The JSE All Share index set a new high on US Election Day. Whether
it was disappointed in the outcome of that contest we can’t say but it has been
dribbling away from that peak ever since. Nothing as sharp as Wall Street
itself, mind you, from where confident sightings of a huge bear are being
recorded. Also the senior suits in the euro zone have talking tough this week
but the euro would appear to be losing the courage and strength it conjured up
during its summer hols. That drama is going to be an annoying background hum
for the world’s financial markets for a long time.
Reporting season is hotting up, with about three dozen companies
either releasing results or issuing so-called trading statements that are
supposed to warn investors of larger than normal earnings changes. Fewer than
ten of these announcements have been disappointing which unsurprisingly include
gold and platinum miners who have been experiencing torrid labour issues. Here
and there are grumbles about how slow and difficult the government
infrastructural spending program is becoming but oddly not every company in the
affected sectors have that complaint. Mostly, however, while acknowledging that
business conditions are tough, management teams are finding ways to keep
earnings growing and dividends flowing. Many are looking outside the borders
for new customers and even new offices and bases. As the saying goes, the boere
are making plans.
The fellow who came up with the phrase Fiscal Cliff to describe the
latest crisis in the US
economy must be delighted with the way it has caught on. Opponents of President
Obama are giving him no time to savour his election victory and are pushing him
to the edge of the precipice as hard as possible. But whatever the name it’s
the same old story told for centuries. No good can come from spending more than
you earn, year after year. The problem is that while increasing income by
raising taxes always yields less than expected, (folk are very adept at discovering
loopholes), decreasing spending is really really unpopular with just about
everyone. Not least, are the elderly, ill and indigent who have become totally reliant
on the government paying the bills. And then there are government employees,
and the politicians themselves, who have little appetite for taking a pay cut
or perhaps being fired. No newly elected politician has ever been brave enough
to start his or her regime by slashing expenditure in the hope that memories
will have faded by the time the victims next enter a polling booth.
Here on the southern tip our tax collector has embarked on a program
of sending banal and emotion-filled messages to taxpayers thanking them for
funding tax eaters. TV ads, phone text messages and a website provide heart-warming
stories of people who, because of the government’s allegedly wise and effective
provision of education, health services and other nice goodies, were able to
fulfil their hopes and achievements. Fine, but note that it is also the hope of
every taxpayer that they can achieve invisibility. Which is not something the
new bank notes can claim; their colouring is rather aggressive.
The inflation rate plays a large part in our lives, with so many
things compared against it as a bench mark. That it is an very poorly
understood statistic was highlighted this week when a new set of weights for
its calculation was released. One has to trust the skills and accuracy of the
compilers of this data but various oddities do come to light. For example the
average consumer spends more on tobacco than on health services! We spend less
on paying for education than we do on buying clothes, and our booze bill is
greater than our electricity bill. Our spending on recreational equipment is
greater than what we need for dairy products. The average SA consumer sounds
like a smartly dressed party animal dancing in the dark.
The cricket in Brisbane
has started slowly but satisfactorily. However, the ‘bokke test against Ireland
starts so late tomorrow that many of the Natal faithful may not be in fit shape
to notice that their baa lamb is in the starting line up.
James Greener
9th November 2012
