WHAT RECESSION?

A wonderful and acrimonious but actually rather meaningless squabble has broken out in the investment world this week. Naturally it concerns numbers and the meaning of economic data and has allowed Tidemarks to unearth his battered old drum and resume beating it vigorously. Rather like sport, the financial world depends on the score to describe their universe. Most of the scores concern the measurement of wealth and value and are expressed in units of currency. One of the tasks expected of a government is to create an environment in which its citizens can grow their wealth. The GDP is one statistic used to monitor the success or otherwise of the government’s endeavours and it is an amazingly crude and blunt instrument for this task. Typically it is calculated for a three month period and in SA for example is published only almost two months after the end of that period, so it is far from current! Considerable adjustment and “data abuse” takes place before publication, of which the largest is a correction for inflation.  The point being, that everyone wants to see a GDP number (these days, in SA, expressed in trillions of Rand) that is larger than its predecessor. If, however, it is smaller, and even worse, also less than the figure from 6 months earlier, the nation’s economy is said to be in a “Recession”. Which is a Bad Thing. This week the USA government published its GDP number for the Second Quarter which triggered the “Recession” condition. Obviously, the Biden administration would be very embarrassed by having to admit this taking place under their watch and have robustly denied this definition and status. They appear even to have pressured Wikipedia into striking out their entry of this definition! We await a new definition.

Meanwhile these arcane definitions and measurements are not reducing the anxiety that is definitely growing among the citizens of the world. Whether it is the so-called “Global Elite” or even our local city councillors, their understanding of and plans for the future are grossly at odds with our need for reliable power, clean water, plentiful food and sensible transport. Almost more worrying than their failure to provide these things, is their foolish and wasteful intervention in poorly understood vanity projects like sustainable energy. Most nations already have the legislation in place to discover, prove and control the selfish and damaging excesses of the private sector? Why don’t they use it?

The headline said “Eskom Seeks Partners for R1 trillion Energy Transition”  and so  no further reading of the article was necessary. At least three words there warn the reader to run for their lives. Starting with trillion, a sum of money beyond comprehension, let alone Eskom possibly finding. Since all monetary payments for anything everywhere ultimately ends up the pocket or purse of an individual  the implied annual cost per head of the number of people who would even legitimately be involved in such a project causes one’s brain to melt down. Next, is the word “Transition” which in this time and place hints at the dread hand of “political wokeness”. And finally, the gross misuse of the term “Partners” which suggests the possibility of joint wealth creation. With Eskom? Come now.

Here in Durban, we have enjoyed a wonderful months long reprieve from the increasingly fierce power cuts suffered by the rest of the nation. Apparently the two “rain bombs” which hit us earlier in the year, seriously damaged so much infrastructure, including electrical substations, that it was impossible for the City Sparkies to implement safe selective switch offs, aka load shedding. But now it’s over and from next week that excuse won’t wash. We are back with the rest of the nation. It is interesting to see how many houses around me have installed solar panels. The home repairs and maintenance sector of the KZN economy is definitely not in recession!  I’m looking out my Coleman pressure lamp.

With the Commonwealth Games now under way (weren’t we bidding to host it?) and athletics world champs just finished, it’s very heartening to see so many fit young people apparently able to tune out from the madness of the world and focus on being the best they can be. It’s also interesting the extent by which records are still being broken. How is that? Are drugs a big thing?

James Greener

Friday 29^th July 2022

 

THE HEART OF DARKNESS

There is something almost sacred about the way the SA Reserve Bank reaches its decision about the appropriate interest rate for the country. The great and good, named The Monetary Policy Committee, meet every couple of months in the Reserve Bank’s very own cathedral in the centre of Pretoria. For two days they watch, talk, think and take catering breaks. On the third day their leader, the affable and wise Governor Lesetja Kganyago, appears in front of the cameras, brushes the last of the biscuit crumbs off his suit, and announces their decision. Yesterday it was an apparently unexpectedly large hike of 75 basis points. So now the Repo Rate is 5.5%pa. This announcement triggers an immediate ripple-like response from the commercial banks who immediately move their interest rates upward by at least the same amount. The nation’s borrowers will now have to pay more for their money.  The economic text books say that this will have the effect of controlling rises in the inflation rate. Sceptics are unsure how this works.

President Cyril, the Frogboiler, really does not want to answer any questions about the suspicious events that took place on his farm when large amounts of folding foreign currency went missing from where he’d stored it in a futon. Nor is he keen to discuss what happened to the people who allegedly stole the loot and even more amazingly were coaxed into returning most of it. It’s a weird story and the way things are going we may never learn the truth. But that’s politicians all over the world. Evasive.

It’s a pity Eskom never registered a copyright for the phrase “Load Shedding”. For despite it being a particular hate of Tidemarks for its weasel-like innuendo that it’s consumers who are responsible for electricity shortages, several really quite grown up nations are also finding that they need also to ration their electricity. The insistence of the Doom Pixie and her mentors and acolytes that carbon dioxide is the world’s greatest enemy, is causing problems for electricity suppliers whose customers want to return to the days when the lights stayed on. Eskom could have made a few bob maybe by leasing out their terminology to other governments and utilities eager to suggest that power shortages are someone else’s fault. An interesting poll result in the USA revealed that only 1% of the population think that climate change is the biggest problem that their politicians need to address. And yet the leaders stubbornly ignore this, believing that voters one day will reward them for ideas like “Net Zero” and the very costly plans to attain this nonsensical target. Note that the European Union has set out emergency plans for countries, asking them to cut their gas use by 15% until March. The EU warned that if they did not act now, they could struggle for fuel during winter if Russia cuts off supply. This wasn’t supposed to happen.

Did you get a copy of the “Mzansi National Philharmonic Orchestra Report 2021/22”? Reportedly it reveals plans for setting up a National Philharmonic Orchestra. This is the brainchild of Sport, Arts, and Culture Minister Nathi Mthethwa who has R30m in his budget that he is dying to spend. Wisely he is choosing an art form which does not require electrical power. The instruments are, as they say, all “unplugged” and, provided the acoustics of the venue are OK, and you can attract audiences prepared to attend concerts in the daytime, it might even work.  The problem will still be to get the urns working for a cup of tea at interval. A poitjie over a fire would tick the “Culture” box.

KFC has launched new high-tech restaurant – with a double lane drive-through. While the term “restaurant” may be a trifle misleading, it does point to a big shift in dining requirements in Pinelands. This Cape Town suburb is home to one of the country’s largest financial institutions where, once upon a time, stockbrokers were expected to attend to pay homage and beg to take their contacts out to lavish meals. Deep fried chicken in a bucket, how ever high-tech, did not qualify.

Whatever we armchair selectors might think, the privilege of putting on a ‘bok jersey and playing a Test, confers exceptional powers and outcomes. Go bokke.

James Greener

Friday 22^nd July 2022

 

EACH SPECK OF LIGHT IS A GALAXY!

Most price charts covering the recent past are dominated by a huge down tick that took place in early 2020 – the date when we all reacted to the official science-based news that the globe was being overrun by a virus that would quite likely harm us all.  The speed with which most prices recovered was much greater than our trust in any subsequent explanation of what was really happening. But this year a fair sized traditional bear market is out of its cage and slowly but steadily destroying a great deal of wealth. The most spectacular victims so far would appear to be the crypto currency punters about which commentators like Tidemarks know almost nothing except to avoid them. The infamous boytjie from Pretoria, Elon Musk is perhaps another victim as this week he began backing away from his heroic and outlandishly overpriced bid to buy Twitter the equally infamous provider of so-called social media. His reasons for doing so probably have more to do with a “cash flow difficulty” than his hand-waving arguments that when he went to inspect his purchase he found too many skeletons in previously unknown cupboards.

Growing up in Grahamstown, some of Tidemarks’ friends were children of academics at Rhodes University. One evening in October 1957, one of these, Dr George Little, a scientist who knew about these things, fired up his venerable grey Standard motor car and ferried a crowd of excited small boys up to the top of Mountain Drive where we waited until a tiny moving dot of light appeared in the sky exactly where he said it would. This was of course Sputnick, the Earth’s first artificial satellite. About the size of a pine apple, remember this was the Eastern Cape, it did no more than send out a regular radio beep signal. This week the first images taken by the James Webb optical telescope, now also in orbit around this planet were released. They are breath-taking.  And very soon NASA’s Google Photos account will be full (tech joke!) as this wonderful monument to human ingenuity and (mostly) American tax payers’ generosity settles down to its task of showing how incredibly lucky but insignificant we are.

Equally attention getting for some people must be the news that in Switzerland not only the suspects but also their wives have been arrested. Two former employees of Swiss industrial firm ABB Ltd are accused of corruption linked to half a billion rands worth of Eskom contracts. That’s going to test the marriage vows somewhat! And what about old JZ’s harem? Maybe the distinction between traditional and civil marriage is about to become clarified?

The experiment with the ‘bok team nearly worked. Awarding more than a dozen new caps to take on a very pumped Welsh squad was a big risk. All round it was a poor weekend for the southern hemisphere rugby world. Once again Tidemarks wants to know why a Māori All Black team is not discriminatory.

On a day when our very own Louis Meintjies came second in the notorious Alpe d’huez stage of the Tour de France I also watched the first day of The Open Championship. Heretically I have decided that the Old Course at St Andrews is a total con played out on the faithful. It’s a ridiculously featureless bleak landscape usually rendered especially inhospitable by atrocious weather. In the absence of anything resembling attractive and interesting vegetation or geographical features to provide navigational landmarks, players and spectators alike wander this wasteland in despair. Cries of pain and frustration waft out of the gorse thickets and across county-sized greens. Stone-lined pot holes await the unwary. The tallest feature on what should properly be a particularly boring dog-walking venue is an unbelievably ancient small stone structure, the Swilken Bridge. It lies at the head of a long queue of disciples, awaiting their turn to be photographed crossing it before it crumbles into the burn beneath. And the canny Scots heft their sporrans stuffed with cash and give thanks to their forbears for starting the fiction that these Links between the shore and proper countryside would be a great place to play golf.  

James Greener

Friday 15^th July 2022