In the last few weeks the
daily range of the All Share index has usually exceeded 600 points and on at
least three days reached 1000 points. This is variability with a capital “ouch”
and even the most skilled and aware trader will have had some scary moments.
Some will have been carried out (see next story). Private investors have wisely
kept away from this market although the odd glimmer of value has emerged at
some of the low points. Once again most of the recent company reports are of
better earnings than last year, but globally and locally the economic
indicators are not pointing to an imminent or even modest recovery. Only
governments appear to be taking on staff and that is seldom a good idea.
There will be great disappointment among certain traders in the City
of London
today. There has been a fellow over at a
Swiss bank who could pretty much be relied upon to buy expensive and then sell
cheap. This dealing strategy caused several billions of his employer’s money to
be lost to other institutions and traders. Eventually his boss noticed the flaw
and he has been taken off the desk. What do the folk who claim to run these
banks do all day to deserve their huge salaries? Risk mismanagement on a heroic
scale. Reportedly the rogue trader in his blog a few days ago noted that he was
in need of a miracle. Indeed.
Earlier this year we were proudly informed that SA had joined the
big league and was now the S in BRICS. Together with Brazil,
Russia, India and China we were an emerging nation to
be noticed and respected. The fun and
bravado has been short lived, however. Some of our club have become worried by
the big financial problems developing in Euroland and are proposing to wade in
there and help. Perhaps by buying bonds. Whoa! Hang on a bit. That’s not how it
works. The money is supposed to flow the other way. No one said anything about helping
Europeans. We are Africans. It is our hands which are outstretched. Get us out
of here.
A large full-colour advertisement promises that for the rather
modest sum of R2550, business owners can spend a day being informed about the
“… host of new laws and regulations that will force them to change the way they
do business, secure data, report, audit, advertise and interact with customers
in the next two years.” Whatever the
alleged merits of the new rules, it is likely that they will increase costs and
unlikely that they will increase sales. The state is choosing a really poor
moment to “punish” the private sector for trying to make a profit. And an
especially infuriating aspect of this regulatory urge is that the state’s own
institutions seem exempt from them.
No one would deny that wealth is unevenly distributed in most
economies and that here in SA it may be particularly skewed. The demand for redistribution
is a sure-fire attention getter frequently used by political and labour
leaders. Slogans like “Economic Freedom” and “Living Wage” are satisfyingly
emotive but hard to define and so the people who lead these campaigns should be
asked to sit down quietly and do some arithmetic. Using actual data of the
current situation they must specify firstly the processes of their
redistribution ideas. And then, critically, prove that the resulting new
distribution is capable of providing sufficient tax to fund their beloved
socialist agenda of providing pretty much everything for free. But then again
politicians are not much good at sums, except if they are counting votes.
The ‘bokke need to win just the next six games to be certain of winning
the World Cup. Oh dear. Thank goodness I had a heart upgrade this year. Now
just let me check where the Lions are on the Currie Cup points table. Ah yes, still
on top.
James Greener
16th September 2011
