Here’s some juicy Sydney finance news. After ANZ’s take-over of E*TRADE Australia- the only institution independent broker of any real size, a large exodus of all the good staff is well under way. This week, ANZ let the contract of the incumbent MIS lapse and has announced the appointment of an ANZ man. After six weeks of weighing up ANZ’s new management, more of the senior IT staff are set to leave, (many already have) with a number of long-term ones left who are really not qualified to do a job anywhere else. With a lot of internal Legacy IT and a site and trading software that is well out of date (it is still impossible to trade using IE7, Firefox or Safari), many of the good staff have found it too hard to make a difference for too long. Prior to the takeover, management procrastinated on long term decisions, feeling unable to spend the funds necessary to increase capacity and bring things up to date. Now the Bank has had two months to lay down its plan, more senior staff (from both business and IT) are walking and juniors are wondering what will happen to their jobs, will they all be outsourced to Bangalore just like ANZ is doing with its Banking Systems? Many know well what the Bank’s record is on managing Broking firms- ETRADE is the third it has taken over in recent years, with the other two are no longer on the map. CommSec bought the 3rd largest player — IWL Limited which was quickly becoming a basket case. Who can pick who the the next institution independent online Broker be?

Not sure what contribution PUMA makes to Macquarie’s profits but Wednesday’s announcement that PUMA is upping its mortgage rates by between 10 and 30 basis points, not paying mortgage insurance premiums on behalf of customers (for mortgages with LVRs below 80%), not writing mortgages above 95% loan to valuation ratios while superficially sounding like they will raise revenues (or stop losing money) will long term reduce PUMA’s competitiveness, slow new business volumes and drive customers away to more attractive offerings. Coincidentally just as PUMA is differentially raising low-doc rates by between 20 and 30 basis points (for existing and new mortgages) we see the majors, eg CBA sharpening their appetite for this previously off-limits sector with new, more aggressive low doc offerings. PUMA is unique in the Australian market as it is both a non-bank originator but it is owned by an ADI. Like non-banks it is experiencing the funding/liquidity squeeze being felt by its peers. However Macquarie/ADI ownership does not bring it any benefits, ie access to cheaper, deeper funding of an ADI parent. Macquarie’s funding costs are higher than its better rated majors (both before and now more so post the sub-prime contagion) and its balance sheet is typically reserved for higher yielding and faster turning assets. It would not surprise to see Macquarie yet again consider offering PUMA for sale and like the last time only withdraw it when it was underwhelmed by the lack of interest. No prizes for guessing what the level of interest might be in today’s market. More so if media reports were correct that APRA canned NAB’s $750m acquisition of RAMS in 2006 since it did not want an ADI to be conducting more risky mortgage lending in an unregulated entity probably makes the majors a little reluctant to step up to the plate.

Regarding the Albert Park by-elections. What a joke. Firstly, Martin Foley of the ALP has sent personally addressed mail on more than five occasions. The wastage of paper is unbelievable. More wastage of paper is done by the VEC who also bombards you with mail. Poor Australia Post and the postie who has to deliver this junk. This wastage of paper reminds me of this Youtube clip. Secondly,  if Martin Foley thinks sending me mail over consecutive days is going to win votes he is wrong. Thirdly, the independents — no one knows who they are. And I refuse to vote Greens. Perhaps I will vote nobody in protest, avoiding to pay the fine. Does Crikey have any insight? What would Crikey do? Ed: since you ask, vote according to your political conscience. If that is an empty vessel, vote nobody.

Security Paranoia (Also) Reaches New Peaks in DFAT Functionaries at one of the Australia’s First XI agencies, the Department of Foreign Affairs & Trade (DFAT) are smiling (discreetly) at the zealous antics of their security-conscious leadership. One of DFAT’s Deputy Secretaries (let’s call him ‘X’) has sternly reminded the assembled First Assistant Secretaries of the Department that authorised visitors to what was once known as Gareth’s Gazebo (DFAT HQ) must be escorted at all times. The reader of the riot act was responding to an incident where a visiting First Assistant Secretary from another department, attending a meeting at DFAT, visited the bathroom without an escort. Deputy Secretary X had no option but to issue a security breach to the DFAT First Assistant Secretary deemed responsible. Not surprising really, X has form. DFAT staff cracked a subtle smirk with the story that X, suspecting that a cleaner was stealing the coffee money from his desk drawer, had DFAT’s security people instal a camera in his office to monitor the small change. Alas, no theft was detected. It’s good to know that the guardians of the national interest are alert and vigilant.

Telstra is on the job cutting spree again, dismissing droves of employees for emails received (yes, received!) and sent with n-dity content… Forget the justice system, it’s Trial by Telstra.

I have been curious about Andrew Laming after having meeting him a few years ago. He didn’t ring true to me which prompted me to check him out. If you look at his bio on the website for MPs, Andrew has acquired a lot of qualifications and done an extraordinary number of things in a very short time — before he hit 38. He’s worked as a GP, studied obstetrics in the UK, is a qualified surgeon, has been a senior ophthalmology registrar at the Royal North Shore Hospital in Sydney, was a pioneer of a breakthrough drug in the treatment of trachoma in Aboriginal children in the NT, was a World Bank consultant in Washington DC, a health planning specialist for the East Timor Transitional Authority, a landmine clearer in Afghanistan, a rigger, gymnasium manager, management consultant, ministerial adviser (Kay Patterson). Maybe I’m cynical but it seems a lot to pack into 14 years. Doesn’t it take years to qualify as a surgeon, ophthalmologist let alone do all those other things?

Laming must know something we don’t. Buses in the Cleveland electorate are sporting signs advertising the Liberal Party with no mention of their candidate, and Andrew’s latest (very badly designed) flyer in the local rag fails to identify him as a representative of the Liberal Party. Methinks the disendorsement may have already occurred….

Market Metrics were conducting a poll in Bowman last night. The focus of the poll was on did people know who was the local Liberal MP (Andrew Laming), did they have a favourable or unfavourable opinion etc. It also asked did people know who Peter Dutton is (the local Deputy Mayor of the Redland Shire Council) rumoured to be the new Liberal candidate if Laming is dumped, and whether people had a favourable or unfavourable opinion.

You gotta think Walt Secord (Rudd’s media guy) has rocks in his head. Walt’s guys have put out two”stories” in the last day or so … one saying Howard instructed Bush to ban TV crews and the other story about Rudd’s people getting the wrong ID (security instead of staff). All inside the beltway stuff but they totally cut across a real good day, with Rudd at the Hu luncheon and also made Rudd look childish against a backdrop of Howard meeting Bush. There are a few of us who think Walt and his crew are acting like teenagers rather than people who will work in the PMO — worse still they are sabotaging their own stories… weird!

The Secretary of PM&C has just offered his EL and SES staff only a one year AWA (their current three year AWAs expire at the end of Sept). He has used a lame review as the excuse to staff for not offering the standard three year AWA’s. Staff have no doubt that his actions are political… it appears that Mr Howard’s right hand man is anticipating a change of government and therefore he is no longer doing business as usual.

It seems as if the Federal Government is now mandating that all employers provide a copy of their IR puff piece otherwise referred to as the “Workplace Relations Fact Sheet” to all employees. Of course, it’s clearly nothing more than ensuring that we have a well informed citizenry coincidentally prior to an imminent election. “The Federal Government requires all employers to make the attached Fact Sheet available to all staff which states your rights and obligations under the Federal Workplace Relations System. You can also view the fact sheet here.”

Brookfield in Queensland has been hard hit by horse flu, mainly from a couple of event horse leaving Warwick early. We now have some eight or nine cases. Despite these horses leaving Warwick just before the lock down last weekend, it was Thursday before the DPI quarantined their property. In the meantime the virus has spread over fences and across paddocks. Heaven forbid we ever get anything serious like foot and mouth in this country.

Today’s SMH “Weekend Business” section has somehow managed to predict today’s share market with a table titled “Friday’s Moves” (page 36). That’s what you get for putting Saturday’s paper out on Friday. They also have a page of data (page 40) on the week’s moves, the best and worst performers etc, even though the ASX is trading today.

In the tradition of the Kirribilli Agreement between Keating and Hawke and the 1995 agreement between Howard and Costello, word has it the Kevin Rudd and Julia Gillard have their own handover agreement already in place. Rudd has agreed to hand over the Prime Ministership to Gillard 12 months into his third term — which may be sooner than some might think if there is a double dissolution election early in the first term of the Rudd/Gillard Government.

From the website of CLP candidate for Lingiari, Adam Giles: “On arriving in Alice Springs a few of years ago I was fortunate enough to continue my work with DEWR, managing the Central Australian Office and implementing labour market programs such as Job Network, CDEP and Work for the Dole. The work provides opportunities for a leg-up for all Territorians not just Aboriginal people.” Maybe someone should tell him CDEP doesn’t provide that opportunity for a leg-up anymore.

Two more secretaries sure to go in the coming “Night of the Long Knives” would have to be Peter Shergold and Michael L’Estrange. Shergold for his shameless partisan spruiking of the nuclear option and presiding over the continued politicisation of the public service (and associated crackdown on dissent). L’Estrange for continuing the authoritarian and shamelessly political regime established by his predecessor in DFAT, Ashton Calvert. One example of this rule was the persecution and eventual sacking of former Labor staffer Trent Smith for a harmless holiday e-mail communication with a Rudd staffer. Surely these are two functionaries that have been just a little too try-hard?

The Wesfarmers-Coles deal is a complete load – rubbery figures abound in the DD material and these new “price-protected” securties are as bogus as those issued when the GIO (NSW) was taken over – Cole’s isn’t bankrupt is it? Why the need for a sale at all, why not a chane of management?

If we are in a leadup to the election, and the AEC is urging everyone to vote, why don’t they have enough staff to handle the increased volume of phone calls they ought to be expecting? Having failed to find my name on the electoral roll (despite never having missed an election — but I may have requested a silent number, I couldn’t remember and wanted to check that I hadn’t just dropped off by accident) — I called 132326 many times over the course of three or four hours, each time punching in my postal code, hearing it ring and then getting the recorded message ‘due to increased demand, your call could not be completed at this time’ followed by a request to call later and the line going dead. Is it just me? Just APEC Friday?

NAB was short on detail when it announced that it was having to liquidity fund its off-balance sheet asset-backed cp vehicles. S&P’s web-site notes that one of its four such vehicles, TSL (USA) Inc, with approximately US$3.8bn in CP outstandings, held approximately 35% in CDOs. These were likely highly rated at acquisition (possibly AAA) and may still retain those ratings if the underlying collateral was not toxic or linked to same. Nevertheless depending on how these assets will be accounted for, there could be mark-to-market inplications, especially as spreads have widened significantly for all credit instruments.

From the grassy centre square: New Footballer Testing Regime Soon? From The Speccy: “One of the advantages of living so close to the MCG is finding interesting pieces of paper lying in nearby gutters. I’m not sure what to make of this, so being unbound by journalistic ethics, I thought it best to release the document into the public record and see what others make of it. Of course, I can’t vouch for the source or veracity of the claims made and it’s clearly just one page from what appears to be a draft media release or speech.”