Economy

COP 25 Delegates by nation & aspirational virtue

Image result for brown envelopes bribe

Carbon Brief has done an admirable job denoting how many delegates from each country are attending the COP25 boondoggle, sorry, climate conference. It notes,

“The country with the most delegates is, by some distance, Côte d’Ivoire with 348. The West African nation also brought the largest delegation to COP23 in Bonn in 2017 – with 492 participants – and the fourth largest to COP24 in Katowice in 2018, with 208.

Côte d’Ivoire’s delegation is more than 50 people larger than the second-placed country, which is the Democratic Republic of the Congo (DRC) with 293. The DRC also had the second-largest number of delegates at COP24 (with 237) and the third largest at COP23 (340).”

40.7% of delegates are from Africa. Similar to past years. Clearly, these COP summits create a fantastic opportunity to prey on the guilt of the West. As FNFM noted last year, the correlation with the number of delegates and the corruption index was significant.

India sent 35 to COP25 down from 182 at COP21. China sent 76, down from 326 respectively although it is more likely they sent investment bankers to see which African nation they can bribe to plunder their resources.

Australia has sent only 20 delegates but we should champion the fact that 65% of them were women. We even beat New Zealand’s 19 delegate field which only had 58% women. That should please those with Kiwi envy.

In what should rile the gender equality activists and Trump haters, the Paris Accord spurning Americans had higher proportional female representation than the EU or Norway. So much for capitalist pigs shunning socialist norms!

Syria had 100% female representation with the sole delegate. However the male patriarchy was perpetuated thanks to zero female representation from Pakistan, Yemen, Eritrea, Tajikistan, Turkmenistan, Mauritius and Libya.

Naturally nothing will come of COP25 until a grandiose statement to tackle the climate emergency (FNFM is surprised the Wollongong City Council hasn’t sent a team after the unanimous declaration to “adopt an aspirational emissions reduction target of zero emissions by 2030 for its own operations“) comes in the death throes of the last day when the most hot air is produced.

NBA ratings take a dive post HK/China saga

Last October, Houston Rockets GM Daryl Morey tweeted his support for the Hong Kong protesters. Little did he know that the Rockets, the NBA and several key basketball stars of the game bowed to China by slamming Morey and apologizing on his behalf.

Rolling over was no surprise for the league given the attempts to drive the game into that populous market to make lucrative sums. LeBron James stands to make up to $1bn from Nike by the time he is 64 thanks to the China market.

Unfortunately, fans at home seem displeased. If the lessons from the NFL kneeling drama weren’t evidence enough, the NBA has also seen ratings plummet so far. Could it be that fans only watch to escape the stresses of a large mortgage, family and work?

Variety noted,

Viewership across ESPN, TNT and NBA TV is down 15% year-to-year overall, according to Nielsen figures. TNT’s coverage is averaging 1.3 million viewers through 14 telecasts, down 21% versus last year’s comparable coverage, while on ESPN the picture isn’t much prettier. The Disney-owned network is down 19%, averaging 1.5 million viewers versus just under 1.9 million viewers at the same stage last year.

Yet more evidence of how getting woke makes you go broke.

Naturally the league has blamed it on the absence of key stars due to injury. Or maybe it is because paying customers are sick of being lectured to?!

If Mitsubishi studied pigs and aviation closer

In 2007, CM suggested that the Mitsubishi Regional Jet (MRJ) was doomed to failure at the concept stage.

All the tea leaves were there to be read. A simple study of the widely available Boeing & Airbus 20-yr commercial market forecasts at the time revealed how the regional jet market was set to shrink 40% in favour of larger jets.

Yet the Mitsubishi Aircraft Corp (MAC) pushed on ahead regardless hoping for a 20% share of a collapsing market. What would possess a company to target a dying segment with a product that wasn’t a game changer? A plane that promised to use composites to reduce weight yet was forced back to conventional alloys and to resize because customers had no demand for the original design.

With 90% of the regional market occupied by Bombardier and Embraer, airlines get great efficiencies by sticking to the same brands during upgrade cycles – minimal marginal costs required to train ground staff and pilots. For airlines to pursue a brand new aircraft that offered little in terms of superior economics nor extensive after sales services, it was always going to be the Achilles’ heel for MAC.

Airlines would not only take on extra costs to train existing staff, but would run huge financial risks with leased MRJ’s (now called the Spacejet to rebrand the failure) if they needed to downsize fleets because there would be next to no other airlines to sell or release them to unlike Bombardier & Embraer. Pilots who chose to be certified to fly the Spacejet also risked limited career options if an airline collapsed.

So it is refreshing to read this great summary on Wolf Street of how terribly the aircraft program is (not) progressing in 2019.

It would make a great Harvard Business Review study on how not to crack into a market.

EU climate emergency vote is way worse than you think

What took the group thinking EU so long? What better way to justify more taxation and wealth redistribution than to declare a “climate emergency”? What you are about to read is a perfect explanation of how little credibility exists in the European Parliament (EuroParl).

In black and white, EuroParl noted,

EU countries should at least double their contributions to the international Green Climate Fund, Parliament says. EU member states are the largest providers of public climate finance and the EU’s budget should fully comply with its international commitments. They also note that pledges by developed countries do not meet the collective goal of 100 billion USD per year as of 2020…Finally, they urgently call on all EU countries to phase out all direct and indirect fossil fuel subsidies by 2020.

Now, this is where it gets curious. Take a look at this file (from page 8) and ask yourself, how many amendments to resolutions within the “climate emergency” conversation were rejected supporting the overall declaration passing 429 in favour, 215 against, 19 abstaining?

Here is one amendment that was rejected 95, 563, 9 by MEPs (you can’t make this stuff up),

Recalls that climate change is one of the many challenges facing humanity and that
all states and stakeholders worldwide must do their utmost to measure it
scientifically so that policy, and especially spending, is based on observable facts and not on apocalyptic fearmongering or unreliable models; emphasises that there is
no scientific consensus on what percentage of climate change is anthropogenic and
what percentage is natural

Seems fair enough! Basing decisions affecting 550 million constituents on real hard data is the right thing to do, no? Clearly not. Shut up and follow the religious cult and demand followers cough up twice as much into the collections pot. The lobbyists must be well pleased.

Or,

“Text as a whole without the words: ‘urgently’, ‘and implement’ and ‘to net-zero
emissions by 2050″ defeated 101, 555, 15.

Isn’t it striking that the majority of MEPs won’t even consciously vote in favour of making sure funds are spent appropriately? Nope, bow down and shut up. Otherwise face being cut off as we get to observe from the EuroParl documents below.

This is what an MEP from Northern Ireland, Claire Fox, had to say,

Madam President, I voted against the climate and environmental emergency motion because I’m really concerned at the hyped-up anti-science scaremongering that’s terrifying young people, telling them that billions will die, that there’ll be a collapse of civilisation, a lot of the rhetoric coming out of Extinction Rebellion and echoed in the debate over the last few days. I think that the fact that we voted against an amendment today that said that we should be committed to bringing the environmental subject back to rational discussion, and we rejected it, admits that actually, we’re having an irrational discussion. This becomes advocacy and propaganda, rather than science. There’s no scientific evidence from the IPCC or anyone else about the extinction of humanity, and we should be very careful about claiming that anthropological climate changes cause floods and droughts, which we have been doing quite casually during the last few days. In fact, the IPCC says that such issues are probably caused by socio-economic conditions, and we forget socio-economic conditions too much and demand, in fact, as this Parliament has done, decarbonisation, which will lead to eco-austerity, massive price hikes in energy, and ordinary working people paying the cost for scaremongering and...

(The President cut off the speaker)

or another Northern Irish MEP Robert Rowland,

Madam President, I’d just like to reiterate what my colleague said. I also rejected the COP24 resolution. I may not be an Economics Professor, but I do profess to understand economics. They also call it the dismal science, but when it comes to the climate emergency, I would describe the apocalyptic forecasts as nothing but science fiction. The adoption of these policies today, and the aim of carbon neutrality by 2050 is nothing short of reckless and the most extreme example of economic illiteracy I’ve ever seen. The fact that amendments were rejected demanding a full impact assessment shows rank indifference to the cost and practicality of aggressive climate policies.

One thing I can say for certain is that the impact of net-zero makes the consequence of any form of Brexit look puny by comparison. Dieter Helm, Professor of Energy and Economics at Oxford University, was right when he said: ‘We should be honest that it is a huge industrial undertaking, and it will have significant cost. These are enormous industrial activities, there is nothing in history that looks like this outside of wartime.

In my own country, our own Chancellor has put that cost at over one trillion pounds, or almost 2% of GDP per annum. It is an insane policy.

If the EU truly wishes to make itself even less competitive, in the face of some of the world’s highest electricity prices, they are only self-flagellating in an already flailing economy which continues to slow to 5-year lows. If the EU truly looked at its record since 2007, it would see its policies have delivered 40 million more people into poverty, a number which totals 118 million people, or 23% of the EU population!

If there was ever a bigger load of intellectual dishonesty posted by the EU it would be this. It states that,

Climate emergency declarations in 1,195 jurisdictions and local governments cover 545 million citizens with 53 million of those living in the United Kingdom. This means in Britain now roughly 80 per cent of the population lives in areas that have declared a climate emergency.

The irony if such a statement is that there is no way in the world that 545 million citizens are in agreement within those 1,195 jurisdictions. 53mn Brits? Seriously? In Australia’s case, many declaring climate emergencies have been local green-left councils who have made idle gestures without backing it up with realities. Constituents have not been asked. Windfarm plans for Warringah are not on the agenda.

The greatest irony with the EU is that they classify biomass (which is more polluting than coal) as a renewable and gives it a zero-carbon emission weighting provided a tree is planted per tree burnt. Sadly trees take 40 years to fully grow to be able to offset that produced. However, we will discover that the fine print taketh away the wonderful headlines.

Will the Poles ditch their coal industry to comply or face savage reprisals from Brussels? Will the EU guarantee Poland gets huge subsidies to pay for its termination? Which country would be so blind as to put their livelihoods into the hands of the EU!? The Greeks might have a view as do the Brits.

This action will spectacularly blow up.

By all means ride the short term wave of renewables stocks but be sure to line up all of those nasty fossil fuel companies into the portfolio that get pummeled by financial markets because the type of economic disaster that will beset the EU will only create the conditions where the peons will revolt and force a return to the way things were. Efficient, cheap and reliable forms of energy that will make a proper dent in the poverty line rather than promises and handouts.

The EU needs to learn the lesson that “Charity is injurious unless it helps the recipient to become independent of it.” It won’t be long before the youth of today get to embrace their love for socialism. Experience is a hard teacher. They’ll get the test first and the lesson afterwards.

Q&A and Kiwi Envy

Oh, the irony.  Q&A, the climate change fearing ABC program, decided to fly to Fiji, belching harmful CO2 along the way to host the show and talk about the potential for climate refugees in the Pacific from rising sea levels and Kiwi envy.

First off the bat, if the ABC want to endorse the Kiwi envy narrative, Q&A might consider the funding structure and staffing levels of TVNZ while they’re at it. Maybe that way the broadcaster could arrest the long term slump in ratings and fix the discontented workforce.

CM wrote six months ago in regards to this,

If you want to look at why the ABC doesn’t need more money, look at the staff costs to income ratio. Despite plateauing between 2008 & 2011 it quickly exploded. It now sits at 46% of tax dollars appropriated. That is $524mn on staff costs per year and rising. 4,939 staff grace the ABC. Revenue per employee is $232,000. A decade ago it was $232,700. Is that what the management target is for hiring? Give the ABC $2bn and presumably, it will have employment costs of $1bn.

Maybe ABC should channel the New Zealand state broadcaster, TVNZ. It gets $310m of its $318m purse from advertising. It’s staff costs excluding capitalizing into programs is $72m which converts to 23% staff cost/revenues. They do with 642 FT employees. Revenue/employee is $495,000. It paid a dividend back to the government of $3.7m. i.e. it is a revenue-generating asset.

In 2007, TVNZ had $339m in revenue. It employed 1,023 people. Therefore revenue per employee was $331,380. So in a decade, TVNZ efficiency improved almost 50%. A 6% cut to revenue on 63% of the staff.

How envious are you now ABC? Thought so.

As to rising sea levels and climate refugees. Virginie K. E. Duvat of the Institut du Littoral et de l’Environnement, University of la Rochelle-CNRS, La Rochelle sponsored by the French National Research Agency; French Ministry of Environment, Energy and Oceans (MEEM) wrote.

Analysis “using tide gauges and satellites showed 30 Pacific and Indian Ocean atolls including 709 islands, revealed that no atoll lost land area and that 88.6% of islands were either stable or increased in area, while only 11.4% contracted.

So where are these climate refugees really coming from?

Then there was the demand that Australia gives up on coal mining. Suppose we do. We should then tell our Pacific neighbours that we can’t afford to cut multi $100mn cheques every year so they can waste it like PNG did on buying 40 Maserati Quattroporte sports sedans as government cars. Give them an option – no coal and no cash or coal and cash? We know which will be selected.

Yet CM loves the garbage espoused in the SMH which continues its hard-left bent, even after being acquired. One would have hoped lessons would be learnt. Clearly not. The SMH folded to the groupthink attack on the Minister for International Development and the Pacific, Alex Hawke for not being like NZ.

Perhaps Q&A might look at the facts there too. Remember when the media was fawning all over NZ PM Jacinda Ardern’s Wellness Budget? The idea that a budget should be solely based on economics is not progressive and more should be directed at “well-being”. That is not to say this budget is not “well-intentioned”. However, the statistics compared to across the ditch do not fare well on relative terms.

Comparing her recent policies versus Australia reveals the kangaroos get better access to social services than the kiwis. How surprising that none of the mainstream media bothered to look at the budget numbers on a like for like basis? Just praise her because she represents their ideal version of a socialist leader.  CM has looked through both budgets and adjusted for currency to make for easier like-for-like comparisons.

When it comes to health spending per capita (currency-adjusted), Australia is expected to climb from A$3,324 in 2019 to A$3,568 in 2022. NZ is expected to go up slightly from A$3,516 to A$3,561 respectively.

On social security and welfare, Australia is expected to pay out A$7,322 per capita in 2019, growing to A$7,977. NZ, on the other hand, is forecast to go from A$5,573 per head to A$6,489.

On mental health, Australia forked out around A$9.1bn exclusively on these services reaching 4.2m citizens last year. NZ is planning on spending A$45.1m in 2019 with a total of A$428m by 2023/24 to hit 325,000 people on frontline services for mental health. While the move is a positive one, NZ will allocate A$1.78bn to mental health as a whole over 5 years. On an annualised basis, Australia will still allocate 5x the NZ amount to mental health per capita. So much for wellbeing.

On education, NZ plans to increase per capita spending 7.9% between 2019 and 2022 whereas Australia will lift it 12.5% over the same period. NZ spends around 2x Australia per capita on education although PISA scores between 2006 and 2015 are virtually identical (and both heading south).

On public housing, Ardern can claim a victory. Australia is expected to cut spending per capita from A$240 in 2019 to A$194 in 2022 when NZ will go from A$137 to A$282. Although let’s hope Ardern has more success than her KiwiBuild policy. The Australian’s Judith Sloan rightly pointed out,

“Ardern also has stumbled with other policies, most notably KiwiBuild. The pledge was to build 100,000 additional affordable homes by 2028.

It has since been modified to facili­tation by the government to help build new homes. Moreover, the definition of afford­ability has been altered from between $NZ350,000 ($340,000) and $NZ450,000 to $NZ650,000.

What started off as an ill-considered public housing project has turned out to be an extremely unsuccessful private real estate scam. The government estimated that there would be 1000 homes built last year under KiwiBuild; it turned out to be 47.”

In the process, NZ’s national debt per capita will grow from A$21,550 in 2019 to A$25,206 by 2022. Australia will climb from A$22,764 to A$23,293.

Look at page 119 of the NZ Wellbeing Budget, we can see the government is forecasting the economy to slow and unemployment to rise.

As we wrote several months ago, the statistics that Aussies are about to pack their bags and head of to NZ are not supported. CM wrote,

“According to the Australian Bureau of Statistics, there are 568,000 New Zealanders in Australia, or more than double the total 3-decades ago. Therefore more than 11% of the Kiwi population lives in Australia. At last census count, 35,000 New Zealanders migrated to Australia in 2018.

According to the New Zealand Statistics Bureau, 38,700 Aussies live in New Zealand. In the January 2018 year, 24,900 migrants arrived from Australia and a similar number departed for Australia.

Stats NZ stated, “Over half of migrants arriving from Australia are actually returning Kiwis who have been living across the Tasman for more than a year…The number of migrants going back and forth to Australia in the past year almost balanced each other out – the net gain was just 40 people in the last 12 months.”

As socialists love to point out, “feelings matter far more than facts“. Just goes to show how easily people will fall for a catchy headline, rather than judge it on its merits. Time the “woke” wake up from this slumber. By all means, celebrate more recognition of higher mental health spending but best put it in perspective. Jacinda Ardern is ordinary.

Jacinda Ardern may sell her dream much better to the woke set, but give me ScoMo any day. Kiwi envy? Really.

Scorched house climate policy?

As 30cm of snow fell on Falls Creek yesterday (i.e. summer), Mother Nature proved yet again she is full of surprises. To think that giving loads of money to the UN can somehow change her stubborn ways is rather obtuse.

Less of a surprise was a protestor, Melinda Plesman, who brought parts of her burnt down house to attack the PM Scott Morrison for allowing the climate crisis to happen. Forget that the Australian Institute of Criminology (AIC) reports consistently that c.85% of fires are either deliberately, accidentally or suspiciously lit. Forget that multiple children have been found responsible for lighting these recent mega-fires. Just blame climate change, even though the Western Australian fire service notes on its own website that there is no evidence of such. CM wrote about that here.

Maybe Plesman could reflect on the internal politics within the upper echelons of the fire services? Not so much the rank and file (supposedly wife-beating) front line firefighters but the bureaucrats who make daft decisions such as buying a Boeing 737 fire-bomber which can only be used at 4 airports rendering it highly inflexible (as much as it’s a great political sales point) or a military helicopter which spends 5hrs in the maintenance shed for every hour it is in the field working. Or replacing 1-yo trucks with brand new ones because records are poorly kept? Or inadequate removal of fuel from the bush floor?

While it is completely understandable Plesman and 100s of others like her, are devastated that their houses have burnt to the ground, had Scott Morrison erected 1000s of wind turbines and solar parks since he took over the top job, it would not have made the slightest dent in the 1.3% of global emissions that makes up Australia’s share of the global total, nor have prevented these fires.

PM Morrison should arrange his RAAF jet to take Plesman to Beijing to tell President Xi that he is to blame for causing c.30% of global human-made GHG emissions and rising. She can then openly criticise Chinese policy that won’t approve new renewables projects unless they are cheaper than burning coal. What a surprise such investments are c.40% down on the previous year in China. What a shock that China has 100s of new coal-fired power plants on the drawing board?

It is easy to forget that Australia ranks #3 in the world for renewables spending per capita. We spent $9.5bn on clean energy last year, almost twice as much as France with its Paris Climate Accord loving Macron at the helm.

Unfortunately, it is too easy to capitulate to the cabal of climate change activism. Submit to the script of 11,000 signatories, despite the fact it included the likes of Mickey Mouse, Albus Dumbledore and Araminta Aardvark. Ignore that a recent major scientific paper, which claimed to have found rapid warming in the oceans as a result of manmade global warming, was withdrawn after an amateur climate scientist found major errors in its statistical methodology. Or the accident-prone Bureau of Meteorology and its 85% senior management structure which is in dire need of a thorough investigation.

Alarmists love to hate the coal industry. Plesman expressed her disdain too. It is a line often pushed by the climate change movement that Australia is responsible for the emissions caused by those who burn our black rocks overseas. By that measure, perhaps we should blame the Japanese, Koreans and Europeans for all of the emissions caused by the production and use of the 1,150,000+ cars we buy but are required to import each year? Or the Americans and Europeans for the commercial aircraft that belch all that nasty CO2? Or manufacturers of mobile devices and computer periphery? Maybe all the solar panels and wind towers, often built with raw materials from the fossil fuel industry?

CM honestly feels sorry for Plesman and others that have suffered such losses from these devastating bushfires but it doesn’t absolve them of getting to grips with the facts. She can be absolutely sure that even if Australia went 100% renewable and stopped exporting coal, that severe bushfires will continue to plague our future. As the WA Gov’t’s Bushfire Front states, “The only factor we can control is the large contiguous accumulations of fuel. Therefore, broadscale fuel reduction burning is the only defence we have against large wildfires. This will not prevent fires occurring, but it will ensure fires are less intense, are easier and safer to control and will do less damage...Experienced firefighters do not fear a 40-degree day per se. This is because even on a hot day, a fire in one or two-year old fuel can be controlled; on the same day a fire in 20-year old fuels with high winds would usually be unstoppable.

Harvey Norman Derangement Syndrome

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CM attended today’s Harvey Norman (HVN) AGM as an observer. This was a 2-hr lesson in HVN Derangement Syndrome by a handful of shareholder activists.

Two key takeaways – 1) there was overwhelming shareholder support for reappointments to the board, & 2) agitator and activist Stephen Mayne did little more than draw the ire of the audience as he rattled off what he believed to be a value-added commentary on the company’s approach to governance and supposed lack of independence, neither which he made a credible case for.

The ultimate irony expressed by Mr Mayne was his confession that he and his proxies would be voting FOR the reappointment of CEO Katie Page as a director, despite his constant interjections at the questionable state of governance at the firm. Seems 91% of shareholders want her to stay. Hardly a vote of no confidence.  Surely if he believed the board is the worst on the ASX for governance, why own shares at all? Crikey!

The flipside was the proposal for Mayne’s appointment to the HVN board received a 91% rejection by shareholders, reflective of their desire to maintain a winning formula. Chairman Gerry Harvey quipped, “who are the 8% of shares that voted for you?

Perhaps the area of focus by the media will be when Gerry Harvey decided to demolish Mayne by running through his trail of digital footprints, including one which described the activist ranking Aussie female politicians by looks with lewd comments such as “oozing sex and fun”, “very very tasty” and “dark, sensual and very attractive.” The chairman questioned whether Mayne was a “sexual predator?” Inappropriate? Whatever one’s personal view, Harvey and most present won’t be losing any sleep over it. Mayne can’t complain at being deprived of time on the microphone. Harvey was harsh but more than fair. It was not lost on anyone.

Mayne said to the media afterwards that, “He’s the worst in the market for governance and he’s only proved it here.” CM only hopes for more Gerry Harvey’s in the market. The leaders that don’t bend to all of the ridiculous woke causes which prioritise irrelevant factors over shareholder returns. As we pointed in an earlier CM, those industry super funds which prioritise social responsibility have all underperformed the ASX200.

It was hard not to be impressed by the global expansion. Katie Page ran through the enhanced footprint throughout Malaysia, Singapore, Ireland, Croatia and the poshing up of stores domestically to a premium standard.

This company has 18% compound returns since its listing. Dividend yield at present is 8%. One for the SMSF. This is a quality business. Management has conviction. There is a tangible track record.

Who on earth would want the likes of an activist who has now been rejected 50 out of 50 times to join ASX boards to occupy a spot at HVN? With such a resounding defeat, will Mayne sell his minuscule shareholding and move on? There are plenty of companies that will indulge Mayne’s desire for woke practices. This was nothing more than a display of Harvey Norman Derangement Syndrome.