“Houston, we have a problem” (with Hillary)

Poor Hillary! NASA (founded in 1958), back in the late 1950s & 1960s, probably weren’t rejecting applications based on gender as a form of sexism but because to be an astronaut in those days meant one had to be at the elite end of an exceptionally high pool of candidates that were invariably drafted from US Navy, Marine or Air Force jet-fighter corps where no women were serving in such roles at the time. John Glenn served as a fighter pilot in WWII, as well as Korea. Moonwalkers, Neil Armstrong and Buzz Aldrin were Korean War fighter pilots. Michael Collins, the spring chicken in that group was a USAF fighter pilot. Noticing a pattern Hillary?

Back then, spaceships weren’t as automated as today. The space programme 70 odd years ago required pilots with in-depth flight experience, as technology back then was very much in its infancy. Exploring the flight envelope was properly in the danger zone. Perhaps the mood at NASA back then was one of chivalry, not gender bias. Maybe they believed in keeping women out of harm’s way after the war, rather than acting like a cabal of white male supremacist misogynists?

Although if Hillary bothered to check her history it shows us that Sally Ride became the first American woman in space back in 1983. 36 years ago. Diversity and inclusion in the rocketship have been around for almost 4 decades!

Did Hillary forget the brave souls including Christa McAulliffe who lost their lives in 1986 on the space shuttle Challenger?

CM once wrote to BMW Motorsport racing as a clueless 16yo car fanatic with dreams to become a racing driver. Sadly, CM’s dimensions (6’2″ and 100kg at the time… err hem even worse now) were not the stuff that would have been suitable for anything other than semi-trailer rigs which BMW didn’t make. Sometimes, at the pinnacle of certain professions, physical attributes, unfortunately, rule certain folk out.

It is none-the-less amazing to witness the oppression Hillary Clinton has faced during her life. Doesn’t your heart bleed? CM thinks many Americans would gladly see Hillary as an astronaut with a one-way ticket. Jettisoned as space junk. Can you imagine if Apollo 13 had Clinton on board during that rescue mission? She would undoubtedly be arguing with Mission Control on how things should be done, not the other way around. At least now, she would have made up for the weight deficit that ill-fated mission required to get the module safely back to earth!

I have no relationship with the CEO & not much with the chairman

Doesn’t this speak volumes? As Australian Wallabies coach Michael Cheika announced his resignation he let loose that it was no secret he had no relationship with the CEO Raelene Castle and a very poor one with Chairman Cameron Clyne.

How could it be that top management had no rapport with one of the most senior line managers of the flagship product? Is it any wonder the Folau debacle got to where it is? Incompetence reigns supreme.

For a leadership team that bangs on incessantly about inclusion, diversity and cohesion, Cheika’s remarks show how loose the grip was on the very people that needed to be the flashing beacon of the very institution Rugby Australia (RA) proclaims it instills. Where was the partnership?

Time for rebirth. The fans just want a winning team and to achieve that communication between the upper echelons of management and staff is key. As it stands it isn’t hard to fathom that there is next to zero at present. Hence why RA’s results (financial and game) are as abysmal as they are

For Cheika to launch a parting shot of that kind doesn’t smack of professionalism but at the same time it is probably the most truthful expose of the inner workings of the RA cabal.

Toxic employees are bad for any business. In most cases the resentment in the ranks coming from management’s tolerance of people who let poison fester within the workplace only worsens performance of the core. Eventually political cunning gives way to results that doesn’t match the bluster. The question is whether RA can be exorcised quickly enough to enable a proper healing? Given the insistence on being woke, that looks unlikely.

The values RA uphold may seem wonderfully progressive in theory but surely as a body seeking to uphold the pinnacle of sports and sportsmanship it should strive to understand where the future lies for the franchise. It isn’t yearning for diversity or participation prizes. Best look across the ditch for inspiration as to why the All Blacks are so strong. Just read their objective #1: to stay on top of the world. CM guesses NZ coach Steve Hansen has a wonderful bond with his board. You can’t fool kids who lose 100-0 that they played well either. Best start with grass roots that embody the spirit of competition. Embrace it. Then watch the fans flock back to the game.

Time we Cheiked out, DeClyned and binned the deflated Castle

The truculence of Australian Wallabies coach Michael Cheika’s is infamous. While he has never shied away from roughing up journalists at media press conferences (like a coach who might have an enviable win record) he couldn’t take a question on his future (around the 3-minute mark in the video). As if he wasn’t going to be asked such a question? His preparation was worse than that of the Wallabies. Cheika said, “Find a little compassion for people that are hurting!” Really? Feel sympathy for a bully? Harden up, snowflake!

Watching the Wallabies last night showed a team with little cohesion and the all too common inability to execute. Is it any wonder fans have grown disinterested. The stats speak to the disaster.

The Wallabies had 64% of possession (68% in 2H) and 62% of the territory (66% in 2H) yet conceded 18 turnovers to England’s 8. England made 172 tackles vs our 73. Clearly, when England had the ball they managed to execute, hence four tries (including two embarrassing intercepts) to one. Dismal.

Post the Rugby World Cup 2019, Cheika has a 50% overall win record. With the All Blacks, it was 17%. England @ 13%. Ireland @ 20%. Even Scotland was @ 50%. Other Wallabies coaches had the following win ratios:

Bob Dwyer – 64% win record

Alan Jones – 68%

Greg Smith – 63%

Rod Macqueen – 79%

Eddie Jones – 58%

John Connolly- 59%

Robbie Deans – 58%

Ewen Mackenzie- 50%

However, the problem in CM’s view isn’t the quality or talent of the players. Far from it. It is the management off the field. Aussie rugby is being systematically destroyed. CM has written before about the falling attendance and drifting profitability. Fans are clearly well and truly tired of the excuses.

It shouldn’t surprise us when Rugby Australia (RA) & NZ Rugby (NZR) reveal primary objectives. It shouldn’t surprise us when RA & NZR reveal primary objectives.

Objective 1 in the NZR 2018 Annual Report is “REMAINING ON TOP OF THE WORLD” (p.18)

Objective 1 in RA’s 2018 Annual Report is written as, “For rugby to continue to be a sport of choice in a rapidly changing society…community coaches are responsible…for creating fun, safe and inclusive environments” (p.10).

Between 2014 vs 2018, RA had the following statistics:

-Wallabies team costs (coach, support etc) +70% ($9.97m)

-Matchday revenue -42.1% ($20.17m)

-Sponsorships -11.5% ($28.23m)

-Player contracts +3.2% ($16.79m)

– Licensing revenue -12.9% ($1.67m)

Has the board reflected on what might be the problem?

It smacks of similar issues that plagued Cricket Australia (CA) leading into the cheating scandal. A culture that thought it was untouchable. The arrogance that they knew better. CA has finally had a cathartic cleansing at the board and coaching level. Results are now starting to show.

If RA wants a new coach, they’d be better off looking to one which promotes fluidity and allows improvisation. The problem with set plays is that it requires the opposition to fall into the trap the attacking team want to set. Simplicity is key.

This video of Coach Brian Clough is a great story of how one man built a team and took it from the bottom of 2nd division to the top of the Premier League. He won two European championships too. Listen to how his players had such great respect for Clough (from the 37th minute).

The three C’s of RA need to go – Chairman Clyne, CEO Castle and Coach Cheika.

Forget the return “ON” your money. Just look to the return “OF” it

CM knew a lot of passive indices existed but not to this crazy extent. Probably explains why there is so much stupid money tied up in me too commoditised investment products. 4 years ago CM wrote a piece on the dangers of ETFs (especially leveraged)  and passive products in a downturn. These products predominantly follow the market, not lead it. So if these products end up stampeding toward the exits in a market meltdown, the extent will be amplified, especially those levered funds potentially making market panic look worse than it really might otherwise be. Don’t be surprised to see the mainstream media sensationalise the size of any falls in the market.

According to Bloomberg, 770,000 benchmark indexes were scrapped globally in 2019…however  2.96 million indexes remain around the world, according to a new report from the Index Industry Association…There are an estimated 630,000 stocks that trade globally, including c.2,800 stocks on the NYSE and c. 3,330 on NASDAQ or 5x as many indices as there are securities globally.

CM wrote back in October 2015,

“ETFs are hitting the market faster than the dim-sum trolley can circle the banquet hall. Charles Schwab, in the 12 months to July 2015, saw a 130-fold preference of ETF over mutual funds given their relative simplicity, cost and transparency….

…ETFs, despite increasing levels of sophistication, have brought about higher levels of market volatility. Studies have shown that a one standard deviation move of S&P500 ETF ownership as a percentage of total outstanding shares carries 21% excess intraday volatility. Regulators are also realising that limit up/down rules are exacerbating risk pricing and are seeking to revise as early as October 2015. In less liquid markets excess volatility has proved to be 54% higher with ETFs than the actual underlying indices. As more bearish market activity has arrived since August 2015 we investigate how ETFs may impact given a large part of recent existence has been under more favourable conditions…

…CEO Larry Fink of Blackrock, the world’s largest ETF creator, has made it clear that
leveraged ETFs (at present 1.2% of total ETF AUM) have the potential to “blow up the whole industry one day.” The argument is that the underlying assets that provide the leverage (which tend to have less liquidity) could cause losses very quickly in volatile markets. To put this in perspective we looked at the Direxion Daily Fin Bull 3x (FAS) 3x leverage of the Russell 1000 Financial Services Index. As illustrated in the following chart FAS in volatile markets tends to overshoot aggressively…

…The point Mr Fink is driving at is more obvious with the following chart which shows in volatile markets, the average daily return is closer to 10x (in both directions) than the 3x it is seeking to offer. This is post any market meltdown. On a daily basis, the minimum and maximum has ended up being -1756x to 1483x of the index return, albeit those extremes driven by the law of small numbers of the return of the underlying index. Which suggests that in a nasty downturn the ETF performance of the leveraged plays could be well outside the expectations of the holders.”

CM has said for many years, where CDOs and CDSs required the intelligence of a mystical hermit atop a mountain in the Himalayas to understand the complexities, ETFs are the complete opposite. Super easy to understand which inadvertently causes complacency. Unfortunately, as much as they might try to do as written on the tin, the reality could well turn out to be the exact opposite.

Hence CM continues to believe that stocks with low levels of corporate social responsibility (CSR) scores like tobacco companies such s Philip Morris, JT and Imperial Tobacco, as well as gold/silver bullion,  look the places to be invested. Cash won’t necessarily be king because the banks are already in a world of pain that hasn’t even truly started yet. Aussie banks look like screaming shorts at these levels. The easiest way for the plebs – without access to a prime broker – to do this is to buy put options on individual bank names. Out of the money options are dirt cheap.

Banks

Forget the return “ON” your money. Just look to the return “OF” it.

NB, none of this constitutes investment advice. It is a reflection of where CM is invested only. 

 

Liking Tulsi Gabbard more and more

Sensible head on her shoulders. The one thing that can be said of Rep Tulsi Gabbard is that she is no run of the mill, toe the line Democrat. Unfortunately the DNC seemingly want to stick to doubling down on what got the party repudiated last election. Heart attack Bernie, Sleepy/creepy/floppy/sloppy Joe Biden, Fauxcahontas, “take your guns” Beto, lacking substance Kamala Harris, Pete ‘I drive a Chevy’ Buttigieg, Andrew ‘stand for nothing’ Yang or Juan ‘give illegals free healthcare’ Castro. Are the Dems serious?

Gabbard’s has attacked the status quo within partisan politics. Her policy platform can be seen here. CM doesn’t agree with half of it but that’s a far cry from not agreeing with all of the other candidates’ policy positions. The greatest irony in the debates is that, with the exception of Gabbard, the other candidates all attack each other despite having almost identical policies.

Gabbard is articulate, intelligent, grounded and doesn’t sound like the rest of the virtue signaling tax to the death rabble she is debating against. Unfortunately Gabbard doesn’t have enough of the poison that is needed to succeed within the Dems. She should go independent.

If America is desperate for its first female (not that should ever be a reason) president surely one can realize that Gabbard, on merit alone, is a far superior choice to Hillary Clinton or Elizabeth Fauxcahontas Warren? She ticks more diversity boxes without having to fill out forms claiming she is someone she is not.

That’s Tulsi Gabbard’s greatest strength – authenticity. She seems to be listening to the American people about not seeking to divide the country any further.

San Francisco Mayor should mind her own business, literally

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The tale of a typical liberal politician. City of San Francisco Mayor London Breed, a Democrat,  said she will no longer conduct business with 22 states that have laws limiting the ability of women to obtain abortions, specifically late-term. At present Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, West Virginia, and Wisconsin have pro-life laws in place. City of SF employees will be prohibited from conducting business travel to states on the list, and from making any deals with companies headquartered in those states. 

The City of SF’s Director of the Department of the Status of Women, Dr. Emily Murase said,

“In recent years, states across the country have passed a growing number of restrictive abortion laws. In accordance with Supervisor Brown’s ordinance, we identified state laws that prohibit abortion before viability and have recommended that these states be added to the City Administrator’s list…If any company that is headquartered in the listed states wants to continue doing business with the City, we encourage them to stand up for reproductive rights and advocate for a change to their state law. We applaud Supervisor Brown for her leadership in authoring this ordinance and for continuing San Francisco’s long history of fighting for women’s rights.”

As regular readers would know, CM detests corporates getting actively involved in politics that are completely removed from the products they sell. Corporations are completely free to go down the path of whatever marketing path they desire. However, CM doesn’t need lectures from Nike, Gillette or Starbucks on their views completely unrelated to fitness, shaving or bitter burnt coffee. CM would prefer these corporations to leave it to customers to make choices solely based on the combination of utility, quality and price of the products they sell. CM is also against boycotting of any kind. Let individuals make these choices.

Unfortunately, too many corporations are folding to this type of virtue signalling. Corporations cannot guarantee that they have 100% support for unrelated political positions among staff, so why push agendas that have little or no relevance to the performance of the business for the sake of public preening? When scandal-clad banks make overt gestures of their moral superiority on matters outside of their remit, CM reaches for a bucket. On what grounds do banks have to lecture we peons on anything? Hypocrites.

Sadly for Breed, Coca-Cola, WalMart, AT&T, Aetna, Pfizer & Eli Lilly have donated to politicians who have advocated for abortion bans in some of those 22 states. Corporate donations to politicians that may support abortion bans don’t necessarily automatically convert to company policy on the same topic. Will City of San Francisco employees caught drinking Diet Coke be hauled into a room and read the riot act? Will an internal lunchtime order for Domino’s Pizza with 50% off a 2-litre bottle of Sprite special demand staff seek pre-approval from the mayor’s office?

True to form, liberals such as Breed have no compunction bullying big business to toe the line, much like the NBA now buckles to the whims of President Xi. While kneeling for the US anthem or shunning President Trump is considered an act of free speech, it is now mandatory for all players to stand for the Chinese national anthem. How wonderful liberals decide to back the side, not the principle.

Regardless of one’s views on the rights and wrongs of (late-term) abortion, it is rather ridiculous for a mayor to dictate terms to public officials in other states who were voted in by constituents that happen to hold different opinions.

Perhaps Mayor Breed should focus on the disastrous liberal policies that have led to a surge in homelessness, drug use and public human excrement clean up squads. Although she won on a ticket of cleaning up this mess, the trends remain in force with the 1Q 2019 trend at 6,700 fecal incidents. Homeless numbers remain high.

So before Breed starts berating her neighbours for their supposed shortcomings, perhaps she should concentrate on her own backyard first. Better still, perhaps she should run for mayor in one of the cities of the 22 states mentioned and push her pro-choice platform to see how far she gets. Didn’t think so.

The ultimate irony is that these 22 states probably have less to lose than San Francisco does with this action.

Surprised?

Who’d a thunk? The irony is that Trump should be leading to higher ratings but it is having the opposite effect.