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Sunday, August 29, 2010

Can't buy me love - but you can buy me toilet!

Is there any depth to which auction houses won’t plummet?

The answer, if you’re an Elvis Presley fan, is no, judging from the bizarre and morbid Kingly artifacts that have gone under the hammer in recent years.

The Beatles aren’t immune to such lurid activities either—John Lennon’s toilet is the latest item to be auctioned off.

It was expected to fetch up to £1,000 at the 33rd annual Beatles Convention in Liverpool. But it went way over that price - an overseas investor paid £9,500 for the item.

It is not known who the scatological buyer was.

I could do with a bit of extra spending-money on my forthcoming Bali trip. Any bid on a dual-flush well-balanced fully-depreciated ex-accountant's toilet?

Saturday, August 28, 2010

Of course!

When it comes to their own benefits, Australian politicians lead from the front: while the ordinary worker is stuck on 9%, South Australian MPs' superannuation benefits are to be upgraded to 15.4% !

Treasurer Kevin Foley said it was the Rann government's intention "to bring state MPs' superannuation into line with our federal colleagues".

Mr Foley would neither confirm nor deny that raising benefits of nine per cent to 15.4 per cent of an MPs' annual salary would be in the budget.

"We've had discussions in both the Labor Party and the Liberal Party, and there is a very fair argument that state politicians' superannuation needs to be reformed, and we'll look at doing that in the near future," Mr Foley told The Weekend Australian.

But Public Service Association chief industrial officer Peter Christopher said the move would be met with "outrage" by public sector workers. (Methinks that's easily fixed: give the socalled "Public Servants" the same 15.4% and they'll shut up!)

"In an environment where every single public sector union is continually reporting pressure on staffing, difficulties improving wages and conditions, and pressure to meet budget cuts, this superannuation rise for politicians will be seen by the community as quite outrageous," Mr Christopher said.

State MPs elected in 2006 or later are now entitled to a nine per cent super payout based on their parliamentary salaries.

The scheme is a legacy of former federal opposition leader Mark Latham, who promised to cut MPs' super benefits to nine per cent of annual earnings if he was elected.

The Howard government and eventually most state governments bowed to public pressure and agreed to downgrade new MPs' super benefits.

But federal parliamentarians elected after 2004 now receive 15 per cent of their salaries in a revised scheme.

Other jurisdictions, including NSW, Victoria, Tasmania and the Northern Territory, have a nine per cent scheme for new MPs. In Queensland, state MPs elected after December 2004 receive 12.75 per cent. State MPs in Western Australia elected after October 2000 receive 12.5 per cent.

South Australian opposition Treasury spokesman Iain Evans yesterday confirmed Mr Foley had proposed the reform , which would be supported by the Liberals. "Whenever the government introduces the changes, the Liberal Party has the position that we will be supporting it," Mr Evans said.

"The Liberal Party has taken a position that we try to line up the state MPs' wages and super with the federal MPs.

"We still support the $2000 differential between MPs' wages, but we do think there is an argument that for a federal MP to be on 15.4 per cent and state MPs to be on 9 per cent clearly makes the federal MPs' position a lot more attractive, and we need to keep a talent pool at state level. (Did I read that right? "Talent"?) Kevin Foley indicated one of his options was to introduce it in the budget but he hadn't resolved that."

A broader view on Broadband

Here are the technical reasons why the National Broadband Network (NBN) will fail :

1) fibre optic cable has a maximum theoretical lifespan of 25 years when installed in conduit. Over time, the glass actually degrades (long story), and eventually it can't do its bouncing-of-light-thing any more. But when you install fibre outside on overhead wiring (as will be done for many of Australia’s houses, except newer suburbs with underground wiring), then the fibre degrades even quicker due to wind, temperature variation and solar/cosmic radiation. The glass in this case will last no more than 15 years. So after 15 years, you will have to replace it, whereas the copper network will last for many decades to come. Fibre is not the best technology for the last mile. That's why no other country has done this.

2) you cannot give every house 100Mbps. If you give several million households 100Mbps bandwidth, then you have exceeded the entire bandwidth of the whole internet. In reality, there is a thing called contention. Today, every ADSL service with 20Mbps has a contention ratio of around 20:1 (or more for some carriers). That means, you share that 20Mbps with 20 other people. It's a long story why, but there will NEVER be the case of people getting 100Mbps of actual bandwidth. Not for several decades at current carrier equipment rates of evolution. The “Core” cannot and will not be able to handle that sort of bandwidth. The 100Mbps or 1Gbps is only the speed from your house to the exchange. From there to the Internet, you will get the same speeds you get now. The “Core” of Australia’s network is already fibre (many times over). And even so, we still have high contention ratios. Providing fibre to the home just means those contention ratios go up. You will not get better download speeds.

3) new DSL technologies will emerge. 15 years ago we had 56k dial-up. Then 12 years ago we got 256k ADSL, then 8 years ago 1.5Mbps ADSL2, then 5 years ago 20Mbps ADSL2+. There are already new DSL technologies being experimented on that will deliver over 50Mbps on the same copper we have now. $zero cost to the tax payer.

4) 4G wireless is being standardised now. The current 3G wireless was developed for voice and not for data, and even so it can deliver up to 21Mbps in Australia. There are problems with it, but remember that it was developed for voice. The 4G standard is specifically being developed for data, and will deliver 100Mbps bandwidth with much higher reliability (yes, the same contention issues apply mentioned earlier). $zero cost to the tax payer.

5) the “NBN” will be one of the largest single networks ever built on earth. There are only a few companies who could do it - Japan’s Nippon NTT, BT, AT&T, Deutsche Telekom etc. Even Telstra would struggle to built something on this scale. Yet we are led to believe that the same people who can’t build school halls or install insulation without being ripped off are going to to do it ? At Telstra, they are laughing their heads off, because when it all comes crumbling down, after they have spent $60+billion and the network is no more than half complete, it will be up to Telstra to pick up the pieces............

Thursday, August 26, 2010

Island of the Gods

It's back to Bali next month! It's the dry season and Ramadan will be over on the 9th (although there isn't much evidence of Ramadan in Bali anyway).

I'll be accompanied by my Greek friend Nick who hasn't sampled the delights of the Island of the Gods yet.

We'll stay the first two nights at my favourite HARRIS Hotel to chill out after the flight.

Then, for the sheer fun of it, onto the PERAMA Shuttle

Two days and nights in Ubud at the Arjana Bungalows to reconvene the Arjana Ool Club, followed by another two (or three) days at Padang Bai in the lap of luxury at the Puri Rai.

Then north to Lovina to meet my old friends Gus and Sandy at Villa Agung, before heading up into the hills for a few more days and nights in my favourite place at Banjar Hills.

Then again, we may stay in the thick of it at Lovina's Rambutan Cottages, as apart from HARRIS, we haven't booked anywhere and will simply take pot luck.

Finally, back to Denpasar for some last-minute shopping at the Discovery Shopping Mall on Kuta Beach and another good night's sleep at HARRIS Tuban before boarding Jetstar to Sydney.

Let's go, Nick! Where the Bali hell are you?

Man-eating tax office

Paul Hogan has been stopped from leaving Australia by the Australian Taxation Office (ATO).

The ATO slapped him with a Departure Prohibition Order when he returned to Sydney last Friday for the funeral of his mother, Flo.

It prevents the Crocodile Dundee star from leaving Australia for any foreign country until his alleged tax debt is paid or otherwise settled.

It follows the tax office serving Hogan with an amended tax bill last month for tax on $37.6 million of undeclared income.

Sunday, August 22, 2010

Independents Day



These three Independents are Australia's King- (or Queen-) Makers: (from left to right) Tony Windsor, Bob Katter and Rob Oakeshott.

The negotiating has begun!

To paraphrase Gordon Gecko, "Gridlock is good." Gridlocked governments have to govern from the centre, and they usually don't get very much done. About the only certain result from a grid-locked government is no major legislation will be passed. That's generally a positive result for everyone. If no news is good news, no new laws are good laws. In fact, I'd be willing to offer politicians a raise if they promised to do nothing. Put them on the dole!

Saturday, August 21, 2010

Well hung!

Australia may well have its first hung Parliament since 1940 !

Neither side gained the necessary 76-seat majority to form government. With 4 Independents, and a first-ever Green member (not to mention the first ever Indigenous member and the youngest-ever (a "schoolkid" of 20) member on the Coalition's side), the remaining 145 seats may be split 72 : 73 between Labor and the Coalition. Counting is continuing and final results for the last few seats may not be known for days, if not weeks.

The Coalition attracted 400,000 more primary votes than Labor and claims that it has the moral ground to govern the country. The Consitution is silent on the question of a hung Parliament so the question of who will govern needs to be decided on the floor of the House. However, Parliament cannot be recalled until all seats have been decided. With several seats extremely close, the count, and possible re-count, could take weeks. It could even involve a High Court challenge!

There was also a huge "Green slide" in the Senate which gives the Greens the balance of power. Welcome to the Age of Uncertainty!

I predict another election within a year!

An old view on NewViews

In the late 1980s, just after I started my Canberra Computer Accounting Software consultancy, I fell in love with NewViews!

It had been developed and was sold by Q.W Page Associates of Toronto. Those Canadians are pretty smart when it comes to recording their loonies!

It was a dream-come-true accounting software for the accountant who had been handed the proverbial shoebox full of invoices, receipts, cheque stubs, and back-of-an-envelope scribbles from which to construct a set of financial books. One could dive right in and start recording from any point for any period as NewViews was totally flexible and non-modular. It offered the feel and flexibility of an endless array of spreadsheets while preserving the integrity of Pacioli's double-entry bookkeeping - click here for Pacioli's 'Treatise' - and an unalterable audit trail.

The flexibility came with a trade-off, however, as NewViews was perceived by some to have a long learning curve, and to require a greater investment of time and effort to create a customized accounting solution. In a software review published in InfoWorld, NewViews was compared to "going to a tailor and handing him a bolt of cloth and a pair of scissors. The result will suit you perfectly, but at a greater cost of time and effort than if it was ready-made."

I took to NewViews immediately and found it a pleasure to use and I did a lot of bespoke-tailoring with it! I am pleased to see that it is still alive and well today!

Friday, August 20, 2010

The hunter and the hunted

BHP's shareholders may have to learn how to pronounce Saskatchewan as their company has gone hostile!

This announcement was released today after close of business Australian time:

BHP Billiton Group Announces Commencement of All Cash-Offer to Acquire PotashCorp

BHP Billiton (ASX:BHP/LSE:BLT/NYSE:BBL/JSE:BIL) today announced that an indirect wholly-owned subsidiary of BHP Billiton Plc, BHP Billiton Development 2 (Canada) Limited (the "Offeror"), has commenced the previously announced offer (the "Offer") to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan Inc. ("PotashCorp"), at a price of US$130 in cash per PotashCorp common share (the "Offer"). The Offer values the total equity of PotashCorp at approximately US$40 billion on a fully-diluted basis.

The Offer represents an attractive premium of 20 per cent to the closing price of PotashCorp’s shares on the NYSE on 11 August 2010, the day prior to BHP Billiton’s first approach to PotashCorp. It is also a premium of 32 per cent and 33 per cent to the volume weighted average trading prices of PotashCorp’s shares on the NYSE for the 30-trading day and the 60-trading day periods ended on the same date, respectively.

The Offer is open for acceptance until 11:59 p.m. (Eastern time) on 19 October 2010, or such later date or dates as may be fixed by the Offeror unless the Offer is withdrawn.

[Here] is PotashCorp's rejection of BHP's offer.

Will China launch its own bid to secure supply of this vital crop nutrient? China has very few potash reserves of its own, and may not want to be put over the barrel on yet another commodity.

Fair-price calculator.

Home is the hapless, home from the surgery ...

Click on image to see results after the bandages have been removed

... but not "brainless" enough to vote Labor in tomorrow's election.

Change of bandages Monday morning, stitches out next Friday morning, back on the old red next Friday afternoon.

What does not kill me,
makes me stronger.

                    Friedrich Nietzsche
                    Twilight of the Idols, 1888

Potash to ashes?

BHP has made a compelling US$40 billion cash offer for PotashCorp of Canada - [click here]. The market has given it the thumbs-down by hammering BHP's share price which fell from last Friday's $40.40 to today's $37.85.

With grain prices soaring and the need to double global food production by 2050 to feed a growing population, I believe potash will turn out to be a hugely important resource as nothing makes plants grow quite like potash and Canada's PotashCorp has access to reserves of it currently valued at £100 billion.

I maintain my overweight position in BHP which I see as one of the few safe havens in a financial world that is in turmoil. The monetising of government debts - euphemistically called 'quantitative easing' - means that the world runs huge deficits. The result: proliferation of paper promises that exceeds the ability to create wealth to finance those promises.

The inevitable solution will be to use inflation to debase the value of those promises. Inflation is the gentlest way for society to fill the gap between promises and reality.

With inflation rising, paper assets such as shares and bonds are not the place to be. Commodities are the answer for two reasons:

1. with the US$ dollar falling - the Australian dollar could go to US$1.10 in a heart-beat -, commodity prises (which are still set in US dollars) will be rising;

2. the demand for commodities is driven by people moving into cities. In 2008, for the first time, half the people in the world were living in cities. In the next five years, there will be another 150 million people - about half the size of the population of the USA - moving into cities, mostly in emerging countries.

Investing directly in commodities is almost impossible for the average punter. The next best thing is investing in commodity-based shares in major mining companies. Mining giants BHP Billiton and Rio Tinto are looking more defensive than sectors like property and healthcare and consumer staples. Thanks to the emerging markets India and China which will underpin strong commodities demand for decades, the miners' longer-term earnings growth potential will be better than all other sectors.

Of the two mining giants, I favour BHP Billiton because of its geographical spread and diversification across a whole range of minerals as well as oil and gas.

My 12-month price target on BHP Billiton is $48.

Its 52-week high was $44.93 in April 2010 (with a 52-week low of $31.33), and its highest ever was $50.00 in May 2008. Its NPV is $45.

Thursday, August 19, 2010

The Sheltering Desert

For the full-length movie, click here


One of my favourite books is The Sheltering Desert by Henno Martin. It takes me right back to my own time in South West Africa and the Namib Desert.

Hanno Martin was born in 1910 in Freiburg, Germany, and lived in Göttingen again from 1965, and eventually died there on January 7th, 1998. In 1935 he left Germany together with his friend and colleague, Hermann Korn, to do geological research in South West Africa. At the outbreak of World War Two they fled into the Namib Desert, where they lived for two-and-a-half years.

The undescribable phsyical and mental hardship they had to bear, the challenge to survive in the vastness of the Namib Desert, the constant threat of detection and their gradual adaptation to live a life as ancient bushmen, while being confronted on the radio with the horrible clash of civilsations in Europe is described in this book, The Sheltering Desert.

Henno Martin wrote numerous scientific publications throughout his succesful academic career as a geologist. This is his only non-scientific work, an "autobiographic novel", a classical tale of escape and survival. Henno Martin continued to spend many years in Africa, where he worked as a scientist at the Geological Survey of South Africa and as professor at the University of Cape Town. From 1958 until 1960 he was professor at the University of São Paulo. In 1965, he became professor at the Institute of Geology and Paleontology of the University of Göttingen, where he also became a member of the Academy of Sciences.



Here is an excerpt from the book:

Forty years have passed since I, my friend Hermann and the dog Otto sought the shelter of the desert in order to escape the madness of the Second World War. We found the shelter we were looking for and we found adventures of survival which confronted us forcibly with the primitive traits of our own nature. Even after half a lifetime, the scenes of our desert existence are sharply etched into my memory, and every visit to the Namib feels like a return home. When I wrote this book twenty-seven years ago, the game which had provided us with food and joy was being wiped out by unscrupulous hunters. Now the »Carp Cliff« and its surroundings and the red dunes to the south of the Kuiseb canyon have been incorporated into the Namib Game Park, and it is a pleasure to record that springbok, gemsbok and zebra have recovered to some extent, and that at the Desert Research Station Gobabeb, on the lower Kuiseb River, scientists are studying the conditions under which life exists in this unique desert. Forty years ago, as Hermann and I lived like carnivores, whilst day by day the cruelties of the great war were brought by the radio into the serenity of our desert evenings, our thoughts and talks were much occupied with the riddles of the evolution of life and of man, of his astonishing cultures and his fateful failings. In the meantime, the dangers which we recognised then have grown and continue to grow at an increasing rate. Our deductions about the link between the complexity of human nature, with its capability for both sublimely altruistic and devastatingly destructive behaviour, and mankind’s evolution from primitive hunting families to competing warlike societies, seem to be as relevant today as they were during the great war. Readers interested in this aspect are referred to the late Robert Ardrey’s book The Social Contract in which the peculiarities and the innate dangers of human nature are traced to their animal roots. Many of our present troubles are aggravated by the prevalent socio- political theories which do not acknowledge the discrepancy that exists between the demands of modern societies and some parts of our hereditary make-up. By blaming all the evils of this world on its social structures these theories mobilise our inherited aggressiveness against other individuals, groups, races and nations, encouraging ever more costly combats with ever more disappointing results. It is essential to realise that a good part of the struggle for physical and spiritual survival has to be waged within ourselves against innate tendencies which, though once a condition of man’s evolution, have now become serious obstacles to our further existence and development. For me the most important gain of our life in the Namib was the experience that the human mind can rise above even the most savage conditions. Whether this faculty will enable us to master the avalanching dangers with which an unbalanced blind progress coupled with a grave misunderstanding of man’s nature are now confronting us, only the future can show.

The book, all 374 pages and 18 pictures of it, can be ordered from Two Books, Pilatuspool 11 A, 20355 Hamburg, Germany, for €12.80. Email service@twobooks.de or the Namibiana Bookdepot.

Wednesday, August 18, 2010

Monday, August 16, 2010

Retro radio

It was love at first sight when I discovered this retro-look radio at Dick Smith! So many memories for just $49.99!

It took me right back to the early 1960s when I borrowed an almost identical-looking "Kofferradio" - "Koffer" means suitcase which just about sums up the size and weight of those early transistor radios - from my older sister. It helped me brighten up my evenings in a rented room far away from home and almost made me forget the old lumpy bed and primitive jug-and-bowl wash-stand.

This 'new' retro radio is authentic right down to the dial which shows all the old stations such as Hilversum, Budapest, and Luxemburg. Needless to say, I have it permanently tuned to a music station that plays Golden Oldies all day long!

Sunday, August 15, 2010


Creating a blog is a quick way of getting noticed by GOOGLE!

Try it right now:

There it is! Right at the top of the page!

So if anybody out there GOOGLEs for Ian Paterson - maybe Ian himself! - and happens to know where he is, please email me as I want to get in touch with him.

Ian and I worked as accountants for PDF Holdings on Bougainville Island in 1973 and kept in touch for many years. After leaving Bougainville, Ian and his family settled at Nambucca Heads on the North Coast of New South Wales. When I asked him why, he said it had reminded him of Bougainville. Another bout of "Bougainvilleitis"!

He opened an accounting practice at Nambucca Heads, mainly doing the books for the cowcockies in the surrounding district. He even had a branch office in Macksville, population 3000.

On my way up north in 1979 to another assignment with Mount Isa Mines, I called in at his office, squeezed in between a delicatessen and a laundromat. We talked about his work and he suggested I should join him as partner. The proposition sounded less appealling after he told me that if it hadn't been for the shoe shop his wife had opened in town, he may not have lasted as long as he had.

Travelling North 1979-style - moi and caravan outside Ian's office

Either things improved with his accounting practice or his wife's shoe shop was doing extremely well because Ian was still there after my return from Saudi Arabia in early 1985. Then, some years later, he wrote that he had finally packed it in and relocated to Brisbane where he had gone into public practice again at Suite 1, Level 8, 141 Queen Street.

And that's the last I heard from him. Somehow the big city just swallowed him up. If you are out there somewhere, Ian, email me. It would be good to hear from you again!

Saturday, August 14, 2010

A blast from the past

"Come and get me, you miserable bastards."

That's how actor Paul Hogan challenged the Australian Taxation Office in July 2008.

The tax office has risen to the challenge and now accuses him of evading tax on almost $39 million of undeclared income and considers him an Australian for tax purposes, despite the Crocodile Dundee star living and paying taxes in the US for a number of years.

The tax bill is the first punitive action taken against Hogan by the tax office, which along with the Australian Crime Commission has been pursuing the actor as part of a tax probe into the use of offshore accounts.

The size of the bill is not known, but if Hogan is assessed at the highest marginal rate of 40 per cent, the tax office is likely to have demanded a base payment of $15 million, as well as interest charges from the date the tax was due and additional penalties that could be as high as 75 per cent of the base bill.

According to documents obtained by The Weekend Australian, the tax office has told Hogan it is considering him an Australian resident for tax purposes for the years 1987 to 2005.

During eight of those years - from 1995 to 2002 - Hogan paid tax in the US where he now permanently resides.

From 2002 to 2005 Hogan lived in Australia.

A mental traveller "Travelling North"

Could I live here? You bet!

Every winter in the Deep South makes me wonder why I ever left the Tropics. I am stuck here at "Riverbend" until it is sold - if it ever sells!

In the meantime, I keep dreaming of a warmer, smaller, cheaper place that I can simply lock up when the mood takes me to hit the road again.

I can just picture myelf floating in the pool which is part of this cute little cottage, located only a stone's throw from the sand dunes of Port Douglas's iconic Four Mile Beach.

Friday, August 13, 2010

Shapes of Bougainville

Click on image for an in-situ picture

Today is Friday the 13th! I don't suffer from paraskevidekatriaphobia but whenever I see a red plastic chair, I immediately think back to Camp 6 at Loloho on Bougainville Island!

This will only make sense to those of you who shared my experience of the Bougainville Copper Project at a time when the world was young and we were young in it. When things were changing for the better, when old ways were destined to go, before we grew up and had families and houses and career jobs, and the sap of life was slowly drained out of us.

Donations are invited to finance my never-ending battle for the prevention of the extinction of red plastic chairs so as to keep alive my twisted memory of something so trivial.

Thursday, August 12, 2010

There and Back

Click on image for view of whole tree - and me!

Today was a gloomy and rained-out day; the Dow was down 266 points; China showed signs of slowing; and the Labor vs. Liberal election campaign had adjourned to the beer-swilling Rooty Hill RSL Club - it was time to shake off the cabin-fever and go for a drive down the coast!

A visit to my favourite "bookshop", the St Vincent de Paul op-shop at Moruya, always cheers me up and today was no exception. I found an almost mint-condition RANSOM by David Malouf, an equally well-preserved copy of Michael Moore's Stupid White Men, and, for a bit of light relief, Scrap Waggon, by the same Barry Crump who wrote There and Back.

As I was lining up to pay for all this lovely reading material, I overheard an old bloke in front of me pleading with the shop assistant to have put aside an old $10-television which he would pick up when he had the money. "We can't do that ...", the assistant told him but, quick as a flash, added, "... however, we can let you have it for nothing!" when she spotted me pointing at his back with a $10-bill in my hand. I last saw him humping the TV-set out of the shop. If only all problems could be solved so easily!

Back on the highway, we pulled in at the Eurobodalla Botanical Gardens where we had planted two memorial trees ten years ago. The ribbon gum in memory of my father had grown into a stately tree but the snow gum which commemorated my old mate Noel had withered away. Maybe it was meant to be because after a lifetime spent in New Guinea he had never quite settled back into Australian life, saying "My spiritual home will always be New Guinea."

Life is mostly froth and bubble.
Two things stand like stone;
Kindness in another's trouble,
Courage in your own.
                    Adam Lindsay Gordon