the AWU hierarchy campaigned for a Royal Commission. You can imagine how popular that would have been? It could have dragged up anything. The AWU paid out people who had been stiffed by Gillard's beau. New South Wales Right hard man Laurie Brereton, then minister in charge of industrial relations, didn't see his way clear to recommend a Royal Commission. A very wise move from the ALP's point of view, one would have to say.
Why all this come up now? Maybe it's just because I'm naturally cynical. Rather, I think, it is because I have been around politicians for a very long time. I see a connection between Lady Macbeth sitting uneasily on her Throne of Blood and the ALP's disastrous poll figures. According to Hedley Thomas (Australian, 14 July, 2012) the revival of this 17 year old case 'was seen by Labor figures, the federal opposition and commentators as a deliberate bid to prompt new questions and scrutiny, potentially destabilizing Ms Gillard at a crucial time amid speculation of a comeback by Kevin Rudd.'
Macbeth is notoriously unlucky. It's usually dubbed 'the Scottish play' by superstitious theatrical folk. Kate Mulvaney did a great job as Lady Macbeth with Bell Shakespeare. I can't see any way the Ranga can be saved.. As for the grinning little dolly man who would be our savior, just remember the billions he wasted on bodgy school halls and self igniting insulation. We've had the most favourable terms of trade in 100 years and neither Rudd nor Gillard could get the Budget out of deficit. Let's bring on Bob Carr.
By the way, 'Throne of Blood' is Akira Kurosawa's movie adaptation of Macbeth to medieval Japan, made more effective by the fact that betraying his lord is was the most heinous crime a samurai could commit. Asked why he looked so terrified in the final scene, leading man Toshira Mifune said 'they were shooting real arrows at me.'
Sunday 22 July 2012
ALP edges Greens in Melbourne by-election
At Ground Zero for the by-election in the Victorian state seat of Melbourne, it soon became evident that no-one wanted the Greens to win, with the possible exception of Stephen Mayne. The poll, held in pleasant weather on Saturday 21 July 2012, pitted the Greens against the rest. The Greens were marginally ahead on the primary vote -- the Greens Cathy Oke with 36.37 percent shaded the ALP's Jennifer Kanis with 33.32 percent. All candidates who were likely to make a difference, apart from Mayne, were preferencing the ALP. Family First candidate Ashley Fenn summed up the mood when he said 'The Labor Party is far from perfect, but they are better than the Greens.'
Stephen Mayne, standing as an independent, did surprisingly well with 4.75 percent of the vote. Mayne, a serial do gooder who is related to the founders of the once great and now extinct transport giant Mayne Nickless, is a former Liberal staffer who seems to have branched out into other areas. Mayne, who claims to have spent an abstemious $2,000 on his campaign, has made no secret that his major ambition is to gain election to the Melbourne City Council. Mayne is now serving on the Manningham City Council, where he is reportedly not popular. Scuttlebutt on election day was that Mayne had done a deal to support the Greens in return for their support in his run for the Melbourne City Council. His bare bones campaign was due to necessity rather than thrift, as he is living on his council stipend and not much else, sources say.
The ALP had done their preparation professionally and got a very strong postal vote, well aware that postal votes have decided many a close election. David Notle, a well known Liberal who has a pharmacy in North Carlton, was marketed as a 'Liberal leaning candidate.' According to the 'Mayne Report', Nolte spent $30,000 on his campaign and his 4.70 percent of the vote flowed 80 percent to the ALP. The Sex Party garnered 6.61 percent of the primary vote, the third highest number of primary votes after the Greens and the ALP. Fiona Patten, a fiftyish political lobbyist and small business owner ran an energetic campaign for the Sex Party, who seem to be an emerging force in Australian politics. They are accumulating some serious bargaining chips. The Democratic Labor Party (DLP) scored only 1.91 percent of the vote despite a strong effort in an electorate not suited to their style of politics. Their preferences flowed strongly to Labor.
Despite the Fairfax press predicting a win for the Greens -- a case of wishful thinking -- it was soon clear on polling day that everyone -- apart from Mayne -- was backing the ALP. Given a normal flow of preferences, it was soon evident that Jennifer Kanis would win fairly well. In the end, the two party preferred vote saw the ALP's Jennifer Kanis score 13,988 to the Greens Cathy Oke's 13,234 at close of counting on Saturday.
In the end, while the election must have caused some nail biting in the ALP camp -- not least by Prime Minister Julia Gillard -- the ALP won a comfortable victory. Once again, the professionals wiped the floor with the amateurs.
A note on working on a booth. Most people working on booths get along well. After all, they are interested in politics and most other people aren't. Even with representatives from 16 different candidates attempting to thrust their how-to-vote card into the hand of the approaching voter, as in the Melbourne poll, the booth workers rub along pretty well.
Stephen Mayne may live to regret his preference deal. The Labor Party has a notoriously long memory and the Greens won't have much patronage to hand around, making his bid for the Melbourne City Council that much more difficult.
Stephen Mayne, standing as an independent, did surprisingly well with 4.75 percent of the vote. Mayne, a serial do gooder who is related to the founders of the once great and now extinct transport giant Mayne Nickless, is a former Liberal staffer who seems to have branched out into other areas. Mayne, who claims to have spent an abstemious $2,000 on his campaign, has made no secret that his major ambition is to gain election to the Melbourne City Council. Mayne is now serving on the Manningham City Council, where he is reportedly not popular. Scuttlebutt on election day was that Mayne had done a deal to support the Greens in return for their support in his run for the Melbourne City Council. His bare bones campaign was due to necessity rather than thrift, as he is living on his council stipend and not much else, sources say.
The ALP had done their preparation professionally and got a very strong postal vote, well aware that postal votes have decided many a close election. David Notle, a well known Liberal who has a pharmacy in North Carlton, was marketed as a 'Liberal leaning candidate.' According to the 'Mayne Report', Nolte spent $30,000 on his campaign and his 4.70 percent of the vote flowed 80 percent to the ALP. The Sex Party garnered 6.61 percent of the primary vote, the third highest number of primary votes after the Greens and the ALP. Fiona Patten, a fiftyish political lobbyist and small business owner ran an energetic campaign for the Sex Party, who seem to be an emerging force in Australian politics. They are accumulating some serious bargaining chips. The Democratic Labor Party (DLP) scored only 1.91 percent of the vote despite a strong effort in an electorate not suited to their style of politics. Their preferences flowed strongly to Labor.
Despite the Fairfax press predicting a win for the Greens -- a case of wishful thinking -- it was soon clear on polling day that everyone -- apart from Mayne -- was backing the ALP. Given a normal flow of preferences, it was soon evident that Jennifer Kanis would win fairly well. In the end, the two party preferred vote saw the ALP's Jennifer Kanis score 13,988 to the Greens Cathy Oke's 13,234 at close of counting on Saturday.
In the end, while the election must have caused some nail biting in the ALP camp -- not least by Prime Minister Julia Gillard -- the ALP won a comfortable victory. Once again, the professionals wiped the floor with the amateurs.
A note on working on a booth. Most people working on booths get along well. After all, they are interested in politics and most other people aren't. Even with representatives from 16 different candidates attempting to thrust their how-to-vote card into the hand of the approaching voter, as in the Melbourne poll, the booth workers rub along pretty well.
Stephen Mayne may live to regret his preference deal. The Labor Party has a notoriously long memory and the Greens won't have much patronage to hand around, making his bid for the Melbourne City Council that much more difficult.
Thursday 19 July 2012
AMP devours AXA Australia
AMP and National Mutual were once the two pillars of Australia's life insurance industry. AMP was headquartered in Sydney and National Mutual was one of the Melbourne business community's great stalwarts, one of the institutions that made Collins Street Australia's financial hub. Then it all came unstuck.
My mother warned me about life insurance policies long ago. She said the payments on the policy had to be made for a very long time and when the policy matured, the value had been inflated away. If you surrendered the policy early, you were likely to retrieve very little of the premiums you had paid. That was all true. But for someone with a professional level job, the calls from insurance agents, which commenced at the same time you began your first real job, became almost impossible to resist. In fact, for many professional people, taking out a life policy went along with getting the key to the door and owning a decent car as a marker of adulthood.
Many people thought like my mother. The life offices offer two types of policies. The first is term insurance. The policy is paid out on the death of the policy holder. Term insurance was invented by two bibulous Scottish clergymen who wished to prevent the impoverishment of clergymen's widows. Apart from inventing life insurance, they were also the world's first actuaries. The firm they founded, Scottish Widows, still exists.
Actuaries are mathematicians who work out risks such as life expectancy, death rates and so on for insurance companies. Life offices couldn't stay in business if they didn't know what they were paying out on, and when.
Whole of life is the second main form of life policy. Term policy holders became resentful that they derived no benefit from the premiums they paid for their entire life. Whole of life is similar to an investment policy which usually pays out at a certain date.
When AXA, the French insurance giant took over National Mutual, National Mutual was almost broke. AXA wanted National Mutual's Asian business, the company's crown jewel. National Mutual was a mutual company -- that is, it was in theory at least, owned by the policy holders. I say 'in theory' because it was almost impossible to extract information from the company. Policy holders were not even given an annual report and even requesting an annual report was a battle. The annual report, when received, revealed that National Mutual was governed by a rogue's gallery of Melbourne businessmen, such as John Elliott and other fallen angels.
National Mutual had a problem. It was the number two life office behind AMP and it wanted to be number one. The way to do this was to write more policies. But there is a catch. Writing a policy is quite an expensive undertaking. The agent gets a commission, the insured's life has to be assessed and a medical examination undertaken, statutory requirements have to be fulfilled and so on. The life office does not start making a profit on the policy for about eight years, and the life policy will have a negative surrender value for quite a while. National Mutual might have been writing more policies, but it was in danger of going broke.
When ASIC eventually let AXA France and AMP carve up the remains of National Mutual, both sides got what they wanted. AXA never wanted the Australian business, only the booming Asian network, and AMP had had its fingers burned with foreign adventures. AMP wanted to be too big to be taken over and it wanted the National Mutual agent network. This is not what happened. AMP agents are company employees.while former National Mutual agents own their own business and needed little encouragement to head off for sunnier climes. Also, AMP has a reputation for stinginess, as evidenced by cutting out the free fruit for company employees. What AMP did get was the North platform, an investment program regarded with almost religious veneration within the funds management industry.
As a policy holder, I received the grand sum of around $300 in stock when National Mutual demutualised, which was better than nothing -- easily the case if AXA, lured by the Asian business, hadn't ridden to the rescue.
My mother warned me about life insurance policies long ago. She said the payments on the policy had to be made for a very long time and when the policy matured, the value had been inflated away. If you surrendered the policy early, you were likely to retrieve very little of the premiums you had paid. That was all true. But for someone with a professional level job, the calls from insurance agents, which commenced at the same time you began your first real job, became almost impossible to resist. In fact, for many professional people, taking out a life policy went along with getting the key to the door and owning a decent car as a marker of adulthood.
Many people thought like my mother. The life offices offer two types of policies. The first is term insurance. The policy is paid out on the death of the policy holder. Term insurance was invented by two bibulous Scottish clergymen who wished to prevent the impoverishment of clergymen's widows. Apart from inventing life insurance, they were also the world's first actuaries. The firm they founded, Scottish Widows, still exists.
Actuaries are mathematicians who work out risks such as life expectancy, death rates and so on for insurance companies. Life offices couldn't stay in business if they didn't know what they were paying out on, and when.
Whole of life is the second main form of life policy. Term policy holders became resentful that they derived no benefit from the premiums they paid for their entire life. Whole of life is similar to an investment policy which usually pays out at a certain date.
When AXA, the French insurance giant took over National Mutual, National Mutual was almost broke. AXA wanted National Mutual's Asian business, the company's crown jewel. National Mutual was a mutual company -- that is, it was in theory at least, owned by the policy holders. I say 'in theory' because it was almost impossible to extract information from the company. Policy holders were not even given an annual report and even requesting an annual report was a battle. The annual report, when received, revealed that National Mutual was governed by a rogue's gallery of Melbourne businessmen, such as John Elliott and other fallen angels.
National Mutual had a problem. It was the number two life office behind AMP and it wanted to be number one. The way to do this was to write more policies. But there is a catch. Writing a policy is quite an expensive undertaking. The agent gets a commission, the insured's life has to be assessed and a medical examination undertaken, statutory requirements have to be fulfilled and so on. The life office does not start making a profit on the policy for about eight years, and the life policy will have a negative surrender value for quite a while. National Mutual might have been writing more policies, but it was in danger of going broke.
When ASIC eventually let AXA France and AMP carve up the remains of National Mutual, both sides got what they wanted. AXA never wanted the Australian business, only the booming Asian network, and AMP had had its fingers burned with foreign adventures. AMP wanted to be too big to be taken over and it wanted the National Mutual agent network. This is not what happened. AMP agents are company employees.while former National Mutual agents own their own business and needed little encouragement to head off for sunnier climes. Also, AMP has a reputation for stinginess, as evidenced by cutting out the free fruit for company employees. What AMP did get was the North platform, an investment program regarded with almost religious veneration within the funds management industry.
As a policy holder, I received the grand sum of around $300 in stock when National Mutual demutualised, which was better than nothing -- easily the case if AXA, lured by the Asian business, hadn't ridden to the rescue.
Wednesday 18 July 2012
Women in print: New Idea has no idea
When I was quite a bit younger than I am now, all newspapers had a Women's Page and Women's Weekly came out every week. Now all that has changed. Under assault from feminism, the Women's Page was trashed. The editors still had to find space for stories that are almost exclusively of interest to their female readers, like recipes, pictures of babies and fashion so they resorted to various subterfuges. Like the famous Clayton's ad, which advertised 'the drink you have when you're not having a drink' they were 'the women's page when you don't have a women's page.' Of course, not all women are feminists, but they tend to have disproportionate influence and representation in the media. Most women would happily read the Women's Page, but the feminists didn't like it -- it was 'demeaning to women' -- so out it went. As for Clayton's, it is a rather insipid drink. Clayton's is famous in the advertising world for a brilliant campaign that couldn't move an unpopular product.
But the Women's Page may be returning. Rupert's Herald Sun (July 16, 2012) has a very similar section headed 'Your Time' featuring an attractive blonde woman of indeterminate age with killer abs. It has features on hand cream, childhood illnesses and fashion trends, plus a big zodiac section. If it looks like a Women's Page and flies like a Women's Page then in my opinion it is a Women's Page.
As for Women's Weekly, Kerry Packer converted it to a monthly. This was held at the time to be a masterstroke because it cut production and distribution costs while retaining the same advertisers. After all, Woman's Day wasn't a daily. Both were published by Australian Consolidated Press, the foundation of the Packer fortune. Old ACP hands may excoriate me, but I could never see much difference between the two.
The big rival to the ACP titles is New Idea. I was sitting on the weekend in my local Greek cafe when I came across a recent issue of New Idea. On the cover was Kate Middleton, Duchess of Cambridge, with a big circle around her tummy, saying 'baby bump'. I picked it up and knew immediately I'd been suckered again. The whole story was an outrageous beat up with no foundation at all. This is not the first beat up of 'Kate's pregnant' variety I've seen on the cover of New Idea -- the seem to carry one every second edition, all totally without foundation.
New Idea is a key title in the Pacific Magazines stable. Pacific Magazines claims to 'dominate the key publishing categories it operates in and publishes one in four magazines sold in Australia.' New Idea' , the crown jewel, is a weekly with an audited circulation of 305,000. Pacific Magazines say it publications reach 51 percent of\all women in Australia and 19 percent of all men.
Despite what the media theorists may think, magazines do not create an audience. They respond to what their readers want. Whether it's Kate's baby or Brangelina's wedding -- another favourite beat up -- women will pay money for these stories. Are 305,000 women dumb enough to believe these 'baby bump' beat ups? I doubt it. Rather instead it falls into the 'bit of fun' category'. I say 'women' because men are not New Idea's target readership. This is classic women's magazine copy. If I bought New Idea, I'd feel as if I'd been hoodwinked, but I'm a male.
ACP can't be holier than thou. Woman's Day's July 16 issue features 'Wills and Kate -- Our Island Paradise' on their honeymoon, pictures that were supposedly so hot no other publication on Earth would touch them. These pictures were supposedly strictly off limits on privacy grounds but Woman's Day -- a weekly -- published them regardless.
'A salesman's is got to dream boy, it comes with the territory' said Willy Loman in Arthur Miller's 'Death of a Salesman.' One might say the same about the day dreams of readers of women's magazines. After all, one day Kate will get pregnant, but we are more likely to learn about it in the electronic media first rather than seeing it on the front cover of New Idea. I don't care, but New Idea and Woman's Day readers do and are prepared to pay for the tittilation..
But the Women's Page may be returning. Rupert's Herald Sun (July 16, 2012) has a very similar section headed 'Your Time' featuring an attractive blonde woman of indeterminate age with killer abs. It has features on hand cream, childhood illnesses and fashion trends, plus a big zodiac section. If it looks like a Women's Page and flies like a Women's Page then in my opinion it is a Women's Page.
As for Women's Weekly, Kerry Packer converted it to a monthly. This was held at the time to be a masterstroke because it cut production and distribution costs while retaining the same advertisers. After all, Woman's Day wasn't a daily. Both were published by Australian Consolidated Press, the foundation of the Packer fortune. Old ACP hands may excoriate me, but I could never see much difference between the two.
The big rival to the ACP titles is New Idea. I was sitting on the weekend in my local Greek cafe when I came across a recent issue of New Idea. On the cover was Kate Middleton, Duchess of Cambridge, with a big circle around her tummy, saying 'baby bump'. I picked it up and knew immediately I'd been suckered again. The whole story was an outrageous beat up with no foundation at all. This is not the first beat up of 'Kate's pregnant' variety I've seen on the cover of New Idea -- the seem to carry one every second edition, all totally without foundation.
New Idea is a key title in the Pacific Magazines stable. Pacific Magazines claims to 'dominate the key publishing categories it operates in and publishes one in four magazines sold in Australia.' New Idea' , the crown jewel, is a weekly with an audited circulation of 305,000. Pacific Magazines say it publications reach 51 percent of\all women in Australia and 19 percent of all men.
Despite what the media theorists may think, magazines do not create an audience. They respond to what their readers want. Whether it's Kate's baby or Brangelina's wedding -- another favourite beat up -- women will pay money for these stories. Are 305,000 women dumb enough to believe these 'baby bump' beat ups? I doubt it. Rather instead it falls into the 'bit of fun' category'. I say 'women' because men are not New Idea's target readership. This is classic women's magazine copy. If I bought New Idea, I'd feel as if I'd been hoodwinked, but I'm a male.
ACP can't be holier than thou. Woman's Day's July 16 issue features 'Wills and Kate -- Our Island Paradise' on their honeymoon, pictures that were supposedly so hot no other publication on Earth would touch them. These pictures were supposedly strictly off limits on privacy grounds but Woman's Day -- a weekly -- published them regardless.
'A salesman's is got to dream boy, it comes with the territory' said Willy Loman in Arthur Miller's 'Death of a Salesman.' One might say the same about the day dreams of readers of women's magazines. After all, one day Kate will get pregnant, but we are more likely to learn about it in the electronic media first rather than seeing it on the front cover of New Idea. I don't care, but New Idea and Woman's Day readers do and are prepared to pay for the tittilation..
Tuesday 10 July 2012
Liberal, Labor pollies either ratbags or liars
'You can fool all of the people some of the time and some of the people all of the time but you cannot fool all of the time' said Abraham Lincoln. Lincoln is either the greatest American president if you live north of the Mason-Dixon line, and the worst, if you live in the South.
Whatever his faults, Lincoln was no fool, even if his constituents may have been at times. What about Australian politicians? I do not think the term 'fool' is useful in the context of Australian politics. We have some blowhards, some traitors but very few fools. At least at the Federal level, it's difficult to get into politics if you are out and out stupid, although some people who are demonstrably mentally ill, in the true sense of term, have managed to get elected.
I think the good old Aussie term ratbag is better. We also have a great many politicians who stretch the truth, and some who even deserve to be called liars. We must draw a distinction between ratbags and liars. Let's look at the Federal Budget for 2012-13. According to the Budget papers, at the end of this financial year, we should expect a surplus of $2.5 billion. Any honest economist (yes, there are some) will tell you that this figure is the result of a fiscal pea and thimble trick. The person who put this Budget together, namely the Treasurer Wayne Swan, is a ratbag. I wouldn't call him a liar he is about what you can expect out of Queensland, which has covered the whole ratbag spectrum from former long serving premier Sir Joh Bjelke-Petersen to media harlot Peter Beattie. Let's say Wayne Swan is a ratbag. From what little you can gather from public sources, in private he seems to be a decent enough sort of person, but he is still a ratbag. It's almost a term of affection.
Although I do not claim great expertise as an economist, I'm told that the 'real' deficit for 2012-13 without the glue and paper patch up is around $30 billion.
Swan apparently believes, as did American showman P T Barnum, that 'every crowd has a silver lining'. His machinations with the Budget are likely to come back to haunt him.
Tony Abbott, on the other hand, has told us that his first priority, if elected -- as he almost certainly will be -- is to repeal the carbon tax and the mining tax. He says he will do this without cutting welfare benefits. He says he will do this by finding 'inefficiencies' in the Commonwealth Public Service. Tell this to any politically literate person and the only response will be howls of laughter. He would need to abolish the Department of Defence, which spends about $60 billion a year, to achieve this goal. This is not going to happen. Thirty years ago the Razor Gang argument might have had some credibility, now it's just nonsense.
I do not believe that Tony Abbott is a ratbag. He is either a fool or a liar. It may be possible to win a Rhodes Scholarship if one is lacking 'common sense', but not if you are a fool. Tony Abbott has devoted his entire life to becoming Prime Minister. I therefore believe that to become Prime Minister he has become a liar. Because it is impossible to abolish the mining tax and the carbon tax without reducing what the the economists call 'transfer payments' and we call welfare. And don't forget that these days the greatest welfare benefits go to the middle class, thanks to Australia's greatest ever socialist Prime Minister, John Howard.
But Tony Abbott knows he has two escape clauses. First, no one has yet been able to convince me that the Libs can get an Act through the Senate to repeal the carbon tax before 2014 due to sheer parliamentary logistics. The notion that you can somehow give the 'carbon polluters' their money back is fanciful. Second, Tony Abbott will send Joe Hockey into the Treasury, from whence he will return a day later, ashen faced (a la Peter Costello) saying 'it's far worse than we imagine, we're going to have to tighten our belts', something Joe has no doubt had a lot of experience with. That this will happen is, as they say in politics, is 'a lay down misere.' Joe will probably be looking at a black hole of around $60 billion and he'll earn the enmity of the back bench when he starts swinging the axe. His last words as he goes to his political grave are likely to be similar to P T Barnum's -- 'Ask Bailey what the box office was at the Garden last night'.
Australian politics is not a three ringed circus nor is Canberra Madison Square Garden -- it's not that electrifiying. But P T Barnum, nominated as one of LIFE Magazine's most influential men of the millennium, knew a thing or two about how to get the crowd onside. Although he famously said 'there's a sucker born every minute, he also knew not to underestimate his audience. 'The public is wiser than many imagine,' he said. It's a wise sentiment Australian politicians should heed.
Whatever his faults, Lincoln was no fool, even if his constituents may have been at times. What about Australian politicians? I do not think the term 'fool' is useful in the context of Australian politics. We have some blowhards, some traitors but very few fools. At least at the Federal level, it's difficult to get into politics if you are out and out stupid, although some people who are demonstrably mentally ill, in the true sense of term, have managed to get elected.
I think the good old Aussie term ratbag is better. We also have a great many politicians who stretch the truth, and some who even deserve to be called liars. We must draw a distinction between ratbags and liars. Let's look at the Federal Budget for 2012-13. According to the Budget papers, at the end of this financial year, we should expect a surplus of $2.5 billion. Any honest economist (yes, there are some) will tell you that this figure is the result of a fiscal pea and thimble trick. The person who put this Budget together, namely the Treasurer Wayne Swan, is a ratbag. I wouldn't call him a liar he is about what you can expect out of Queensland, which has covered the whole ratbag spectrum from former long serving premier Sir Joh Bjelke-Petersen to media harlot Peter Beattie. Let's say Wayne Swan is a ratbag. From what little you can gather from public sources, in private he seems to be a decent enough sort of person, but he is still a ratbag. It's almost a term of affection.
Although I do not claim great expertise as an economist, I'm told that the 'real' deficit for 2012-13 without the glue and paper patch up is around $30 billion.
Swan apparently believes, as did American showman P T Barnum, that 'every crowd has a silver lining'. His machinations with the Budget are likely to come back to haunt him.
Tony Abbott, on the other hand, has told us that his first priority, if elected -- as he almost certainly will be -- is to repeal the carbon tax and the mining tax. He says he will do this without cutting welfare benefits. He says he will do this by finding 'inefficiencies' in the Commonwealth Public Service. Tell this to any politically literate person and the only response will be howls of laughter. He would need to abolish the Department of Defence, which spends about $60 billion a year, to achieve this goal. This is not going to happen. Thirty years ago the Razor Gang argument might have had some credibility, now it's just nonsense.
I do not believe that Tony Abbott is a ratbag. He is either a fool or a liar. It may be possible to win a Rhodes Scholarship if one is lacking 'common sense', but not if you are a fool. Tony Abbott has devoted his entire life to becoming Prime Minister. I therefore believe that to become Prime Minister he has become a liar. Because it is impossible to abolish the mining tax and the carbon tax without reducing what the the economists call 'transfer payments' and we call welfare. And don't forget that these days the greatest welfare benefits go to the middle class, thanks to Australia's greatest ever socialist Prime Minister, John Howard.
But Tony Abbott knows he has two escape clauses. First, no one has yet been able to convince me that the Libs can get an Act through the Senate to repeal the carbon tax before 2014 due to sheer parliamentary logistics. The notion that you can somehow give the 'carbon polluters' their money back is fanciful. Second, Tony Abbott will send Joe Hockey into the Treasury, from whence he will return a day later, ashen faced (a la Peter Costello) saying 'it's far worse than we imagine, we're going to have to tighten our belts', something Joe has no doubt had a lot of experience with. That this will happen is, as they say in politics, is 'a lay down misere.' Joe will probably be looking at a black hole of around $60 billion and he'll earn the enmity of the back bench when he starts swinging the axe. His last words as he goes to his political grave are likely to be similar to P T Barnum's -- 'Ask Bailey what the box office was at the Garden last night'.
Australian politics is not a three ringed circus nor is Canberra Madison Square Garden -- it's not that electrifiying. But P T Barnum, nominated as one of LIFE Magazine's most influential men of the millennium, knew a thing or two about how to get the crowd onside. Although he famously said 'there's a sucker born every minute, he also knew not to underestimate his audience. 'The public is wiser than many imagine,' he said. It's a wise sentiment Australian politicians should heed.
Thursday 5 July 2012
Bob Diamond upends Barclays Quaker virtues
Bob Diamond, newly sacked as CEO of Barclays Bank, came to represent everything the bank's founders detested. The Barclays motto is 'honesty, integrity, plain dealing.' To understand the origins of the Barclays imbroglio, we must consider two things -- first, the origins of Quaker business culture, and second, the nature of the man himself and what utility he represented to the Barclays board.
The whole Barclays imbroglio rests on manipulating the setting of Libor. Libor stands for the London interbank offered rate. Libor is set through a process of bidding by participating banks. Its essential function is to set the rate at which banks will lend to each other. Libor is also a reference rate for a whole host of other financial products. Many such products are quoted as Libor plus a margin. It is estimated that Libor influences some $800 trillion in financial products. The Bank of England does not fix Libor; it is a market rate. Thus, the controversy over Barclays fraudulently manipulating the setting of Libor is no small thing. It represents an assault on the core values of the City of London and the ethics of English business culture, summed up in the motto of the London Stock Exchange - 'My Word is My Bond.'
Barclays had its beginnings as a Quaker firm. The Quakers, or to give them their proper name the Society of Friends, are a religious group. They were perscuted mercilessly by Charles II. They had to stick together. Quaker firms believed that they had an obligation to their customers and employees. Perhaps the firm that most famously embodied these virtues was Cadbury's Chocolates. Barclays, founded in the early 1600s, was at the center of a web of Quaker banks that conserved and marshaled capital for the close-knit Quaker business community. Barclays business ethic was the Friends' ethic -- honesty, integrity, plain dealing.
Before we look at shamed CEO Bob Diamond, we must look at Barclays. Barclays holds assets of US$2.33 trillion, ranking only behind BNP Paribas, Deutsche Bank and HSBC. But the market is a lot less forgiving than the Quakers. The market demands growth. When the board of a solid, mature business but largely directionless enterprise like Barclays is offered the chance of new growth by a red hot entrepreneur like Bob Diamond, they will almost inevitably grab the opportunity.
If we wish to understand Bob Diamond, we should look not to American builders of business empires like J. Pierpont Morgan, but instead to Jay Gatsby, hero of F. Scott Fitzgerald's masterwork of the Roaring Twenties 'The Great Gatsby.' Like Jay Gatsby, Diamond is a chancer. He came from a humble beginnings. His Irish-American parents reared a family of nine of their teachers' salaries. Diamond went to mediocre educational institutions and until he got his chance with Barclays, his employment record was nothing to rave about. He is Boston Irish, right down to supporting the Red Sox and the Celtics.
Diamond's problem is that he is just too American. Well known for his extravagant pay packages, he infuriated public opinion by saying he would take all the 20 million pound severance package owed to him following his defenestration by Barclays. Barclays offered chairman Marcus Agius as a sacrifice instead of axing Diamond, but it was made clear Diamond had to go. Diamond did many things that just aren't English -- his lurid red scarves, calling peers of the realm by their first names in public and his cringe-worthy opening statement to the parliamentary committee that 'I love Barclays'. An Englishman loves his dog. He may love his football team. He may even love his wife, though he almost certainly wouldn't say so in public. But he almost certainly doesn't love the firm for which he works. Even his optimistic grin, when most Englishmen would look suitably glum, was irritating.
Put together a lumbering giant like Barclays and an ambitious man reared in a 'take no prisoners' investment banking culture and fireworks were bound to happen. As they did. The end result was that Barclays gained a reputation for being, as Labour MP John Mann put it 'a rotten, thieving bank.' Barclays Quaker forefathers must be turning in their graves.
The whole Barclays imbroglio rests on manipulating the setting of Libor. Libor stands for the London interbank offered rate. Libor is set through a process of bidding by participating banks. Its essential function is to set the rate at which banks will lend to each other. Libor is also a reference rate for a whole host of other financial products. Many such products are quoted as Libor plus a margin. It is estimated that Libor influences some $800 trillion in financial products. The Bank of England does not fix Libor; it is a market rate. Thus, the controversy over Barclays fraudulently manipulating the setting of Libor is no small thing. It represents an assault on the core values of the City of London and the ethics of English business culture, summed up in the motto of the London Stock Exchange - 'My Word is My Bond.'
Barclays had its beginnings as a Quaker firm. The Quakers, or to give them their proper name the Society of Friends, are a religious group. They were perscuted mercilessly by Charles II. They had to stick together. Quaker firms believed that they had an obligation to their customers and employees. Perhaps the firm that most famously embodied these virtues was Cadbury's Chocolates. Barclays, founded in the early 1600s, was at the center of a web of Quaker banks that conserved and marshaled capital for the close-knit Quaker business community. Barclays business ethic was the Friends' ethic -- honesty, integrity, plain dealing.
Before we look at shamed CEO Bob Diamond, we must look at Barclays. Barclays holds assets of US$2.33 trillion, ranking only behind BNP Paribas, Deutsche Bank and HSBC. But the market is a lot less forgiving than the Quakers. The market demands growth. When the board of a solid, mature business but largely directionless enterprise like Barclays is offered the chance of new growth by a red hot entrepreneur like Bob Diamond, they will almost inevitably grab the opportunity.
If we wish to understand Bob Diamond, we should look not to American builders of business empires like J. Pierpont Morgan, but instead to Jay Gatsby, hero of F. Scott Fitzgerald's masterwork of the Roaring Twenties 'The Great Gatsby.' Like Jay Gatsby, Diamond is a chancer. He came from a humble beginnings. His Irish-American parents reared a family of nine of their teachers' salaries. Diamond went to mediocre educational institutions and until he got his chance with Barclays, his employment record was nothing to rave about. He is Boston Irish, right down to supporting the Red Sox and the Celtics.
Diamond's problem is that he is just too American. Well known for his extravagant pay packages, he infuriated public opinion by saying he would take all the 20 million pound severance package owed to him following his defenestration by Barclays. Barclays offered chairman Marcus Agius as a sacrifice instead of axing Diamond, but it was made clear Diamond had to go. Diamond did many things that just aren't English -- his lurid red scarves, calling peers of the realm by their first names in public and his cringe-worthy opening statement to the parliamentary committee that 'I love Barclays'. An Englishman loves his dog. He may love his football team. He may even love his wife, though he almost certainly wouldn't say so in public. But he almost certainly doesn't love the firm for which he works. Even his optimistic grin, when most Englishmen would look suitably glum, was irritating.
Put together a lumbering giant like Barclays and an ambitious man reared in a 'take no prisoners' investment banking culture and fireworks were bound to happen. As they did. The end result was that Barclays gained a reputation for being, as Labour MP John Mann put it 'a rotten, thieving bank.' Barclays Quaker forefathers must be turning in their graves.
Wednesday 4 July 2012
China eyes ANZ Bank bid
Of all the bank shares I have owned -- some long forgotten, like Advance Bank and Challenge Bank -- the one I view with most affection is the ANZ. It was steady, reliable and unlike some -- such as Westpac -- virtually immune from convulsions. During my time in Taiwan, it was the only Australian bank represented in island China, under the steady hand of Chris Mouat, who ran a sound and profitable business. The ANZ could always be relied on to come to the party and represent Australia (and New Zealand) in community events. Although the ANZ is the smallest of the Australian banking system's Four Pillars, it has always punched above its weight, especially in business banking.
The ANZ is the descendant of the English banks that once had a good share of the Australian banking market. Stock pickers with long memories may recall that the ANZ was at one time quoted in pounds sterling. In what was then the largest merger in Australian banking history, the ANZ merged with the English, Australian and Scottish Bank (ES&A) in 1970. The merged group's finance company -- finance companies are another relic of history --memorialised the merger partner with the name Esanda.
The ANZ has always been a very Melbourne bank, very preppy, as they say in the US. Go into a Westpac branch after lunch and ties are usually at half mast. ANZ staff are spick and span, nice calming blue themed uniforms, efficient and courteous service -- polite without being overly familiar.
But the ANZ has decided its destiny belongs in Asia. In 1984, it picked up for a song the run down Grindlays Bank, which was at that time the largest non-government bank in India. Grindlays was run by English public schoolboys who looked impressive on paper but ran the bank into the groundthe ANZ people overcame the deference we colonials naturally feel for such people, they realised these chinless wonders were basically incompetent. Once they took Grindlays in hand, it started to perform well. The bank looked like it had a good foundation for its Asian strategy.
Then, lo and behold, new ANZ CEO John McFarlane sold off Grindlays to Standard Chartered Bank to 'derisk the bank!' Standard Chartered is usually described as an 'emerging markets bank.' At that time, it was about the same size as the ANZ and it is one of the ANZ's main competitors in Asia. So much for the Asian strategy. I got a laugh from the Standard Chartered country manager in Taiwan when I described a Standard Chartered international board meeting in Taipei as 'one of the most important events in Taiwan's financial history.'
Enter Mike Smith, ex-HSBC and Old China Hand. Since taking over as CEO at ANZ in 2007, he has vastly developed the ANZ's Asia business. Any traveler in China can access his or her Australian ANZ account directly via the Construction Bank ATMs that can be found in almost every town in China, just by paying a foreign ATM fee and a small exchange cost. The ANZ has developed its branch network throughout Asia through organic growth and judicious takeovers. While margins are said to be thin, it's doing well.
Perhaps too well. I'd like to see who is lurking in the nominees who dominate the register of every major company. It might not be cost effective for say, HSBC, to bid for the ANZ but Chinese bidders have other priorities besides cost of capital. A Chinese bidder would put the Australian government in a very difficult position. Would it allow one the Four Pillars to be owned by foreign interests? We saw the French take over National Mutual when it got into trouble. No-one is suggesting the ANZ is in the sort of diabolical mess the over-ambitious National Mutual was in. The French wanted National Mutual's Asian business. Like National Mutual, rebadged as AXA, the ANZ does have a very good Asian business. Could the Treasurer knock back China (population 1.3 billion) as he did the Singaporeans (population 5 million) when they came knocking for the Australian Securities Exchange (ASX)?
I believe the Chinese will soon -- if they have not already -- build a significant position in ANZ. You have no doubt heard this before, but the Chinese are patient people -- when it suits them. There are vast oceans of excess capital sloshing around in the Chinese financial system earning negative real rates of return. My understanding is that the Chinese feel that they have been dudded on many of their Australian investments. The ANZ would be a nice bite size acquisition for one of the Big Four Chinese banks who wanted to expand their foreign branch network and gain access to a nice steady earner in Australia.
The ANZ is the descendant of the English banks that once had a good share of the Australian banking market. Stock pickers with long memories may recall that the ANZ was at one time quoted in pounds sterling. In what was then the largest merger in Australian banking history, the ANZ merged with the English, Australian and Scottish Bank (ES&A) in 1970. The merged group's finance company -- finance companies are another relic of history --memorialised the merger partner with the name Esanda.
The ANZ has always been a very Melbourne bank, very preppy, as they say in the US. Go into a Westpac branch after lunch and ties are usually at half mast. ANZ staff are spick and span, nice calming blue themed uniforms, efficient and courteous service -- polite without being overly familiar.
But the ANZ has decided its destiny belongs in Asia. In 1984, it picked up for a song the run down Grindlays Bank, which was at that time the largest non-government bank in India. Grindlays was run by English public schoolboys who looked impressive on paper but ran the bank into the groundthe ANZ people overcame the deference we colonials naturally feel for such people, they realised these chinless wonders were basically incompetent. Once they took Grindlays in hand, it started to perform well. The bank looked like it had a good foundation for its Asian strategy.
Then, lo and behold, new ANZ CEO John McFarlane sold off Grindlays to Standard Chartered Bank to 'derisk the bank!' Standard Chartered is usually described as an 'emerging markets bank.' At that time, it was about the same size as the ANZ and it is one of the ANZ's main competitors in Asia. So much for the Asian strategy. I got a laugh from the Standard Chartered country manager in Taiwan when I described a Standard Chartered international board meeting in Taipei as 'one of the most important events in Taiwan's financial history.'
Enter Mike Smith, ex-HSBC and Old China Hand. Since taking over as CEO at ANZ in 2007, he has vastly developed the ANZ's Asia business. Any traveler in China can access his or her Australian ANZ account directly via the Construction Bank ATMs that can be found in almost every town in China, just by paying a foreign ATM fee and a small exchange cost. The ANZ has developed its branch network throughout Asia through organic growth and judicious takeovers. While margins are said to be thin, it's doing well.
Perhaps too well. I'd like to see who is lurking in the nominees who dominate the register of every major company. It might not be cost effective for say, HSBC, to bid for the ANZ but Chinese bidders have other priorities besides cost of capital. A Chinese bidder would put the Australian government in a very difficult position. Would it allow one the Four Pillars to be owned by foreign interests? We saw the French take over National Mutual when it got into trouble. No-one is suggesting the ANZ is in the sort of diabolical mess the over-ambitious National Mutual was in. The French wanted National Mutual's Asian business. Like National Mutual, rebadged as AXA, the ANZ does have a very good Asian business. Could the Treasurer knock back China (population 1.3 billion) as he did the Singaporeans (population 5 million) when they came knocking for the Australian Securities Exchange (ASX)?
I believe the Chinese will soon -- if they have not already -- build a significant position in ANZ. You have no doubt heard this before, but the Chinese are patient people -- when it suits them. There are vast oceans of excess capital sloshing around in the Chinese financial system earning negative real rates of return. My understanding is that the Chinese feel that they have been dudded on many of their Australian investments. The ANZ would be a nice bite size acquisition for one of the Big Four Chinese banks who wanted to expand their foreign branch network and gain access to a nice steady earner in Australia.
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