Malcolm Turnbull accused Ken Henry of 'talking his own book' - here's what the insult means in markets

Malcolm Turnbull. Photo: Stefan Postles/ Getty Images / File

After NAB chairman Ken Henry tipped a bucket over the government’s new $6.2 billion bank tax this morning through two newspaper interviews, prime minister Malcolm Turnbull and others have been responding with the vigour you might expect today.

In an interview with Adelaide radio, Turnbull said Henry was “talking his own book”. Here’s the quote:

HOST: What if Ken Henry is right and your bank levy will weaken the industry, making it more vulnerable to a future crisis?

PRIME MINISTER: Well look he is talking his own book right – he is the chairman of a bank. He knows as well as I do that the banks can well afford to pay this.

“Talking your own book” is a phrase often used casually in financial circles to dismiss the credibility of a particular analysis. (The level of derision and contempt varies, but we’ll get to that in a moment.)

It implies you are sharing a view publicly in the hope that more investors will agree with it, and take positions in line with yours, helping to drive the price action in your favour.

A simple example is a money manager saying Amazon is going to hurt Australian retailers when they are betting that shares in, say, Harvey Norman are going to fall. Wary investors sell retail stocks and the fund manager makes money.

Or you might see a portfolio manager offering an enthusiastic assessment of the outlook for the mining sector. They would be “talking their own book” if they had just bought a few million (or billion) dollars’ worth of mining shares.

Another example would be issuing a complex-sounding thesis citing various data trends to conclude there are serious concerns about the Chinese economy, when you have just taken a big position betting that the Australian dollar and iron ore are going to fall.

NAB chairman Ken Henry. Photo by Mark Nolan / Getty Images / File

Turnbull’s allegation that Henry was talking his own book essentially accuses him of defending his financial interests and those of his company. It’s rather obvious: the new bank levy will hurt bank profits and lower returns, and Henry has a direct financial interest in not seeing it proceed.

Of course, in some ways it is a banal insult: “talking your own book” can be just code for “well, he would say that, wouldn’t he?”

It’s an acceptance that naturally, people are going to analyse any issue in line with their own interests.

But it can also have a more vicious undertone. In the worst cases, accusing someone of talking their own book can imply that their view is mercenary and of little substance beyond their financial position and interests.

So it’s fun to consider just how cutting was the intent behind Turnbull’s comment about the analysis by the former head of Treasury.

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