Friday, 29 July 2016


The investment guru Warren Buffet once famously noted that it was only when the tide went out that one could discover who was swimming naked. He was referring to what happens when paper profits (usually in derivative markets) are converted into actual cash.  Here in Durban after 48 hours of nearly continuous torrential rain it was the opposite effect and we discovered where the storm water drainage was lacking. It’s amazing how floods seek out the weaknesses in retaining walls. Cue a huge increase in business for the brigade of bakkie-builders. Unfortunately, the storms were concentrated along the coastline and the important dam levels are largely unchanged. Water restrictions remain in place. Should you however, require millions of empty plastic bottles, the beaches here are where you need to go,
We are back into a season of four day weeks. South Africans have become very comfortable with being given a day off to vote. Election day is next Wednesday and on the following Tuesday we shall celebrate women. This might be expected to put a small dent in the productivity figures for August but that statistic is under pressure from far greater forces than just not going to work. The ever flamboyant yellow-suited Statistician-General Pali Lehola (does any other nation have a civil servant like this?)  seemed strangely enthusiastic when releasing the latest awful employment numbers. It is both heartening and astonishing that the party never thought to embargo these numbers until after the election.
Yet again the papers carried a group photo of the dozens of sleek and self-satisfied looking delegates who attended a recent meeting of the G-20 finance ministers and central bank governors. The accompanying report gravely noted that this mob vowed “to boost global growth”. Gosh, thanks guys (and a few dolls). But wait, isn’t that bolted on to all your job descriptions anyway and didn’t you say that last time? And the time before that?  However clever and well intentioned these leaders of our economies are, their interventions are mostly irrelevant and ineffective. As our own Governor so lucidly explained “... low growth has nothing to do with technical factors that have to be dealt with by monetary policy. The slowdown … has to do with structural impediments.”  Yup. Like poor personal safety, threatened property rights and restrictions on the use of capital and labour.
Eskom is looking for a contractor who will gather intelligence, analyse forensic evidence and probe crime syndicates. The task is to reduce electricity theft. Actually what they need is a man with a good set of wire cutters. Perhaps also cutting off the supply to any sub-station with illegal connections would also quickly gain the attention and support of the legal paying consumers drawing their power from that box. Any one reporting an illegal connection should be rewarded with a month’s free electricity.
Nedbank’s Divisional Executive of Transactional Banking, Forex and Investments has taken a quarter page advertorial in the daily newspaper to try and teach readers about compound interest. Through no fault of her own, the typesetter has failed to print the basic formula correctly, but it is odd that her schedule of illustrative values uses a product not currently offered by her employer. That is 10%pa interest (apparently tax-free) compounded annually. Further, there is substantial confusion between present and future the schedule of illustrative results The investment made today appears to decrease in nominal value in future years. Undoubtedly the Divisional Executive does know what she is doing but it’s unlikely that depositors are excited by this piece.
Compared to the interminable round robin stages of the Super Rugby tournament, the play-offs are brutally quick. With just the Lions left out of the three SA contenders it’s all or nothing tomorrow at Ellis Park. They so deserve to win. I’ll be in my red cap shouting at the screen.
James Greener
Friday 29th July 2016