There are
definite signs that sellers on the JSE are thinking that accepting a lower
price is better than waiting. It’s nowhere near a crash or panic yet and
presumably there are buyers pleased with their "bargains”, but there’s not
been anything like this for a couple of years. There is still a great deal of weakening needed
if prices are to reach the tempting valuation levels of a decade ago so a lot
more patience is probably sensible. Meanwhile the reasons being offered for
this pull back make for interesting reading. The rand is not soggy so it’s probably
not offshore selling. It would be odd if investors were suddenly being spooked
by the further revelations from the leaked “Guptagate” emails. Maybe it is the “recession”
news? But no observer of the local business scene can have been surprised by
that surely? Curious.
Full
appreciation and understanding of what the Gross Domestic Product figures
published every quarter by Stats SA actually represent, is reserved only for
those who have endured many years of instruction at the feet of experts. The
rest of us must just accept that if the numbers go down it’s a bad thing and if
they go up it’s a good thing. Furthermore, if they go down for two quarters in
a row it is officially a very bad thing and the banner bearing the dreaded word
“Recession” is hoisted and pundits are expected to be especially grave and
gloomy. We have remarked before at the mathematical precariousness of all this nonsense
which falls into the danger category of small differences of large numbers.
For example,
this week’s shocking figure of -0.66% pa is the result of a R5 billon decline
in a R3 trillion total. Remember also that some of the contributing data in
this calculation were generated by developments as long ago as October 2016. It’s doubtful that a nation where 12 000 dead
people remain on a register of approved suppliers to government can really
aspire to the implied degree of accuracy that the reams of GDP data promise. This
is not to deny that the South African economy is in very poor shape but rather
to suggest that there are other more sensitive and accurate measures of how much
trouble we are in. Chief amongst these is the number of beneficiaries of social
grants and the total amount distributed every month. This is a figure that
ought to be displayed in lights on Table Mountain and MP’s salaries reduced by
a matching amount every time it rises.
Unfortunately,
the lure of the socialists’ promises of free stuff and the surprise that democracy
can deliver the unexpected like Brexit has produced an unexciting UK General
Election outcome. Just more bureaucrats to shuffle paper and issue advice on diversity
and tolerance and health and safety. It is astonishing how accepting and
complacent people have become even in the face of outrageous acts of villainy
and terror. A few more teddy bears and bunches of flowers placed on the blood-stained
pavement seems to be all that is required. Almost no one appears to be howling
for strong government response. Here in SA our murdered farmers don’t even get
a mention let alone the ruthless and merciless police action that all these events
deserve. And now there’s suggestions that the killer fires in the Knysna area
might well have been deliberately started. The politicians meanwhile squabble
about the meaning of words.
The lore here
on the edge of the Indian Ocean is that when the aloes begin to bloom then the
sardines will arrive and winter is truly underway. And then the ‘bokke start to
play tests. When we last saw them in action they seemed to have lost their way
entirely. Tomorrow they meet France at Loftus. Oh dear it’s going to be a tense
crowd around the TV with plenty of shouting. The good news is that the baby ‘bokke
seem to have struck form in their tournament but the Proteas took one in the
face from Duckworth and his chum Lewis this week. As discussed above, this
maths stuff is hard.
This is the
601st edition of Tidemarks and a ramble through the back numbers (www.tidemarks.blogspot.com ) shows that a healthy disdain for officialdom has
rarely been unwarranted.
James
Greener
Friday 9th
June 2017
