Paul the octopus has been perfect in his prediction of the outcome of soccer matches throughout this tournament. This explains why the rock pools down here on the ocean’s edge are suddenly thronged with investors armed with sticks topped with red rubber strips. They are each attempting to capture their own clever cephalopod and dispense with human analysts whose predictions of the future are usually hopeless. Paul and his peers would doubtless have foreseen the 5% rise in many bond and equity markets, including our own, in the first week of July. These omniscient octopi would sensibly have rejected as irrelevant the surging government deficits and put their clients into long dated bonds. In the US the 10 year bond rate has fallen 100bp to 3% in just three months – an epic bull market. In SA the equity market surge has been led by the financial sector where almost every day there is a rumour of someone taking over someone else. In London, where austerity is the new buzz word and consumers are becoming an endangered species, the share market has been the world’s best performer in recent weeks. Even the JSE All Share has regained the 27 000 level with ease. Only something with eight legs would have seen that coming. But surely no one saw the dollar losing 6.5% in a month? There are just no trends to which one can hitch a portfolio.
Nevertheless, us land bound analysts continue desperately to churn out and interpret the flimsiest of data. For example what should we make of the index, compiled by the SA Chamber of Commerce and Industry, which measures Business Confidence and which increased in June to 84.8 from 82 the previous month? The survey must have polled mainly vuvuzela and flag distributors. Many people, including the President, have not been at work much. The cameras often caught JZ warming a presidential seat in the VIP box at the SWC games after he returned from attending the G20 riots in Toronto. He would also have needed some time off to nip back to Zululand to distribute his coming home mementos to the family. I did see a convoy of trucks, escorted by the blue light brigade, heading up the N2.
News is coming in that the Telkom CEO is to step down immediately. Now that the World Cup is almost over and the free tickets, transportation and tempting tit-bits have come to an end, it is probable that we shall see many more fat cats stepping off the various gravy trains. There no longer is any reason to occupy the corner top floor office and collect all that abuse for not running the business properly. As a local headline asked the day after Durban hosted its last match: “Now What?” Indeed. But to return to the Telkom chap for a moment, he will apparently stay on as a consultant for a few more months. What on earth for? Based on the performance of the company during his tenure, his contribution was probably largely confined to finding the best route to the executive dining room. The new guy should be able to grasp that fairly quickly.
Many of us also grasped quite quickly this week that we are rather dependant on the internet. Out in the deep sea somewhere a tiny and probably cheap component went phut and a crucial fibre-optic link between SA and the rest of the world stopped working. The alternative lines could not cope and things got badly jammed up. Will the incoming boss at Telkom please make a note that there is almost unlimited demand for reliable bandwidth at the right price.
The Tri-Nations begins tomorrow and it will be great relief to watch rugby after the histrionics of the soccer fields. Mind you, for all their apparent frailty in a contact, those soccer boys are seriously fit. It’s just the rules that need a good going over. Similarly, racing bicycles over cobblestones is also only for the very fit. Time to go and arrange the cushions on the couch.
James Greener
9th July 2010
