This week it felt as if the government’s hatred for and onslaught
against wealth and capital and private enterprise had been ratcheted up several
notches. There was an endless parade of talking heads boasting about meetings
that had “identified needs” most of which were about telling business what to
do with their own money. There was one small beacon of sense from Minister
Manuel however, who complained about the state’s penchant for interference –
particularly the recent veto of the Telkom deal with some Korean money and
skills. Undoubtedly in due course he will receive a severe lashing for stepping
out of line but so far the fury and indignation at his effrontery has rendered
the critics mute. The saving grace is that virtually none of these “needs” will
receive any attention beyond appearing on the agendas of yet more meetings. The
leaders appear to be beyond caring or embarrassment that the nation now knows that
they can’t actually fix anything that needs fixing.
Ratings Agencies are rather innocuous members of the market
landscape largely indistinguishable from the research departments of investment
institutions. They do much the same job of pretending to be able to forecast
the future, in particular whether or not an organisation or even a country will
be able to service their debts. They probably have no more raw data than other
analysts, even in those cases where the entity being rated has arranged and
paid for that rating. Nevertheless, their track record of success is not
noticeably better and like any of us in this business they have made some great
blunders. Their impact and importance is
inversely proportional to the experience and sophistication of the user of
their results. Thus they tend to send politicians screaming for help when they
make an unpopular call which questions policy. And so now there is proposed
legislation to allow the state to charge and punish anyone who makes a rating
call that might in some way be suspect.
Now most analysts will stoutly maintain that their work is as robust
and rigorous as the combination of data and skill will allow. Their product is only
an opinion about future possible outcomes and is clearly undeserving of being
hunted down by some bureaucrat who believes it to be inexact or mischievous or
unsupportable. The market will do that long before the law does.
In the next few years the country’s conventional TV broadcasts –
mainly from the state broadcaster SABC – will change over from analogue to
digital and if you really want to watch that stuff you will need to get a box
to plonk on top of the TV set to convert the signal. Those viewers who
subscribe to the satellite broadcasts that require a dish antenna are very
familiar with this decoder box. Naturally government is terrified that its propaganda
might not reach the audience after the changeover and so has identified a large
number of poor households who, despite already owning a TV and paying the
annual licence fee (?), will receive a share of a R2.7bn handout to help them
buy the converter. And of course the state is also drawing up a list of
manufacturers who will be permitted to make these boxes. Why? This smells of
special deals for chums. I wonder how long it will be before cheaper knock-off converters
appear in the stores? And if you don’t have a box do you need a licence?
The Lion’s easy win over the Sharks last Saturday was a wonderful
reprise of the Currie Cup final but will thin out the number of people prepared
to talk to me at the bowling club tonight should I mention the topic. The
‘bokke will find England a bit harder to subdue so perhaps I should let the
conversation dwell on tomorrow’s test at Kings Park. Are we really fielding the
best 15 rugby players in the land?
James Greener
8th June 2012
