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This is what I am very afraid of. Commodity bulls, watch out.

China’s bad loans could bust world economy

The risk of what Nobel laureate Paul Krugman calls “Japanification” – a semi-permanent economic funk – has haunted China for at least a couple years now. Last week a Bank of America Merrill Lynch report again asked: “Will China repeat Japan’s experience?”

Let’s dispense with the suspense: Yes, China very likely will. And the outcome will have far more serious global implications than the chances of stagnation in Europe. China’s “severely under-capitalised financial system”, “imbalanced growth” and chronic “overcapacity” all remind Merrill Lynch analysts Naoki Kamiyama and David Cui of Japan in 1992, when its bubble troubles first began to paralyse the economy. China is even more reliant on exports than Japan was in the 1990s, and its all-important property market now “may be tipping over”.

Most worrying is the shaky banking sector and the lack of bold action in Beijing when the scale of Chinese bad debt may be higher than Japan’s ever was; they believe non-performing loan ratios are “significantly into double digits”. In the first half, the analysts estimate, commercial banks had to book larger non-performing loan liabilities than for all of last year.

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The popular tonic is that China has $4 trillion of currency reserves to toss at its bad-loan problem. Yet any move to turn China’s US treasuries, European debt and Japanese bonds into cash could precipitate a global rout. A Chinese crash would hammer commodities markets, industries from manufacturing to hi-tech, and credit ratings of export-reliant economies from Australia to Japan to Brazil. It would be an untimely blow to the US and a fragile Europe.

The 'Second Phase' vs the NDP

The central message of President Zuma's second inaugural address is that, during the next five years, his new government will launch the "second phase of our transition from apartheid to a national democratic society.

This second phase will involve the implementation of radical socio-economic transformation policies and programmes over the next five years."

The bad news for white South Africans is that the 'second phase' is aimed primarily at their established and legitimate economic interests.

Read the whole article.

After seeing this, I consider everyting I do as low risk. 

Read this and weep, that is if you are white.

The NDR: FW de Klerk's reply to Cyril Ramaphosa

Most seriously, the NDR's central goal is a comprehensive state campaign to harm the legitimate interests of citizens on the basis of their race by eliminating what it calls "apartheid property relations" (whatever they may be). "This requires the de-racialisation of ownership and control of wealth, including land; equity and affirmative action in the provision of skills and access to positions of management..."  "De-racialisation", in the NDR's simplistic analysis, means that, ultimately, whites should own 9% of the wealth and land because they comprise 9% of the population - regardless of the legitimacy of their ownership rights, their skills and their contribution to the economy and to society.

I agree with Ramaphosa on the need for section 9(2) measures to promote equality. However, Ramaphosa completely ignores section 9(3) and 9(5), which prohibit unfair racial discrimination by the state and which declare that discrimination is unfair unless it is established that it is fair.

It really is time to emigrate.

Eg. ATT (-166)

What does that mean ? Are earnings negative, i.e. is ATT a huge loss-maker, maybe due to debt burden ?

 

The ANC govt's plan for expropriation on the sly

A new Expropriation Bill by another name

Media coverage of the Promotion and Protection of In- vestment Bill of 2013 (the Investment Bill) has focused on its role in replacing South Africa's bilateral investment treaties with various European states. Representatives of these countries have broken their usual diplomatic silence to warn against the reduced protection it gives investors from their states. However, the true significance of the Bill goes very much beyond this.

The Investment Bill is, in fact, a new expropriation measure that will apply to all property owners in South Africa, both local and foreign. It is also likely to result in many people receiving zero compensation on the loss of their property, provided the State takes this, not as owner, but rather as ‘custodian' for the disadvantaged. In combination with the Restitution of Land Rights Amendment Bill of 2013, it could see property of many kinds taken by the State as ‘custodian' for land claim- ants and without any compensation to its former owners. Yet most commentary on the Investment Bill has overlooked this risk, helping to lull all property owners into a false sense of security.

The Bill's reference to ‘investors' is also misleading, for it suggests that the new law will apply solely to companies and other commercial enterprises. In fact, the Investment Bill will apply to everyone, including ‘natural persons' and ‘regardless of nationality'.

Any black or white South African who owns a home, a car, or unit trusts is vulnerable to the Investment Bill's provisions. So, too, are enterprises of every size and in every sector of the economy, from mining to agriculture, banking, manufacturing, and services.

Once the Investment Bill is in place, the current Expropriation Act is likely to be overtaken or repealed. The Government, which has encountered stiff resistance to its draft expropriation bills of 2008 and 2013, will also have no further need to try and push a replacement expropriation law through Parliament.

Instead, all South Africans will find that their rights on expropriation are already governed by the rules laid down in the Investment Bill. And this, of course, will give the State the power to take measures to acquire property of virtually any kind as ‘custodian' for the poor - and without the need to pay any compensation.

This so called Rand Hedge is performing so poorly on the LSE that its Rand Hedge status here has been more than a
total disaster. It is one of my LT holds so am pretty disappointed.
BTI is a similar story - dead in the water on LSE. I hold those as well.

 

If true, we should all join Orca in Portugal; when he takes the plunge.

Tlokwe vote ‘fixed’

False addresses, voting outside registered areas and bussing in out-of-town voters were allegedly uncovered in Potchefstroom’s recent by-elections – amounting to what could be South Africa’s first proven case of vote-rigging.

and...

http://www.timeslive.co.za/politics/2014/01/27/elections-need-to-be-independently-monitored-agang-sa