Thursday, 9 July 2015


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