That was quite a week and not just because my old friends over at the Gauteng Enterprise Propeller (honestly) went into reverse thrust by going on strike. Workers there allege that the blades have been screwing themselves into ever higher pay scales while neglecting the cogs and shafts. The media and politicians worked themselves into a great state of excitement as several allegedly significant statistics were released. The market, however, was pretty much unmoved and the JSE All Share sailed on all week just north of the 22 000 mark, suggesting that none of GDP, CPI, PPI, repo rate or the rest are of much interest. Even the rand shimmying to below 8 per US dollar appears to have been expected. Market performance in May will still be in the region of an excellent 8% despite this rather flat week.
Governor Mboweni totally ignored the singing and dancing throng that pitched up at his bank demanding that he open the window and throw out folding money. Reportedly he did not even bother to send out a lackey to collect the demands and instead concentrated on getting just the right nuance to his forthcoming rate cut announcement. A further (and final?) stomp on the “Rates Down” pedal has lowered the price of money to below the level of inflation. The theory says that money this cheap encourages borrowing and that spending will ensue. We will see. A problem is that the Credit Act suggests that lenders deal only with borrowers who have a job. As the aforementioned throng wanted to point out, there are not of lot of jobs going.
The official measure of economic activity is a rather blunt and belated tool. When published just four times per year it reports on a three month period that ended almost two months previously and reveals things that anyone who actually works for a living already knows only too well. And this is that compared to a year ago far fewer customers and clients are buying goods and services. About all the official numbers actually do is to permit economists to shade in their calendars and label the period “Recession”. Officially. Nevertheless it is turning out to be an exceptionally harsh recession and probably did not end in March. Precious few company reports are remarking that the current business environment is looking better. Standard Bank has even seen fit to revise down a previous forecast of their results.
In the US, General Motors are also studying the calendar to choose a propitious date on which to declare themselves bust and let the shareholders (including every US taxpayer) kiss their investment goodbye. The smell of burnt fingers could match the aroma that will waft over Swaziland if the reported proposal to brand on the buttock everyone who is found to be HIV positive is carried out. Back home we have our own problems with identifying the fit from the sick. Apparently there might be a reason to think that an admission of guilt for fraud is a less serious barrier to public office than a conviction for the same offence. Nearly as offensive is the news that taxpayers support a Spousal Support Office in the Presidency. The new man’s current spousal complement of three is produced as a reason for the preservation and even growth of this astonishing office.
There is so much sport to follow at the moment that tomorrow I am in danger of tuning to the channel showing the British Lions facing the Chiefs at Roland Garros for the FA Cup. On Sunday, however it should be easier to find the action from Murrayfield as the mini ‘bokke nail the Sevens Series. Go Bulls.
James Greener
29th May 2009.
