Thursday 20 March 2008

DEEP IN THE DZONGA


As I write these words, the mysterious futures close-out event is about half-way done. The volumes going through the market are massive but there has been no significant impact on share prices. These were already looking weak before close-out began, driven largely, I suppose, by the rather scary drop in the gold price. This event in turn was probably a result of the gullible and chronically hopeful punters believing that the Fed’s latest dose of rescue remedy will fix the US economy. I am sure that merely reducing the price of money to below the rate of inflation will not remove the waves of suspicion and distrust that are presently washing over the financial beaches. No one who has any cash is remotely interested in lending it to anyone except to someone who will undoubtedly be able to repay it even if they have to crank up the printing presses to do so. Hence short term US government bond yields are plunging but rates for all other categories of borrower are soaring. When one of the best known banks in the world can go from hero to zero in just a day – what other nasties are coming down the road?
Back here on the southern tip, the after-tax-and-inflation rate of return for cash on call is perilously close to zero if not negative. This explains why there is a ceaseless search for something of value in the share market to buy. On the simple raw data, the metrics suggest that there are some tempting offerings in the financial sectors of the JSE. But if another big bank somewhere in the world were to follow Bear Stearns into oblivion, that would surely spark jitters about whether our own money lenders are as safe as they and Governor Mboweni claim. Therefore I would I not yet be betting the farm on this idea but perhaps just a small vegetable patch.
At ten minutes to eight this morning the planet passed through the southern hemisphere autumnal equinox and so it is now decidedly downhill to winter. Here in the big smoke an unusually cold and astonishingly wet spell coincided with the resumption of power blackouts. It is also the season of short working weeks. Yesterday the government caved in to workers (?) pressure and created one of only two working days duration at the end of April. Fortunately, I am a veteran of such events having lived in London during the UK miner’s strike in the early 70s and my advice is to keep a bottle opener, corkscrew and small torch about your person at all times. In South Africa, you can die of many things but boredom and thirst should not be among them.
For example, did you see that we have added a new word to the English Language this week? Dzonga. The government is calling for people to serve on a Digital Dzonga. It appears that this is a council that will oversee the implementation and monitoring of the switchover to digital broadcasting. As usual, as well as inviting ridicule, the state is way behind private enterprises that actually will make money from this switchover. Last week, in the wilds of KwaZulu Natal, I noticed a cell phone company team laying a fibre-optic cable near the unremarkable and very analogue village of Mtubatuba. Wait until the Dzonga hear about that. And my old friends, the Gauteng Provincial Government, forever in the dark about what they are for, are requesting proposals for Service Providers to develop a Gauteng State of Development Report. It would be all the more funny if I wasn’t paying for this nonsense.
Please enjoy a safe and happy Easter break. Sadly, I think that the Lions will go the way of all the chocolate bunnies this weekend.
James Greener
20th March 2008



Friday 7 March 2008

ON THE BRINK OF SOMETHING BIG


Friends who visit the Victoria Falls, often bring back pictures of themselves cavorting in a small pool right at the lip of the 100 m drop. I am unable to get any enjoyment at all from viewing these pictures, or even worse, contemplating splashing around in that supremely foolish venue myself. My vivid imagination worries about things like the outer edge giving way; a surge of water flushing through the pool or perhaps even a testy crocodile or hippo arriving to join them in this unnatural jacuzzi. Buying shares on the JSE at the moment fills me with the same dread. Nevertheless, some folk are doing so and coming out alive and invigorated. I watch in terror.
The Top 40 Index set a new all-time record high this week, although its stouter elder cousin, the All Share Index, has yet to do so. This gives a hint that the market performance is not evenly spread and indeed just a few of the super-sized resources shares are responsible for the fun. Most of these counters are listed on overseas exchanges as well, and so in addition to riding the huge crest of the commodities price wave they are also benefiting enormously from the collapsing rand. This it is doing with style and aplomb and having vaulted over the narrow lip, it is now plummeting into the gorge. We are, however, all certain that it will this time find a ledge to cling to and not continue to the bottom where the Zimbabwe dollar has now worth just one 25 millionth of a US dollar (and that after shedding three zeros on the way as well).
A friend and close neighbour was murdered in his home last weekend and his wife and teenage son sustained possibly fatal wounds. The incompetent bigots who claim to have the nation’s support to run my beloved country refuse to acknowledge the rapid disappearance of the necessary characteristics of a civilised and mature society. I doubt the killer will be found. The police have yet to arrest any of the assailants and intruders who in the past year were responsible for terrifying other friends in the same suburb. They do not even try to prevent so-called taxi-drivers from blockading routes and disrupting traffic that is already grid-locked on the inadequately planned and maintained roads system. The drivers are probably better armed than the police. What possible logic enables authorities to dismiss and discount the dangerous reality of life for ordinary people and visitors in this potentially wonderful land? Just how big are gifts, bribes, perks and incentives that are being offered and taken that they are able to obscure the facts? I am very very disillusioned today. Sorry.
By way of light relief I offer you the wonderful and revealing slogan that was being chanted by a crowd of women who were staging a protest at a taxi rank. Taxi-drivers are never far from the news these days. They are a conservative crowd it seems and have been harassing female passengers and passers-by that were, in their opinion, underdressed. The mini-skirted misses pointed out that “We are not road signs – you need to treat us with respect.”
I believe that we all ought to be treating the news out of the US with respect. It is not trivial when the largest economic and military nation on the planet slides into a morass of deficit, debt and doubt. It can’t even find a credible presidential candidate who might restore its dignity. Its wealth is probably a lost cause.
Tidemarks will not appear next week as I am going to hide from all this craziness in the Umfolozi bush. But not before watching the Lions pile insult on top of the injured Bulls tonight. At least one SA side will not lose this weekend.
James Greener
7th March 2007