PSA elections:

Paul McLeay, NSW Labor MP for Heathcote, writes: Re. “MP linked to NSW public sector union ballot” (yesterday, item 14). Alex Mitchell yesterday wrote that the opposition wants to know if any of my allowances have been used for the Public Service Association election. The answer, should he have asked me is: absolutely none. I have not used any allowance, given any time, or participated in any way in the current PSA election.

The PO Box 444 Engadine is leased by Lawrie Daley a member of one of my local branches. I have used this PO Box previously in campaigns. The PO Box that is paid for by the Parliament is 346 Engadine. So, while I can see there is confusion — that is all there is to it. I restate; absolutely none of my allowances, resources, time or energy has been spent on the PSA election.

Alex Mitchell writes: In yesterday’s piece I incorrectly said that NSW PSA general secretary John Cahill was heading the Members First team in the current election. John is, of course, head of the Rank and File team. Members First is the ALP right-wing ticket. And Cahill is former Premier Joe Cahill’s grandson, not his son.

Historic (empty) houses:

Kate Clark, Director, Historic Houses Trust of New South Wales writes: (Re: Crikey yesterday Item 18, Taxpayers foot the bill for neglected historic houses). As a former Trustee, historic house expert Ian Evans played a major role in shaping the future of the Historic Houses Trust (HHT). And as he knows only too well, looking after important places is challenging. At the HHT we manage a range of sites on behalf of the State government, including the Hyde Park Barracks, the Museum of Sydney, the Justice & Police Museum and the working class cottages at Susannah Place, as well as Government House. We have landscapes, gardens, collections, a wonderful library and even a beach, all in addition to the houses, farm and gardens at Vaucluse and Elizabeth Bay, Rouse Hill and Parramatta.

We want as many people as possible to enjoy these sites; we have around 300,000 paying visitors each year, but three times that number come to our sites to enjoy an event, concert or exhibition and another 900,000 people use our public spaces every year. We are especially proud of our education program where some 55,000 children learn about everything from art, to geography, to science and history at our sites. We know that visitor patterns are changing, which is why we were one of the first organisations to set up a highly successful series of public programs to find new ways in which people could engage with important places. We are justifiably proud of our prestigious headquarters at The Mint which has just been recognised internationally as one of thirty projects that have reshaped the built environment over the past three decades because it shows how new design can work in a historic context. The Mint has won many awards, including best specialty venue in Australia, for our thriving venue hire business which last year saw 70,000 people experiencing our sites.

Like every cultural institution, we are operating on a reduced budget and our staff have worked tirelessly to find creative ways to generate revenue. Nearly a third of our total income comes from our own activities.  There are challenges for the HHT in reaching wider audiences, but also opportunities including in western Sydney where our new education centre at Rouse Hill House & Farm is being built to cope with burgeoning demand. The simplistic solution to the challenge of managing a diverse portfolio of properties is to call in the real estate agent. However, the Historic Houses Trust has taken a different approach, keeping properties alive by making them relevant to future generations so that our past is preserved, not lost.

Short selling and the economy:

John Patrick writes: Re. “Selling the effects of short selling short” (19 November, item 2). May I draw readers attention to the self-serving propaganda peddled by John Corr, the chief investment officer of Fortitude Capital, a Sydney hedge fund, as reported in the Weekend Australian (20 September 2008): “John Corr … said the volatile market conditions were not just the result of hedge fund investment strategy … Mr Corr said shorting was part of the market’s natural mechanism, despite recent criticism from corporates about hedge funds targeting their stocks. ‘Australia has a robust financial system and shorting is a legitimate part of that, it helps companies issue innovative products’ he said.”

The claim that short selling is part of the market’s “natural” mechanism and that it is a legitimate part of the market needs to be challenged. Such a claim serves the interests of those who use the market to skim value that rightly belongs to shareholders. It serves neither the interests of investors nor the interests of serious explorer/producers. It is not “natural” or “legitimate” to sell something you don’t own or something on loan to you. A closer description might be deception and fraud!

As for short selling “helping companies issue innovative products”, you just have to look at what happened in the US when companies issued innovative products. It was those sorts of products that exported US debts to the world. And that propaganda continued a week later on the ABC’s Inside Business program in Alan Kohler’s interviews with Chris Gosselin (CEO Australian Fund Monitors), Dean Fergie (Executive Director, Opis Capital) and Danny Bhanari (Tibra Capital).

Their use of such terms and concepts as “distortions”, “inefficiencies” and “natural selling pressure keeping the market in line” was nothing more than self-serving propaganda to legitimise short selling practices. Why do journalists keep uncritically interviewing such people, and why do they keep reporting their propaganda? They should interview the managing directors and chief executive officers of those companies in the energy and materials sectors such as Beach Petroleum, Mincor Resources, Avoca Resources and others, who have been targeted by short sellers.

These are companies who raise venture capital on the basis of the fundamentals of their business enterprise and in turn on the basis of their share price. For them and those who had supplied their venture capital, short selling is theft of share price growth – the return for early risk-taking that rightly belongs to shareholders. It is a practice which not only diminishes the investments of all shareholders, but far worse, it will eventually disadvantage the raising of venture capital and ultimately the Australian economy.

This practice not only needs to be banned indefinitely, but those who have employed it in the past need to be exposed by the Australian Securities Exchange. And those superannuation funds who loaned shares to legalise the practice of covered short selling are accomplices in that theft. They also deserve exposure and censure by the ASX.

Julian Gillespie writes: Re. “Bank Deathwatch: US, Dubai, Germany, Ireland — no one’s safe” (yesterday, item 24). The devil is in the detail they say — and looking at the details of the Citigroup bailout is no different. After receiving another US$20 billion in cash (after already receiving US$25 billion), and gaining guaranteed coverage from Treasury and the FDIC for another US$15 billion should the losses start to mount, Citi can also look to a back-stop loan facility with the Federal Reserve for up to US$260 billion, a loan facility that is Non-Recourse.

In other words, if Citi can’t subsequently pay the Fed loan off, the Fed can’t seek to liquidate any remaining assets Citi may hold for repayment. But I guess that’s the point — if they can’t pay back the hand that feeds them, they would probably be stuffed anyway. Nonetheless, this Non-Recourse loan is full risk to the Fed, with no responsibility in Citi. Gee, keeping that membership current with the Bankers’ Club of America really does pay off!

Garth Longhurst writes: In the 21st Century, we can clone sheep, put a man on moon, build a computer that fits inside a pin head and yet we do not learn from our mistakes regarding money. Surely to be a high ranking company executive you need to have some concept of the term consequence. Oh sorry I forgot — the same people elected George W.

John Goldbaum writes: Re.”Long-term investing has its risks too” (yesterday, item 25). Adam Schwab could learn a lot from Oscar Wilde about The Importance of Being Solvent. To have a “long-term” portfolio which included any one of Centro, Babcock & Brown, MFS, ABC Learning Centres and Allco could be considered unfortunate. To have all five is decidedly careless.

Adam Schwab writes: Justin Templar (yesterday, comments) claimed that “before the black swan arrived companies such as Rams, Allco, ABC Learning, Mariner, Ford, General Motors, etc were well-regarded in the market — and their share prices reflected the view of the market, including people possibly even as intelligent as the Schwab himself….Presumably Schwab is now driving a rather large Bentley, paid for from the proceeds of his short selling of these shares. Or was he possibly too foolish to realise that his prescience gave him a unique opportunity to make a profit on the downside?”

One can’t help but be a little offended — not by Templar’s comments, but by the fact that he hasn’t been paying attention. In September 2007, when the ASX was trading at 6,278, there was this article, entitled “Australian market continues to defy reality” (at the foot of the article, a “short” position on the ASX200 was disclosed). Or way back in December 2006, when ABC Learning Centres was trading at more than $8.00, there was this article questioning the company’s profitability, followed by a series of critical articles during the year while ABC was still trading at above $5 per share. As for Ford and General Motors, they haven’t been well regarded for decades, while RAMS only lasted as a publicly listed entity for a week before collapsing. Sadly though Justin, there is no Bentley in the garage.

Rudd’s first year:

Martin Gordon writes: Re. “Happy Kruddiversary: as good as it gets” (yesterday. item 2). In February there was a 42 page 100 day report cards, now there is an 86 page 366 day one. Yes Kevin and co have being busy, but most are actions rather than achievements. How many actual school trade training centres, actual computers have materialised? The report conceals those inconvenient truths. There are plenty of appointments, committees, reviews etc. But I like the one about Ningaloo Reef which from my holiday there recently is genuinely impressive.

Both the 100 day and the 366 day reports are identical and read as follows: “The Government is working to accelerate the processes necessary to nominate the Ningaloo Reef in WA for World Heritage Listing.” Apart from the fact the reef is already protected and the bureaucratic puffery, I think the ‘accelerated processes’ has actually stalled! Given the expectations Kevin and co have raised by their never-ending spin cycle, they may want to turn to substance rather than spin.

Daniel Lewis writes: Re. “Kruddiversary: according to Crikey readers” (yesterday, item 13). Oliver Tobias refers to something he has noticed “particularly in some European countries, it is a cohesive and thoughtful society that generates a good economy, not the other way around”. Exactly which “cohesive society” in Europe is he referring to? Do they actually have one yet?

It’s no secret that the biggest polluters on the planet and the biggest human rights abusers have some of the worst economies and highest levels of poverty. When will environmentalists, and human rights activists shake off their Leftist Communist legacy and learn that a healthy economy is what allows people to be concerned with such trivia as welfare, health, human rights and the environment. Nobody is going to be particularly “cohesive and thoughtful” when they are out on their a-se.

Peter Davies writes: I was reading the Kruddiversary comments and saw one from a Heathdon S McGregor, who said that the Democrats copped it for campaigning one way but then voting differently once elected. Obviously this person is referring to the 1998 election campaign and the GST issue. Can people please get this straight? The Democrats stated clearly throughout the 1998 election campaign that they would negotiate with which ever party won the election to bring about tax reform. For the life of me I can’t recall if the ALP had any big tax reform proposals at the time, but the Coalition did — the GST. After the election the Democrats did exactly what they said they would do — negotiate with the government and bring about tax reform. I was a Democrat staffer from 1991 until 2005 and was around during those heady days in 1999. The GST had little to do with the demise of the Democrats. Internal conflict which got out of hand was the ultimate culprit.

Sarah Palin:

Graham Anderson writes: Re. “Video of the Day“. You know although I value my Crikey subscription sometimes you fall over yourselves to be just a little too cute and politically correct (to the left). Take your video of the day with the provocative intro of “Why Sarah Palin’s Republican handlers were right to keep her on a tight leash”. Hell’s bells she’s obviously going to show us what a prejudiced, gun totin’, moose huntin’, right-wing born again anti-abortion nutter that she undoubtedly must be. Thank Dog she didn’t make it proof — that but for a heart-beat we, and all the free world, were going to be in deep do-do. But what I saw was a perfectly cogent politician visiting a constituent’s business, responding to reporters’ questions off the cuff, with no notes, in a competent manner that would put our Kevin to shame. For heaven’s sake I’m as pleased as anyone that Barry Obama got in but surely Crikey could learn to stop putting in the gratuitous boot just because it can.

Television:

James McDonald writes: John Taylor (yesterday, comments) wrote: “Were the 1.243 million actually watching or were they asleep with the TV on? … Why haven’t advertisers woken up over many years that the TV ratings are a fraud?” I know nothing about TV ratings, but if my fortune depended on convincing folks to spend too much money on something stupid by means of cute animations at the mental level of Thomas the Tank Engine and jingles that stick to the ear like chewing gum to a bus seat, I would tell the network to run my ads in programs attended by owners of supersize plasmas dozing catatonically in front of the modern equivalent of a campfire in 5.1 surround, with the remote lodged safely down between the cushions. And I’d pay a premium to run my masterpieces at the beginning of the ad break when the volume jumps up a few notches.

Chris Roles writes: In reference to John Taylor’s comments about RPA being gross and the figure of 1.2 million last Thursday not being correct I would like to remind him that RPA has been on air for 14 years now and has a significant core, and loyal audience. RPA is about as real as so called reality television gets, unlike most of the shows shown under that banner. RPA is considered by good judges to be both entertaining and educational and the reason it has survived in the cut throat world of commercial television is because it also touches people which is also rare in commercial TV. So John, if you want to slag off shows on TV for being unworthy of their audiences you could start with a whole range of shows before you get to the gross and worthy RPA. (Disclosure: I have been the cameraman on RPA for the last eight years).

Send your comments, corrections, clarifications and c*ck-ups to [email protected]. Preference will be given to comments that are short and succinct: maximum length is 200 words (we reserve the right to edit comments for length). Please include your full name — we won’t publish comments anonymously unless there is a very good reason.

Peter Fray

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