Editor's Desk
Emotionally it sounds good, but it is not good investment
- Editors Desk
- Published Date
- Daniel Steinmann
- Hits: 5
It is somewhat baffling to find a foreign investor so eager to enter the local scene, it embarks on a social investment programme less than a month after it started construction of its facility. To the shareholders of that entity, it means that after all statutory obligations have been complied with and after all levies and other charges have been settled, the local community gets to benefit before the investors who supplied the capital, see any return on investment.
Recent events are not the first instance of social investment taking precedence over dividends. This pattern has been repeated so often over the past few years, it has now almost become a new standard to all foreign investors. This is indeed an indication of a very high expectation of future profits.
Read more: Emotionally it sounds good, but it is not good investment
How many billions can the mattress hold?
- Editors Desk
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- Daniel Steinmann
- Hits: 30
My views on the informal economy are regularly sought by policy makers and entrepreneurs alike. The reason is rather straightforward: by all observations there is a remarkable amount of cash in circulation but it is hardly captured in the conventional channels, and most important, it is also largely unreflected by the commercial banking sector.
Over the past decade attempts to analyse and measure the extent of the informal economy usually lead to disappointment. At some point, (more than ten years ago), the finance ministry was very interested to try and form some picture of the size and the tempo of the informal economy, mostly as part of its endeavour then, to expand the fiscal net. If I go by policy development of the last seven years, I get the impression these ideals have been abandoned.
Load shedding is the best advocate for a reliable nuclear facility
- Editors Desk
- Published Date
- Daniel Steinmann
- Hits: 75
It may be somewhat early to be too dogmatic about the prospects for the coming winter but the warning message broadcast every evening on DStv channels, to reduce electricity usage, does not bode well for the coming months.
More than one expert, either on energy or on weather, forecast a dismal picture for southern Africa in terms of electricity redundancy. As a matter of fact, redundancy is a dirty word and South Africa’s power utility has already warned that load shedding, or a modified form of it, is inevitable. The learned Eskom leadership ascribes this to their maintenance schedule, but the more sober analysts realise the utility simply cannot supply its own users, especially during the coldest part of the winter. Where does that leave us, who are also dependant on Eskom for about two thirds of our electricity during peak time.
Warning signals like these always make me wonder what have we been doing for the past twenty years. It must have been that long ago that I wrote a power station does not get built in one year, and not too far into the future, we shall need more than just one power station.
Read more: Load shedding is the best advocate for a reliable nuclear facility
Like all asset bubbles this one too will pop. When, is an open question?
- Editors Desk
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- Daniel Steinmann
- Hits: 45
Two major game auctions took place during April. At the Erindi auction, there were many animals offered which can only be described as types or mutants for instance white springbuck, black springbuck, golden gemsbuck, and white blesbuck.
At the Outjo Game Festival, none of these more popular fashion game was on offer, but a pattern very similar to the Erindi auction, became noticeable for the rarer species.
Game, or at least certain types of it, has turned into an investment commodity. And looking at the industry’s development over two decades, it is clearly in a classic asset bubble.
Now I know the game farmers, or the new “game investors” do not like to hear this and I have been taken to task on more than one count of my views on overpriced game. But unfortunately, I have to point out the economic anomalies, and I have to make the fundamental calculations to determine the potential return on investment as far as expensive game goes.
Read more: Like all asset bubbles this one too will pop. When, is an open question?
Not even boring academics can escape the allure of Schadenfreude
- Editors Desk
- Published Date
- Daniel Steinmann
- Hits: 98
A not-insignificant storm in the academic teacup has been raging for the past few weeks. Celebrity US economists, Professors Carmen Reinhart and Kenneth Rogoff, were still basking in the glory of their most recent work, when a group of adamant peers said, May we please have that data, we want a review. As it happened, the learned academic duo allegedly ignored most if not all these requests.
Reinhart and Rogoff were noted scholars long before the publication of their most recent book, “This time it’s different.” They are well-known and highly regarded for their benchmark work in macro-economics, and both enjoyed a quasi-celebrity status, at least in the United States. The publication of their seminal work was in part the result of developments in the G20 economies following the 2008 crisis. The work’s title alludes to typical political and policy responses, citing economic planners who fell back on the argument that today’s conditions after the crisis can not be compared to any other period in economic history. But the title is meant sarcastically implying that this time, it is NOT different.
Read more: Not even boring academics can escape the allure of Schadenfreude
