Club Troppo

Perhaps as long as twenty five years ago certainly more than twenty years ago I was in Venice, on a trip to touristy Murano and I bought a little statuette of an eighteenth century fellow sitting at his desk, wig atop his head, quiver in hand writing on a scroll, a vase of ink at the ready with a candelabra which adds both grace and light. It seemed so small and delicate (its about 1½ inches cubed), it struck me as unlikely that Id get it back to Australia in one piece. But the man who sold it to me put it in a small box with cotton wool. It wasnt the greatest solution the box was eminently crushable but it survived the journey.

Back home, having started cartooning in a substantial part of my days my little fellow, who it seemed to me must surely be Mozart, sat on the window sill in front of my desk all through that time companion and talisman as I cartooned away. Drawing and painting is an intensely calm and enjoyable thing to do and it doesnt surprise me that there are so many artists who live into their nineties often the ones painting the most serene paintings, like Monet and some who dont, like Picasso. But of course there are unlucky exceptions.

My little guy didnt survive the transition to economics all that well. Doing economics seemed so much less gracious than drawing and painting, and I couldnt really look Mozart in the eye. He became neglected despite retaining his usual place on the window sill, at least for a time. When we moved to Melbourne, Mozart ended up on top of the pelmet in my bedroom becoming rather forlorn and gathering dust. I acknowledge him from time to time wondering how, after all my efforts, hes somehow managed to lose one of three candles on his candelabra.

Anyway, about five or so years ago, Rafe Champion sent me a parcel with some articles in it that wed discussed. And he accompanied it with a couple of postcards. One was a lovely, fanciful picture of what seemed to be my old Mozart, on this occasion sitting at and playing his piano forte in the Sydney botanical gardens, with the harbour bridge arching decorously in the background and a duck landing (actually on looking closer and thinking about it, it must be taking flight) in a lovely pond in the foreground. I popped the postcard in the little rille made by the roll of the blind on my window and its flat surface. Mozart had weaved his way back into my life. And there he sat.

About two years later it occurred to me to ask where Rafe got these cute postcards, and immediately on asking such an obvious question I wondered whether his wife had done them. Id met her briefly. And yes, on inspecting the postcard further, it announced that the illustration was by Kilmeny Niland who has illustrated many fine Australian childrens books. (Australia has magnificent childrens books). For a while now I have looked at Mozart and thought about the fact that Kilmeny has been suffering from non-Hodgkins lymphoma. This normally yields to chemotherapy but Kilmenys case has been a rarer more aggressive and more drug resistant T-cell variety.

Last night Rafe e-mailed me to tell me that Kilmeny had died yesterday at Greenwich Hospital. As Rafe put it She crossed the Styx at noon today (Friday). It was a release, by November or December she really had enough of the process. I barely knew Kilmeny, though we shared an enjoyable lunch at Bondi a few years ago. But I am one of many no doubt mostly younger than me whose lives she had touched in ways that she would never know. And many other than me would want to convey their condolences to Kilmenys family and particularly to Rafe in a loss which, as is the way with such things, is incomprehensible.

(Continued)

I got this spam a few minutes ago, from a fellow calling himself Dave:
(Continued)

From Crikey!

McGauchie loves Sol, shareholders not so much

Adam Schwab writes:
It was certainly fun while it lasted.

This morning, Telstra confirmed the worst-kept secret in corporate Australia, announcing that CEO Sol Trujillo was resigning his role and returning to the United States at the end of June. Telstra chairman, Donald McGauchie was effusive in his praise for Trujillo, noting that “his vision, strategic direction and commitment to execution have positioned Telstra as a media communications company with a wide range of options for ongoing growth under Sol’s leadership, Telstra has significantly outperformed the market and its global peers, producing world-leading results within the telecommunications sector. The Next G network is undeniably the worlds best national mobile broadband network and stands as Sol’s crowning achievement.”

While the Telstra Chairman was happy with Trujillo’s performance, Telstra shareholders may be slightly less impressed. When Sol was appointed in July 2005, Telstra shares were trading at around $5.20 – yesterday they were at $3.71, a drop of approximately 28% in four years. Notwithstanding the global financial crisis enveloping sharemarkets in the past 18 months, Telstra’s position as the monopoly provider of foxed line telecommunications services should have placed it in a unique defensive position. (By comparison, other dominant telecommunications companies outperformed Telstra in recent years – US-based AT&T’s share price is steady since July 2006, while Singapore Telecommunications is up by 45% over the same period).

Trujillo (who was previously the CEO of US West in the United States) brought with him a very American style of doing business. Along with Communications chief, the outspoken Phil Burgess, Telstra adopted an aggressive stance towards the ACCC and Federal Government, culminating in December when Telstra was excluded from the tender process for the National Broadband Network after failing to include a plan on how to involve small and medium enterprises. Telstra’s election to not include such a plan, which would have taken less than a day to prepare, led to the companys share price dropping by 16 percent the following day.

Some analysts question whether Trujillo’s combative stance has been appropriate in Australia and whether Telstra shareholders have ultimately benefited from the company’s less-than-cordial relations with regulatory authorities.

Since his appointment, Trujillo has also placed a very heavy reliance on costly, outside consultants. The Australian revealed in September 2006 that months after he became CEO, Trujillo appointed management consultants, Bain and Accenture, to develop “a comprehensive multi-year plan for the most rapid and dramatic ever transformation of a telecommunications company worldwide.” For around 120 days work in 2005, Telstra allegedly paid Bain around $54 million – or approximately $45,000 per consultant, per day – roughly four times the cost of other leading consulting firms. The apparent success of the Bain-led transformation plan was believed to be a key factor in Trujillo receiving a multi-million dollar cash bonus payment the following year.

Trujillo will depart from Australia far richer than when he arrived. Of course, Sol was a wealthy man before he set foot in the country, having received a controversial US$72 million termination payment from US West after the company merged with fellow Telco Qwest in 2000. Trujillo’s termination payment included “a $US36.9 million “change-in-control” payment, $US13.7 million in pensions, $US10 million for signing the agreement and $US2 million for office space and administrative support.”

Notwithstanding his substantial wealth, the Telstra board authorised payments to Trujillo of $8.7 million in 2006, $11.78 million in 2007 and $13.39 million in 2008 (Trujillo’s 2009 remuneration will be revealed later this year). Remarkably, Trujillo also managed to receive between 86 and 88 percent of his short-term cash bonus in any of those three years, despite Telstra’s share price underperforming rivals such as AT&T and SingTel.

Telstra also released its financial results for the six months ending 31 December 2008 this morning, revealing a decrease in profit for the period of one percent to $1.92 billion and lower EBITDA guidance (although sales revenue was up by 3.2 percent). Following the trend of previous periods, Telstra recorded strong growth in mobile and broadband revenue, and another impressive performance from Foxtel and Sensis, but a continued drop-off in PSTN revenues. Telstra also continues to borrow to pay its lofty dividend to shareholders, with the companys total debt rising to $16.4 billion.

Telstra shares fell by six cents this morning to $3.71. 

Regular readers won’t be surprised that I had another crack at this topic. The time seemed right. From a column published today in the Age. 

Call it the audacity of hope.

In the political playbook of George W. Bushs advisor and confidant Karl Rove, you go after your enemy where you are weak or they are strong.

John Howard was at his audacious best working from the Rove playbook in 2004. His authority having been undermined by the duplicity of his 2001 claim that boat people had risked drowning their own children for a photo op, Howard declared the 2004 election would be about whom you trust.

As we learned more about Mr Latham it turned out Howard had a point.

Now Queensland Premier Anna Bligh is telling the good denizens of Queensland that in running up budget deficits and higher debt, in presiding over a downgrade in her Governments credit rating, shes doing the difficult thing, the tough, the unpopular thing. Well you could have knocked me down with a feather.

Here you were thinking it was the easier thing to do. This tough thing the Premier is doing turns out to be her least worst political option, all the easy options having run out.

Governments, state and federal have been taking the easy option for around a decade during which we should have been investing more in infrastructure, skills, and productivity where necessary and prudent by increased borrowing.

At least Queensland has done better than most state governments, with a strong capital program thats continuing where other states have been winding theirs back to preserve their AAA ratings (for a while anyway). Queensland has also mostly avoided shonky public private partnerships which usually cost more and simply push government debt off the books.

At least now, making a virtue of necessity, the Queensland Labor Government will be advancing the sensible arguments that have gone missing for so long. Theyll be saying that yes, other things being equal debt is bad. But just as those with a mortgage believe the benefits of owning their own home are greater than the costs (including the debt and interest they incur) so borrowing enables governments to generate greater benefits than the costs they incur. Just as firms decide to borrow more to grow rather than fixate on having a AAA rating (a AA rating is nearly as strong) now governments well at least one government is explaining why AA is better for a growing state than AAA.

I couldnt agree more. Nor it seems could Standard and Poors whose statement on releasing its credit downgrade sounded almost apologetic, repeatedly emphasising Queenslands strong balance sheet, its strong management and strong system support.

So why, when the arguments are starting to run my way do I have a queasy feeling? (Continued)

Last Sunday, on the same opinion page where John Hewson excoriated Peter Costello, Kerry-Anne Walsh wrote a piece defending Julie Bishop, and accusing her detractors of double standards.

Bishop wasn’t a bad performer. Yes, she made a few stumbles but the one that was most often thrown at her – plagiarism of a Wall Street Journal article – was a cut-and-paste mistake by a staffer.

That incident was in September. The Australian reported at the time that:

Coalition sources have confirmed a staffer admitted using the material without referencing it, “a mistake they won’t make again”.

So, what’s a ‘referencing mistake’? Presumably it’s something as trivial as a ‘cut and paste mistake’. In fact, omitting a footnote and failing to delete sentences originally cut and pasted from someone else’s document are not the same thing. Moreover, while each of them independently might be forgiven as a careless oversight, when they occur simultaneously it’s unlikely to be innocent. (Continued)

I rang a patent lawyer today to discuss my upcoming business, to check whether any part of what I’m doing is patentable. There’s a lot of existing systems and papers that describe part of what I’m doing, but not all.

In any case, he told me that if I decide to pursue and Australian patent, I could expect to spend around $3000, and for an international patent, at least another $10,000. Both with no guarantee of success of course.

It makes me wonder. The popular image of patents is a canny fellow thinking up a clever doodad in his garage. But in practice it doesn’t work that way — the vast majority are lodged by large corporations. In software they are generally lodged defensively, creating a situation of mutually-assured patent wars if one big firm decides to sue another big firm. Then the little guy loses out because he doesn’t have any patents to swap.

So a question for the lawyers and economists: would it be worth changing the patent system so that only individuals could file in their own name?