SAY WHAT?

Krugerrands are back trading at over R20 000 a coin. This happened last in 2016 and is the combined result of a soggy rand and a perkier dollar gold price. The fascination with this investment device is its utter invisibility to the tax authorities – even when they are not on strike – and the role its price pays as an indicator of perceptions about South Africa. Not a lot is the current indication.

Once again the great and good in the business of setting the price of money itself, met in Pretoria this week and made no change to the repo (repurchase) interest rate  When not coping with President Cyril’s rapid mind changes about whether or not to nationalise the Reserve Bank, the staff there must surely notice that whatever they have done (mostly nothing) in the last few years with the one really big lever at their disposal, our economy is still in a deep hole. Isn’t it time to do something different? The most radical move would be to step away from control by committee and let the markets compete for the short-term funding provided by the central bank. When this was last tried 20 years ago, collusion between the borrowers brought the experiment to a halt. Maybe the staff could do some thinking about how to curb that practice instead of just waiting for the next meeting in 2 months. If the repo rate is a critical barrier to getting the country back to productive work, assuredly the market will diagnose that and correct it. Instead we all are obliged to spend way too much time and energy filling in forms for government officials to lose. The global evidence is that the real barrier to actual economic freedom and growth is the number of those unproductive government officials who on May 8^th will undoubtedly vote to keep their jobs which seems to consist mostly of stopping the private sector from doing theirs.

Like the famous tale about the bank robber who explained to the judge that he robbed banks because that’s where the money was, the story here involves the Public Investment Commissioner. It is the custodian of the single biggest stash of other people’s wealth in the country and guess what? A never-ending stream of people line up at his door with a story about what riches they could create if they were granted just a tiny bit of this pot to invest. What the split is between scams and actual success is not easy to say, as it is the blow-outs that (eventually) get the publicity. What’s very worrying is how many of the scams have an inside job component. And very senior too. This week the acting CEO was suspended.

A perfect example of the fallacy that human rights exist was provided in South Africa this week by a government body called the Human Rights Commission. This completely racist organisation, totally in thrall to the anti-white factions in this country, explained to the world that the meaning of the words “human” and “hate” can be determined only after the history and circumstances of the aggressor and victim are considered. They claimed that in judging whether an incident was a hate crime deserving censure and punishment or just a minor offensive moment easily excused, depended on who said or did what to whom. Malema’s calls for genocide (but not right now) was apparently in the latter category. Outrageous.

What might jokingly be called the main stream media (MSM) here in SA probably consists of the state broadcaster and two newspaper groups, both in remarkably poor financial health. The latter two devote way too much space pointing out each other’s shortcomings but I suppose that’s cheap and easier to do than despatching reporters. But what these guys have done is to make the white male all but disappear from South Africa. In just a few years the MSM have found a South Africa where people like me have no role to play except of course for paying tax and operating rescue services -- which includes keeping politicians and their kin out of jail. It’s a remarkable feat, made a little easier perhaps by the departure of many of these people from their homeland.

The Duckworth-Lewis formula used to decide the outcome of a shortened limited overs cricket match has been around a long time and there must be stats to test if it favours the side batting first. Old D & L have certainly handed the Sri Lankans some tough decisions recently.

James Greener

Friday 29^th March 2019

WHAT ELSE DOES CYRIL NOT KNOW ABOUT?

As usual when there are any number of news items that might concern investors, the money still flows into the markets. Even the US 10-year bond yields are falling to the point where they are just about to trade lower than the Fed Funds rate of 2.5%. Not that this is a signal for panic, but it doesn’t happen very often that short term money yields more than long term money

There are more than 29 000 South Africans resident abroad who have been registered to vote in the forthcoming election. This feels like a big number until the IEC also announce that they are planning to print 50 million ballot papers. But there are just 23 million eligible local voters. Who got the contract to print at least twice as many papers than required? There must be a simple explanation – like expecting power cuts to halve production perhaps.

Our President is rarely pictured without a broad smile on his face.  Even when he got stuck on a commuter train which was delayed four hours. But the nation was both amused and incredulous when said that until then he was unaware how bad the train system was. Then, his keynote speech on Human Right Day public holiday likened the energy crisis to the apartheid “challenge” – a similarity that is both inappropriate and wrong. Apartheid was a deliberate, horrific, exclusion by government of a targeted group of its citizens. The power cuts which are affecting the whole nation are the consequence of a total failure by government to understand  about the effect that mobility and scarcity of the crucial skills and experience has on running a competitive economy in the 21^st century.

Pres. Cyril must be annoyed by his predecessor (Jacob Zuma) offering opinions to anyone who will listen. Just for a start he thinks that he is being victimised by unnamed “big people” both here and overseas who would like to see him simply “disappear”. Now Russian President Putin is undoubtedly a “big person” who JZ rubbed up the wrong way by resigning from office shortly before supposedly inking a huge contract to provide South Africa with nuclear power plants. Today JZ claims that our current electricity woes are due to that deal collapsing. Which shows how, like pretty much everybody else in this country, he is also clueless about how long it takes to get a massive project like a power station built and operating from scratch. Even if that deal had gone through two years ago, the argument about where to put it would be just warming up. And the Guptas would be trying to wangle a uranium mine for free.

Truck-loads of accountants have now released the much-anticipated initial report of how Steinhoff, the JSE-listed furniture business, became so big and then so broke, so quickly. Steinhoff -- or what is left of it -- however, decided that this analysis of what their own accountants had been doing would upset sensitive viewers and released only a summary which still ran to 10 pages and reportedly revealed that the can of worms was much older that expected. Not only the burned investors but all observers are appalled that the company can keep so much still hidden from view. The truth is that accounting as practiced by those who intend to deceive will always outstrip those who are trusting.  Hence it will take years and many more skilled heads right up to the rank of judges before a conviction of anyone implicated in the Steinhoff fraud will happen.

The newly launched Capitalist Party of South Africa want to end the “tyranny of incompetence in South Africa”. A fantastic phrase. The Purple Cow logo is also memorable. Unfortunately, they may battle to gain traction and visibility in the short time until the May 8 election. But their explanation about how our proportional representation voting system can work in favour of small parties is interesting. Are there enough thinking people on line to spread the news of their presence, because for sure the newspapers won’t or can’t. They don’t have the capacity even to cover the catastrophes left in the wake of cyclone Idai.

I don’t think I have seen the Super Over phenomenon in T20 before. Thank goodness for Natal boy David Miller doing the necessary with a six and change.

James Greener

Friday 22^nd March 2019

THE IDEAS OF MARCH

Our runt has lost around 10% of its value against the “big” currencies in the past 6 weeks. Another similar sized drop will take us to the lows reached in September last year. This is very disappointing news and instead of looking to make announcements abut relaxing barriers to business and trade, the very unhelpful plan to nationalise the Reserve Bank is getting all the government’s economic attention. Marxists are so misguided when they believe that a central bank can control a currency. Just who is responsible for the rand’s current decline is unknown but it’s certain that there are more rands being offered than there dollars (or pounds etc) to buy them.

And in the Party HQs the drawing up of the electoral “lists” are in full swing. These reveal each person’s place in the party’s standing order. So far the number of utter deadbeats, failures and frauds named by the ANC make it clear that this list must have formed part of the deal that was struck to allow Cyril to become president. Absolutely no intelligent free-acting politician promising a New Dawn would have selected so many bad ‘uns.

For those of us not actually trying to run a university infiltrated with young people who are so obviously unsuited to become graduates, it seems easy. Simply identify and immediately ban from ever attending any tertiary learning institution in this country, anyone who is violent or destroys property. While these folk may one day become politicians and join the other bottom-feeders sucking on the public purse, their present behaviour is totally undeserving of  support by taxpayers.  Oh, and any loans that they have received from the state so far, must be repaid. Of course, the authorities are hamstrung by bleeding hearts wittering on about “rights” – things which never existed --- and a pitifully slow and expensive legal system.

Obviously the Eurocentric jokiness of April Fool’s Day has no place in the deadly serious agenda for the board meeting of the New Development Bank to take place in Cape Town on that day. Remember this is the outfit formed by the BRICS nations to do all kinds of good stuff in a “Partnership for Sustainable Development” The press release goes on in this vein of mumbo jumbo for many paragraphs before hinting at the real issue which is “that there still exists a wide financing deficit”. Ah. Fancy that. There’s the punch line. Usual thing. More money out than money in. Pesky capitalists – always droning on about getting a return on their investment.

Not all of the cabinet ministers dozed trough the explanation about the Fourth Industrial Revolution. Quite a few have recently woven the neat phrase into recent speeches to demonstrate how on top of things they are. But they didn’t study the handout to the talk that warns that all this clever stuff could see about half the current jobs simply disappear. Hmm. Best not get too excited about the future until all the kids can read and count and then develop clever, fast selling computer games. And accounting apps that catch the crooks.

Not too long ago a million of anything, especially money, was a great deal. Those of us slightly more used to big numbers and scientific terminology could glibly talk about k for thousands, “bar” for a million and even a “yard” for a billion. The fun was to watch journalists (and presidents) stumble over getting the terminology right. But now in the age of the Guptas, Joostes and government scale corruption, anything less than a billion is chump change. Although criminals seem not yet able to talk of trillions they are already in use in our GDP and government expenditure records, and of course the three largest shares on the JSE have market cap measured in trillions.

The death of Charlie Whiting, the key man at any F1 race just days before the new season begins in Australia this weekend, is immensely sad. Amongst the egos and the money in that sport he seemed like a good guy. Because of his obsession with safety there are more drivers alive than deserve to be. Whether a similar outcome has happened in rugby because of close monitoring of the tip-tackle is much harder to say.

James Greener

Friday 15^th March 2019