Lift your game Santa Claus or yule be sorry

Debt Man column – The West Australian (Business)

December 24, 2010.

Bruce Brammall

DebtMan

Dear Santa,

You’re from a place that’s cold, right, so you’ll understand this warning. “You’re skating on thin ice, dude.”

I know you don’t control everything. But you are in control of Christmas. And the national psyche generally during December. And this time last year, you and I did a deal. On behalf of all readers of “The West”.

And, honestly, I’m underwhelmed. Your probation continues for another year. (Kerry Packer has his hand up.)

You deliver presents at this time of the year to those who’ve been good. I’ve been good, Saint Nick. More accurately, I haven’t been bad.

And that low behaviour bar seems the standard that’s good enough for DebtBoy’s and DebtGirl’s showering of presents with your name on them at this time of year.

Last year, we agreed not to moan about higher interest rates or rises in excess of the RBA. I didn’t. But by crikey, the service at my bank this year has been more appalling than usual.

We promised not to be panicked by Professor Steve Keen’s anti-property rantings and we’d keep our chins up about the ever-rising Australian dollar.

We didn’t ask for much in return. A level playing field for property (tick), interest rates and government debt were allowed to rise, but not get out of hand (tick).

You delivered Grade-A “boring” on those two. For those, you deserve a beer. Drop by my place again soon, in your off season. I’ll shout. And I promise not to drink it before you get there.

But come on, Clausy, what’s with the stock market? We only asked for something between 8 and 12 per cent. Given 2007, 2008 and 2009, we’d have been perfectly happy with a dull, average year.

Sure, there’s a few days left of 2010, but it would be a Christmas miracle ranking alongside Christ’s birth to hit that target now.

The All Ordinaries started the year a smidge under 4900 points. It’s less than that now! Even adding back dividends, it’s barely positive.

And what’s with the route? Was it following your Christmas run? We had two technical corrections before June 30 – about 10 per cent in January/February and 17 per cent in April/May.

In between, we got an 11 per cent rise in February/March. In the last seven months – from the low base of 4200 points – we’ve had a pleasant 15 per cent gain.

Forget Barnaby Joyce’s loose lips scaring the international horses. You nearly allowed Ken Henry and Kevin Rudd to get their “resource super profits tax” up. The replacement MRRT is still a shambles.

If investors hate uncertainty, thank you, NOT, for this year’s federal election and 17 days of leadership vacuum. And for Tony Abbott’s admission that we couldn’t trust anything that came out of his mouth, unless it was scripted.

Rudd ditched the “greatest moral challenge of our generation” with the ETS, David Jones golden boy Mark McInnes resigned under a cloud, and Australia’s dollar hit parity. None of which are particularly helpful to investor sentiment.

Then, just as we relaxed … you saved some for December. Banking and super reforms.

Treasurer Wayne Swan’s attack on the big banks reminded me way too much of a quote from American satirist PJ O’Rourke.

“Wherever there’s injustice, oppression, and suffering, America will show up six months late and bomb the country next to where it’s happening.”

Change “America” and “country” to “Australia” and “lenders” and you’ve got Swan’s lending reforms.

The “bomb” was the axing of exit fees. But Swan’s IED (improvised explosive device) hit the little guys. They’re the ones that have been charging big exit fees to keep their own interest rates down and keep a grip on their customers.

Investors understood it straight away. The “big four” banks got an immediate share price boost, while Bank of Queensland and Bendigo and Adelaide Bank got pummelled.

Finally (I think) we got superannuation reforms. Well, sort of. Most of them won’t be implemented for between two and five years.

Thankfully, super is a long-term game, because nothing announced by Bill Shorten is going to help a single retiring Australian in the next five years.

Santa, I know I gave you a written warning last year. But you’ve now officially run out of chances, Fatso. Something from the stocking for the stock market in 2011, please.

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au .