Re-treading a
previous Governor of the Reserve Bank and fitting him up as Minister of Finance
has been well received by the currency and bond markets. But the share market
is fretting about other stuff that investors think Tito Mboweni can’t influence
in the medium term. The All Share (without resource shares) has weakened more
than 10% in recent weeks and is testing a 12-month low.
The latest word
to be misused and shorn of its meaning by the kleptocrats is “bank”. Very simply
a bank attracts depositors to put their cash with them in return for regular
interest payments and at the very least their capital back. Borrowers approach
the bank for loans and expect not only to pay interest on the money borrowed
but also in due time repay the capital. The bank profits from an (ahem) modest
difference between deposit and lending interest rates. The possibility of
failure to perform on either side of this transaction is coyly referred to as
“credit risk”. The VBS Mutual Bank debacle is setting new standards for this
phenomenon. Neither most of the lenders nor some of the borrowers have any
right to be dealing with a mutual bank and huge sums of money have gone
missing. Unsurprisingly it was VBS Bank which supposedly granted a mortgage to
President Zuma when he was instructed to pay back the money spent on his
private home.
The technical
aspects of the internationally agreed changeover of the method of broadcasting
the meagre content of our nationally owned TV stations from analogue to digital
are at all difficult. But a political fly in the ointment, together with an
opportunity to divert money in unusual directions blew this project up into the
so-called set-top box debacle. Politicians fretted that without this piece of
equipment, voters would be unable to see them! The government therefore decided
that they would give boxes to many tens of thousands of households identified
as poor, despite them owning a TV set, having an electricity supply and
presumably paying for an annual TV licence. The contracts to make and supply
these boxes obviously provided an opportunity for a spot of cash-flow
harvesting. But the far bigger prize in the broadcasting business lurks in the
money that viewers are prepared to pay for good new content like movies, series
and sport. However, the providers of this lucrative content will sell it only
to those broadcasters capable in turn of identifying and charging their own
customers. Multichoice (DSTV) is currently the sole South African broadcaster
able to do this and their charge of almost R1000 a month for the “full bouquet”
of content is well worth defending. Allegedly, Multichoice have long been
involved in frank and meaningful discussions with ministers and bureaucrats
about keeping encryption (the tool that gives DSTV the power to control who can
see what) out of the set-top boxes. This of course would perpetuate their
monopoly on selling desirable content. But now, at just the wrong time for everyone
contemplating monopolistic practices, the internet has begun to upset the
status quo. Copious and cheaper content can now be delivered directly to
viewers without the need for dish antennae and decoders or the infamous boxes. Watch
this space!
The
profile on the SARS website for Mrs Mmamathe Makhekhe-Mokhuane, their Chief
Officer: Digital Information Services and Technology is quite impressive. But in
two TV interviews on Wednesday, not so much. Among a slew of non-sequiturs,
unanswered questions and alarmingly clueless rambling she demonstrated also that
her understanding of choral ensembles needs some tuning. She lamented that
since its formation in 1967 the Drakensburg Boys Choir had not yet included a
single woman. What relevance this has in supporting her demand for R2bn to fix
the IT mess she claims to have inherited is unknown. But with that kind of
thinking this lady must be a gift for even the most inept salesman with a tax
system to sell. Meanwhile the rest of us are uncertain whether to be delighted
that the tax collection system is allegedly on the brink of collapse or
terrified to contemplate a nation where government salaries and state grants
are not paid timeously.
Is the
Currie Cup a league format or a knock-out competition? Judging by the turnouts
last week, fans don’t much care for domestic rugby by this stage in the season
anyway.
James Greener
Friday 19th October 2018
