We are all now only too familiar with the host of rules and regulations that apply whenever we want to do something as simple as open an account or carry out some other mundane financial task. There must be computers world-wide stuffed full of records of my mother’s maiden name, proof of my home address and the number of times I have spent exorbitant sums at angling supply shops.
This morning I discovered that my cheque for R72.00 made out to the City of Johannesburg, for a trailer licence, had been deposited into an account named Kolgans Visserye. This looked a bit fishy. The bank’s reaction on being told of this potential fraud was quite disappointing. My report was not the first to alert them to the possibility that a fishmonger appeared to be acting as the city treasury. And when I told them that I had received the licence, they lost interest completely suggesting that the city would not have issued it unless they had received my payment successfully. I am not comforted by this view, especially when we get yet another headline that R1bn has been written off by the city in unpaid accounts.
Investors in and clients of the New York broking firm called Refco, have also been obliged to write off very substantial sums. It seems that major fraud may be to blame for this, the fourth largest bankruptcy in US history. This collapse adds to my growing unease about the situation in the largest market in the world. The US long bond yields are again on the up and all those innovative mortgage schemes will surely begin to hurt the vitally important US consumer’s ability to spend. The Dow has ricocheted about a bit this week, driving the technical analysts into a frenzy of speculation about head and shoulder formations and the like.
But when it comes to bouncing, our own all share index has been giving us a foretaste of the unpredictable behaviour that we will see in the struggle at Loftus tomorrow. With moves of almost 5% from one day’s high to the next’s low, followed by a near complete recovery, the “timing is everything” school of investment has been getting a thorough testing. I hang on to my view that we have seen the top and that down is now the main trend for sometime.
Governor Mboweni has returned from an overseas junket and has been hogging the headlines with startling doubts about his performance in his previous job as minister of labour. And while we were trying to digest that one, he slipped in a hint that he thinks interest rates are too low. This had little impact on the equity market this morning which has lost scores of people to their half-term hideaways in the bush and on the beach. Turnover today will be about the lowest recorded this month.
Fortunately, other records this month include some decent rainfall in Gauteng and our new colleague from the Cape has been suitably impressed by the ferocity of the highveld thunder storms. We just don’t need one tonight please when I stroll down to Wanderers to watch SA take revenge on the Kiwis for lifting the tri-nations. It will be my first time at a 20-20 cricket game so I am interested to see it all.
Only two shares (Lonmin & Reunert) in the top 50 list are up so far this month. Who got that one right?
James Greener
21st October 2005
