Posted by Peter on 07/05/2021

Rolling the dice

Life has a way of dealing unexpected surprises. Out of the blue I received an email from Geoff Tapper (the Skipper who helped us get Great Escape from Adelaide to Lake Macquarie) asking if I would be interested in crewing on a yacht delivery from the Bay of Islands in New Zealand to Coffs Harbour in Australia. I needed to be ready to leave in a few days as the weather window for sailing from New Zealand to Australia was closing.


The yacht is a 45’ Beneteau named ‘Estelle’ and the family who owned her had sailed her from the Mediterranean to New Zealand prior to the Covid-19 outbreak. They wanted to get the boat to Australia but couldn’t do so themselves. The travel bubble between New Zealand and Australia had opened and I suspect this was an ideal opportunity to get a delivery Skipper to sail the boat to Australia. The next few days were a whirlwind trying to get ready for an ocean crossing at very short notice.

To complicate matters, the travel bubble only applies to air travel between New Zealand and Australia and we needed authorisation from New South Wales health department to sail back to Australia in the travel bubble. NSW health gave us authorisation on condition that we have a Covid-19 test on arrival in Coffs Harbour and that we isolate on the boat until the test results came in.

It was an ideal opportunity for me to see my daughter in Auckland. It has been almost 2 years since I last saw her. It is now Thursday 6 May and I am writing this first part of the blog post from a deserted Sydney airport. I have travelled through Sydney airport on many occasions and it is normally a bustling, vibrant and very busy airport. Prior to the pandemic, 1 000 international tourists arrived at Sydney airport every hour.

The airport is eerily quiet, all of the shops are closed and most have even removed their stock. There are a few restaurants open but even the McDonald’s is closed. This is when it hits home how bad the pandemic is. Australia relies heavily on international tourists and it is only because the Australian government (like so many other governments around the world) have simply thrown billions of dollars at the economy that it hasn’t collapsed. How long they can continue to do remains to be seen.

Sailing from New Zealand to Australia in the middle of May is far from ideal. The best time seems to be January to March when the weather is settled. There are many horror stories of trips that have gone really badly and the Tasman Sea is not be taken lightly.

As the crow flies, the distance between the Bay of Islands and Coffs Harbour is about 1 100 miles. Given that we are sailing across, we have no idea what distance we will cover or how long it will take. Geoff seems to think about 6 to 8 days but that seem optimistic to me. Fortunately there are three of us doing the trip which makes it easier. Eight days of 4 hours on and 4 hours off with only 2 on board would be quite challenging and if something happened to either of us it could get very difficult. That said, many couples do it every year.

The weather forecast ( looks fairly good for next week. There is a high pressure system over New Zealand right now resulting in the weather being very settled. The forecast is for some rain and fair winds for next week. The night time temperatures will be very cold.

The plan was for Geoff and Dean (the other crew member who is flying in from Melbourne) to arrive in Auckland on Friday 7 May. We would then all take the bus from Auckland to the Bay of Islands on Friday evening. Saturday would be spent getting to know the boat and provisioning and we would leave on Sunday 9 May. That would give us enough time to get to Coffs Harbour before the end of May.

My flight left Sydney at 11H40 and was scheduled to arrive in Auckland at 16H30. I was flying with Air New Zealand which is an airline I try and avoid. True to form, Air New Zealand were late in departing, ran out of food and even managed to run out of passenger arrival cards. How hard can it be to get things right when there are only a few flights every day?

By the time we arrived in Auckland at 17H00 the New Zealand government had announced that they were closing the border with New South Wales from midnight on Thursday. There had been two cases of Covid-19 in New South Wales where the source was unknown and that was enough to cause the New Zealand health authorities to close the border. The border with New South Wales would be closed for at least 48 hours which meant that Geoff could not leave on Friday.

Everything is now up in the air and we will only be able to make decisions once the border between New Zealand and New South Wales re-opens.

Every time we make travel plans in the pandemic we are rolling the dice – we cannot complain if it goes against us.

Posted by Peter on 01/05/2021

Sydney Fish Market

One of the things we enjoy doing is visiting fish markets. We have been to a few around the world with Pike Place Fish Market being one of our favourites. Pike Place Fish Market is world famous for the throwing of the fish. The Sydney Fish Market is second only to the Opera House when it comes to attracting tourists. Over 13 500 tonnes of seafood pass through the market each year and 1 000 crates of seafood (roughly 20 000kg) are auctioned every hour during the weekday wholesale auctions.


It is normally a bustling place with lots of overseas tourists but with the Australian borders closed it was fairly quiet. There is an abundance of lobster available now that China has banned the import of Australian lobster. The lobster fishermen are now getting A$25/kg as opposed to the A$80/kg before the ban. It’s a great time to be eating lobster!

The New South Wales government has, as a way of stimulating the local hospitality industry, given every adult in New South Wales four A$25 ‘Dine & Discovery’ vouchers. These vouchers can be used at participating restaurants and tourism companies. Doyles are a participating restaurant and so we decided to spoil ourselves with a seafood platter for two for lunch. One of the vouchers would cover half the cost. Not quite lobster, but a feast never-the-less.

Posted by Peter on 24/04/2021

Great Escape gets Antifouled

Antifouling: The process of protecting your hull from marine growth by applying a protective paint layer to the bottom of your boat.

It has been a while since Great Escape was taken out of the water and even longer since the boat was last antifouled. We could see the marine growth at the water line and it didn’t look pretty. To make matters worse, the boat had been on a swing mooring near a power station pumping out large volumes of warm water which marine life thrive in. It was time to get the boat out of the water and paint the bottom – a costly and time consuming process.


The first question was whether to do it ourselves or have a boat yard do it for us. We decided to do it ourselves for two reasons; it would be cheaper and a learning experience for us. Our experience with having people do work for us on the boat has not been good and we prefer to do the work ourselves if we can.


There is only one boat yard on Lake Macquarie at Marmong Point Marina. The staff at Marmong Point Marina were really helpful. It is quite a process antifouling a boat. Once the boat has been hauled out of the water and the bottom scraped and pressure washed, the boat is placed in a cradle and then the work really starts.


The first step is to acid wash the water line which is followed by washing the bottom of the boat with the marine equivalent of sugar soap. This is followed by sanding the bottom to get rid of all the stubborn marine growth and loose paint. We then washed the bottom with clean water and left it dry overnight. In some places the previous antifoul had worn away completely and these areas then had to be primed. This was followed by two full coats of antifoul paint.


Six days later and we were done.

Posted by Peter on 23/05/2020

The disconnect between ‘Main Street’ and ‘Wall Street’

Investopedia defines ‘Main Street’ as, “a colloquial term used by economists to refer collectively to America’s independent small businesses. It gets its name from a common name for the principal commercial street of small towns across the country. In England, the equivalent term is High Street.” ‘Wall Street’ on the other hand refers to, “big business and high finance.” Right now the disconnect between these two is about as big as it could possibly get. Not just in the USA but around the world.

Covid-19 has unleashed a financial crisis the likes of which we have not seen for a very long time. The seasonally adjusted insured unemployment rate in the USA for the week ending 25 April was 15.5% with a total of 33 million Americans filing for unemployment benefits. Some States in the USA are already running out of unemployment money and will need to borrow from the Federal Unemployment Account fairly soon.

The Washington Post on 11 May 2020 reported, “Two of President Trump’s top economic advisers projected Sunday that unemployment will climb as the coronavirus pandemic continues its sweep across the United States, with one official predicting that the unemployment rate will jump to 20 percent by next month.”

New York Governor Andrew Cuomo has stated that the coronavirus pandemic has left his State “basically bankrupt”. There are more to follow.

The USA is not alone. Every country has been affected with tens of millions of people losing their jobs. Big corporations are haemorrhaging cash (and suspending dividend payments) with no end in sight and many small businesses will not reopen when the lockdowns end. The Asian Development Bank has warned that the Covid-19 crisis could leave a US$8.8 trillion hole in the global economy.

With all this bad news one would expect the stock markets to be heading south. Apart from a small hiccup they have simply ignored all the bad news.

The Dow Jones Industrial Average (DJIA) tracks 30 well-known large companies that trade on the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (NASDAQ). The DJIA reached an all-time high of 29 551.42 on 12 February 2020 as a result of an 11 year bull market – the longest bull market in history.

The DJIA fell 1 597 points (about 6.3%) on 5 February 2020 although this was not the largest single day fall – that occurred on 29 September 2008 when the DJIA lost 777 points – almost 7% of its value. During the 1930’s Depression the DJIA lost nearly 90% of its value. The DJIA briefly entered a Bear Market earlier this year but has recovered strongly.

The DJIA closed at 24 331.32 on 8 May 2020 – a little over 17.6% off its all-time high on 12 February 2020. Most stock markets around the world have a similar pattern. News that would normally see stock markets fall sharply – like large unemployment numbers – now has them gaining ground. Wall Street is now taking bad news and turning it into good news. It makes absolutely no sense.

The disconnect between Main Street and Wall Street is starting to ring alarm bells. It would appear that greedy investors who are scared of losing out on a market bounce are prepared to accept huge risks in return for possible spikes in the market. It was John Maynard Keynes who said, “markets can stay irrational longer than you can stay solvent”. Wall Street is certainly behaving irrationally right now. Main Street is in a bad way right now and there is more pain to come and Wall Street seems to think we are about to restart the bull market. Perhaps reality will set in when companies report second quarter results.

A big part of the problem, in my opinion, is Reserve Banks pouring trillions of dollars of imaginary money into the markets. Many investors are of the opinion that Reserve Banks (especially the Federal Reserve in the USA) will do whatever it takes to protect the market and protect them from losses. They may be right – Berkshire Hathaway CEO Warren Buffet famously said, “It’s never paid to bet against America”, but he did qualify that by adding, “We come through things, but its not always a smooth ride.

Matt Egan from CNN Business on 12 May 2020 stated, “This is the most expensive time to buy stocks in 20 years.” The problem for investors is there is nowhere else to try and make money. Interest rates are at all-time lows and will remain there for some time.

Today’s investor would do well to remember Warren Buffet’s two investment rules, “Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1”. Buying shares at the most expensive time in the last 20 years in the midst of a pandemic seems to me an almost sure fire way of losing money.

It is interesting to note that Warren Buffet has just sold all of his shares in the USA’s four largest airlines – United, American, Southwest and Delta Airlines. These shares were valued at more than US$4 billion and were sold at a loss. It would seem that he favoured a smaller loss now rather than a bigger loss later. While Warren Buffet – and his research team – were selling the airline shares at a huge loss someone was buying them.

Scott Pelley from 60 Minutes interviewed Fed Chair Jerome Powell with the interview airing in the USA on Sunday 17 May 2020. During the interview Scott Pelley asks Jerome Powell, “What gives you hope in this dark time?” to which Jerome Powell replies in part, “…I would say I would never bet against the American economy or the American people.” It would appear that Warren Buffet and Jerome Powell are singing from the same hymn book.

During the interview Jerome Powell made some interesting comments about keeping the markets functioning. This is how the conversation went:

PELLEY: Fair to say you simply flooded the system with money?

POWELL: Yes. We did. That’s another way to think about it. We did.

PELLEY: Where does it come from? Do you just print it?

POWELL: We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds for other government guaranteed securities. And that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.”

So there we have it. Someone sitting behind a computer at the Fed simply creates trillions of dollars of imaginary money. Using a combination of smoke and mirrors (and some clever sounding financial terms) the Fed then lends this imaginary money to the USA government where it suddenly appears as real money for the USA government to spend. The Fed is not alone, right now all Central Banks are doing the exact same thing.

This is music to the ears of Wall Street. As long as the Fed is happy to keep pouring money into the market all is well. What could possibly go wrong? I cannot help but feel we are not too far away from the mother of all stock market corrections.


Posted by Peter on 11/05/2020

International Travel – what’s it worth?

As the world grapples with the fallout from the Covid-19 crisis, one thing that is abundantly clear is that international travel is at the back end of re-opening economies. Those countries that have managed to, using an overworked phrase, successfully flatten the curve and get their numbers under control will be loathe to suddenly open their borders and risk foreign travellers reintroducing the virus into their countries.

It will be a huge problem for those countries that rely heavily on international tourists but, with international tourism being such an important part of the world economy, almost every country will be affected. In 2018 there were 1.401 billion international tourist arrivals worldwide. These international trips generated US$256 billion in passenger transport and US$1.5 trillion in receipts at the destination. Travel for leisure and by air dominates international tourism.

In 2017, Tourism was the world’s third largest export category (US$1 586 billion) after Chemicals (US$1 993 billion) and Fuels (US$1 960 billion) and ahead of Automotive products (US 1 470 billion) and Food (US$1 466 billion). International travel is big business and vital for some countries. It is hard to believe that in a few weeks a little over US$1.7 trillion in international trade simply came to an abrupt stop. No-one knows what effect this will have on the world’s economy and it will take some time for the effects to be felt. What is however clear is that it’s going to hurt – badly.

The World Travel and Tourism Council estimate 75 million jobs are at risk and that in 2019, “Travel & Tourism’s direct, indirect and induced impact accounted for:

  • US$8.9 trillion contribution to the world’s GDP
  • 10.3% of global GDP
  • 330 million jobs, 1 in 10 around the world
  • US$1.7 trillion visitor exports (6.8% of total exports, 28.3% of global services exports)
  • US$948 billion capital investment (4.3% of total investment)”

For 2018 the top 10 international tourism destinations (by arrivals) were:

Rank Destination International Tourist Arrivals International Tourist Receipts
1 France 89.4 million US$67.3 billion
2 Spain 82.8 million US$73.8 billion
3 United States of America 76.9 million US$214.5 billion
4 China 60.7 million US$40.4 billion
5 Italy 62.1 million US$49.3 billion
6 Turkey 45.8 million US$37.1 billion
7 Mexico 41.4 million US$23.8 billion
8 Germany 38.9 million US$43.0 billion
9 Thailand 35.5 million US$63.0 billion
10 United Kingdom 37.6 million US$51.9 billion

Australia does not make the top 10 by arrival numbers (9.3 million) but ranks number 8 by International Tourist Receipts (US$ 45.0 billion).

China is the world’s largest market for outbound travellers with 150 million travellers in 2018. Approximately 10% of China’s 1.4 billion inhabitants travel internationally – well they did prior to Covid-19. Where do the Chinese go? Here are the top 10 destinations for 2018:

  1.  Hong Kong – 49 000 000
  2.  Macao – 27 500 000
  3.  Thailand – 10 100 000
  4.  Japan – 9 250 000
  5.  South Korea – 6 250 000
  6.  Vietnam – 4 800 000
  7.  Singapore – 3 600 000
  8.  Malaysia – 3 150 000
  9.  Cambodia – 2 750 000
  10.  Taiwan – 2 750 000

The United Nations World Tourism Organisation estimate that Chinese tourists overseas spent US$277.3 billion in 2018. By comparison, American tourists overseas only spent US$144.2 billion. The world desperately needs the Chinese (and everyone else for that matter) to start travelling overseas but it is hard to see how this is going to happen anytime soon. The sudden loss of overseas tourists is going to leave a gaping hole in the economies of many countries and this is going to compound the financial fallout from this crisis.

Australia and New Zealand are already floating the idea of a ‘trans-Tasman bubble’ which would see flights between the two countries resuming fairly soon and allow tourists to travel freely between the two countries. Both countries rely heavily on international tourists (and immigration) to support their economies and the loss of overseas tourists is going to put a huge dent in both governments coffers.

It is not hard to see why both countries are so keen to create a ‘trans-Tasman bubble’. There were 8.5 million international visitors to Australia in 2018 – they were arriving at a rate of 970 an hour – and 1.3 million of these visitors came from New Zealand. New Zealand tourists were second only to Chinese tourists.

For the year ending February 2020, 1 550 683 Australians travelled to New Zealand. This was more than from China (367 629) and the USA (370 879) combined. A ‘trans-Tasman bubble’ would go a long way to getting the much needed overseas tourists back in Australia and New Zealand but it would clearly be a far bigger benefit to New Zealand.

Given that both countries have been hit hard by the loss of overseas tourists it is however hard to see that either country will want to see that amount of money leaving the country and the tourism bodies in both countries will fight tooth and nail for every tourist dollar. Australia launched a ‘Holiday Here This Year’ campaign after the bush fires last year and they will no doubt be pushing that message hard.

The problem facing both Australia and New Zealand (and others who adopted a ‘go early, go hard’ approach) is that they cannot open their borders without a vaccine, unless of course they impose a 14 day quarantine for all overseas arrivals, which will in itself stop international tourists from visiting these countries.

Sweden adopted a very different approach and did not go for a hard lockdown and their infection and fatality numbers are not the worst in the world. They are in fact doing a lot better than some countries who did adopt a hard lockdown.

Sky News Australia recently interviewed Johan Giesecke – Sweden’s former state epidemiologist – who has suggested New Zealand may have to isolate international arrivals for the next decade. He makes a compelling case for Sweden taking the course that it did and if he is right those countries that adopted a ‘go early, go hard’ approach may well have wrecked their economies in vain.


While everyone desperately needs to see full planes and busy airports again I daresay it will be a while before we see those again. What is more likely is that we will see more ‘trans-Tasman bubble’ type arrangements between various countries.