With just a few exceptions like some
severe losses among Chinese shares and patches of untidiness on Wall Street,
most markets are trucking along blissfully unaware that the bears are
gathering. It’s nearly impossible to make a case for adding to any holdings of
any of the large capitalisation shares on the JSE and the bond market still
looks very rich to those of us who can remember yields in the ‘teens.
Unsurprisingly it was the taxpayers who
got the worst of the deal in the sale of the government’s large shareholding in
Vodacom to the state employee’s
pension fund. Apparently it was “agreed” the fund would acquire the investment
for about 90% of its market value. That this little “gift” amounts to about
R3bn, shows once again that most people playing with these numbers actually
have no grasp of just how much money this is. Shortly after this news, we were
treated to the sight of the tax commissioner and his staff padding about in
t-shirts bearing the message “Together we make tax easy”. Since there is
absolutely nothing easy about handing over our money to an incompetent and
corrupt regime unable even to keep the lights on, this message is an outrageous
display of contempt towards the sector of the population that pays the most
while being subjected to ever increasing discrimination and prejudice.
The government will use most of the approximately
R30bn raised by the sale to make yet another loan to Eskom. Most of us suspect,
however, that the first call on this cash will be for the top brass to secure
their ridiculously undeserved bonuses and that the regulator’s warranted
refusal to grant the utility a further huge price increase will be trotted out as an excuse for more and
longer power cuts.
Among the other people who didn’t receive
the money they were expecting this week were those who have made loans to the
Greek government and to Edgars, the local chain store. The official word for
this sort of event is “default” and all manner of nasty things can happen once
this happens. Chiefly of course it is that no one wants to lend more money to a
defaulter except under the most strenuous terms. i.e. at high interest rates. An
alarming aspect of the Greek development is the suggestion that the government
has been eyeing the personal savings accounts held in local banks as a
potential source of funds to keep things (like pensions and government
salaries) going. This is not unprecedented but it is a very bad habit. It will
be interesting to see if there has been a surge in demand for the so-called
cyber-currencies like Bitcoin which are much harder for politicians to steal. It
can be noted though, that the gold price hasn’t flinched. Edgars creditors are
probably going to receive some of their money back in the form of notes printed
by Edgars themselves. These are usually called share certificates.
Free market disciples are delighted by
the operating model of the Uber personal transport service. It appears to be
the near perfect marriage of modern communications and customer demand.
Understandably there is considerable squealing coming from the traditional
cabbies who are merely the latest occupation being required to adjust to
technology. Their remedy is obvious. Local authorities however, are very
alarmed that passengers don’t seem to care that their ride is neither licensed nor
inspected and perhaps not even furthering the aims of “transformation”. This
municipal concern is really about the throttling of a revenue stream as drivers
and fares now have new ways to judge the quality of each other part in the
transaction.
Now this is that weekend in the year when
sport bursts out of every pore and the potatoes give the couch a pounding.
There are horses, and tennis and cricket and rugby and bicycles and Grand Prix
and golf and athletics and even woman’s soccer. I notice that FIFA boss Sepp Blatter will also
be at home in front of the TV and won’t attend the women’s world cup soccer
final in Vancouver.
It can’t be that he’s anxious about having his collar felt by the Canadian
Mounties can it?
James Greener
Friday 3rd July 2015
