As usual
there’s a tussle between bulls and bears looking for clues in the usual charts
and news items about the markets. The main story seems to be President Trump’s
determination that he knows the correct price for everything and anyone
offering stuff to his country at a lower one will be hit with a penalty tax.
While this protectionism is almost always welcomed by the local producers of
the same stuff, significant price gaps are of course a signal of an imbalance
that will in due course unwind, very often in an unforeseen manner. These days
its quite likely that the correction will have its origin in something that the
internet can do better than anything else: distribute information.
The talking
heads are mumbling about an inexorable rise in the price of money. That is
interest rates are on the up and in a world where the total amount of debt is
so much larger than ever before this is always grist to the mill of the bear. Here
in SA the debt totals and metrics are simply terrifying and that’s without
adding in the potential train smash that would be caused by the threatened EWC
(expropriation without compensation) policy that would leave mortgages in an
unexplored no man’s land. The banks have been uncharacteristically quiet about
this matter. Maybe they hope that behind the scenes negotiating is the way to
explain to communists how the modern world works.
While this
policy is likely born of a desire to punish specific sectors of the population,
it should of course apply to everyone and this possibility provided a wonderful
opportunity for the Zulu king to call an imbizo. This is a gathering dominated
by men wearing the skins and claws of endangered cat species and the turnout on
Wednesday was enormous and probably alarming for those leaders who have
discarded tribal structures in favour of the perhaps more sophisticated Westminster
style politics. The king and his audience of chiefs and headmen derive
considerable income from stewardship of almost half of the land down on this
side of the nation. They are clearly unimpressed by the possibility that EWC could
spill over into nationalising “traditionally held” land. i.e. theirs! Speakers
at the imbizo wanted not only to remove the name Natal but also hinted of some
sort of declaration of independence from RSA. Now folk who don’t live here may be quite in
favour of the idea of a Zululand UDI, seeing it as an opportunity to shed from
the rest of South Africa a large net tax-eating province. Our response is to
warn them that a visitor’s visa will be required and the costs to use our
beaches, net our sardines and attend our horse races will be swingeing. And the
Sharks would become a Test playing team. Oh, and you’ll need to ask politely
when you need some sugar.
The week’s
revelation for us clueless chumps was that the combination of corrupt tax
officials, dodgy cigarette manufacturers and allegedly health-preserving
tobacco sin tax increases, reduced the revenue collection on these items. Is it
possible that we as a nation are really smoking fewer cigarettes? Very
doubtful. Research shows that more than a third of cigarettes are sold at below
the cost of just the tax alone and so obviously have found a loophole. The
un-assessed tax billions were not wasted however. Politicians of every stripe
have been grateful recipients of donations to keep their lifestyles up to
standard.
Now that the
financial rewards for cheating in sport are so tremendous, it is a relief that
the Tour de France starts this weekend. Not that there aren’t any pill poppers taking
part there but it has become the most wonderful travelogue program on TV. The
organisers of the race and the producers of the TV coverage are total masters
at choosing routes and camera angles that show off the very best of the French
countryside. Just ignore the 200 odd lean and sweaty men peddling furiously and
focus on the other parts of the screen. Totally marvellous. The tennis is now a
grunt fest, grand prix results are suspicious, and soccer is akin to a
revivalist healing session complete with shamans and miracle cures. And for SA
fans, rugby and cricket are infested with politics. And if your rear gets bit
numb with all this sport just remember to call the Road Accident Fund chaps who
will put you in touch with someone who’ll rent you a nice comfortable chair for
a mere R1666 a month.
James Greener
Friday 6th July 2018
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