The Distillery: Casino mud wrestle

Scribes think John O'Neill's dirt-slinging at Crown is poor form, with one saying it could harm future business dealings.

As Australia's bitter casino war rages on, the commentariat appears to have picked the side of Crown boss James Packer. The consensus is that his rival, Echo Entertainment chairman John O'Neill, is coming off desperate and frustrated.

At The Australian, John Durie is shocked that O'Neill would air long-running grievances about Packer and their past business dealings.

"…if the opposition is slinging mud around it doesn’t help O’Neill or Echo to jump into the mud pit with them. Worse, the way he did it disclosed private talks in a manner which won’t endear him to others who want to do business with the Echo chair…O’Neill argues he had to do something to defend his company but the Echo chair knows as well as anyone the best form of defence is superior corporate performance, not a meaningless war of words."

Fairfax's Elizabeth Knight thinks O'Neill's tantrum goes to show just how frustrated the gaming boss has become.

"It wasn't a good look but it gives an insight into the pressure O'Neill must be feeling as the threat increases of Packer moving the casino battle to Brisbane, after a big victory in Sydney…it is desperate times for Echo, which O'Neill felt required desperate measures."

As for yesterday's market bounce, Knight's colleague Malcolm Maiden says the Fed's communications blitz has finally convinced investors "the so-called Bernanke Put – monetary policy that by historical standards is looser than an elephant wrangler's lariat – was being sized up for a trim, not measured for the grave.

"The US Federal Reserve and its chairman, Ben Bernanke, said nothing much that was new on Thursday morning local time ahead of local market trading. Markets rallied instead of falling as they had before because investors now get the message."

Business Spectator's Stephen Bartholomeusz, however, thinks Bernanke has been giving conflicting messages on purpose.

"… [Bernanke] appears to be trying to achieve two potentially conflicting objectives with his public commentary. Last night he clearly wanted to reassure markets and other participants in the economy that the Fed would maintain its stimulus until there were clear signs of recovery. Last month, it seems, he was trying to blow some of the froth off the bubbles of risk-taking the QE3 program has generated. … No wonder the markets are confused and volatile."

Elsewhere, The Australian Financial Review's Chanticleer columnist, Tony Boyd, is impressed Gina Rinehart’s Hancock Prospecting is powering ahead towards completing $7 billion in funding for the Roy Hill iron ore mine, even when the resources sector is beset with an endless flow of bad news. He suggests commercial bankers like the project for three reasons:

"First, it is a high quality deposit that has iron ore off-take agreements with shareholders in the mine and other parties. Second, it is happening at a time when the cost explosion bubble in West Australia has burst. Costs remain high in the mining sector but Hancock is coming to the market for about 3500 construction workers when the workers are available locally. … A third reason why commercial bankers are comfortable about putting aside precious Basel III capital for Roy Hill is that they are riding in on the coattails of some of the world’s biggest export credit agencies." 

Meanwhile, the newspaper's economics editor, Alan Mitchell, accuses Kevin Rudd of falsely invoking the memory of the Hawke-Keating reforms and of their successful accords with the unions and business.

"[Rudd], too, plans to bring together the Australian Council of Trade Unions and the Business Council of Australia and other industry groups to hammer out a reform agenda. But there is a huge difference between the Hawke-Keating accords and Rudd’s proposal. Bob Hawke and Paul Keating and then secretary of the ACTU, Bill Kelty, knew what reforms the economy needed, and they built the Accord around them. They made politics serve the nation. Rudd, the ex-diplomat, is seeking nothing more than a grand compromise between rent-seeking business and a dying union movement pining for a return to the industry plans and protectionism of the pre-Hawke era."

Mitchell’s papermate Jennifer Hewett tends to agree, although she says it's public perception that matters. For the moment, Rudd is selling himself better than Tony Abbott is.

Also in The Australian Financial Review, mining guru Matthew Stevens applauds InterOil's appointment of former Woodside Petroleum man Michael Hession as its new chief. "Because, from the look of it, InterOil is a bit of a Woodside in the making."

And finally, The Australian's Criterion columnist, Tim Boreham, examines a note from Goldman Sachs showing the correlation between Australian equities and the US market has fallen below its historical average. Boreham blames the beaten-down resources sector, which he now thinks presents some good, long-term buying opportunities.