Globally, investors were delighted with
the news that Fed Governor Bernanke appears to have relented somewhat and has
agreed to keep on hosing cash into the US economy from where a lot of it
finds its way into the markets. US
market indices are setting all time highs. The JSE All Share index has returned
to the 41 000 level (a mere 1 000 points off the record), gleefully disdainful
of anything that might suggest this is high-risk territory. Like being concerned by comments that the important
construction sector is “facing a (government ) firing squad”; or that China’s imports have taken a dive;
or that president Zuma’s cabinet reshuffle has placed yet more avowed communist
party members in positions of power over vital sectors. When in doubt pay up is
the investor’s mantra and this is prising sellers out of the woodwork Volumes
are satisfyingly high.
The dollar gold price is now at levels
last seen more than three years ago and a wonderful skirmish between the bulls
and bears on this commodity has broken out with the “barbarous relic” camp
hooting with delight while the bulls are asking if anyone has seen signs that
the Fed is hell bent on anything other than the destruction of the US dollar. Meanwhile
thanks to our weak currency the rand price of bullion has given up just a
year’s worth of upside work and those of us who fear the relentless rise of the
socialists are taking this as a buying opportunity.
A fellow over at National Treasury has
spotted that the business of looking after other people’s money can be rather
lucrative. He points out that if fees were lower then clients would get better
returns. This rather simple piece of arithmetic fails to address the hardships that
a cut in money management fees would cause for purveyors of premium liquors and
exotic cars. And the urban landscapes would become drab and uninteresting
without the temples and palaces erected by the guardians of other people’s
money. Careful where you go with this one chaps. The luxury goods markets need the
support of more than just politicians and their cronies. But here’s an idea.
Why not see if fund managers will agree to share downside as well as upside
risks with their clients. Wouldn’t that be fair?
There is just one interesting development
to emerge from the disgraceful and painful saga being played out in the
politicisation of Nelson Mandela’s last days. That is the revelation of the
complex family, clan, tribal and royal structures and traditions that still
influence a large proportion of our fellow citizens. Claims and explanations of
a number of relationships and status of individuals have been both made and
rejected in recent weeks and so far at least one camp has resorted to a
non-traditional western-style court to seek redress and satisfaction. While this
is fascinating to watch it is also deeply unsettling since a simple clean
resolution to the end of the Mandela era is what the country so grievously needs.
Another thing the country desperately
needs is for the government to roll back all the legislation which makes it
impossible for employers to assemble teams of workers who need to and want to
work for the offered wage without any outside interference. The debacle at the
seriously behind schedule power station construction site is repeated on a
smaller scale just about everywhere in the country. Once again we despair at the distortion of the
labour market brought about by those who believe that the state knows best.
Increasingly too this position is coloured with the desire of the corrupt and
crooked to maximise profits.
Just when England thought they were getting
the better of the Aussies on both the rugby and cricket fields along comes this
debut number 11 who scores 98 runs. And the yellow jersey is being worn by an
old Johnnies boy. Isn’t sport wonderful?
James Greener
12th July 2013
