So that was yet another one of those short weeks. This time we took Wednesday off to vote. The JSE All Share index has become rather range-bound and peaceful. It is a relief that the election is over and we will have a break from having to sit through threats and promises none of which will ever happen. There are probably very few listed companies that will feel an immediate impact from the election result. The wave of company reports now swelling the newspaper pages are as usual mixed but the business of lending money does seem to be trickier than before. The brewer of my favourite lager seems to have found new customers to replace my demand that has been reduced for reasons of weather and weight gain. The bond market has gone sharply stronger. Presumably the feeling is that an increased opposition presence in the council chambers of the nation might somewhat slow down the larceny and looting of public money.
One of those periodic squabbles about inflation has broken out. Many people feel that their purses and wallets are under far more pressure than the official numbers claim. They are probably quite correct. The CPI is theoretically an average of everyone’s shopping baskets and therefore is not equivalent to any single one. However, despite that, I have never met anyone whose personal basket has under performed the CPI. Doubtless we will soon see a tirade from the eccentric and irascible Chief Statistician who will defend his figures and ridicule those of us who don’t understand “how to do statistics.” In the USA, a project using the internet has been launched that aims to use thousands of consumers to sample and report millions of prices more or less continuously.. It will be interesting to see the results. The bad news of getting a higher inflation figure than the official one is of course that unions and workers will seize on it when wage negotiations come around. I am not sure what will happen if the project reveals an inflation number more benign than the official statistic though.
After yet another round of most Central Banks – including our own – deciding that the price of money is just perfect and there is no need to raise interest rates, lending is still not really growing. In the US, housing prices are falling markedly in several areas and many mortgage holders owe the bank much more than their property is now worth. In some cases the householder has stopped repaying that debt and, confident that it will take a year or more for eviction to be enforced, is using the money to cope with rising fuel and energy prices. It is all very messy.
While there are dreadful personal tragedies surrounding the debacle, it is hard not to find huge amusement in the fact that a large and deeply self important international bureaucracy received a note from its CEO regretting that he would have to quit since he was in prison. Surprisingly a rather undignified scrum of candidates has formed for this cushy job involving luxury travel, lengthy meetings and laborious press statements. Even our own Mr Manuel has reportedly thrown his hat into the ring. The scandal has had the welcome effect of bringing the IMF into the public eye especially in the USA where tax payers are stating to ask questions. Why, for example, are they the largest supporter of this slush fund which seems to spend its money firstly on creature comforts for its own staff and secondly on hand-outs to dodgy work-shy foreigners.
It is painful and embarrassing to me that cricket is now so obviously ruled and played by many venal scoundrels. Sadly, SA was one of first places to unearth them in the top levels and the lack of respect for the supporters is still present despite that dreadful episode. I was even rather grateful not to have to watch the national captain run through his list of clichés and platitudes about getting stronger and learning from failure because he chose not to return home after the World Cup. Now we have the dreadful sight of the sport’s bosses denying that they have stolen money that so clearly should not have gone to them alone. Is the Super15 crooked too?
James Greener
20th May 2011
