Daan's Snippets

Good news: the Deeds Offices are set to reopen on the 13th of this month. One cannot commend those in command: they had five paid-for weeks to prepare for this eventuality but, on the lifting of the level V restraint, found themselves unprepared (like the five oil-lamp-bearing maidens in the Bible). 


When does debt, owing by a deceased, prescribe? Take a look at the Prescription Act section 13 (1) (g-h).


What is the difference between a guarantee and suretyship? Do take a look at the latest De Rebus article in this respect – of interest to me also was a side-comment that a bond, to secure a surety, could extend to obligations beyond the principal debt.


Un-African? Same-sex marriages are not catered for in the Recognition of Customary Marriages Act 120/1998: http://journals.ufs.ac.za/index.php/jjs/article/view/4245/3764


When asked for an opinion, you state the question/facts, identify the applicable law, apply this to the question/facts and come to a conclusion? Syllogistic reasoning is taught in our law as a point of departure but may not serve well in practice; take a look; http://journals.ufs.ac.za/index.php/jjs/article/view/4246/3765


Please bear with me; I would like to do a bos-som (Rockspider calculation):

SA’s GDP is some 350bn $; our tax on this is approximately 28% which equals to about 100bn $.

If SARS collects 30% less tax this year, then we will need to borrow about 30bn $ (working on our previous budget). 30bn $ as a percentage of 350bn $ is approximately 9%. If you add this to our approximate borrowings to GDP ratio of 70%, this takes us to a state debt of about 80% of GDP; and we are not counting Covid 19 borrowings, state bailouts to SAA (R15bn), Land Bank, Eskom, municipalities and so on. 

A debt spiral, in bos terms, is a situation in which an entity does not have enough funds to service current debt and pay necessities, resulting in a downward spiral of increasing debt from which one cannot escape (https://unctad.org/en/PublicationsLibrary/gdsmdp2017d4v1_en.pdf). Interestingly, in 1993 the Reserve Bank had published a paper on this topic which found that the then ratio of government debt to GDP may not be high by international standards but that the upward trend in this ratio should be stopped (then the SA debt to GDP ratio stood at approximately 55%) https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/2904/occpaper6.pdf .

Looking back six months to October 2019, Bloomberg published an estimate that our never-ending yearly overspend will result in a rise of state debt to GDP ratio of 80.9% by 2028.

What I’m attempting to say is that the ideological pratings by those in power is truly dangerous; one needs to be pragmatic when financially with one’s back against the wall. I am, what was in the old days in Natal, known as a When-we: I grew up in Zim and the destruction, wrought by ideology in the economics of that country, beggared my parents and the whole nation. I believe that we are teetering on the cusp of a debt trap, especially as we are expected to suffer from the hangover of our current financial situation for another two years or so. Oh yes: I’m an optimist!


I had respected our Minister of Finance; but I waiver: his flip-flop handling of the SAA debacle is becoming increasingly farcical – one suspects that his unionist/SACP roots are starting to show. Now he wants to start another airline and carries on about seeking partners: clearly he means finance. Why would anyone want to partner our state in running a business, especially when you have to pay and our state will retain the say?


Speaking of farce:

  • a pair of Wits academics was given a two thirds page in The Mercury this week: they propose that one should delink basic livelihood from labour and develop policies that deliver an economically secure future for all – a permanent income guarantee. They call for a top-up of the income of the poor. Great: our tax system is supposed to redistribute wealth, but even a bos-som calculator must conclude that there is not enough money for such a plan now and, unless something dramatically changes, in future.
  • Most private enterprise workers and filthy capitalists are going to take a serious financial haircut this year: yet civil servants (take eThekwini and SABC staffers for instance) will be given a raise in excess of the inflation rate. In fact, they and the poor, will be unaffected by our economic situation. No, we are not all in this together.


Farce: bos-defined as something serious turned ridiculous::

  • our government has learnt nothing from the failure of prohibition; attempting to stop people smoking and drinking (for our own good of course) is ridiculous beyond understanding. I can still buy beer in Pietermaritzburg just costs more @ at R300 for 12 cans ;
  • this week it was reported that both the Kusile and Medupi designs are flawed in that the tower specifications are not dovetailed to the type of coal that is used. This is a major financial disaster which will cost us not only billions in repair but future downtime (for which clearly no one is to blame). In fact, Eskom loadshedding is predicted for this winter as businesses comes back on-stream;
  • whoever came up with this idea should be given a medal: a suggestion was made that the Durban ice rink be turned into a morgue! Why can’t pizza ovens be attached to power stations?
  • if farmers can distribute free vegetables; why can’t the SAB distribute surplus beer?


A note on the use of social media, by an employee which might impact on his employer, is worth reading: https://joubertscholtzinc.co.za/2020/05/06/the-professional-gravity-of-personal-social-media-use/


It was reported that some 40,000 estate agents had received no lockdown income owing to the closure of the Deeds Office. I was unable to obtain the exact number of registered estate agents but Internet sources quote only some 36,000 registered estate agents. Undoubtedly their financials will not get better and I have little doubt that the days ahead will see a cull of established estate agents that might far surpass the 2008 slaughter. The situation around estate agents today differs from that in 2008 in that there are fewer part-time estate agents today than then, which might make the impact of reduced turnover significantly less? The desperation amongst agents is such that suggestions were even made to drop the EAAB registration fee: bluntly, if you cannot afford two grand you’re going to go bust anyway.

In this respect, despite the optimistic (and completely true) puffing-pointings-out that now is the time to buy, FNB expects property sales to drop by some 40%. It’s not going to get better: it’s going to get worse.


As far as pre-lockdown property prices are concerned, FNB had reported that residential prices are still increasing at 1.9% year-on-year (keep in mind that this is less than inflation rate) but, again, I have little doubt that this is not a trend that will continue into the next quarter; in fact, the projections are that residential property prices will drop by some 20% post-lockdown.


Rates sums (less bos – this time I know what I’m talking about): rates certificates are issued for a maximum of 60 days in advance. Practically speaking, eight weeks. If you’re conveyancer obtained a rates certificate just prior to lockdown, then the odds are that it will expire or be very close to expiry by 13 May, the day on which our deeds offices will open. If your rates certificate expires before registration, which should be approximately by 21 May, getting that certificate replaced will be no easy task as most municipalities were under lockdown and have built up a backlog. Bluntly put: a few transfers are going to be registered; most will be delayed by our queueing up to pay tax – again (send more money!). Some consolation is to be found in that Municipality Is have been authorised to commence work in terms of reading meters, issuing certificates and so on.


If a property was sold or parties had entered into a lease prior to lockdown, they may now move under level 4 restrictions.


With the we-are-going-bust-while-the-neo-nazis-rule hooha, we have lost sight that the Land Expropriation report is now due.


A man can be pig ignorant and very well educated. There’s a line of that through politics.

John Le Carré


Some 9000 Zulus died during Shaka’s three-month mourning of Queen Nandi. One Gala (a very brave man) bade him stuff a stone into his stomach and get on with life. Likewise, it is time that those in power stuff a stone into their stomachs and let us get on with life.


The lockdown has produced truly bizarre results:

  • we find money (that we do not have) to build transit camps for the poor, which we could not afford last month, and we call it de-densification;
  • the homeless hungry, now housed as above, is not happy with the accommodation or the food provided;
  • those who had no access to services are suddenly provided with water, washing stations and the like – dying of hunger is okay but dying of CV is not;
  • the ANCYL suggests that surfing will put the lives of others at risk and is a white privilege;
  • we are awash in a deluge of conspiracy theories, ranging from Big Money/Pharma, Cold War and, lately, Ramaphosa-lace revolts;
  • and lastly, but possibly the worst, a zoom-show with Zuma!

The time has come to call upon Afrikaners to rise up, make their voices heard, burn things…have a braai guys?

Lighten up

On Mother’s Day (for economists):

  • you raise my interest rate 30 basis points without a corresponding drop off in consumer enthusiasm;
  • despite a decade of inflation (brave man!), I still dig your supply curve;
  • further stimulus could result in uncontrolled expansion.

Contributed by:
Daan Steenkamp Attorneys
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