No wonder I stopped trying to be an analyst all those years ago. Against
the background of a growing appreciation
that in the name of socialism and transformation, our political leaders are
intent on crafting a business- and employment- unfriendly environment, there
are violent strikes in critical sectors of the economy. The rand has taken a
battering and is as much as 10% off recent levels against all the major
currencies. The rating agencies are still doling out report cards full of Fs.
Many important industrial companies are mumbling about earnings downgrades and
what is the All Share doing? Very nicely thank you. It has been consolidating
above the 36 000 level without seemingly a care in the world. And still the
“Buy” recommendations roll off the research assembly lines. Reportedly a survey
has also discovered that banking confidence is at a record high. Very strange
stuff. Is this a case of ABC investing? Anything But Cash.
A growing share of the country’s business is being conducted in
sectors that are hard to observe and
measure directly and which are dominated by cash transactions. There is a
glorious common misconception that anyone conducting a cash business is exempt
from registering for tax! Reports coming out of Limpopo
about tender corruption reveal how easy it is to obtain a meaningless and false
tax compliance certificate. Sadly of course the source of increasingly more of
this money is corrupt government contracts where the business model allows for
immediate, frequent and large dividend payments to everyone awarding and
winning the tender, which leaves nothing left for hiring someone to do the
actual job. Presumably this model figures large in the “economic freedom” plan
being touted by certain politicians. As we have presumed before, the sole good
news is that, unlike earlier regimes, little of the stolen money is yet being
sent to homes in Switzerland
and Lichtenstein, instead it is bolstering the domestic consumer economy. Here
in KZN it is very common to see all building activity on a new house or
renovation cease for several months. The explanation is that the owner is
building up his cash pile before recalling the artisans and launching the next
phase.
Our government has embarked on a program of insulting its citizens.
This is a whole lot easier than actually operating an administration that
delivers services. We have been told that although it looks as if things are
falling apart at SAA, in fact things are NOT falling apart and actually the sudden
departure of a dozen board members and top executives is a good thing for the
airline as it makes space for people who really know how to run an airline.
Again. We have been told that the cost and motivation for a nice new road in
the heart of Zululand has absolutely nothing
to do with us and we may enquire no further. And also the huge Zuma family
compound that has blossomed at the end of that road is vital for the well being
and security of the president and therefore the country. Reportedly the pres
himself paid for much of it. Really? We have already discussed the relatively
meagre presidential salary and it sure doesn’t extend to helipads, clinics,
underground bunkers and tunnels. We citizens are certainly being kept in the
dark about how powerful are enemies are.
A sign of how cowed we are by the state’s relentless interference in
our commercial activities was the hailing as a victory a court’s decision to
reduce to just R200m (from R500m) the contribution (fine) Wal-Mart has to pay
in order to complete its linkup with Massmart. The money is to be used to “assist
existing and potential South African suppliers to Massmart”. Very courteously
Wal-Mart / Massmart have refrained from pointing out that these suppliers can
quite easily use this assistance in also supplying the competition.
There is absolutely nothing to say about rugby this week.
James Greener
12th October 2012.
