Comment 12 October 2016
Fears overdone & underplayed
There is evidence of fears over- and undershooting in the world. Some anxieties more than warranted, others perhaps overhyped. This will of course differ in the eye of every beholder. But in large global masses of people it adds up, with the balance falling either way.
Up to July Trump looked like a steamroller, coming as underdog from behind, tapping deep unfathomable anger, potentially taking the November Presidential prize, and giving the world a massive shock with his inclinations of trade protectionism and fiscal activism, derailing Fed and bond markets, creating a massive Dollar boost and having even more such global disruption potential, not least in geopolitical terms by swinging that police baton with some force, not shy of cracking skulls.
Comment 5 October 2016
SA interest rate prospects
After nearly three years of insisting with some vehemence to be on a rising rate trajectory, SARB seems to be going for a course correction, one that may only by exception still allow for higher rates, a matter of circumstance.
With inflation set to peak and thereafter slide, and the economy this year barely skimming the zero line, and according to the IMF not all that much better next year, the idea of a rising rate trajectory always appeared rather outlandish. Until considering the full set of circumstances.
Comment 4 October 2016
Why is SA outlook improving?
by Cees Bruggemans words 950
The SA growth prospect has wriggle room. Where in recent months there had been a collective dive for the bottom and growing competition to call a recession, this passion has in recent weeks/months much becalmed. Instead, there is this urge to call out higher growth numbers, as if having cleared a challenging sandbank with screeching bottom and deeper water again our prospect.
But it remains a bit of a mystery just what resides at the bottom of it all. Noticed anything that could function as engine, never mind as turbo? But then we argue, nearly like good Europeans (….) about a few growth decimals. As if in a previous life we ever took notice of the decimal point. But now this seems to have turned into a matter of life & death. It is up, it is up!!!! By a dismal decimal or two. But so be it. The tide has turned, the decimals are up. All we need to do is explain why. That is hard indeed.
Comment 22 September 2016
Chaos in time of Serenity
by Cees Bruggemans words 450
Certain things just clash, do not go together, whether colours or personalities or political convictions. I find myself at a dawning day where too much simply doesn't sit at the same table. And yet they do, and do we have to rationalise it.
Our universities are becoming very unsettled (is that understated?), leading civil servants are being culled by court action at a prodigious rate, our political elite refuses to budge, with no clear succession path, the mood in the country can be described as darkening, our growth reform efforts have yet to show results. One is left hanging by the barest of threads.
Comment 13 September 2016
Mistaken SA notions
by Cees Bruggemans words 1050
This weekend there was a newspaper item reporting president Zuma was back in the country after a two week absence attending a number of foreign forums even as his governmental internal war proceeded without rest. The interesting aspect of the news item was that the first meeting Zuma had on returning was with the Black Business Council to discuss broad based BEE. His immediate preoccupation was not the war in government ranks. Or the Treasury efforts to orchestrate confidence and get growth going. No, it was the redistribution effort known as BEE that favours only a few.
I twittered this news and questioned its priority. What I got was a split SA response, and both very outspoken. Purely going by tweet surnames, Black SA respondents felt BEE is the only relevant national priority we have. And White respondents feel it is something that doesn't work for the nation as a whole. Oh dear. What does it mean and where does it lead?
Comment 7 September 2016
The world slowly adrift
by Cees Bruggemans words 800
There is an enormous impatience in the world for much faster growth, ever more faster growth than the present, partly from fear (if weak growth were to lead to relapse and policy means were not to be available to address such weakness adequately, what then...). It shines through in G20 communiques, most recently again out of China, with leading global policymakers wishing to be able to make a bigger impact on global performance, faster, more diversified, better founded.
And yet one cannot get away from the impression of there being too much complaining going on. Yes, slow growth, but steady. Not necessarily shakily. Perhaps better founded than fully acknowledged.
Comment 6 September 2016
Patronage Network Decades
by Cees Bruggemans words 600
It has to date been a difficult decade. Not only because having to absorb a severe global headwind as the Chinese commodity supercycle with its rich commodity export prices ended and then ingloriously faded into nothingness, leaving us without a term-of-trade engine. It has also been challenging for the manner the ruling ANC clique since 2009 changed the playing rules. Instead of a modern government distributing resources, we got a minor chieftaincy starting to issue traditionalist patronage on an unprecedented scale – contracts, positions, influence. benefits. Regardless of cost to the state or private interests. With unlimited appetite for more. That latter aspect has had alarm bells ringing. What next?
The irony is that the worst should be over this decade, if you believe in stable systems. Globally, things finally calmed down in 2016 even as US recuperation proceeded steadily, Chinese adjustment proceeded enough for commodity space to find some new stability. At home, the Zuma chieftaincy was made to look its awkward self, losing ground heavily in local elections, encountering growing resistance from modernists in society, with definite sell by dates of this regime signposted. A matter of time before the associated incompetence and corruption is left behind and more reform-minded modernist forces take over.
Comment 4 September 2016
Hillary & Theresa’ s Inheritance
by Cees Bruggemans words 950
Both British Prime Minister Theresa May and US President-hopeful Hillary Clinton have won, and presumably will win shortly, ultimate power on the rebound. Theresa from Brexit and Hillary from Trumpian (and Sandersian) anger.
But that was only as a means to an end…Far more fascinating, if I may, is to explore the pinnacle of the historic mount that they have climbed and now sit astride (or will shortly do), as the Victorian Lion did imperial Britain. There is method here. Its core unrivaled power. And the key question: what do to with it.
Comment 31 August 2016
A global challenge?
by Cees Bruggemans words 670
It is posed as a growing global confrontation ending in deepening trade and currency wars, but perhaps it is just a robust challenge that global elites will sit out. A world of difference between these outcomes, and their implications for us. Global growth has become very slow, to the point of regression, world trade stagnating, global integration being slowly unwound in places, rising anger among many classes of people being left behind, fretting about what to do if another major macro-demand crisis were to hit.
For some, the slow global growth recuperation is a reflection of too much debt deadweight that has not been cleared. Write it off and see animal spirits revive. I suspect that is too simplistic, for which part reason central banks are not at all prepared to impose such net welfare loss, on the assumption that the ship will not right itself straightaway.
Comment 30 August 2016
Three SA Foci 2016/17
by Cees Bruggemans words 1140
And then, after a long gestation, the world suddenly changed somewhat, as with a real birth and new life intruding anew. The ANC government party entered into an active yeasting process from within; the DA/EFF combo along with smaller splinter support got hold of three major metros and many smaller municipalities scattered through the land and have become focused on delivery transformation; the economy is under own steam to find its way as best it can. And all this against a very dynamic global backdrop, hopefully accommodating and devoid of major shocks roiling us, too.
This looks to be our reality in 2016/17 and possibly through 2018/19, but with the realisation of a definitive ANC leadership conference sometime these next 18 months, topped off with a national election and new president in 2019, before revisiting the municipalities again in 2021 local elections. These will be the key local course setters for the 2020s decade and beyond.