Royal commission or banker slapstick show?
You’ll have to give me a moment. I still haven’t recovered.
After a year of reporting on Europe’s unfolding financial crisis, I’ve seen some funny stories reported in the press.
I laughed out loud when Italian Deputy Prime Minister Matteo Salvini was called a ‘Horrorclown’ by the German media.
And had a good chuckle when one Italian Member of the European Parliament took off his (Italian made) shoe to stomp over the EU document that announced the rejection of his country’s budget.
But when it comes to comedy, Australia’s coverage of the royal commission just takes the cake. You’ll have to excuse my outbursts of laughter as I take you through an article from The Australian about the latest developments. Because they’re just hilarious.
Here’s the first paragraph that put me in stiches. It’s about Ken Henry, former Treasury Secretary, ASX Chairman and outgoing NAB Chair (emphasis is mine):
‘He also clearly thinks that while NAB has a long way to travel to meet community expectations it is heading down the path, telling The Deal: “I will prove him [Ken Hayne] wrong.” That was on the Tuesday last week, before stepping down two days later.’
‘I’ll show you!’ he says, two days before quitting…
I’m not sure how Henry plans to reform NAB from the outside…
But get this. According to The Australian, Henry’s downfall has nothing to do with his disastrous performance at the royal commission. The real reason is even funnier than his post-threat resignation:
‘As Treasury secretary Henry was regarded as one of [the] great public policy minds in the country but even friends say he was a polarising character because he knew he was the smartest person in the room.
‘This perceived attitude may have played a part in the fateful royal commission testimony late last year.’
Henry was too clever to be a banker!? What a hoot!
But at least NAB has plans to reform in clever Henry’s absence. It wants to ‘establish a special board committee focusing on the customer’. This sounds like a good idea. Suncorp already has one.
But the way Suncorp set up its committee only sent me back into a fit of laughter again: ‘The entire Suncorp board, under chair Christine McLoughlin, is on the customer committee.’
What a bunch of clowns. Having failed miserably to serve their customer, the board sets up a committee to focus on the customer, and then made the entire board members of the committee!
Next thing, members of the Suncorp Customer Committee will be recommending board members investigate themselves over their failures…
Now, I think all of this is hilarious. But The Australian claims: ‘The circumstances of Henry’s resignation are on any reading a sad end to a brilliant career.’
I couldn’t disagree more. By my reading, the whole thing is clearly meant as a comedy. I mean, surely this sort of thing is supposed to make you laugh:
‘The irony being he [Henry], more than anyone in the industry, had pushed for the commission to be established and more than any had contributed to the public debate on a range of issues.’
Yep, the guy in charge of the bank that acted unethically should be forgiven because he warned everyone about the problems at his bank…
Heck, he even told us the bank he runs is misbehaving so badly it must be investigated by a royal commission…
Clever Henry was even aware of the specific failures of the bank he was overseeing: ‘He admits asking himself why the board didn’t jump in earlier on issues like fees for no service.’
A good question, isn’t it? Just odd that the person who is supposed to answer the question is the one asking it.
Perhaps Henry was too busy agitating for ‘public debate’ about the problems he was supposed to be fixing…
For some strange reason, Henry’s shareholders at NAB didn’t appreciate his incredible efforts to expose his own failings in the public arena. When it came time for them to pay him for his attempt to raise public awareness of his own incompetence, they said no: ‘He [Henry] also inexplicably presented to last year’s annual meeting a remuneration report that received the biggest “no” vote on record.’
To summarise, Ken Henry knew all along something was wrong. But did he do anything about it?
Instead, he busily pondered questions. Questions like why his bank was charging dead people for doing nothing. And publicly debated the need for investigations of his own bank’s misbehaviour.
The irony is, as chairman of NAB, it was his job to answer those questions and deal with those problems, not ponder and publicise them!
Well, Henry sort of did do something about the problem, I suppose. He called for a royal commission to expose the practices. Of course, it was his bank that was doing the outrageous things exposed by the commission!
Henry also went on to point out that he had been asking the right questions all along:
‘Yet he and [commissioner] Ken Hayne agree on the central issue, with Henry telling The Deal: “Everyone in business acknowledged the need to keep customers happy but how much time do they spend actually doing so?”’
Again, a valid question. The sort of question Australia’s bank chairmen and directors should’ve been busy answering, not asking!
Why does the guy who is supposed to answer these questions keep asking them instead?!
Because the answers are too bad.
If anyone realised what the answers are, there’d be hell to pay. Which is where the funny part of today’s Daily Reckoning ends.
I just received confirmation. My university in Australia has thrown me out at last.
I haven’t looked at my PhD thesis or university email account for two years. My fifth PhD supervisor left a year and a half ago, I think. I wasn’t notified at the time.
He’d gone on sabbatical for six months twice inside a year, so I never noticed he’d disappeared altogether. Nor was I reassigned to a new supervisor, which would have been for the sixth time.
Back in June of 2016, I decided to stage the same disappearing act my supervisor had on me. The fact that it took the university two years to realise I was long gone completes the circle of negligence.
I’m not sure how to return the fictional laptop or non-existent building access keys they never gave me. But I’m certainly not travelling to Australia to hand them over as demanded.
Why did I abandon my project after four years of work? I’ve effectively lost four years of my mid 20s as a result…
Because everything I wrote about in my PhD became national news. It’s all confirmed now. Everyone knows about it. Even Ken Henry can’t feign ignorance anymore. Not now that he’s resigned over the scandal I studied for four years.
Back in 2012, when I first claimed most Australian mortgages were based on lies, I was ridiculed. When I claimed that thousands of Australians could cancel their mortgage and keep their home, people laughed me off.
Except the few who followed my advice. And the Australian authorities, who shut me up quick smart. That’s why I turned to academia. To avoid the government’s censorship of my claims.
But now my accusations and claims are confirmed. The royal commission put the Australian banking industry’s dirty laundry out to dry and found piles of skeletons in the closets, too.
Now that disbelief is suspended, the consequences are playing out.
House prices are falling at their fastest pace ever. ‘Bricks and slaughter’ is one TV investigation’s headline. 60 Minutes has this headline: ‘Expert warns Australia could turn into slums in 20 years’. It’s going to take 10 years to process all the criminal cases uncovered by the commission, by one estimate.
Australia’s housing bust has barely begun though. The royal commission exposed plenty of examples of what was going on. Such as bribes in brown paper envelopes to get loans approved. At Ken Henry’s NAB, no less. I wonder if he pondered why this was happening…
But the commission carefully avoided asking just how common the dodgy practices were.
Can you believe that? Having uncovered evidence of widespread horrific practices, nobody went on to find out how common the problem is…the one thing that really matters.
I know exactly why nobody asked. It’s what my PhD uncovered. I know of far bigger problems looming inside the Australian mortgage industry than anything you’ll see in the media or royal commission reports.
Here’s what I concluded.
The results of a proper investigation would devastate Australia’s banks and the economy. Because mortgage fraud is so widespread, and carries such devastating consequences for banks, it would implode the entire Australian economy.
With three months to go before my approved completion date back in February 2017, my PhD supervisors realised what I’d uncovered too. Proof the Australian banking system would be insolvent under law if a proper investigation was launched.
So the supervisors told me I couldn’t complete the PhD. Because it ‘isn’t theoretical enough’. They advised me to choose a different topic and start again. After four years and approvals at every step of the way.
What changed? My theoretical PhD had suddenly become a little too real for anyone’s liking. My obscure academic scribblings from 2012 had become front-page news.
Well, most of them. The worst is yet to come. The housing crash is about to turn into a banking crash.
Until next time,
The Market Trigger for Gold
World’s #1-ranked gold expert reveals why 2019 could be your last chance to buy gold at this ‘bargain’ price
Daily Reckoning Australia contributor, Jim Rickards, is our global expert on gold. And in this revealing interview he explains why gold is so important in the global financial system, even if central banks deny it. He also show you why a new gold rush is quietly taking place, as confidence in paper currencies fall. In this free interview report you’ll learn many things, including:
It’s a fascinating and insightful interview. Simply enter your email address in the box below and click ‘Send Me My FREE Report’.