This week we learned that a tragic and appalling terrorist outrage, this time in London, meant little for the markets. I was very surprised by this lesson, but obviously there were people who welcomed the buying opportunity offered by the initial response of a sharp dip in prices. We bears will just have to be patient and wait. Eventually, some event will destabilise the market. In all likelihood it will be a seemingly trivial announcement that will be identified well after the fact. Only sterling itself has so far suffered any modestly significant and enduring weakness. It amazes me to see that the world’s cash has been flowing solidly back into the USD. The real government deficit in that country is now so large that even a 100% tax rate would not close the gap!
I am certain that politicians worldwide will seize the opportunity afforded by these attacks to say “we told you so” and to ratchet up the restrictions and invasions on individual freedoms. It has already begun. A member of my own family arriving in Toronto from London yesterday waited an hour and a half while all in-bound luggage was X-rayed! Air travel is going to get even more tedious. The sad irony is that none of the measures put in place in the last few years managed to detect or predict yesterday’s disaster.
Did you spot our own distinguished president in the row behind the leaders of USA and France during the telecast of Prime Minister Blair’s impassioned speech at the G8 summit? In common with the other heads of government our man appeared not to be paying too much attention to the oration and his mind was obviously elsewhere. Perhaps he was wondering how soon he would be able to escape the perils of bagpipes, oatmeal and haggis and get aboard the presidential jet and its R827 per passenger catering budget. He will need something to help ease the transition from Gleneagles to Sudan – his next port of call.
After having (sort of) announced the tender winners (Basil Read Holdings up 27% this week) for the Gautrain project, the provincial premier and at least half a dozen public servants are off to London, Tokyo and Randstad (not Randburg) on a fact-finding tour. It seems that these places have “good transport, cultural and safety set-ups”. Apart from lousy timing as far as London is concerned, I would have thought that this kind of study should have taken place years ago when the project was first being planned.
Citizens, however, are less convinced that public transport is the answer and bought a record 50 000 new vehicles in June. Retail sale growth in April of 9.2% shows that the chunky pay increases for various CEO’s around town are being put to good use. The spread between the top and bottom of various pay scales is always a rich source of acrimony and accusation. It is probably one of the reasons for next Tuesday’s strike by Joburg municipal workers. However, council officials have assured residents that “services will not be disrupted”. How will we tell?
Our office move here at Watermark proceeded with little disruption to services. None of the pictures are hanging yet, but the kettle and most of the telephones are working. The computers seem to be thriving on cement dust and the local coffee bar has cancelled all plans to close. Go ‘bokke.
James Greener
8th July 2005
