Zim hyperinflation not so special

Official inflation in Zimbabwe now stands at over 100,000%.  Jokes around Zim’s official stats aside, this isn’t even real hyperinflation by historical standards. Germany, in 1922, in the aftermath of Word War I and the Treaty of Versailles experienced inflation of over 200 billion percent. Goes to show how short our memories are (as a […]

National consequences of not understanding uncertainty

Business Report has an interesting article where Eskom recommends shelving new infrastructure projects due to lack of electricity until at least 2013. A few important quotes form the piece: Bongani Nqwababa, Eskom’s finance director, said yesterday that the parastatal had advised the government that it wanted South Africa marketed only from 2013 for both local […]

It’s not just us – the cost of (electric) power

South Africans have been lamenting the state of our power infrastructure and Eskom’s inability to keep infrastructure up with demand.  Now there’s plenty of useful debate left there (so many of the points I hear made are irrelevant and serve to distract everyone from the real issues. Past sins For example, why are so few […]

Anyone left to argue? Rudco liquidated, CLIENTS LOSE MONEY

It’s peaceful around here this morning. I’m in Stellenbosch running a financial modelling course for the Faculty and Institute of Actuaries, in conjunction with the Actuarial Society of South Africa. The sun is shining, the skies are blue and although the wind is getting up, it is still a pleasant day. But that has nothing […]

Directors’ Dealings – Information, Noise and the role of Randomness

I was reading an article about the directors of Imperial and Steinhoff purchasing shares in their respective companies. Steinhoff directors made the news when the CEO originally used Single Stock Futures to gear his exposure to a significant position in the company. (This position has since been converted into a direct position with about the […]

The wheels (of justice) turn. Just too slowly for Rudco.

“E.s.” commented on my earlier post: Too Good To Be True about the ridiculous proposition for turning lead into gold (offering fixed rates home loans in the South African Rand at 6% interest). The interesting thing here is that since Rudco’s initial plans were announced, interest rates have ticked up several points, and are likely to increase further in December (consensus from the market is currently around 50bps) and quite possibly again early next year. I’m sorry E.s., you clearly haven’t been reading the blogs and comments here and other places. To repeat the four themes: The business model is not viable therefore you should expect problems sooner or later. Rudco are in contravention rules, regulations and judgements, […]

Telkom, SBC and a few things suddenly making sense

Business Report is running a story about the shareholder agreement between government and SBC that impacted South Africa’s telecommunications environment. Ann Crotty (from Business Report) writes: The shareholders’ agreement signed by the government when it sold a 30 percent stake in Telkom to the Thintana Communications consortium placed both companies above South Africa’s laws, according […]

Deja vu and the myopia of our spirit

Amongst the stormy seas of markets recently (off the back of a credit and liquidity crunch apparently initiated by ongoing and deepening problems with sub-prime loans in the US and the related CDOs), bobs the grey and bloated bodies of a clichéd failure. Unwavering belief in trends, normal market conditions and trading rules developed out […]