Joe Le Taxi

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The Holistic View

A $71 billion corporate treasury puts Michael Saylor at number five overall. Given the scheduled CAPEX of the three above him he might go past them before too long. The open question really is whether Bitcoin counts as a corporate treasury asset? The current answer seems to be no. Late last week the S&P 500 Committee decided that Strategy was not fit for inclusion in its index.  

To qualify, a stock must meet various requirements around market cap, liquidity, US domicile etc. all of which Strategy met. After doing that, it must then get past the S&P Committee. 

However, despite the company meeting all the requirements and already being included in a major stock market index, it may still be denied inclusion if the committee tasked with evaluating companies rules against adding it after taking a “holistic” view of the prospective candidate.

The “holistic view” sends shivers down my spine. It’s HR-speak, usually an excuse to deny someone who meets all the written criteria for an unspoken reason. 

It just so happens though that in this case, I agree with them. Taken as a whole, there are enough reasons to say no to Strategy. Nobody has seen this kind of business before. An entire company built on the idea that the value of fiat currency will decline faster than the prevailing rate of interest at which the company can borrow. I agree with the thesis long term, but it's hardly a mainstream view. 

Essentially, the whole thing is a put option on the financial system. Do investors understand that? Probably not. Is it suitable for someone that doesn’t want sleepless nights about their investments? Again, probably not. 

Strategy’s new website does a very neat job of breaking all the new products down. MSTR (the stock itself) and then all the preferred stock products STRD, STRK, STRC, STRF. To me it’s too much risk. Owning bitcoin is to be short fiat. Owning MSTR is to be 2x short, or more. 

Fine for Michael Saylor, less fine for ordinary mortals. Personally I want eight hours sleep, not four.

The Australian Club 

This week's Australian Club (the no ankle-socks one) guest speaker was Mr Michael Newman, a former trade minister. He apparently launched a broadside at the scale of government bureaucracy in Australia. 

“17 per cent of the working age population in Australia is now on the government payroll. In Japan, it's not 17 per cent or 15 or 10 or even eight, it is just five per cent.”

“the extent of the grift, inefficiency, inward looking focus with a strong emphasis on DEI, toxic culture, ineptitude, lack of leadership, cronyism, unethical behaviour, sabotage, toleration of underperformance, censure of outperformance and steadfast resistance to change”

Perhaps those things are true, my experience of it is rather different.  

Sad to say, the closest I truly come to looking bureaucracy in the eye is by renewing my parking permit at the local council. The process is seamless. It involves many pieces of paper which I don’t possess and spend hours having to source. By late-morning, once I have the documents which prove nothing, I head to the council. The whole circus can only be done in person, even so, there is never a queue. I simply stroll into the large airy building where the staff compete to serve me. 

I weirdly enjoy it because it is so needless yet so personable. It feels like something from 1960. They stamp pieces of paper and move them between trays. Someone behind the counter collects it, disappears inexplicably and then returns reverently with a stamped piece of paper which has presumably been approved by a nameless bureaucrat in the window seat. Then they give you the ticket like you’ve won Olympic Gold. Big smiles. “Here’s your parking permit, sir”. Only $70 for the year. Honestly, I love it. It's insane, totally unnecessary, completely made up. 

The experience is really what Universal Basic Income is. It will never be people sitting at home twiddling their thumbs, it will be pretend work. It will be a process for which there is no need, nor justification. For example, the whole parking palaver, just scan the number plate. Do I live in the area or not? 

The idea that 17% of people "work for the government” is just wrong. It’s way more. 

I suspect 25% of the time in our business is spent on complying with government mandates. Whether it be GST, Corporate Tax, Payroll Tax. Most recently we spent some time determining whether an OFFICIAL email from the government was in fact legitimate. It turns out to be from the Attorney General’s Department and relates to the use of the Identity Verification Service. 

The email is full of hot links, sent from a .io address. I don’t think they could have made it look like a phishing scam if they had tried. I still can’t believe it is from the government. On the same day we had to wade through some cyber-security stuff they sent us, which was well intended and called out many of the red-flags in their other departments' messages.

But what of it? Some people work for the government 100% of the time. Quite frankly I feel like I work for the government 25% of the time at least. It's probably true of most of us. So, in total 40% of time is ‘government work’. Even then, half the lawyers and accountants in Australia in the supposedly private sector are just helping other private sector clients comply with government stuff, isn’t that government work?  

I’m not complaining though. We need the processes, we need the forms and we all need to work for the government. 

I love Big Brother & I love the Party. 

4000 people

Nearly 10% of the ANZ workforce to be culled by Nuno. Sad times for the people involved but you’d have to say a 10% attrition rate would be considered quite normal in most parts of the banking world. Nuno did take time out to say a couple of things of interest:

“…..wants a leaner operation to, improve risk management and insists jobs aren't being lost to AI.”

Rather like Telstra who continued to reduce their headcount again in July (now down by approaching 3,000 since 2024). Their CEO was also quite clear the reductions were “not in relation to artificial intelligence”

The Commonwealth Bank went further in August, reinstating 45 people it didn’t need, who were going to be fired because of AI. No AI job cuts there either. 

Everyone really needs to relax. You aren’t going to lose your job because of AI. 

You are going to lose your job though. 

Mistral

Mistral is a French AI company. Nobody uses it because, although it's good, it’s not the best at anything.  “Le Chat” (yes they did) is about as good as GPT4 was: 

There is zero reason to engage with it. Not the best, not open source. If you want non-US, DeepSeek is better and free. Kimi-K2 is even better, and free.

Mistral just raised $1.7 billion with most of the money coming from the Dutch industrial chip giant ASML. ASML has a French CEO, Christophe Fouquet. The COO is also French, Frédéric Schneider-Maunoury.  They also hired Bruno Le Maire, Macron’s Ex-Finance minister as an adviser to the company. 

So a very French led company makes a very big investment in a French AI company. All arms length I’m sure. There are rumours that AMSL is considering relocating its HQ to France as well. Why?

Imagine you were ruler of a country, knew AI and chip manufacturing would be critical, but had neither. What would you do? How would you do it? I’m not suggesting anything sinister or wrong is happening. All of this is approved, publicly announced and might even be strategically beneficial for AMSL, who knows? 

$1.7 billion though? It would leave them hugely under-scale. Allegedly it cost $1 - $2 billion to train GPT5 and it will cost more to train GPT6 (which is in training)

Europe missed the boat, perhaps French state money and France’s energy surplus can get them back in the race. It's more interesting because it reveals something about what the French government believes to be strategically important. Rather like, I don’t want your opinion, just show me what you actually spent your money on, which the French (via a “Dutch” company) just did.

Credit to levels.io for the conspiracy here. 

Euro-Trash

Roughly translated: Which way is the railway station? 

You might recall the 2024 gamble of French President Emmanuel Macron. He decided to call national elections. It didn’t work. At first it looked like the National Front would get a majority but to avoid it Macron’s party and their partners withdrew an unprecedented number of their own candidates to avoid three way run-offs (a legitimate and understood tactic in France). 224 candidates pulled out, compared to eight in 2022. The previous record was 79 in 1997. 

As a result, France got a hung parliament with left and right well represented and the centre not so much. Since that election France has had four Prime Ministers and Macron will now have to appoint his next sacrificial lamb. 

For Prime Minister Bayrou, he gambled too. His necessary attempt to cut France’s 6% ongoing deficit was doomed to fail from the beginning. What of it though? He simply called a confidence vote knowing it was suicide and lost. He becomes the first ever French Prime Minister to lose a self-nominated confidence vote.  

Some of his proposals were never going to be vote winners. He wanted to scrap two public holidays and chose Easter Monday and Victory in Europe day. I’m not sure he could have done much worse there. 

His monetary proposals weren’t as radical. Cutting back on something called ‘Taxi-Medical Transport’. It turns out that the state compensates people in France for the cost of a trip to the hospital. The annual cost of €3 billion is up 45% since 2019.

One taxi driver was recently put on trial for claiming €2.4 million in a single year, the trial is ongoing. Joe Le Taxi insists he was simply hardworking, logging the equivalent of seven return trips to the moon in his Citroen.

There was the other usual stuff too, freeze on pensions, tax brackets etc. but it was never going to fly. Still, prior to the vote they got their full batch of 30 year bonds away for 4.43%. 

France’s official debt-to-GPP is 114%. Including public pension commitments alone (which are legally documented liabilities) it rises to 369% of GDP.  When Macron finishes (in May 2027), assuming a very low cost on the current debt stack of 2.3% and a 6% ongoing deficit, he will leave office with France holding debt at 413.4% of GDP. It’s not even vaguely credible. 

Before long Madame Christine Lagarde will ride to the rescue of France. I predict it will be her last act as President of the ECB. I think she will receive an award for it too. 

Let’s see. 

Further Information

Our August 2025 report to investors can be found here.