This bear is starting to grow up. It is now a week since the All
Share set a record high and since then every day has seen a bit of value shaved
off the market. Some days as much as 2% has been lost The major indices suggest
that the declines have been more or less similar across the market with no area
doing worse than another. Perhaps, however, prices of the mining shares will
get a little extra battering now as a consequence of the very recent promulgation
of yet another piece of legislation that will smear more layers of restrictions
and costs on the already reeling industry. One executive in that business has
publicly stated that the new laws will cause most mines to go “ex-growth”.
Reaction from the Marxists who run the country but have never run a spaza shop
has been predictably nil.
SARB Governor Marcus has revealed that she also is deeply concerned
that the government is rapidly making matters worse. Her pointed reference to
the lack of leadership from the top will almost certainly earn her a slew of hysterical
and stinging rebukes from the various idiots and talking heads who feel the
president is unable to speak for himself. It will be interesting to see if she
manages to keep her job.
The insistence of our leaders that a socialist program WILL be the
only one permitted is terrifying and of course assured of failure. The reasons
why this bear might turn into the real deal with claws capable of tearing 25%
or more out of this market are starting to gather out in the open at the
evacuation assembly points. Parts of
this nation’s structure are now burning fiercely.
But the conflagration has not been spotted by everybody. This week brought
news that the effects of a law passed 100 years ago are to be investigated.
Reportedly that legislation, like so many today alas, proposed a political
allocation of assets – in that case, land. Probably, like the ones that are being
crammed into the statute books today, it was bad law. But there are much more
pressing problems to which the state should direct its very limited resources
than something that the market is now free to sort out on its own. Today there
is no barrier to any citizen owning any piece land – except for the tens of
thousands of hectares owned by the state which, in some places, are entrusted
to the care and whim of unelected traditional leaders. Now that’s a problem in
need of a solution. Just imagine the mobilisation of capital that would result
if true owners were granted freehold and so able to raise mortgages.
The rand recovered a little as earnest talking heads declared that
its collapse had been over done. The problem when a true bear market arrives is
that sellers get jammed in the exit doors each offering to sell their bit for
less than the previous offer. The actual true value – if indeed there is such a
thing – is nothing more that a number scribbled on a scrap of paper pinned to a
notice board in a draughty corridor. No one pays much attention. The sole price
is the one just agreed. This is true in all free markets.
The rather unusual event of a double header test match program takes
place at Kings Park this weekend. For the price of a
single ticket fans will get the opportunity to watch a test between Scotland
and Samoa before the Springboks take on Italy. Leaving aside the fact that the current state of school
geography will have many of the younger fans utterly baffled by the origins of
two nations where the men don skirts as formal wear, the real pre-match interest will again be
focussed on the demonstrated inability of the stadium organisers to provide a
pilsner in a parking lot.. A belated attempt to apply liquor licensing laws
that for decades have been far more breached than observed has resulted in
large numbers of unhappy and thirsty fans. Confusion about who can drink what
where is widespread. It will be even worse if Italy manage the unthinkable. Much
as India
did to our bowlers.
James Greener
7th June 2013
