To understand why more interest rate increases in South Africa (SA) may not effectively combat inflation, one must first understand the broader economic factors that contribute to higher inflation rates in emerging countries when compared with developed nations.
Read full articleWelcome to the world of banking crises, where there is a consistent flow of money and the stability of a shaky Jenga tower! Here, banks can go from being the pillars of the economy to crumbling ruins faster than you can say “subprime mortgage”. So, grab your wallets and hold on tight as we unpack the events that unfolded in March.
Read full article“We believe in what people make possible.” This is the slogan of one of the fastest-growing companies in the world, Microsoft. Currently, Microsoft seems to be achieving feats beyond what is possible. Growth within the world’s largest economy, the United States, has recently slowed down. Gross domestic product figures show that the number of goods and services created in the last quarter registered the weakest pace of expansion since the second quarter of 2022.
Read full articleSouth Africa (SA) is in a peculiar place. For the first time, in a long time, the ruling party might not remain in power. Since the African National Congress came into power in 1994 many South Africans have started to question the party and their policies. Very few, if any, of the promises that were made almost three decades ago, have come to fruition.
Read full articleThe abrupt collapse of Silicon Valley Bank (SVB) and Signature Bank (SB) has caused much panic and volatility in the market. SVB is the biggest lender to fail since the 2008 financial crisis and the 16th largest bank in the United States (US). The 15% drop last week in the broader banking index suggests panic about a wider national banking crisis in the US, however the fear is likely unwarranted as the conditions that gave rise to the crunch at these tech-focused groups are not shared by most banks.
Read full articleRay Dalio, a billionaire hedge fund manager, once described politicians who continuously raise the debt ceiling in the United States (US) as “a bunch of alcoholics who write laws to enforce drinking limits”. And to no one’s surprise, the US has, once again, reached the point where they need to increase the debt ceiling.
Read full articleResearch by the world’s largest financial institutions seems to support our view that the monetary policy tightening cycle in the United States (US) is approaching its third stage, an economic downturn. We have been expecting this for quite some time and have made the necessary changes to our investment strategies.
Read full articleTwo things stood out during February: The question around offshore investing, and the 2023 Budget in South Africa (SA).
Read full articleIt is undeniable that South Africa’s (SA’s) economy is in a poor state. But evidence suggests that the rate of deterioration has slowed down considerably. In fact, a strong case can be made to show that the rate of improvement is greater than the rate of deterioration. And, if that is the case, the long-term trajectory is towards a flourishing rather than towards a withering economy, an economy where employment income and life expectancies increase rather than decrease.
Read full articleYou have been tasked with a last-minute instruction: you have to deliver a speech to a group of investors on how South Africa will be able to weather the current loadshedding crisis. After burning the midnight oil, you have not even drafted an introduction. With only an hour left, you go to ChatGPT and ask it to write a short introduction for you. In less than 10 seconds it writes a sublime 50-word introduction. It is a hit with the audience! This is exactly what newly appointed Chancellor of the Exchequer, Jeremy Hunt did in a recent pro-innovation speech to the UK government.
Read full articleYue Fei, the son of an impoverished farmer from Northern China, is one of China’s most decorated and celebrated war heroes. As the Jurchens invaded Southern China in the 1130s, it was Yue Fei who showed tremendous courage as he and his troops fended off the advancing army. He was so courageous that he once, with only 500 men, defeated 100 000 Jurchen soldiers. To this day, Yue Fei is a national symbol of hope during difficult times.
Read full articleLast week, the South African Reserve Bank (SARB) increased interest rates for the eighth consecutive time since they started their rate-hiking cycle in November 2021. Since then, the prime interest rate has increased by 3.75% to 10.75%, its highest level since 2009. This means that every R1 million debt that a household has, will now be roughly R3 125 more expensive each month; a thought that is keeping many South Africans awake at night.
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