MORAL COMPASSES GONE HAYWIRE

Supposedly President Trump is a very bad thing for America and the world. Also supposedly the share prices of companies in a nation will go up only when the companies are making money and growing their businesses in a favourable economic climate. US share prices are at all time highs. At least one of these statements must therefore be wrong. Unless of course investors are ignoring politics which is a good idea anywhere. Recently our own President, who continues to disappoint those who hoped he knew a thing or two about the real world, berated the private sector for failing to transform. This is a code word for making skin colour the sole criteria for employment and promotion. A technique which has stunningly failed the public sector, although when it was called apartheid it did manage to keep the lights on.

A commercially clueless cadre has proposed that the idea of shopping malls signing up “anchor tenants” is probably a bad thing and leads to unjustifiable profits at the expense of the poor.  The practice of a mall owner signing a discounted lease with a branch of a large retail business boasting a loyal customer base in return for refusing space to that store’s competitors does indeed appear to show little concern for shoppers. In fact, the mall owner can probably squeeze rents up for all the other tenants citing the drawcard of the big store. But these are merely the consequences of market forces being the primary driver of the industry. And South Africa claims to be a global leader in many measures of shopping mall design, operation and customer acceptance. On their own the “shut out” stores are already leaning on mall owners about this practice. But still the regulators are worried that small and start up shop keepers are excluded from the becoming mall tenants. They therefore want to interfere, instead of just going shopping.

Years ago the in-group joke amongst scientists was that the growth in number and pages of research journals was such that they were accelerating along the library shelf space, approaching the speed of light. Today it’s Books about Crooks in South Africa that are swamping us. They are appearing faster than we can even grasp who it is that has been exposed and how widespread and bad the thievery, corruption and influence peddling has become. Soon we’ll need genealogical type wall charts.   

The woes in the dead tree media sector continue. The glory days of owning a newspaper are over Even the slightest of taps on the wainscoting at Independent Newspapers sends the vermin scuttling. But nevertheless, in the proud tradition of proprietors world-wide, Dr Iqbal Surve, the head honcho down there, continues to use his titles to put his own (increasingly crumbling) case. Meanwhile Business Day is behaving like a chain store and trying to entice subscribers with Black Friday specials. We all know about loss leaders in retail but it’s quite different in a newspaper one would think.

Presumably there are many SAA employees who having just been paid only half their November salaries are requesting to meet with their Union Leaders. These are the chaps who emerged beaming from pay negotiations just weeks ago and announced satisfactory increases all round. Not a word was said then about the fact that there simply was no money in the SAA bank account. It is desperately sad that leaders from the president down are rarely called to explain and account for the obvious untruths they use to buy adulation and support from their followers. Many years ago in the Dilbert cartoon one of the characters who had been promoted to management was required to undergo “surgery” to disconnect her “moral compass” before assuming high office. A clever meme.

It seems rather sacrilegious to be discussing Rassie’s replacement already. There’s surely no need to emulate the boardroom at Cricket SA where the volume for a game of musical chars has been turned way up to drown the sounds of the backstabbing and buck passing. And on the topic of fast publishing, Eddie Jones’ autobiography is now ready for us to buy our English friends for Christmas.

James Greener

Friday 29^th November 2019

BAD GUYS BEWARE?

Market turmoil at Christmas time is not unknown. There are plenty of folk who aren’t that fussed about 25^th December and may try a quick foray when others are snoozing off the feasts. While individually there will doubtless have been portfolios and individuals who have had exceptional returns both up and down in 2019 the overall picture is pretty staid. Even the large unbundling activity around the Remgo stable seems relatively benign but keep a close eye. When behemoths like that shake off the water like a Labrador after a swim, it may be that they found something in the river. The 3.7%pa consumer price inflation print was rather interesting. But it didn’t impress enough members of the Monetary Policy Committee who as usual took 2 days to decide to do nothing. At almost 300 basis points the gap between the repo rate and inflation is bouncing along at a 10 year high. Which if nothing else signals that cash is not the worst thing to own at present.

The pictures of Andre de Ruyter the newly appointed CEO for Eskom show him to be eager and youthful. And we the electricity users of the nation wish him all the very best as he steps through the revolving door and takes the stairs (no lifts – power cuts) to the top floor corner office at Megawatt Park. There, waiting for him will be the usually behatted Chairman Jabu Mabuza, who, having heard that the new man also doesn’t have an engineering background, will be keen to show him how a coal conveyor belt works. And what happens when it breaks. Mr Mabuza recently honed this little lecture at a press conference.  Sadly, Mr de Ruyter will have little time to absorb these critical technical facts before having to deal with malevolent racist politicians who believe him to be culturally unsuited for such an important post. Reportedly, though he has experience in getting customers to pay what they owe and success in that area will be a huge step forward for his new employer.

Perhaps the acts of retribution against the people who really have stolen our future here in South Africa are just starting to take place. So far, it’s mostly only private sector alleged felons who are feeling the lash. A gratifyingly fierce asset forfeiture unit order has been dished out to the folk who operated under the name of the decidedly dodgy Regiments Capital. We are longing for the sound of clanging prison doors.

Pity poor Tlali Tlali the spokesman for SAA. He has had to trot out all the usual guff about turnaround strategy to steer it out of the financial quagmire and bleeding cash because of fierce competition not to mention cash flow challenges. As if these are all amazing new management discoveries and tools. Nosy journalists armed with calculators keep on pointing out that SAA’s main problem is simply that there are far too many people working for the airline and that it’s unsurprising that staff salaries in November are expected to be paid late. Its not been revealed which bank(s) have been talked into lending “working capital” of R3.5bn but the fine print suggests that we that taxpayers have issued some sort of surety. This really wont end well. Are the Unions about to learn a long overdue lesson in economics?

Why is the government so coy about when construction will begin on a new fuel refinery to be in Richards Bay?  It will require around 21 000 people to build it and when operational in 2027 (don’t buy tickets to be there for the opening yet) will need 5000 people to operate it. But these numbers have been lost in the far more interesting issue of who will own it. Its unlikely that SA will be able to afford very much and their partner is slated to be Saudi Arabia. Who presumably is also pencilled in to supply the crude oil feedstock?  What with the Brulpadda condensate field discovery announcement, South Africa is about to become like Texas in the 60’s.

There are people in high places in sport both here and abroad who really don’t like to see our sports teams do well. Why else then schedule the new rugby world champions to meet Scotland (twice) and Georgia in home tests in July?

James Greener

56^th anniversary of JFK’s assassination.

MINISTERIAL HANDBOOK – FILED UNDER FICTION

Aside from ex-president JZ producing a sick note excusing him from attending a commission of enquiry session which might have been embarrassing, local politics pales into insignificance compared to the nonsense unfolding either side of the North Atlantic. Clearly only a small fringe of the hysterical left in America have any interest in the supposed impeachment proceedings against Donald Trump. The US stock markets have never been stronger. Just what is happening in Britain is anyone’s guess and it will be different this afternoon anyway. The rand strengthened too.

So, Moody’s didn’t change their judgement of South Africa’s creditworthiness. But they did indicate that unless things had changed for the better, the next time their analysts checked in at the Fairest Cape for their onerous task of sampling the wine and crayfish, a downgrade was inevitable. Tidemarks is well known for its scepticism towards these “ratings agencies” and likes pointing out both the conundrum of using a multi-rung scale to flag a binary situation (pay versus doesn’t pay) and the inevitable 50% error rate in forecasting. In fact our total outstanding debt as a nation is deeply concerning and default is a possibility even if the current strike at SAA does soon result in the sale of this state asset.

The Ministerial Handbook is in the news again. Reportedly the latest edition of this Guide has taken 9 years to prepare which seems like a long time.  Presumably as well as dealing with ministerial perks, privileges and pocket money it is stuffed with little tips of etiquette like take off your hat inside (if male), don’t seize the parliamentary mace and wave it about however angry you are, behave with dignity and decorum and don’t dress as if you have come to fix the lights. Apparent the big changes concern ministerial travel. There are now limits to what they can spend on a car, which end of an aeroplane they can sit and what to do when the mini bar is empty. Apparently, there has been no mention of why ministers need to travel as much as they do. Especially to exotic climes and venues with lavish shopping facilities. Like school children after an outing we should require our ministers to write us an essay on their return entitled What I Did on my Trip.

The financial structure of Dr Iqbal Surve’s empire is deliberately difficult to value which suggests that it is probably worth far less than claimed. Amazingly none of the authorities responsible for protecting the public against financial flim-flam, has yet done very much. But then Dr Surve claims friendship and association with many powerful folks. Nevertheless, (and this is the funny bit -- unless it’s your money) an investment manager who has lost significant amounts buying Surve’s shares over the past few years has now instituted proceedings to try and reclaim it. A spokesman for the fast collapsing empire has described the claim as “preposterous, vexatious, laughable and without merit”. This delightful choice of words deserves a wider audience because it is true, but only because the money in question has surely long since disappeared “in unusual directions”.

Catching our eye this week was the National Empowerment Fund which, with a word like that in its title, probably involves a race-based selection of beneficiaries for hand-outs. None more so than its CEO who reportedly is on a salary package 50% larger that the President’s. That’s very empowering but maybe not what the original promoter of the program had in mind.

It seems that there are many explanations for why today is called (or ought not to be) Black Friday as there are retailers hoping for a surge of shoppers through their doors and websites. That would be fine and dandy and only of peripheral interest to those of us who apart from the biltong shop and the bottle store don’t “do” much in the way of shopping. We are however alarmed by the inexorable growth in debt both private and public as the shopping sprees and state hand-outs continue unabated.

There was no Tidemarks last week and so I relinquished the opportunity to heap scorn on the England rugby team for almost everything they did on November 2^nd. Their behaviour was however soon eclipsed by scenes of the ‘bok scrumhalf dressed only in underpants handing a beer to the Queen’s grandson. Way to go Faf! Who expects protocol in a rugby dressing room anyway?

James Greener

Friday 15^th November 2019