CHANGING THE CHANNEL

Re-treading a previous Governor of the Reserve Bank and fitting him up as Minister of Finance has been well received by the currency and bond markets. But the share market is fretting about other stuff that investors think Tito Mboweni can’t influence in the medium term. The All Share (without resource shares) has weakened more than 10% in recent weeks and is testing a 12-month low.

The latest word to be misused and shorn of its meaning by the kleptocrats is “bank”. Very simply a bank attracts depositors to put their cash with them in return for regular interest payments and at the very least their capital back. Borrowers approach the bank for loans and expect not only to pay interest on the money borrowed but also in due time repay the capital. The bank profits from an (ahem) modest difference between deposit and lending interest rates. The possibility of failure to perform on either side of this transaction is coyly referred to as “credit risk”. The VBS Mutual Bank debacle is setting new standards for this phenomenon. Neither most of the lenders nor some of the borrowers have any right to be dealing with a mutual bank and huge sums of money have gone missing. Unsurprisingly it was VBS Bank which supposedly granted a mortgage to President Zuma when he was instructed to pay back the money spent on his private home.

The technical aspects of the internationally agreed changeover of the method of broadcasting the meagre content of our nationally owned TV stations from analogue to digital are at all difficult. But a political fly in the ointment, together with an opportunity to divert money in unusual directions blew this project up into the so-called set-top box debacle. Politicians fretted that without this piece of equipment, voters would be unable to see them! The government therefore decided that they would give boxes to many tens of thousands of households identified as poor, despite them owning a TV set, having an electricity supply and presumably paying for an annual TV licence. The contracts to make and supply these boxes obviously provided an opportunity for a spot of cash-flow harvesting. But the far bigger prize in the broadcasting business lurks in the money that viewers are prepared to pay for good new content like movies, series and sport. However, the providers of this lucrative content will sell it only to those broadcasters capable in turn of identifying and charging their own customers. Multichoice (DSTV) is currently the sole South African broadcaster able to do this and their charge of almost R1000 a month for the “full bouquet” of content is well worth defending. Allegedly, Multichoice have long been involved in frank and meaningful discussions with ministers and bureaucrats about keeping encryption (the tool that gives DSTV the power to control who can see what) out of the set-top boxes. This of course would perpetuate their monopoly on selling desirable content. But now, at just the wrong time for everyone contemplating monopolistic practices, the internet has begun to upset the status quo. Copious and cheaper content can now be delivered directly to viewers without the need for dish antennae and decoders or the infamous boxes. Watch this space!

The profile on the SARS website for Mrs Mmamathe Makhekhe-Mokhuane, their Chief Officer: Digital Information Services and Technology is quite impressive. But in two TV interviews on Wednesday, not so much. Among a slew of non-sequiturs, unanswered questions and alarmingly clueless rambling she demonstrated also that her understanding of choral ensembles needs some tuning. She lamented that since its formation in 1967 the Drakensburg Boys Choir had not yet included a single woman. What relevance this has in supporting her demand for R2bn to fix the IT mess she claims to have inherited is unknown. But with that kind of thinking this lady must be a gift for even the most inept salesman with a tax system to sell. Meanwhile the rest of us are uncertain whether to be delighted that the tax collection system is allegedly on the brink of collapse or terrified to contemplate a nation where government salaries and state grants are not paid timeously.

Is the Currie Cup a league format or a knock-out competition? Judging by the turnouts last week, fans don’t much care for domestic rugby by this stage in the season anyway.

James Greener

Friday 19^th October 2018

IS ATTENDING A JOBS SUMMIT A PROPER JOB?

The US Federal Reserve this week announced the expected regular small increase in the key short-term interest rate. This nudged the yield on the 10-year bond well above 3% and into territory not explored for 8 years. Money managers so long starved of high quality (i.e. free of default risk – really!?) choices, sold other currencies and moved into US dollars causing the weakness throughout most markets. Ours were not immune. Although we mostly didn’t notice because we are so busy with numerous commissions gazing at navels full of fluff. Even the saintly finance Minister Nene might have a skeleton in a cupboard never before opened. This openness stuff, once the mantra of a left-wing liberation movement rightly suspicious of a well and long established hegemony, is biting back. Ambitious investigative journalists world-wide must look longingly at all the dirt available for the South African truth seekers to dig into. Provided, of course that they avoid certain “trigger words”, like synonyms for simian. Left wingers clearly never had a mother who told them the rhyme about: “Sticks and stone may break my bones, but words will never hurt me.” Cambridge University has removed the statue of one of their most successful alumni – Field-Marshall Jan Smuts. And student bodies are banning the practice of clapping because the noise alarms a few of the people who voluntarily attend gatherings where the audience might clap.

There are many words and phrases that the current government misuses grievously ( see the next paragraph) but among the worst is “performance bonus”. Maybe somewhere in a clean and tidy office somewhere in the labyrinthine corridors of the Union Buildings or at the controls of a machine or in front of a class or just even wielding a spade there is a public employee doing a great job worthy of a small thank you present at holiday time. But multi-million rand performance bonuses handed out after being dismissed for incompetence or after just a few months in the job are a travesty of the term. Let alone a severe and unwarranted waste of public money. The private sector is not immune to this self-awarded largesse and the claim that such packages are necessary to retain the staff could benefit from being tested from time to time. But the difference is that the money has come from the shareholders and other employees and in theory there are remedies available if those parties feel hard done by.

The organisers of this week’s Jobs Summit are to be congratulated for assembling so many of the people responsible for the fact that jobs are so scarce. Unfortunately, they didn’t follow through either by getting speakers to explain that fact to the well-fed ministers in the front row or by herding the whole lot off to go and do some proper work for a change. The people who actually do create jobs by employing people to provide paying customers with jobs and services they require were far too busy to attend this “Summit”. Also, the new record high fuel price is now an important consideration for anyone who doesn’t have a government-supplied credit card to use to fill-up. One day the world will hang its head in shame for allowing politicians to gain so much power over the rest of us who are perfectly and uniquely able to know what we need to do to survive.

While probing my mouth for things to fix the dentist and his nurse were discussing the odds of a ‘bok victory versus the All Blacks tomorrow. Apparently in recent years Loftus is not a happy hunting ground for us versus the Kiwis. My contribution was garbled (gargled?) but where there’s life there’s hope. It’s similar to waiting for Ferrari to deliver on their promises that they are technically superior to Mercedes.

Tidemarks will not appear next week as I shall be birding in Maputaland with a party of likeminded buddies. The latest reminder from the organiser is to bring a beer mug. I wonder whatever for? Further good news is that the whales are plentiful and active this season in the ocean off Durban and indeed the whole Natal coast. Such a privilege watching them.

James Greener

Friday 5^th October 2018