Friday 26 May 2017

SOMEONE ELSE USED MY COMPUTER TO SEND THIS MESSAGE



Nearly the only bellwether market indicator to be displaying any real activity at the moment is the dollar / euro in the favour of the euro. This gauge of investor opinion is hard to explain but foolish to ignore. It does suggest that the share market strength on Wall Street is largely domestic in origin though. Trump’s Grand Tour of the middle east and Europe clearly impressed only folk back home.
It is remarkable how similar the two narratives are. That President Trump of the USA will be impeached and that President Zuma of South Africa will stand down. Neither has the remotest chance of happening despite the loud and frantic insistence of the supporters of each proposal. The former was pretty fairly elected and believes he is doing what he promised his supporters. The second has a simple view that he is the chief and won’t shift until his tribe says so.
Time was when the sole people to post bulletins about what they were up to was the British royal family. A small framed notice on the railings at Buckingham Palace or a line or two in the Court Circular would tell the hoi polloi what they needed to know. Today nothing is too secret or irrelevant not to deserve a few hundred kilobytes on the internet. This is a very bad idea especially if you have no idea what you are doing anyway. The puzzling thing, however, is that even if later you blatantly lie about something you once proudly boasted about, no one is much concerned. The closest that any high ranking passengers on the state gravy train come to resigning in disgrace is to take unpaid leave.
The corruption and theft is now so open and organised that there is sufficient data available for an academic study to be carried out which confirms and details the huge extent of the condition. What a pitiful place we have come to.
So-called financial engineers are a very resourceful bunch. They use as many terms for describing a basic transaction as Brian Molefe has for not being at work. In essence every funding transaction however dressed up for tax or other purposes consists of a sum of money passing from A to B with the expectation that value in the form of repayments from B to A will take place in the future. The rights and duties of both parties vary enormously from deal to deal and importantly the consequences of a breach of any of these by either party is usually specified. The ratings industry has made a niche for itself in passing judgement on the likelihood of such a breach occurring.   This week we were introduced to the term “side pocket” to describe certain accounts used in the rehabilitation of African Bank who a few years ago were caught out when the people to whom they lent money, failed to repay it. This new term is both a noun and a verb and “to side pocket” sounds like a dubious practice but the story is that various players in the African Bank debacle are now reaching into these pockets and extracting previously stashed value. It seems somewhat like mining down the back of the sofa for coins and old potato and casino chips.
By the time you read this it will be too late for you to attend the public hearing at the Nelson Mandela Community Hall in Tarlton. If you like, however, there is another one tomorrow at the Sicelo Community Hall in Meyerton where you can catch up with what the Gauteng Economic Development, Environment, Agricultural and Rural Development Portfolio Committee has to say about the Plant Breeders Rights Bill and the Plant Improvement Bill. News like this makes one proud to be South African. Even our plants have rights and there are committees to look after them.
The Proteas, however, have some hard work ahead in England to restore their pride. Maybe the exceptionally lush greensward of the Headingly outfield distracted fellows more used to empty dams and parched crops. So many of our rugby players these days are too old, too young, broken or absent that assembling a team which will satisfy the millions of amateur selectors is very difficult. But the task is now done and all we need to worry about are the French who arrive next month. It is also worrisome that yet again the post office has failed to deliver my invitation to the Monaco Grand Prix.
James Greener
Friday 26th May 2017

Friday 19 May 2017

MANY TIMES LOTS EQUALS LESS



Explanations have been offered for why some markets slumped almost 5% this week. The most inventive reason is that the news from Brazil (a fellow-member of the cosy but distinctly tainted BRICS club) about a crooked politician who had been found stealing was particularly shocking for local investors. Well, what about the realisation that our country is now being run by a foreign family? In the histories yet to be written about our poor land, the chapters with the name Gupta in them will amaze and fascinate readers. And in the USA opinionistas are eager to show that the Trump phenomenon is losing its lustre. The alligators that infest the swamp that he claims to be trying to drain are getting nasty and vengeful.
Over in Europe accusations, outrage and stupidity vie to be named the most influencing event of the instant. Nevertheless, sellers of many currencies and securities are accepting lower prices than a few weeks ago, so something is changing. The more excitable talking heads are even fretting about a proper bear market. It is always possible. An inconvenient fact is that the commodity price recovery spotted a few months ago is not gaining traction. Consumers aren’t inclined to consume.
For anyone learning English, the press reports about the Brian Molefe affair are providing a wonderful lesson in synonyms. Fired, retired, resigned, ……. Who knew that there were so many ways to describe leaving a job? For a while “retrenched” seemed to be the favourite term. But doesn’t that imply that the post itself has been closed, in which case no one else, including the previous incumbent, could go back to that position. Curious. And even more worrying than the taxpayer’s farewell gift to Mr Molefe of R30m is the indication that suddenly Eskom don’t have enough power for us all. Could this have something to do with the poor-quality coal that became excellent-quality just as soon as it was delivered by a different seller? Or perhaps it’s just common or garden cable theft.
A similar exasperating drama is playing out in parliament where a very revealing squabble about whether MPs should or even could vote secretly for or against a motion has inevitably found its way to a court. Anyone opposing a secret ballot is obviously fearful that the majority vote will be against their own preference. Even without the legal arguments about the fine detail on the House voting rules, one is curious to know how secrecy can ever be assured when there is an electronic voting button on each MP’s desk? Despite any assurances to the contrary, the spooks who managed to jam cell phone signals in the Chamber will surely be able to find out which button was pushed on which desk? But will Number One pay the slightest attention to a vote of no confidence in him? Almost certainly not. Meanwhile his ex-wife, helped by our very generous funding and a big boost from JZ himself, has stepped up her campaign to become our next president. As well as the usual hand-outs of T-shirts and food, reportedly her voter persuasion packs include cell phone time. Very clever.
Also smart are the fellows at Prasa – the passenger train services. They have discovered a new multiplication method which reduces the product even if one of the factors increases. They say that they can accede to worker’s demands for a pay hike and still cut costs. Miraculous. The small print reveals that Prasa intend to reduce the head count but even if that were possible the bonuses for the corner office denizens will undoubtedly soak up any saving pretty quickly. Weren’t these the guys who ordered trains larger than the tunnels?
The social engineers who know what’s best for us always seem to forget that everyone loves a winner. No one who has followed the Blitzbokke to their 2017 world championship knows or cares if there are sufficient “community” players to meet some unacceptable target. Just as long as the 7 best South Africans are on the field handing it out to Fijians or English or whoever is all that matters to the rest of us. Meanwhile SARU have been phoning around the world’s second tier provincial tournaments and offering them our two slightly shop-soiled and redundant franchises. It reminds me of stock fair day in Grahamstown when the streets were full of livestock being herded to and from their destiny.
James Greener
Friday 19th May 2017 (Endangered Species Day)

Friday 12 May 2017

ESKOM PENSION: THE ACTUARIES ARE STILL THINKING



Despite the nation’s ratings downgrade, there have been few share price moves to get pulses racing in recent months. And average earnings (at least for the non-mining sectors) have also been very steady. Now over 100 of the JSE listed companies publish their half-year results in May. But any ratings impact will likely have taken place too late in the reporting period to be significant. So, there should be scant effect on earnings and dividends in the appropriate indices. However, good companies will have factored in well-signalled events like this long ago. It’s the unexpected that can do the big damage.
Only the very bright and well-connected will ever understand how government makes decisions. Brian Molefe, the fellow who left after just 18 months as CEO at Eskom, the power utility, is going back to his old corner office on Monday. The reasons for his abrupt and early departure were never made clear. Famously he was brought to tears when faced with questions about a rather odd deal that he may have structured to the very great benefit of president Zuma’s great chums, the Gupta family. His alleged success at Eskom of eliminating the necessity for load-shedding had far more to do with the alarming decline in electricity demand as the economy slowed, than astute supply management. Even a cabinet minister, however, was shocked by the R30m pension pay-off that Mr Molefe claimed would make him feel much better. The minister insisted that this amount must be reviewed. However, negotiations about the amount have collapsed and until resolved, the sole solution seems to be to send Brian back to his old job. But what about his new job as an MP? Not only was some back-bencher booted out of the House to make way for this luminary who, it was whispered, was in line to be fast-tracked into the finance ministry.  Will there be an equally hasty swearing-out ceremony? And it’s not as if Eskom doesn’t already have a boss man (well, acting of course) who has demonstrated his credentials for the post by denying that he knows anything about a lucrative tender awarded to a family member.
All of which makes it even harder to concur with the government’s tougher stance about private sector companies appointing patently unsuitable individuals. The appalling performance and effectiveness of state owned and run enterprises tells the whole story. Organisations which have followed this “transformation” policy have seen benefits accrue only to the unsuitably promoted individual. Customers, clients and citizens in need of their services are unsatisfied and frustrated to the point of violent and terrifying protests. The wilful and unjust refusal by the “leaders” to acknowledge it is they and their racist precepts and policies that are the problem is so very depressing. What skill these deplorable schemers do have is to mislead people and redirect anger by ascribing their leadership failures to other races and groups who these days are all but insignificant in the decision-making process. Undeniably of course these allegedly evil groups are the source of most the funds. They provide employment, pay tax and indulge in charity and altruism. They don’t deserve to be targeted and harmed and their numbers are shrinking. Sadly, of course Africa has demonstrated that provided the elite are OK, the welfare of everyone else is unimportant Even if they are reduced to using livestock as currency it’s not a problem for the Big Man and his cronies.
The speed and manner in which South Africa is plunging into a financial black-hole is going to provide material for shelves-full of academic research in the years to come. Chief culprit is going to be the Social Grant system that in the absence of economic growth and employment has been created to prevent almost half the nation from starving to death. Grant distribution cannot be allowed to falter for even one month and is now an unstoppable monster. The intransigent and probably corrupt minister in charge, Bathabile Dlamini has now reported that the cost of moving the payment system in-house to her ministry will be R6 billion. This is ludicrous. She could buy a controlling interest in the private company that currently does the job for far less than that. But watch this space. She is, reportedly related to Number 1 by marriage.
I am told that being drawn in Pool C alongside New Zealand for the 2019 Rugby World Cup is good news. As long as we manage to beat the other teams in the Pool it means that we would not meet the All Blacks again until we reach the Finals. That sentence contains so many conditionals I think I’ll now go away and read up where or what Repechage is since they are the fifth team in our Pool. GP back in Europe Yea!
James Greener
Friday 12th May 2015