Friday, 9 June 2017

Edition No. DCI

There are definite signs that sellers on the JSE are thinking that accepting a lower price is better than waiting. It’s nowhere near a crash or panic yet and presumably there are buyers pleased with their "bargains”, but there’s not been anything like this for a couple of years.  There is still a great deal of weakening needed if prices are to reach the tempting valuation levels of a decade ago so a lot more patience is probably sensible. Meanwhile the reasons being offered for this pull back make for interesting reading. The rand is not soggy so it’s probably not offshore selling. It would be odd if investors were suddenly being spooked by the further revelations from the leaked “Guptagate” emails. Maybe it is the “recession” news? But no observer of the local business scene can have been surprised by that surely? Curious.
Full appreciation and understanding of what the Gross Domestic Product figures published every quarter by Stats SA actually represent, is reserved only for those who have endured many years of instruction at the feet of experts. The rest of us must just accept that if the numbers go down it’s a bad thing and if they go up it’s a good thing. Furthermore, if they go down for two quarters in a row it is officially a very bad thing and the banner bearing the dreaded word “Recession” is hoisted and pundits are expected to be especially grave and gloomy. We have remarked before at the mathematical precariousness of all this nonsense which falls into the danger category of small differences of large numbers.
For example, this week’s shocking figure of -0.66% pa is the result of a R5 billon decline in a R3 trillion total. Remember also that some of the contributing data in this calculation were generated by developments as long ago as October 2016.  It’s doubtful that a nation where 12 000 dead people remain on a register of approved suppliers to government can really aspire to the implied degree of accuracy that the reams of GDP data promise. This is not to deny that the South African economy is in very poor shape but rather to suggest that there are other more sensitive and accurate measures of how much trouble we are in. Chief amongst these is the number of beneficiaries of social grants and the total amount distributed every month. This is a figure that ought to be displayed in lights on Table Mountain and MP’s salaries reduced by a matching amount every time it rises.
Unfortunately, the lure of the socialists’ promises of free stuff and the surprise that democracy can deliver the unexpected like Brexit has produced an unexciting UK General Election outcome. Just more bureaucrats to shuffle paper and issue advice on diversity and tolerance and health and safety. It is astonishing how accepting and complacent people have become even in the face of outrageous acts of villainy and terror. A few more teddy bears and bunches of flowers placed on the blood-stained pavement seems to be all that is required. Almost no one appears to be howling for strong government response. Here in SA our murdered farmers don’t even get a mention let alone the ruthless and merciless police action that all these events deserve. And now there’s suggestions that the killer fires in the Knysna area might well have been deliberately started. The politicians meanwhile squabble about the meaning of words.
The lore here on the edge of the Indian Ocean is that when the aloes begin to bloom then the sardines will arrive and winter is truly underway. And then the ‘bokke start to play tests. When we last saw them in action they seemed to have lost their way entirely. Tomorrow they meet France at Loftus. Oh dear it’s going to be a tense crowd around the TV with plenty of shouting. The good news is that the baby ‘bokke seem to have struck form in their tournament but the Proteas took one in the face from Duckworth and his chum Lewis this week. As discussed above, this maths stuff is hard.
This is the 601st edition of Tidemarks and a ramble through the back numbers ( )  shows that a healthy disdain for officialdom has rarely been unwarranted.
James Greener
Friday 9th June 2017