Our economy barely grew in the first quarter of 2008. 2.1% real seasonally adjusted growth is shockingly low given the previous quarter’s 5.3% growth. One needs to stretch back to 2001 to find a lower point of economic growth. Mining down 22% A large part of the problem is the 22% decrease in the economic…
Credit and economic risk collide when it comes to debt issued by Eskom. The damage is exacerbated by serious operational and medium-term management issues. Ensuring reliable supplies of raw materials should be a top priortity, but hasn’t been. Moody’s is considering a multi-notch downgrade of Eskom’s foreign and local currency issues. Eskom’s debt is not…
Nationwide Airlines is on the ground. A series of business and operational problems met the global economy of skyrocketing avgas prices and left them insolvent by R172m (assets of R46m less liabilities of R218m). They’ve also left friends of mine stranded in South Africa after a trip from Ireland for another friend’s wedding (congratulations Kay and…
The South African Reserve Bank increased the Repurchase Rate today by 50 basis points. As usual, all the talking heads are out explaining why this was exactly the right thing, exactly the wrong thing, exactly the right thing for the wrong reason and several other combinations. Historical levels of Repo updated graphs – Short memory…
Behavioural finance is no longer a “new idea”. It has entered mainstream finance education through CFA, Business Schools, even actuarial exams (ST5 for UK and South African actuaries). Some of the biggest lessons revolve around how bad we as a species are at making decisions in the face of uncertainty. Emotional biases, overconfidence, loss aversion,…
Florida is experiencing its very own fun and games with nuclear power station shutdown, blackouts and unhappy Dwarves and Princesses.  Ok, so apparently the Dwarves and Princesses were mostly unaffected. Without wishing the hardship on  the Floridians, I’m pleased to hear the news in that it shows that systemic risk in electricity grids is a global operational risk and not…
Official inflation in Zimbabwe now stands at over 100,000%. Â 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…
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…
