COME ON THE ‘BOKKE

Riots are the weapon of angry, frustrated and ignored young men and women. Here in South Africa their puzzling and illogical targets for wanton destruction are schools and other places of learning.  The obvious sufferers are usually the younger men and women of the rioter’s district. Authorities are now hoping that the parents and elders of these pupils will volunteer to protect these establishments but with a twist. The volunteers will be paid. But not as much as proper guards would be. This plan may not work out. Sjamboks might.

Whatever your view of the present USA leadership, the just passed 50^th anniversary of the moon landing is a reminder of the undeniable fact that America was indeed Great. Today? Well maybe not as much. Amongst the celebrations to mark the event was a life-sized sculpture of the three astronauts set in a diorama of a lunar landscape complete with a replica of the first moon footprint. The whole is constructed out of a ton of butter which the organisers are keen to reassure visitors to the Ohio State Fair, is past its sell by date and will be recycled. Neil Armstrong was born in nearby Wapakoneta.

The revelation that yet again taxpayers are going to top up Eskom with even more billions is worrying Moody’s – one of the globe’s more influential ratings agencies. They point out that despite the deluge of cash pumped into this utterly incompetent and insolvent public utility, no turnaround plan for a permanent solution has been tabled. Therefore, the cash handouts will simply continue to the obvious detriment of the debt to GDP ratios and other mystical metrics which supposedly provide indicators of financial health. The truth is that the state and probably all its agencies spend far more than their incomes. These outfits are dead broke. Moody’s will undoubtedly have to soon down-grade the nation’s credit rating, which will result in everyone having to pay (a lot) more interest when borrowing money from overseas.  

Even the most loyal fan of President Cyril must by now be puzzled by his apparent lack of understanding of the seriousness of the situation. It is indeed a wonderment that, when in the private business sphere, his skills and acumen earned him billions. Why does he aspire to a draughty office in the dilapidated Union Buildings where his main occupation seems to be briefing lawyers? Currently he is having a full go at the Public Protector who has come to the conclusion that we need protection from him. This is only one of her strange decisions, but she may also be taking orders from elsewhere.

One wonders just what the Zulu King Zwelethini had to say during his meeting with the Prince of Wales in Wales this week to commemorate the 140^th anniversary of the battle of Isandlwana. Given his perennial shortage of money – partially perhaps to do with having so many wives -- was he there to probe the question of a winner’s bonus? Certainly, the photograph of the event seems to show the representative of the losers in that battle looking as if he has mislaid his wallet while the victor’s representative is wearing a look of happy anticipation.

Winner’s bonuses are a touchy subject over in New Zealand at the moment where the female prime minister has got involved with the question of why the  world cup winning Silver Ferns (women’s netball) got nothing, while the second placed Black Caps (men’s cricket) were rewarded with $2m. Hmm. Perhaps it’s not the moment to ask why the women who play 3 sets at Wimbledon get the same prize money as the men who play 66% more tennis. Meantime the All Blacks (men’s rugby) await the Springboks who last week beat the Wallabies (men’s rugby team, now described by their fans as Useless). And then there’s Shane Lowry, the Irishman who won The Open (golf) on an Irish course and the Irish cricket team (who knew?) giving England a big fright at Lords just ahead of the Ashes. And can a German and Frenchman driving Italian cars finally shut out the Brit and the Finn driving German cars at Hockenheim? Will a Frenchman at last break the drought and win Le Tour?

James Greener

Friday 26^th July 2019

JUST HOW POOR ARE WE?

The sad and alarming news that Zimbabwe looks to be once again destroying itself with its new currency by sliding into uncontrollable inflation is yet another chapter in the book about the dangers of centrally run economies. Among the early signs of most financial calamities is the appearance of spuriously accurate statistics. That nation’s inflation rate is now quoted to five significant figures as being 175.66%pa. What this means is that consumers are now faced with average prices almost 3 times higher than a year ago. In like vein our own Reserve Bank told us yesterday that our nation’s economy is so finely balanced that the monetary policy committee felt that it would be able to withstand a reduction in the price of money of no more than one quarter of a percent. Such finesse! So now banks, borrowing overnight accommodation funds from the Reserve Bank (the repo system), will pay just 6.50%pa down from 6.75%pa. Wowee! Pensioners dancing in the streets, shops limiting customers to one trolley each, boom time is back. New readers to Tidemarks are cautioned that excessive irony is an occupational hazard.

To be fair though the interest rate cut is more a (virtue?) signalling move rather than a big kick start. The hugely indebted are barely going to notice the decline in their monthly repayments. And at the other end of the yield curve it is unlikely to offer much comfort to those lenders with big exposures to the many state-owned enterprises that are already battling to pay salaries and are defaulting on pension fund contributions. Still no word of pruning costs though. Budgetary Control is not a big thing here on the southern tip.

Ex-president Zuma’s appearance in the hot seat at the Zondo commission of inquiry into state capture didn’t work out as he hoped, and so, like Elvis he’s left the building. Sadly, he didn’t have much memory about recent events but he did have near perfect recall about all the spies, enemies, poisoners and assassins he had to contend with in his early day as an ambitious politician. Also, like most of us, he is a bit hazy about exactly what state capture means but his characterisation of the shady Gupta brothers as good guys who merely found well-paying jobs for two of his sons convinced nobody. He appeared to be genuinely puzzled with suggestions that he hasn’t been much good in any of his many jobs, especially the spell at the helm of the South African government. Sympathy for him, however, was not visible at the commission.

The boss man of the company that makes Glenmorangie, a premium Scotch Whisky brand, is in South Africa promoting his tipple to what he has identified as “a developing urban and middle class with resources to afford it.” Doesn’t that make you proud? And wonder about those who whine on about this being the most unequal nation on earth. They can’t both be right so in future we all need to see and use the stats that the Glenmorangie fellow is using. SARS might also be interested.

About the only good outcome from that Super Over circus at the Cricket World Cup final is that it prevents the New Zealanders from possibly being able to claim two major world cup titles in one year.

The first weekend of the Currie Cup did not go well for many in my circle and now we are in that period where internationals appear in schedules causing even more stress. Fortunately some sense has prevailed and in this world cup year the fixtures have been curtailed. Those of us raised on a limited number of international sports events every year are in two minds about whether sports men and women earning more air-miles than caps is all that good for anyone except the television companies. The fact that the loudest and glitziest advertisement currently on the Supersport channels boasts that that company is Africa’s largest sports sponsor sort of gives the game away about who makes the most money out of this particular merry-go-round.

James Greener

Friday 20^th July 2019

WHO WILL BUY MY TIRED IDEAS?

Share prices in the USA are setting new highs every day. This is not the sort of behaviour associated with the forthcoming economic depression being forecast by most of the talking heads. One side in this debate is badly misinterpreting the signals and Tidemarks is starting to wonder if  most of us are unable to grasp that the internet is facilitating the development of a huge, significant but somewhat opaque economic force. Are countless billions of transactions perhaps unintentionally but more likely deliberately simply bypassing the traditional models and methods of data collection and surveillance? Even casual users of the internet’s services will have noticed the recent appearance alerts about cookies and other monitoring tools. These messages are presumably prompted by official demands that service providers get to know their clients. But the only way to control this genie is to shut down the internet – a method tried by some countries recently but doomed to failure as satellite coverage of the globe grows. It’s a difficult time to be a despot or a financial analyst.

So this fourth industrial revolution (4IR) is real then? And like other social upheavals worthy of that name, it is leaving all but a few scrambling for understanding of the details. Furthest in the rear are of course the politicians who depend on being able to maintain different persona depending on their audience and don’t appreciate having their insincerities exposed.

It is a great pity that the world is already over-supplied with hypocrisy because we here in South African have tons of the finest A-Grade stuff ready to export. The brazen insouciance and stunning ignorance that our putative leaders display in dealing with the vital and critical matters that they need to solve for the future of our nation is breath-taking and dispiriting. They change their minds and stance just as fast as some of them can shuck a red overall and slide into an impeccable suit. The shocking behaviour by the MPs of the EFF party towards a minister who obviously scares them deserves far stronger sanction than so far administered.

In the presence of overwhelming evidence that governments are terrible at running things, Finance Minister Tito Mboweni has paused in his hobby of producing on-line cooking lessons to announce the formation of a government-owned bank.  The implicit reason for such a move is that existing commercially owned banks don’t care much about the poor. Well, true. The poor are generally not great clients for banks but nevertheless a feature of the recent financial landscape has been the formation of several banking enterprises which admirably can see benefits in catering to our many currently unbanked citizens. Taxpayers, who presumably will be expected to fund this state bank venture, would be delighted to be provided with both a business plan and a form with which to accept or decline to participate. Come to think of it we still haven’t been told how the grandiose National Health Insurance scheme will work, beyond the rumours that the state will decide where, under what conditions and for what rewards all the nation’s doctors will practice. Cue even more stories about internationally in demand professionals flocking to the airports.

What would be more useful from this minister would be an explanation for why our currency has strengthened around 8% so far this month and an assurance that he will keep it on that track.

Even Lewis Hamilton is finding the amount of televised sport on offer this weekend overwhelming. And he gets to watch the Silverstone Grand Prix from the best seat in the house, his own car. The rest of us must shoehorn that event in between the men’s Wimbledon final, the cricket world cup final, the Tour de France, Currie Cup rugby and replays of the few games that Bafana and the Proteas have won in recent weeks. Demanding and dedicated couch surfing awaits.

James Greener

Friday 12^th July 2019