The All Share index performance in May is
going to come out around -3%. This is not good news. The bear is definitely stirring. Only the
really brave or very well informed are going to claim that this drop in share
prices is exposing bargains. Company presentations to investors are full of hand
waving and hyperbolic spin avoiding the bad numbers in the penultimate slide.
Even Statistician-general (what a grand title) Lehola could not find any
lipstick that would stay on the 1.5% GDP growth pig. The daily trading ranges
of prices in the rand and bond markets are particularly wide. This is a sign of
confusion and indecision as speculators try to profit from intraday volatility
rather than ride longer term trends. Winter may have arrived here at last.
One of the big market stories of the
moment is that the regulators are pretty sure they can smell the stench of
traders fixing prices in the foreign exchange markets. Indeed every now and
then one of their quarry breaks cover and proffers money in exchange for being
left alone. For some reason these payments are not expressly referred to as
fines or admission of guilt forfeits but pretty much that is exactly what they
are.
The thing about trying to manipulate
markets is that your competition usually detects it long before the regulators
do. And the nature of the game is that they will seek a way to exploit that
suspicion and to profit from it before it gets truly exposed and blows up or is
shut down. The real “crime” in these affairs is usually the reluctance of the
mangers and supervisors to delve too deeply too soon into why a particular
trading desk is doing so incredibly well. Some traders are just very good – for
a while. But inevitably the gaps and profits will get too wide and too high to
conceal and then, as the saying goes: “The money runs out before the paper runs
out”. And then the compliance crews arrive and concoct another round of
controls to make it ever harder to buy cheap and sell expensive and in due course
this industry too will get regulated to death on the grounds of “safety and
fairness.” But life is neither of these things.
The high pitched whirring noise that
started a few days ago has a number of sources. Firstly it’s the spinning of a
web of total nonsense about why the taxpayers should pay for a great many
improvements and features at Number 1’s private home. Then it’s the din of
paper shredders and track covering devices at the homes and offices of anyone
involved in securing the 2010 Soccer World Cup for South Africa. And finally there’s
the giggling waffle from President Zuma himself as he sugar-coats the latest
set of dreadful economic numbers.
Actually the one encouraging item that we
can take from the terrier-like display by the US lawyers on FIFA’s case, is the report
that no way could be found to extract the USD10m bribe money from the National
Treasury and it had to be redirected from FIFA’s own funds. The sad thing is
the astonishing similarity of denial and innocence displayed by presidents Sceptic
Blather of FIFA and JZ of South Africa. Assuredly both are fully aware of and
implicated in their respective pits of corruption and malfeasance and both are
displaying that same impeccable mien of puzzlement and hurt.
In the next few days a man will fly a
flimsy but huge plane across the Pacific. The aircraft carries no fuel and the
flight could last 5 days. It is powered
entirely by electricity stored in batteries and charged by sunlight collected
by photo voltaic panels draped along the wings. Clearly there is a critical balance of
sunlight, battery capacity and sleep deprivation. Rather similar to South
Africans coping with load shedding. It’s a wonderful project that celebrates
and demonstrates human ingenuity and skill. Quite unlike government activity in
South Africa.
Early on Sunday morning the biannual
migration of Comrades runners from Durban
will take place. Almost as momentous will be departure of Bismarck and Jannie
(du Plessis) from the Sharks. It’s going to get rather emotional and damp eyed
at Kings Park these next couple of weeks.
James Greener
British National Biscuit Day (how could one
not mention this?)
