I have just seen the suggestion that the JSE could close the year 20% higher than where it is now. Statistically this sort of rise in just four months is not impossible or unprecedented. I would be interested to know what proportion of this pundit’s personal portfolio is invested in the market today. Anything more than say 10% liquidity and I would suggest that he, like me, actually feels that this kind of move is economically unlikely. You may have noticed that some surprising companies have been blaming consumer spending cutbacks for slower earnings growth and even dividend cuts. Of course there have also been several delightful results and companies have showered their shareholders in money.
I watched the Olympics closing ceremony and stared open mouthed at the scruffy performance put on by London, the next host city. And that was just its mayor, who clearly had not coped with the time zone shift. Still wearing the suit he had slept in, he lurched onto the stage to collect the flag and wave it about in a dazed manner. Elsewhere in the stadium a straggle of equally scruffy alleged thespians did odd things with umbrellas and a badly made model red double-decker bus. An elderly musician survivor from swinging London managed to stay upright for long enough to strum a few chords and an American soccer player emerged from the roof of the bus to kick a ball. However, was it so bad that the pound deserved to be marked down severely this week? Or perhaps it is just the rest of the world noting that it will cost the UK a lot of pounds over the next four years to lift their game?
In contrast, various stories have surfaced about how demand for gold coins has exceeded the supply of even the largest producers and suppliers. That this alleged demand has not really yet shown up in the price of these shiny dense discs leaves me a tad suspicious about the reports, but it is fun for us gold bulls to hear this kind of thing.
What is not fun for tax-payers, however, is the size of the tab that we have been landed with to pay for lawyers to represent the leader of the ruling party at his forthcoming trial. Just why this bill should be handed to the nation has not been made clear and it is especially irritating to see this news today when provisional tax payments are due. It is also hard to reconcile this use of public money with Minister Manuel’s claim that “Tax collecting enables development.” Unless of course, he is referring to the development of those lucky lawyers’ lifestyles.
Another equally banal and foolish statement that “Economic growth (is the) antidote to poverty in Africa” is apparently the conclusion to a study carried out by the World Bank. You really have to wonder what many of these semi-official organisations are for when you encounter this presumably high-priced nonsense.
Thanks to the recent squabble about how to calculate inflation, when this week’s very bad (old style) numbers were published, folks were uncertain whether to whine or blow raspberries. Having just been told that the price of bathroom taps will go up tens of percent on Monday I belong to the whining school and must now dash off to the plumber to see if we can avoid using wooden bungs in the new house.
No matter how you try to do the maths of GDP per ball, or swimming pool per city or medals per mouth we are doing very badly at sport right now. I scored zero fish too. I declare the bar open.
James Greener
29th August 2008
