Comment 27 August 2016
SA overreaction? Or not...?
by Cees Bruggemans words 680
How does one respond to judicial intimidation and political innuendo? Our markets are rule-based, requiring trust in the most basic assumptions. When instead, one is offered ambiguity, active feinting, uncertainty tends to rise, to the point of spilling over into panic.
It has been interesting to see the instantaneous market reaction to suggestions finance minister Gordhan is under renewed siege from any number of quarters, some of them supposedly visible (the SARS wars), but others sensed in deep background (political motivations clearly not in line with the national interest).
Comment 24 August 2016
Costly politics hits Rand
by Cees Bruggemans words 680
It is not a simple business, power politics. As our internal political strains intensify, sacrificing our financial health appears to be a minor matter. With the local elections dealing the ANC a brutal reality check, and advancing opposition parties exuberant, the moment was apparently ripe to reassert full national control over the direction of affairs.
More specifically, which faction will succeed in predominating in leadership struggles next year, going on to secure the national elections in 2019, and thereafter keep ruling for another decade? Given the years behind us, and the way things have unraveled, there was hope for reform, but also deepening unease about entrenchment. It is the latter that seems to be now mobilizing, trying for another round of power consolidation.
Comment 23 August 2016
SA’s Next Major Choice
by Cees Bruggemans words 660
The electorate has finally again spoken. A few key municipal signboards have changed hands, crucially NMB, Tswane & Johannesburg, but also some important smaller cities. Combined opposition now has its work cut out, making service delivery work, in all likelihood accompanied by friction and more media circuses. It will remain a major battleground for change, seeking clean efficiency delivery and uplifting the urban poor more effectively, likely only coming in slow stages, with possible retreats as well as advances as the great battle for supremacy waxes & wanes.
But that's not where the next main focus should be. Instead, we can acknowledge the ANC government as still very much the principal power in the land, about to make a crucial choice affecting all of us, as it will set the pace for the next decade. And another decade lost to triviality, diversions, waste, corruption & personality cults would be a heavy price to pay for a country seeking better focus, results, progress.
Comment 16 August 2016
Clinton Presidency & SA risk
Trump has made a speciality out of the outrageous, upset many people but kept coming on. However, scaling up from petty outrage among the relative few 13 million early followers, it is a different challenge entirely when preparing for the final massive November contest when needing over 65 million votes.
Though many voters may also not like Hillary, she at least is conventional and acts presidential. A strange combination to put you over the top in America, where “personal like” rates high in doing anything. But with 100 days to go, and the Trump bloopers multiplying, just not looking presidential and in control of his actions, what exceptional turn of events might still allow one more Trump recovery? An invitation to henceforth focus on a Clinton Presidency, the original prediction but now by a landslide (indeed taking how many Republican senators down, too?). With what risk implications for us?
Comment 11 August 2016
Global fault lines shaping us
by Cees Bruggemans words 700
The world isn't a unity. It is fragmented. Each region with a different past, legacy and make-up, yet competing today in a global arena. Some parts will drift to the top, as some have done in the past, some will find their ranking diminished, yet others will fail to feature. All of it shaping each other, including us down south.
For some 400 years, different parts of Europe have dominated the globe while integrating her into one, if fragmented, system. During the past century two non-European superpowers took over until the USSR fell, leaving the field to America. Entering the 21st century, there are many wannabes dominant powers. Some will feature, others may prove shooting stars.
Comment 4 August 2016
Barely afloat & sinking
Those who remember 2004, 1994, 1986, 1982, 1979, 1974, 1964 and so back in time will have known the sensation. Enough heads up, sniffing the air, smelling Lady fortune, putting their oars in the water, raising sails, starting engines, ready to start rolling, and then take off. Whether it is to be an aborted launch before being too long in the air (1994, 1986, 1982, 1974) or one of those pellmell rushes of adrenaline into blue yonder (2004, 1979, 1964), one knows what an economic take-off feels like.
This in contrast to funerals, of which far too many in recent years. Even so, this present episode we are living through is by far the weirdest stretch of economic runway I can recall in decades. Even in that most challenged of episodes (the run-up to full democracy 1989-1993), at least everything seemed to say the same thing. Careful now, rather safe than sorry, stand back, nail that deck cargo, don't leave things to chance. But this time? Longer and far more brutish at sea with no quick fix in the offing, the rotting hulk settling ever deeper in the water, even if still afloat and drifting.
Comment 2 August 2016
Four SA mini-windfalls
Just because we are five years down-range mired in mud, with leadership to match, doesn't mean that serendipitous luck has completely left us. Indeed, going by our richly varied natural endowment, windfall luck remains part of our DNA, however unpredictable and temporary.
To really lift the wagon out of the mud without own effort, we need a major windfall, as happened sometimes in the past (for instance the opening up of the Free State goldfields in the 1950s). That's more than temporary luck, more in the nature of a structural gain. But there remains scope for small leg-ups, mini-windfalls that ease our journey through this difficult patch in our national life.
Comment 31 July 2016
Where are we heading?
by Cees Bruggemans words 880
The world this past decade appears increasingly crisis-prone, restless, if not rudderless. There have been major policy interventions keeping things afloat, but not restoring a greater sense of purpose. Instead, we are anarchic adrift. And in some ways recuperating but in other ways getting ever deeper into trouble. Or so at least it seems.
Deep chasms seem to have opened up, inside countries and between regions. Do these matter, can they be overcome, or will they get a lot worse, as well as the restlessness and drifting?
Comment 28 July 2016
These are eventful times. The British preparing to exit Europe (voting Brexit just last month), their main beef being free movement of people (and deep aversion to being prescribed by Brussels), fondly or not so fondly waved on their way by Continentals. And a terror campaign on the Continent still unfolding its full intensity, drawing in so far especially France, Belgium, Germany and Italy, its origin apparently not unconnected with free movement of people.
Who is really saying goodbye to whom here, and will exits be overtaken by events?
Comment 26 July 2016
SA government prop
Despite dwindling overall GDP growth these past five years, to the point of coming this year to a standstill, consumer spending was long shielded and last to give way. The prop keeping everything going remained supportive well beyond its sell-by-date but seems at long last to have given the ghost. Perhaps…
The primary sectors suffered from drought and global commodity price collapse, debilitating strikes and reduced Chinese mining off-take, less industrial export opportunity and more import competition, manufacturing and transport also suffering from the primary sector draining weakness, and many businesses not having enough reason to invest, seeking alternatives elsewhere, making our own reality that much worse. Not something our government had many answers for, except an admonishing finger to employers not to lay off any workers (not quite understanding the reality or perhaps simply ignoring inconvenient truths, half of them of their own making?).