The end of my week in the Kruger Park was somewhat marred by returning to a house that had been burgled. Fortunately an alert neighbour heard the sound of breaking glass and the alarm siren, which prompted him to peer over the boundary wall and spot the felon loitering in the garden waiting to see if there was going to be a response from the security company patrols. The neighbour issued a few good old fashioned threats and imprecations in the so-called language of oppression and the thief vanished in a flash having had very little time other than to make a bit of a mess and pocket a few small items.
With this experience fresh in my mind, it was with some interest that I read that the police themselves make use of private security companies to guard some of their police stations. Since our response guys failed to show up I would suggest that the police ensure that they have good alert and civic-minded neighbours instead. A lot cheaper too. Just a bottle of wine and a note of thanks for each foiled robbery attempt. Of course they must ensure that the wine is not from one of those KWV cellars where they have been adding synthetic flavouring to the fruit of the vine.
There will have been quite a call for relaxing beverages of every flavour in dealing rooms world-wide this week as suddenly everyone fell in love with the US dollar again. This showed up as a 5% correction in the price of gold from its recent 22-year high of USD 457/oz. Our own rand has given up more 3% against the greenback since last Friday. Now all of this was rather unexpected since pundits had been calling the death of the dollar in ever louder and frantic tones. As I have written many times before, the science of predicting the future in financial markets (and probably in other fields as well) has a rather poor track record of success.
Yet another example of this was Thursday’s decision by the SARB not to change the repo rate. I have read at least one commentary which complained that the 15 minute pre-announcement speech seemed to hint strongly that a cut was forthcoming. However, when the Governor turned to the final page and told us that the committee had decided to do nothing, these hints were shown to be mere teasers. What that commentator must realise is that the speech part of the announcement is surely written some considerable time before the speech and probably even before the meeting of the committee. It therefore has to be pretty agnostic on the decision. I anyway have a suspicion that the final page is picked from the top of a pile of paper containing random “cuts’, “raises” and “do nothings”. It is slipped onto the bottom of the speech as the Governor enters the press conference and the announcement is as much of a surprise to the Governor as it does to the rest of us.
So next week has just four working days, less one for luck, so I would imagine that the market will be pretty quiet, perhaps just drifting south on lack of interest. It’s hard to believe that there are any situations of compelling and outstanding value that are not to be missed right now.
I trust you are getting these good rains too.
James Greener
10th December 2004
