WHAT RUSSIAN OIL OLIGARCH?

The USA is hailing its president a genius for coming up with a plan to cancel student debt. Attempts to point out that cancelling debt normally means transferring it to someone else has not elicited a response nor the name of the new debtor. Here, it’s the taxpayer.

There is a particularly annoying insouciance that South Africans have had to put up with from our government for the past 25 years. It is quite stupid to assert and imply that this country and all its institutions and history began only in 1994. Like every nation without recorded histories and allegedly accurate chronicles, we are always going to be ignorant of who did what to whom, when and where.  Assuredly though, injustice and cruelty between parties, each trying to maximise their benefits of finding and living in a land so rich in natural resources, has been happening since first we learned to walk on two feet. Tidemarks is currently irked by the snazzy motif being sported by the tax man which boasts that SARS has been at my service for 25 years. Two of those ideas are just plain wrong! Who redefined “service”? And does that mean that those of us who have been paying tax since long before this magic date can now claim some kind of righteous refund?

The decline in education standards continues unabated. What syllabus produces judges who deny that clear and unambiguous slogans enjoining one’s followers to kill specified people constitute “Hate Speech”?  To be fair though (why?) this hate speech business does fall under Granny’s advice that “Sticks and stones may break your bones, but words will never hurt ye.” And then there’s the utter nonsense that hoisting a particular flag constitutes Hate Speech.

Is there really any point in sending people to the moon. And back again? Even the prospect that one of the crew in 2025 could be (gasp) a woman, hasn’t really reignited public excitement much. The launch of the iPhone 13 will create a greater buzz. The breath-taking results from the James Webb Space Telescope is evidence that mankind can now examine almost everything interesting anywhere without someone nearby suppressing their innate human desire to push anything that looks like a button. Nations looking for brownie points and national prestige would do far better advised to strive for universal literacy and minimal numbers of public servants. How terrifying would it be to try and outcompete a country where most citizens could read and write in several languages, do calculus and understand both physics and basic human biology.

Our president seems to bumble along spending his days in a total fog of ignorance, surprise and congeniality. Everything that happens in this land seems to reach the Frogboiler’s desk and then his brain only days after the event. This week, Igor Sechin, boss man of Russia’s largest oil company, the state-owned Rosneft, popped into SA on holiday. During a refuelling stop at Lanseria, Igor reportedly left by car in “the direction of Pretoria”. True to form, much later, our man Cyril said he had no idea Igor was in town. Really? Haven’t we recently been cosying up to Moscow looking for cheap oil?  It would have been a such great opportunity for our leading proponent of the use of the couch as a banking device to get some roubles to plump up the cushions in the study.

The trouble with away rugby test matches in the Antipodes is that my local watering hole and sports bar is offering Bacon and Egg rolls with Coffee as an enticement to watch the game there at 7:30am. Although I suspect that the keys to the bar will be located well before halftime, especially if the bokke are leading by a hefty margin (or even if not).  One of the throttle points for economic activity in KZN has to be the section of the N3 Freeway between Durban and Pietermaritzburg. Even the old road is always very busy and the Comrades Marathon event on Sunday will snarl things up even more. As the meme doing the rounds boasts, however, this year marks the 50^th year straight when I have not attempted to run this event and I owe a word of thanks to my sponsors and mentors.

James Greener

Friday 26^th August 2022

 

RETURNS TOO GOOD TO BE TRUE ARE EXACTLY THAT

 It’s exasperating to watch politicians charging into battle against “inflation” with laws and more laws, when it is state interference in the operation of free markets that is mostly to blame for money losing its value. This week there was a photo of the great and good in US politics watching President Biden signing into law the Inflation Reduction Act. This act will spend USD 370bn in “climate investment” over the next 10 years. and could cut US greenhouse-gas emissions by about 30–40% below 2005 levels by 2030. Not only is the name of the bill and claims about its potential effect, great examples of hubris; that word “investment” is so misleading when the only returns apparent, will accrue to a few scientists with great PR poking about in dodgy data. Naturally those “scientists” and their shills have already complained that they will need more much more money than this to make a decent livelihood from climate change.

The headline to the story tells it all even if the details are complicated and opaque “The Crypto Geniuses Who Vaporized a Trillion Dollars”. It’s a classic tale involving a couple of mates from the same school who thought they could monopolise and control a niche financial market related to these puzzling crypto currencies and lots and lots of other people’s money. Naturally there’s a luxury yacht, now up for sale  named “Much Wow” (an insiders joke apparently), bobbing through the tale. Their outfit is (was?) called Three Arrows Capital, with several corporate locations, now abandoned. Twitter responds very obligingly to any search for 3AC.  And one can see photos of the yacht and the clever boys themselves, The “investors” which include some allegedly dodgy characters who seemed to have been the lenders of last resort in the dying days of the caper are camera shy. Their reaction to finding themselves at the end of the (non) value chain will be the stuff of lurid headlines. Unsurprisingly the pair of geniuses have done the smart thing and also disappeared.

For a nation where reportedly only about half of the drivers on our roads have ever obtained a driver’s licence, the present squabble about whether the five-year expiry period is legally enforceable, seems somewhat moot. Firstly, it is claimed that the 60-month limit exists only because the physical licence card degrades in that time. Personal experience suggests this is true and reminds us that the contract to supply the sole card embossing machine for this task in the country went to a friend of Jacob Z – our previous president. Secondly and far more likely it is that the renewal process generates a useful regular income for the state for very little effort on their part.  But not even mentioned in the debate, is that it might be wise in a nation with our terrifying road accident death toll record, for drivers to be fully retested from time to time. However, for that to happen the absolute requirement for all legitimate and competent drivers must be that testing for and reissuing a licence should be a one stop process available at multiple locations open for long hours especially at weekends. The current eye test has doubtful utility.

The adage that lotteries are a voluntary tax on the mathematically illiterate has always amused Tidemarks. It seems true that the prize winners in the national Lotto games do seem to get what they are promised, which is around half of the ticket sale’s income. The other half should then be distributed to the beneficiaries who have been successful in applying for funds from the Lotto. [Therein lies another seedy story of racism and corruption]. Naturally the administrators and operators of the lottery do need to recover the running costs for this process. But in what is sadly now standard operating procedure for any state agency, the ruling party cadres infest the process and simply steal the money before the distributions.  This week’s the National Lotteries Commissioner, Ms Thabang Mampane, resigned after it was discovered that her lavish new home was bought with Lotto money. Her salary incidentally is recorded as R4.5m pa. Her previous job was COO of SABC, the state-owned broadcaster. Shame on these people.

That walk through the Long Room at Lords for players coming back to the dressing room after scoring a duck must be the stuff of nightmares.

James Greener

19^th August 2022

CHARGE THOSE BATTERIES!

In less than 5 months the monetary authorities in the USA have increased the cost of money in the most basic and key market by 400%. This interest rate, known as the Fed Funds rate, was cut dramatically to 0.5%pa in early 2020 as an intervention to ameliorate the effects that the lockdown response to the pandemic were expected to have. They weren’t wrong there! It remained unchanged for an unprecedented 2-year period until this year when in just four steps it has been hiked to 2.5%pa, a level equal to a multi-year high. This 200 bp change does obviously trickle down to increase the cost of credit in all its forms in every corner of the US economy. Allegedly this will control and reduce the massive and painful increases in inflation which everyone, except the Biden administration, is complaining about. Funny stuff economics, hey?

So, the boy from Brooklyn (the one in Pretoria) is going short Tesla (his own company) in case he is forced to go long Twitter (not yet his own company). What a messy situation when he (Elon Musk) seems to have so many other projects in need of his guiding hand and intellect. But perhaps the other side of the Tesla trade is not all that great either. Tidemarks has already noted the growing realisation, if not outright panic among leaders and their “expert advisers” -- that renewable energy is not the same as ample energy. The alarming choice between Heat or Eat reportedly faces many people in the northern hemisphere in the forthcoming winter. Even if the Doom Pixie and her acolytes were right about there being proven and perfectly understood links between atmospheric gas concentrations and the globe’s macro environment, the unassailable fact still is that we do not yet have better fuels than those that need to be extracted from out of the ground. Namely coal, oil and uranium. Hydrogen as a fuel is sadly still rather dodgy although it does feel as if it ought not to be so. Battery powered transport is a very expensive technology not yet nearly capable of doing what most of us expect it should provide. It won’t be long until this fact starts to gnaw away at the enthusiasm of those who believe they are saving the polar bears.

A much-trumpeted feature (security) of the blockchain structure for storing financial transaction records never seems quite to fit with the frequent stories about theft in the mysterious world of cryptocurrencies. Invitations to join the crypto party pop up on the ‘net with ridiculously minimal requirements that assure us that merely one click of the check box (and presumably a credit card number) will fill my Wallet – not the leather one – with “tokens” bearing the weirdest names and that are perfectly safe! None of that tedious FICA stuff seems to be necessary. Recently, the University of Johannesburg has become the first South African tertiary institution to use blockchain technology as an additional security measure to protect its degree certificates against alteration or falsification. A QR code, the modern version of “Open Sesame” is printed on the certificate. So that’s alright then.

Always on the lookout for things that should interest and maybe concern readers, Tidemarks unearthed the following revelation of how the bureaucrats are spending our money. The National Treasury seems inordinately proud that South Africa is one of five pilot countries that are participating in the Fiscal Openness Accelerator Project (FOA) that was launched in 2019 by the International Budget Partnership (IBP) and the Global Initiative for Fiscal Transparency (GIFT). Since they probably also have scant understanding what this means, other than having meetings, they have this week solicited comments and called for “pre-budget consultation for the 2023 Medium Term Expenditure Framework”. Here’s one: Halve the state salary bill by firing the most expensive 10% of the civil servants.

The demise of the printed newspapers that most of us were quite used to paying for has had serious employment implications for the journalists who were worth supporting. That is the sports reporters, a specialist niche who often have fascinating insights into this marvellously diverting and largely unproductive human activity. The few who are left are issuing warnings that the bokke will find a very different All Black team awaiting them at Ellis Park this weekend. Hmm.

James Greener

The Glorious Twelfth, 2022 (unless you are an infamous grouse that is)

Camel and Goat Crossings?

The price of crude oil has dropped more than 25% in the past two months. Obviously consumers responded to the price spike by cutting back and very gratifyingly the principal of supply and demand has shown itself to be alive and well in one of the world’s biggest and most liquid markets. It is interesting to watch Saudi Arabia, whose economy is almost entirely based on producing and selling oil, starting to prepare for a very different future. The latest to catch our attention is a project called The Line. This is a 170km dead straight chunk of building stretching across the desert. They have a lot of that in Saudi. Then there is their foray into buying up the world’s supply of professional golfers in the so-called LIV Golf project. Aside from a great supply of bunker material the connection is not obvious, but the world’s golfers are starting to mock IPL cricketers for their meagre income!

The rest of the planet can only admire the incredible fearlessness shown by the Biden administration when it comes to dealing with planet’s bully. Not only did they defy the conditions and threats by China about what the USA had better not do, but they sent perhaps the least diplomatic and intellectually impressive politician in the US Congress to do it. Excepting for Gaga and Giggle themselves. China have responded with a firestorm of live ammunition which significantly so far has not actually hit anyone. But this sabre rattling by two nations with nuclear arsenals is not soothing

News from the USA is that the government there is planning to employ a further 87 000 tax collectors. This is perfect evidence for the fact that their leaders prefer to increase state income over the alternative of cutting spending.  It also shows that the rules about who must pay how much in tax are irredeemably complicated and punctured with loopholes. The implicit notions held by politicians (who, don’t forget, are always the first in line to dip into the collected taxes) is that somehow tax is a noble and welcome duty embraced by taxpayers everywhere. The other lethally incorrect assumption is that politicians and bureaucrats will spend our money far more effectively and wisely than we will ever manage to do.

Here in SA, there has been a revival of the mantra about “Tax the Rich”. As usual the supporters of this funding strategy have yet to identify who they think is “rich” and how much excess liquid wealth do they have. Undeniably SA has an utterly shameful and horrifying number of people who are unarguably poor. But dividing the wealth by the number of desperate outstretched hands yields a surprisingly tiny once-off per capita distribution amount. And that’s before one factors in the cost of this country’s premier skill and skimming off say at least 15% (hollow laughter) in commissions and facilitation fees.  While the hand-out might buy a few votes in the forthcoming elections, it will not be a big number. And soon both the money and folk who were squeezed to provide it will be gone.

Tidemarks proposes that a fiscal solution worth testing would be to perform a swift and formula driven cull of at least half of those who live off the public purse, but crucially, at the same time, lifting most of the impediments that inhibit private sector employment. The formula (which would be fascinating to devise) would exclude from the cull only the lowest ranked and paid. The top and highest paid echelons will bear the brunt of the downsizing. Subsequent promotion and pay increases would increase one’s chance of being culled We need not worry about the people who are “let go” as the state has obviously already decided that they have superior skills, so presumably the private sector can’t wait to get them on board. Luxury goods stores might feel a bit of a squeeze for a while.

The bokke host the All Blacks in Nelspruit this weekend and the war of words has already reached a crescendo. It will indeed be a nail biter and Tidemarks is sure the bokke will win. The nice victory of our women’s netball team over the Scots last night (a family derby) is a good harbinger.

James Greener

Friday 5^th August 2022