Judging by how quiet the markets are today it seems that women around the country have been asked to celebrate their very own public holiday by loading the 4x4 with food, drink and children. I’m sure the roads out of town are filled with families off to make a long weekend of next Tuesday’s holiday. By tonight the air above the game and fishing lodges of the country will be thick with braai smoke and the local wildlife will be bolting at the sound of popping corks and snapping ring pulls.
It was just a month ago that two groups of aging performers from the world’s richer countries were squabbling over who had done the most to grant $50bn debt relief to the world’s poorer countries. At Gleneagles we had the head honchos of the G8 and from Hyde Park we had Sir Bob and another clutch of wailers. Just what mandate either group had to speak for the actual taxpayers whose money had been loaned to the dubious dust-bowl desperados and despots, was not explained. Are those citizens pleased to have the chance to write off any chance of getting at least something repaid? As I read it, folks in the UK and the USA are already in pretty dire straits on the debt front themselves. And now this week comes the report that the bureaucrats tasked with the actual job of tossing the loan ledgers into the bin are a little anxious about what this largesse will do for their own way of life. Writing off so much money will make a huge impact on their ability to carry on their business and they may just have to shut up shop. By the way, this figure of $50bn shows that our own $1bn arrangement with the other Bob is not a trivial amount. One Business Day correspondent converted this sum to about R150 per man, woman and child currently living in South Africa, many of whom would, I’m sure, be very grateful for such a handout.
This morning’s report of a speech by Governor Mboweni leaves me in no doubt that he will amble up the microphone next Thursday afternoon and proclaim a quite large drop in interest rates. Yesterday he expressed “confidence” that a growth rate of 6% was attainable. What else can he do to help this happen but tug on the only lever he has? And the Bank of England cut rates this week – which shows the way.
Normally lower interest rates and cheaper money are seen to be good for share prices. However, I find it hard to see how most of the listed companies could report even better earnings growth than they have been doing these past months. Almost every day we read of yet another large “special dividend” as companies dole out their extra cash. I have no idea what the economists mean when they waffle on about the “velocity of money” but I reckon it must been reaching the speed of light here in South Africa these days. And Einstein said that was as fast as anything could go.
I was disappointed to see the newspaper advertisement from the tax man assuring us that despite the threat of a staff strike, the “service” would be unaffected. I was quite prepared to ease their burden by cancelling my subscription to their mailing list.
I have received a message from a Kiwi friend suggesting that the All Blacks, having devoured the Lions, are now eager for a taste of Bambi. I just hope that the ‘bokke have properly digested their double helpings of Wallaby.
James Greener
5th August 2005
