Friday, 9 March 2018


The US 10-year bond yield is at a 4 year high of 2.9%pa and could easily go higher. There are signs that President Trump may be prising the dead hands of the interventionists and control freaks from the wheels and levers of the US and therefore the global economies. It’s much less comfortable letting the markets go where they will but at least one gets proper signals and as risk rises so do returns. Sightings of Bear are likely to become more frequent.
The genie is out of the bottle, and while, as usual, most news stories are about fraudulent flows of funds, the reports in between are starting to be about a very heartening pushback. Doors are being knocked on, offices are being raided and some rather simple yet searching questions are being asked. Like: “Where is the money?” Many of the previously arrogant and confident cadres are now starting to look as if they have been feeding on that nasty polony and are waving doctor’s notes excusing them from games. No wants to give the internet a chance to pounce on their lies and refute that it was not them, nor were they there and anyway they were just acting in their private capacity. Even the Constitutional Court have found their backbone and started to grumble that many of their rulings have been utterly ignored. Can the country really climb back towards the moral high ground from which our leaders fled as they scampered down into the swamp, shedding scruples and integrity like a crowd of skinny-dippers? Hmm.
Hot on the heels of the tax on sugary beverages, the tax on carbon is coming at us. The government’s sole interest in these imposts is the revenue they will raise. The scientific understanding of and justification for the government meddling in these products is almost zero. The implications of and impact on the citizens of these taxes are utterly unknown. However, like the pernicious increase in the VAT rate, these are likely never to be reviewed and repealed. Tax income is like a drug to politicians convinced of their omniscience in all things which will be good for the rabble.
The week’s good news may be hidden in the GDP numbers for the last three months of 2017. Reportedly the nation enjoyed 3.1% more economic activity than a year previously. No matter how odd this result may strike you, it’s very nearly impossible to verify from other sources. The fact that the agricultural, forestry and fishing sector was the greatest contributor to this growth seems at odds with the widespread drought conditions that most of the country complained about. But negative contributions from mining and construction do fit with the anecdotal evidence. Whatever the reliability of these results, it makes life much easier for the new Cabinet. Having a larger than expected GDP figure of R4.7 trillion as the divisor in all the calculations used to compare SA with elsewhere will come in very handy. Perhaps proper economists will one day explain to us how this fits in with that terrifying statistic that more than half of the young people in this land are unemployed. Oh wait! Just as soon as the government gives them land they will be able to join that burgeoning farming sector. Sick joke.
The comedy is provided by a Canadian bank which is starting to wonder where the Gupta clan and their costly executive jet have gone. They lent the shysters from Saxonwold quite a lot of money to buy the plane and now to the astonishment of the treasurers in Toronto and contrary to all international regulation, the plane’s tracking systems have been muted. This is not very nice. They will be dismayed further to learn that there are 55 million South Africans ahead of them in the queue also looking for their money back.
The waters around the Aussie cricket tour have become very muddy with more than a few traces of blood. The ICC is taking an inordinate interest in the rather complicated family lives of some of the players. Is this because its International Women’s Day?
James Greener
Friday 9th March 2018