Flatlining. On Friday I was again privileged to attend an economic presentation by Nedbank’s Nicky Weimar. She says that our GDP growth, oscillates between growth and recession, resulting in an average growth of 1% or less. This stagnation is not in line with other emerging markets, which outperform us. Some of the interesting snippets one can take from her talk are:
• GDP is driven by government and consumer spending as well as fixed investment spend.
• the Investment Seminar held last week is correct in focusing on fixed investment spend, but deals with this as if it were a private sector issue, ignoring the implosion in this sector caused by SOE malfunction.
• What this leads to is companies seeking to maximise the extraction of income from existing capital by way of AI, rather than embarking on new fixed investment spend.
• Since 2007, Eskom tariffs have increased by 300% pushing up production costs which directly led to the retrenchment of some 120,000 mining workers.
• We have built two of biggest coal-fired power stations in the world. Medupi can only function at 70% and Kusile at 60% of the planned electricity production, owing to stuff-ups. We produce less electricity today than in 2004.
• Off a baseline in 2011, our labour productivity has grown little but our labour costs have grown to 160% more than it was then.
• The turning point of 6% income deficit on GDP, coupled with a 70% plus GDP/debt ratio, heralds our entry into debt trap territory.
• At the core of our state debt crisis is the growth of our civil service whose salaries are funded by borrowings.
• Her predictions are that-
- inflation will probably stabilise;
- R/$ rates are so unpredictable that one cannot give any guidance in that respect;
- our economy is not going to grow for some years;
- expect junk status.
• An interesting aside on junk status is that we will get grouped into a so-called frontier index where we will be the great performer; at the cost of more expensive borrowings.
The contraction of our industrial output, announced on Thursday, together with the suggestion that many of the investment pledges at the Investment Summit relate to operating costs rather than new investment, confirms what has been said above.
Skirt lengths and economics: the so-called Hemline Index postulates that the shorter the skirt the stronger the economy (unfortunately the three-year lag makes index useless for future predictions). May we all prosper! https://www.bbc.com/ideas/videos/what-your-skirt-length-can-tell-you-about-the-econ/p070r0np?playlist=fashion
Apple may well find that, retaining its lead in some sectors, will become increasingly difficult: the latest Huawei smart watch outperforms the Apple version by some 13 days in terms of battery life!
The pilot phase of Biz Portal was launched last week – the intention being that South Africans should be able to register a business within a day: https://bizportal.gov.za/
The Public Private Growth Initiative, unveiled by Roelf Meyer at the South Africa Investment Conference (and which is approved of by the Government – whatever this means), will oversee 32 farming investments across South Africa which are valued at a total of almost R13mn. Mr Meyer had left Parliament many years back on the sentiment that Parliament was not an appropriate forum to punt development. You have to applaud this fellow; he has done more for this country than most of those appointed to high office.
Most smaller businesses have little interest in BEE requirements – after all, who wants to deal with Big Daddy which also a well documented reputation of slow payment. For those who must needs deal with the state or banks; the BEE Codes of Good Practice, which come into effect from next month, will allow businesses to provide bursaries for students in order to bolster their skills development scorecard.
Whilst on the topic of race and business: Cliffe Dekker published a very handy summary of recent case law in this respect: https://www.cliffedekkerhofmeyr.com/en/news/publications/2019/Employment/employment-alert-4-november-Affirmative-Action-Ten-lessons-learnt-from-recent-case-law.html.
The investment in education that is supposed to propel our economy forward, NSFAS, has resulted in R1bn of a regular expenditure in the last financial year. My understanding is that our government allocates some R10bn and more annually to this vote and one would think that the state would get this expenditure right.
Timeshare, initially, sounds like a great idea. Once in, consumers find it very difficult to get out of such a scheme. Where do we stand, given that the Consumer Commissioner launched an enquiry into such schemes last year? I am not sure whether this link would be available to non-subscribers but, do take a look: https://select.timeslive.co.za/news/2019-11-04-stuck-in-a-timeshare-contract-heres-how-things-now-stand/
Nemba clauses have become a standard insertion in property sale contracts. One’s sentiment, despite the intent of the legislation, is that the government will be slow to follow up on non-compliance especially in urban areas. Take a look: https://www.golegal.co.za/invasive-alien-species-threat/
An evergreen source of dispute is the discovery of defects to a property after the glow of purchase has waned. The article that follows sets out your options: https://www.golegal.co.za/defects-property-transfer/
Co-ownership of property, intended for resale, should be preceded by a written agreement. There are few things as divisive as great plans becoming unaffordable. Consider this: https://propertyprofessional.co.za/2019/11/08/how-does-co-ownership-work/
The inability of our local municipality to provide reliable power has prompted me to install a PV system: this is become a trend, with home owners increasingly buying into homes with green features. Do install such a system early as the acapital cost takes some used to recoup (if at all).
Matching the trend of the economic report above, Andrew Golding says that our young population will drive the housing property market, but that a robust recovery should not be expected.
The applicant has a right not to be defamed. I however must take into account also the right of the public to receive information. The horns of the dilemma may be illustrated thus: Mr Zuma is of late referred to as a thief in the media without any apparent consequences; when does such a reference have consequences? An article on this topic by Neethling, UFS, may be found (in Afrikaans) at: https://www.litnet.co.za/vonnisbespreking-belastering-van-openbare-figuur/
Playing the system : the Tigon saga continues with Moneyweb reporting that Mr Porritt has again applied for the recusal of the presiding judge. Yawn.
The Pietermaritzburg Registrar of Deeds has issued a circular 2/2019 to the effect (if I understand it correctly) that a double execution will be held on 18 December whereafter the Deeds Office will close down for the year. Lodgements up to and including 4 December should make it by this cut-off date.
Conveyancers should note the amendments to Regulation 68 of the Deeds Registries Act: if you do not have a copy, ask me.
I hold an article by Le Roux on the ins and outs of the S4(q) deductions allowed by the Estate Duty Act. If this interests you, ask me for a copy.
Similarly, I hold an article by de la Harpe on section 37 C of the Pension Funds Act and divorce settlement agreements. Ask me for a copy.
I actually think I think better in high heels. Theresa May
Women’s high heels derive from Asian warriors having had to wear heels to stay in the stirrups. Men adopted this as a macho thing in the middle ages and women followed suit: https://www.bbc.com/ideas/videos/the-curious-origin-of-the-high-heel/p07sqgpy?playlist=fashion
The end is nigh: Burger King will be selling two plant-based burgers at its burger joints in Europe. When Burger King – hardly a cutting-edge player in taste – embraces synthetic meat…
Girls who can run in heels should be feared.
If loving shoes is a crime… I’m looking at life without parole.
How do you know the high heel was invented by men?
W̃ho else invents things?
What would you rather be stamped on by a herd of elephants or an angry woman in high heels…
At least the elephants you could reason with.
A friend asked if I’d like to go drag racing,
I had to politely decline.
I can’t even walk, never mind run in high heels