News That's Fit To Punt - 05/Jul/2014

Semaphore Of Sociopaths

It's all about the message, and what message we're allegedly sending to people smugglers. So goes the theory in the continuing shit-storm that is the Coalition 'policy' towards asylum seekers.but sometimes we're not even sure that's where the message is going to or whether it's being received properly. It's a mystery as to how this government thinks communication theory functions.

The latest corker episode appears to be Scott Morrison ordering Tamil asylum seekers  from India, to Sri Lanka, In all honesty it's hard to fathom the depths of the kind of morally deficient mind as Scott Morrison who would surrender the said Tamils to the Sri Lankan authorities. It's a bit like happily offering up Jewish refugees from say, Sweden and repatriating them to Germany in 1944 or something. He's certainly not talking about what exactly was done and this government is hiding behind its usual "oh, this is a military operation so we need more secrecy" routine. Which is to say Scott Morrison is offering up the moral tenacity of a Sergeant Schultz who always insists he "knows nothing".

Weirder still, Mr. Morrison, it turns out, is going to Sri Lanka to attend a commissioning ceremony for some boats.  You really wonder how these people live with themselves.

Financial Mischief Writ Large

The business of the Commonwealth Bank of Australia offering up inappropriate financial advice because of its incentive laden program for their sales staff has turned into the eye sore issue for the Australian financial sector. First, there were the whistle-blowers who carefully leaked the secret to the corporate watchdog ASIC. ASIC then sat on its hands for 18months and failed to investigate. After which the anonymous whistle-blowers were forced to come forwards so that ASIC could get off its backside and investigate the mess. If the 18month delay was bad, the Senate hearings into ASIC have shown that ASIC and its personnel are too close to the banking industry it regulates, for it to be a proper watchdog - (which, it must be said was also said of the SEC in America after the Bernie Madoff Ponzi scandal).

So the ALP government drafted up legislation to stop this problem, but then the Coalition government has since watered it down at the behest of the lobby groups on behalf of the big banks. In the aftermath, the minister responsible for this area Mathias Cormann claimed that there were enough safeguards and the industry had changed substantially so that the legislation didn't need the safeguard that required financial advisers to offer responsible advice. He then went on to talk down the situation at the CBA as some kind of temporal anomaly when in fact the Senate investigation had identified the misplaced incentive as a systemic risk.

The upshot is that the CBA will be forced to cough up more money for is victims but it wants to control the process - which is a bit like letting criminals decide their own punishment in court. Once again, you wonder how these people live with themselves.

We Cut Health And Education To Buy These Toys

On of the crappiest investments our government has made over the last decade has been the F-35 JSF project. Not content with the money we've already spent helping to develop these planes, Tony Abbott pledged to actually spend even more to bring these planes over to Australia. The joke, - as it were - is on us because we're about to take delivery of some of these planes that barely work in a matter of weeks, and the whole fleet has been grounded due to engine problems.

The F-35 is like 'The Zap Gun' in Philip K. Dick's novel, where our civilisation comes up with increasingly unlikelier weapons systems to make a show of having come up with new exotic ways to kill and destroy. The paper specs of the F-35 is meant to put the fear of something ferocious into the hearts of America's enemies but the only thing it's really scaring are the bean counters who track the expenditure towards their development.

The nutshell of the problem is that they set out to deign a plane that fulfills the varied needs of the four service branches of America, each with their unique profiles. Some of these requirements were going to be mutually exclusive and contradictory. As it stands it doesn't seem to have passed any of the tests to be commissioned. Not even the US Marines who were most bullish about getting their F-35s commissioned is looking like they will succeed by the end of this year, as they had announced.

Thus I point to the fundamental waste that is the F-35 at a time when there is *allegedly* such need to cut government services. If we should be buying any warplanes, we should be buying the F-22. At least they work, and come in cheaper.

BrisConnections Chaos Continues

Mac Bank Earns World Of Trouble


Of course it's not going to help the sense of chaos that characterises the whole BrisConnections venture. Now, the second largest shareholder has decided to go for management control.

The company's second-largest shareholder, represented by Jim Byrnes, and a mysterious finance company in Surfers Paradise have launched a bid to secure management control.

Less than a fortnight after a proposal to wind up the project was voted down by unit holders, BrisConnections said yesterday it had a received a request from Brisbane Toll Road Link, which owns 15.2 per cent.

The request was for a second meeting to consider the appointment of Armstrong Corporate Capital to replace the BrisConnections Management Company.

Another request was for the second $390 million instalment call for BrisConnections shares, due on Wednesday, to be delayed until "Armstrong notifies members that it is due and payable".

New Hampton Distressed Asset Fund is the owner of BTR but Macquarie and advisers close to BrisConnections are questioning whether the US hedge fund exists.

But Mr Byrnes said in an email last night: "The company does exist." He provided no other information and declined to answer the Herald's questions or identify who was behind the fund. According to Australian Securities and Investments Commission documents, its address is the same as Mr Byrnes's home address. Mr Byrnes also lodged a statement of claim in his name in the Federal Court yesterday, as part of his planned $1.3 billion class action against the toll road's advisers, Macquarie Capital Advisers.

BTR director Carl Trad, an importer of luxury cars, declined to say how he became involved with the company, except: "I've had some really good advice."

When the Herald phoned the Armstrong office in Surfers Paradise, the unidentified person who answered the phone said: "I'm sorry, I'm not giving any interviews to the press, thank you."

The problem for BTR is that even if a meeting is called, the earliest date it could be held is May 12, three days after the final deadline for it to pay the second installment. A Macquarie bid to buy out 80 per cent of the unit holders would do little to solve the problem of many in dire financial circumstances if they were forced to pay the installments.

Don't you just love the way the craziness begets more craziness?

It's enough to wonder when ASIC is going to step in and fix this thing. Leaving it to the unit holders or Macquarie Bank or eve this new bunch out of Surfers Paradise is a surefire recipe for horrible repercussions where the tunnel might not get built.

Then there is the consideration whether if Brisbane really needed this tunnel in the first place, and whether Mac Bank were up to their usual tricks in inflating forecasts for just how much traffic is going to use this lousy toll road when current roads already service the airport just fine. It's certainly starting to stink of the same graft and greed routine that plagued the Sydney Cross-City tunnel fiasco all over again, and surely ASIC has to be wondering if Mac Bank was acting in good faith when it launched these partially paid units. Because so far, if the past record is anything to go by, there's a lot that "goes to character" sying they were acting in much, much, much less than good faith.