Once again after clearing up two days worth of tea cups and biscuit
crumbs, the Monetary Policy Committee sent Governor Marcus into the front room
to say that interest rates were just perfect and that not enough has happened
in more than a year that was worth reacting to with a change in the price of
money. Fair enough, but it is true that consumer inflation has popped out of
the target range on the upside, the JSE All Share index is setting 4 year highs
and most companies directly exposed to consumer spending are reporting tidy sales
growth. Frankly, with that sort of data, it is hard to decide what to do with
the repo rate, so to let the sleeping dog lie seems sensible. Just check him
for a pulse from time to time.
This year the Davos jamboree for analysts and politicians clashes
with my timeshare week at St
Lucia. So even if I had cracked the nod, I
would have turned it down. No contest:
warm sea, empty beaches, cold Castles, hundreds of hippos and thousands of
crocs versus acres feet of snow, far too many overdressed people, hot chocolate
and many million words. It is not as if anyone in Davos will explain why
despite all the advice that was offered there last year, the world still spent
2011 lurching closer to another recession and Greece is even less able or likely
to repay its debts. And now there are some doubts about lending money even to France. The
fact is that borrowing in a currency that you don’t control and can’t print
when repayment time comes around, can cause embarrassment.
Mind you it is difficult to embarrass anyone who holds high office. Someone
in the presidency claimed with a straight face that having a back-up plane
shadowing the one with the Prez on board is standard procedure “in case it
suffered mechanical failure.” This raises several questions including one about
transferring the rather bulky (but nimble on his feet) JZ between aircraft if
the first one began to splutter a bit over the ocean. Far better for us all if
we just upgrade him to First Class on SAA. He might even meet his next wife on
board.
The executive placement business must also be doing well. At times
it seems that the sole news in the money pages is about executives departing or
arriving the corner office. Public sector posts seem to be the most volatile.
Shortly before having to answer cheeky questions about where the money has
gone, departing incumbents frequently choose to use the side door on their way to
begin a spell of suspension on full pay But recently the private sector
revolving doors have also been whirring. Undoubtedly the pressures of meeting
both shareholder expectations and government directives must take its toll.
For example it seems that there are new and complicated rules about
how to measure turnover. Reportedly this development has been missed by many
businesses with other things on their mind. Even in a sophisticated first world
economy these regulations must seem often pointless and nitpicking. Generally all
one tries to do is to provide goods and services of sufficient quality and
value that customers and clients will surge through the door waving money.
Enough of those unlikely beings and you can then consider hiring more employees
and so on in a happy upward spiral. The bookkeeping must simply be accurate and
capable of quickly identifying fraud and impressing bankers and shareholders. Recently
the Post Office’s own banking arm was scammed for millions. The government’s FICA
requirements did nothing to stop or identify the crooks. Simply, the managers were
not paying attention. Perhaps they were
swotting up on the turnover rules.
Soon we might learn who the new ‘bok coach is, what happened to
Cricket SA’s money, and how much time soccer players spend rehearsing their goal
scoring dance routines. Expect great heights of choreography at the upcoming
continental championships.
James Greener
20th January 2011
