Naturally, the All Share index claimed another record high this week. However, a few hours later, Governor Mboweni, glowing prodigiously in the spotlights, spoilt the party with a half percentage point rise in interest rates. Without dwelling on my ever deepening confusion about why an increase in the price of money is supposed to slow the rate of increase in the price of everything else, we note that the rand strengthened and share prices have mostly slipped a bit. Something was almost bound to come along and put a brake on the incredible JSE price surge of the last six weeks. And it might as well have been the Governor and his committee of monetary policy wonks. Obligingly, not long after the TV screens reverted to the soaps, the largest listed credit-dependant furniture retailer published a trading statement to warn that they were not earning as much as they had hoped. Realise that the store’s experience of customer reluctance was from a period probably unaffected by even the rate hike before this one and you might agree with me that this Thursday’s action was unnecessary. Certain areas of the economy are already slowing down all on their own.
Talking of slowing down, did you see the enormous map of Gauteng published in the press today? In intricate detail, it shows the plans the bureaucrats have for alleviating the dreadful and wasteful congestion on the region’s roads. Before my eyes gave up, the main thing I could see were seemingly dozens of toll plazas every couple of kilometres along the main arterial routes. That should speed things up nicely. Actually, it would certainly ensure that the heavy construction boom continued for much longer.
I am delighted to see that some real engineers have told the suits at Eskom not to mislead their customers by claiming that wet coal is responsible for a portion of the electrical power shortages we are suffering. This lame excuse was obviously thought up by someone who’s sole understanding of how thermal power stations work is obtained from occasional visits to the staff canteens at these places. A poorly planned maintenance program that has taken far too many generating sets out of commission simultaneously is obviously the problem.
By contrast, the efficiency of the privately operated cell phone networks was amply demonstrated this week. An innocent observation that an unusually heavy rain cloud was approaching Joburg, mutated into an SMS text avalanche that convinced many folk that every known form of extreme weather was about to hit the town. People fled for home causing even more traffic chaos than usual and confused dogs, cats and family members were herded into cupboards and under beds to await the hurricane /tornado /tsunami /earthquake. In the end, it rained quite a bit and an irritating cold front hung around for too long. Predictably, already a government official has decided that it is the state’s task to ensure that nervous citizens will not get spooked in this way again. I await his plan with interest. Perhaps it will have application in these markets as well?
South Africans are already very nervous, having slowly returned to normality after several days of wildly celebrating the departure of the Aussie and Kiwi teams from the World Cup. Normal breathing will return only late on Sunday night after the ‘bokke have ensured that they will be the southern hemisphere nation to go into the final. This is very tense stuff. I need to leave now and prepare for the real storms that are about to burst on the TV set. Two bottle stores were out of Castle last Saturday! Biltong futures are through the roof.
James Greener
12th October 2007
