WHERE DID SARS FIND SO MUCH MONEY?

There are quite a few signs that interest rates here in SA are uncomfortably low and that money is a bit cheap. The ability of all tiers of government to collect revenue is under threat from many sides. Quite simply most citizens simply don’t have the money with which to pay the rates and tax bills being presented. PAYE is a major tax collection method and with fewer people “E-ing”, less of that tax is being collected. Next, the featherbedding of civil servants throughout the Covid calamity has reduced their already awful productivity levels and people are rebelling against paying for services unrendered. The “working from home” model, even for private enterprise, rarely meets all client expectations. And then of course the unashamedly blatant uncontrolled blight of theft and corruption has hollowed out the intentions and goodwill of many of the diligent citizens left standing. Tidemarks ceaselessly chunters on about the urgent need of the public service to reduce expenditure and give the poor dead horse named Taxes a break from flogging. Without that, there is mothing else left but to borrow. Which pushes interest rates up. Recently our government dragged the Minister of Finance away from his stove to rearrange the budget for the rest of the fiscal year. He was instructed to find yet more money to keep SAA alive. This demonstrated clearly that the state rated resuscitation efforts on a moribund and unlamented state asset(?) above things like buying enough Covid vaccine to get the nation back to work. This week a confirmation of this appalling choice of priorities fell dreadfully flat. The special SAA flight, assigned to fly to Brussels to collect a second rather paltry batch of vaccine was grounded for some kind of compliance reason and sat on the runway at ORT with full tanks, forbidden to take off. Another airline brought the stuff in and President Cyril manned up for one of the first jabs. Meanwhile the first batch of a vaccine made in India, which a couple of weeks ago merited its own reception committee of a platoon of politicians, poltroons, and parasols, has been deemed unfit for purpose and too close to expiry to be used on our people. Attempts to return it to the seller for a full refund are so far unsuccessful. You’d have hoped a call to the Guptas might have been useful. Unfortunately, this country has bad form in trying to turn medical events into musical comedy, but one feels that there is a blockbuster in this story somewhere. The sequel is already writing itself in the news that President Squirrel has asked the Minister of Higher Education to “put together a team of scientists to begin the process of developing our own vaccines to deal with this and future pandemics.” “Cadres in Camouflage” is another operetta in need of a score. The story of young people, desperate for a proper paying job and a sense of worth, who dress up in camouflage uniforms, call themselves Veterans and find venues at which to dance and act out their faux military manoeuvres in the dark. This week they pitched to “defend” ex-president Zuma as he hangs out in his palace in Nkandla ignoring orders to come and chat to the headmaster. Another batch camped out in Bloemfontein for an overnight vigil in support of a senior party member who is due in court there sometime. So much energy. So poorly developed and directed. Shame on you ANC. The folk at National Treasury deserved to pop open a bottle of something fizzy a few weeks ago when they reported an all-time monthly record revenue collection of R180bn. This was the December figure, and it was even R11bn greater that the expenditure of R169bn.The was the first monthly surplus since June last year! Well done. Tennis, which for ever has probably been the sport with one of the highest umpires to player ratios has used the virus as a reason to ship in the technology and ditch all but one of the on-court officials. Reportedly there have been few complaints about errors. Meanwhile the unsafe tackle law in rugby is proving contentious. James Greener Friday 19th February 2021

FIRE IN THE HOLE

The price of money in the form of 10-year borrowings by the US government has doubled in the past 6 months. For a country with so much debt that ought to be a seriously worrying statistic. The actual numbers are small (1.16%pa now versus 0.54%pa in September) but the impact on the borrower is huge. Their interest costs have soared. An extra 62cents per $100 borrowed. Just scale that up to the billions and feel the pain! Watch this space. The other interesting space is the optimism that seems to have surged through the JSE investors now that we are enjoying a much more lenient lockdown regime. It’s not at all easy to tease out the specific points of optimism while watching the government appear to make yet another mess of the Covid-19 program. The simplest of sums like how many patients could at best be “jabbed” in a day, divided into the number of people we need to vaccinate = years! And we have yet to start. The prioritising of candidates and the electronic record keeping systems are both genuinely tricky tasks. The dodgy power supply is playing its malevolent part as well. The idea of holding an annual State of the Nation event (SONA) seems to have been borrowed from an era long past and a world where a president had things to boast about. Frankly, here and now, a single short sharp odoriferous word would suffice to describe the current state of this nation. Replete with all the usual wish lists and waffle, the only different item was that he emulated minister Tito Mboweni by introducing a botanical metaphor. Our parttime gonzo chef and finance minister has invoked the common aloe ferox in his recent budget speeches and has even on occasion brought one to parliament in a pot. Cyril chose the fynbos, a uniquely Western Cape biome that requires severe wildfire events in order to regenerate itself, to illustrate the nation’s future. Wisely he refrained from bringing a sample and setting it alight. The pile of resulting ash would probably not have been as illustrative as he wished. In his speech President Cyril assured us that 2021 would be as a year of ‘change, for progress and for rebirth’. He placed fighting Covid-19 as the most pressing priority, alongside rebuilding and restarting South Africa’s flailing economy. One day a smart person is going to find a way of publicly and swiftly matching political promises with outcomes in real time and blowing appropriately themed raspberries. The sole good news about President Cyril’s SONA last night was that someone beforehand must have decided that our local strain of these nasty covid bugs is highly attracted to pageantry and posturing. Consequently, the customary amusing and alarming fashion parade of the great and good, accompanied by the usual complement of crooks, idiots and clowns, was cancelled. There’s a lot of space-related excitement at present as so far this week two craft have arrived at Mars to begin orbiting that planet. A third and much more sophisticated one from NASA will soon attempt to land a rover on the planet. Privacy and quality of life for Martians have gone out the window. Astronomers have discovered the most distant object ever found in our solar system and it has been nicknamed "Farfarout," after the previous record-holder, "Farout," which was discovered by the same astronomers in 2018. Isn’t it nice to know that there are folk for whom the terms load shedding and lockdown appear to have no impact. Unless tagged under weightlifting, the news that three suspects were detained at OR Tambo International Airport at the start of the year after gold bars weighing 73.5kg were allegedly discovered in their hand luggage is not really sport related. But anyone able to hoist 25kg of hand luggage into the overhead locker deserves respect. What did the cop on duty at the X-Ray machine make of that? James Greener Friday 12th February 2021

MONEY FOR NOTHING

Those of us with a bearish inclination are on average wrong most of the time because fortunately bear markets last for shorter periods than the bull markets that separate them. For example, the rand was very week at the start of this year but has now recovered at least half that loss. Obviously, the alarming rise in lawlessness especially amongst our lawgivers and their cronies that currently dominates the news channels has no impact on sentiment. The previous president has declined a high court order to come and tell a commission his side of the state capture story. And the current one has firmly reiterated that building unity within the ruling party is his highest priority. Anyone coming into financial markets for the first time may be puzzled by why the “science” is not more exact and forecasting more accurate. Time-series of prices in financial markets comprise one of the longest and most accurate data bases of any kind in the world. And yet no one has managed to tease out unambiguous signals about future movements. To this end it is instructive to learn that there are 417 economists on the US Federal Reserve Board of Governors. Attending a meeting of this lot must be tedious and repetitive. There can be barely a single “fact” that we have been told about the dreaded virus that has not subsequently been adjusted or scrapped. This highlights the tricky and ever evolving nature of medical research and understanding but disappoints those who are used to the modern world having effective and immediate solutions to most problems. Less worried however are the leaders who have even said how this Covid-19 pandemic has provided a great opportunity for political interventions. A feature of the past year has been the undisguised delight with which naturally inclined authoritarian regimes made up rules as they went along. At every stage in the unfolding crisis, funds earmarked for helping the victims of the disease and the even more lethal economic lockdown programs have been looted and stolen. These crimes have often been carried out at the very moment when our President has been assuring us that corruption was under control. The imminent initiation of a vaccination program already has spawned schools of sharks and bottom feeders. Our leaders missed a perfect opportunity to cheer us all up a little when they were ferried out to the airport, on to the apron and right up to the plane that was delivering the first consignment of vaccinations. The bigwigs emerged into the rain, each under cover of a brolly handled by a personal umbrella jockey. They gazed at a bundle of cargo on a pallet. Which may or may not have been all or part of the consignment since none of us know what a million doses of vaccine look like. Words were said and hands were shaken but no one cracked the joke that this scene could easily have been crafted by the Monty Python comedy team. It was all profoundly serious but ended in farce when President Cyril also used the occasion to nominate the Cuban doctors (a mercenary team who arrived 9 months ago to help with the pandemic and who have been spotted at work only rarely) for the Nobel Peace Prize. Another weekend, another series of power cuts plague the nation. The inference is that there are just too few experienced and competent maintenance engineers capable of fixing stuff at a rate faster than it breaks down. Presumably, there is also the wet coal excuse available since the nation has enjoyed substantial rains recently. It has been pointed out by others even more cynical than I that local suppliers of sandpaper are devastated by the news that the Australian Cricket team have decided that it would be foolish to come here for a Test series. The Aussies have cited Covid-19 as the reason not to come to SA. But it is more likely to do with being one of the “Big Three” in world cricket (Australia, England & India) demonstrating that they can determine their own schedules. Or maybe it is just that they hate being reminded about being caught cheating. James Greener Friday 5th February 2021

BUY CHEAP AND SELL EXPENSIVE

In the beginning those rather natty scarves in the colours of the SA flag and sported by most of the South African delegates SA to the Davos World Economic Forum, may have been a good idea. Team building and identity signalling and that sort of thing. These days, however, the wearer of this scarf is likely to be a mendicant, eager to spin a story and hold out an upturned palm. “The Saffers are here, hide your wallet” will be the whisper round the room. Frankly, Davos may have somewhat lost its cachet compared to the days when it was mainly a gathering of the rich and famous swapping stories about how terribly nice some of the poor people turn out to be. President Cyril did not attend in person this year, but nevertheless delivered an online speech in which he whined about how selfishly the rich countries were behaving. It would be interesting to learn what the audience numbers for that presentation reached. Since then, PC has, without any trace of embarrassment or shame also asked for private local money to help with funding the vaccination program. Unsurprisingly this is quickly becoming a confused mess which includes forgetting to shut the door of a fridge being used to store temperature-critical doses. And now a strange nationalism is creeping into the vaccination debates where allegedly more virulent and transmissible variants of the nasty bug are attributed to various countries. South Africa included. A few weeks ago, Tidemarks lamented the apparent dearth of truly knowledgeable and unconflicted people in the matter of the Covid-19 pandemic. Seemingly everyone has an agenda or a position to promote. Suddenly, some seemingly neutral true experts are beginning to put up their hands and for me at least, much of the confusion, propaganda and ignorance is being replaced with credible facts. It will still take a long time to displace the entrenched “accepted wisdom” so eagerly promoted by ignorant and power-drunk functionaries. Unfortunately, politics and racism has now become woven into the fabric of official guidelines and response to this new respiratory tract viral infection. Worse is that various regulations have allowed racketeering to flourish and there is considerable resistance to lifting even the most senseless restrictions like the closing of schools, the ban of liquor sales and the use of beaches. It was really refreshing and nostalgic to attend an online investment meeting this week. To hear the careful arguments about the painstaking search for value among the companies listed on the JSE was wonderful. Copious ingenuity and smart thinking and hard work was evident. Integrity is still a thing. One had quite forgotten these techniques in a world seemingly overrun with blatant dishonesty and corruption in the handling of other people’s money. It is terrifying to contemplate what the National Budget due in a few weeks has in mind for savings like investing in shares. Consider that for more than a decade now every single financial flow related to share ownership already attracts a tax. The sole reason to try and follow the astonishing GameStop share price story from the NYSE is that it is probably quite amusing. In events like this it is often hard to get the truth anyway, as the winners and losers are both reluctant and embarrassed to become known. The lesson as always is to caveat emptor. If you are surprised to learn that short positions have an all but unlimited downside risk (i.e. you and your grandchildren can lose everything) you really should not be playing. There will undoubtedly be little pockets of fanaticism trying to whip up support for the Sharks in tomorrow’s Currie Cup Final but the absence of the opinion of the man at the end of numerous bars around the province tonight will put a damper on events. He can always be counted on for a pithy comment that raises the standard of discussion, at least until the next round. But since none of these components are allowed at present, the best we can hope for is that the power stays on. James Greener Friday 29th January 2021

JUST FOLLOWING THE MONEY

It is increasingly difficult to understand just what contributions Cyril Ramaphosa must have made to private companies such as Lonmin, MTN and McDonalds during his spell in the real world between political appointments. Whatever it was, he was handsomely remunerated by his employers – a trend now continued as our country’s President, where his efforts have been dismal. He ranks 11th in the world leader’s salaries. He is particularly weak at managing his colleagues and positively lethal when it comes to budgeting. His track record is, like much of the national railways, bereft of tracks. It seems clear that he does not understand where and how the state gets its money. Nor even does he have any clue about how badly it controls how it is spent. Ceaselessly he promises that the next project will be “corruption free” even while the looting has already begun. Having this guy to manage our country is an unbelievably bad idea. He is undoubtedly paid way too much. No one can reasonably expect any of the globe’s political honchos to have any knowledge of or skills in virology and epidemiology and by and large they have all become confused and scared in the face of the medical events that unfolded in the past year. But we do expect them to notice when the national responses to the pandemic not only fail to work but cause incredible suffering unrelated to the infection itself. Why hasn’t Cyril fired the callous and insensitive minister who instructed police to use a firehose to enforce “social distancing” --- an oxymoronic term if ever there was one --- on a queue of mostly elderly people hoping for a stipend? Why does President Cyril protect so many totally incompetent and nasty cabinet ministers? And now the vaccination debacle has begun. The state has appointed itself sole source and distributor and immediately things are going awry. This nation’s record in providing state run services, from electricity to car licences is not great. It is scant comfort that Deputy President David Mabuza has been placed in charge of the vaccination program. Like his boss he too has no record of running anything like this, successfully. Right away the matter of issuing registration cards to those who will be vaccinated has the usual suspects scrambling for the suspiciously lucrative contract to manufacture them. Tidemarks has already suggested using the common implanted chip like a dog ID tag. Not acceptable apparently. Not only has this country yet to even begin the vaccination program but it turns out that our cost per dose will be amongst the highest in the world. That rings alarm bells for most people. But not yet for our President. An inability or unwillingness to understand the financial context of almost any situation bedevils many South Africans. The worst offenders are often those who have enjoyed feather bedded employment (i.e. state subsidised)for decades and truly believe that they are worth more than what they are paid. Actually, having to live off what a customer is prepared to pay for goods and services is unknown for far too many workers. The Sharks Rugby franchise is now half owned by a US outfit called MVM Holdings whose first move has been to appoint a marketing company called Roc Nation. A breathless plug for Roc Nation includes a list of their celebrated clients but leaves Tidemarks none the wiser about the alleged benefits of the deal. Doubtless answers to many questions can be found in the press releases and it would be churlish to offer negative comment at this stage. Best we wait until teams are allowed back on the fields and fans can go to watch and buy beer. The degree and complexity of controls of our recreations is often underestimated by foreigners. They will be puzzled to learn that there is a whole government ministry who have a final say about sporting matters that displease them. Like the fact that one may surf – provided one does not use the beach to reach the waves. Mind you if this Eloise Cyclone behaves badly in the next few days, surfing miles from any beach could be a thing. James Greener Friday 22nd January 2021

SANDY BOTTOMS

This week an especially incompetent and corrupt cabinet minister felt that it was necessary to define the word “beach” thus highlighting that we are in the grip of idiots and that we desperately need someone in whom we can believe and trust to tell us simply what is going on. The sole definite fact is that the world is coping with a new viral infection which is extremely unpleasant to get and can be fatal. Further it seems that no one has yet found a method to deal with the spread of this really nasty bug. Most national attempts have manged only to destroy great swathes of their economies with a series of ever hardening “lockdowns”. The absence so far of a fast and reliable test that unambiguously confirms if a patient is infected and to what degree, is a serious obstacle to managing this pandemic. So too is the lack of an effective universally adopted treatment regime. Both these medical shortfalls have been fertile grounds for rumour and quackery. For example, all stocks of Disprin vanished quickly off suppliers shelves as the word spread that a nostrum could be made based on this common analgesic. The face mask “war” has raged fiercely from the outset, but we are still none the wiser if wearing one is proven to offer anything more that an indicator of resigned compliance with overzealous regulation. This is what the beach definition is all about and which has enabled a second equally dreadful vindictive hat-wearing minister triumphantly to announce that the police patrols have arrested thousands of citizens who now will have criminal records for the crime of being beside the seaside. In effect it seems that almost every coastal property in the nation is now a potential a crime scene. Tragically, the most emotive and harrowing statistic of all – the count of deaths attributable to Covid-19 -- appears to be open to political tampering and adjustment. The clarion cry that: “We are pursuing these hateful lockdown programs in order to save lives” needs statistics to show that this is true. And it may not be. Which is why we need that trustworthy soul to tell us what is really going on. Now that the dust has settled a bit, it may be useful to scratch through some of the numbers that our diligent public servants have been publishing, regular as clockwork right through the Covid Calamity. Some series like the Gross National Product (GDP) have been grievously damaged. It has always been a data set that invites criticism and suspicion and it has not coped well with the effects of the lockdown. The ways in which people are trying to recover will certainly never have occurred to the designers of the data collections and anomalies and omissions can confidently be expected for years to come. Remember that 50% down followed by 50% up does not return you to your starting point! The national exchequer figures, while probably more exact, also tell a grim story. Average monthly tax collection is barely above R100bn. This is 10% below the peak achieved before the economy was crushed. The number of “deserving poor” has rocketed and despite promises to cull the public sector wage bill, the cost to government for supporting these two groups requires an amount of R150bn a month This difference is, as everyone is fond of saying, unsustainable. We once had a president who did not understand big numbers. The concept of negative numbers is clearly baffling to many more. One analyst who is handy with figures has concluded that proposed policies like the Basic Income Grant will need every one of the already very few taxpayers to pay an extra R5 000 in tax a month. Ummmm. Nope! Your move Mr President. A totally unexpected object from the development of the internet is the high-quality camera which is embedded in the micro-computers that we all use to connect with “the net”. Not only is it likely that virtually every event anywhere is recorded several times, but that recording is shared around the world instantaneously. So, for example, the local policeman who was pursuing his side hustle of using a police van to deliver some booze got exposed. And the shirtless man who invaded the US Capital Building wearing a fur hat with horns instantly became a folk icon. And who did not enjoy the video of the cops desperately trying to free their van from the rising tide? Schadenfreud anyone? Well what else is there to watch in these miserable sporting hiatuses? James Greener Friday 15th January 2021

AFRICAN AMERICAN NOW THE WORLD’S RICHEST PERSON

Like many of the world’s stock markets, prices on the JSE have begun the year in ebullient mood. It is always hard to separate out to what extent local share price strength is a result of rand weakness (i.e. more rands needed to buy a dollar) but those of our exporters still in business will welcome any help. Sadly the global trend of comfortably off public employees making decisions inimical if not lethal for large swathes of private enterprise strengthened considerably during the festive season. Presumably, it’s the sudden recent surge in the dollar price of the so-called crypto currencies that is triggering the annoying floods of adverts and assurances that these instruments are the undoubted path to great wealth. This old sceptic notes that predicting the share price behaviour of entities for which there are audited (for what that’s worth!) valuations of net asset values and earnings forecasts, is rarely correct. Why a virtual asset with no intrinsic value beyond its theoretical scarcity should be a better investment pick is hard to fathom. As always though, Caveat Emptor. At the risk of triggering another wave of requests to be removed from the list of those to whom I email this scurrilous and seditious (and free) denial of all that is known to be true and real (irony alert), I ask the following question. Why are the regulators, bureaucracies and other financially invested bodies, almost all of whom have yet to miss a single pay check because of the lockdown programs, actively seeking to curtail our freedoms, crush our financial independence and insult our knowledge and common sense? Tidemarks bought a new cell phone at Christmas. The timing was partly the season but the visit of tech-savvy youth capable of making these things perform magic was also a major factor as was the fact that the previous device got dropped once too often. As the saying goes “the devil is in the detail” which in this case means that the answer to a query about a vital piece of information (like how to make the damn thing simply ring when a call is received) is buried in the third level of menus. When at last I was happily ensconced with a beer and browsing through the news channels on my fiendishly smart device, President Cyril was on the wee screen closing bottle stores and weeping. His topic was of course his government’s latest plans for (again) controlling the spread of the Corona virus infection. He belongs firmly in the camp where doing the same thing repeatedly and getting much the same nil result each time, is countered but not explained with the rhetorical question about what would have happened if the 10-month-old multi-layered lockdown strategy had not been announced and in some measure obeyed? Nobody knows. But the one thing that is certain is that the monies needed to run the crusade have been ill-directed and undoubtedly, in large part, filched. The newest target for the amoral plunderers of the public purse is of course the nation’s need to purchase vaccines. Once again, the truth is hard to find but one fact seems undeniable. Very simply it is that this nation is unlikely to get or be able to afford all the muthi it needs and so a priority list for recipients will be necessary. Already there is a lot of pushing and shoving at the head of the queue, amongst whom are numerous deadbeats who the rest of us think do not deserve any kind of priority. Those of us who derive our knowledge about the wastes of Saudi from the 1962 (yes that old!) Lawrence of Arabia movie are being continually surprised by the astonishing landscapes appearing in the Dakar Rally. There is undoubtedly a lot of sand. A lot. But the more solid pieces including those which are manmade (and often very old) are curiously lovely and impressive. Why is it that the French seem to excel at organising incredibly long and exceptionally tough races for cars, bikes (Le Tour) and yachts (Vende ́e Globe)? James Greener Friday 8th January 2021 Hint. He was born in Pretoria. medicine