MFS responds to Stephen Mayne:

Guy Hutchings, CEO, MFSIM, MFS Limited, writes: Re. “Will MFS trigger a financial planners backlash? You bet” (yesterday, item 3). There were a number of inaccuracies and omissions in Stephen Mayne’s article on the MFS Premium Income Fund published on 30 January. In the interests of alleviating the undue concern that would have been caused to investors in the fund I would make the following points.

  • The MFS Premium Income Fund is not as you said a big investor in the MFS Living and Leisure Group (MPY). The fund has 0.3% of its assets in the MPY stapled securities. The fund has a loan facility to the group which we fully expect to be repaid before maturity.
  • MFS Investment Management does not pay high commission to financial planners. The rate of commission paid to financial planners in 44 basis points (0.44%) – one of the lowest retail commission rates in the industry and designed to appeal to fee-for-service advisers. Commissions are paid by MFSIM not the Premium Income Fund.
  • Only 16% of the funds assets are invested in MFS related entities and there are no funds invested in MFS Limited or its wholly owned subsidiaries. No assets in the Premium Income Fund are impaired in terms of generating income or recovery of principal and the fund continues to pay its distributions at the target rates.
  • The deferral of redemptions by the Premium Income Fund is not caused by a deterioration in the quality of its assets. Distributions will continue to be paid from income generated by the fund. MFSIM has waived its management fee for the duration of the deferral.

The real Mick Keelty:

John Goldbaum writes: Re. “Could the real Mick Keelty please stand up?” (yesterday, item 4). The real Mick Keelty doesn’t believe his resignation is needed to restore the AFP’s reputation. The real Mick Keelty thinks that resignations by bosses who stuffed up are detrimental to organisational stability. The real Mick Keelty thinks that taking responsibility for poor decisions will discourage others from applying for top jobs. That’s why the real Mick Keelty doesn’t work in the private sector.

Marilyn Shepherd writes: I watched the news last night and saw a stand up comedian pretending to be Mick Keelty. It was the best laugh I have had in years as he bleated about the naughty media, the same media he used to hang the Bali Nine, deny the passenger list to the SIEVX victims, pretend to care about anything at all and who exposed him for setting up Dr Haneef. The man is beyond a joke who should have been sacked by McClelland for the crimes he has committed in our names over many years.

Tony Barrell writes: A cynic might say that Mick Keelty’s attack on the meeja is a survival strategy. After all, if he were to be for the chop for his professional deficiencies, he can claim it’s really because he “spoke out”.

Adrian Chan writes: If Rudd has any moral fibre, which I doubt, he will sack Keelty. It seems Rudd is going to be a poor man’s Tony Blair, all talk and no idea of what democracy means.

David Liberts writes: Having bagged Greg Barns in yesterday’s Crikey comments, it’s only fair that I should write in again to say that I agreed with every single word Greg wrote in yesterday’s item on Mick Keelty.

Rudd and the public service:

Tony Kevin writes: Re. “Rudd’s failure to clean out the public service has Canberra angry” (yesterday, item 1). Your interesting and timely story left two important omissions: Andrew Metcalfe, Secretary of Immigration, who as First Assistant Secretary heading the Border Control and Compliance Division managed DIMIA’s participation in the now notorious AFP/DIMIA people smuggling disruption program in Indonesia in 1999-2001; and AFP Commissioner Mick Keelty, who led the AFP side of the same covert operation. Senior Labor Senators Faulkner, Ray, Ludwig and Jacinta Collins busted their guts in 2002 trying to get to the bottom of this murky mess. They never got satisfactory answers from the then government, which refused to answer questions, and the shameful cover-up well-nigh broke Faulkner’s heart. Now Keelty and Metcalfe, like Halton, seem comfortably in the saddle. Keelty — who also has a few other notches in his gun belt like Haneef and the Bali Nine — is sufficiently confident to throw down the gauntlet to Rudd, in his recent taunting speech at the Sydney Institute of all places, whose thrust seems to be “sack me if you dare”. Rudd and McClelland should dare, and should sack Keelty. It is a crunch moment for Labor. Rudd’s present strategy of indiscriminately not rocking any public service boats is deeply worrying, and not just to bleeding hearts. He needs to rethink this, if he is to be seen as truly in charge of the federal public service, and not as a helpless passenger on a boat going who knows where.

Bob Smith writes: Alex Mitchell touches a real raw spot. But there is a good case for leaving Howard appointees in place. It has two main points: first, “ethnic cleansing” of public services after changes of government (state as well as federal) has led to generalised charges of politicisation that have devalued the expertise that governments genuinely need in a public service — it’s good to have a PM with the foresight to break the cycle; second, building up public service capabilities for the challenges ahead is more than about personalities — it’s systemic. What’s needed now is an open debate about the skills and knowledge the public service should have and how it should acquire them.

The ABC’s logo:

Dave Horsfall writes: Re. “Crikey competition: design a new logo for the ABC” (yesterday, item 17). Crikey wrote: “We don’t really know what that means either, but we do know that back in 1965, graphic designer Bill Kennard ripped off Lissajous to win the ABC staff competition to design a corporate logo”. Hardly; this effect is demonstrated in every first-year electronics course, by feeding two alternating current signals into the X and Y axes of an oscilloscope and seeing the amplitude/frequency relationships between them.

Denise Marcos writes: The ABC lissojous (logo) is a thing of beauty which I doubt can be improved upon; furthermore, it has relevance to the mathematics of sound which harks back to the radio origins of the Australian Broadcasting Commission. Within our nation the ABC lissojous is possibly the most recognisable logo of any Australian organisation: it denotes a quality product, almost guarantees it. A corporate management which suggests even slightly diminishing its use is not business savvy. May the heavens preserve us from snake-oil merchants posturing as marketing gurus and keep their grubby mitts off our beloved lissojous.

Mick Fanning writes: Been at the ABC more than 30 years. Never heard it called a “squiggle” till today. I’ve always known it to be “The Worm”, or “The Self- Cop-lating Worm”. Some people used to call it “Talbot the Worm” but that was really an animated cartoon character used on TDT during the Bill Peach days. Can’t wait to see what the Crikey readers come up with for a new one.

The ABC:

Steve Pivetta writes: Re. “No new logo for the ABC, but rebranding on the cards” (yesterday, item 5). Margaret Simons wrote: “‘ABC. It’s easy as one, two, three.’ Crikey offers this (for free) to our public broadcaster as its new line for marketing television.” This line is not new, as I recall. In February 1998, as an Age night casual sub-editor, I wrote a remarkably similar headline, perhaps word-for-word. Maybe you read it there? I remember the moment vividly: after I sent my “ABC” headline up-table to the-then chief sub (Steve Waldon?), he boomed: “Who wrote…?” “Crikey!” I thought, “What have I done?” before raising my hand, “Good one!” came the reply. Phew! I was a 1994 Walkleys state finalist for Best Three Headines (Herald Sun). Like riding a bike, some things you don’t forget. Thanks, Margaret, for reminding me.

Guy Rundle in the US:

Patrick Howard writes: Re. “US08: Rudy deathwatch in the spooky wetlands” (yesterday, item 2). What can I tell you. I’ve not enjoyed reading US presidential campaign reports so much since Hunter S Thompson loaded up on medications and hit Chicago for the first “Fear & Loathing on the Campaign Trail” in Rolling Stone in the 1960’s. Guy Rundle writes the madness and the hypocrisy with a clear-eye and a fine sense of the downbeat. We can only hope he stays the course until one of the flaming egos he’s following around becomes the next President of the United States.

US housing:

Trevor Best writes: Re. “Housing: the biggest US scandal in four generations” (yesterday, item 22). As an ex-banker I can confirm that whenever there is a benign interest rate environment in any economy (such as when it was 1-2% in the US) the building/real estate/banking industries r-pe the economy with their ears back. Any yobbo who can raise his knuckles off the ground can earn brain surgeon rates of pay, banks will lend, lend and lend again, and the lumpen will roll over their houses into bigger ones several times believing they are getting richer. When the music stops, (interest rates return to normal and perhaps overshoot), the result is just what we have seen in Australia through several cycles from 1971, and what pertains in the USA now. Is it a scandal that all parties are greedy or does it serve them right? There was a time in Australia (e.g. the 1920s) when it was virtually impossible to borrow to buy a home, and consumer debt was only accessed by those trying to pretend they had a higher station in life. My father didn’t marry until he was able to pay cash for a house. In 1930 you didn’t dare risk that some banker might take control of your life if you were out of work for a couple of weeks.


Peter Keenan writes: Re. “AGSM: A highly ranked management shambles?” (yesterday, item 24). Richard Farmer is no doubt correct. Having adroitly sidestepped the issue raised in the “Tips and Rumours” item, he comes right to the point – yes, Richard, those wishing to become the CEO of BHP or Telstra will probably go to Melbourne. At least there they will have access to dedicated specialised library services, something sadly missing for the MBA students at the University of NSW into the future.


John Hayward writes: Re. “Endorsements for hire in Tassie pulp mill debate” (yesterday, item 10). Richard Farmer is right. You should never rely on purchased expert opinions, even those indirectly bought through political donations. With the Gunns pulp mill, however, you don’t need much in the way of expertise. There have been no serious arguments with the fact that pulp from the mill will be more than 25% dearer than that from its burgeoning South American competitors, even with its massive subsidies. These don’t include the tax-break- driven Managed Investment Schemes which are funding Gunns’ purchase of a huge (ca 20%) area of Tasmanian rural land, or the looming mass transfer of State Forest land to Gunns as scheduled in their Wood Supply Agreement with Forestry Tasmania. Both of these perks will operate independently of the mill, and will hand a frightening amount of the island to Gunns even if the mill goes no further. Gunns refusal on Tuesday to discuss the financial viability of the mill may have been embarrassment at their extraordinary windfall, or even real ignorance, but it is something which all taxpayers should have a handle on before pledging the company a lifetime of financial support.


Steve Martin writes: Re. “ICC dances as India fires bullets at its feet” (yesterday, item 6). Cricket is now big business with huge sums of money involved via TV rights with the top flight cricketers commanding salaries in the million dollars range, more when the sponsors payments to them are included, so it’s scarcely surprising that the ICC dances to BCCI and TV networks tunes. Certainly Andrew Symonds has every right to feel offended by the racial vilification that is alleged. As Francis Leach says all this could have been avoided by mediation. If Harbhajan Singh continued with his denial, Andrew Symonds could have defused the situation by swallowing his pride, and saying that as Harbhajan was denying the vilification occurred, he would accept Harbhajan’s word and withdrawn his charge. Everyone could draw their own conclusions pro or con. Incidentally our cricketers have made sledging an art form, so maybe a little hypocrisy is involved here.


Enzo Raimondo, CEO, REIV, writes: Yesterday Crikey published the follwong in it’s “Tips and rumours” section: “Age readers would not be aware of this because, after bowing to pressure from who knows who, it has stopped printing these figures in the Domain section of the Sunday Age…” The REIV collects and publishes auction and private sales data on the Victorian housing market on a weekly basis. This information is available for those who are watching the market on the REIV website, the Sunday Age and Sunday Herald Sun. Traditionally there are very few auctions conducted in January, most of which are not in the metropolitan area. The low volume of auctions therefore makes the “clearance rate” as a measure of market activity and strength irrelevant. For the record the results for residential auctions which have been published since late December are:

Weekend starting 19th Jan
Sold at Auction: 17
Sold before Auction: 10
Sold after Auction: 1
Passed in: 12
Passed in on vendor’s bid: 9
Clearance rate: 70%

Weekend starting 12th Jan
Sold at Auction: 7
Sold before Auction: 8
Sold after Auction: 2
Passed in: 1
Passed in on vendor’s bid: 1
Clearance rate: 94%

Weekend starting 5th Jan
Sold at Auction: 4
Sold before Auction: 3
Sold after Auction: 3
Passed in: 0
Passed in on vendor’s bid: 0
Clearance rate: 100%

Weekend starting 29 December 2007
Sold at Auction: 28
Sold before Auction: 19
Sold after Auction: 5
Passed in: 16
Passed in on vendor’s bid: 15
Clearance rate: 76%

Interest rates:

Kevin Brady writes: I’m going to try a different response to Jeff Bye’s question (Tuesday, comments). This is not a standard economic text book question, but takes a different approach to the role of money and interest rates in the economy: Money is power — those who have it have lots of power, those who don’t have little power. Inflation is a measure of the loss of integrity in the currency – that is, how much “power” is lost by the powerful. Interest rates work the other way — the interest paid on loans usually goes to the most powerful – the banks and those with the greatest amount of money — thus restoring the previous balance! So high interest rates work to maintain the power of the powerful, and high inflation works to reduce their power! (I won’t go into the arguments for hyper-inflation or hyper-interest, but they are largely the same).


Chris Graham writes: In response to an article I wrote for Crikey on Tuesday in which I described several government ministers as “oxygen thieves”, an outraged Andrew Lewis yesterday invited me to explain “Which of these men do you want dead? Obviously if you want them to stop stealing oxygen you want them to stop breathing.” I thank the Honourable Member for Thatsnotfunny for his question, and acknowledge his very valuable contribution to… the argument in favour of not allowing absolutely every Australian citizen the right to vote. Andrew, it was a “joke”. I was “kidding”. We call that “humour”. It might not be your style, but here’s a shock – not everything is about you, Andrew! But since you asked, if I did have a death list, I certainly would not include Wilson Tuckey, by virtue of the simple fact that he is already very old, and I’m content to let nature “do its thing”. I will admit to occasionally fantasising about Tony Abbott disappearing under the bumper of my hybrid-electric car. But unlike the conservatives (who hold life so precious that they brought us such wonderful hits as “The Iraq War” and “Afghanistan Unplugged”), I don’t actually promote violence in real life. I prefer to make my point at the ballot box.

Michael Brougham writes: Um …okay. I don’t usually feel a need to defend Crikey, but I think Andrew Lewis might have missed something (that or I’ve missed the joke, in which case I humbly apologise). “Stealing oxygen” refers to the need for oxygen to be present in order to keep a fire burning, not to physically suffocating individuals you happen to disagree with. And before I’m accused of not only wanting former members of the Howard government dead but of also advocating immolation as the most appropriate means, we’re talking about metaphorical fires here. I think Chris Graham was calling for more attention to be paid to the case for an apology and less to cranky anti-apology Liberal politicians, not for the (admittedly far simpler) option of topping said politicians.

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