WHATEVER FLOATS YOUR VOTE

The investment guru Warren Buffet once famously noted that it was only when the tide went out that one could discover who was swimming naked. He was referring to what happens when paper profits (usually in derivative markets) are converted into actual cash.  Here in Durban after 48 hours of nearly continuous torrential rain it was the opposite effect and we discovered where the storm water drainage was lacking. It’s amazing how floods seek out the weaknesses in retaining walls. Cue a huge increase in business for the brigade of bakkie-builders. Unfortunately, the storms were concentrated along the coastline and the important dam levels are largely unchanged. Water restrictions remain in place. Should you however, require millions of empty plastic bottles, the beaches here are where you need to go,

We are back into a season of four day weeks. South Africans have become very comfortable with being given a day off to vote. Election day is next Wednesday and on the following Tuesday we shall celebrate women. This might be expected to put a small dent in the productivity figures for August but that statistic is under pressure from far greater forces than just not going to work. The ever flamboyant yellow-suited Statistician-General Pali Lehola (does any other nation have a civil servant like this?)  seemed strangely enthusiastic when releasing the latest awful employment numbers. It is both heartening and astonishing that the party never thought to embargo these numbers until after the election.

Yet again the papers carried a group photo of the dozens of sleek and self-satisfied looking delegates who attended a recent meeting of the G-20 finance ministers and central bank governors. The accompanying report gravely noted that this mob vowed “to boost global growth”. Gosh, thanks guys (and a few dolls). But wait, isn’t that bolted on to all your job descriptions anyway and didn’t you say that last time? And the time before that?  However clever and well intentioned these leaders of our economies are, their interventions are mostly irrelevant and ineffective. As our own Governor so lucidly explained “... low growth has nothing to do with technical factors that have to be dealt with by monetary policy. The slowdown … has to do with structural impediments.”  Yup. Like poor personal safety, threatened property rights and restrictions on the use of capital and labour.

Eskom is looking for a contractor who will gather intelligence, analyse forensic evidence and probe crime syndicates. The task is to reduce electricity theft. Actually what they need is a man with a good set of wire cutters. Perhaps also cutting off the supply to any sub-station with illegal connections would also quickly gain the attention and support of the legal paying consumers drawing their power from that box. Any one reporting an illegal connection should be rewarded with a month’s free electricity.

Nedbank’s Divisional Executive of Transactional Banking, Forex and Investments has taken a quarter page advertorial in the daily newspaper to try and teach readers about compound interest. Through no fault of her own, the typesetter has failed to print the basic formula correctly, but it is odd that her schedule of illustrative values uses a product not currently offered by her employer. That is 10%pa interest (apparently tax-free) compounded annually. Further, there is substantial confusion between present and future values.in the schedule of illustrative results The investment made today appears to decrease in nominal value in future years. Undoubtedly the Divisional Executive does know what she is doing but it’s unlikely that depositors are excited by this piece.

Compared to the interminable round robin stages of the Super Rugby tournament, the play-offs are brutally quick. With just the Lions left out of the three SA contenders it’s all or nothing tomorrow at Ellis Park. They so deserve to win. I’ll be in my red cap shouting at the screen.

James Greener

Friday 29^th July 2016

WHEN THE SUN DON’T SHINE

There are countdowns for everything at the moment. The Olympic games, the local government elections, the demise of SAA and SABC, the junk status downgrade for our poor country and then the US presidential elections. More personal is the growing tally of relatives and friends who have decided to leave South Africa for good. The most common reason offered for their move is to reunite families already splintered and seeking safety and sense elsewhere. Most of us are too polite to suggest that racial discrimination has reached intolerable levels. Ironically none of the young skilled and competent citizens who are now the most affected by the current policies of social engineering and quotas were alive when previous governments were making the same mistakes. Only a few us might now remember in bemusement our conviction that we could make SA a better place for everyone with our protests against apartheid and votes for an opposition. But fortunately despite our cynicism there is still an encouraging number of fellow citizens who believe they can get this country to the place it deserves to be. But it will take courage to sack most politicians, half the civil servants and remove the restrictions on capital and labour that several generations of politicians have piled into the statute books.

The unexpected decision by Eskom to phase out their policy of buying power from anyone with a windmill or solar panel is really interesting. Firstly, they seem to be admitting to the incontrovertible technical fact that these so called renewable sources don’t deliver electricity all day and every day and this doesn’t match the kind of supply that users demand. And secondly it is rather embarrassing that the price of power from these systems is substantially lower than even the published and massaged costs of building power stations and buying and burning coal.

Here in Durban the great and good as well as the loathsome and dubious have gathered to offer us their views on what should be done about AIDS. Mostly absent from this jamboree of course are the ground troops working in clinics, hospitals and laboratories. Their efforts and successes have been remarkable. Also missing is a report in person from Number One on his experiences of showering as a preventative measure in virus transmission.

There is some kind of unwelcome race to the bottom going on as Governor Kganyago underbids the IMF (who called 0.1%) with his forecast of 0% growth for our poor nation this year. Fortunately for the politicians, these folk and their utterances are so remote from the understanding and experiences of most of the electorate that there is little chance that they will be turfed out of office for failing to perform. This week an ANC party bigwig assured his audience that the party had been anointed by his deity to rule in SA. So far no one has pointed out that the track record of the party in achieving a prosperous and happy nation doesn’t say much for that assurance.

For a considerable sum of money, the Joburg Municipality has purchased a fleet of emergency vehicles designed to support police at the scene of accidents and incidents. Among the equipment and facilities squeezed onto these trucks are bar fridges and a mini conference room. Soon after their official unveiling the fleet was dispatched to attend a riot but failed to arrive because of an unspecified “technical difficulty”. Well at least the cops on board could have sat around the table and had a cold drink or two and argued about who forgot the map book.

How long before Minister Mabalula discovers that the Tour de France is a sport and that the South Africans taking part may be in need of his talents. Louis Meintjies is lying second in one of the categories and the chance of a photo op on the Champs-Elysees on Sunday for Fikile must be very tempting. Now we are down at the sharp end of the Super Rugby competition and Lion’s supporters are still smarting from last weekend’s loss in South America. Nevertheless, there are 3 SA teams to shout for this weekend.

James Greener

Friday 22^nd July 2016

LARRY STAYS PUT

There are about three dozen shares listed in the mining sectors of the JSE. In their most recent report a third of them declared a loss for the previous 12 months. Not one of the 4 companies who claim to be mining diamonds is making profits and six of the eight listed coal companies are in the red. These facts would appear not to carry any warnings for the unions who are now entering the season of wage demands. In a year’s time then, these statistics are likely to be even worse especially as the government continues to be rather hostile to any company not owned by good friends of the president. Equally alarming is the emergence of the civil servant’s pension fund as a source of funding for some very dodgy business plans. Now it takes many years of study to acquire the actuarial expertise necessary to understand the interplay between employers, employees, retirees, investment returns and inflation but putting pension money into ventures that have scant possibility of repaying sounds like bad news even to a physicist.

Those who are still fretting that Britain has made a big mistake in leaving the EU might take a look at the warnings from some pretty august outfits about the state of many banks inside the community, especially Italy. It’s the same old story about lending money to deadbeats because of who they know and not because they are a decent credit risk. And then there’s the wailing noises from the nations in the bottom right hand corner of the continent who are asking what will happen to their applications to join now that the rich Brits are leaving. Fascinating stuff to watch from here on the warming up southern tip.

Perhaps the most amazing thing about the clinical way in which Britain switches Prime Ministers is the handover of the official residence – 10 Downing Street. Suddenly there was David Cameron and his family on the doorstep waving to the cameras. Amazingly none of the children was tapping out a status update on a cell phone and Mrs C wasn’t clutching a supermarket bag stuffed with still warm pyjamas and half a bottle of milk rescued from the fridge on the way out. Mind you they probably had to leave the milk behind for Larry the cat who, it turns out, is on the permanent staff at No 10 and doesn’t shift digs just because of mere political firestorms. So no sooner had the family shuffled down the street to be taken away into obscurity than the new key holder pitched up with her startled looking husband in tow. After the waving and smiling, the big black door mysteriously swung open and the pair bolted inside. Not even a duffle bag of overnight things in sight. All very classy.

Meanwhile our man JZ was across the channel warming a seat at the Elysee Palace and offering advice and wine tips to the French top man Francois Hollande. For once Hollande might have been pleased to see the shining pated Number One as the touchy subject of how much one can pay for a haircut in Paris was unlikely to come up.

The millions of people around the world who spend a great deal of July watching 200 ridiculously fit men ride bicycles across some incredibly picturesque bits of France all cheered when Chris Froome punched a spectator who was behaving badly. Now Chris is a very nicely brought up lad who went to St John’s in Joburg. He wouldn’t have retaliated like that unless he was sorely provoked. So everyone was outraged when it turned out he was fined 200 Swiss Francs for that laudable exercise in crowd control. Just yesterday unruly spectators caused another incident affecting the race leader. How about reversing the fines process and awarding a bounty payment to a rider who manages to whack a deserving trouble maker? That will keep everyone back from the road and it will add interest for the riders at the back of the peloton as they could weave about trying to get in range of a flag-shaking lout dressed only in underpants.

James Greener

15^th July 2016