Friday 28 December 2012

PLEASE MR PRESIDENT BE NICE TO OUR BULL MARKET



Now that he has consolidated his position as kleptocrat in chief for the next half dozen years President Zuma has obviously decided to let his true nature show through. He appears to have dispensed with the services of those minders who hitherto have so skilfully managed his “best friends with everyone” persona. Just days after axing suspected enemies from the inner circles JZ has now identified animal lovers as unsuitable role models for people of his race and culture. Given his penchant for draping himself in the skins of rare cats when dancing and praying, this announcement should really come as no surprise.
What was puzzling, however, was his choice of bribes for the rural community where he was speaking on Boxing Day. While undoubtedly useful and welcome, items such as wheelchairs, and lawnmowers are not obviously icons of African culture. The jackpot prize was a 4 room house and a bed which I am sure the lucky winner was much happier with than a beehive grass hut and a rush mat on the floor. In closing proceedings our newly assertive president promised more of the same every December 18th. Presumably someone had pointed out that dishing out goodies to the poor on the day after Christmas might be construed as a tad colonial and Eurocentric. The President travelled to his next appointment in a German car.
And of course the so called developed lands across the equator are not with out their own lunacies. In the USA there are websites counting down the time to the moment (next Monday apparently) when that country plunges over a fiscal cliff. This deadline – set so long ago when it all seemed an unlikely scenario – will enforce simultaneous tax cuts and spending boosts with possibly dreadful consequences. The simple guess, however, is that nothing much will happen this time either as the world has become quite used to the USA’s large and growing level of debt simply because their currency, the US dollar, is still the only game in town. Unavoidably there will be a day when the ridiculousness of letting one of the world’s greatest debtor nations provide the global currency standard will dawn. It will happen without any warning and very very quickly. Massive fortunes will be made and lost and the rest of us will have to stand on the sidelines and clutch our Krugerrands.
Current amusement in Euro land comes in the form a list of Greek citizens who, it is alleged, could solve that country’s budgetary crisis  at a stroke – if only they were to pay the tax they are thought to owe. The list, it seems, keeps getting lost! And when found again it is a few names shorter. Has no one managed to tap these names into a spread sheet? Is it still a grubby piece of paper bashed out on the office Olivetti many years ago?  Those of us in the real world are only too aware of the dreadful ubiquity of anything in electronic form.  In a heartbeat there are copies everywhere and it becomes impossible to lose. Clearly there is no one in the Athens bureaucracy who has any appetite for making the call to even the first name on that list asking that they pop in to the tax office for a chat. More than plates will get broken.
Have you noticed and been impressed by the sight of the All Share sniffing the 39 500 level in recent days? Undoubtedly the weekend newspapers will have hunted down excitable and quotable analysts who will gladly blather on about reaching 50 000 in 2013. After all, that’s merely 25% away. This very unexcitable old bear is still worried that the earnings that appear to driving this bull market are based on consumer spending which has “leaked” from the government’s capital budget. There really is scant evidence of that long promised and much needed infrastructural spending taking place. And that index? Well, it has been achieved on miniscule volumes. Let’s wait and see if the institutional fund managers come back from the beach in a mood to join the ride or feed the ducks.
Have a really wonderful and safe and prosperous New Year
James Greener
Full Moon December 2012.

Saturday 22 December 2012

NEAP TIDEMARKS

So it turns out that the forecasters of ancient Mexico were no better than today’s analysts at getting the future right. It is bright and sunny here in the nation’s holiday capital and no apocalypse has been evident. Not unless you count the disappointment that has overwhelmed the bulls now that the All Share may have delayed its assault on the 40 000 level. That treat looks as if it has been delayed until the New Year. Another disappointment for both bulls and bears here on the southern tip is that shortly after noon today the Earth reached the position of midsummer and will now begin to tilt the other way. That means that the hours of sunlight in each day will begin to decline as we slide downhill all the way to winter again. Very sad.
So now we know where Manguang is if not what it was for. In the words of Shakespeare’s Macbeth : “It is a tale. Told by an idiot, full of sound and fury. Signifying nothing”.  Surprisingly for one who normally wants everybody to be his friend, Jacob Zuma took note of who backed the wrong horse and indulged in a spot of vigorous reshuffling of his pack. The discards probably have little to worry about, however, because many of the replacements also have copybooks which are far from blot-free. One does not remain a pariah for long in politics especially if you can deliver a constituency of malleable voters. Will readers of my age please explain to their younger colleagues about nib pens, ink wells and copy books filled with rows of “pot hooks” displaying the desirable characteristics of “thin up and thick down”. Perhaps a word or two about blots and blotting paper will also be enlightening. Hopefully it will not be necessary also to explain who Shakespeare was.
It remains to be seen if shoehorning a highly successful billionaire into a cabinet of communists will cause a reappraisal of the rapid, alarming and soon to be unsustainable policy of entitlement. The wealthy gent in question has already  instructed his people to take a good look at any possible conflict of interests  and them presumably to act speedily to arrange the ex-trade unionist’s affairs so as not to trouble the tax man too much. There’s no point in letting the government white-ant your nest egg even if you are that government.
Despite being told what to watch for in the slog and scatter form of pyjama cricket I still find it hard to take the results too seriously, especially when we lose.  I am also baffled by yet another crisis which has just broken out at Cricket SA. It involves the SABC and money and therefore sounds pretty hard to fix. Us armchair umpires have little idea what goes on behind the scenes so we can watch the game on the small screen at home where the fridge is close at hand and the seats are much more comfortable. I suppose we ought to play our part and actually watch the adverts rather than take the opportunity to go and tend to the braai fire.
Please do have a happy and merry Christmas
All the very best
James Greener
Summer Solstice 2012.


Friday 14 December 2012

GONGED OUT IN MANGAUNG



Unless there is a fearsome counter-reaction to the latest news from China that their economy is supposedly on the mend, the JSE All Share index will be delivering a total return of around 22% for 2012. This is splendid and certainly unanticipated by most pundits (especially me) this time last year. Obviously the very steep rises in energy costs such as petrol and electricity had a far smaller impact on the wage-earning population than was forecast. Somehow and from somewhere plenty of people found more money to spend on stuff and well-run companies were able to turn this spending into better earnings which resulted in share prices being pushed up. The numbers in that category of spenders obviously swamps those on fixed incomes, who are undoubtedly having a much tougher time.
In conflict with this is a conclusion drawn from the October government cash flow data which show that the deficit is growing larger and faster than expected. The chief cause is a result of revenue (tax) collections being less munificent than forecast. This is not what might be expected if there really is a growing middle class who should be making contributions by way of income tax and VAT. Now monthly data is naturally volatile and National Treasury says that everything is going fine and not to worry. Indeed, the expenditure side is, so far, reasonably on track. However, politicians rarely do anything that will reduce spending and if the deficit worries them they will probably try and fix matters by poking about in the taxation legislation. This morning for example Chamber of Mines felt it necessary to point out that any further tax increases in their industry will be a case of flogging a dead horse. I reckon we are all pretty much taxed out these days.
Given the seemingly haphazard way in which the delegates for the ruling party conference have been selected, their powers are a bit worrying. Not only do they get to pick a party leader who will then be the nation’s (unelected) president, but they apparently will pronounce on all manner of other topics. Like the business strategy for the country’s major utility suppliers. Mind you, anyone who knows anything about telecoms, broadcasting, power generation, railways and harbours have long since been fired or retired so why not ask the delegates in Mangaung how to run a phone or an airport company. The government is now totally in thrall to a centrally planned economy and the “reds under the beds” that the previous lot warned us about are now out in the open, bouncing on the mattress and holding on to the curtains for support. Eventually something will fail.
Amid scenes of simulated amazement and astonishment, the suits in euro land claimed to discover what the rest of us have known for ages. That Greece was bust and that most lenders of money to that government were not going to get much of it back. Reportedly this admission and realisation is a “good thing” and will clear the air and encourage another set of experts to rush in and lend even more to a nation that has become very used to living beyond their means.
The 12th World Toilet Summit here in Durban has passed with very little to show for it. About the sole topic to receive any publicity was the presentation by a local team of a new waterless loo. Unfortunately for them the incessant rain and severe flooding in the province somewhat diluted the message that waterborne sewage is a luxury in places like Africa. Disappointingly there was no final communiqu̩ from the toilet-masters about the correct way to rig a toilet roll Рwith the loose end on the outside. An opportunity missed.
Unless you are keen on watching golf played in hot and muggy places there is not much sport to catch the eye. The Kings meanwhile have announced their target of finishing in the top four of the SA conference of the Super 15. This is just a clever way of saying they don’t want to come last.
James Greener
14th December 2012.