Economy
Everyone is suddenly an economist and the topic has become quite overtrodden: the fact is that throwing borrowed money at the lockdown has two essential difficulties associated therewith:
our same sub-optimal and corrupt administration has to administer/dole this out;
the fiscal deficit and resulting borrowings will push south Africa to the brink of unsustainable credit, unless the reforms that are promised are real, wide-ranging and properly implemented.
The Prez said: Our economic strategy going forward will require a new social compact among all role players – business, labour, community and government – to restructure the economy and achieve inclusive growth.
The structural reforms are reported (by Engineeringnews) to include the overhaul of SOEs, reducing energy, transport and broadband costs, all of which had been identified before but had not been fully implemented.
Considering the above, there is hope, but I have become cynical… somehow I suspect that this is both easier said than done and that the ANC idea of a restructuring, compared to that held by mainstream economists, have little in common. My gut feeling is that we are in for hard times.
A year ago the Land Bank was still one of our few profit-making organisations; halfway through the 2020 financial year it had suffered a R184m loss and is now verging on a default in its repayment of its domestic medium term notes of R20bn and R30bn. The losses appear modest compared to the debt it was carrying and one wonders if Moody’s downgrade was not optimistic? The Land Bank’s difficulties are attributed to agricultural disasters, but I cannot dismiss the nagging doubt that it’s mismanagement chickens are coming home to roost (think on its non-performing loans ratio: a lovely sanitary term).
Business
Worldwide the success rate for business rescue is 5% and locally this is estimated at between 8 and 10% of those who submit to business rescue. Not great but probably better than nothing?
Our Eskom woes have been pushed to the back page: an interesting note appeared on repurposing existing facilities. Worth a look if you have little else to do: Reference
The implementation of DebiCheck by our banks have been pushed back to May next year.
Is it still cool to use an iPhone; if it is cheap? Enter the SDE model @ US $400.
Must you tell? The Companies Act places an obligation on directors of a company to disclose financial distress to affected persons: Reference
Stats SA released week-old survey data reflecting that 4 in 10 businesses feel that they cannot continue to operate. Take a look at the report: Reference
Another report published by UCT on job loss vulnerability may be found at Reference
Ecsponent has defaulted on its obligation to pay and has posted a loss before tax of R1.98bn.
The Prime Meridian Direct marketed, accident and health policies have been cancelled.
ITER: SWKE sent me the following link – take a look; it deals with fusion energy. Reference
Property
Heard on the radio: TPN, on residential rentals, reports that one third of such renters had not paid their full rent and one sixth of all such renters had not paid rent at all. Worse is predicted for May rentals.
FNB estimates the present price-drop for commercial properties to be in the order of 7 – 8%.
A Property360 article mooted a temporary raise in the transfer duty threshold as stimulus to the property industry – pigs might fly (swine flu?).
Members of the Property Industry Group announced its Tenant Assistance Relief Package. If your landlord is a member of that grouping, take a look at Reference
House.me offers rental management at 2.5%: I attempted to obtain a rating for this entity which offers what appears to be quite a good deal. On checking hellopeter I found that the first negative reviews had been expunged with only the complimentary ones remaining! I have had experience of this before: an aggressive lawyer can get negative ratings expunged relatively easily; which, in turn, means that the site cannot be relied upon.
Practice
Halelujah: the Pietermaritzburg Registrar of Deeds has just (Sunday evening) announced that the Deeds Office in Pietermaritzburg will reopen on 4 May running at one third of staff.
An interesting statistic, that I stumbled upon yesterday, was that the USA incarceration rate is the highest in the world and whilst Uncle Sam has 4.7% of the world population, it houses around 24% of the world’s prisoners. One wonders why?
In the same vein, yesterday it was reported that, nationwide, some 118,000 charges for lockdown contraventions had been laid, of whom 42,000 had appeared in court. The sloppiness of the rush had many of the arrested discharged as the proper procedures had not been followed.
In Q1:20 deeds registries reported a 40% drop in lodgements – keep in mind that only one week of this period was affected by the lockdown.
This week there reappeared a wringing of hands article over the Chief Justice decree that English would be the only language of record of our courts; it quotes statistics which show that only 8.1% of South Africans speak English at home and that 54% of appearers in criminal cases have little or no English. Whilst true, I think the CJ’s decree is pragmatic and politically on the button.
So you represent a chap who is accused of money-laundering: what is the status of the tainted money that pays your fees? It appears that tainted legal fees may be subject to forfeiture. Take a look: Reference
Quotables
Calderwell, referring to McKinsey in The Myth of Talent:
They were they looking for people who had the talent to think outside the box. It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.
Ron Nicholson on the lockdown’s efficacy for the poor (paraphrased):
Those living in overcrowded townships benefit least from the lockdown and, given that 87% of our population is below 54 years of age and are probably resident there and would experience mild symptoms, we are impoverishing the many for the sake of the few.
Comment
The Prez says that our lockdown has revealed a very sad fault line in our society: this was not apparent to him before?
Out of touch? Dali Mpofu (EFF) asks why a mere R10bn should not be lent to save SAA? The difficulty with this is clearly that one cannot save a dysfunctional organisation as it stands, which Mr Mpofu seems to ignore.
Misplaced faith: We must have faith in the masses, and we must have faith in the Party (Mao): our Communist Party have not paid salaries on time…
“We have now heard that some people have fallen sick from this and we are now looking at putting this (sic) as a regulation so that whoever is found drinking sanitisers as a way to replace alcohol will be arrested as they would be breaking the law.” Chairperson of the Eastern Cape Traditional Leaders ignoring those who sniff glue and drink cough medicine…
The legend behind dragons’ teeth holds that Cadmus (son of Phoenician king Agenor) had killed a dragon which had denied him access to a spring. On advice from Ares, he sowed the dragon’s teeth, from which a great crop of warriors arose who eventually turned on each other until all but five were left standing. Our leaders sowed the dragon’s teeth of civil disobedience which might well destroy its faithful…
