Don’t look
now but there is a calf-sized bull market going on. Even the rand seems
enthusiastic about the future, now that a ratings agency has not as feared
downgraded our credit rating. Do be
reminded, however that similar to the situation where a company pays for an
auditor to pass judgement on their accounts, the agency also charges RSA a
hefty fee for the rating opinion. Both these processes can be and are
corruptible. Nevertheless, buyers of SA shares and bonds and currency outnumber
sellers at the moment and that’s always a nice thing. There are sparkles of
reasonable relative value glinting in the dark corners. For those of us of a
pessimistic turn though, the stories of outlandishly high salaries being paid
to both private and public managerial level employees are worrying. In the
private sector especially the income gap between cleaner and CEO is alarmingly
wide It is very unlikely that the top guys are really worth that much to the
business. The remedy is simple, we can move both our custom and our investments
elsewhere. No such route is available when it comes to buying power or water or
all the other things that politicians insist only they can supply.
In the 1940s
a very smart theoretical physicist named Richard Feynman invented a simple
looking but immensely helpful diagram to illustrate what happens in the nucleus
of an atom. What is far more difficult however is constructing a diagram that
will illustrate what exactly is going on in this nation’s so-called “security
cluster”. The first problem is to understand what are the threats and risks to
who and what, that require the dozens of opaquely named outfits that infest our
civil service and feed on the taxpayer. For instance, are there really foreign
forces at work plotting an invasion and seizure of our land and the minerals
buried beneath it? They certainly wouldn’t be coveting our workforce or
infrastructure, both of which are mostly in poor shape. The presence of all
these assorted agencies and acronyms generally comes to light only when they squabble
and bicker amongst themselves. Undoubtedly in a nation as politicised and
tribalized as ours, there are scores of factional fracas bubbling beneath the
surface. Here in KZN political assassination is sadly commonplace. And the high
taxes and duties levied on so many consumable items have spawned huge schools
of smugglers and secret salesmen. So, in theory it looks as if there is no
shortage of work for government paid spooks at every level. Nevertheless, it
would be nice for the rest of us to be assured that we are getting value and
for that we sorely need one of Prof Feynman’s diagrams.
It seems as
if only one parliamentarian has made the crucial point in the shouting match
about the Public Investment Commissioner’s “failure” to uplift the poor. Simply
that it’s not their job! The PIC is the custodian and manager of an immense
pool of wealth that belongs to hundreds of thousands of other people and which
will in due course be returned to them. And if it is an able, wise and honest
manager the amounts returned to these clients will be greater than the amounts
deposited. That’s the simple model of a retirement fund and it is not suited to
be a vehicle for investments that embody a high risk of failure. Unfortunately,
this fact is poorly understood even it seems by the PIC itself. There are many
vehicles and methods for matching people with an appetite and capacity for risk
to entrepreneurs, start-ups and other identified deserving causes but the PIC
is not one of them.
The rise and
rise of sports betting businesses is noteworthy as is their appearance as team
sponsors. There’s something just a tad disturbing about it all and the increase
in suspicions and accusations of match fixing suggests I am right. What a
curmudgeon! Every four years I am
surprised by the realisation that the rugby and cricket world cups are happening
almost back to back. What a treat. Now what’s the odds on a ‘bok win at both
events? All these new names and faces on the F1 circuit are tricky to keep up
with now that the newspapers no longer print those handy guides to teams,
drivers and calendar. And have Ferrari run out of their traditional red paint?
The replacement tomato orange colour is dreadful. So too is that so-called
light blue worn by the Cambridge crew at the Boat Race. You’d think an ancient establishment
like that would by now have seen the colour of the sky.
James Greener
Friday 5th April 2019
