REMEMBER TO READ THIS ALOUD

Our wee runt is stronger against most major currencies that at any other time in the past six months. Could it be that the whispers about selling off SAA, breaking up Eskom and having a new Head Public Prosecutor has sparked a small fire of optimism that honesty, integrity and understanding are starting to roam the corridors of power?

In December, our government spent R143 billion rand. This is a mere R1bn more than in December 2017 and might be taken as a sign of expenditure control. During calendar 2018, however, our leaders whistled through almost R1500 billion, which is R200bn more than SARS managed to collect from the battered taxpayers. To fill this shortfall National Treasury needs to borrow and amazingly they are managing to convince the lenders (most of whom are also the aforementioned taxpayers) to pay ever increasing prices for government bonds. This optimism thing may be stronger than we thought.

In just over a fortnight the Finance Minister Mboweni will present the national Budget and it has to be a racing certainty that he won’t reduce a single tax. There is still scant evidence that anyone except avowed hard-line socialists with ever more punitive and misguided ideas about redistributing wealth has any input into budget policy.

It was not difficult for South Africans to imagine just what it was like in the USA when the government there “shut-down”. It sounded rather like “business as usual” for anyone here trying to obtain the documents and services that our government requires us to have. We are well familiar with snail’s pace inattention and being told by the clerk that one is talking with the wrong person and anyway the forms the other official issued are the wrong ones and anyway this office is now shutting. Come back on Thursday. Reportedly some Americans began to realise that one could live quite well without bureaucrats. What it all meant politically in Washington only the bravest and unhealthily inquisitive could guess.

Those of us who from time to time believe we have discovered or invented something that will make our lives easier (like using a pair of braai tongs to reach from the driver’s seat for the newspaper lying in the drive) have no idea just how valuable our intellectual property might be. The fellow who claims to have told Vodacom, his employer at the time, about a useful idea he had, now has a crowd of supporters bouncing in the streets demanding that he be paid R70bn. It’s doubtful that this was the value of the idea to Vodacom but undoubtedly in return for their noisy support of the claimant, the mob expect a kick back and so life goes on in South Africa. It has not been discussed if the expectant protestors have noted that faced with an unexpected expense like that, Vodacom will likely increase their prices.

A far more modest amount of only R32m has also not yet been paid. This time by the ANC whose main defence for not settling this bill with the business that was managing their website and digital membership list is that they are 107 years old and have a proud legacy. Unfortunately, the teenage geeks who run the internet are uninterested in legacies.

The banks themselves were very professional in not refuting the claim by SABC that they all simultaneously suffered identical “glitches” and failed to pay the broadcaster’s January salaries. Those with inside knowledge, however, were adamant that the glitch was simply that there was no money to do so. Presumably National Treasury had to call their bank to make an instant EFT payment courtesy of the tax payers.  Allegedly many other state-owned enterprises will also soon have to explain to staff that the cash box is empty. Emptied by lax controls and clueless budgeting practices.

Not only is it World Read Aloud Day but the Six Nations rugby begins, it’s the Sydney Sevens and if you like that sort of thing the poor Pakistani cricketers are still hanging around and have to play the T20series against the Proteas.

James Greener

Friday 1^st February 2019

HEY ALEXA – FIRE THE GOVERNMENT

A prominent opposition politician has suggested that a tax boycott might catch the government’s attention. Wouldn’t it just! Already words like treason are being bandied about – a term not once mentioned when the outright theft of public money is the topic. We have all however, been placed in the very uncomfortable position of recognising that probably almost 20 million citizens are now hugely dependent on a regular state stipend and if that were to cease, insurrection would be very likely.

800 000 American civil servants are being remarkably tolerant of the selfish and stupid behaviour of their employers in sacrificing their well-being to score political victories. Not a single toyi-toyi down the streets of Washington? How quaintly restrained. With all the talk of what computer based Artificial Intelligence can achieve, it is time to boot out most of the world’s seated paper-shuffling tax eaters. Those like teachers and nurses who stand when serving customers get to keep their jobs and a pay rise.

A perfect example of clueless government was aired this week by Home Affairs Minister Siyabonga Cwele, who announced the introduction of a National Identity System (NIS) which will replace the current national population register. “NIS would be supported by a multimodal automated biometric identification system”. This would be my sixth ID document, but the multimodal bit has me worried.

So, stuff in December was a tad cheaper than in November? Well that’s what Stats SA says. Particularly for the non-durable goods group which presumably is largely all about food and fuel and on average comprises 35% of our expenditure. This and hundreds of other fascinating figures can be found in a monthly official publication – just one in a series of amazingly detailed and candid documents about the nation and its behaviour, that are available. It’s a very laudable and almost unexpected product from a government that the news reports would like you to believe is utterly consumed with stealing from the public purse.  As usual, however, the inflation numbers hardly ever agree with what we remember happened when it was time to settle the credit card bills.

A similar document reveals that our penchant for imported goods is picking up again after a period when the trade balance (the difference between imports and exports) narrowed almost to zero. This statistic too is hard to reconcile with personal experience and observation and on a monthly basis is astonishingly volatile. However, when one reads that illegal gold mining volumes are now possibly on a par with formal production, it suggests that certain mining production statistics need quite large error bars.

President Cyril made some astonishing claims in Davos about inward investment flows which will have sent bankers scurrying off to check the deposits ledgers to see where its all gone. Before he could give some more details the buffalo farmer raced off to India for more chin wags. One idly wonders if the name “Gupta” ever comes up in these meetings? After all, this was the family that saw to it that SAA closed down its route to India in favour of an Indian airline in which Zuma’s pals had an interest.  Certainly, the now ancient and increasingly irrelevant Mahatma Gandhi link between the countries is wearing out as a discussion topic.

The tennis coming to us from the Australian Open in Melbourne is a frenetic razzmatazz. The organisers do battle with time zones and some incredibly hot weather to try to reach the big overseas TV audiences when they are home from work and settled down with a beverage. And to fill the gaps there’s an unsettling mixture of dramatic highlights and odd scheduling. Also annoying is the obsession shared by doubles players for continual personal contact. The game for four people is a very entertaining format but the rapid sequence of touching, signalling and whispering is distracting and irritating. More serious though is the Proteas’ habit of taking the long way around to secure victory. Relying on the middle to lower order to set batting records is very nerve wracking.

James Greener

Burns Nicht 2019

ANOTHER CROOKED MAN IN A LITTLE CROOKED HOUSE

A US investment guru has declared that the bear is now finished with the markets and it’s happiness all round from here on. Well that’s rather nice, but the bottom of a bear market is rarely that obvious and often happens only once all the wise men have declared that it’s the end of shares as we have known them and it’s time to go and grow vegetables. Another typical indicator is when dividend yields, as opposed to their more flaky younger brother, earnings yields, rise to be comparable with government bond yields and other near riskless investments. As always, however, this time it’s different. We are at a place where news travels at the speed of light between people who might have huge holdings of currencies that don’t exist but have value because the computer says so. And the world’s largest economy is headed by a man who believes that his allocation of assets (usually to people who are already well off) is better than what a truly free market would deliver. We have had “stress tests” and all manner of snooping through the numbers and once again the notion that some organisations are “too big to fail” is being believed.

And so, another ANC linked outfit that most of us had never heard of, gets exposed as a conduit for distributing mostly public funds in unusual directions. Its website claims that the Bosasa Group is “a multi-functional group of companies that has developed many of its own specialized techniques for business services”.  No kidding! This might be a tad untruthful since bribery and corruption have been around for millennia. But it has become apparent in the last few years that down here on the southern tip these activities have reached gold medal standards. The amount of folding money that is being sloshed about in secret (presumably the aforementioned “specialized techniques”) must comprise a significant fraction of the Reserve Bank’s published total of notes and coin in circulation. And if these transactions were to be recorded, the nation’s GDP would also be appreciably larger.

It is rather embarrassing for those of us who made careers in financial research to learn how naive we were to believe that it is possible to understand, analyse, interpret, and what’s more forecast, the future levels of significant economic parameters and company results. The old dictum of “follow the money” is as true as ever but when the money is rolls of cash that would choke a whale let alone a horse, it is foolish to trust most published numbers. And now that so many of the gatekeepers and umpires have misplaced their arithmetic skills and moral compass it is even worse. So many of the source documents really are “fake news”.  More telling and useful is the length of the price list in the motoring pages of luxury car models. The beneficiaries of these illegal and unrecorded flows use their cash to buy not only a comfortable life. They spend huge amounts to buy votes. T-shirts and KFC for eighty thousand makes a hole in anyone’s wallet, so it’s just as well there are sympathetic business contacts who understand how things work.

Now that Donald Trump and Theresa May aren’t going to Davos there is going to be more space for delegations like our own to send even more folk to fly the flag (in fact, the scarf) and shake the slotted tin. There have apparently been training sessions for delegates to ensure that they all sing from the same song sheet. Lots of uplifting verses about poverty alleviation and job creation. Not a line about the need for bribes to secure a contract. The fact that not a single conviction of anyone suspected of corruption has yet been made will however catch the attention of the many shady characters haunting the bars of the World Economic Forum. The perfect investors.

It seems that the Protea’s coach Ottis Gibson has written into his contract the explicit requirement that he and the lads win the World Cup this year. Wow. No pressure then? Judging by the way they blasted through the Test matches, Ottis seems to have got the team already thinking about the 50-over format.

James Greener

Friday 18^th January 2019