There are some things I’d like to write to you about more often than I do.
But when I do write to you about them, I find that’s when I get the most feedback…nearly all of it negative.
In fact, that’s when we tend to get the most ‘unsubscribe’ requests.
Why is that? It’s probably because when people (perhaps you included) signed up for Money Morning you did so because you wanted to read about shares and how to make money.
So when I write to you about things not related to shares and making money, maybe you feel cheated or short-changed.
Well, that’s the last reaction I want you to have when you open Money Morning each day. So, I’ve decided to do something about it…
Right now, I’m in discussions with my publisher to launch a new free newsletter service (he loves the idea by the way). I can’t give you all the details now, but I hope to have more news for you within the next few weeks.
Until then, I’ve decided to use Money Weekend as the forum for these ideas. I call them ‘Personal Worldview’ ideas.
What does that mean? It’s just a fancy term I use to describe non-financial market related news, ideas and analysis.
But that doesn’t mean they’re unimportant. These are ideas and analysis that still have a direct impact on your way of life, your freedom, your health, your family, and your wealth.
It’s just that not all the thoughts are to do with making money.
Anyway, I think you get the idea. Over the next few weeks you’ll get a taste of the ideas, thoughts and analysis that I’ll write to you about in the new free newsletter.
Before I get into today’s essay, this…
The End of Fortescue?
Jim Chanos is a US fund manager who profits when shares fall. He tries to ‘sell high and buy low’. This is called short selling. One company Jim Chanos has targeted is Aussie miner Fortescue Metals [ASX: FMG].
Earlier this year, Chanos said if the iron ore price fell below $100 then the company would be in a lot of trouble. He even questioned if the company could repay its debts if the iron ore price fell that low.
Well, in recent weeks, the price of iron ore has fallen below $100.
The demand for iron ore is falling as the Chinese economy slows. And the problem for Fortescue is that 98% of its sales go to China, and thanks to ambitious expansion plans, it has a very high level of debt.
With its revenue falling, investors fear it could have trouble paying back its debt, let alone making a profit. In that scenario, there’s a real chance it could go bust.
There are two stories here. One is the fast-fading China boom. The second is whether Fortescue can survive the downturn. You can read about both in this article: With Iron Ore Prices Falling Will Fortescue ‘Break the Buck’?
Now, over to the special Money Weekend essay…
Why Women Really are Smarter Than Men
You wouldn’t believe the amount of red-tape and regulation in the financial services industry. It seems as though everything we write or say has to come with a disclaimer.
The red-tape for stockbrokers is even worse. The regulations are so bad that it’s hard to get a broker to give you an opinion on a stock. And we don’t blame them. If a stock tip goes bad, they’re worried the client will sue them.
So it didn’t surprise us to see the report in Wednesday’s Age that:
‘[A]n internal report at Macquarie Private Wealth, which found more than 80 per cent of the division’s private client advisors were in breach of compliance standards.’
The report doesn’t state the severity of the compliance breaches. But our bet is most of them are minor rather than serious errors.
But the finance industry isn’t the only one drowning in red tape.
The drug industry is another. The approval process for new drugs is measured in years rather than months or weeks.
All along the route, the government agency needs more proof the drug works. Meanwhile, hundreds and even thousands of people die or get sick.
But even when a government agency approves the drug it has to come with all kind of warnings about possible side effects. In other words, before you take the drug, make sure you’re really sick because this drug could cause all manner of harm!
Of course, the argument is that the government is just worried about you. It wants to protect you. It doesn’t want you to lose money. And it doesn’t want you getting sicker than you already are by taking a drug.
But, there is one industry where the government isn’t quite so worried about your health. In fact, in this one specific industry, the government would rather you didn’t find out about the risks.
Because if you believe the advertising, there aren’t any risks. There’s only excitement, experience and training. Sounds great, right? So, what is this wonderful industry?
It is the Australian military. Or as they prefer to call it, the Australian Defence Force (ADF).
An Australian Military Sampler
You’ve probably seen the ads for the ADF on TV…learn a trade…travel the world…get new skills…and potentially get a bullet through the head.
Oh that’s right, the ads don’t mention the last point, even though the primary (and arguably, sole) purpose for an army, navy and air force is to send young men off to kill or be killed.
But killing young men (your sons, fathers, brothers or husbands) isn’t good enough for today’s politicians. They want to kill your daughters, mothers, sisters and wives too.
The following report appeared in the Age two weeks ago:
‘The military will offer women temporary “try before you buy it” deals to encourage them to take on full combat roles, and replace some exacting physical requirements with more practical tests for both sexes.’
There are two disturbing aspects to the report. First, it was written by a female journalist – Misha Schubert. We would have hoped that rather than a warm and cuddly story about women’s rights taking another step forward, the article would have pleaded with women to not fall for the government’s dirty trick.
The other aspect is the use of the phrase ‘try before you buy it’.
It’s as though joining the military is like test driving a car, trying on a pair of jeans, or sampling the food at a restaurant.
But we’re not sure they’re the same. Just how do you try military combat? How would it work?
Well, let’s see: how do you like that mortar fire that’s just blown your leg off?
And what do you think of the hollow-point bullet that’s just blown your insides to the outsides?
What’s that you say? You’re not keen, never mind, thanks for trying anyway, here’s a coffin for you.
‘Terrific’ News for Women
But that’s not all. Even the Australian sex discrimination commissioner, Elizabeth Broderick is in favour of putting women in the firing line. As she told the ABC:
‘And I think…it is terrific that women will be allowed into every single role across Australia’s Defence Force…
‘Where are we going to start? We’re going to start in recruitment. So the – when we looked at it, the most successful program to recruit women into the ADF was the gap year. So the gap year was kind of scaled back for a variety of reasons. What we’ve said is those principles of “try before you buy” so that as a woman I can just – I have a minimum 12 months service, rather than sign up for 14 years at age 18…’
‘Terrific’ isn’t exactly the word we’d use.
Now look, let us make something clear. We’re not saying that the armed forces is man’s work and that women shouldn’t be allowed. What we’re saying is that governments and politicians have a lust for power and that leads to a lust for war.
As Ralph Raico writes in ‘Great Wars and Great Leaders: A Libertarian Rebuttal’:
‘The King of Prussia, Frederick II (“the Great”), confessed that he had seized the province of Silesia from the Empress Maria Theresa in 1740 because, as a newcomer to the throne, he had to make a name for himself. This initiated a war with Austria that developed into a world-wide war (in North America, the French and Indian War), and went on to 1763. Of course, many tens of thousands died in that series of wars.’
This lust causes leaders to think that it’s OK to send young men (and now young women) off to war. And to make sure that no-one disagrees, they invoke the memory of past wars, dead soldiers and old soldiers.
Somehow remembering a previous pointless war justifies sending more young Aussies off to fight in a new pointless war.
And if anyone dares speak out against it, you’re labelled as denigrating the memory of the Diggers who have died.
No, that’s not quite true. We just don’t like power crazed maniacs (politicians) sending youngsters off to fight in pointless wars.
And the fact that the advertising for military service doesn’t mention any of the risks shows you just how deceitful these people are: ‘Don’t make that investment…and don’t take that drug…but hey, here’s gun, go and shoot someone, and with any luck you’ll make it back alive…’
So perhaps in the spirit of fairness, so that the military has to make the same risk disclosures as the financial and drug industries, maybe military advertising should include something about the risks of joining the army, navy or air force.
Maybe the ads could recount the military blunders at Gallipoli, and warnings to the recruits about the potential ineptness of the officer class, who may not be as smart as they let on.
Or perhaps they could give recruits a transcript of Lord Cardigan’s retelling of the Charge of the Light Brigade during the Crimean War:
‘We advanced down a gradual descent of more than three-quarters of a mile, with the batteries vomiting forth upon us shells and shot, round and grape, with one battery on our right flank and another on the left, and all the intermediate ground covered with the Russian riflemen; so that when we came to within a distance of fifty yards from the mouths of the artillery which had been hurling destruction upon us, we were, in fact, surrounded and encircled by a blaze of fire, in addition to the fire of the riflemen upon our flanks.
‘As we ascended the hill, the oblique fire of the artillery poured upon our rear, so that we had thus a strong fire upon our front, our flank, and our rear. We entered the battery—we went through the battery—the two leading regiments cutting down a great number of the Russian gunners in their onset. In the two regiments which I had the honour to lead, every officer, with one exception, was either killed or wounded, or had his horse shot under him or injured. Those regiments proceeded, followed by the second line, consisting of two more regiments of cavalry, which continued to perform the duty of cutting down the Russian gunners.
‘Then came the third line, formed of another regiment, which endeavoured to complete the duty assigned to our brigade. I believe that this was achieved with great success, and the result was that this body, composed of only about 670 men, succeeded in passing through the mass of Russian cavalry of—as we have since learned—5,240 strong; and having broken through that mass, they went, according to our technical military expression, “threes about,” and retired in the same manner, doing as much execution in their course as they possibly could upon the enemy’s cavalry. Upon our returning up the hill which we had descended in the attack, we had to run the same gauntlet and to incur the same risk from the flank fire of the Tirailleur as we had encountered before. Numbers of our men were shot down—men and horses were killed, and many of the soldiers who had lost their horses were also shot down while endeavouring to escape.
‘But what, my Lord, was the feeling and what the bearing of those brave men who returned to the position. Of each of these regiments there returned but a small detachment, two-thirds of the men engaged having been destroyed? I think that every man who was engaged in that disastrous affair at Balaklava, and who was fortunate enough to come out of it alive, must feel that it was only by a merciful decree of Almighty Providence that he escaped from the greatest apparent certainty of death which could possibly be conceived.’
We really would like to see that happen. But it won’t. Because it would be a disaster for their recruitment campaign. Only those with a death wish would sign up.
Smarter Than Men
That said, perhaps we don’t have to worry about the fate of women who join the ADF. Because despite all the marketing efforts so far, it seems few women have fallen for the trap. As the Age article by Misha Schubert noted:
‘Despite months of intensive publicity over the year since Defence announced it would open frontline roles to women, the military says only three have so far expressed interest – all of them as naval mine clearance diver officers.
‘No army women have sought combat positions and the air force has not had any responses to its call for applicants. They navy is about to issue a call for formal applications from women, who can start from January.’
Hats off to Aussie women for ignoring this deadly advertising campaign.
Many women have claimed for years that they are smarter than men. We don’t know if that’s true or not, but based on these results it’s certainly seems like it has a ring of truth.
PS. This is just a sample of what you can expect to read in the new free newsletter when it’s launched. Keep reading Money Weekend for the next few weeks for more insight into the topics I’ll cover. But because this is your newsletter it’s important you have some input into the content. So please send an email to email@example.com to tell me the kind of topics you’d like me to write to you about…
em>Highlights in Money Morning This Week…
Kris Sayce on A Slow Burn for the Australian Economy: “This isn’t about a two-speed economy. It’s not about the mining sector doing well and the non-mining sector doing badly. This is about the end of the mining boom and the knock-on effect it has on the rest of the Australian economy.”
John Stepek on Brace Your Portfolio for a Hard Landing in China: “Once it became clear that the Chinese economy was indeed slowing down, the bulls said it would be a “soft”, well-managed landing. But now that the landing is looking a lot harder than they’d expected, the bullish argument is that there will be a rebound in the second half of 2012. However, the latest data suggests there’s little hope of that either.”
Bengt Saelensminde on Spanish Banks are in BIG Trouble: “Repossessions would mean putting the properties on the banks’ balance sheets…And that would mean big fat losses. But the tide is going out. Cash is disappearing out of Spanish banks. It’s getting harder for the banks to cover their private parts. And Bankia won’t be the last one…”
Nick Hubble on Australian Resources Boom Curse…or Industrial Renaissance?: “The goose that lays the golden egg may be cooked. A report by research firm Variant Perception has caused some controversy. No longer are Australia’s problems just the ramblings of crazed Money Morning editors. Here’s what analyst Jonathan Tepper had to say about Australia’s fake prosperity.”
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Written by Kris Sayce
Kris Sayce is Editor in Chief of Australia’s biggest circulation daily financial email — Money Morning. (You can subscribe to Money Morning for free here).
Kris is also editor of Australian Small-Cap Investigator, his small-cap stock research service, where he provides detailed analysis on some the brightest, smallest listed companies on the ASX.
If you’re already a subscriber to these publications, or want to follow his financial world view more closely, then we recommend you join Kris on Google+. It’s where he shares investment insight, commentary and ideas that he can’t always fit into his regular Money Morning essays.