Comment 1 February 2017
by Cees Bruggemans words 500
It isn't an easy proposition. But the thing that Zuma & Trump have in common is that they don't understand certain issues AND are willing to incur penalties for the broader population, provided their own mission definition wins through.
This rationale removes us from a modern democratic setting, regressing into the distant past how things were done. With loss of efficiency and net income gains. We are clearly getting off the path of decades, and enter an uncertain era in which we apparently welcome regression into past less efficient development paths, eroding our future real income & wealth gains.
Comment 31 January 2017
Unexpected abrupt changes
by Cees Bruggemans words 660
To get jobs back and stimulate home production and growth, Trump favours major intervention in manufacturing trade specifically. This has overnight caused all kinds of disruption while raising deep concerns.
It is as if Trump wants to go back into the past with his protectionism, and replay a Brazil import protection scheme that ultimately didn't work. And he wants to do it in a sector least amenable to generating future job growth.
Comment 11 January 2017
Trump’s winding road
by Cees Bruggemans words 850
It started simple. We will give you tax cuts, better infrastructure, less regulation. For those craving it, there will be more trade protection & fewer Mexicans. Geopolitically, we will demand fairer treatment, as much from our European and Asian allies as from China.
But it never stays simple. Daily tweets ensure that the (growing) assault from special interests, questioning media and of course surviving Democrats offers ever more intensity. And the President-elect ever so willing to respond.
Comment 8 January 2017
Why relapse if you can bounce
by Cees Bruggemans words 1000
The biggest surprise of 2016 for me was the extent of the rebound in global commodity prices. If something, like iron ore, is 75% down from its cyclical peak, momentum could easily knock another 10% or 20% off. Greedy but doable? The trend being your friend.
But that is reckoning without surprises, the biggest of which was 1Q16’s Fed capitulation, backpedalling on its number of expected hikes, but also allowing for some Chinese demand rebound and global supply consolidation (closing of old mines). And not forgetting slow steaming and inventory rebuilding at Chinese harbours.
Comment 7 December 2016
A changing world 7/12
by Cees Bruggemans words 800
A quarter of the UK electorate changed that country’s course last June wth its Brexit vote (and rocked expectations around the world) . A month ago, less than a third of eligible American voters changed its course drastically by voting Trump (and nuked global expectations in doing so). Those were close contests. Now two-thirds of Italian voters by a margin of 60:40 have rejected Renzi’s ideas. Austrian voters retained moderation in their President 53:47. Ahead lie yet more hurdles in 2017 (Holland, France, Germany and possibly Italy again).
The reason for these abrupt shifts can be found in those parts of these electorates that have suffered economically and feel threatened socially, especially by some foreign migrants (where traditionally migrants have strengthened societies, not weakened them).
Comment 1 December 2016
The Old Boys network revived
It was a nice try a few months ago, imagining an all-girls team in charge in 2017. Hillary in Washington, Theresa in London & Angela in Berlin, Janet at the Fed and Christine at the IMF (if not France). Facing off the usual bullies Putin, Erdogan, Xi.
How wrong can you get it? The bullies are still in place, or in fact moving up a notch in the rankings. But the girls aren't quite making it. Angela & Theresa are probably safe for now, Hillary would require an electoral college miracle to make an unexpected comeback, Janet’s days may be numbered, while Christine is lying low. That's about half the A-team gone or doubtful.
Comment 29 November 2016
European surprise potential
by Cees Bruggemans words 1050
SARB last week choose not to discuss European risk potential for SA in its latest monetary policy statement, instead preferring to focus on Trump, Fed and to a lesser extent Brexit. America remains our closest orbit. Leading overseas banks are not averse either to such an European view, describing any EU populist derailment as unlikely, implying continuation of the status quo. Don't worry, be happy.
It may well be that conventionality will still win through in 2017, in which case calm down. But it is rather ironic that after heightened SARB angst during European crises of 2009-2014 in which nothing major in the end happened, we are now getting a studious “All quiet on the Western front”, when everything clearly isn't as quiet as all that. What are the realistic odds, and implications?
Comment 23 November 2016
Scaling new heights…
by Cees Bruggemans words 1030
It is a strange mix. Our unemployed and discouraged labour topping 8.2 million, compared to 11 million formally working, with the 3Q16 total SA employment only up 5k year-on-year while the unemployed and discouraged jumped 519k (out of a population aged 15-64 increase of 636k).
In contrast, New York equity indices have all been setting new highs, even as the US 10yr bond yield, after dipping below 1.8% on Trump’s triumph, has since been trending higher, now at over 2.3%.
Comment 22 November 2016
New storms (& lulls) brewing
by Cees Bruggemans words 850
This is yet another week where you may count your blessings. With Trump heading right-of-centre with some of his senior appointments, making one wonder about what awaits in 2017. SARB likely not moving a hair this week, though reportedly still trigger happy, but then do consider our weird local and global context. Rating agencies having to decide to pull plugs or leave them plugged (for now). Zuma trying to explain to cadres how they should behave.
And then there is Europe.
Comment 20 November 2016
by Cees Bruggemans words 1250
Debauchery. It brings to mind Roman orgies of 2000 years ago. Or Boccaccio’s Decameron 1300 years later. Narrowly interpreted as unrestrained indulgence, mainly of a sensual nature. In its broader sense it can be taken as referring to destructiveness, corrupting existing structures of value.
Which naturally raises the question whether we have some debauchery going on under our very noses in our modern midst? I dare say there are a few excellent orgies taking place every Saturday night somewhere in this country, whether in private houses as in Roman times, in creative grottos as after the Black Death in Boccaccio’s imagination, or even in bored fertile minds generally on a daily basis. Recent Eskom revelations with reference to Saxonwold Gupta shebeens allows at least some minds to wander.