Undoubtedly there is plenty of froth in the markets even if most
investors can’t see the large bubbles that we bears are sure are there. In the USA, property
prices are still falling and a very large number of house owners owe more money
on their mortgage than their home is worth. Also in the US, the central bank is
lending money at very low interest rates to banks that, without any one very
interested in borrowing it in turn, are pleased to buy US government debt and
make a bigger profit. In the Euro Zone, the patchwork quilt is unravelling at
the seams as communities who believe themselves to be industrious and thrifty,
deeply resent supporting others that they feel are spendthrift and idle. And
here at home the government begs big business “to come to the party” (i.e. send
money) while simultaneously berating them for trying to make that money. The
markets have experienced many failed upside break-out attempts, but they are
faced with these and other headwinds which blow business from their preferred
courses of getting on with what they can do. Rather they have to do what they
are told to do.
The ultimate bear’s scenario is of a significant correction that
unfortunately will destroy a lot of wealth and probably scar many people but
which would result in a new and solid base from where to start again.
The chaps who run the nation’s ports are going to dig a brand new
one down on the site where the old Durban
airport used to be. It is very exciting and it should create a lot of
employment and will need plenty of spades. When finished, the new harbour will
be capable of berthing two dozen ships. What is not mentioned, however, is what
they plan to do with all the sand that will come out of the hole. There is only
a limited market for souvenir packets of the stuff for nostalgia freaks wanting
to remember the old runways. The rest is going to require some inventive
salesmanship. Maybe someone in Joburg would like to build a beach resort?
Just how many athletes and administrators are we sending to the
Olympics and how much will their outfits cost? It must be plenty because out of
that amount the Chinese supplier has promised sponsorship of around R30m. It is
little wonder that no local supplier of takkies and t-shirts was interested in
kitting out the boys and girls in green and gold if this was the level of
incentive required. Is this maybe one of those mysterious trades like the
notorious arms deal where we expected to benefit from R110bn of so-called
“offset investments” in return for buying just R60bn worth of toys for the defence
force?
This kingdom thing is getting really messy. We might be in for a War
of the Hibiscus. It seems that the government knew that something was brewing
and took the precaution of setting up a Commission on Traditional Leadership
Disputes and Claims. So far at least ten king wannabes have made appointments to
meet with the commission who will need the Wisdom of Solomon to sort it all
out. Fittingly the venue for the meetings is the Jewish Hall in Durban.
Perhaps the Commission will have representatives at Zuma’s place in Zululand this weekend looking to see if any of the
pretenders really are A-list and have scored an invitation to the President’s
wedding. This is the sixth time Mr Zuma has taken a bride but a Presidency
spokesman has tried to calm tax-payers fears of mounting costs by pointing out
that Miss Ngema will become just the fourth official wife. Nevertheless, her
two children become eligible for 60 single domestic economy class air tickets a
year – paid for by the state. That’s a lot of flying and multiplying that by
the whole Zuma youth ensemble it helps explain why flights are so often fully
booked. And why the Pres himself travels by private jet. He avoids having a
youngster from the back of the plane creeping forward to ask if Dad could
advance next month’s pocket money.
You have probably noticed that the Lions are at the foot of the log.
Again. But they have won a game; unlike last year. Go Sharks (they need even my
support against the Chiefs tomorrow).
James Greener
20th April 2012
