Daan Steenkamp's Snippets

Barnabas Zulu, “Judge Hlope’s attorney” has been ordered to repay some R20m in legal fees paid to him by the Department of Environment, Forestry and Fisheries. Whatever your opinion of this gentleman, the fact is that the Department in question was party to the miss-spend involved, and it seems unfair that he alone must bear the consequences.

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What documents may be marked without prejudice: https://www.golegal.co.za/correspondence-without-prejudice/  

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There has been criticism of the practice of those who are critical of state conduct, to involve our courts in what could well be described as political issues. The public service unions have taken on the State on public sector wages, which dispute AIDC wishes to join, on the basis that it wants to challenge the constitutionality of Ramaphosa’s “neoliberal austerity measures”. If ever there was a political argument in court…

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Hard news:

Economy

Pundits do not agree on our GDP trajectory for the next year; these are the predictions:

  • Momentum 4%
  • PwC 2.3%
  • Old Mutual 5%

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The question is we are we going. As far as Rand value is concerned, Prof Grant (a publications editor for the Free Market Foundation) suggests that SA inflation is tending lower which, with world inflation tending higher, will stem Rand value loss against other currencies. If he is correct, then overseas investments may be a hedge against inflation but will not produce the kind of return that our own stock-market might.

So, what is the condition of our own stock-market? De-listings are accelerating as per statistics published this week by PSG:

Why are institutions delisting? Look (unsurprisingly the publishing institution remains positive of investing in it): https://www.allangray.co.za/latest-insights/local-investing/our-take-on-the-shrinking-jse/?

On the same downwards trajectory, is a graph showing the number of projects undertaken of late in South Africa and (which shows why engineers are taking strain) which will undoubtedly affect our stock-market in the long-term:

If all this confuses you – go to the bottom of this newsletter…. I have little doubt that no one really knows how our stock market will perform.

But the big topic now is wealth and inequality. How wealthy are we and who holds this wealth? The following BusinessTech graph is easiest to understand:

What this graph illustrates is that we are poor country, and that redistribution is not going to change the spread of wealth much – hence the very thin BIG allocation. The fact is that we do not possess the wealth to satisfy all, and that wealth inequality has not changed since democratic rule. To address this, I believe to be outside the capacity of those who govern us.

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Ironically, the commodities boom has thrown us a lifeline – look at trade balance ex the SARB:

Business

Tax and Sasria pay-outs: https://www.moneyweb.co.za/news/south-africa/unravelling-the-tax-complexities-around-damaged-or-destroyed-buildings/

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There is a move by the Post office to take on courier services – the response was that the Post Office has a monopoly over postal services but not courier services. Speaking for myself: the second Post Office, servicing our area, unexpectedly closed its doors and the fact is that I will not use the postal service again. They are simply too slow and too unreliable.

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Caltex is to be rebranded as Astrom

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An NHI initiative (second time around) is that doctors/healthcare practitioners will have to produce a Certificate of Need to open a practice, if the proposed NHI regulations are adopted. So, is medicine a calling or a business? If you happen to stay in Sandton, why would you want to open a practice in Alexandria?

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An article on the efficacy of online education may be found at: https://www.nber.org/system/files/working_papers/w29113/w29113.pdf. What drew my attention – look at the abstract – was that neighbourhoods, with better broadband technology fared better than others. In this respect MTN has announced plans to expand its LTE and 5G networks in the Eastern Cape. Getting better, but the poor must needs come second.

Property

The value of township RDP houses has doubled post hard-lockdown; these are now selling on average at R320k.

Quotables

The country needs and, unless I mistake its temper, the country demands bold persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something.

Franklin Roosevelt at the height of the USA Great Depression 1932

Comment

The-looters-had-no-choice-but-would-be-held-accountable Duduzane Zuma now wants to run for president. But wait, there’s more, there is his sister: https://citizen.co.za/news/south-africa/politics/2584278/zumas-daughters-hit-back-at-naomi-campbells-open-letter-to-former-president/

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Us/them: the WHO has called for a reversal of the flow of vaccines going to high-income countries to low-income countries. Now this is an issue worthy of debate: on the one hand we are all of mankind and interdependent; on the other, perhaps, if you’re poor, you are not worthy of surviving?

Lighten up

When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what their IQs were. The first replied 190. “Wonderful,” exclaimed Einstein. “We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity”. The second answered 150. “Good,” said Einstein. “I look forward to discussing the role of New Zealand’s nuclear-free legislation in the quest for world peace”. The third New Zealander mumbled 50. Einstein paused, and then asked, “So what is your forecast for the budget deficit next year?”

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This tale is said to be told by John Kenneth Galbraith (a famous post-Keynesian economist) on himself. As a boy he lived on a farm in Canada. On the adjoining farm, lived a girl he was fond of. One day as they sat together on the top rail of the cattle pen, they watched a bull servicing a cow. Galbraith turned to the girl, with what he hoped was a suggestive look, saying, “That looks like it would be fun.” She replied, “Well….she’s your cow.”

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Why is the work of an economist and a plumber so similar in nature? Both handle gross domestic product.

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Economic forecasting is like driving a car blindfolded and getting instruction from a person looking out of the rear window.

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Contributed by:
Daan Steenkamp Attorneys
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