Westpac pierced by a Stiletto

Since the super system came into being in 1992, annual compound growth used to run at 15 per cent. You could live off that!

Now the 20-year return on superannuation averages less than 10 per cent and the 10-year return roughly 6.5 per cent.

Unless you were a tinned-food, atomic-shelter-type hoarding your gold bars, it has been a rough ride of late. Amid all the despair, there are some good things to come from this global meltdown:

One, pressure off mortgages. Interest rates are headed lower.

Two, pressure off petrol prices. The oil price is now at eight-month lows. That's good for both consumers and business.

Three, the strong dollar is great for overseas travel.

For retirees though, who are not supposed to have a mortgage and probably can't afford much overseas travel, it's all a bit glum. And as rates fall, so do bond yields and returns on their fixed-interest investments.

Although retired investors generally back their well remunerated company boards when it comes to annual meetings and railing shareholder activists, things could get a little more terse this year when AGM season rolls around.

Things will definitely be a tad terse at the Qantas annual meeting. This reporter has a degree of sympathy for anybody running an airline. Huge staff, myriad stakeholders, high fixed costs and so on.

And in view of the economic turmoil and high oil prices, chief executive Alan Joyce hasn't exactly had clear skies. Nonetheless, the dogs are barking - or the rats are hissing perhaps. Don't be surprised if a resolution turns up in the notice of meeting seeking to depose Joyce and, perhaps, chairman Leigh Clifford.

Such is the level of antipathy among some shareholders that a vote of no confidence is potentially in the mix. Although Qantas won a few plaudits this week for trying to do something big, there is some downside to the restructuring.

First, the shift offshore won't endear management to Canberra.

The capital has had an unwritten compact with the national carrier for decades. Qantas lounge memberships, Qantas promises on unprofitable rural routes, government protection on the Pacific route, big government travel budgets, etc. That compact might not be so solid any more.

It was always expected that the Qantas cost base would be a bit higher and the jobs kept onshore.

There is also the strategic issue, too, that, in case of a war, Qantas heavy engineering needed to be entirely in Australia.

On Joyce's other flank is a resurgent Virgin Australia, led by the bridesmaid for the top job at Qantas, John Borghetti. Joyce might have beaten Borghetti for CEO but Borghetti has since won the affection of the investment community for his strategic nous - tying up a deal with Singapore Airlines in particular.

Now, as if the unions, the share price and the global aviation markets aren't enough, Joyce has Borghetti trying to nick his government and top corporate accounts accounts to boot.

Westpac - we love you long time.

August 1, 2011: the Herald reports Westpac is the financier behind "the world's biggest brothel" - an expansion of the present Stiletto brothel on Parramatta Road, Camperdown, into a 42-room megaplex. Racing identity Eddie Hayson and pornographer Malcolm Day are involved in the deal.

August 2: there is a backlash against Westpac as customers and shareholders write to the bank, and the Herald, complaining about the bank's involvement with prostitution.

Westpac informs complaining parties it is not the financier of the world's biggest brothel. The story is wrong, the bank says.

Westpac informs the Herald it is the financier of a property development on Parramatta Road which just happens to have a brothel in it. It is therefore financing a commercial property but not a brothel.

August 3: industry observers say the story is wrong anyway. Despite detailed claims in materials sent to investors and cited by the Herald, the proposed Westpac brothel, sorry, property development, is not "the world's biggest brothel".

One source cites a bordello in Thailand as the world's biggest property development with a brothel on it, another claims the Paradise Club bordello in Spain is twice the size at 80 rooms and 2700 square metres.

August 8: a source claims the Orchard Towers "four floors of whores" development in Singapore is the biggest commercial property which happens to have a brothel.

August 15: the Herald reports that Westpac has pulled out of the brothel deal, despite the fact it is only funding a commercial property.

Delecta Ltd, the company proposing the "world's biggest brothel" after a reverse takeover of Hayson's Stiletto premises, informs the Australian Stock Exchange that Westpac's funding offer has been withdrawn.

August 16: sources confirm that Westpac's board and executive had been mortified at being hauled into the public spotlight as brothel financiers, especially in view of the gender of chief executive Gail Kelly and directors Elizabeth Bryan and Carolyn Hewson. It therefore cut its ties with Delecta, Day's public company.

The happy ending: as banker to Hayson's private companies since Hayson bought the Student Prince Hotel and turned it into Stiletto 10 years ago, it is business as usual for Westpac - PR crisis averted, valued customer maintained ... and commercial property duly funded.