One has a certain sympathy for journalists in search of a
headline grabbing story and the older the better because it saves a great deal
of new research. This time it’s Moody’s, the ratings agency who waited until
after the election to warn anyone who’ll listen that there are big problems
with classifying South Africa as financially healthy. In fact, because of the
skeletons tumbling out of cupboards, particularly at Eskom, the nation is right
on the brink of being ranked as “junk”. Which means that Moodys would then
recommend that prudent lenders should cross Pretoria off their list. Which
means that to borrow money we will have to pay higher interest rates. Which is
a big problem for President Cyril and his new government. Which is why it’s an
important story, but not an easy problem.
Long term US interest rates have now decisively fallen below
short-term rates. Simply put it means that the return on a money market deposit
is higher than on a 10-year bond – something most of us are unused to and unsure
what to do about it. Theoretically
though it also means that borrowing long term money is becoming cheaper than
say an overdraft and this is supposedly good for entrepreneurs. But these rules
of thumb rarely work out as expected and anyway most people in the US at the
moment are getting ready to fret about the presidential election which takes
place next year. It seems as if every
time someone shakes a tree in Washington DC, another Democratic Party hopeful
falls out.
This surfeit of candidates in opposition to the incumbent
is something we in SA have just learned all about. We were offered candidates from
47 different parties many of which hoped that the electorate were by now totally
fed up with where 25 years of ANC rule had taken both the country and themselves.
However, it seems that most of those who managed to vote without spoiling their
ballot paper are amazingly quite happy and satisfied and appear to be looking
forward to another 5 years of the same uninspiring, incompetent and larcenous
leadership.
To those of us who are certain that there has to be a far better,
happier and critically, an economically successful way forward for our beloved
country, this is a shattering result which suggests that promises of patronage
and ties to the tribe outweigh common sense and self-interest when it comes to
politics on the southern tip. Those who are confident that President Cyril is
capable and willing to wield a large broom and cleanse his administration should
be having doubts. Reducing the budgeted cost of his forthcoming inauguration is
a characteristic clever attention-getting stunt. But the next really important
indicator will be the makeup of the cabinet. Fellow Rhodian, and Grahamstonian,
Rob Davies seems not to have made the cut. We shall miss his stubborn adherence
to the Eastern Cape sense of style. But, so far, the signs are that many of the”
tainted” gang will be back to slumber on the leather seats of parliament.
Climbing to the top of Mount Everest is a very
praise-worthy but somewhat extreme way to avoid being in South Africa through
election time. Nevertheless, hearty congratulations to Saray Khumalo who has
just successfully completed this epic climb. Meanwhile the possibility of SA
getting back on the F1 Grand Prix calendar is under consideration. A night-time
street race in Durban would be fantastic. Ferraris already dominate the
informal version of this racing and the Mercedes cars will be stolen during the
load-shedding. A lot is being written about the exodus of South African rugby
players to Europe that will take place after the world cup this year. The state
of the economy and weakness of the rand is blamed but it would be interesting
to see a schedule of just where the sport’s money flows. How much gets snared
in the long corridors of administrators?
The video of 75-year-old Mick Jagger literally bouncing
around the studio after his recent heart valve replacement operation is a great
advertisement for the benefits of a sex, drugs and rock and roll lifestyle.
This Rolling Stone has certainly not gathered any moss.
James Greener
Friday 17th May 2019
