Anyone who can offer a view on what is happening in Euro Land
and how it will impact the rest of us is going to be wrong within a few hours
of making the prediction. The mess is deep, smelly and very unlikely to end
well. Perhaps the only good to emerge is that it is revealing to plenty of
people that most of their respected and trusted leaders are no more reliable or
trustworthy than just about anyone else. Those leaders have the use of the
presidential palace, plane and party planner but not much in the way of an idea
of what to do except spray public money from a fire hose. And when the hydrant
runs dry …..? It is very sad really. From a very simplistic viewpoint the
single euro currency seems like a good idea and makes life easier for many of
us. But the clever folk who said it was a doomed structure are starting to look
as if they were right. But then recall the first sentence.
Most local company earnings continue to show growth and this week
just a bank and a construction company unsurprisingly announced against that
trend. Nevertheless the simpler valuation models still suggest very few
compelling buys in the share market. A number of administrative and technical
developments being made by the now all-powerful JSE are intended to make the
bond market friendlier for small investors. With the unwarranted but inevitable
confusion that will attend next year’s probable implementation of a new way of
taxing dividends, bonds might seem like a safe haven. Outright purchases of
bonds at these generational low yields are unwise though. However, there are a couple
of instruments available for those who are not totally spooked by the thought
of collecting taxable interest payments.
So Stats SA has followed my idea of enabling everyone to compute their
own inflation rate. At one memorable
analyst meeting many years ago the usual moans of disbelief about the latest
official inflation number were being voiced. The company economist was trying
to fight his corner and support the data and pointed out to the senior partner
that “… the CPI is not based solely on the price of Famous Grouse and aeroplane
fuel, you know!” With the new Stats SA tool he can now check that point.
The levels of silliness and breathless excitement are mounting here
in Durban as
COP 17 approaches. This is not, as the name suggests, a new police series on TV
but the next in a sequence of talking shops where hypocrisy trumps science and
slogans beat reason. The future tense
will be in great demand and impossible promises will be made. Hoards of lavish-spending
tax-funded delegates are eagerly awaited. There are private jet runways and
first class lounges and top of the range suites which have remained unused
since the World Cup except for the odd visit by local party big-wigs. The War on
Carbon demands that its generals fight from the comfortable seats and the
kingdom is delighted to provide them. Expect siren-wailing traffic-halting limo
cavalcades sliding through red lights en route to deliver delegates to hector
audiences about reducing their carbon footprint. Less welcome will be the
footprints of the grubby takkie-shod and surprisingly numerous pavement
preachers who mysteriously manage to find the price of a ticket to these
salubrious and far-flung conference venues. Happily I shall be missing the circus.
I shall be in the bush for a while and the tide will leave no marks.
Oh how nice it would be if the planners had remained with the
original series of three tests against the Aussies. Two just doesn’t work –
especially if we lose the second one.
James Greener
18th November 2011
