One should be grateful for all the people who happily buy and
consume the egregiously expensive Red Bull drink. The obviously fantastic
profits generated from selling this brilliantly marketed so-called energy drink
are used to support a large number of people who are eager to do dangerous but
very entertaining things. The world would be a much duller place without Red
Bull sponsoring Grand Prix teams, and assorted crazies on bicycles, boards and
balloons. Last Sunday a fearless fellow called Felix stepped out of a capsule
floating under a helium balloon nearly 40 km up. He whistled back to earth, setting all kinds
of records some of which will stand until this bull market finally expires and
the bear pulls on his pressure suit and also steps into space.
This particular display has again been delayed by some heroic
meddling and a great deal of hard work with the Thesaurus. It is really all
very simple A group of worthies – some of whom get awarded Nobel Prizes for
this sort of thinking – observe that there
are people, businesses, institutions and governments who have spent (or have
promised to spend) far more than they ever will have or collect. The worthies then point out that in their
opinion certain of these deadbeats and their clients and creditors don’t
deserve to find out where or how this particular business model might end and
so should therefore either be lent or given (the distinction often emerges only
much later) some money to tide them over what is almost certainly (!) merely a temporary
embarrassment that will disappear when “things get better”. This is where the
creativity comes in, as words like bust, bail-out, and rescue are considered
way too direct and even offensive for the parties concerned. The sole certainty
in this piece of theatre is that the source of the funds for these exercises
will be those citizens (both living and yet to be born) who conduct their lives
in such a way that they have savings and, simply put, spend less than they
earn. Be aware of course that there can be many acts and scenes in the show and
the bear may never get on stage while you are watching.
These sleights of hand are taking place all over Euro Land
and in celebration of calamity postponed globally most investors are
enthusiastically pushing equity prices higher. In the US the
quarterly results season is in full swing with more companies than ever beating
earnings expectations. This expected versus actual is another cute piece of
theatre which can be put to very good effect if required to disguise reality.
Interestingly, this time it seems to be largely genuine. The US may actually
be growing a little, although it seems possible that its days of leading the
global economy back to health may be nearly over. Increasingly the rest of us
are taking our cues from China
but the real problem there is credibility. Who knows what is actually happening
there? Our own lefty cabinet ministers have no doubts, however, and are letting
agreements with traditional western trading partners’ lapse in favour of
expectations of great things from our new best friends.
Sadly the labour crises back home are definitely genuine with
management resorting to desperate measures to try and keep mines open and
businesses ticking over. Next week we get to hear one of those odd second tier
budget speeches from Minister Gordhan and the main interest there must be
whether he will be brave enough again to point out that the government is not
delivering anything other than a deeply divided nation of tax payers and tax
eaters. Not to mention the growing third force of people who are tax
invisibles.
As a fellow survivor of the cancer and treatment that Lance
Armstrong conquered and endured I have always fervently believed that he would
have avoided any other interventions from the pharmaceutical industry. The current
news is devastating and confirms that I will never need to enter a bike race to
prove my own remission. Instead I can anticipate the terrors of the Lions
playing an away final in the Shark Tank.
James Greener
19th October 2012
