It has been another hectic week in the market with very wide daily ranges and many puzzling divergences between presumably similar companies. The most concerning problem is the continuing collapse of the rand versus almost every other currency. That is a sure sign that money is looking offshore for ideas and bargains. In principle, the weak currency is good news for anyone exporting stuff, particularly minerals that have been dug out of the ground. For example, a kilogram of gold will now cost you a record setting R222 100. Despite this, the market’s biggest gold mining company who produced 170 000 kg of gold in 2007 reported a loss of more than R4bn. This sort of news makes it hard for investors to know what to do.
New York shopkeepers on the other hand have no doubt that any customers who offer euro notes instead of the local greenback are very welcome! More than any other event so far, this development surely signals the end of the US dollar as the world’s sole reserve currency.
It is clear that people also want very little to do with those businesses that deal in this money stuff. Local banking shares continue to get cheaper and overseas there is no let up in the flow of stories about the bosses along Wall Street opening cupboards and discovering skeletons. The utterly discredited rating agencies that were conned in the first place and failed to see that dross dressed up as gilt was still dross, are now flitting about, down-grading everything in sight. Incredible sums of wealth are still being wiped off portfolio valuations and balance sheets. It is ironic and amazing that organizations that obviously had no idea what was going on in their own dealing rooms, still have clients who clamour for and believe in the investment research that they write about other businesses!
An equally bewildering idea was offered by Minister Sonjica who launched the National Energy Efficiency Campaign on Tuesday. Sadly, this does not involve decimating the ranks of the civil service but was mainly about confirming that DEPP is still very much in place. This is the “Developmental Electricity Pricing Program” which consists of punishing individuals in order to honour a very foolish promise to provide cheaper power for “electricity-intensive investments”! Locals who believe that they can continue to cook their food, heat their houses and watch TV can look forward to penalties if they use and pay for more power than some bureaucrat thinks they should have.
In what I think must be the stupidest official idea so far this year, the Johannesburg Roads Agency has used our money to buy a half page full colour ad in the paper. The agency begins by claiming to “care for the mobility of our citizens” and declares that “potholes are a nuisance to the road surface and the road users”. I beg your pardon? In what way can a road surface become annoyed with potholes? Half of the advertisement is a high-tech montage of photo and computer graphics illustrating for less educated readers the difference between a trench and a pothole. The accompanying text provides further detail on this topic. The Agency shares with us its five point commitment to repairing these nuisances and Honesty achieves third place. What a relief. Dishonest repair of a pothole is a terrible thing. The Agency is also proud of its “continuous consultation with the Weather Bureau” for forecasts, since apparently, potholes can’t be fixed in the rain! Nowhere is there any mention of spades, picks, wheelbarrows, gravel and asphalt. Any further comment from me would be unwise.
James Greener
8th February 2008
