If a bookie did it they’d tear the stand down. After the race has started we are going to change the rules. We are going to call losers the winners and winners the losers and there’s nothing any of you can do about it. It sounds like the very worst kind of rort that only British bookmakers could dream up to prevent someone from actually beating them yet it is what the Australian Government has aided and abetted our so-called financial regulator to institute.
Never again do I want to hear any of that nonsense about letting the market determine outcomes. Where have the free market zealots been while ASIC rewrites the rules on short selling? Nowhere to be heard as they go along with a shameful theft of lawful gains from the winners because someone has determined that the wrong people have ended up with the money. Fair dinkum, if something as blatant as this happened on a race course the punters would burn the stand down.
[Well, these days, probably not. No one actually goes to a race course anymore, unless they want to wear a fancy hat, because racing administrators and governments long ago killed off the reason for a gambler to actually be in attendance at the track. The rage these days would be against some poor publican running a TAB agency in his pub.]
I almost felt sorry for poor little Wayne Swan yesterday as he tried to justify what his bureaucrats had done to interfere with a normal market mechanism. Our Treasurer was clearly out of his depth as he tried to justify the unjustifiable for there is no doubt that changing the rules half way through an event is the one thing that is guaranteed to ensure that confidence in a market is shattered forever. The Australian financial market will pay for this decision for many years to come. Australia can forget about becoming the financial hub of the Asian time zone. The belief of our financial regulators that they had best be seen to be doing something just in case something terrible happens has seen to that.
And for what purpose?
I am not a share owner and have no interest either direct or indirect in the market and in that sense will neither benefit nor suffer financially if prices on the ASX go up or down. But I fear that I, along with all Australians, will suffer because Government has decided to pretend that it knows best.
When I look at the examples which the supposedly learned financial journalists give of the companies that have suffered from this terrible short selling business I see only examples of how correct the evil short sellers have been in their assessments. Good and sound businesses, it seems to the non stock market obsessed mind like mine, have nothing to fear from hedge funds, or any other monster, selling shares that they do not own. If the profits keep coming and the dividends are paid from real income, the share price will look after itself and the shorters will lose their money. When the profits are based on bogus revaluations of unsaleable assets, vouched for by valuers whose fee depends on signing the right piece of paper, it seems to me only right and proper that the shorters have a field day.
A little Murdoch payback. When you are a journalist covering an election in a foreign country you can look and listen but rarely ask. Candidates are interested in influencing people who vote, not those in far off places who don’t. Which is what makes this morning’s contribution by Senator John McCain to the op ed page of The Australian stand out so much. Not that the Republican candidate would have had much, if anything, to do with the words appearing under his name. The work would have been done by some hack on the campaign staff but it is still a rare event for the team of any would be president to care about penning some words relevant to Australia.
What this surely tells us is the importance of Rupert Murdoch to the Republican campaign effort. His Fox News network gives huge coverage to the conservative cause with a clearly discernible bias towards candidate McCain. And the New York Post is giving a new meaning to partisanship with its daily slanting of coverage against Barack Obama (as we showed in Crikey recently) with Sarah Palin being given star billing.
A reward for such help is that even a Murdoch editor from Australia is treated as an important person.
The unusual lobbyist goes home. Phil Burgess, Telstra’s former lobbyist-in-chief, or group managing director, Public Policy & Communications, gives a farewell message to Australia in the Sydney Morning Herald today as he heads off home to the United States. After some rather grudging praise to governments for past actions he gives details of three problems that come to his mind – unbounded faith in regulators, a dodgy notion of competition and a dangerous mindset manifested in the phrase “We’ve got to get it right”. In the experience of Mr Burgess, that is a banality used to justify endless studies, reviews, commissions, and other mechanisms to fob off any serious challenge to government inaction – regardless of the lost jobs, delayed investment, lagging productivity or stunted economic growth.
He might well be right in this harsh assessment but surely the Sol Trujillo amigo’s real message should be that most Australian companies are far too timid in their dealings with governments. The Burgess style was to directly confront both public servants and ministers on behalf of the telecoms giant and to ignore the scarcely veiled threats of punishment they replied with. There was none of the fawning before politicians that is the technique of most senior company executives of my experience who are so desperate to be liked.
The continuing market dominance of Telstra shows the success of this crash through technique the American brought to Australia with him. He will be missed.