Pretty much everyone it seems is keen to see the rand weaken. That is they think it would be a good thing if a unit of foreign currency were to cost more than it does at present. Quite how this can be made to happen is not clearly explained beyond a bit of arm waving and muttering about lower interest rates. Presumably the fact that our rates have been coming down precisely over the period when the currency has been going up is an embarrassment best left unexplored. The rand is strong because people with other currencies (except in fact the Yen) can see attractive things to do with rands. This includes the so-called carry trade which admittedly does rather depend on interest rates in South Africa being higher than elsewhere. Observe that the theory that after the world cup, demand for the rand would diminish has also been shown to be wrong. Sometimes the attraction of another nation’s money evaporates when the authorities in that country begin to behave erratically. This theory too is being disproved as the lunacy levels in the corridors of power rise. About the only sure thing is that when the currency does once again hit the skids and dollars cost R10 each, the moaning will be just as intense as at present with calls for someone to do something about it.
Equally puzzling is the strength of the equity market where the All Share index has been making a credible attack on the 30 000 level, a number it last enjoyed – on the way down - in July 2008. It is puzzling because the current round of company reports revealed no exceptional growth stories and some decidedly downbeat outlook statements. Very few companies or industries seem to think that business is undoubtedly getting better. Our largest bank is going to fire some staff. That’s not an indicator of things getting better. There is of course a world-wide scramble for yield and income and news of a blue chip company downsizing does cruelly suggest that they are doing what they can to keep shareholder earnings stable.
Talking of stable, all these headlines about SAB and Castel were a little worrying until it turns out that it had nothing to do with Castle, Mr Charles Glass’s finest brew. Groupe Castel is a brewery company that SAB are thinking about adding to their portfolio in their quest for world domination of thirsty folk. This share is always expensive but always worth buying!
It should also never be confused with SABC, which is a horror show pretending to be a national broadcaster. In actuality it is a device for transferring tax payers’ money to lucky individuals whose first task on assuming executive office is to submit a resignation letter along with a claim for large sums of money. Anyone sitting tight and displaying skill or interest in providing licence payers with a service is dismissed, but is still eligible for the going away presents. The SABC revolving door staffing policy provides newspapers with 5% of their daily content, none of which is ever read by anyone.
On the other hand there is great interest in reading where and when our president jetted off to, and particularly who went with him. Sadly, however, this information has now been classified and we shall just have wait until an overseas photographer snaps a picture of the fortunate fiancée before we know that we shall have to start saving for another wedding.
It is a small thing I know, but how do the teachers find the time to traipse off to their union conference just weeks before their pupils’ year end exams? The conference anyway seems to have developed into an acrimonious battle between political factions rather than a discourse about how to rescue the children from the failed experiment of OBE.
As usual these games events provide unmissable viewing for those of us unaware that girls did Greco-roman wrestling or that hockey was played in a shallow swamp or that SA has a strong archery squad or that synchronised swimmers wore water-proof makeup. The Sharks might need some of that stuff if the rain promised for Newlands tomorrow shows up.
James Greener
8th October 2010.
