If you ever need evidence that no one knows what the future will bring, just glance at last few years’ results from the country’s largest gold mining company. If anyone should have inside knowledge about the gold market and the gold price, it must surely be these guys? Well, not really. They are still suffering mightily from the consequences of taking some large bets a few years ago that the price would not go up anything like as much as it has. They placed their bets using a portfolio of various derivative instruments. Unfortunately, for them their view was wrong and for a year or more, the losses incurred in that portfolio have totally swamped any benefits that the recent high gold price could have delivered.
Readers of Tidemarks are already well acquainted with incorrect forecasts. Just as soon as I saw governor Mboweni beaming out at the world resplendent in a blue tie, I knew that my call for a 50bp rise in rates was doomed. He and his wise men and women decided that the price of money at the moment is just right and left the repo interest rate unchanged. Immediately the pundits began to suggest that we may have reached the peak of the interest rate cycle and the All Share index promptly raced to a new high. This leaves the bears feeling ever more foolish and lonely.
Some small consolation has come this morning from the news this morning that a shortage of green bottle glass is causing a drought for drinkers of the more exotic and expensive brews. This long-time Castle drinker faces no such problems as he settles down to cheer the Lions to victory. Brown glass rules.
The Gauteng health department has taken space in the papers to call for proposals from pie suppliers. Presumably, the present supplier is not up to scratch. Judging from the particularly seedy look on the face of national health minister while addressing a press conference recently, she may well have lunched on one or more such offending items. No doubt, the matter will be elevated up the priority lists to somewhere near level of the campaign to do something about the perceived crimes.
I spent last weekend on a journey to Grahamstown and back. The number of heavy transport vehicles on the roads is astonishing. Stuff is on the move. Wherever possible I used minor roads but even there one can find signs that economic growth is affecting nearly every one. Almost every little dorpie now boats a “China City” where cheap goods are flying off the shelves. During one refuelling stop, the wire windmill vendor’s pitch to me was somewhat ruined by his having to break off to take a call on his cell phone. While poverty is undoubtedly still widespread, one does have to wonder at the statistic that cell phone networks now have connections to almost 80% of the total population. We certainly seem to have lots to say to each other. Now please will someone prise Telkom’s grasp off the data lines and let us enjoy a similar widespread access to the internet?
For a brief while in the Mountain Zebra National Park, I was blissfully out of reach of any network. Not just for this reason but for the animals and the facilities I recommend the park should you find yourself near Cradock one day. Not a bear in sight.
I am glad that cold front has moved off now. Enjoy the weekend.
James Greener
16th February 2007
