There are two quite similar annual migration events that take place in the northern hemisphere. I have long wished that I could have taken part in one of them, but the closest I got was when it was suggested that I really ought to attend the other. Both events require travel to exotic locations where delegates and attendees assure the people that they leave behind, who are usually also the ones footing the bill, that they will behave properly, meet interesting and useful people and get to bed early. At both gatherings hot air and effort goes into putting on a show that will excite and encourage everyone within earshot, especially the powerful, the interesting and the rich to request more details, preferably in a more private setting. The differences between these two gatherings, however, consists principally in the age of the participants and the number of clothes items they packed. The World Economic Forum in Davos attracts people who score high in both areas. The Spring Break festivities are famous for the paucity of both. No prizes for guessing which one I wish I had been able to get to and which one I was lucky to escape being sent to.
My sole question about the current proceedings on the snowy Swiss slopes is that if these guys and gals are so good at this economics business why, at last year’s meeting, did they set a program that has lead us into the present economic swamp?
When it comes to programs I must admit to being pretty alarmed at the news that the taxman and the banks have shaken hands upon the latter promising to use the very loopholes that they have exploited in the past to pay more tax in the future. Leaving aside the implication that this makes about possible prior infringements of the law, it does mean that depositors and shareholders are probably the ones being committed actually to paying for this lofty ideal. I am sure that salary cuts for bank directors will not be the source of funds for this forelock-tugging exercise. But we may never know.
Banking companies are always a very difficult area for investment analysts. The business is intrinsically very simple with only one product, which should make stock taking simple. Naturally in real life where clients, customers, competitors, tax collectors, shareholders and staff all would like to see different things, the accounts are usually a monument to human ingenuity and a delight for the printing company. Standard Bank’s annual report weighed over 1kg last year.
Back here south of the Limpopo, inflation has all but been declared dead. I am not so sure. The fact is that prices for mostly everything except fuel are still way higher than they were a year ago even if they are not going up as fast. Nevertheless, several rent-a-quotes have forecast that Governor Mboweni and his committee are sure to drop the price of money itself by at least 100 basis points when they meet next week. This will certainly be welcomed by the indebted amongst us but I can’t see it staving off the inexorable closing in of the global recession on our sunny (once the rain goes away) shores. Like being a president, being a central banker these days can have very few attractions beyond free catering and a nice entry to have on the CV.
One CV entry that no one should ever be allowed is the boast that they were a minister of sport (or culture or recreation). Government has absolutely no part to play in any of these areas and the reports of intended forthcoming legislation are terrifying. We already know that the selectors of our national teams steadfastly ignore the collected wisdom of millions of us bar room experts some of whom have even played the game. The minister’s sign-off of the team sheet will not guarantee a winning side Or am I naïve in thinking that is what he wants?
James Greener
30th January 2009
