THE CASE FOR CASHLESS COMMERCE

Tidemarks missed the fact that the extradition agreement between SA and the United Arab Emirates was signed about a year ago. But it has taken since then for the cops in Dubai to pop round to the Gupta compound and arrest several members of the notorious Gupta family. While this arrest is a wonderful move, it is puzzling that legal opinion is that the delay before actually shipping them back to SA is likely to be even longer. Why? Just the action of arresting them shows that the Arab fellows have already made up their minds and that putting them on a flight to ORT (not Sun City) should be simple.  Rajesh and Atul have presumably insisted they have done nothing wrong so let’s have them back here and stick them in a cell with Jacob Zuma. In a day or two the friendship may have cooled, and the shouting and finger pointing will break out.

Despite Google’s assurance that the €500 note is becoming the unit of choice among your common-or-garden money launderers, Cyril seems to prefer Uncle Sam’s $100 bill when it comes to currency for his (ahem) confidential transactions. But this means that the rather piffling amount of USD 1 million does require the counting and carrying of ten thousand physical notes. This is not a trivial number or task. Reportedly our President Frogboiler shoehorned about 5 times this amount into his palliasse at the farm which sort of raises the old story of the Princess and the pea. It also suggests that his suspicion of Uncle Sam does not extend to his money.

One of South African top wildlife sightings is a cabinet minister excitedly quoting the bleeding obvious as if it’s an Earth-shattering revelation. One genre of this habit is when the declaration includes a list of items which have been “identified” by a committee. Transport Minister Fikile Mbalula is an aficionado of this practice. This week he announced that a road policy is being developed with four critical chapters, namely: Road Safety, Road Financing, Non-Motorised, and Road infrastructure delivery models.  Can you picture the hours of committee work that went into identifying and labelling these topics? The real tragedy is that not much is likely to be done even as the latest horror accident claims two dozen lives. The first item on Fikile’s sorely cries out for effective and immediate official action. But like the Americans and gun control no one in charge (if they even exist) wants to tackle this problem, and it’s hard to understand why. Is it a toxic topic for voter support? Reportedly there is a country in Europe where the police confiscate and then totally crush any uninsured car they find on the roads. That’s pretty final!

Repairs and recovery from the two deadly rain bombs that hit Durban in the last 6 weeks are not obviously receiving much attention from the local authority. It turns out that little of the promised National Treasury rescue fund money has yet arrived in the province because no one has filed the correct applications! A feature of the rebuilding is the number of privately funded and organised initiatives taking over the official public functions. Are the state employees still working from home? It really is time to defuse this way too overblown health scare and get everyone working properly.

URC semi-finals happen this weekend with two SA based sides playing, but with a few SA stars playing for the Irish sides.  Prices at the bookies show little support for the possibility that both will win and meet each other at the final. Are the organisers of this tournament now sorry they invited SA to join?

The TV sports networks have discovered an eager audience for women’s championship level golf where the players are almost all what has been crudely described as “eye-candy”. Interspersing scenes of birdie hunting by these lithe and attractive young ladies with commercials for power tools, cars and beer is apparently proving a winner. This week there was even a tournament format using what used to be called a “gruesome foursome”. i.e. mixed pairs.  

James Greener

Friday 10^th June 2022

ROYAL HOME TRUTHS

In the absence of actual honest reliable data about the future, and the past for that matter, financial markets happily resort to rhyming couplets like “Sell in May and Go Away”. Well, that didn’t work this year. Only the people who dabble in the mysterious crypto currencies and other members of this family of chimera instruments would have benefitted from taking that advice.

Those of a masochistic bent might enjoy reading the interview granted by André de Ruyter, the CEO of Eskom, to David Ansara of the Centre for Risk Analysis. The Eskom boss has a refreshing but alarming way of telling it exactly as he sees it and sacred cows are harmed in the process. De Ruyter is not happy with the government requirement that “interposing non-value-adding intermediaries in the process of procurement (because this) inflates cost, … introduces additional risk in terms of potential corrupt practices, and …also slows down our supply chains”. What a lovely euphemism for the phrase - cadre deployment.

In the meantime, the nation’s interposer-in-chief, Ms Mmamoloko Kubayi, who chairs the ANC's economic transformation committee, a government agency in charge of implementing the current version of apartheid, has been speaking. After helpfully revealing that load shedding (aka power failures) were crippling the country's economy, she offered the party's policy conference in July as an opportunity “to help Eskom improve financially and operationally”. What great timing. Financially it would help Eskom a great deal if Ms Kubayi’s committee could get municipalities to settle their massive debts to the utility. And operationally? Well, why not tell South Africans that acts of sabotage in the power stations must stop?

Many years ago, the respected market analyst named Richard Russel, wrote a wonderful piece about the service to investors that would have resulted from someone telling the Wright Brothers that there was no future in flying machines. Russel’s thesis was that because of Wilbur and Orville, airlines came into being, and these businesses have consistently and spectacularly destroyed investor wealth. The Comair stable of the local arm of British Airways and Kulula are merely the latest in a long line of disappointments. There probably are exceptions but business school archives must be stuffed with analyses about why investing in moving passengers by air is normally a bad business. Nevertheless, there seems always to be a queue of bright eyed hopefuls ready to take on the task of managing what inevitably appears to be a lethal mixture of a very wide range of staff skills, an inventory of very costly and complex machinery, an ever present and vigilant regulatory bureaucracy, and a consumables bill exposed to one of the most price volatile items on the planet. And then there are the passengers, some still filled with expectations about the excitement and romance of air travel. Richard was very prescient.

The rather unfortunate outcome of the UCR quarter final line up this weekend is that only two of the three SA teams that reached this stage have any chance of becoming semi-finalists. Obviously the pairing of the Bulls and the Sharks, in the early match tomorrow, means only one will move through. A background irritation to this tournament for local fans is that our government is still of the view that having more than half the spectator seats filled at a sports event poses a health risk. A very popular sport this weekend in London is “Spot the Duke” The occasion of the Queen’s Platinum Jubilee has caused a gathering of the Royal Family. Because of various choices and indiscretions in the recent past some members are now dubbed “non-working” and not on display. But as every celebrity comes to learn there is no limit to the power of today’s camera lenses and some of these miscreants have been snapped deep inside the palaces where the celebrants are gathering. Sadly the Queen herself is not well but nevertheless seems to be enjoying the party in her honour.

James Greener

Friday 3^rd June, 2022.

PETROL DEARER THAN BEER

The government made remarkably little noise about the fact that it generously rebated the tax on fuel by R1.50 a litre during these last two months. Unfortunately dabbling with the pricing algorithm has backfired somewhat as the expected “return to normal” has not taken place and not only is that rebate likely to be ended but the external factors have ganged up against us and we can expect a total increase starting next Wednesday of R3.50 per litre. Oooh. Its remarkable that the frequently quite vocal protestors have not yet taken to the streets to display their “We are Angry” dances. Perhaps they know that they may gain supporters from the usually apathetic and phlegmatic white monopoly capitalists and that would upset their “them and us” narrative.

Ex-president Mbeki carefully nurtures the widespread assumption that he is a wise elder statement. However, he somewhat tarnished this reputation recently when he reportedly appeared at a national youth task team political school under the banner of “Rebuild, renew, revive, reimagine and reposition the ANCYL towards economic freedom in our lifetime, now or never”. Word salads like this are always an alert that waffle is in the air and unfortunately its not obvious that Mbeki any longer has a constituency of followers interested in doing what sounds like a great deal of hard work. Borrowing one of the opposition’s tag-lines “Economic Freedom” was interesting.  But there was no report that Mbeki explained just who in this land still requires to be granted this particular freedom and if so by whom. Judging by the ads that infest both the TV and the Internet there are dozens of outfits eager and able to lend money to entrepreneurs.

Those of us who complain that no one has yet been called to account for the numerous corruption cases of the past few years should note that arrests were made this week. They included a senior civil servant from the Ministry of Mineral Resources and two Gupta side-kicks. Allegedly they nicked about R1.75bn of mine trust funds That’s a goodly sum and paying it back before lengthy prison spells is a splendid idea. Naturally the lawyers for this unsavoury crew are already in full cry and are faithfully following the Zuma playbook of delaying the trial until we all grow weary and old. Talking of which the assurances that the paperwork necessary for extraditing the actual Guptas was awaiting only the correct ink for the necessary signatures, has gone quiet.  Oh how we need to see those fellows in a dusty hot South African court room.

 

Tidemarks is a keen follower of most motor sports excluding of course the rather sad E series designed to promote the idea that battery powered transport is the way of the future. This weekend it’s the Monaco GP, that celebration of allegedly understated sophisticated and refined wealth. No one will ever admit that it’s a ridiculous circuit for Formula 1 cars. It’s just too special to risk getting it cancelled. Amongst other track specialities is the tightest and slowest hairpin corner in the sport. Allegedly designers of the racing car steering geometry need specially to take this left hander into account. At the other end of the spectrum is the insanity of the TT motor bike races held on that mysterious Isle of Man. This is a festival of raw speed and scant safety features and begins this weekend too. It's difficult to find the TT events on TV but its worth the search if only to try and decode the impenetrable Manx accent apparently reserved for commentators at the event. This event places in proper context the squabble taking place in Formula 1 about driver’s jewellery and body piercings. A TT rider’s piercings only count if caused by bits from the rider’s bike dislodged by a stone wall or a spectator holding a beer. Or once a horse! Watch for the side car events!

James Greener

Friday 27^th May 2022

WHO WILL BUY OUR SWEET RED RULERS?

It does seem that the equities bull markets are over for the moment. As always one only knows this for sure sometime after the trends reverse. The fact that the down ticks are not yet precipitous demonstrates that there is still considerable balance between buyers and sellers. For inclined bears it appears that the dreadfully cruel war between Russia and one of its previous provinces, Ukraine should have a negative impact on investor confidence. On the other hand, now that we are belatedly learning just how important Ukraine is for global commodity supplies, there undoubtedly are those who saw it coming and are well positioned  SA motorists are not one of these lucky folk. Petrol prices are squeezing the life out of our economy.

Apparently the double jump was expected. The Monetary Policy Committee obviously noticed the downgrade of their tea time nibbles from  Chocolate Digestives to mere Marie biscuits and hit back yesterday with a half percent rise in the repo rate instead of the one quarter percent jump it has applied in the last three adjustments . This caused the major commercial banks (acting entirely independently, of course) each to adjust their lending rate to prime clients to 8.25%pa. Which in turn cascades into virtually every money lending agreement price being adjusted upwards. Allegedly this will rein in inflation. Patient readers will remember that since the beginning of time Tidemarks has remained unconvinced by this long held assertion of economic cause and effect.  Making money more expensive seems an odd method to make goods less so.

The Prat in a Hat, Police minister Bheki Cele, has been ranting about something one would have imagined was his problem to fix. That is the atrocious working conditions that the police must endure. But most of the premises occupied by SAPS are state owned which means they are the collective responsibility of all the fat cats who get to sit around the Cabinet Room Table. That’s where the chair throwing needs to take place to demonstrate just how disappointed and disgusted we are with our non-functioning government. We need a billionaire to pitch up and threaten to buy the whole sorry mess and then to start by firing everyone on the state payroll who sits in the same chair all and every day and calls that “working” . First to go should be the aforementioned hatted one. Next should be those still sheltering at home awaiting “zero covid. “

Fortunately, it seems as if the cockamamie idea to erect a gigantic flagpole (with a flag to match) has been shelved. The only public reason offered by the spectacularly useless Arts and Culture Minister Nathi Mthethwa for this project is that it will “memorialise our democracy”, whatever that might mean.  The idly cynical amongst us think that R22m might be worth it, if only to see how long it will take our nation’s world class metal recyclers to nick a 100m tall steel flagpole.  These amazing disconnects between ministerial imagination and citizen realities are breath-taking. Another example was the astonishment expressed by ex-minister Tito Mboweni that privately owned Safair’s business model included charging passengers R15 for a bottle of water. Years of flying for free at the front of the plane have taken their toll on this amateur cook’s grasp of real life.

The format and fixture list of the United Rugby Championship has an insoluble problem. Seasons! It certainly pits interesting sides against each other and its rather relaxing not to have whining antipodeans in the background all the time. But the laudable attempt to reduce inter-hemisphere travelling costs is up against the fact that rugby is not a sport for summer conditions. Nevertheless, there is considerable interest in the URC for SA fans this weekend as there should be at the PGA Championship being played on another of those impossibly groomed USA golf courses. In the meantime, there is an incredibly silly spat breaking out about F1 drivers wearing jewellery.  The self-acknowledged injuries they might suffer from their various body piercings and adornments must be trivial when contrasted with steering the fastest cars on the planet – a risk they obviously already accept.  

James Greener

Friday May 20^th 2022

 

CHAIRING A MEETING – A NEW MEANING

According to my trusty Google-connected mobile phone, a Bitcoin would currently cost you R485k and change.  Almost half a million rand! For what? For the opportunity to find a greater fool to whom you can sell it? That’s called a Ponzi scheme. The number of similar intrinsically valueless instruments and platforms on which to trade them has been growing for decades. There are tens of thousands of them, each presumably complete with a cohort of enthusiastic supporters, almost all of whom will in due course become disillusioned and poorer. This week Warren Buffet, that entirely real experienced expert is reported to have said that he would not pay even $25 for the worlds total supply of so-called crypto currencies. That’s because they don’t represent any value into the future. True enough. Tidemarks has always cheerfully admitted to not understanding Bitcoin and its umbilical cord – the blockchain. Its all a messy mystifying morass of mendacity. Maybe it’s a backlash from the sad realisation that the legacy markets such as property, equities and debt are not as straight forward as they portray themselves. The shysters are everywhere. It turns out that the systems in place to encourage institutions to publish regular reliable statements of their financial situation have not worked too well. The incentives for organisations to dupe their employees, their creditors, their shareholders, their competitors and especially the tax man now apparently outweigh both the possibility of being timeously exposed and also any sanction arising therefrom. The information they grudgingly supply is deeply untrustworthy for making judgements about the worth of potential investments. Investors (looking for income and capital gain) are switching to gambling (looking for short term profit)

Its chair-throwing season here in the political arena again. Local elections are coming up and the niceties the founders of democratic processes imagined are suspended. Unfortunately, political assassinations are also in full swing. A record number of men and women who thought they could make a difference are never going to get that opportunity. Only the families mourn these killings with official reaction often reduced to platitudes and the rest of us worrying about the petrol price. There’s an indignant article doing the rounds about the apparent vendetta against SA in not awarding us a long overdue Rugby World Cup venue status again. Allegedly the Aussies edged us out of the running, but SA is a hard sell when it comes to guaranteeing safety of visitors. And locals for that matter.

So SARS have published their plan for improving their collection of taxes from us. Other commentators have noted that they do seem to be pursuing the rats and mice for nickels and dimes when to the casual observer the health of the super luxury car and home markets seems astonishing. Wasn’t there an attempt years ago to limit cash payments for these sorts of assets?  Top of SARS’s check list for the plan is to employ Artificial Intelligence (AI) to detect non-compliance among taxpayers. Well, excellent. But one sort of thinks that ordinary intelligence might have more success. You know the old proverb about “set a crook to catch a crook”?

The Giro d’Italia marathon bike race has begun, and early stages have been through Sicily and the adjacent tip of the mainland. The TV coverage of these events provide a wonderful glimpse of the geography of the country, but the relatively unkempt dilapidated appearance of the urban areas shown so far, is quite a surprise. The landscapes are magnificent however. Even routing the peloton near the summit of an active volcano was interesting if bleak.  The Miami venue for last weekend’s Formula 1 GP was rather the opposite. Lavish opulence everywhere.

Wokism is going to swallow the world. The word processor program that I use to compile Tidemarks has taken to highlighting words that it feels may offend some readers. Gosh I hope so. A few weeks ago, an edition of Tidemarks triggered replies from a number of readers who requested I remove them from the mailing list and one who wished to cancel their subscription.  They must have been offended. Naturally I complied. I shall miss that sub though!

James Greener

Friday the Thirteenth May 2022.

 

GOING ON ABOUT THE GOVERNMENT

The dollar prices of a wide range of commodities are showing steady and, in some cases, alarming rises. The precious metals not so much. Obviously, folks are demanding stuff one can eat and use. A frequent news theme is the shortage of materials and goods causing delays and backlogs in manufacturing and retail. Ruthless stock and cost controls so eagerly and confidently adopted in these industries have proved to be very vulnerable to government polices of lockdown and work from home. Ironically neither of these had as much effect on the infection rates as they had on national capacity and productivity. Just about the only people financially unaffected were the political leaders and their armies of bureaucrats who never missed a payday or stopped issuing instructions of increasing irrationality and outright foolishness.

This week our government began the process of repealing the State of Disaster declared when the virus first appeared more than two years ago. Even this is not going well. The state is reluctant to acknowledge that we all have had two years of learning and experience of living with this infection. We are onto the fact that management of this pandemic long ago slipped out of the hands of knowledgeable and experienced doctors disinclined to panic and was hijacked by just about everyone else. Naturally the Ministry of Health is the chief interferer and we have already found one Minister with his hands in the honey pot, so their intentions are suspect.

Unsurprisingly the talking heads have almost all seized on “Climate Change” as the cause of the recent terrifying and calamitous floods here in KZN. The main reason for using for this vague and unsubstantiated culprit is that it provides a useful distraction from the likelihood that most of the mayhem was a result of unskilled and corrupt planning and maintenance activities. No amount of banning fossil fuels and getting us to drive all-electric cars would have mitigated this natural disaster of unusual rainfall inundating a tragically inadequate and unprepared infrastructure. Engineering rules of thumb such as 100 year storms are in constant need of revision. A simple support for this fact is the fascinating picture pairs showing identical stretches of coastline many years apart. There is scant if not zero change to the sea level! Perhaps one day it will be acknowledged that there is not much hard science to back up the claim that carbon dioxide is as dangerous as many insist. 

As a nation we really need to stop wasting public money on the long dead albatross that is SAA. Several thousand gigabytes of incredibly infuriating and pointless commentary clogged up the internet recently with discussion of the 2018 results for this alleged airline. The Auditor-General claims to have ploughed through these financial statement (which apparently are still incomplete and surely always will be as the staff responsible for preparing them must be long gone). Results for later years are still in preparation which merely points up to the chimera of an imminent sale of the rotting body to an “independent private enterprise”. No true private money would buy a business with so many still to be discovered cupboard-bound skeletons lurking. Oddly, many who have requested sight of the alleged sale agreement have been ignored.

Another gobbet of legislation comes with the amazing name of “Older Persons Amendment Bill”. What?!  But it’s not that sinister. It merely sets men to the same pensionable age (60) as women. And probably in so doing exacerbates an actuarial liability arising from an aging population with insufficient retirement resources.

I’ve not yet seen the F1 street circuit in Miami but frankly after with Monaco on the Grand Prix calendar no other venue can be worth it. Its odd that a similar observation can be made in comparing the country sides through which the Tour de France and the Giro d’Italia (starting today) pass. France wins every time for the armchair tourist.

James Greener

Friday 6^th May 2022