Most people already have a pretty good idea of the state of the
nation and so had no interest last night in watching the President make more
promises that have little chance of being fulfilled. Those of us who repaired
to the pub instead felt vindicated by this morning’s news reports which proved
as soporific as the event itself.
Have any of you fellow tax-payers had word yet from the Free State
Health department about the outcome of the lab test they were about carry out
on the condoms that they ordered for the ANC centenary celebrations? It was
never explained why it was appropriate or even necessary for the state to
provide a million of these johnnies for the party shindig in Bloemfontein. However, it was revealed that
they were suspected of being substandard. Hence the scheduling of a lab test
and my interest in finding out if I paid for substandard goods. Let no one
accuse this place of being boring and predictable.
The Mining Indaba seems to have been rather similar to the Greek
tragedy. The Principal players talked past each other while a chorus recited
well known laments and commentaries in the background. The odd flickers of
common sense and hope were soon extinguished by torrents of scorn and derision.
Politicians remain convinced that most mining companies are generators of super
profits that deserve savage taxation. The term Resource Rent Tax was bandied
about. Ugh. Year after year, almost all the small cap mining shares on the JSE
report losses. This strongly suggests that digging useful stuff out of the
earth is a very difficult business that requires lots of capital and skills. While
the state has the former (thanks to the tax payer) the country as a whole is
very short of the latter and no benefit will accrue form further meddling by
the bureaucrats.
It seems like a good idea. The government is going to create and
operate an insurance fund that will cover the banks if their customers fail to
repay their mortgage loans. Initial capital will come from the taxpayer (where else)
and thereafter borrowers will pay a premium into the fund. Well, if they don’t
pay their mortgages will they pay their premia? I hope the scheme works but
examples of successful state interference with creditworthiness are very rare.
Usually this sort of system is mostly about buying votes by getting folk into
houses they really can’t afford. Fannie Mae is the delightful name of a similar
scheme in the USA
that has run into loads of trouble and has required oodles of taxpayer bail-out
money.
Hopefully the press report has got the story about the proposed
legislation on insider trading wrong. It suggests that it will be an offence for
you as a broker to take an order when you know (and hopefully yourself have) an
equal and opposite order in the same share at the same price. For years this
“bookover” trade was a very appealing situation for a stockbroker who was
thereby able to provide quick execution, create two happy clients and, of
course, claim double brokerage. The latter aspect has been much eroded since
“big bang” by negotiated commissions and principal trading but how on earth can
it be criminal to match a buy and sell order? When will the socialists grasp
that business profits generate the tax revenue that they wish to distribute to
the needy (beginning, naturally, with themselves). And then there’s the rather
nasty squabble about whether house prices are going down or up. Anecdotally it
seems that it is quite hard to sell a house these days but usually that can be
solved by dropping the price and surely there is no shortage of people in this
country in need of a home?
Williams’ new F1 car has been unveiled and it appears that the left
front air spoiler is sponsored by an anti-dandruff shampoo. That’s a bit low
rent for a glamour sport isn’t it? Despite my interest in seeing a renaissance
in Eastern Province sport, the idea that the
Southern Kings could be SA’s sixth team in the Super Rugby tournament seems
dodgy. Not only is the country’s talent spread even thinner but the competition
will have to run until nearly Christmas time.
James Greener
10th February 2012
