Economics
South Africa is reportedly in the 80th month of a weakening economic cycle, of which only the last three can fairly be attributed to CV 19. Self-made? Certainly.
I was intrigued to hear a political commentator decline naming Zimbabwe as a failed state, whilst I had long thought this to be the case. On looking this up, Zimbabwe displays at least two of the four characteristics of a failed state, i.e. the erosion of legitimate authority to make collective decisions and an inability to provide public services. The question was provoked by a discussion on Zimbabwean inflation, now sitting at 785% year-on-year. And you thought we had it bad?
The Big Mac Index is an indication of purchasing power parity – by which measure the Rand is 68% undervalued against the dollar. If this measure is adjusted to GDP per capita, the Rand is still trading at 41% less than it should against the dollar. Interestingly, the Rand is expected to strengthen against the dollar, on the back of a search for yield in emerging markets, in the medium-term, to possibly R15/$.
Why is our taxi industry singled out for special treatment – CV19-wise? Other industries are cottoning in on the potential for rescue packages from the state and I have little doubt that this trend will continue.
Estimates are that SAA has cost us some R30bn to date. At today’s price of about R200k per RDP house, we could have built 150,000 decent houses for the indigent. The question is which is worth more?
The term intergenerational mobility may be defined (in this context) as the number of generations needed for those born in low-income families (the bottom 10% in terms of income) to reach the mean income in their society. The WEF estimates that, in South Africa, this will take 9 generations. Quite depressing.
Business
Promises:
When disaster struck in Tulbagh in 1969, we were there; when the aliens come, we will be there… Thus runs a radio ad for a well-known insurance company. The problem is that it will not pay out today, hence the blurb above conveniently speaks of only the past and future; promises.
Tesla has become the world’s most valuable car manufacturer. Toyota earns 10 times more gross revenue does Tesla: Ford’s pickups generated $17bn more in the last year than all the Tesla products combined. Tesla’s value is predicated upon expectation of future earnings; hope built on promise?
Nissan has worked out a way to replace the lithium-ion battery with a polymer equivalent at 90% of the cost. Production will commence next year. Now that is promise!
Do you have to pay salaries when staff does not/cannot work? No. Reference
When can one assume that an employee has deserted his employment and how does one deal with this? Reference
An interesting, if questionable, decision by the CIPC in March, is that its discretionary power under section 22(2) of the Companies Act to investigate a company trading under insolvency circumstances will not be exercised in the light of CV19. On the face of it, understandable, but possibly not in the best interests of the public, who might deal with a company unable to meet its obligations?
Of more immediate relevance to most of us is the decision by Telkom to shut down ADSL services on 1 September, wherever fibre is available.
How not to do BEE: Reference
Our Minister of Finance proposes to amend the FICA legislation to provide for additional disclosures of those who flog crypto currencies. In the same vein is the Cybercrimes Bill which, if adopted, will deal with malicious communications, and unlawful access to computer systems, the unlawful interception of data and cyber fraud/forgery. Interestingly, e-service providers, financial institutions and businesses will be obliged to report such crimes.
Property
An oft-repeated complaint is that our local authorities are broke and resultantly do not provide proper services. Msunduzi residents are complaining that they must pay 50% of the outstanding sum upfront when disconnected… We cannot buy food on credit, why must services be provided on that basis – especially when you have a record of not paying?
But wait, there is more!
This very municipality collects payment of only 2% for water supplied to Vulindlela: unsustainable?
A final beef on municipal affairs: why is illegal land occupation, during CV19, less illegal than before?
The rot in local government is across the board: a recent writer on SALGA, created to represent, promote and protect the interests of local government, describes that entity as a “lazy, lethargic leopard…unlikely to change its spots…remaining a politically aligned cadre deployment honeypot, unable to come to grips with its conflicted and confusing role within local government”.
FNB rated activity levels of commercial property (out of 10 as perceived by estate agents) as follows:
rentals 3.6;
industrial 4.5; and
office at 3.7.
The bad news is that the prognosis is that these levels will drop further, and vacancy rates are on the up. The residential rental market is bleak: yet I have heard those in that market saying that this is not so, as the private sector (as opposed to fully paid government employees) cannot afford to buy and must rent?
Generally, FNB says that up to 58% of sales are driven by, what it coyly refers to as economic shrinkage.
Ooba reports a flood of home loan applications, up 51% year-on-year, in June. Much of this is ascribed to first-time home buyers increasing by some 12% owing to, amongst other things, an unprecedented 27.5% drop in the prime lending rate. One of those other things is a drop of 36.8% in the average deposit on a house purchase for the 2nd quarter (yoy).
From a broader perspective, our world-class EAAB did not renew the PI insurance for estate agents when it lapsed about a year ago and neglected to report this to the industry. Take out your own.
Be wary of forfeiture of deposit arrangements if the purchaser defaults. If framed as a penalty, such clause will fall under the Conventional Penalties Act whilst, if framed as rouwkoop, which allows the purchaser to, as it were, buy his release from the contract, such an arrangement is valid.
Practice
WDD (Wat de d*nner) is the polite equivalent of W*F: the LPC wants to amend our practice rules so that the requirement of a driver’s licence, for a candidate attorney, will amount to misconduct. The BLA takes this further and calls for such actions to constitute a striking-off offence. Jislaaik: I know of attorneys who have dipped into their trust funds and are still practising… surely an excessive penalty?
Furthermore, requiring Afrikaans proficiency will also be regarded as anti-transformative, discriminatory, and exclusionary. Consider this: very few attorneys go to court. Those doing chamber work of any kind, including patent attorneys, conveyancers and the like often serve, Afrikaans, Zulu, or similar clients. Why would the requirement of language proficiency for such be wrong, or is the call made based on the misunderstanding that attorneys must do court work?
The RAF is in chaos, with claims handlers reportedly trying to appear on its behalf in court…
How should you deal with notice in terms of a breach clause: Reference
The Pietermaritzburg Deeds Office closed on Wednesday (owing to a staff member and a conveyancer’s clerk testing positive for CV 19) and will reopen on Tuesday. One wonders how many times this will happen before those in charge will do the sum?
We often deal with the transfer of properties in terms of a divorce order/settlement, many years after divorce, as the parties simply failed to follow through on their obligation to deal with the property concerned by registration in the deeds office. Does such a failure undo the undertaking/obligation in the settlement agreement? Take a look: Reference
Courtesy of STBB
The Gordian knot: Stats SA reports that, in 2018 the median age for grooms was 36 and that for bridegrooms was 34. The then median age at divorce was 45 years for men and 41 years for women. This leads me to believe that the seven-year itch applies primarily to women…
Comment
S&M (Suip en Mo*r. Alt: B&B – Bier & Bliks*m;) I confess to having been dismayed at the alcohol sales lockdown. However, a statistic of 3000 alcohol-inspired… injuries over two days at Baragwanath Hospital must require one to re-think: that is one every minute that must be treated in outpatients – a challenge for any system, let alone one besieged by CV19. This week brought the real question to the fore: how to deal with alcohol abuse? Difficult: as I have noted before, S&M is a national self-inflicted sport – after all, we do not punish rugby players and motocross riders, do we?
A macabre calculation: how does one balance the cost of saving lives with the cost (often also in lives, given poverty) of not forcing behaviour change? I do not have the wherewithal to debate this, save to say that a UK calculation has found the cost of an extended lockdown to be high, relative to the benefits. One should also bear in mind that fewer people in the UK live as far below the breadline as here and that our cost/benefit ratio is probably worse. Reference
Quotables
An ounce of performance is worth pounds of promises
Mae West
You cannot trust the promise someone makes while drunk, in love, hungry, or running for office
Moore
