I thought
that by now I would be out of reach of the internet and separated from all news
deserving of consideration and comment. Obviously, the Lockdown changed all my travel
plans and so to stave off my own (and hopefully your) boredom for a moment here
is another Tidemarks.
It takes
years of study and experience before mere mortals attain the sublime levels of understanding
how central banks work to control liquidity. For those of us for whom this idea
involves simply opening a tap, central bankers do things like “accommodate”, “offer
repos” and, the newest toy in the box, carry out “quantitative easing” The
objective allegedly is to ensure that credit – the oil that makes commercial
activity slip along smoothly -- is freely and easily available to those who
need it. And, of course, pay for it.
This week has
seen the largest amounts of such monetary intervention in history as
governments have been desperately prodding their central banks indeed to open
the taps and stave off the economic calamity of COVID 19. The USA, whose government
is arguably pro-rata even more indebted than our own, have announced USD 2
trillion (now that’s real money) stimulus package. Details of where this money
will come from are hazy, but presumably the Federal Reserve Governor has been
invited to the White House for cookies, coffee and a chat. All this interfering
in the markets is undoubtedly an attempt to get the stock and other US markets
to resume the soar away bull run they have been enjoying because of President
Trump’s alleged wisdom. But not even Greta Thunberg – the world’s current
favourite prophet – saw this Bear Market coming.
Meanwhile our
president Cyril has ordered a supply of slotted collecting tins to be labelled
Solidarity Fund and distributed where passing folks (foreigners especially) might
drop their spare change. The government set the ball rolling with a donation of
exactly zero. Two wealthy local individuals who are forever being pilloried by
the lunatic fringe for not doing more with their money – besides paying tax and
employing people – have each pledged a billion rand donation but notably not to
this Solidarity Fund. Too many people know where the tin openers are.
Funding woes
aside there is no doubt that our government’s response to the pandemic has been
breath taking and commendable in its speed and comprehensiveness. Unfortunately,
the powers now made available to some of the less bright and politically
vindictive officials are a bit worrying but also even amusing. The squabble
about whether taking a dog for a walk would be allowed (it isn’t) was among the
best. Banning the sales of things that people like and maybe need to pass the
time does seem rather silly. Also, the attempt by government to control all the
news about the pandemic is alarming and these days totally fruitless. Indeed, the
minister responsible for this sort of thing has told us that she and her staff
are working hard at this time to release more spectrum (gobbledegook for radio
channels) and improve internet connectivity.
Its also very
sad that while they are doing so well in coping with what is for everyone an
unprecedented event, the government appears still to be insisting that their demonstrably
ineffective and damaging racist dogma and policies be integrated with the
relief measures. Despite the crisis, the bureaucrats are still producing forms
to be completed to ensure that as few of the minorities as possible will
benefit from any of the government’s generosity, mostly supplied by those same
minorities. It’s also interesting that it seems as if all the benefits and
payment holidays being proposed are just postponements and when, as the saying
goes, we “get through” all this, the bailiffs will be back.
It should have
been the University Boat Race in London this week end. I’ll just have to ask
you to accept that Cambridge wins.
James
Greener
Day 1. SA COVID 19 National Lockdown
