If you didn’t understand “volatility” a few weeks ago, and if you have been watching the markets in recent days you have been on a steep learning curve. Wednesday’s low in the All Share index was almost 10% below the high achieved just 5 weeks earlier. The recovery since then has been patchy and to me at least, unconvincing. A popular whipping boy for this see-sawing is next week’s futures close out event. That’s the affair that takes place every three months on some mysteriously selected Thursday. For a few hours around noon, normally relaxed traders tense up a bit and don’t stray too far from their screens. When it’s all over, they go off to the close-out party and try to obliterate all memories of the day. Cell phones ring unceasingly as back-office staff try, with increasing desperation, to contact them to confirm the deals that occur in huge numbers during those frantic 100 minutes. It’s all good clean fun with, theoretically, as much money won as lost.
One reason that my inherent bearish nature has regained the upper hand is the sharp up-tick in the US 10-year bond yields. For a nation that has as much debt as GW Bush’s subjects do, rising rates just have to be bad news and must inevitably curtail the number of Chinese-built toys and gadgets that they can buy. And an American consumer who isn’t consuming, is bad news for the world.
In lighter vein my favourite story of the week just has to be the decision by Transnet workers (?) to postpone their strike “to allow workers in Gauteng to show support for former Deputy President Zuma, who is appearing in court on rape charges.” Does that mean that, unlike when they are on strike, they will still be paid while dancing outside the court?
In the view of some trade union bodies, the serious problem with a shortage of electrical power in the country is because Eskom were distracted from their duties by having to think about how to privatise the company. Equally puzzling was a warning from the same parties to government that it would not be pleased if any meeting called to discuss the shortages failed “to break out of the existing construct of electricity generation, distribution, supply and cost.” I hope this was a misquote. Surely that’s exactly what the problem is?
I am not a great movie goer and am unlikely to see South Africa’s Oscar-winning film, Tsotsi. However, we have to congratulate everyone who was involved in this triumph while lamenting that it may reinforce the global perception that crime is our national competitive advantage.
Without dwelling on the many rugby and cricket matches that are taking place against the fellows from down-under this weekend, I can point out another area where we are undoubtedly ahead of much of the world. Thursday’s Business Day carried a startling colour picture of huge bloated white cow carcasses lying on a beach in Perth. The caption eased the shock somewhat by revealing that these were “art” pieces, rejoicing under the title: “B(l)eached Cows”. Not even this witty name can avoid the fact that our own herd of colourful charity-collecting cattle were much pleasanter to have around. Surely not even Aussies can sun-bathe next to a model of a long dead cow?
James Greener
10th March 2006
